It's thrive or die for Criminal Records, Earwax Records and Atlanta's mom and pop shops

Just a few hours before the annual Halloween parade descended upon Little Five Points on Saturday, Oct. 18, independent record store owner Eric Levin stood on the sidewalk at 1154-A Euclid Ave., swaying from side-to-side, giddy with excitement. Overhead, local artist R. Land stood atop a tall ladder, drilling screws into a temporary sign with a primitive green and yellow lizard-monster spitting out the words "Criminal Records."

It was the day after opening day at Criminal's new location, one-tenth of a mile from its former digs between Junkman's Daughter and Aurora Coffee. Inside, employees scrambled between partially assembled shelves carrying stacks of CDs and working to make the place look presentable. An air of excitement filled the room, and in the periphery the first few intrepid customers cautiously checked things out.

Unless you've been living under a rock for several years, it's no secret that Criminal's move is a potential catastrophe. The economy is bad, unemployment is high and free music is just a mouse click away. But Levin, who also heads the Alliance of Independent Media Stores and founded the annual Record Store Day, doesn't show any signs of concern over the financial doom and gloom on everyone's mind.

"The stock market crashed, but I don't have any stocks," he offers with just a hint of unease in his voice. "I believe in trickle-down but I'm selling affordable luxuries, and escapist culture is always a safe bet during troubled times."

For 17 years, Criminal Records has been a staple of the L5P shopping district. Along with Wax 'N Facts on Moreland Avenue, the independently owned store has survived the Internet music boom that saw other neighborhood record shops, including Satellite and More Dusty Than Digital, go the way of the dodo bird.

Despite the convenience of downloading and the lower prices offered by big-box retailers like Target and Best Buy, there are still some tangibles (like collectible vinyl) and intangibles (like knowledgeable clerks with barber shop-like banter) that only the indies can provide.

But staying afloat is still a struggle.

In the last decade, Criminal has expanded to include comic books, toys and DVDs in an effort to diversify its inventory, and the new store includes used vinyl, and an already revered $1 bin. There's also a stage for in-store performances that's equipped with an Orange amplifier backline.

The larger location means that more money is tied up in inventory and higher rent, which makes staying competitive on an already uneven playing field more difficult. "I'm floating checks, my credit cards are full, and I'm not sure how I'll make payroll next week," says Levin. "But we will do it."

He's not alone. Over Labor Day weekend, Ella Guru Records moved from Toco Hills to Elizabeth Street near L5P. But times are still tough.

"It's a labor of love," says Ella Guru owner Don Radcliffe, who makes most of his profit by selling used vinyl and CDs. "Unless you can do incredible volume with new releases, it's hard to make any money. But every city has a good store like Criminal Records that takes care of everybody who needs the new Of Montreal CD. With us, we rely on the guys who do the circuit; they hit Wax 'N Facts, Wuxtry, Full Moon. They're looking for a wide variety of stuff and this place is an inch deep and a mile wide.

"What's important is that you have an environment where people can learn about something new and buy it," says Radcliffe. "Sort of like Pandora Radio, but with people."

Retail chains including Target, Best Buy and Barnes & Noble all skirt L5P, like vultures biding their time. In Lawrenceville, Eat More Records shuttered its doors in January after 30 years. And earlier this year, Earwax Records quietly disappeared after bureaucratic red tape quashed the 15-year-old store.

Earwax opened in a prime spot on Peachtree Street in 1993. After 10 successful years, it moved to a storefront with less visibility on Spring Street. But the indie store still thrived.

Then, Earwax founder Jasz Smith attempted to move again, in January, into a building at 335 Peters St., in the trendy Castleberry Hill district, where he hoped to draw increased foot traffic. But things didn't pan out.

Smith signed a lease on a roughly 100-year-old building in Castleberry Hill that hadn't been occupied for nearly 30 years. But he says the city and the neighborhood association made his attempts to bring the building up to standard an unbearable challenge.

"The neighborhood association is very hands-on with everything that happens in Castleberry Hill, and any changes you make not only have to go through the city but also through the neighborhood committee. And they were both on us from day one," says Smith. "If I picked up a hammer, they were there asking if I had a permit for it. And 'What about those nails? You got a permit for those?' With the city up our ass and Castleberry Hill telling us what we can and cannot do, it became a nightmare."

In the end, Smith gave up. Now the store's inventory gathers dust in his home, while he sells music on the Internet.

Earwax's downfall is a sad and ironic tale for a city whose slogan is "Every day is an opening day." As Criminal forges ahead, Levin offers a grim assessment of the situation. "There are no small business incentives in Atlanta. The city paid however many hundreds of thousands of dollars to Dallas Austin for that stupid Atlanta song %22The ATL%22, and they could have had a flagship hip-hop record store instead. As consumers we now have fewer options because of the city."

For a time, Levin attempted to coax Smith into moving Earwax to the L5P storefront that currently houses Stratosphere Skateboards, which will likely move into Criminal's former location on Moreland Avenue. But Smith balked at the idea. He admits that the ordeal in Castleberry Hill crushed both his spirit and his wallet.

"You reach a point where you have to put your emotions, ego and everything aside and look at it logically," he says.

"If somebody said to me, 'I'm opening a record store in 2009,' I would look at them like they were out of their damn mind! After 15 years of successful business I'm at square one," Smith says. "Starting over now doesn't make sense."

But Levin repeatedly stresses the importance of fostering a local community when milling over the loss of Earwax and the ominous threat of encroaching chain stores.

"You have to buy local," he says. "If you want your potholes fixed and the police to come when you're in danger, you have to put your money where your house is."