Downtown Santa Monica has felt the recession but not as much as the city’s other commercial districts.
Kathleen Rawson, the Executive Director of the Bayside District Corporation, who manages the city’s downtown, explained that Santa Monica’s downtown area has certain attributes that make it more able to withstand a recession than other areas. These characteristics include “a strong brand identity,” being near the Pacific Ocean, being close to hotel properties, having a location near people with disposable income, and having a better infrastructure than other commercial destinations. She also noted that Santa Monica’s downtown is dynamic and always changing so it encourages people to come back. An example of this is the continual change of street performers.
Another sign of the downtown’s vitality is the stability of its businesses. Rawson stressed that “many tenants have renegotiated their leases” and property owners are willing “to make a deal with existing tenants.” The Third Street Promenade has the highest occupancy rate of downtown as a whole but there is also renewed interest in second and fourth streets. In addition, the re-opening of Santa Monica Place in August helped generate a lot more pedestrian traffic on the Promenade and this trend has continued. Also contributing to the downtown area’s continued success has been the Buy Local Campaign.
John Warfel who is a member of the Bayside Corporation’s board of directors and the president of Metropolitan Pacific Capital Incorporated said that the downtown real estate market for both office space and retail has stabilized but is “still soft.” It’s “still a different leasing market” than it was before the downturn and the leasing of spaces on streets other than the Promenade is taking longer. Downtown projects that already had their financing in place are moving forward but those seeking financing are confronting a more conservative market. He also noted that “we’re now working harder for the same business activity” than before. “The recession has made everyone realize how fragile retail districts can be.”
The president of Jewels by Kurt, Michael Kurt, noticed the downturn has made his customers “more selective, more cautious about what they are buying, and looking for quality that suits them.” He has not lowered his prices because he believes they have always been reasonable. His family has been in the jewelry business in Santa Monica for 48 years.
Shannon Leonard who owns Beadniks opened her franchise at the start of the recession and has “seen an increase in business every month.” She attributes her business growth to the use of focused marketing and word of mouth. She also noticed that people are bringing a lot of beaded items in for repair in her classes, which are being taken by people who want to supplement their income by selling their creations on crafting websites or at their office.
Hi De Ho Comics owner, Saleen Aaron, found that his business has “definitely been slower this year” but tourists have helped replace some of his lost sales. His regular customers are comic enthusiasts and when they become the mainstay of his business he knows the economy is slowing. He opened a second store in Laguna Beach this summer. In his view a down economy is a good time to expand because it’s “easier to find specialized employees who are focused on our type of product.” He thinks his business will continue to do well over the next two years because Hollywood will be releasing a number of films that will cause an “upswing in comic reading.” His business has been in Santa Monica since 1977.