By Barbara Tenzer
If one reads the article written by Andrew Fixmer on Feb. 4, 2002 entitled “Bayside business: Boom or blunder” in the Santa Monica Daily Press and really knows the history of the Promenade one would have to laugh at the faulty reporting. I don't blame the writer because he is new in town. How would he know that he is dealing with misinformation, political hype and a bunch of generalities that are not true? Let’s start with “we have a street that is so successful we have become a victim of our own success.” What does that mean? It is bad for rents to go up. Maybe it is also bad for theatre tickets, cars and everything else to go up. Let's control all prices.
Yes, the city has netted approximately $11,000,000 of revenue from the businesses and parking structures. Does that make it a success?
It is my opinion that this street is popular not because of the city but sometimes in spite of the city. Since the Los Angeles area is basically a driving town unlike San Francisco or New York there is a tremendous need for a Promenade like setting.
Our problem is not that we are dealing with over inflated rents, as one of our council members said. Our problem is finding a parking space in the structures, hoping the elevators work, and then wondering whether or not our car is going to be broken into by the time we return. Once we park our car and walk through the attractive garbage area of the structure or pass the scary bathroom area we then exit into the not so well signed alley that leads us to the Promenade. We now have the opportunity to walk by groups of vagrants that sit around all day asking for money. Or better yet, we get to be approached by panhandlers and have to actually respond to someone hitting us up for money. What is really the best is when we are sitting in the outdoor dining area and people hang over our table and ask us for money or food.
The reporter stated that dozens of restaurants have been forced off the Promenade in recent years. Ask him to name the dozens of restaurant. There are many reasons that different restaurants have left that have nothing to do with high rent. But everyone just assumes it’s about the rent. For example, do you remember, Remi, that wonderful Italian restaurant that left? They had nine years to go on their lease and were paying rent in the $3 per square foot range. Were they paying high rent? No! Were they making money? No! Was the owner tired of being in business on the Promenade and dealing with the parking problems, the panhandlers and the noise from the street performers? Yes! Everyone who knew him would tell you the same thing. The owner was tired of running the restaurant and moved to Europe. He would say he was forced off the Promenade but not because of the rents!
Let’s talk about the food court that was in the 1400 block. Everyone talks about those poor tenants but no one talks about the real story. Each one of the tenants signed a four-year lease and each lease had a clear cancellation clause in case the landlord wanted to develop the property. The landlord operated the building as a food court for over 10 years. He did everything he could to make it work. After many years of the tenants not paying the rent on time and vacating their stores in the middle of the night and the health department constantly threatening to close the place down, the landlord decided he had had enough. The landlord worked out a very good deal for the tenants that no one talks about. The tenants received two years notice to vacate even though their lease only called for one; six months free rent at the end of their lease term and $400,000 to split.
Also, in this article the reporter failed to say that there is an additional approximate 50,000 square feet of restaurants that opened up on Fourth, Second, Wilshire Santa Monica and Broadway.
I don't think the city actually understands the big picture and what their role is. The city’s role is safety and cleanliness; not deciding what the tenant mix should be.
The reporter stated that most officials agree that if the proper mix of retail, restaurants and entertainment on the Promenade is maintained it can’t fail. I am glad that most officials agree. While I am sure they have a lot of expertise in many different areas I don’t think any of our council members are experts in retail leasing or retail management, nor do I think it is their job to try to attempt to determine the proper mix. If the city had not created the original moratorium on restaurants maybe they wouldn’t be worried about retail today. It was the city that limited the number of restaurants — not the property owners. The property owners begged for more restaurants. It was the city that forced the property owners to look for retailers. And now the city is blaming the property owners.
Several years ago a fabulous restaurant tenant named Tutu Tango had negotiated a lease for a property in the 1200 block. The city said no. The restaurant was very unique. While you were eating local artists were painting in designated areas. All the pictures hanging in the restaurant were by the local artists. It was a place to eat as well as a place for Santa Monica artists to paint and sell their pictures. They are now located at Universal City Walk.
And, if this is an entertainment district where is the entertainment? Where is the music? How come the city just denied another great restaurant from coming to Ocean Avenue?
Kathleen Rawson has done a great job since she has been on board. But she got handed a mess. I think the more the city tinkers with the Promenade the more problems it will have. The rent is not the problem, neither is the tenant mix.
One last thought. Denny (Zane) is right. The Promenade was jump started by the theatres and there is a lot of competition for movie audiences today. But what will devastate the Promenade is not whether you have Old Navy to shop at or Mr. Green Jean’s store or whether there are a few less restaurants on the Promenade and a few more restaurants on Second or Fourth. Ultimately, what will hurt this area is the lack of parking, no convenient valet, panhandlers, garbage smells and the public being afraid for their safety. So yes, the city does have the responsibility to recognize their role if we are going to have real golden years. (Barbara Tenzer is president of Tenzer Commercial Brokerage Group Inc., which handles real estate in downtown Santa Monica.)
Originally published in the Santa Monica Daily Press print edition on February 7, 2002. Read the original PDF.