Kate Spade closes at Bethesda Row as the rich continue to flee MoCo

Kate Spade New York closed at Bethesda Row Monday, yet more evidence that high-tax Montgomery County no longer possesses the concentration of ultra-wealthy residents to sustain such high-end boutiques anymore. The closure put a harsh, laser-beam spotlight firmly on Montgomery County, as there are no media reports or corporate announcements of Kate Spade stores closing elsewhere in the country.

Despite the localized nature of MoCo's moribund economy and dwindling "1%," Kate Spade the company didn't come off well in the closure Monday, either. I first heard that the Bethesda Row store would be closing from a reader who shops there on Sunday night. She had received an online notification that the store would be closing, which did not give a closing date. When I attempted to get a comment from the corporate office of Kate Spade early Monday morning, the handbag brand was clearly in denial.

The company would not answer emails all day Monday. A Kate Spade representative in an online chat feature on their website said she had no indication the Bethesda Row store was going to close.  I then called their store at Bethesda Row. Over several attempts, no one answered the phone, which kept ringing and ringing. Meanwhile, pressing 1 during the call would still prompt a voice recording of a chipper employee reciting their street address and operating hours.

Finally, I went to the store in person. It turned out the company had been pretending all day that the store was still open for business, when in fact - while they were telling me this - local contractors were removing the sign from the storefront and covering the boutique's windows. This was misleading to both customers and journalists.

Inside Kate Spade Monday

While Bethesda Row isn't yet becoming Skid Row like the once-touted "Montgomery County's Rodeo Drive" in Chevy Chase, the departure of Kate Spade is a major "check engine light" event. With new retail tenants like LensCrafters in the works for Bethesda Row, it's clear that the market is moving downscale, as the rich continue to flee Montgomery for lower-tax jurisdictions in the region.

Revenues for the County government continue to decline, even as property taxes have increased each year, and taxes are now at a record high for Montgomery County taxpayers. This is an obvious indication that the uppermost tier of the tax base has been sharply reduced. We are now in a downward spiral, where no matter how much you jack up taxes, you are going to get less and less revenue over time. And we have an ongoing structural budget shortfall, as far out as the projections go.

If things seem bleak now, with Montgomery at rock bottom in the region by every economic development statistical indicator, imagine what will happen if the country falls into a recession in the next few years. As I've warned since 2010, we can't go on like this. We must grow our lagging commercial business sector, to recover all of that lost revenue we are currently ceding to booming job centers in Northern Virginia. We need more boardrooms, not more bedrooms. And we must lower our Draconian taxes to levels competitive with rival jurisdictions, so that the wealthiest part of our tax base can begin to return and supply the revenue we need. Finally, we must cut spending drastically, before the County goes bankrupt, which could easily happen now if we have another Great Recession.

Montgomery County Public Schools, as we learned again during a classic Friday "bad-news" dump by MCPS, are continuing to sharply decline along with graduation rates. Our archaic County government liquor monopoly is causing us to lose massive amounts of liquor sales and nightlife revenue to D.C. and Virginia. Our incompetent County Council and their Nighttime Economy initiative ended up tanking the nighttime economy in the County with record numbers of nightspot closures, which caused other businesses to slash late-night hours, and left streets quiet and dark in urban areas after 9 or 10 PM. And our belligerent, radical County Council, pursuing a far-left ideological "War on Cars," continues to oppose completion of our master plan highway system, Express Lanes, and a long-planned new Potomac River crossing.

As a result, Montgomery County hasn't attracted a major corporate headquarters in over two decades. We are in real trouble, folks. Can enough residents wake up in time to stop the Montgomery County cartel before they take us over the financial cliff? Or will we just keep going the way we've been going, badly managing a decline, slouching towards disaster?