THE CHANGING FACE OF DOWNTOWN : Government Money Becomes Urban Lifeblood : Innovation and Optimism Thrive on Public Funds in Inglewood, San Pedro

Three years ago, vacancy rates in downtown San Pedro topped 50% and dozens of storefronts had deteriorated into revolving doors for failed businesses.

“Buildings all over were being boarded up,” one property owner recalled. “Everyone was really feeling helpless.”

Today, much of downtown San Pedro remains depressed, and some shops are still calling it quits. But vacancies are down, and new businesses are moving into town--and staying. Merchants say new-found optimism has swept through the half-century-old business district.

Scores of merchants and land owners, with the help of Los Angeles harbor-area Councilwoman Joan Milke Flores, are leading a revitalization effort that they hope will turn downtown San Pedro into the jewel of the South Bay.

Federal Funds

The group will pump more than $2.6 million in public and private money into downtown over the next year. The money, most of which comes from the federal government, will be used to improve public facilities improvements and upgrade the facades and interiors of dozens of shops along Pacific Avenue and 6th and 7th streets.

The revitalization effort is just one example of how cities in the South Bay are attempting to reverse decay in downtowns by flooding them with government money. Government-sponsored projects are also under way or in the planning stages in downtown Torrance, Manhattan Beach and Inglewood.

The fledgling San Pedro program and the 15-year-old Inglewood effort--which is the oldest and most dramatic downtown renewal in the South Bay--illustrate how two cities have used money and urban planning in different ways to tackle similar problems.

The San Pedro Revitalization Corp., as the agency in that community is called, in 1984 grew out of a committee of merchants, community leaders and city officials that Flores had appointed to look into the problems of the downtown.

Quaintness Important

“The downtown really needed a shot in the arm,” said Ann D’Amato, a member of the corporation’s Board of Directors and a deputy to Flores. “Keeping the quaint flavor of San Pedro is important to people who live here.”

Last year, the corporation was designated to oversee the San Pedro portion of the city of Los Angeles’ CARE (Commercial Area Revitalization Effort) program, which funnels federal Community Development Block Grant money into run-down commercial districts in low- and moderate-income areas of Los Angeles. With that designation came $200,000 a year to operate the agency and pay four full-time staff members.

“The purpose of the program is to encourage private money to come in,” said LeRon Gubler, executive director of the San Pedro Peninsula Chamber of Commerce, which had originally proposed the revitalization effort to Flores. “It is sort of a partnership. The city uses public funds to entice private funds.”

About 20 miles to the northwest of downtown San Pedro, Inglewood city officials have been trying for 15 years to turn around their downtown, once the commercial center of the entire South Bay and now a struggling business district in search of a new image.

Shoppers Lured to Malls

In the late 1960s, merchants in downtown Inglewood faced many of the problems now confronting downtown San Pedro. New shopping malls siphoned customers from Inglewood’s deteriorating commercial center, changing demographics wiped out the area’s traditional customer base, and before long, “For Rent” and “Going Out of Business” signs filled storefront windows.

The city of Inglewood, in the urban-renewal style of the time, declared the area a redevelopment zone, and began tearing down buildings.

Much of the money came from federal programs aimed specifically at revitalizing central cities, including the National Redevelopment Program, Urban Renewal Grants, Urban Development Action Grants, Comprehensive Planning Assistance, various other grants, including Community Development Block Grants and those offered through the Department of Commerce’s Economic Development Administration. (In recent years, the federal government has phased out most of those programs and several cities now use federal Community Development Block Grants for downtown revitalization.)

From 1971 to 1976, Inglewood and other government agencies spent about $50 million in local, county and federal money to build a series of new government buildings and senior citizen housing complexes in the downtown, and it offered tax incentives and rebate programs to attract private developers.

“The philosophy was that if the city showed some confidence in its own future, that the optimism would be contagious and have some effect on the attitudes of private developers,” said Inglewood City Manager Paul Eckles, who was assistant city administrator when the redevelopment began.

Government Buildings

The city built a new city hall, a Police Department building, a public library and a main fire station, and persuaded the county to build a municipal courthouse and county health building in the civic center complex. The new construction sparked a flurry of office development in the so-called In-Town Redevelopment area, which is bounded by Florence Avenue, Locust Street, Manchester Boulevard and Fir Avenue.

But unlike the old downtown, most of the new development was not retail.

Several large office and residential projects were built, including the Kaiser Permanente medical facility, the 200-unit Inglewood Meadows housing complex on Locust, and two 80,000-square-foot office towers on La Brea Avenue. The city is now negotiating with developers interested in building two separate 400-unit housing projects in the downtown area.

Eckles said the redevelopment program was designed to reduce the retail space in downtown Inglewood while providing nearby office and residential developments to support a smaller, more economically viable commercial downtown.

“We have taken out a lot of the old marginal retail structures,” Eckles said. “We think when we are done with the project the retail that remains will be better because there is less of it, and what is there will be better supported by surrounding office and residential developments.”

Some Merchants Complain

But while Eckles and other city officials hail the downtown redevelopment as a success, some merchants complain that the city has become too large a landlord in the downtown.

“The private people have been driven out,” said Jack Le Van, who owns a retail building on Market Street. “The city has been in direct competition with the general public for space and access in the downtown. The city has acquired the land through redevelopment and put up buildings that sit empty with high rents.”

