> ## Content Index > Fetch the complete content index at: https://www.smdp.com/llms.txt > Use this file to discover other available public pages before exploring further. # Economist says SM must get creative to stay competitive - URL: https://www.smdp.com/economist-says-sm-must-get-creative-to-stay-competitive/ - Published: 2004-01-08T16:00:00.000Z - Updated: 2026-10-23T03:28:26.000Z - Author: Carolyn Sackariason - Tags: Business, Main St, #archive-import *Economist: Santa Monica, state ‘not in a bubble’* For Santa Monica’s economy to rebound, it’s going to have to reinvent itself. “Nothing remains forever. Maybe you had a hot product and maybe the sizzle has gone out of it,” said Jack Kyser, a chief economist for the Los Angeles County Economic Development Corp., which tracks and works with 88 cities in the county. Kyser spoke to a group of about 100 business people at the Santa Monica Civic Auditorium on Wednesday about the future of Santa Monica’s economy. “The economy is going to get better but for Santa Monica, you have some challenges,” he said, adding retail is fad driven and people now want more of a Main Street shopping experience. “You have to be strategic.” Santa Monica might have once been a mecca for business, tourism and retail. But as recent economic trends have indicated, it’s losing its edge — and staying competitive will determine how well Santa Monica attracts shoppers, tourists and new businesses. Like any business, the city is forced to find new ways to stay competitive, particularly in its top industries — the leisure and hospitality, retail and business sectors. “Santa Monica has held up fairly well in terms of tourism,” Kyser said, adding the local industry has been able to hold its daily room rate to more than $200\. He said hotel occupancy rates held relatively steady last year — 64 percent — and it’s predicted to climb to 75 percent this year. However, competition for the tourism dollar will inevitably get more fierce and Santa Monica must find inventive ways to market itself, Kyser said. And while the tourism sector has been relatively stable, retail sales in Santa Monica have flattened out. Kyser said the competition in surrounding cities can no longer be ignored. Changes at the Grove on Fairfax Avenue, and new multiplexes in Century City and elsewhere are drawing more consumers because they have kept up with what shoppers want. The demand for mid-sized retail stores like Robinson’s May and Macy’s have fallen by the wayside and have put Santa Monica at risk, Kyser said. “That is a problem for you and you have to look at that seriously,” he said. He pointed to other cities like Long Beach, which has reinvented itself as a destination for business conferences with its new meeting space, or Culver City, which is consistently talking to Kyser’s firm about how to become more competitive. He also noted that a friend of his does-n’t shop in Santa Monica anymore because she has to pay for parking, whereas other retail outlets provide it for free. “Little things mean a lot. You have to think about your opportunities,” Kyser said, adding doing a comparative analysis with other cities and stealing their ideas is not out of the question. The challenge is to maintain the demand for Santa Monica, especially when a lot of businesses and restaurants are moving back to the center of the county, Kyser said. The average salary for a worker in Santa Monica dipped slightly last year from $55,000 in 2002 to $50,000 in 2003\. The peak for employment in Santa Monica was in 1991 when 84,000 people had jobs here. That’s compared to about 70,000 this year. And while unemployment here is slightly lower than Los Angeles County — 6 percent — fewer businesses are setting up shop in Santa Monica. “A question for me is why are people not relocating in Santa Monica?” Kyser told the group. Perhaps it’s because City Hall doesn’t give incentives to businesses to come here. Kyser pointed to El Segundo, which actually waives a business’start-up fees if City Hall doesn’t issue the proper permits in a set amount of time. Santa Monica government is notorious for its bureaucratic process, which costs new businesses an enormous amount of time and money. New business in Santa Monica has remained flat for several years with about 6,000 establishments currently here. Of those businesses, 75 percent of them have between one and 10 employees, Kyser said. He added that there might be start-up businesses that haven’t been accounted for and those that do exist are most likely “fragile.” Santa Monica enjoyed a slow and steady population growth last year — 1,400 new residents moved here, bringing the population to 90,700\. But there isn’t enough affordable housing to keep up with the demand, Kyser said. On a national level, Kyser said there was tremendous growth in the third quarter of last year and 2004 should see solid 4 percent growth. The next year looks even better, he added. In California, personal income growth rose 3 percent, despite that a lot of high tech jobs were lost, as well as jobs within a wide spectrum of companies that are using labor overseas, Kyser said. Doing business in California will continue to be a challenge in the coming years as energy and employee costs like worker’s compensation and health benefits rise. “It’s gotten very expensive for any business to hire someone in California,” Kyser said, adding that Gov. Schwarzenegger’s plan to lure more business here will be affected by those increasing costs. The focus also should be to keep the current businesses from moving elsewhere. “We are not in a bubble,” he said. “They can move to another state or go off shore.” ![](https://storage.ghost.io/c/55/9f/559f9abc-8372-4a2e-8c2d-27386da4e363/content/images/2026/10/010804-03_01.jpg) Jack Kyser of the LAEDC speaks at the Santa Monica Civic Center Auditorium on Wednesday morning. (Photo: Carolyn Sackariason/Daily Press) *Originally published in the Santa Monica Daily Press print edition on January 8, 2004.* [Read the original PDF.](https://s3.us-east-1.amazonaws.com/smdp%5Fbackissues/010804.pdf?ref=smdp.com)