A swap mart in west Mesa is closing, and those involved with it are debating how much Arizona's crackdown on illegal immigrants contributed to the failure.
Fiesta MarketPlace's general manager and a shop owner say customers and vendors stayed away after Sheriff Joe Arpaio conducted an immigration raid at a nearby McDonald's. The swap meet opened last fall and serves mostly Hispanic clientele.
Business was good at vendor Jose Barbosa's Soccer Shop until the raid, he said.
"Since that day, things went south," Barbosa said. "It scared people away."
About 15 merchants left within two weeks, Barbosa said.
General manager Russell Groen said business fell 80 percent after the March raid and April's passage of SB 1070, which makes it a crime for illegal immigrants to be in Arizona. It takes effect July 29.
"The merchants and the customers, many of them would talk about maybe moving out of Arizona," Groen said.
He's closing the swap mart June 30 because of financial losses.
Arpaio said the impact of SB 1070 has been exaggerated, but he says efforts to arrest illegal immigrants have undoubtedly driven some out of Arizona. Legal residents won't face any problems, he said.
"I don't know why everybody worries about this unless they're violating the law," Arpaio said. "If you have violated the law and you're leaving town, well, that's something that's up to them to make the decision."
Other merchants said the immigration issue was a factor, but they say other problems doomed the market before this spring's events.
The marketplace at 1360 W. Southern Avenue didn't advertise enough and had poor visibility in an area filled with vacant stores, said Stanley Meher. He had a close view of the marketplace's entrance from his jewelry booth and said too many people walked around for only minutes and would leave without buying anything. Customers told him they had trouble finding it.
"They said, ‘We didn't even know this place exists,'" Meher said.
The marketplace opened in August in a 56,000-square foot space that had long been a Service Merchandise. Most of the 70 or so tenants weren't in place until the Christmas shopping season, Groen said. He wrote a letter to merchants early this month to say the marketplace would close June 30 because of substantial financial losses.
Barbosa is one of the 10 or so tenants who remained last week. As he had people packing his stuff up, he explained he already had a loyal customer base from a small shop he operated for five years in a Mesa strip center. Barbosa is reopening his store in a shopping center at University Drive and Extension.
Arpaio's raids on other swap meets across the Valley made people fearful to operate businesses or shop at the marketplace, Barbosa said.
Arpaio said he supports small businesses. But he also made note of a Friday raid on an El Mirage business that resulted in arresting several suspected illegal immigrants. It was his 36th raid of a private business.
"I think I proved today that if you are doing anything illegal, especially stealing people's identities, you're going to jail," Arpaio said.
Hardip Singh Sodhi doesn't know what he'll do with the merchandise from his Bless You Luggage & Gifts. The enterprise was his first since moving to the United States from India in 2008.
"We opened up business with a very excited mood," he said.
He's lost as much as $15,000 and is selling everything at 50 percent off to unload the items.
He pointed to a stack of unopened boxes in the back of his booth and said he hasn't had to replenish his stock since opening in November because sales were so low. He then pulled an invoice from a drawer to show he's selling items for less than it cost for him to buy the handbags, belts and other accessories.
He doesn't have any money to open elsewhere.
"We have no plan," Sodhi said. "We are crazy mad. What do we do with all this stuff?"
The swap mart should have worked had it not been for the immigration issue, Groen said, because nearly all the tenants had experience in this kind of setting and were set up at other Valley swap marts.
The economy played a role, Groen said, but it also should have boosted demand for low-priced goods. Most merchants operated at other swap meets and knew their business, he said, which should have further helped their odds if it weren't for the immigration issue.
Councilman Dennis Kavanaugh said he doubted immigration was a major factor in the marketplace's failure.
He closely follows the Fiesta District and said numerous consultants have told Mesa the area has vastly more space for retail than the neighborhood can support. Most vacant strip malls will forever sit idle and will only sustain development if converted to office, owner-occupied housing or other uses, he said.
"My feeling is the consultants were correct in their assessment of the area that retail is way overbuilt and new retail coming into the area, unless it really is a unique destination place, is really going to have a difficult time succeeding," Kavanaugh said. "The owners of so many properties have to bite the bullet and understand that's not a location where there's going to be a success with more retail."