Jeff Miyaoka had a tough first month as general manager of the Pike at Rainbow Harbor, the much ballyhooed dining and entertainment complex in downtown Long Beach.
The Long Beach Clothing Co., one of the Pike’s few stores, moved out in March. About the same time, the doors shut at Gameworks, a 40,000-square-foot gaming, bowling and restaurant venue that opened, along with the Pike, in 2003.
“That was an unfortunate surprise,” said Miyaoka, who assumed his post in late February after working as senior director of property management for New Hyde Park, N.Y.-based Kimco Realty.
Today, the center features 34 restaurants, nightclubs and entertainment venues, including the popular Bubba Gump Shrimp Co., Gladstone’s 4 Fish, the Laugh Factory, a 14-screen Cinemark theater and a hotel. In a nod to its amusement park roots, it also has a Ferris wheel and carousel.
But with the departure of Gameworks – closed as part of a corporate restructuring by owner Sega Entertainment U.S.A. – the 369,000-square-foot Pike development is only 75 percent full. Not very reassuring for a location long heralded as a cornerstone’s of the city’s new downtown.
Located on 18 acres near the waterfront between the Aquarium of the Pacific and the Long Beach Convention Center, the center is in an area that has struggled to reinvent itself for decades. The Pike now finds itself mired in a struggle to attract patrons.
Some of the blame is being heaped on the Pike itself, including an awkward two-level design and the fact that it is bifurcated by Shoreline Drive. Then there is the lingering recession, which has slowed tourism and is still crimping spending. It hasn’t helped that several downtown condo projects have not been built.
“The center has had difficulties historically leasing some of that space. It’s not an easy center to make work,” said Victor Grgas, property services bureau manager for Long Beach, which owns the Pike, but contracts out management to Developers Diversified Realty of Beachwood, Ohio.
Colorful history
From 1902 until 1979, the site was home to the Pike, a famous amusement park for which the center is named.
Located at the end of the Pacific Electric Railway trolley line from Los Angeles, popularly known as the “Red Car,” the park included a “Main Street” lined with such concessions as a saltwater taffy store, tattoo artists, pony rides, fortunetellers and weight guessers. There were rides and attractions, including a house of mirrors and wooden rollercoaster extending over the sea.
In the 1970s, after purchasing the RMS Queen Mary and permanently docking it nearby, the city began a major redevelopment aimed at turning its waterfront into a tourist destination. But the Pike site – with the amusement park long since demolished – languished as a fierce debate raged regarding its fate.
Finally, the California Coastal Commission in 1999 approved a plan for the construction of a commercial and entertainment development, and the Pike opened seven years ago.
But the complex has struggled. Though some businesses have been successful, vacancies have generally remained high. Grgas believes the two-level design particularly hurts businesses on the second floor. And it doesn’t help that most of the restaurants are on the seaside of Shoreline Drive while the theaters and the former site of Gameworks are on the other.
Miyaoka said Developers Diversified is planning some changes to overcome the limitations of the design. Among them are the addition of large panels containing graphics to “animate and enliven” exterior walls; additional outdoor festivals, concerts and marketing events to attract more traffic; better signage to create a “more cohesive waterfront branding message”; and improvements aimed at enhancing traffic flow.
The city has also given Developers Diversified, which has a 66-year management agreement, plenty of breathing room. The company owes the city annual rent of $1.5 million per year, but Long Beach agreed at the beginning of the deal to waive payments until 2016.
“It may not sound like a good deal,” Grgas said, “but at some point, we hope there will be some revenues.”
Too little, too late?
At least one consultant thinks that may not be enough.
Linda S. Congleton, principal of the Linda S. Congleton & Associates retail consulting firm in San Juan Capistrano, said the Pike’s problems are all related to size and demographics.
“The biggest issue from day one was that this is a very large project that needs a large customer base and you don’t have enough housing in the area to support it,” she said. “The center is too large to be supported just by tourists.”
The city hadn’t planned for things to turn out this way. When the Pike opened in 2003, there were several large downtown condo projects on the drawing boards, several of which were put on hold when the housing market collapsed.
Even so, some tenants said they’re doing just fine.
Hooters of Long Beach – which recently moved to the Pike from a nearby location on Pine Avenue – reported that business has improved by 20 percent.
“We started seeing traffic on Pine slowing down,” said Adrian Oca, the restaurant chain’s area director for Los Angeles County. “We saw the Pike as a growth area and it’s exceeded our expectations.”
However, it’s been more a mixed bag at the local shop of ice-cream chain Cold Stone Creamery – and more typical of what other businesses have been experiencing.
While sales so far this year are about the same as last, said General Manager Citlaly Torres, traffic at the center is beginning to wane. She blames the lull on the loss of Gameworks.
“People don’t stick around as long as they normally would. Instead of three or four hours, they stay for one,” she said. “It hasn’t affected our numbers yet, but eventually it will. Right now we’re on the borderline; it goes up and down.”