One city official, who spoke on the condition he not be identified, agreed.

“As far as I am concerned, the city has turned its back on small business,” the official said. “The city has brought in a bunch of new office buildings and taken steps to make Market Street look good, but the small businesses in this city are still suffering.”

And apparently some of the big businesses are, too. All of the downtown department stores have closed or are planning to do so in the near future, citing declining sales. J. C. Penney closed a year ago, the Boston Store will close this month, and city officials said that Sears--the largest store downtown--is expected to close its store on Manchester within a year. Sears officials declined to comment.

Street Crime

Some downtown merchants and residents also complain that redevelopment has not eliminated the purse snatchings, muggings and robberies that have scared away customers for years, nor has it wiped out an adult movie theater and some rough-and-tumble bars along Market Street that put a damper on evening business. Some merchants also say that redevelopment has not helped the downtown shed its image as a center for low-quality, discount merchandise.

“It’s hard to convince people that they can find fine merchandise in downtown Inglewood,” said Darla Beadle, co-owner of Red, a boutique on Regent Street that carries high-fashion women’s wear.

While acknowledging that not all is perfect, city officials say it would be much worse downtown if the city had not gotten involved.

“You just have to look around to see that there has been a dramatic transformation in the appearance of the downtown,” Eckles said. “I shudder to think what it would be like if there had not been an active redevelopment effort.”

Empty Lot a Reminder

Merchants and business leaders in San Pedro who are pushing for change in their downtown do not consider Inglewood’s route to revitalization an option. They say a barren five-acre lot just several blocks from downtown San Pedro serves as a painful reminder that old-style, knock-’em-flat redevelopment projects won’t work in San Pedro.

The lot, smack in the middle of the city’s Beacon Street Redevelopment Project, is the site of a proposed 200-room hotel and office development. It has lain empty since 1971, when city bulldozers leveled several blocks of bars, flophouses and thrift stores that had given the area a notorious reputation among seamen and residents.

City officials say developers are expected to break ground at the site in February on a long-awaited Sheraton hotel and an adjacent office and commercial development. But many merchants say they remain skeptical that a hotel ever will be built on the site, and others say it is small consolation for a decade and a half of fallow land.

Revitalization in downtown San Pedro, merchants and city officials say, means preservation, not demolition.

“The problem is that you make the land vacant, and then you are the victim of the market as to when somebody will come in and replace what was there,” said Gerry Fagan, who with his wife runs Lad n’ Lassie children’s clothing store, one of the most successful downtown businesses.

Preservation Preferred

Added Gubler, of the local Chamber of Commerce: “Knocking things down was typical of urban renewal in the ‘60s and ‘70s. Today, there is a growing movement to preserve.”

The San Pedro Revitalization Corp., while still operating as a committee, hired a consultant to study the needs of the downtown. After 18 months, the Envicom Corp. produced more than 500 pages of reports, including recommendations about how to upgrade the downtown.

The study outlined many of the constraints on the downtown, but it also issued a glowing economic forecast for the area. With proper marketing and upgrading of downtown businesses, the report concluded, the central business district has the potential to achieve five times its current sales--$77 million per year, compared to its current $15.8 million.

While city and revitalization agency officials acknowledge that it will take years for the downtown to reach that potential--even under ideal conditions--they say residents and merchants will start seeing changes this year.

Larry Montgomery, executive director of the revitalization agency, said the agency attracted 13 new businesses to the downtown in 1986, and he expects more this year. The agency does not keep statistics on closings, he said.

Face Lifting Started

Last year, 39 projects in the area qualified for the city’s rebate program for design improvements. Facade work along 6th and 7th streets is expected to begin in March, and public improvements--new trees, benches, crosswalks and street lights--should get under way in June, he said.

“The planning is behind us, so now it is just a matter of time,” said Marylyn Ginsburg, a member of the agency’s Board of Directors and the owner of the Grand House, a successful downtown restaurant. Ginsburg recently purchased property on 7th Street, where she is building a British-style pub, and she is expanding Grand House to include a bed-and-breakfast operation.

“This place has been a gold mine for me, and only gradually are people going to realize that it can be for them, too,” she said.

While merchants in San Pedro are not looking to Inglewood-style government construction to save the downtown, much of their optimism is dependent upon government participation of a different sort.

Biggest Landlord

The largest landlord in the harbor area is the Port of Los Angeles, and it is no coincidence that confidence in the future of downtown San Pedro comes as the Harbor Department is developing or planning several major commercial and tourist attractions.

The port is making improvements to the Ports o’ Call seaside shopping village and is planning a $34-million fisherman’s wharf near the harbor’s main channel. It is developing a 1,357-slip marina, hotel and restaurant complex on the West Channel in San Pedro, and has plans to build a $54.7-million hotel and commercial development at the new World Cruise Center near the Vincent Thomas Bridge. The port is also planning a shuttle service between the new developments and downtown.

The Envicom study on downtown San Pedro identified the community’s ability to capitalize on traffic generated by the port as crucial to the success of the revitalization effort.

“The port is putting a tremendous amount of money into this community,” said Ginsburg, of the Grand House restaurant. “It takes a while to turn around a shabby image, but with our closeness to the port, the good weather and the beauty of the harbor, I don’t see how the area can be anything but thriving in the next several years.”