Peering into the Future of Downtown

By Jorge Casuso

Jan. 3 -- To many merchants, residents and officials in the Bayside District, the future of Downtown seems murkier than it has in years.

If you peer into the crystal ball with a hopeful eye, you’ll see tourists returning by summer and joining residents — already encouraged to shop local during the holidays — for a casual stroll or an outdoor meal on the widened sidewalks of the new Downtown Transit Mall.

A wary eye will look at 2002 and see travelers continuing to avoid taking to the air, worried shoppers cutting back on their purchases and Downtown residents trying to cope with the final phase of transit mall construction.

Whatever the forecast, Bayside officials agree that the new year likely will be a time to regroup and chart the future after the stunning success of the Third Street Promenade — where rents reached as high as $10 a square foot — was dampened last year by a slumping economy and hit hard by the September 11 terrorist attacks.

“The downturn has caused most people to pause and gives us an opportunity to reflect on how to approach the future,” said Kathleen Rawson, executive director of the Bayside District Corporation, which runs the Downtown. “The focus of this organization will have to change. We have to completely re-engineer the approach that we take.”

“It’s hard to predict too far out at this point,” said Rob York, a consultant to the Bayside District, “but there is a sense that the performance of the restaurants and retailers is stabilizing after the shock of the last two months. It will be a year of rebuilding our base and getting our confidence back. It takes some time for people’s confidence to go up.”

Economists disagree about the depth of the national recession or when it is likely to end — crucial factors in predicting the fate of Santa Monica’s economy. But barring the cautionary “unforeseen circumstances,” City economists are predicting that the worst of the slump will be over by early fall.

“There are two schools of thought,” said Mike Dennis, the City’s finance director. “One thinks the economy will bottom out around March. The second thinks there will be a longer and deeper trough that will last until the end of summer or early fall.”

A key question, Dennis said, is “what will be the effect of the recession on the capacity of the local economy to generate revenues? Will it return to normal? Or will it ratchet down a notch?”

Several factors seem to lead to the gloomier prediction. For one, the City, including the Downtown, won’t have the degree of new development it has had, Dennis said. Then there are the effects of more aggressive regional competition from other shopping destinations, including a new mall in Hollywood.

But two crucial questions still remain: When will the City see the full return of visitors from outside the county, who, according to a study by the Convention and Visitors Bureau, spent nearly $228 million in 2000? And will consumers go into debt and spend less? “We don’t think we’re going to have a clear answer until late spring,” Dennis said.

It is difficult to gauge consumer confidence at the peak of the holiday shopping season, but some merchants are cautiously optimistic.

“The last two weeks we’re obviously back,” said Charlie Christensen, general manager of Santa Monica Place, which has 140 stores and restaurants. “We’re seeing a lot of shopping bags. Maybe there’s light at the end of the tunnel.”

Although Christensen is hopeful the economy will rebound next year, he expects merchants, as well as shoppers, to be more prudent and apprehensive.

“They’re prepared to batten down the hatches and weather the storm,” Christensen said of the merchants. “I think everyone is being a little more prudent. I don’t know if it’s going to be a banner year or continue the downturn.”

Adamm Gritlefeld, whose Adamm’s Stained Glass and Gallery has been a staple of 4th Street for 21 years, believes lower rents on the street are luring restaurants that are in turn generating customers for neighboring businesses.

“It’s getting better, especially with the restaurants being pushed off the Promenade,” Gritlefeld said. “Fourth Street is only going to get better. Restaurants are the main thing. People go out for dinner and walk past the front window and call us.”

Still, Gritlefeld doesn’t expect a replay of 2000, when the downtown economy boomed. “It’s going to depend on the strength of the dollar and tourists and how people respond to the airline thing,” he said.

If the economy remains uncertain, completion of the transit mall by summer seems a sure bet. City officials are hopeful that the mall — which will be finished by June — will not only lure pedestrians to the streets around the Promenade, but also make it more convenient to take public transportation Downtown. There will be dedicated bus lanes on Broadway and on Santa Monica Boulevard and buses will make separate stops to drop off and pick up riders.

“As someone who lives in Santa Monica, I’m hoping that those who don’t take public transit will find that it’s easier to get downtown on the bus and not have to worry about parking or traffic,” said Joe Stitcher, customer relations manager for the Big Blue Bus. “I would hope people will use it to actually visit their city on foot instead of visit the one place they want to go and then leave.”

But some Downtown residents, who are trying to cope with the final phase of transit mall construction, predict that even when completed the project will snarl traffic on Broadway and on Santa Monica Boulevard with dedicated bus lanes.

“I see a lot more aggravation with the final phase of constructing the transit mall,” said Arthur Harris, a downtown resident who sits on the Bayside District board. “For residents there’s going to be a lot of noise and dirt. A lot of people don’t come downtown a lot because of the congestion. We’re still in a shakedown finding out what the transit mall means in the long run.”

As its executive director, Rawson believes the Bayside District Corporation must revisit its marketing efforts and continue catering to local residents, 80 percent of whom visit the Downtown at least once a week, according to a recent poll.

“We need to create affordable opportunities for merchants to advertise,” Rawson said. “We may have to look to special events and resurrect the lunchtime concert series to bolster a sense of community. We’ll probably keep the ‘shop local’ campaign going in some form.