WESTSIDE COVER STORY : On Main Street, a Bumpy Road to Recovery : Business is picking up again along the trendy Santa Monica avenue hit hard by the recession and competition from the Third Street Promenade.

Consider it just another incarnation in the life of the Avenue by the Sea, a street that in its century of existence has been, among other things, a seedy setting for rough-and-tumble bars, a mini-enclave for Bohemians and, most recently, one of the trendiest shopping and eating streets in Southern California.

Just three years ago, the commodity most abundant on Santa Monica’s Main Street was gloom. The nationwide recession, coupled with the popularity of the Third Street Promenade a mile away, becalmed the 11-block stretch in a sea of red ink. Shoppers deserted, merchants padlocked their doors and one of the symbolic presences in the area, the Pioneer Boulangerie, closed, taking 60 jobs and 17 years of history with it.

“We saw all the people leaving,” said one Main Street retailer. “Third Street really knocked us on our pants.”

But like a veteran prizefighter, Main Street has slowly picked itself up off the canvas.

Business, while not booming, has again begun to trickle into the street’s cafes, boutiques and galleries. A proposed street-scape design that would beautify and landscape the avenue is being polished and will be submitted to the Santa Monica City Council, perhaps as early as next month. The number of open storefronts along the street has declined, and merchants are talking of organizing a business-improvement district to tackle some of the thornier obstacles to better sales.

The street is even the focus of a current Sunset magazine piece, which in a four-page spread breathlessly touted Main Street’s shopping as “terrific,” food as “delicious” and crowds as “endlessly fascinating.”

“(Business) is not going to jump back tomorrow, but we’re on the way back,” said Russell Barnard, who owns the Omelette Parlor and who has been a landlord on the street since 1979. “We’ve passed our low point.”

Agreed Philippe Chicha, who has owned property on the street for 12 years: “The people who are not making it are getting out, but we’re getting new blood. It’s a rejuvenation.”

Indeed, merchants say that their receipts during the last year are showing better and better figures. Dyan Ullman, owner of the boutique Just in Case, which sells bags and accessories, says that her 1994 sales were better than 1993s, and that so far, 1995 revenues are running ahead of last year’s.

Similarly, Geri Gilliland, who with her husband, Theodore Lonsway, owns and runs three restaurants on Main Street, says that at one location sales are up 40% over last year.

Part of the street’s comeback can be attributed to the recovery of the state and local economies. Then there is the added attraction of the street’s impressive array of restaurants, including Chinois on Main, Rockenwagner and Schatzi--a culinary walk of fame that draws customers from throughout the region. But much of it, say merchants, is due to thecity’s taking a greater interest in Main Street, which after the debut of the Third Street Promenade some felt was treated like an older sibling in a family with a new baby.

After the outdoor mall opened in September, 1989, gross sales tax revenues for the businesses along Main Street dropped 30% within three months, said restaurateur Barnard, and the perception was that local government was overly focused on promoting the new mall atthe expense of the other areas of Santa Monica.

“For a while, a lot of people on Main Street felt like a neglected child,” Ullman said.

Taking matters into their own hands, merchants began petitioning the city for greater involvement. The results were many. More and bigger signs were put up to designate public parking. Three years ago, a re-striping program reduced the number of traffic lanes from four to two and made the area more pedestrian-friendly.

And last year came the introduction of a Farmers Market, the city’s third. In the last three months, sales at the Sunday morning market have increased from $4,000 to $9,000 a day, said Howard Robinson, real estate and economic development manager for Santa Monica.

Another plus for the area has been a decrease in crime. Despite some panhandling and street violence in parts of nearby Venice, Santa Monica police say that crime is down along Main Street, as it is citywide.

“Each ( (factor) is another penny on the scale,” Robinson said. “No one element is going to be a panacea in itself.”

