Last month, downtown Manhattan Beach’s only lingerie shop closed its doors after 21 years. Lulu’s owners, David and Cindy Levin, decided to retire and terminate their lease after their building’s ownership changed.
Taking its place on the corner of Manhattan Beach Boulevard and Highland Avenue is San Francisco-based retailer Marine Layer, which has three shops in San Francisco and one on Abbott Kinney Boulevard in Venice.
Lulu’s closing reflects an accelerating trend of high-end chains and offices replacing independent retailers in downtown Manhattan Beach.
A single block on Manhattan Beach Boulevard, once exclusively independent retailers, is now rampant with familiar corporate names: Noah’s Bagels, Jamba Juice, Peet’s Coffee, The Coffee Bean & Tea Leaf and Free People apparel store.
“Some people resent the fact that the town’s changing, which I don’t understand,” said David Levin, who owns H.L. Sports, a sporting-goods store in Hermosa Beach, and serves on the board of the Manhattan Beach Business Improvement District. “Manhattan is becoming more affluent, and that affluence has created an interest from all these (chain) stores. They want a presence on these streets, so they’re willing to pay to do that.”
It happened on Montana Boulevard in Santa Monica and Abbot Kinney in Venice, he noted.
Not everyone shares Levin’s laissez-faire philosophy. Increasingly, over the past few years, Manhattan Beach residents have been urging the City Council to intervene in the downtown’s evolution. The downtown is losing its quaint hometown feel, they argue. Without intervention, a McDonald’s could one day sit in place of The Kettle, the beloved eatery in the heart of downtown. In the 1970s, the city went to court to block a McDonald’s from opening down the street from The Kettle, at the former LaMar Theater location. The city prevailed, and that location is now a Skechers office.
The City Council recently responded to concerns about the downtown by agreeing to recruit a consultant to carry out an elaborate study and community outreach effort. An estimated $100,000 will be allocated to determine how to balance property owners’ rights and residents’ wants in the downtown business mix.
On July 15, the council passed an emergency zoning ordinance prohibiting street-level changes of use in the downtown for 45 days. Laurie Jester, the city planning manager, described the moratorium as a “timeout” to give the city time to determine its next step. On Aug. 19, the council will hold a public hearing to consider extending the moratorium for another 10 months.
For 18 years, Magpie, an independently owned gift shop, occupied a storefront near the intersection of Manhattan Beach Boulevard and Highland Avenue, in the heart of downtown Manhattan Beach.
At $3 per square foot, the $6,000 monthly rent became too much during the recession. In 2012, the company terminated its 10-year lease and moved to Santa Barbara, building owner Tony Choueke said.
After Magpie moved out, a local furniture maker moved in. He lasted five months before calling it quits. The independent garment shop that followed lasted four months, despite the rent having been lowered to $2.50 per square foot, Choueke said.
In a few months, when the $1 million in improvements to the of the two-story building are completed, Magpie’s ground-floor space will be listed for $10 per square foot. The second floor will be $6 per square foot.
Choueke said the higher lease rates are necessary to justify the cost of the improvements.
“If the rents don’t go up, nobody’s going to invest in making nice buildings,” he said. “You can’t maintain a city if you don’t upkeep it.”
Sotheby’s International Real Estate has expressed interest in occupying the entire building, but the moratorium would block that prospect. The company has yet to decide whether it wants the upper floor.
“What’s wrong with having a global brand?” asked Choueke, who owns four other downtown commercial properties. “It’ll bring in the customers.”
Choueke said he’s not against retail, but he urges the council to look past the emotional response and ask what tangible benefits independent retailers bring to the city.
“If the business is not generating profit, obviously the person can’t pay the rent and that’s what capitalism is based on,” he said. “If it’s not making a profit, is it the responsibility of the property owner to subsidize that?”
In 1985, Manhattan Beach native Kris D’Errico found her first job in downtown Manhattan. Today, she owns two downtown apparel shops, Bella Beach and Bella Beach Kids.
“What is downtown Manhattan Beach?” she asked at the July 17 council meeting. “It’s not Sepulveda Corridor. It’s not the mall. It’s the heart … a sense of community with people working together. If we don’t stay unique, we’ll be lost in the shuffle of corporate America.”
“Every property owner is different,” said Kelly Stroman, executive director of the Downtown Manhattan Beach Business and Professional Association. “Some see the value in having (independent tenants), while others don’t. Those who don’t are more apt to go for a higher rent. It could be double what locals pay in other areas.”
Julie Hantzarides, owner of the Greek-Italian restaurant Old Venice on Manhattan Avenue, has benefited from a sympathetic landlord. In November 2006, her restaurant and four neighboring businesses burned down as the result of an electrical short.
The restaurant had been serving the downtown for nearly three decades. After the fire, the community raised money for the five businesses, which “trickled down to every employee,” she said recalls.
Tragedy struck Hantzarides a second time when her husband Jimmy died in a bicycle accident less than two years after the fire. Fellow downtown merchants banded together and started a fund to help her family.
After the burned-down building was replaced, the rent was nearly doubled. But the landlord offered the original five businesses discounted rates, Hantzarides said.
“We are incredibly fortunate to have a landlord who cares about the integrity of the downtown,” she said. “She’s always been extremely fair.”
The last time the city asked its residents to envision their ideal downtown was 1996, after the city purchased the former Metlox Pottery factory on the east edge of the downtown.
After a long series of meetings, a consensus emerged among residents and other stakeholders: a town square of sorts with dining, extra parking and no movie theater.
“Metlox Plaza is a very good example of the city coming together and building based on the needs and wants of the residents and the town,” downtown’s executive director Stroman said. “That was the beginning of the evolution that we see now.”
But with Metlox, they were working on a blank slate.
“That is the challenge,” Community Development Director Richard Thompson said recently on “South Bay Show,” an online radio show. “Here we have a built-out downtown that is not broken. It’s really in good shape. The question is, how do we continue with that and keep the small downtown feel?”
Thompson said he believes there is a place for offices, banks and chain stores in the downtown. The challenge is agreeing on where.
“I don’t know if there’s a perfect model,” Chamber of Commerce President James O’Callaghan said. “Every city does it a little differently.”
Downtown Seal Beach is widely recognized for its success in fostering small, mom-and-pop businesses in its downtown. The city restricts the downtown’s ground-floor storefronts to businesses that encourage outdoor activity and maintain pedestrian flow, such as cafes, ice cream parlors and dining with patios, according to Jim Basham, Seal Beach’s community development director.
During Old Town Pasadena’s revitalization a few years ago, zoning restrictions were used to encourage sales tax-generating businesses, and to restrict the number of offices and service-based businesses. O’Callaghan believes a mixture of the Seal Beach and Pasadena models could work for Manhattan Beach.
“I think a good, healthy compromise will eliminate some of the talk in the past about blatantly outlawing certain types of businesses,” he said.
Choueke believes the city should encourage property owners to invest in improving the downtown.
“A lot of these properties can be developed for better use. But if the city alienates the property owners, everything will deteriorate.”
January 28, 2015
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