Burbank Village at a Crossroads : Development: The downtown area is being revitalized, but it is coming at the expense of some longtime merchants.

Downtown Burbank, once best known as the butt of comedian Johnny Carson’s humor, may yet have the last laugh.

New restaurants and nationwide chain stores such as Blockbuster Video, Ross and Starbucks Coffee are swarming into a four-block stretch of San Fernando Boulevard in the Burbank Village section of downtown.

Skyrocketing rents, up by as much as 300% since 1989, have forced many small, independently owned businesses to fold or move out. At least 26 have left since 1990, with just as many new businesses moving in to take their place, according to the city’s Community Development Department.

Burbank Village, bordered by 1st and 3rd streets, Magnolia Boulevard and Angeleno Avenue, is at an important crossroads. A mix of old and new businesses compete daily for the attention of passersby along San Fernando Boulevard, the main thoroughfare.

The area “is exceedingly important to the well-being of the entire city,” Mayor Bill Wiggins said. “It is one of the life arteries of Burbank. It’s a big, big people draw.”

Morey’s Shoes & Boutique, for example, opened in 1947 as one of more than a dozen shoe stores in the area. Today, it is surrounded by new restaurants such as Gourmet 88 and Fuddruckers.

“This town is hotter than a firecracker right now,” said owner Morey Goodstein, 72.

Other independent merchants, such as Malcolm Macdonald and David Shekel, said that increasing rent and lease rates are squeezing them out of what was once a dull downtown area of mostly mom-and-pop stores. Both men have closed their stores for good.

For Macdonald, Burbank Village has become a victim of its own recent success.

Sections of San Fernando Boulevard struggled economically for years. But now the AMC Burbank 14 Theatres on Palm Avenue draw large crowds on weekends, as well as investors who see the Village’s potential and are willing to pay more for space, he said. As late as midnight on Fridays and Saturdays, movie-goers searching for things to do roam the boulevard for places to eat, drink and shop.

“We’ve been without a lease for some time, but we’ve not been in any danger of being moved out of the building,” said Macdonald, 38, manager of Book Castle, a used-book shop that closes today to make way for a Blockbuster Video store. “This property is so enormous nobody else was prepared to put the kind of money into it that it required until the last six months.

“Of course, I’m sorry to see family businesses go. On the other hand, the city put a fair amount of money into revitalizing this area, making it more upscale, and that’s what they’re getting.”

The city has pumped about $100 million into revitalizing the greater downtown Burbank area, according to Burbank’s Community Development Department. The money has helped open office buildings, the Media City Center shopping mall and AMC’s multiscreen movie theater, among other improvements.

For decades the city has tried to enhance the retail climate along San Fernando Boulevard. In 1967, a six-block stretch was closed to traffic and turned into a pedestrian-only, open-air mall. But in 1989, the city paved the road, hoping to boost the area’s sagging businesses.

Now even neighboring cities spot the potential.

“Over time, i think it will be a very successful area,” said Marsha Rood, a development official with the city of Pasadena. “It’s a major step forward for Burbank.”

But as Burbank takes that step forward, some longtime area merchants are being forced to step down.

Shekel’s, a variety store that opened on San Fernando Boulevard in 1977, closed because rent had jumped by about $2,500.

“All my life, I put here,” said David Shekel, 60. “I started from scratch. We put all our efforts in to keep this store up to date and all of a sudden we have to quit.”

One of Shekel’s landlords, Tom Tunnicliffe Jr., acknowledged that he pressured the store owner to pay up or leave within 30 days.

“Landowners made a significant investment in these buildings and suffered with tenants paying low rents,” Tunnicliffe said. “Now, we’ve got businesses coming through the door willing to pay $2 plus (per square foot).”

An effort is under way to promote a new downtown Burbank through advertising, sidewalk sales and hospitality nights.

City officials will soon consider a proposed tax on Burbank Village businesses to help fund the marketing scheme, as well as improvements to parking, signs and lighting. Taxes would range from $100 to $2,500 per business each year.

When downtown Burbank is completely refurbished, it won’t resemble any local hot spots, said Gwen Pentecost, executive director of the Downtown Burbank Stakeholders Assn.

“It’s not going to be another Melrose Avenue. It’s not going to be another Third Street Promenade (in Santa Monica). It’s not going to be another Old Pasadena,” Pentecost said.

“It’s going to be Burbank.”