Keeping Independents Alive
Popular shopping thoroughfares such as Santa Monica’s Third Street Promenade and Colorado Boulevard in Old Pasadena hope to come full circle.
There were few patrons back in the late 1980s when these slumbering shopping districts tried to reinvent themselves after years of neglect and destitution. Only the small merchants who believed in the areas helped keep them afloat until the mega-chains arrived.
As progress would have it, rents have squeezed out some of these independents, and now district officials are focusing on bringing them back.
“We need anchors to drive pedestrian traffic, and we need these smaller entrepreneurs to maintain the balance and character of the area with their unique offerings,” said Maggie Campbell, president of the Old Pasadena Business Improvement District, which manages the 22-block shopping area on and surrounding Colorado Boulevard. “As we become more sophisticated, there’s a growing recognition that we don’t want to become this predictable shopping destination, one that you would find at a mall.”
Campbell said a plan is still in the making for the district, which has seen its sales drop to $121 million from $160 million in the last four years, but the plan involves the support of property owners who are the ones who control the real estate transactions.
Home to Crate & Barrel, J. Crew, Victoria’s Secret and Banana Republic, Old Pasadena claims that 51 percent of its roughly 280 businesses are independent operators—although most independents fall in the restaurant category.
Open since 1988, Lulu Brandt is a boutique off Colorado Boulevard that sells designer labels such as Rene Lezard and Blumarine to the 30- to 60- year-old shopper. Co-owner Karen Brandt said that business is ahead of last year slightly, but she’s having to work harder as shopping competition grows. Last year, the Paseo Colorado open-air mall bowed just blocks away.
“The pendulum has swung in the other direction, and people realize that going to Old Pasadena is like going elsewhere,” Brandt said.
It’s a problem that’s recently played out on the now successful Third Street Promenade, which generates $200 million in annual sales. Like Old Pasadena, Third Street was once blighted and ignored. A number of the smaller merchants who eked out the tough first few years have come and gone, including those dozen or so tenants at the food court that was built over by a Bebe clothing store about three years ago. Recently, property owner Wally Marx had to cancel the lease he helped subsidize for the Midnight Special Bookstore, which plans to leave the boulevard by spring.
One standout tenant is Adam Shaffer, a pioneer on the street who opened his Undercover boutique in 1993 when monthly rents per square foot were in the $2–$4 range. His rent since has skyrocketed to $10 a square foot, but he manages to bring in $1 million to $2 million in yearly sales with the help of celebrities such as Shannon Elizabeth and Darryl Hannah as well as fashion-forward consumers who don’t mind the clothing’s triple-digit price points.
Shaffer, who does plan to add lowerpriced items to his mix to appeal to tourists, said he believes the addition of like-minded stores would bring more serious shoppers to the boulevard.
“I’d welcome more independents because they’d bring the types of customers I’d want—those who are looking for something unique and different,” Shaffer said. “The critical masses aren’t my market. The majority of the shoppers on the street don’t have the money for my clothing.”
Marx, however, believes that prohibitive rents don’t make recruiting mom-and-pop businesses an easy proposition.
“Every shopping district has to address the issue of the independents because having a Gap on every corner doesn’t help anyone—including the Gap,” Marx said. “But the reality is that the more successful stores are the bigger ones with deeper pockets who can weather the good and bad times.”
To get a handle on the issue, the Promenade has banned the conversion of restaurants into retail stores as part of its one-year moratorium. Officials with the Bayside District, operators of the Promenade, say the real opportunities for smaller businesses exist on adjacent streets. In the last year, Buca di Beppo and Benihana have popped up on Santa Monica’s Second and Fourth streets. Those anchors will in turn lure new merchants to the area, said Kathleen Rawson, executive director of the Bayside District.
“We don’t have four walls on Third Street, so we see a significant opportunity to explore ways to bring in unique retailers to balance downtown’s shopping needs,” Rawson said.
With construction recently completed on the $13 million Transit Mall project surrounding the Promenade, the region now has dedicated bus lanes, benches, drinking fountains, widened sidewalks and extra lighting to facilitate pedestrian traffic among the streets.
Rawson points out that the model worked in Beverly Hills nearby pricey Rodeo Drive. In the last few years, neighboring Beverly Drive and Camden Drive have flourished with their cheaper rents.
Other districts that pride themselves on their more independent spirit also pay the price: They see more turnover and miss out on the advertising benefits of the bigger chains. At the Gaslamp Quarter in San Diego, where about 100 restaurants and pubs and 100 stores fill the eight-block-long district, the area’s biggest chains are Borders, the Old Spaghetti Factory, TGI Friday’s, Z. Gallerie, Urban Outfitters and Lucky Brand Dungarees. Most of the other tenants are lesser-known restaurants, boutiques and service stores.
Over the years the area has built itself up as an entertainment draw, and now it’s trying to alert local shoppers that a retail bonanza awaits.
“It’s hard to get the general San Diegan down here to shop, and more recognition is needed that there are authentic, unusual items for purchase here,” said Dan Flores, the associate executive director of the Gaslamp Quarter. “We just don’t have a large budget, and that’s our disadvantage.”
