Downtown Long Beach by Samuel Lippke.
6:50am | “The Downtown Long Beach Associates (DLBA) is a non-profit organization operating on behalf of the tenants and commercial property owners of the Business Improvement District,” says the DLBA Website. “It is dedicated to the management, marketing, security, maintenance, advocacy, economic and community development of the assessment districts in cooperation with the City of Long Beach and the private sector.”
That sounded to me like a group I should consult in my quest to better understand those pesky Pine Avenue vacancies, and so I spoke with Kristopher Larson, the organization’s vice-president.
Because Larson’s been on board for only three years, he was reluctant to say much about what Long Beach has done wrong — although he did offer one insight.
“In some regards, I’d say the city has tried maybe too many things,” Larson says, pointing out as an example that 10 to 15 years ago Pine Avenue was home to too many “soft goods” vendors — e.g., clothing stores — most of whom he says “were there only because of forgivable loan programs that the City offered … to make it make sense for their location on Pine Avenue.”
A challenge inherent to this type of vendor, Larson says, is that they operate on thin margin (“in most cases only 6 or 7 percent”), which means they have very specific site-selection criteria.
“They go where their customers are,” he says. “And Long Beach, because it’s always been a little land poor (I guess we’ll call it) — [i.e.,] there hasn’t been a lot of large, open, vacant, developable sites — we really got poached for a lot of retail space over the last few decades. When you look at the malls just outside our borders, those end up being the places where retailers decide they want to locate. Because no retailer wants to be responsible for driving its own traffic. They want the benefits of co-tenancy; they want to put themselves stores around other stores that attract similar buyers. … Co-tenancy becomes very difficult in an environment like Pine Avenue, where you have a highly diverse set of property owners, each of which operates under very different circumstances; and where the building stock doesn’t necessarily lend itself to a modern retail environment.”
Larson echoes what Vice-Mayor Suja Lowenthal told me concerning the need to avoid bringing to Pine Avenue tenants that won’t contribute to a vibrant downtown. For example, a business that closes at 5 p.m. “does nothing to contribute to the street as a fully functioning, main-street vibrant environment. This goes back to co-tenancy: Who’s going to be the neighbor? If I’m running a café, do I want the neighbor to close at 5 p.m. and all their employees leave and go home? Now that building is doing nothing for me except detracting from my ability to create the sense of vibrancy outside of my café.”
Larson also echoes Lowenthal’s take on the difficulties of multifarious ownership on that strip of downtown real estate. “Pine Avenue is such a mixed bag of different property owners — everything from the highly engaged, highly visionary property owners that are here on a regular basis and are willing to put up the tenant improvements to get a deal done … [to] the opposite side of the spectrum: people who are completely disengaged, [who] live nowhere around here, they probably own the building outright, they’ve got zero debt-service on it, and they’ll just wait for the economy to rebound so they don’t have to put a penny into [their property now]. There’s nothing you can do about that.”
So, what can the City do?
“Over the next five years or so we’ve got to create the experience that no one else can do,” Larson says. “And that’s where you get into niche markets. … That’s what we have the highest opportunity in the short term to be able to exploit.”
Larson agrees with The Brokers that in the near future that experience will come primarily from restaurants and entertainment, the longer-term goal being that retail will piggyback on the atmosphere.
“Retail is an evolution,” he says. “You look at any downtown, they follow the same type of evolution. … But it begins with an experience-based economy — the people are going for a particular reason, a particular experience.”
As for creating that experience, Larson says that “we have … competitive advantages that we’re not exploring. I would say the first is the creation of a truly Parisian outdoor dining experience that you don’t see often in the State of California … because that would help to enliven the public realm. It would help to blur the transition between the public and the private realm, and it would enable the passerby to simply move through a higher-activity zone and something that would almost feel foreign in California.”
The current barrier to this, Larson says, is the enforcement of laws the rationale for which no one can quite recall, pointing to North Beach in San Francisco as an area with such a dining experience and “where the police just look the other way” in terms of enforcing those laws.
