Landlords will be represented on Promenade task force
Feeling pressure from the business community, city officials decided Tuesday to allow a landlord to be part of shaping a new and improved Third Street Promenade.
The Santa Monica City Council ignored recommendations by senior staff by adding a landlord to the Third Street Promenade task force and shortening the ad-hoc committee’s life-span to only one year.
Senior city staff members recommended the council extend the current 45-day retail moratorium for two years and create a task force that included no landlords or business owners.
Critics said following the staff’s recommendation would cripple the downtown economy and frighten potential new businesses from setting up shop. They say the council has been far from pro-business and could make already tough economic times more difficult for merchants.
“Obviously, from the beginning it has been a problem to us because they (city officials) think a small group of people can dictate what the market needs,” said Kathy Dodson, executive director of the Santa Monica Chamber of Commerce. “Not having any business interests on a group that is going to decide and determine what’s down there without paying any heed to what works down there is very problematic.”
City officials say the Promenade is quickly becoming a retail corridor without any flavor, resembling shopping fare commonly found in suburban malls. The city for years has tried to manage the mall so it would be a unique and vibrant entertainment center. Ten years ago there were too many restaurants and not enough retail. Today, it’s just the opposite — large retailers are able to pay more per square foot than small businesses. Looking for the greatest return on their investment, landlords let the space go for whatever the market will bear.
But the Santa Monica City Council is trying to buck that economic trend. It voted last month to place a 45-day moratorium on all development and expansion, consolidation and changes in use of commercial properties along the Promenade. In the meantime, a task force is being formed to address the issues.
The task force will be asked to consider regulations that would prevent any new retail stores from coming in and how — if at all possible — the city can deter landlords from raising rents so small, locally owned stores and restaurants can remain there.
On Tuesday, the council directed the city’s community development department to take applications from Promenade landlords to serve on the task force. The motion adding a land owner passed 6-1, with Councilman Herb Katz casting the dissenting vote.
“I don’t see why somebody who owns land down there automatically qualifies as somebody to serve on the task force,” he said. “I think the people recommended to serve on the task force would do a fine job.”
Local businesses disagreed with Katz, saying complex issues regulating the Promenade required the work of a task force with a landlord’s input.
“The balance of property uses is a complex issue. It needs the work of a task force,” said Kathleen Rawson, executive director of the Bayside District Corporation, which oversees the downtown core. “But we believe there needs to be a broad mix from both the city and business and landlords.”
As part of the moratorium, Mayor Mike Feinstein and mayor pro tem Kevin McKeown convinced the council 4-3 to prevent landlords from consolidating retail space so stores can be larger, which has been done in the past to accommodate nationwide retail chains. They fear consolidation of spaces will lead to larger rents and less variety of businesses.
“I am very worried about the corporatization of Santa Monica as a whole and especially on the Promenade,” said McKeown. “I hope this will at least allow the small businesses and restaurants a chance to compete with retailers for space.”
The council then extended the current moratorium for one year, over the objection of Feinstein who thinks the city is undermining its efforts by not giving the task force proper time.
“The problem with giving us too much time is that we’ll use it,” said Councilman Ken Genser. “No matter if we could get our work done in a shorter amount of time, we will take all that we have been given. So the shorter the time the better.”
Residents Tuesday said landlords are the ones to blame for the Promenade’s problems and some even accused landlords of price gouging tactics.
“Landlords are jacking up the rents. It’s price gauging in a sense. You pay what they want or you are forced out. Rents are going up and people are going out,” said resident Joe Natoli. “The city has to take the lead here. Pull in the landlords and make them explain why they feel the need to triple rents and mistreat businesses.”
“The city has to take the lead here. Pull in the landlords and make them explain why they feel the need to triple rents and mistreat businesses.” — — JOE NATOLI Santa Monica resident
But landlords disagree, saying they feel the city would only make matters worse by not allowing the real estate market to operate without government intrusion.
“My eyes almost popped out of my head when I saw a two year moratorium being suggested. That may not be long for city government but it means a lot to businesses,” said Ann Greenspun, president of the Santa Monica Chamber of Commerce. “It does seem we need representatives of all the aspects of the Promenade on the task force. Only then will we be able to head off the heat and work together.”
Originally published in the Santa Monica Daily Press print edition on January 9, 2002. Read the original PDF.