Some things on Olvera Street never seem to change.

Visitors touring this cradle of Los Angeles can pick from a variety of colorful tourist tchotchkes, from wide sombreros to painted guitars. Several restaurants and food stands offer Mexican-American fare such as tacos and enchiladas. And costumed mariachis strolling among the historic adobes provide a sense, albeit stereotypical, of what old downtown was.

But now Olvera Street is changing. A bitter battle has developed between the merchants and their landlord – the city of Los Angeles – which is cracking down.

For example, a glass-blowing shop in business for three decades has been shuttered since its proprietor fell behind in his rent last year. Another Olvera Street landmark, Casa de Sousa coffee shop, just last week received an eviction notice – only the second in the Mexican marketplace’s 80-year history. And a third store has not been allowed to reopen since the man who ran it for 60 years died in May.

They are all indications of the cracks that have appeared in this city-run district known formally as El Pueblo de Los Angeles Historical Monument. For years, the city operated the park with a relatively laissez fair attitude, but now it is a much tougher landlord because of its growing budget woes.

The city has begun strictly enforcing late-payment policies and raising long-discounted rents to current market levels. The street’s merchants, many of whose families have been there for generations, say the city’s new stance could be a death knell.

“What’s at stake is a family tradition that has given L.A. a unique cultural icon for 80 years,” said Vivian C. Bonzo, president of the Olvera Street Merchant’s Association, which represents the district’s 74 retail stores and eight restaurants. “How many other places have survived that long?”

Robert Andrade, general manager of the city department that oversees Olvera Street, contends that survival is indeed at stake, but that it can only happen if the attraction stands on its own.

“We have a financial responsibility to the residents of this city. I have a department to run. This place has to be commercially viable,” he said.

An audit released by the City Controller’s office in June brought the financial issues to a head.

According to the audit, in fiscal 2007-2008 the park’s revenue totaled $3.3 million, but $2 million of that came from parking fees. Only $840,000 came from rents paid by the concessionaires. The rest came from common area maintenance fees paid by businesses, as well as income from events and filming.

During the same period, the audit reported, expenditures for the city department that runs the attraction totaled $4.1 million, mostly for administrative salaries, custodial services, building maintenance and security. The bottom line: nearly a million dollar transfer from the city’s general fund to make up the deficit. In short, taxpayers are subsidizing the business tenants.

“While general fund contributions to El Pueblo have increased each year for the past several years, rents from El Pueblo merchants have not,” the audit concluded.

Historic attraction

Located in the area where early Los Angeles is said to have begun, the district contains an original Mexican plaza, circa 1825, as well as 20 historic buildings and four museums.

In 1930, a group of business people formed Olvera Street as a Mexican marketplace aimed at replicating the cultural and commercial ambience of early California. The street, really an alley, was later incorporated into a state historic park, which the city took over in 1989.

It is here that some 2 million school children, tourists and city residents flock annually to buy Latino curios, hear Peruvian flutes, get a taste of Mexican pastries or watch a traditional candle maker at work.

But while the businesses have benefitted from their location in a historic park, Andrade said their rents have not been raised in years. The June audit recommends increasing rents and maintenance fees to current market levels.

Olvera Street merchants, he said, now pay $252 to $300 per month for small center-aisle kiosks, and $1,800 to $7,500 for larger spaces. Andrade wants to double the average rent and increase monthly maintenance fees – which range from $5 to $900 and are also paid by the merchants – by as much as 400 percent.

“We plan to sit down and initiate negotiations with merchants for new lease agreements,” he said.

Those negotiations are supposed to start in November. But in the meantime Andrade is strictly enforcing city policies on late payment – something merchants say has traditionally been lax.

Currently, six Olvera Street merchants are behind in their rents, and one is on a repayment plan, Andrade said. City policy calls for businesses to be evicted after falling four months behind.

Financial woes

That’s what happened to glassblower Luis Diaz, who had been there for years until vacating last April. He could not be reached for comment. It’s also what’s happening to Conchita Sousa, whose family has operated Casa de Sousa coffee shop at the same location since 1949.

“They are displacing a 60-year legacy,” said Sousa, who admitted she fell behind on her $1,896-per-month rent.

But she said that was because business was slow. Indeed, she and other merchants say the city’s crackdown couldn’t come at a worst time given how the recession has cut traffic and sales by as much as a third at some shops.

Mike Mariscal, the proprietor of a gift shop called Myrosa Enterprises that was established in the 1950s, said that before the city cracks down on merchants it should look at itself. He claims that bloated city administrative salaries are a bigger issue.

“Olvera Street is unique,” said Mariscal. “What can you compare us to? You can’t equal what we bring to the city.”

Part of what the street brings, he said, is the historical continuity of families there for generations. That continuity was broken somewhat by last year’s eviction of the glassblower and the more recent actions aimed at Sousa. It has also been threatened, Mariscal said, by the closure of Casa Carolina, a Latino curio shop whose long-time proprietor died in May.

“Traditionally the business automatically goes to the next of kin,” said Carolina Tanzini Ross, whose father, Melone Tanzini, collapsed at age 87 in the shop he’d owned for years. “But when we were ready to reopen they said they couldn’t locate any paperwork showing that he wanted to leave us the shop.”

Andrade denies that there has ever been a policy of benign nepotism in the absence of a legal will. And he denies angry merchants’ accusations that he simply aims to replace them with higher-paying tenants.

“I have an obligation to the city’s taxpayers,” said the general manager, who’s headed the department since 2006. “Why should they be subsidizing business owners? I don’t think that’s right.”