With Santa Monica’s tourism off by as much as 20 percent and business on the Third Street Promenade mall down by up to 40 percent, it’s time for drastic measures.

Like going after the locals.

Kathleen Rawson, executive director of Bayside District Corp., the nonprofit agency that oversees the outdoor mall, said a new marketing effort would focus on L.A.-area residents who can drive to the city. This could include extended store hours and free parking.

Efforts will be made to rally the city’s four business districts along Montana Avenue, Main Street, Pico Boulevard and the Santa Monica Pier to develop complementary programs to keep commerce within city limits.

Misti Kerns, executive director of the Santa Monica Convention & Visitors Bureau, said she would encourage hotel operators to adopt a friends and family program that offers discounts for folks visiting city residents.

Very expensive market

The bureau also will push Santa Monica as a destination to the L.A. market as is being done in Las Vegas, San Diego and Santa Barbara.

“We typically don’t market Santa Monica in the L.A. market,” she said. “This is a different day, though, and Los Angeles is a very expensive market.”

Well before Sept. 11, Santa Monica and Third Street Promenade in particular had seen a slowdown from what had been several years of major growth, turning what had been an also-ran shopping area into a major tourist destination. In the process, rents along Third Street skyrocketed to the point where numerous locally based merchants were forced to move.

Now, most everyone is getting hit.

Kevin Shattuck, store manager at Hear Music, said he recently had his “slowest day in years.” Overall, Shattuck said business is down 20 percent. He and store personnel are working on locally-targeted out-of-store events and promotions to drum up publicity and interest.

“We’re trying to get out,” he said. “There’s not a lot we can do to affect the flow on the Promenade.”

Lee Ann Elliott, general manager of the Tommy Jeans store, said the normal 60-40 tourist-to-local ratio is now 20-80. “It’s not good at all by any means,” Elliott said. “The local people come in and look around and buy something if they feel like it. The tourists spend a lot of money because they don’t have Tommy (stores) everywhere.”

Major economic downturn

It’s too late for one merchant. Paul Kaufman decided directly after the terrorist attacks to pull the plug on Na Na, an edgy clothing store.

“It definitely accelerated things,” Kaufman said, as others packed up boxes of shoes and clothes and scavenging customers picked over the remnants of the store’s going-out-of-business sale. “It was pretty clear there was going to be a major economic downturn because of that.”

It’s not just the retailers who are suffering. Jason Bramlett, manager at Teasers restaurant, said the entire year has been slow for the eatery and things have gotten worse since Sept. 11. The initial weekend after the attack “killed us,” Bramlett said, because cancellation of all sporting events kept most of the weekend crowd at home watching CNN.

“It was like we lost two weeks,” Bramlett said.

Teasers management are now considering some drastic measures, including limiting operating hours, scaling down the menu and raising prices.

While the influx of national chains along Third Street has been controversial because it pushed out the mom and pops, it might turn out to be an economic blessing in disguise. These retailers, after all, generally have greater resources to tap during an economic slowdown.

Randy Starr, principal at Tenzer Commercial Brokerage, said purchases might be down, but leasing on the Promenade remains steady. In fact, Starr said he’s wrapping up two leases in the 5,000 square foot range, at between $10 and $11 per foot.

John Cook, manager at Lucky Brand Dungarees of America, said things weren’t so bad at his store in part because of a loyal customer base that has started to come back.

Rob York, a retail development consultant to the Bayside District, said everyone on the promenade is feeling the pangs of a slowing economy. To date, however, national chains and local operators are holding things together.

“People are hanging on at this point, but if this is something that drags on for several more months it would be naive to think there wouldn’t be some people at risk,” York said.