By HOWARD FINE
Staff Reporter
For years, merchants at Santa Barbara Plaza in the Crenshaw District have seen their volume of business slacken, and they, along with many nearby residents, have pushed for redevelopment.
But now that a deal has been struck for Earvin “Magic” Johnson to demolish the rundown shopping center and build a new one in its place, some of the center’s 200 merchants fear they may be priced out of business.
“I’m paying around $500 a month now for rent. When the new buildings go up, my rent could go up to $1,500 or $1,800 a month,” said Julio Garcia, who owns Mr. Tailor, a small tailor shop at the center. “But what kind of customer is going to pay the prices I need to charge to pay the higher rent? They are not going to pay Wilshire Boulevard or Beverly Hills prices.”
Garcia, who has run the store for the last 15 years, said the prospect of moving to another location is daunting.
“I don’t think many of the customers will follow me to a new location. It’s not easy to start all over again and build a business,” he said.
It’s all part of a process that has come to be known as “gentrification,” the redevelopment of an inner-city retail or residential area.
This particular case involves a plan by Johnson Development Corp., along with partners Victor Macfarlane and Ira Smedra’s Arba Group, to demolish Santa Barbara Plaza and build a new 475,000-square-foot center on the 22-acre site. The $100 million project still needs approvals from the Community Redevelopment Agency and the L.A. City Council before work can begin. Ken Lombard, president of Johnson Development, said construction is set to begin in late 1999 and be complete in mid- to late-2001.
But along with the new stores and presumably, new customers would come higher rents. Some of the 200 businesses now in the center fear they will be forced out by the redevelopment.
“If business is good, it won’t be a problem paying the higher rents,” said Kang Yi, owner of the Village Inn Coffee Shop. “But what happens if business is not as good as they say it will be? There are no guarantees. The only thing that is certain is that the rents will go up.”
Lombard said that when it comes time to renegotiate rents, the partnership would consider the tenants’ situation.
“We will sit down with each individual tenant and find out what their needs are. We will then discover if there is a gap between what we are asking and what they can afford to pay,” Lombard said. “For those tenants that want to stay, we are going to be working with (City Councilman Mark Ridley-Thomas’) office and the CRA to put together an approach that can provide them an opportunity to be part of the center. Just what will be provided has yet to be determined.”
To help the tenants through the process, Ridley-Thomas has called on the services of the Community Development Technologies Center, an L.A.-based non-profit organization dedicated to helping communities and small businesses in low-income areas.
Ridley-Thomas said he has long been concerned that some of the tenants could be put at a disadvantage with the higher rents.
“This has been one of the central issues of the debate all along,” he said. “My role is to help the business owners and existing property owners get a fair shake, while making sure that the redevelopment process goes forward. At times these two goals come into direct conflict, and that is the primary reason why I have asked CD Tech to come in and help the business owners.”
CDTech President Denise Fairchild said the organization would give each of Santa Barbara Plaza’s tenants an information packet guiding him or her through the process. CDTech will also help the tenants renegotiate their rents and put together proposals to seek financing from banks.
“This is the first time, to my knowledge, that anyone is stepping in to help tenants deal with the CRA or the landlord in an inner-city redevelopment project,” Fairchild said. “Until now, they have largely been on their own.”
Not all tenants are concerned about the prospect of higher rents. They believe a rejuvenated plaza would bring in more customers and boost profits.
“This place is deteriorating,” said Sheila Jones, owner of Elegance Plus, a plus-size women’s clothing store. “We need businesses that will draw people over here.”
Jones said her business is growing enough to meet the expected higher rents. “I do intend to come back once the new plaza is built,” Jones said. “It will bring a whole new tenant mix.”
Some shoppers also are eagerly awaiting the redevelopment.
“I think it’s great,” said Ann Landry, who lived in the Crenshaw area for several years before recently moving to Pasadena. “It will bring so many new stores in here.”