Santa Monica City Councilman Ken Genser doesn’t like what’s happened to the Third Street Promenade and the $40 T-shirts at Kenzie, a new Canadian women’s wear import, illustrate the problem.

“It has become much more like a shopping mall with a lack of stores that meet people’s day-to-day needs,” said Genser, who believes that the expensive shops don’t serve the average resident. “I think people would love to see things that are more affordable and more unique.”

It’s a dilemma that has Santa Monica politicians in a bind. To retain at least some of the street’s local feel, they’ve discouraged chain stores, but haven’t banned them outright. That could squeeze the flow of sales tax dollars.

“The goal is to get a mix of large and very small,” said Santa Monica Mayor Pro Tem Herb Katz. “Ideally, we would like as much of mom and pop as possible.”

The city has always found it difficult to regulate the stores. Unlike a mall with a single landlord, the Promenade is made up of many landlords that are a collection of family and institutional players.

The Bayside District Corp., a quasi-public agency, prods landlords to think of the larger interest of the city when securing tenants. But the market is often king, keeping small, independent stores out.

“The mix is a challenging issue for us to address because, of course, we don’t own the buildings,” said Kathleen Rawson, Bayside’s executive director. “The city does what it can. Ultimately, it is the decision of the landlord.”

Foreign additions


Rob York, a consultant for Bayside, said there are almost no vacancies these days, despite rents that run from $7 to $13 per square foot for ground floor space. Rents have been rising 5 percent to 10 percent annually for the last few years, although a store can relocate to a nearby street and sometimes cut its monthly rent almost in half.

Kenzie is among three new foreign-owned chains on the Promenade. The two others are Spanish stores Zara, the flagship brand of Industria de Dise & #324;o Textil, S.A., and Mango. “We would not be able to have these companies coming here if there was a strict no-chain-store ordinance,” said Vincent Muselli, president of Muselli Commercial Realtors.

Katz also agrees that an ordinance identifying a certain type of store would be hard to craft. “If we start putting limits on chain stores, where do we stop?” he said. “Your chain or my chain? Three stores or 10 stores?”

A proposal to limit chain stores on the Promenade, one in a long line of measures that the City Council had considered as a means of managing the street’s make-up of stores and restaurants, was sidelined by the council.

Katz said he isn’t going to bring back the chain store ordinance because he’s satisfied with how the Promenade mix is going. He said that another City Council measure passed in 2003, which limited Promenade stores to 50 feet of frontage, has done its job of stopping huge stores from taking over the street.

Not all council members think chain stores are that bad.

Councilman Kevin McKeown, who consults for Apple Computer Inc., cites the Apple store in Santa Monica as an example of an appropriate merchant. “My primary interest is to keep the Santa Monica Third Street Promenade serving the people who live here,” he said.

‘Always under contention’


Meanwhile, real estate brokers are predictably wary of any move to address the street’s retail composition. “Any time you restrict the free enterprise system to try to control it you don’t necessarily achieve what you want to achieve,” said Muselli.

Without the chain stores, he argues, the Promenade would be struggling because mom and pop operations tend to hold on even when they’re in the red and not attracting shoppers. The chains keep a close eye on the bottom line and are quick to shutter an underperforming unit.

Sales tax revenues from the Promenade increased 15.5 percent, to just under $2.7 million last year. Bayside estimates that about 20,000 to 50,000 visit the Promenade daily, depending upon the season and the weather.

That success, in turn, feeds the streets surrounding it. Sales tax revenues from the Bayside District outside of the Promenade went up 14.2 percent to nearly $1 million last year.

Still, no one expects the council to stop tweaking the Promenade mix. “It is always under contention. We are watching it,” said Katz. “We are up on retail. We are down on restaurants. Now we need more restaurants, and it used to be the opposite.”