Garment Mart Shows Signs of Unraveling : Business: A tenants association at the California Mart votes to leave Downtown, possibly for Santa Monica. The group says crime and decay make the area unsuitable for the high-fashion industry.
More than 200 tenants of Downtown’s California Mart wholesale garment building have voted to leave the area, saying crime and image problems make the area an unsuitable place for the high-fashion industry.
About 300 of the building’s 1,455 tenants voted in an election last month to decide whether to stay Downtown. About 42% want to move to the Water Garden commercial and office complex in Santa Monica, 34% favor moving to the site of the former headquarters of Mattel Toys along the San Diego Freeway in Hawthorne, and 3% want to relocate to the Miracle Mile area. Only 21% wanted to remain Downtown.
The election was organized by the 110 E. Ninth Street Tenants Assn., which formed in July and hired real estate brokers to scout for places California Mart tenants could move.
“The association board of directors views this with great cognizance as a mandate to move, under the right circumstances,” said Jeff Krinsky, a women’s apparel wholesaler who is a member of the board.
“This is not about bolting from the California Mart. This is about the future . . . and our members indicated the future of the wholesale apparel and accessory industry belongs somewhere other than Downtown.”
The association membership occupies about 30% of the space in the 1.5-million-square-foot California Mart building, according to California Mart officials. Most of the members are wholesalers of women’s apparel and accessories and they represent both large corporations and smaller companies, Krinsky said.
The association’s board of directors began meeting with Water Garden developer Jerome Snyder last week to discuss lease terms, marketing and promotions and security, Krinsky said. Once details are worked out, which members hope will occur within six months, the board will present them to the entire group for approval.
The group will move only if there is enough support for the terms, Krinsky said. He said the board doesn’t plan to schedule another vote. Krinsky said he believes Snyder presented enough preliminary details about the development that the “fine-tuning” process won’t change the tenants’ minds.
Since Snyder would still have to build a 600,000-square-foot structure for the California Mart tenants, the wholesalers wouldn’t be able to move in for at least two years.
California Mart officials responded to the balloting results by noting that no specific location garnered a majority of votes, and accused the tenants association of breaking up the wholesale apparel industry.
“This vote was split and clearly fragmented,” said California Mart spokesman David Stamper. “That’s what makes us deeply concerned. This vote is not a mandate.
“The fragmentation of this vote is indicative of a fragmentation the apparel industry cannot afford. We spent 30 years unifying the garment industry into one centralized, solidified, critical mass. To dismantle that marketplace will hurt the garment industry.”
Stamper also expressed skepticism that as many as 300 tenants will move.
“We sincerely believe when it becomes a business decision, these people will decide to stay, with the infrastructure, the programs and the support network this building invests in for the people in the building and their customer, the buyer,” Stamper said.
The tenants’ main gripes are crime and Downtown’s image problem. Buyers who come from across the country and stay Downtown complain of high hotel and transportation costs and fear walking the streets at night, association members said.
Some tenants also said the Morse family, owners of the 27-year-old California Mart, hurt business during tough economic times by increasing rents as much as 20%, mixing types of apparel on each floor and allowing competing cash-and-carry wholesalers--who provide inventory on the spot and sell retail to the public--into the building.
California Mart and city officials, including Mayor Tom Bradley, have responded by repairing and cleaning the streets and assigning nine bicycle police officers to the neighborhood. California Mart general partner Sidney Morse also dropped rental rates by 23%--down to between $2 and $2.40 per square foot--and cut parking fees by 20%.
Although other developers proposed monthly rents slightly higher than the California Mart’s, tenants said they still want to move because of Downtown conditions.
Jean Desmond, a lingerie wholesaler and eight-year California Mart tenant, said she is dissatisfied with the city’s efforts to clean up the area. “They’re Band-Aids,” she said.
And though she voted for the Hawthorne location, Desmond said she is willing to move to the Water Garden. “We’ll go where everybody else goes, because that’s where the buyers will go,” Desmond said. “I’m very happy at the California Mart, but the area’s so depressing. It’s just gotten worse.”
City Hall officials said the steps they have taken are working, but added they are open to more ideas to improve the area. “We’ve responded to them when they had concerns,” said Wendy Greuel, assistant to the mayor. “If there are other issues that have not been addressed by the city, we’re willing to meet with the tenants and discuss what items they’re interested in.”
Lydia Shayne, another Bradley aide, responded to the tenants association vote: “We’re disappointed, but on the other hand, we’re still hopeful that we can work out a deal so they can remain at the California Mart. The Downtown area is the center of the Garment District.”
Developers of all three alternate sites promised more upscale, safe surroundings, convenient access and cooperative, financially stable management. Krinsky said the Water Garden, at Olympic Boulevard and 26th Street, won the most votes because of its Santa Monica location and its “splendid” architecture.
Snyder said the apparel mart “fits very well” into the complex and that his staff is committed to helping the wholesalers with marketing and promotions.
