Savings Grace

Savings Grace
Goodwill Southern California’s Craig Smith at a store in Los Feliz.

When executives at Goodwill Industries of Southern California asked about abandoned grocery stores in Marina Del Rey and Hacienda Heights as sites for new thrift stores, Los Angeles County planning officials told them no way.

Why? Because a county zoning rule that dates from the Great Depression bans thrift stores at those sites.

Instead of giving up and moving on, as other thrift store operators have done, Goodwill Southern California executives decided the archaic zoning rule needed an update. So they approached County Supervisor Don Knabe and asked him to revisit the zoning code.

“We were getting put into the same category as pawnshops and used-car lots, which meant we were not allowed in many neighborhoods,” said Craig Smith, chief operating officer for Goodwill Southern California. “It’s such a huge missed opportunity, as every time we open up a new thrift store, that’s another 20 to 30 jobs for the community.”

Earlier this month, Knabe proposed a change in the county zoning code that would allow thrift store operators an easier path for approval in areas that until now have been off-limits.

Knabe’s zoning proposal received initial approval this month from his fellow board members; assuming final approval is granted, the zoning change could be in effect by this spring.

“This is an opportunity for these stores to set up shop and put people to work,” Knabe told the Business Journal last week. “These secondhand stores are mostly operated by non-profits that also provide job training and social services programs, and we need those now more than ever.”

Goodwill thrift stores provide a revenue stream that helps fund the non-profit’s operations, which include helping long-term unemployed people train for jobs.

“For us, the thrift stores help us fulfill our mission, which is jobs skills programs and jobs training for people with vocational challenges,” Smith said. “As government funding has fallen off, we are relying more than ever now on our thrift store operations for revenue.”

And as the need for more stores increased, Smith said that Goodwill has been stymied in its attempts to set up stores in unincorporated county territory for the past seven years. The region includes nearly 1 million people in communities including East Los Angeles, Hacienda Heights/Rowland Heights, Marina Del Rey, Stevenson Ranch and Willowbrook.

Most recently, he said, Goodwill had briefly considered abandoned grocery store locations in Marina Del Rey and Hacienda Heights, but then learned the zoning code banned thrift stores in those locations.

“As soon as we found that out, we dropped our plans and moved on,” he said.

Although Goodwill leaders scouted other locations, they did tap Knabe’s shoulder and told him about the old ban on thrift stores.

Goodwill isn’t the only thrift store operator to encounter this problem. Hollywood-based AIDS Healthcare Foundation, which operates Out-of-the-Closet Thrift Stores, has also faced the same blockade. Jonathan Kreuyer, general manager for the thrift stores, said his staff had looked at a few sites in unincorporated areas of the county but walked away.

“Immediately when we heard the sites weren’t zoned properly, we moved on,” he said.

There are currently no Out-of-the-Closet Thrift Stores in unincorporated county territory.

Unlike for-profit developers, non-profit thrift store operators do not have the resources to wage lengthy battles to try to get government zoning approvals. That’s especially true since the recession hit four years ago, according to Regina Birdsell, chief executive of the Center for Nonprofit Management in Los Angeles.

“We’ve seen this issue come up more frequently in the last couple years or so,” Birdsell said. “Given what has happened to the budgets of non-profit organizations, no one has the time or the resources to take on these zoning issues themselves or hire someone to shepherd these things through on their behalf. So, as soon as they see trouble, they drop their plans and move on to a location that’s easier.”

Depression roots

Currently, thrift stores and other secondhand retail stores are allowed in unrestricted commercial zones, which encompass about 2,600 acres throughout unincorporated county territory. Any retail or commercial operation can go into these zones, from car dealers to Wal-Mart stores. In unincorporated county territory, 199 businesses have secondhand dealer licenses, which cover a broad category that not only includes thrift stores, but also businesses that sell used books, used jewelry and other items.

Under a code revision made in 1936, secondhand stores are not allowed in 1,200 acres of commercial districts zoned for neighborhood businesses, such as dry cleaners, 7-Eleven franchise outlets or small grocery stores.

At that time, during the decade of the Great Depression, secondhand stores had spread rapidly in Los Angeles and throughout the country. Bruce Durbin, county supervising regional planner, noted that in those days, secondhand stores often featured big bins full of donated or discarded items that people rummaged through. And they attracted the unemployed and homeless for miles around. The stores were seen as undesirable as pawnshops.

“The intent of the ordinance amendment was to keep these stores out of areas with residents,” Durbin said.

That county zoning code amendment has remained on the books since, even as the nature of secondhand stores has changed. In the 1970s and 1980s, thrift stores began to display their wares much as department stores do. Instead of just attracting the homeless and destitute, these stores were also pulling in middle-class bargain hunters. The stores began generating revenue that non-profits used for other programs. Also, for-profit secondhand clothing and merchandise stores have gained popularity.

Knabe said these changes have made it necessary to update the code.

“Thrift stores are not just for the less fortunate now,” he said. “There’s no reason why they can’t be allowed in more neighborhoods.”

But Knabe said there is still one major issue: the dropping off or donating of merchandise. He said he’s heard reports of people discarding used clothing or other merchandise at thrift stores in the middle of the night – items that are often too degraded for the donation centers to accept. If not dealt with swiftly, the items then become an eyesore and the donation centers could become dumping grounds.

To address this, Knabe’s ordinance change requires a public hearing for any thrift store that accepts donations on the premises, so that neighbors can express any concerns they have about traffic and cleanliness. “The key is to make sure there’s a proper screening process in place during the hours of operation and adequate security in place during off-hours,” he said.

Most thrift stores operated by non-profits have donation centers, so they would have to go through a public hearing and get a discretionary permit, which is similar to a conditional use permit process that other municipalities have.

Thrift store operators say they are willing to apply for the discretionary permit process, as long as there is a reasonable chance of being allowed to open.

“If this change in the ordinance goes through, then yes, we would look at opening stores in unincorporated L.A. County and we would try to get the conditional use permit, if that’s required,” said Out-of-the-Closet’s Kreuyer.

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Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.

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