Beyond the Promenade

By Jorge Casuso

May 14 -- The site of the old Bob Burns on the corner of 2nd Street and Wilshire Boulevard is teeming with activity, as the dimly-lit cocktail lounge and restaurant, with its large wrap-around surface parking lot, has been replaced with five buildings.

The new structures are now home to two restaurants (Houston’s and California Pizza Kitchen), Hennessey & Ingalls (the art and architecture bookstore that relocated from the Promenade) and Emeritus College (which moved from a parking structure on Second Street). There are also two retail outlets (Knoll and Ceragem), as well as a number of office spaces.

“What an upgrade!” said John Warfel, who chairs the Bayside District board. “You get all that, instead of a restaurant and a parking lot.”

The corner of 2nd and Wilshire isn’t alone. All along the Bayside, new businesses are opening up or relocating from the Third Street Promenade, where commercial rents are among the highest in Southern California.

Circuit City has moved into a vacant bank building on the corner Arizona and Fourth Street, giving pedestrians reason to venture to what was once a concentration of banks.

New ventures are also banking on the former Home Savings of America building on 4th Street and Santa Monica Boulevard. The corner is now bustling with outlets for Burke Williams and Lulu Lemon, a Belgian chocolate retailer, as well as office and residential spaces. Down the block on 4th Street, Benihana’s has taken over an old store that sold inexpensive antiques.

“A lot of it was dead space,” said Warfel, who runs Metropolitan Pacific, a commercial real estate brokerage and investment firm. “It was not serving Santa Monica or Santa Monica visitors to any degree, and what we got was really dynamic.

“The evolution of Downtown is happening,” Warfel said. “Businesses are locating off the Promenade. It’s starting to take hold, and we have some major players like Circuit City.”

The transformation of streets flanking the Promenade – particularly 2nd and 4th – has been a long, difficult and ongoing task.

While locating off of the Promenade can slash rents by between one third and one half, the physical nature of the streets – which include banks, parking structures, churches and non-profits – is not conducive to strolling shoppers.

But while the Transit Mall’s widened sidewalks are helping to entice pedestrians to turn the corner and stroll to shops and restaurants drawn to the once dead streets, 2nd Street – remains a challenge.

Unlike 4th, with its freeway exit, there seems little reason to venture there.

“Second Street has not gotten the kind of activity (4th Street) has,” Warfel said. “Second doesn’t have vehicular traffic.”

A recent casualty of the dead street is Midnight Special, which announced last week that it will go out of business just six months after the independent alternative store moved there from the Promenade.

But things could start to change. Equinox Fitness – which will occupy 30,000 square feet of office space – is opening this fall.

“It will turn the lights on and create a much more active space,” said Robert O. York, a consultant for the Bayside District. “This should add quite a bit of activity there.”

The vitality of the streets surrounding the Promenade is indicated by a spike in sales tax revenues that are growing at a greater clip than those on the Promenade, York said.

“If you stand back and look at Downtown as a whole, there are a lot of good things happening with entrepreneurs and independent businesses,” York said.

“They may not be all on Third Street, but the activity Third Street is generating is spreading throughout the Downtown.”

If anything, the future looks even brighter, York said.

“There is still retail space available, so the trend is pretty clear at the moment,” he said. “There is continued interest, activity and investment in the greater Downtown.”