Tax ignites controversy over Santa Ana’s downtown

Almost a year ago, George Mendoza moved his Corona barbershop to downtown Santa Ana.

The shop, on the east side of 4th Street, features tattooed barbers and rap music. Only steps away, vendors hawk sliced fruit and businesses sell quinceañera gowns and cowboy boots.

Mendoza, 37 and the son of an immigrant, remembers how when he was a child, his family would shop in this same area, once called Fiesta Marketplace. More often than not, he says, they headed home clutching multiple bags of clothing and shoes.

“We were the Spanish-speaking family that used to shop here in the early ‘80s,” he said. “And we’re the family that left.”

Fiesta Marketplace has since been renamed the East End and is at the heart of an intensifying debate involving the city, property owners and tenants over the future of the downtown district.

The fight came to a head during a City Council meeting last week that dealt with a controversial special business tax to boost downtown Santa Ana as a go-to destination.

Councilwoman Claudia Alvarez, in a fit of anger, accused Irving Chase, who owns much of the East End, of leading an “ethnic cleansing” campaign in the downtown core of Latino business owners. Then she compared him to Adolf Hitler.

“Hey, so if Hitler rents you a place, he’s giving us a great deal, so who cares what he stands for?” she told the council. “We need to put a stop to this.”

Chase, whose parents survived the Holocaust, walked out of the meeting, as did his son, Ryan.

Alvarez has since apologized, but her comments underscored the simmering tensions and are not likely to be forgotten soon by either side.

The elder Chase, who helped develop the original Fiesta Marketplace, says he is only trying to bring more people to the area’s restaurants and nightclubs. He also says he wants to keep longtime shoppers, many of them Latino immigrants, as well as to reach out to their children and grandchildren.

“We are leading the change on our property,” Chase said.

“I want original entrepreneurs, people who are starting businesses that aren’t done anywhere else. If you can find everything in South Coast Plaza or Main Place, or the Block, why would you go to downtown Santa Ana?”

The immigrant customer who used to frequent the area has moved on to big-box stores like Wal-Mart and Home Depot, he says, and business owners need to adapt to new economic realities.

“They need to reach out to more than just the narrow customer that was once there,” Chase said.

That, however, has prompted some local activists to refer to Chase as the “great gentrifier.”

He and his son have been accused of acting in self-interest as board members of Downtown Inc., an organization charged with promoting the downtown area and providing security services. Ryan Chase is the agency’s president; Irving Chase had been serving as secretary but stepped down after Alvarez’s comments.

The organization is funded through that special business tax, which supporters see as vital to making the area attractive to visitors. Opponents, however, say the tax money should benefit all downtown merchants not just a few and argue that the real aim is to push out Latino businesses.

Some storefronts have displayed signs opposing the tax. Shawn Makhani, who owns Telas, a fabric store off 4th Street, is one of them. He said he appreciated Alvarez for standing up for people like him, whose tax bills have almost doubled.

“I appreciate her guts,” he said.

Sam Romero, 76, has owned a specialty Catholic gift shop off 4th Street for 30 years. He said Downtown Inc. is promoting only the night life, not the family atmosphere. He said some of the downtown merchants are being “choked economically” because of the tax. As Romero noted, funds are not being used to promote daytime businesses.

“It’s pro-drunk, anti-family,” he said.

Arturo Lomeli, a dentist who has owned property in the area since 1993, says downtown business owners are being “taxed unconstitutionally.” He says he is paying an extra $3,000 a year on a historic building for marketing and security services that don’t benefit him.

“It might not put me out of business but, philosophically and constitutionally, I have an issue,” he said.

In the coming months, new restaurants and retail shops are expected to open. Ryan Chase, 29, says such changes are needed if downtown Santa Ana is going to thrive again, and he points to the recent reopening of the venerable Yost Theater, a concert and events venue, as another good sign.

“Orange County needs culture,” he said.

On a recent Saturday, Tomas Ramirez, 36, stood outside a Mexican restaurant smoking a cigarette. The lifelong Santa Ana resident said that when he was a child, “you wouldn’t come here after 5 o’clock.

“This has been known as a bad area to come after dark,” he said. “But now, it’s beautiful.”

nicole.santacruz@latimes.com