Operators who stay will pay thousands more in rent
CITY HALL — A new outdoor vending cart program on the Third Street Promenade could send at least 12 small business owners packing.
The program, intended to improve the consumer experience on the Promenade, has been taken over by a new management company. As part of the changes, the company has only signed on five of the 17 existing retail operators thus far. However, more may be allowed to stay if they are selected and can meet the financial obligations, as well as several conditions related to their business, including providing sales projections to the city.
Those who have been chosen to stay will face higher rent and thousands of dollars in start-up fees. Currently, rents are about $1,900 a month per cart. At a minimum, new rents are expected to be $2,600 a month, with at least $4,000 in cart renovation expenses, sources said.
Several Promenade cart operators showed up at Tuesday’s City Council meeting and expressed concern that bringing in a new vendor will make it difficult for the small business owners to stay afloat. City officials, on the other hand, said the vendor, Provenzano Resources Inc., has essential marketing expertise that will increase sales for cart operators.
In June, Provenzano Resources Inc., (PRI) was awarded a five-year contract to replace Promenade Services Inc., the group that had managed the Promenade’s cart operations since 1989. City officials and the Bayside District Corp. — a nonprofit group of business leaders who help manage downtown with City Hall — felt it was time to see if there were any vendors who could present better concepts or approaches to handling the Promenade that would make it more profitable for all parties involved.
City Hall put out a request for proposals in April of 2003 to see what offers it received. The incumbent vendor, Promenade Services Inc., had been managing the cart program on a month-to-month basis.
Since the approval of PRI’s contract in June, company officials say they have begun to revamp the cart program.
“We’re contracted and dedicated to giving Santa Monica the best,” said Deborah S. Kravitz, PRI’s president. “Therefore, there will be changes.”
The new program, expected to be underway by Nov. 21, will consist of 17 retail, five food and three artists carts. The new carts are intended to be a more attractive addition to the Promenade, Kravitz said. PRI also has hired a merchandising expert who will see to it the wares for sale at each cart are distinct from other carts and nearby shops.
Such moves will likely increase revenue for the cart operators, Kravitz said.
“Our professional merchandiser will make sure the tenant products are as well presented as they can be to maximize selling ability,” Kravitz said.
Cart operators say the changes are being made at their expense.
“It’s an abusive program not in the spirit of what the city supports,” said Sylvia Espinoza, a cart operator.
PRI, which owns the carts, has the discretion to choose which cart operators it will use, according to Miriam Mack, the city’s economic development manager.
“Everyone’s goal is to be making more money,” Mack said. “The bottom line is, there’s going to be change, but the whole idea is to provide a level of excitement and interaction on the Promenade, and ensure quality service and a quality product.”
Previously, merchants complained because an operator could have multiple carts on the Promenade. Under the new system, operators will only be allowed to have one cart, so “everyone can have piece of the pie,” Kravitz said.
Also, now there will be carts dedicated just to artists and to food vendors. The crafts to be sold, such as photos and paintings, are intended to promote LA-based artists, Kravitz said.
Staring Oct. 1, no carts will be operating on the Promenade while PRI renovates the carts’ storage facilities. The improvements are expected to be finished by Nov. 21, in time to have the new carts up and running for the holiday shopping season, Mack said.
Meanwhile, old operators whose contracts have been renewed will have a six-week lag during which they won’t be earning revenue.
The concerns that cart operators discussed at Tuesday’s meeting raised a few eyebrows among elected officials. Councilman Kevin McKeown said City Hall should respect the small business people whose hard work has helped make downtown vibrant and exciting for residents and visitors.
“I heard concerns that there may be some disparity between changes in the cart program and the council’s stated policy supporting local small businesses providing unique craft and artisan products,” McKeown said. “Along with similar concerns about possible changes in our beach food stand operations, this makes me want to examine our practices on leasing in public spaces and make sure we’re providing what our community really wants.”
City Councilmembers said they want a report from city staff that will update them on the process, as well as address the cart operators’ concerns.
Originally published in the Santa Monica Daily Press print edition on September 16, 2005. Read the original PDF.