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Tuesday, Jan 31, 2023
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Big Store Interest in Wilshire Worries Santa Monica Shops

Big Store Interest in Wilshire Worries Santa Monica Shops





By DANNY KING

Staff Reporter

Wilshire Boulevard has always stood out among Santa Monica’s retail corridors.

Montana Avenue has its boutiques, Santa Monica Boulevard its car dealerships. Third Street Promenade has its theaters and shops. But Wilshire Boulevard is a hodgepodge of uses without its own identity.

Those days are no more. Zoned and priced out of other areas, Wilshire increasingly is being targeted by big box chains.

With rents topping $7 per foot per month on the Promenade and $6 on nearby Montana Avenue, retailers are being pushed onto Wilshire, driving rents to twice the rates of five years ago. At $3 per foot rents and higher, single-unit service operations have started to be priced out.

As a result, Wilshire is becoming a catchall for national retailers looking to stake a claim in the ever-attractive Santa Monica consumer market.

“Third Street has pretty much become the Rodeo Drive of Santa Monica,” said Joanne Sumabat-Smith, associate at CB Richard Ellis. “So these national retailers are looking for places to go.”

The influx comes at a cost, said Jason Douglas-Hiley, co-owner of The Yellow Balloon hair salon on Wilshire near 13th Street. Two of his neighbors, both single-unit operations, closed shop recently when rents doubled.

“Either you’ve got to be high end to pay the rent or you have to be a high-volume discount operation the people in the middle tend to get squeezed out,” said Douglas-Hiley, whose store has been in the area for 18 years. “If you can’t go to a hardware store without driving to OSH on Bundy Drive (in West Los Angeles), it doesn’t seem like a community.”

Plenty of targets

Among the spots along Wilshire being targeted:

– The old Monica Theater, 1314 Wilshire Blvd. At 16,000 square feet, it is being marketed to regional retailers. No deal has been signed.

– Just Tires, at 1610 Wilshire Blvd., will be redeveloped into an 18,000-square-foot retail property when its lease runs out in September. Three national chains, one of which sources said is Staples, are in discussions with the property owner. A lease expected to be signed by the end of the month.

– A 14,000-square-foot Walgreens will open in August at the former Great Western Bank site at 1952 Wilshire Blvd.

– Whole Foods has broken ground on a 30,000-square-foot market at 2201 Wilshire Blvd., the longtime home of Madame Wu’s restaurant.

– The owners of 2320 Wilshire Blvd., home of Wilshire West Detail & Car Wash, are looking to build a 65,000-square-foot mixed-use project on the block-long site.

– The former Goodyear Tire Center at 1200 Wilshire Blvd., recently targeted by Trader Joe’s. Neighborhood groups opposed the project, citing zoning rules reverting the parking area to residential use once the tire center use terminated. A 7,500-square-foot mixed-use project is now being discussed.

The developments would add to an existing stable of big-box retailers along an 11-block-stretch that includes two Rite Aids and a Vons.

While the new developments are a signal of Santa Monica’s prosperity, they may also eliminate any local flavor for a thoroughfare not known to be a prime shopping district in the first place.

“The retailers know the cost of doing business that’s why they’re willing to pay to be there,” said Matthew May, president of May Realty Advisors. “Most of the (existing national) retailers are doing the volumes to support the rent.”

City moves

The corridor’s evolution is noteworthy in a community known to be protective of its local businesses. In response to the spate of rent-induced restaurant closures on Third Street Promenade over the past few years, the Santa Monica City Council enacted a moratorium on restaurant-to-retail store conversions on for the three-block area in January.

The city, looking to protect small businesses on Wilshire, will begin assessing potential sites for development of parking structures along Wilshire, a move that would help parking-strapped operators without the real estate to have their own lots.

Zoning bonuses for mixed-use residential projects including greater floor-to-area ratio allowances than available to pure retail projects will also encourage nearby residential building, providing additional foot traffic neighborhood businesses need.

Still, the city will stop short of employing use control measures as it has done on the Promenade.

“The Promenade is higher on our radar the mix there really determines whether people come to the area or not,” said Mayor Michael Feinstein. “People are more likely to be on Wilshire because it’s a through corridor. It’s not a destination of itself.”

As a result, expect fewer small businesses to open up along Wilshire, said Douglas-Hiley.

“We’ve been here a long time. If I have to raise my prices a little bit, I can get away with it,” said Douglas-Hiley. “But if I walked in here now, we couldn’t make it.”

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