Downtown Anaheim Waits for Its Promised Revival

It’s late afternoon and the owner of Zorba’s, who moved his Greek restaurant from near the Orange County Performing Arts Center to downtown Anaheim three months ago, is wondering whether he made a smart move.

Sure, his rent is a lot cheaper, but business is sparse and Aristidis Deslis is getting discouraged.

“I want to stay here and stay positive,” Deslis said. “But the way it is now, I don’t see how anybody can make it.”

The city’s downtown--for years a series of dusty vacant lots--began a dramatic metamorphosis five years ago with the construction of two high-rise office buildings, retail shops and hundreds of new homes.

The Disney Ice skating rink, touted as the magnet that would bring the area alive, has proved to be popular since its opening last fall--attracting about 2,000 skaters a week--but it has not brought many new customers to the area’s restaurants and shops.

Pacific Bell, whose hundreds of employees accounted for a majority of the downtown’s business, relocated about 200 of its workers to another location last fall and has put its high-rise building up for sale.

In the last two years, three restaurants have come and gone and the owner of a local Norms restaurant--forced to relocate because of freeway widening--told city officials this month that he wouldn’t move downtown from his previous Anaheim location if the land were offered for free.

Downtown Anaheim’s office vacancy rate is 20%, about the same as the average for central Orange County. However, that rate is 5 percentage points higher than the overall county average.

Amid this bleak backdrop, a city councilman has been publicly critical of the city’s redevelopment staff and their efforts to revitalize the area, questioning their vision for downtown.

“We’re going on our 17th year down there trying to make something happen,” said Councilman Frank Feldhaus. “It just has not been done. We’ve lured businesses to the area that last only a short period of time before going broke.”

Mayor Tom Daly said that Anaheim’s experiences are no different from those of many other Orange County cities struggling to revive their downtowns.

“I don’t think any of us have been happy with the pace of the progress,” Daly said. “I won’t be satisfied until there are many more thriving businesses and more nighttime activities. But we have to recognize that there have been substantial achievements.”

The city’s redevelopment staff acknowledges some setbacks, but say they should not overshadow the steady progress that has been made in recent years.

“The impression that things are not happening is not correct,” said Elisa Stipkovich, executive director of the city’s redevelopment agency. “When you look at the entire area, there’s not an area we haven’t developed or rehabbed. It’s a matter of finding the final pieces.”

Stipkovich said that of the approximately 200 acres of downtown redevelopment land, there are only six acres still to be developed. But many say those are crucial parcels that could make or break many of the area’s struggling businesses.

Some of the vacant land is being considered as a new location for Chapman University’s Law School. Anaheim is one of three cities vying for the school. The UC Irvine Extension Center is also planning to move into a new building downtown.

Feldhaus is against the effort to attract college campuses, instead pushing for more specialty shops and sidewalk eateries which he said could draw some of the 14 million tourists visiting the city each year to downtown, located 1 1/2 miles from Disneyland.

“A college will bring in a fixed number of businesses,” the councilman said. “That area needs activities that will draw from all of Anaheim.”

Many merchants agree. They complain bitterly that they moved to the area with assurances from city officials that Disney Ice would be an enormous source of business for them. The loss of Pacific Bell employees has only deepened their feelings of betrayal.

“If I handled my customers the way they handled us, I would have been sued and out of business,” said John Machiaverna, who owns a downtown jewelry store and a coffeehouse next door. “You can’t just tell people stories. The rink is a landmark but it doesn’t help business. I can’t stay here and lose money forever.”

Catherine Noyes, who runs a gift shop and eatery on tree-lined West Harbor Place said “something needs to be done or we’re not going to make it and this is going to become a ghost town again.”

Some downtown business owners have had trouble paying their rent, including Yvonne Koury, owner of Nutrition Nook. Koury, 58, said she was given an eviction notice last fall and was forced to pay more than $10,000 in back rent with a credit card.

“I can’t just start all over. I’m not a young girl here,” said Koury, who breaks into tears when discussing the eviction notice. “I’m not going to just let it go. I’m here six days a week. This business is me.”

A steady lunchtime crowd from nearby office and government buildings has kept the Jungle Grill and Bakery afloat. But owner Ric Katz said he is disappointed that more local residents don’t eat there.

“We’re struggling because we don’t have enough community support,” said Katz, who opened the restaurant last September. “But then you ask yourself why would people want to come down here when there is no movie theater or anything to draw people?”

Efforts to land a movie theater, which many business owners want, have been so far unsuccessful. But Stipkovich said that effort continues. Vacant property at the corner of Lincoln Avenue and Harbor Boulevard, now used as a temporary parking lot for the Disney Ice, could be the site of a new theater, she said.

“We are still optimistic that things can happen and they can happen quickly,” Stipkovich said.

One bright spot is the imminent reopening of the former Celebrity Theatre, a concert venue that closed in early 1994 after years of playing host to such acts as Garth Brooks, Reba McEntire and Luther Vandross.

New operator Bruce A. Kahn, who has renamed the facility the Freedman Forum Concert Theater, said the venue will have its first public concert on Jan. 27. He said he will have 8 to 10 shows per month and has lined up acts such as Kenny Rogers and Johnny Cash.

Kahn, who renamed the location after the late Leo Freedman (who made a brief attempt at Broadway-style musical productions there in 1987), said he plans to attract business for nearby restaurants by inserting listings in his ticket packages.

“We’re real interested in making it work for everybody,” Kahn said. “We’re a part of the community now.”

Glenn Hellyer, a local real estate agent who has done the bulk of the leasing to downtown businesses, said the Freedman Forum should make a big difference.

“When the Celebrity Theatre was in operation, the restaurants were filled every time there was a concert,” Hellyer said.

But after its closure, two downtown restaurants, the Rose and Crown British Pub and Yves Bistro, failed after being open about two years. Both had financial assistance from the city’s Redevelopment Agency.

By all accounts, the city’s current downtown is a major improvement from what the area had become by the mid-1970s. Then, it consisted of thrift stores, cheap hotels filled with transients and poor families, an adult movie theater and adult bookstores.

A developer who bought rights to the land began bulldozing many of the buildings in the area in the late 1970s but never followed through with developing the area, resulting in blocks of vacant lots.

A turning point came in 1990 when the city sold 16 acres of undeveloped downtown property to the Koll Co. for $2 million after the land had sat empty for 17 years.

In 1992, the Koll Co. built the 11-story City Hall West, which serves as the headquarters for Anaheim’s public utilities administration and several city departments, among other things. Koll also built the eight-story Pacific Bell building.

The following year, Kaufman & Broad Corp. built 111 new homes in the city’s downtown that were designed to match the style of older areas of Anaheim. The company is nearly finished building 152 more homes in the area.

In addition, historic homes have been relocated to the area and there are plans for a new community center, YMCA and Boys and Girls Club.

“I don’t know any other city that has done as much as we have,” said Richard Bruckner, the city’s economic development manager. “It’s not completed but we’ve come a long, long way.”

Still, others wonder how the city, with a successful sports arena, stadium and convention center, has not been able to create a thriving downtown after all these years.

“Anaheim has always been a city that looks for the big deal like the Angels and Disneyland,” said Machiaverna. “I don’t think they have a lot of love for the small businessman. And they should.”