EDVARD PETTERSSON
Staff Reporter
Pico Rivera has had a tough time selling its heavily Latino population to name-brand retailers.
Any number of national clothing, electronics and restaurant chains have snubbed the community, say city officials, because prospects were uncertain about operating in a city where the population is 83 percent Latino.
“They saw that the (income) data was good. But because they had never opened a store before in a minority market, they didn’t want to take the risk,” said City Manager Dennis Courtemarche.
Now, the stakes are so high that Pico Rivera has launched an aggressive marketing campaign to change the way retailers perceive this city of 62,000.
Faced with the closing of a Northrop Grumman Corp. plant later this year, Pico Rivera is scrambling to replace $2 million in annual business taxes collected from the aerospace giant. The plan is to have the site redeveloped as a major retail/industrial center.
No retail tenants have been signed thus far. But Vestar Development Co., which has an agreement with the city to develop 60 acres of retail on the Northrop site, is pursuing the likes of Target, Staples, Toys ‘R’ Us, and The Gap, according to project director Jeff Axtell.
“The retailers we’re after are fine with the demographics,” Axtell says. “Retail is coming to terms with the Hispanic community, which is the fastest-growing market out here. They have been learning to market to these communities.”
The city has also hired Edelman Public Relations to convince retailers that Pico Rivera offers a stable middle-class Latino market.
“We recognized that we had to be active in order to be a player,” Courtemarche says. “It is unusual for a city to market itself this way, but we felt we had to do something to change the image of minority communities.”
Some retailers might perceive Latino communities as havens for newly arrived immigrants with little income to spare for non-essential items. But Courtemarche says Pico Rivera breaks that stereotype because its population is mainly third- and fourth-generation immigrants who have worked their way into well-paying jobs.
He says the $42,300 average household income has increased by 11 percent since 1989 and now exceeds the average for L.A. County, which is about $40,000. In addition, Courtemarche says, 70 percent of the homes are owned by their occupants, which indicates a stable community.
“Corporate marketers have recognized the Latino immigrant market for many years,” said Gregory Rodriguez, a research scholar at the Pepperdine University School of Public Policy. “They have not recognized the Latino middle class. Part of the problem is that they are still figuring out how to market to these people. What language should they use, for example, English or Spanish? Some companies have been making efforts, like Macy’s and American Express, but to reach middle-class families is still part of the next stage of integrating the Latino market.”
The result has been largely under-served middle-class Latino markets.
“Local people have expressed a strong interest in more retail, family restaurants and movie theaters,” said Darlene Peysar, the city’s business assistance manager. “Right now people have to go outside the community, to Montebello and Whittier, for many of the popular stores.”
The need for a marketing push became apparent after Northrop announced in 1993 that it would close its Pico Rivera plant, which once employed 12,000, by the end of this year. Since then, the city has considered a number of developers, eventually selecting Majestic Realty Co. to develop 140 acres for industrial use and Vestar to pursue retail development on 60 acres.
Currently, Northrop, Majestic, and Vestar are in the final stages of negotiating the sale of the property. Brook Morris, Majestic’s executive vice president, said the firm will buy the land from Northrop, then sell part of it to Vestar.
Several large retailers said they consider much more than the population breakdown when choosing locations. Asked what Wal-Mart looks for, spokesman Mike Maher said, “We look at everything. We’re obviously opening stores in areas where there is a demand for our products.”
Officials at Best Buy, which operates 25 stores in the L.A. area, also say they are not concerned about the ethnic make-up of prospective sites. “We talk to developers and look at traffic patterns, household income and market share more than we look at whether a community is a minority community or not,” said spokeswoman Laurie Bauer.
Larry Kosmont, a real estate and tax consultant, said “It is always difficult to attract retailers to new demographic areas. But Pico Rivera is a stable community, with a middle-class, working population. The right kind of projects can certainly succeed there. Besides, the success large retailers have had in similar Hispanic markets, such as Huntington Park and Montebello, have made them more comfortable with these demographics.”
Courtemarche agrees that a shift is occurring in corporate attitudes about doing business in minority communities. But he believes Pico Rivera must continue to be proactive.
“We have been unsuccessful in attracting these kinds of retailers in the past,” he said. “So we’re going to continue to market ourselves until we have the kind of retail businesses here that we think our city deserves.”
