Revitalization Drive Gains a New Garage

Ushering in a new era for downtown, city officials opened a new five-level, $4.8-million Art Deco parking garage Monday that they hope will be a beacon of economic vitality.

“This parking structure represents a major cornerstone in the Redevelopment Agency’s effort to revitalize our historic downtown,” City Councilman Ray Di Guilio said.

The garage is just the latest in a $15-million string of city Redevelopment Agency investments in downtown.

Dozens of new palm trees, widened sidewalks, new street lamps and a 10-screen theater are reshaping the long-struggling downtown business district.

But while the improvements are being met with great enthusiasm, they are coming at a high price for some longtime merchants downtown, where going-out-of-business signs seem as common a sight these days as cranes, cinder blocks and construction fences.

Several downtown merchants are calling it quits this month, joining a handful who have closed their doors since February.

The reasons for the closures are many, from bad business decisions and lagging foot traffic during the construction to intense real estate speculation that is pushing rents out of reach for mom and pop.

“You could say my original dream wasn’t to go out of business,” said Ingrid Schuh, who is closing her Follow Your Dream gift shop later this month after more than seven years on Main Street.

Business has been declining the last few years, Schuh said, and she has been forced to operate without a lease for a year and a half.

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She is sure her rent will go up, and she said she is sad to see so many businesses, including her own, squeezed out by the drastic changes downtown.

“I would go into the hole before I would ever see the benefits of it,” Schuh said, “and I don’t want to do that. I’m getting out before I get in too deep.”

Many other merchants say they have stuck it out and are excited by the opening of the parking garage, which will allay one of their most frequently heard complaints: no parking for their customers.

Although many doubt that the theater will bring the kind of economic stimulus officials expect, other merchants are convinced they will benefit from the increased foot traffic.

Due to open by Thanksgiving, the Century theater and retail complex promises to draw large weekend crowds. In the meanwhile, it is drawing investors and real estate speculators who see plenty of business opportunities.

Many buildings and parcels have sold in the last year, city redevelopment officials said, as speculators and property owners try to position themselves for what could be the county’s next booming business district.

Over the last two years, Di Guilio said, 22 properties in the downtown area have changed hands.

Count the Erle Stanley Gardner building on that list.

The building, at the corner of California and Main streets, sold for $800,000 in April 1995.

The retail and office complex was sold again Aug. 14, 1997, for $1.35 million, records show.

On Jan. 1, 1998, the local historic landmark, just a block from the theater complex, sold yet again for $1.97 million--more than twice the price paid less than three years earlier.

Much of the buying and selling of downtown properties has been speculative, Di Guilio and other observers said, meaning the buildings have been bought for their resale potential, not as an investment for a specific retail or office purpose.

For some merchants, the speculation boom has meant skyrocketing rents or month-to-month leases riddled with uncertainty, forcing some small, locally owned businesses to close or move to cheaper places out of the downtown.

“Clearly, the prospect of the theater is creating real estate speculation that’s driving up prices, and that’s driving up rents,” said Bill Fulton of Ventura, an urban planner and author. “That’s inevitably going to drive some businesses out, and it’s going to attract some businesses in.”

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David Kleitsch, the city’s economic development manager, said the theater project has become an easy target for struggling businesses.

Rent increases for retail space can be equally attributed to a thriving real estate market, he said. In some cases, those renting retail space have been paying well below market rates, especially for a historic Southern California downtown two blocks from the beach.

“Some increases may occur because people want the tenant to move along--and that seems harsh, but that’s reality--and some have occurred because people are perceived to be paying below-market,” he said. “We’ve also seen that landlords have looked at the theater and decided they’re not going to jump into anything long-term.”

The city contracts with an east Ventura small-business development center that helps merchants adjust their business practices to compete in a changing marketplace.

“We don’t want these people to get swept away,” Kleitsch said. “Ultimately, it would be nice to keep that mix of ma-and-pa businesses in the downtown through the transition, but there has to be initiative also by the individual.”

Donna Small bought the Crafter’s Showcase four years ago, only to be forced out of the 500 block of Main Street last year because her store sat where the theater is being built.

With considerable financial help from the Redevelopment Agency to cover moving and other expenses, Small moved her business into a store twice as large on Oak Street, a downtown side street.

With significantly reduced foot traffic, business quickly dried up. The store will close at the end of the month.

Even with an understanding landlord, Small said, she overdid it with the larger store by expecting too much, too soon.

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“Everyone says ‘Hang on, hang on, it’s going to get a lot better for us,’ ” Small said. “It doesn’t matter how I balance the books. There’s no way I can handle the rent.”

Ventura City Councilman Brian Brennan said he has been troubled by the closings of locally owned businesses because of increased rents.

But in all likelihood, many merchants have been paying artificially low rents because the downtown business district has languished economically in recent years, and landlords invested next to nothing in their properties, he said.

Still, Brennan laments the idea that downtown Ventura could be besieged by nationwide chain stores, as happened after redevelopment projects in Burbank and Pasadena.

“I don’t want to see every franchise in the world here,” Brennan said. “The diversity of business and nature of non-franchise business is what we should try to really put a spin on for Ventura--be different than other downtowns.”

Tim O’Neil, chairman of the Downtown Ventura Assn., said that incoming stores may be more upscale, but that some of the older stores in town will survive because of customer loyalty and strong ties to the business community.

“We’re more than Bakersfield-By-The-Sea,” he said, “but we’re not Carmel.”

To O’Neil, the closures mark the end of a long construction process that has seen streets and parking lots uprooted and business lagging.

Although there has not been the sort of “rent-gouging” many people expected, he said, the uncertainty of the month-to-month rents has been tough on merchants.

But the future for downtown is bright, he said.

“You can almost see the end of the goal line,” he said.