But some people lay part of the blame for Main Street’s doldrums on the merchants and landlords themselves. As the area mushroomed in popularity during the mid- to late-1980s, it became a magnet for merchants who simply wanted to be on “the hot street” and who were willing to pay the relatively expensive commercial rents. While the business turnover on Main Street was high, the cachet of the area ensured that new merchants would come in when the old ones left. It was only when the economy fell off that the “for lease” signs began appearing.

“A lot of the stores that went out of business probably should not have been in business in the first place,” said restaurant owner Lonsway. “There are people out there--you just have to have something they would want to buy.” Agreed David Teck, chairman of the Main Street Merchants Assn. and owner of the World Cafe: “The marginal retailers are just going elsewhere.”

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Yet some residents in the surrounding Ocean Park neighborhood feel they are trapped in a Catch-22. Although locals make up most of the street traffic on Main, one criticism is that there are not enough shops--drugstores, hardware stores, etc.--designed to serve their needs. On the other hand, commercial rents on Main Street remain high enough--between $2.25 and $3.50 per square foot, according to commercial realtor Vince Muselli--to preclude some of the stores that residents would like to see on the street.

“More neighborhood-serving stores would be doing well here, but they can’t pay the rent that people are paying down here,” said Frank Gruber, who lives three blocks away in Ocean Park. “There’s a lot we can use down here.”

Gruber himself considered renting an office on Main Street but was put off by the prices. He now has his business in a building on the Promenade. “The landlords (on Main Street) have a fantasy about what they should be getting,” he said.

Landlords acknowledge that their rents traditionally have been high, but they say that, in some cases, they are coming down, depending on the type of lease and potential merchant. Commercial space used to be available for about $4 per square foot, but today some storefronts are being leased for $2.75 per square foot, Lonsway said. “(Landlords) are negotiating on rents. They haven’t had to do that for the last 10 years,” he said.

Property owners also say they are being more selective about tenants, in the long-term interest of the street. Invariably, they bring up the specter of Westwood--which they say lost its luster when the mix of businesses began to cater to a younger crowd that spends less money--and which has yet to regain its “cool factor.” Likewise, few merchants say they want to become like the Promenade even though the outdoor mall bustles with pedestrian traffic and remains a popular destination point for out-of-towners and so-called local tourists.

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“When I thought of where I wanted to open in Los Angeles, it was a no-brainer,” said boutique owner Ullman. “There is a quaintness here, and I didn’t want to be in a mall.” Echoed David Teck: “Part of the charm of Main Street is that it attracts different people than the malls.”

Indeed, Ron Schur, who seven years ago took over the restaurant, The Galley, a Main Street fixture since 1934, attributes its success partly to the Main Street ambience. Even during his off hours, he said, he visits the street to soak in the atmosphere and people-watch.

“It’s a place where you know the postman, where you know the merchants,” said Schur, a New York native. “It’s a real sense of neighborhood. There are very few places in Southern California where you feel safe and can walk outdoors.”

Yet belying its folksy and funky demeanor, Main Street also is a street of serious business. Landlord Chicha says that few people are aware of the subdued wealth and influence of the tenants that reside on it. Among others, Main Street houses the offices of celebrities such as actors Arnold Schwarzenegger and Bill Cosby and architect Frank Gehry.

“It’s a very quiet but powerful street,” Chicha said. “It’s really a street that puts people on the map.”

Whether that map has the road to recovery on it is still not for certain.

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Though hard times are slowly lifting for the local economy, business remains sluggish for many merchants on Main. Noah’s Bagels, a much-anticipated tenant and a microbrewery pub, is to arrive this summer, but Banana Republic is set to move to the Promenade and the Reebok store also may be leaving. Parking continues to be a problem--a proposed multistory lot was quietly scrapped a few years ago after bitter debate over whether to situate low-income housing units on it.

Consequently, although landlord Russell Barnard welcomes the reawakening of business, he says that the street is not yet over the hump.

“In the short term, this is still going to be a tough year,” Barnard said. “It’s going to be a slow growth back.”