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News-Press: Panelists examine how to fix State Street vacancies

September 06, 2018
Santa Barbara, California – Published 9/6/2018
By Mitchell White
Panelists examine how to fix State Street vacancies

With more than 30 vacant retail storefronts scattered throughout the heart of downtown Santa Barbara, it’s apparent that a change is needed.

Whether it’s the Macy’s that has been closed the last several years, or the multiple empty spots in the 400 and 700 blocks of State Street — locals are finally saying enough is enough.

More than 268,000 square feet of retail space was on the active market in 2017. This year there remains over 237,000 square feet of space on the market, Gene Deering, senior vice president of Radius Commercial Real Estate Group said during a panel discussion Wednesday in the Reagan Room of the Hilton Santa Barbara Beach Front Resort.

Mr. Deering explained that this is the first time in his 14 years with Radius that he has seen the community taken such a keen interest of the real estate market downtown.

Around 150 people gathered together for the discussion hosted by the UCSB Economic Forecast Project as part of its mid-year economic update titled “The State of State Street.”

Founder and Principal of Downtown Works Midge McCauley shared some statistics and findings from the 2017 retail assessment of State Street conducted for the Santa Barbara Downtown Organization, during which time she encouraged interested parties to work to combine sales and services.

From bike shops that sell coffee, to dress shops that also serve as convenient stores — though some argue that retail is dying Ms. McCauley says that shoppers are still looking for an experience.

During Mr. Deering’s portion of the panel, he showed a video recording he took after strapping a GoPro camera to the front of a scooter as he rode up State Street.

Areas like the Waterfront and the Funk Zone are thriving, with lots of activity and lots of demand. Once you go under the Highway 101 underpass, everything changes, he explained.

“You want a picture of why we’re here and why we’re talking about State Street? It’s right here,” he said as he rode along the 700 block of State Street, where Blush, Payless, Tonic night club and Verizon have all left. The former Panera Bread across from Macy’s is also vacant.

The big obstacle will be how to incorporate, as he calls it, “experiential retail” to the area where Macy’s once was, similar to what the Moxi has been able to do for the lower portions of state street.

“In my mind, State Street is still beautiful,” he said. “We’ve got interesting architecture…. we’re not a mall-based community where there is no end in sight. It’s a beautiful canvas, we just need to make some changes to bring it back to where it was.

“We’re not going to come up with ideas that work right now and then we’re done.”

The solution could involve more mixed-use tenants that offer both housing and shopping, like the Saks off Fifth in the 1000 block. It could also include shifting from retail to office space, as has been the case with 820 State Street.

The total number of vacant storefronts isn’t exact. Some spaces aren’t on the market or could be under construction. The current vacancy rate is estimated to be as high as 16 percent, Mr. Deering said.

“The numbers say it, walking around the street you can feel it, but we’ve got great options ahead of us as long as this room stays engaged,” he said. “It takes us going to dinner on State Street — are we going to shows at the Arlington and grabbing a cocktail afterwards? We need to be engaged.”

Over the last year or so, city officials have met with several groups and local residents to examine the ongoing issues of downtown vacancies. Focusing on how to get people downtown and keeping them engaged is one of the main issues, said Nina Johnson, senior assistant to the city administrator.

Services such as downtown ambassadors that serve as the eyes and ears of the police department are ongoing to help deal with the city’s homelessness issues. The city recently received $900,000 in grant funding to impose the new smoking ban, which will also be put toward other public safety issues downtown like loitering and public intoxication.

In dealing with public intoxication, next month the City Council will discuss restrictions on the sale of single-serve alcohol containers at convenience stores and gas stations, Ms. Johnson said.

Local groups are also looking how to reboot community events like “1st Thursday’s” and other family-friendly events and block parties to get people to go downtown.

The city is working with local hotels to sell passes for the city shuttle service to make it easier for people to venture up and down State. Officials are also exploring incentives to shuttle or parking to attract more people.

Some places may not necessarily need improvement, but activity to liven them up, Ms. Johnson explained.

Discussions to revitalize the Highway 101 underpass are ongoing. The city has announced plans to reduce traffic lanes in that area and will seek to make the area more inviting and connect the Funk Zone, Waterfront and downtown corridor.

“It’s not a very welcoming area today,” Ms. Johnson said. “There’s a lot that we can do to improve it, make it more of a destination and an area that you want to go in and an area that you want to take yourself.”

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