Tobacco haven's last light: 'Oasis' for smokers' fellowship is closing

It was more than just a cigar shop.

Modeled after a European smokeshop, the Tinder Box in Issaquah had a meeting room with leather furniture, a big-screen television, tables and a kitchen stocked with beer, wine and food. There was a walk-in humidor, a tobacco bar for pipe smokers, and cabinets full of tobacco and cigars that extended from one end of the 2,500-square-foot store to the other.

"To me, it was like an oasis," said Dilip Kulkarni, who has been coming to the store since it opened in October 1997. "It was a nice place, where young people who were of legal age could talk to old ghosts like me rather than getting into trouble. This was the only place you could go where you wouldn't be booted out for smoking cigars or pipes."

Customers don't know where they'll go after today, when the store closes. Tim and Nathan Reasoner, a father-and-son team that managed the shop, say the increased state tobacco tax put them out of business. They say their revenue dropped by half, and they lost 60 percent of their business.

"We thought we could make it," said Tim Reasoner, who co-owns the shop with a partner. "We started to come back after 9-11, but then the tax went through last January, and that just killed us.

In November 2001, Washington voters passed Initiative 773, which raised the tax on a pack of cigarettes from 83 cents to $1.43. The initiative also raised the price of other tobacco products, like cigars, by more than 70 percent.

Smokeshop owners are hurting because consumers don't pay a tax on those items if they buy over the Internet. Cigar shops have been hit harder, however, with sales of tobacco products such as cigars decreasing by 42 percent, compared with an 18 percent decline in cigarette sales.

"We get so many people coming in here to try a couple of cigars before they buy them on the Internet," said Joe Arundel, general manager and partner of Rain City Cigars in Seattle. "It drives us crazy, but can you blame them?"

Customers can buy a Macanudo Portofino — a commonly found cigar, Arundel said — for $11.89 in his shop, or online for $5.40.

Some smokeshop owners have begun selling coffee and food and offering cigar tastings and educational lectures. But selling other items hasn't helped Arundel's bottom line, and his sales have been down about 20 percent since the tax was imposed.

While there are no statistics for how many local smokeshops have gone out of business since the tax, tobacco organizations say they've heard of several closing.

The tax went into effect Jan. 1, 2002, giving Washington the highest cigarette tax in the country.

Faced with budget shortfalls, 20 states last year increased cigarette or tobacco taxes, and during January alone, eight states introduced them, the National Association of Tobacco Outlets says.

"Tobacco is a good fall guy," said Bill Fader, executive director of the Retail Tobacco Dealers of America. "It's an easy thing to tax and it's an easy place to get funds.

"But what happens is that customers start going elsewhere to get tobacco products. They cross state lines and order off the Internet."

But proponents of the tax will have none of it.

"They've selected a business detrimental to health, so I don't feel bad about that (going out of business)," said Marina Cofer-Wildsmith, director of communications and marketing for the American Lung Association of Washington. "As business people, I hope they will find a product line they can sell that will benefit people."

Money from the tax helps pay for health care for low-income residents, tobacco-use prevention programs and water-quality improvements. Because of the tax, Cofer-Wildsmith said, 83,000 fewer people smoke in Washington. For every 10 percent increase in the retail price of cigarettes, adult smoking drops by about 4 percent, teen smoking by about 7 percent.

The tax may be preventing tobacco use, but it hasn't brought the state that much extra money. Washington collected $21.9 million on noncigarette tobacco products in 2001 and $22 million in 2002, the year the tax was increased, the state Department of Revenue reports.

Meanwhile, Nathan Reasoner says that once his Issaquah store is closed, he hopes he can make a living from his family's other store at Southcenter mall.

"I don't want to walk away from the industry where I've spent so much time and have so much knowledge about," said Reasoner, a third-generation tobacconist. "But I don't know if I can survive off Southcenter. It's a very bitter, bitter end."

Kristina Shevory: 206-464-2039 or kshevory@seattletimes.com