Of course, changing the pertinent restrictions would serve just as well. “And that costs nothing,” he says. “That’s as simple as a zoning change. We are looking to see an opportunity like that come around — hopefully in the passage of the Downtown Plan — a more liberal interpretation of these regulatory mechanisms.”
Regulations, Larson says, are often inimical to economic progress. He cites The Pike as a prime example.
“Its biggest challenge was not one of design,” he says. “Tidelands [restrictions] is what made The Pike struggle [by] limit[ing] the kinds of uses it could have. … The Pike was actually sued for having tenants like Borders. … Oftentimes it’s the regulatory environment that impedes the ability for particular uses to proliferate.”
Larson feels that with the recently completed land swap, The Pike is poised to become a strong retail center. However, a challenge he feels it still faces is the City’s lack of knowledge about the demographic that visits The Pike.
“If you can’t isolate a particular demographic characteristic, you can’t sell that to a retailer,” he says, “because they don’t know who the customers would be — so you gotta go with the general play, things that would appeal to all people: ice cream, movies, chain restaurants.”
A problem The Pike doesn’t have but that plagues its north-of-Ocean Boulevard streetmates is parking. Everybody knows that, of course, but Larson’s take is a bit more nuanced than most.
“[P]arking is both the first and the last impression that a person has of an individual [shopping, dining, etc.] experience,” Larson says. “And ideally you want it to be forgettable. And so while our problem here isn’t access to parking — because we actually have a very tremendous parking supply — what we have is inefficiently-located garages or poorly-managed garages, in terms of the upkeep. … When [people] vote with their wheels, they vote with their wallets. And so when somebody is willing to drive to the Lakewood Mall because they know they’re going to find what they’re looking for there, it’s difficult for us to compete.”
Which brings us back to competing by creating a unique experience. But what about those who claim that while it’s all well and good to talk about less-than-ideal co-tenants, the biggest enemy to a unique, vibrant downtown is empty storefronts?
“I would agree,” Larson says. “It certainly is painful in the short term. … [But] sometimes you have to have a loser to create the opportunity for a winner to come along … It’s not a popular thing to say, but it is a reality that dives economics. … Sometimes a down economy creates opportunity; necessity drives innovation.”
As an example he points to Harvelle’s, the jazz/blues club now occupying the Promenade space formerly known as The Cellar. “It’s a proven operator who comes to Long Beach after running one of the most successful blues clubs in the State of California for the last 28 years in Santa Monica,” he says. “It’s going to really make that space perform. … Now you’ve got a better destination that’s going to attract people to the downtown.”
And that, Larson says, is the main focus: adding attractors, and only attractors.
“We certainly know what we’re looking for,” he says. “It’s not casting the biggest net: it’s going out and finding the right tenant that fits our demographic — that is not going to be intimidated by Long Beach once they get here, that is familiar with the community, that knows its up-sides and understands how it fits within a larger picture.”
So, what have we learned from our little stroll down Pine Avenue, this crash course in “Downtown Commerce for Dummies”? Well, I still feel pretty dumb. I don’t blame my consultants (who said far more than I could include in this virtual space). Maybe I’m just a slow learner.
I do feel I have a better understanding of some of the reasons behind the vacancies, and some of the challenges in getting them filled.
Will there be a definite improvement within the next year? Certainly there is optimism. Is it just my ignorance that I’m more curious to see what happens than confident in what will happen?
There are, of course, several questions I neglected to ask, like, Will having more restaurants really help, or might that actually hurt the ones already there?
But this miniseries never aspired to be comprehensive. And of course there’s plenty of room for follow-up. We never crossed north of 3rd Street. We never got into the DLBA Retail Visioning Report to which Larson directed me. I am still processing the comments of readers with insights that open up entirely new avenues of consideration.
This was merely few snatches of conversation, a conversation in which there is obviously much more to be said.