DOWNTOWN : CalMart Tenants’ Moves Hit Snags

Disgruntled California Mart tenants who were hoping to move to a Santa Monica commercial complex are now studying other sites because of the development’s troubles with financing.

A couple of hundred members of a tenants association that favored the Water Garden site are now looking to move to another Westside location, according to women’s apparel wholesaler Jeff Krinsky, a director of the tenants group.

Krinsky would not identify the potential site.

Meanwhile, another couple of hundred CalMart tenants have expressed interest in moving to the proposed Fashion City complex in Hawthorne. So far, about 250 tenants who would occupy 260,000 square-feet of Fashion City have signed non-binding letters indicating they intend to move if the project is built, according to developer Bob Comstock.

To satisfy lenders, Fashion City organizers had hoped by year’s end to get tenants to submit letters of intent to occupy 50% to 70% of the proposed complex. So far, letters have been signed for only 37% of the space.

Upset with high lease rates and with Downtown crime and homelessness, several hundred of the CalMart’s 1,455 tenants formed an association last year to consider moving.

The 1.5-million square-foot center at 9th and Main streets handles more than $6 billion in merchandise annually, according to city figures, and serves as the anchor for the 2,300-acre Downtown garment district.

In response to the tenants, CalMart has increased security, cut rents and helped create Downtown programs to clean the streets and employ the homeless. Occupancy in the building has risen in the past few months, according to CalMart spokesman David Stamper.

Last December, the tenants group reviewed three sites promising more upscale surroundings, convenient access and financially stable management. In a close vote, the membership chose the Water Garden, a development with a park-like setting. But its developer, the J. H. Snyder Co., has been unable to line up financing to construct the 600,000 square-foot garment building at the complex.

Meanwhile, Comstock, whose Fashion City project came in second in the original tenants group voting, has continued to court apparel wholesalers.

Comstock also plans to develop an adjacent entertainment and retail complex similar to Universal CityWalk. But Fashion City would be built only if the overwhelming majority of CalMart tenants agree to move, said Alan Schwartz, president-elect of the South Bay Assn. of Chambers of Commerce.

The promise of surrounding amenities lured June Michaels, a lingerie wholesaler who has been at CalMart for nine years, into signing a letter of intent with Comstock: “You have everything in one place--you’re going to have hotels, theaters, plenty of shopping . . . I just don’t see any hope for L.A. reviving--not Downtown.”