Photo by COREY PERRINE, Naples Daily News // Buy this photo
Photo by DAVID ALBERS, Naples Daily News // Buy this photo
When a neighboring Internet cafe with slot-like computer games suddenly went dark in Bonita Springs, Jerry Paul felt a bit like a losing gambler.
He was a little stunned — and the loss hit him quickly, as if he’d lost a wad of money himself.
For him, it meant a fall off in business at Anthony’s Trattoria, at the Southern Exposure Plaza, off U.S. 41 North, south of Bonita Beach Road. As one of the restaurant’s owners, he saw a 10 to 15 percent drop in his business, or a loss of 40 to 50 customers a week, who would normally stop in for appetizers or dinner before or after playing games, or grab takeout to bring to the gaming parlor.
The Internet cafe — Jolly Roger 777 — was only closed temporarily, so Paul hopes the reopening will stop his losses. But the cafe could be doomed by legislation that would essentially ban businesses that offer sweepstakes-style online games for cash prizes and wipe out adult gaming arcades that pay their winnings with gift cards.
On Thursday, the Senate passed a companion bill to prohibit the businesses from giving out gift cards or other cash prizes. The legislation is now headed to the governor for signing.
“We are disappointed and disheartened by the Florida Senate’s dismissal of amendments to protect hundreds of law-abiding, taxpaying arcades. Today’s action means amusement arcades, which have been operating legally for almost 30 years, will be forced to shut down. In addition to affecting Florida’s more than 200 senior arcades, children’s amusement arcades also face similar problems under this legislation,” said Gale Fontaine, president of the Florida Arcade Association, in a statement after the vote.
Having just experienced the pain of losing an Internet cafe at his plaza, though short-lived, makes Paul fear for the future of his Bonita Springs eatery.
“Anytime you take away foot traffic from any store in a plaza, you can definitely feel the hurt,” he said. “And I don’t know what Tallahassee was thinking, but I guess it’s not thinking of everything it should of.”
Jolly Roger didn’t open as usual March 21, then didn’t open again until Wednesday. Even though the cafe wasn’t closed for long, Paul said he expects his restaurant to continue to suffer because many of the cafe’s customers won’t realize it has reopened, and the cafe may only be open for a few more months if the proposed legislation becomes law.
“I don’t know what’s going to happen,” Paul said. “It’s anyone’s guess now.”
Asked about the timing of his recent closing and whether it had anything to do with the looming legislation, Dale Stratton, Jolly Roger’s owner, said, “I don’t want to talk about it.”
Beyond hurting neighboring businesses, the closing of all Internet cafes and adult arcades in Florida will create more empty holes in neighborhood shopping centers across Southwest Florida and leave their landlords scrambling to find replacements.
Dave Wallace, a broker-associate for CRE Consultants in Naples, who handles leasing at the St. Andrew’s Square, a strip center at the northeast corner of U.S. 41 East and St. Andrews Boulevard where federal agents recently raided an Internet cafe, said the Legislature is going too far with its proposed ban.
“That’s the real travesty — that the bad apple spoils the barrel,” he said. “That will be difficult and that will be a huge negative impact.”
The Internet cafe at St. Andrews Square in East Naples, which operated as the Palm Business Center, was one of nearly 50 shut down across the state last month in an undercover operation, “Reveal the Deal,” which led to nearly 60 arrests on racketeering and money-laundering charges. According to investigators, the now-defunct Allied Veterans of the World, posing as a nonprofit, collected a combined $300 million in profits since 2007, while paying only 2 percent to charities.
“My personal experience is this arcade industry employs people, it provides rent for landlords, tax revenues for the municipalities and it’s entertainment,” Wallace said.
The closing of the Palm Business Center left about 4,000 square feet empty at one end of St. Andrew’s Square, which is about 70 percent leased.
“We’ll be fine. It’s just that we’ve got to get through this,” he said. “Normally, we are very particular about who we let in there and that is what surprised us about Allied Veterans and what happened.”
On the bright side, he said, it’s easier to fill empty retail spots than it was a few years ago in the Naples area, with an improving economy and a turnaround in the housing market.
Gaming centers are seen as ideal tenants for strip retail centers because they attract a loyal crowd, most of them seniors, who will shop and eat at nearby businesses, Wallace said. He estimates there’s about a dozen cafes and adult arcades in Collier County and Bonita Springs, typically taking up 3,000 to 5,000 square feet in neighborhood shopping centers. There are more arcades than cafes.
Gina Nguyen, manager for Serenity Nails & Pedispa, said her business, one of the closest to the now-dark Palm Business Center, hasn’t taken a hit with the cafe’s closing.
“We had a built-up clientele, a lot of clients already. So we’re fine,” she said noting that her business has been in the plaza for more than four years, much longer than the cafe, which only opened last year.
Other neighbors in the plaza say they’re doing just fine too, including Alvino’s Pizzeria & Family Restaurant, which received some traffic from customers of the cafe, but not too much.
Carli Fike, manager of Once Upon a Child, a children’s resale shop, off U.S. 41 North, near Wiggins Pass Road in North Naples, said she’d be sad to see her next-door neighbor, Winners Vegas Style Games, go away.
The two businesses feed off each other and the arcade is very busy, she said.
“There are some grandmas and grandpas that go over there, they do come and stop in our store. They’ve never heard of us before, so they stop in,” Fike said.
In late 2010, Philip Agostino Sciacqua, owner of Agostino’s Fine Furnishings & Interior Design, recruited an adult arcade with the more traditional slot-style machines to his former retail plaza in Bonita Springs, at the corner of U.S. 41 North and Strike Lane, across from Circle K. The plaza is now bank-owned and Sciacqua was forced out a few weeks ago, leaving behind 13,000 square feet of space.
The cafe, now known as the Las Vegas Casino, takes up about 3,800 square feet in the Agostino’s plaza. Under new ownership, it recently reopened as an Internet cafe, with all new computer-based sweepstakes games, Sciacqua said.
“They are paying rent for it,” he said. “It’s a part of the property that’s not very visible, but it’s generating revenue. So to take that out and to have somebody replace them, it’s a gamble. It’s a very risky proposition in this market.”
While vacancy rates at retail centers have improved in Southwest Florida, vast empty spots remain in Bonita Springs with the exit of big box stores, such as the Target at Bonita Bay Plaza.
“It’s hard enough to fill a commercial spot right now,” said Bonita Springs Mayor Ben Nelson.
He’d prefer to see the Legislature allow slot machines at specific sites where gambling is legal, such as the Naples-Fort Myers Greyhound Track, rather than just trying to stamp out the fun for the many seniors who play the games at Internet cafes and adult arcades.