SAVED BY THE BOOK.

Byline: Joe Mosley The Register-Guard

It's almost poetic, the cadence of events.

A year ago, south Eugene's Tsunami Books had slipped over the precipice. Owners Scott Landfield and David Rhodes acknowledged the end, saying their grip on the business was slipping.

And customers, repaying the debts of their gratitude, joined hands to form a unique entrepreneurial safety net.

They became investors, concerned less about financial gain than preventing the fall of a bookstore that had become more than a business.

"It's just such a unique cultural icon," says David Berg, who with his wife, Judy, is now a shareholder in a reconstituted - and solvent - Tsunami Books.

Berg, a retired database specialist who volunteers about 60 hours per month with the Nature Conservancy, says he and other bookstore loyalists were simply unwilling to accept Tsunami's demise.

"It was just too vital," he says. "It's a business that serves the good of the community."

Tsunami Books - behind its familiar, mural-painted facade on South Willamette Street - has served since 1995 as a hub for book signings, folk music performances, writing workshops, and meetings of community and political activists. It has become especially well known as a local Mecca for poets, its shelves a welcoming outlet for writers and its book-framed stage a favorite spot for readings.

All of which has produced loyal customers - patrons, in every sense of the word.

Landfield conceded in a June 2005 Register-Guard story that Tsunami Books was awash in about $80,000 of long-standing operating debt and said it would close its doors after a liquidation sale.

The store had recorded three or four years of strong sales, he now says, but was consistently operating at the edge of its credit limit. With a lease renewal coming up, the business partners decided to call it quits.

"We were at a point where a slow week would put us in just a blind panic," Landfield says. "We knew a slow month would do it."

But he remembers with some awe the chain of events that followed publication of the story of its impending closure.

He tells a tale of four local poets who went on a walk that same day through the old Masonic cemetery near the University of Oregon, deciding among themselves to do something about the news, then showing up at the bookstore hours later with pledges for at least $30,000 in aid.

"They just started rallying the poets," Landfield says.

Erik Muller, who according to Landfield stirred the rally, remembers a somewhat more mundane scene.

"It was not like the 12 apostles," says Muller, a poet and owner of Traprock Books, a local publisher of poetry.

"I was told by Scott that I was an instigator (of the bookstore bailout), but I was not aware of that," he says. "It was kind of a brushfire of concern. I called some people, and some other people called some people."

However it occurred, the conscience of Eugene's literary community was roused.

Poets and book lovers and advocates were drawn together, and a partnership of action was formed. For the most part, money was offered with no strings attached.

Landfield and Rhodes were both touched and amazed.

They reassessed the situation, did some brainstorming of their own and laid a few ground rules for any financial assistance.

"I was adamant (that) I was not into handouts," says Landfield, who worked in the woods for 20 years and helped build Tsunami with little more than sweat and credit card debt.

"The community basically stepped forward with donations. They weren't expecting any money back, but it just rankled me. It was our ambition to create a new business paradigm."

A meeting was called - exactly one week after the news of Tsunami's imminent closure - for all those interested in saving the bookstore. A paid facilitator was brought in, and a lawyer.

"I had, I think, 28 people here," Landfield says.

All wanted to help, and all were ready to chip in money.

Tsunami Books originally had been set up as a Chapter S corporation, which meant it could take on as many as 75 shareholders without changing its basic structure.

But Landfield and Rhodes wanted to come up with a shareholder agreement that would guarantee all contributions would be treated as investments, with eventual returns that hopefully would be at least on par with mutual fund payouts.

A potential partner from the Midwest also stepped forward with a sizeable investment, which was accepted before the investor balked last fall over his limited role in the store's operation.

Repaying the investment stalled the bookstore's reorganization, and required both the recruitment of additional local shareholders and a clearer vision of the new Tsunami family.

"An ingredient to this working is a benign (corporate) community," Landfield says. "Too many bosses, that will spoil anything. We needed a group of investors that had complete faith in us."

Landfield, Rhodes and the small knot of initial shareholders settled on a private club-style process for choosing additional investors.

Each potential newcomer was anonymously voted upon by those already in the shareholding membership, and a single no vote would blackball any nominee.

"Handpicking these people became an art form," Landfield says.

But the growing clique - which nicknamed itself "The Cabal," in a jab at the Bush administration's inner circle - was unanimously like-minded in its enthusiasm for the bookstore and the abilities of its original owners to manage it.

In all, 23 shareholders - or 33, including spouses - were admitted into the club.

Their investments, totaling about $70,000, bought 32 percent of the company, while Rhodes kept 28 percent and Landfield 40 percent.

The owners have included in their shareholder agreement a covenant that states their intention of offering all investors what amounts to a stock split after five years - they would be repaid the amounts of their investments, and still own the same value in shares.

Landfield continues as the primary employee of the bookstore, although he says his workweeks are now "under 60 hours," while Rhodes and one of the new shareholders are working part time.

"I think it's a really smart move by the owners of the store, to set it up in a way so that coming in there's just no question that the owners are completely responsible for the everyday operations," says Randy Swangard, director of the Charles H. Lundquist Center for Entrepreneurship at the University of Oregon.

Swangard says an independent bookstore, in particular, would be an unlikely investment option for most people. So some degree of blind faith in its mission would be critical in any attempt to recapitalize through the sale of shares.

"Here's somebody who creatively figured out a way to stay in business and satisfy their customers," he says. "They had built this loyal customer base that said, 'No, we're not going to allow this (closure) to happen.' And that's kind of refreshing.

"In today's big-box world, where if I don't find what I like at Shopko I'll just go over to Target, that's kind of cool. But I'm not sure it would work for everybody."

The rise of bookstore chains such as Borders and Barnes & Noble has resulted in a shakeout of locally owned stores across the nation, according to industry groups. Almost 50 percent of all independent bookstores have closed in the past decade - and the announcement of Tsunami's would-be closure last year came just a month after the Book Mark closed in downtown Eugene.

Brian Juenemann, marketing director for the Eugene-based Pacific Northwest Booksellers Association, compares Tsunami's new structure to that of a cooperative such as a farmers' market.

But he recognizes that the store's original owners cultivated a unique strain of customer loyalty by taking an active role in their neighborhood and offering a venue for their patrons' interests.

"They've put a lot of energy out for that kind of thing," Juenemann says. "So I think it's great that it came back to them."

Muller, the poet and instigator, says he and his wife, Ann, felt obliged to do something about Tsunami's plight.

The bookstore's owners have been willing not only to carry Muller's books and those of his publishing company's other authors, but also make their store's stage available for readings.

And he recognizes that a bookstore with both the facilities and the commitment to support the writing community is an increasingly rare asset.

"Every town needs one, let me put it that way," Muller says. "One of the things Scott and David have been able to do is they've conceived of the bookstore as a gathering place, and not every bookstore has that luxury."

As for his investment, Muller is ambivalent. He has other investments in "some pretty low-yield green funds," and is less concerned about yield than the good his money may achieve.

"I'm just seeing it as an investment, not necessarily for financial (gain) but for viability of the bookstore and the things it does well," he says. "I don't think I've really ... worried about it at this point, as an interest-maker. It's not Coca-Cola or cluster bombs."

Berg, the Nature Conservancy volunteer and Tsunami shareholder, says his motivation also was to preserve what he considers a local institution rather than turn a profit.

"If there's anything at the end of the rainbow, that's fine," Berg says. "But that's not the investment.

"It's something to be proud of, and I can be proud of it."

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