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Steamboat Springs — Over the past 25 years or so, Rogers Israel had many occasions to run up the street and duck into Boggs Hardware to make a small purchase.

"I swear I went in there every day," Israel recalled. "I'd run over, grab a light bulb and yell, 'Hey, John, I'm taking this, and he'd just wave at me,'" Israel mused.

Israel, the former longtime owner of the Cantina, knew in advance that John Sena would happily mark the light bulb down on the restaurant's account ledger and include it in a monthly statement.

"I'm going to miss that neighborhood thing," Israel said. "Bob (McCullough, the store's owner) has one of the best senses of humor in town."

Loui Antonucci, former owner of the Old Town Pub and a member of the City Council, has experienced the convenience Israel is talking about.

"If you owned the Old Town Pub and the flush valve on the toilet went out, you needed to fix it in the next five minutes," Antonucci said.

The disappearance of the last hardware store on Steamboat's main street is emblematic to many of the way the community's shopping districts have changed. But the real story resides in the market conditions that are driving those changes.

Antonucci, now the landlord of the restaurant he once operated, said that when commercial properties in a resort town sell, the turnover leads to escalating real estate prices. It's natural for the new owners to look at the money they have invested in the property and come up with a revised estimate of how much rent they need to collect in order to derive a return on their investment. Higher rents are just one factor in the increasing cost of doing business in Ski Town USA.

"Steamboat is still a very seasonal town. The off-seasons are still the off-seasons," Antonucci said. "Every year, the cost of operating a business goes up. You can't have a business that does the same numbers every year. Eventually it will put you out of business."

Scott Ford of the Small Business Development Center at Colorado Mountain College said the cost of doing business on Lincoln Avenue dictates to a degree what kinds of businesses can prosper downtown. The product or service being sold has to offer enough of a margin to pay the rent and other expenses and still yield a profit. In his role at the SBDC, Ford meets with many people who are exploring the possibility of starting or moving a business here.

"You can run into having very few kinds of merchants that are going to have the margins that will support the expenses," Ford said. "I sit down with a lot of people and look across the table and say, 'I think you will work a huge number of hours at a job that will pay less than minimum wage.' There's just not much opportunity here to make money."

Commercial property manager Bill Moser agreed the cost of doing business on Lincoln dictates what kind of business is feasible in the heart of downtown Steamboat.

"In general, different businesses can work with certain occupancy costs," Moser said. "They have to work as a percentage of your business. If you get outside of those parameters, you can't make any money."

Different businesses work on varying margins, Ford said. A clothing store, for example, might purchase a garment for $60 and be able to sell it for $100. The difference of $40 represents the margin, or gross profit, a retailer can expect to derive from that item. All of the costs of doing business, including rent, insurance, advertising, payroll, property taxes and more, must come from that margin.

Goods and services that offer higher margins create more room to prosper. Narrow margins make operating in the high-rent district on Lincoln Avenue more perilous.

With many items, shoes for example, the buying public has a highly refined sense of what they should have to pay for them, Ford said. They aren't willing to pay significantly more simply because they happen to be in Steamboat.

Antonucci has observed that businesses that survive on Lincoln Avenue over the long haul either sell items that turn over quickly, or permit high prices that afford greater margins. Expensive sweaters, jewelry and galleries of Native American art seem to fit that profile, he observed.

At the other end of the spectrum, the spontaneous souvenir purchases tourists often make often involve high margins. Savvy retailers place small, high-margin goods near the front of the store, Ford said.

Renters on Lincoln Avenue are paying $22 to $24 per square foot on the low end, Ford said, and rents go up to more than $30 per square foot. Antonucci said some people nearing the end of a 10-year lease could be paying as little as $10 a square foot. But when you add in the fee they pay for "common area cost" or "triple net," the lowest rent on Lincoln is probably more like $13 to $15 per square foot. He says he has heard that some businesses on Lincoln are paying more than $40 per square foot.

The most common store on Lincoln Avenue between Third and 13th streets is a restaurant -- there are 20 of them.

Restaurants cannot be successful at the upper end of the rent scale, Antonucci said.

"Thirty dollars doesn't work for a restaurant," he said.

Triple net can represent a significant portion of overall occupancy costs, Moser said. Common spaces within a commercial building include hallways, restrooms and coffee areas.

Depending upon the lease, triple net might also include utilities, some building maintenance and even a clause that permits a straight pass through to the

tenant on mid-lease increases in property taxes, Ford said.

Moser points out that the city of Steamboat Springs' franchise fee on energy utilities, and the state of Colorado's heavier tax burdens on commercial property, all combine to squeeze small-business margins even tighter.

There aren't as many vacant spaces on Lincoln Avenue this month as one might guess -- only three or four retail store fronts.

One notable building is at 704 Lincoln, on the north side of the street opposite the Harbor Hotel.

Moser happens to be handling the marketing of that building, which once housed dental offices and has since been remodeled. It has been empty for 15 months since the exterior remodeling was completed, but not for a lack of serious inquiries.

"I've talked to 50 or 60 people who were very interested," Moser said. "We're in ongoing negotiations. We've had tremendous interest just recently."

As commercial rents have risen in other ski towns -- Aspen, Vail and Jackson, Wyo., among them -- a concerning trend has been the replacement of independent retailers with national brand stores. Ralph Lauren outlets stores J. Crew and the ubiquitous Gap are not out of the realm of possibility.

The danger is that Steamboat Springs could begin to look just like southwest Denver instead of a unique shopping destination where shoppers can discover singular shopping experiences they cannot find at home.

"That means the experience of coming downtown is not attractive as it once was," Ford said. "My sense is that's a risk we have."

Moser said he has tried to keep independent retailers successful. He doesn't believe Steamboat has reached the critical mass national retailers are seeking, but he wouldn't rule them out in the future.

"I've worked with nationals and the only thing that's keeping them out is that they're big companies and the data and statistics they use are pretty clear cut. They're not willing to take too many chances."

Sometimes a CEO buys a home in a ski town and insists on having bricks and mortar in that market, but that's an exception, he said.

"Initially, they look at the buying power in a community," Moser said. "They want to know how many people live within a certain radius. You're not going to get them to buck demographics. That's good."

Antonucci observed that the payrolls of businesses in the local service and construction industries have a lot to do with whether retailers here prosper. He believes, over time, the grit and determination of retailers will determine the future of Lincoln Avenue.

"I would hope that in the future it would stay similar to what it is today with business that are independently owned and operated, and that we can preserve that historic feel and the architectural integrity of the downtown," Antonucci said. "But everyone has a price when they are willing to sell out. Local business and property owners have control of the future of downtown Steamboat."