It is easy to get caught up in the negative aspects of the current reality on State Street in Santa Barbara, but community leaders are recognizing the positives and trying to build on them.
The corridor, part of the economic life blood for the Tri-Counties, is a mixed bag. Lower State Street, near the waterfront and Funk Zone, is doing relatively well, but the further one goes up State Street, the more vacant storefronts there are.
“It is something we are all concerned with, and we should be,” Paul Casey, city administrator for Santa Barbara, said at the Radius Economic Forecast in Santa Barbara on Nov. 1. “This is the heart of our downtown and having a vital, vibrant and active downtown is important to the community and the city from a revenue standpoint and for economic development.”
As the forecast underscored, there is no easy answer to the problems on State Street, which will become a priority for newly elected mayor Cathy Murillo.
When Macy’s closed 100 stores nationwide several years ago, it was not a shock that it decided to close one of its Santa Barbara locations. But the city did not expect it to close the downtown location, Casey said.
There is a unique dynamic that surrounds Paseo Nuevo, the shopping center on State Street where Macy’s once was. The city of Santa Barbara is the underlying land owner of the old Macy’s, but the company is still holding onto the building. Since it does not seem like Macy’s is interested in doing any kind of redevelopment or reinvestment, Casey said the city is very much looking forward to the day the company sells that asset.
“I think we all want to engage in a conversation about what that corner should become,” Casey said. “I think it is extremely unlikely that it is going to be three floors of retail. Those days are over.”
The main challenge will be repositioning the corner into a functional space that works for both the city and the community. The city hopes that Macy’s will make a decision soon and sell the building to someone with the creativity needed to make the space successful.
One ongoing idea that could be a solution to some of State Street’s woes is to inject residential space into the downtown area. More people living downtown could bring vibrancy back to State Street but then another problem would pop up. Parking.
“Do we couple parking and have them provide it offsite? Do you not require parking at all? Do you take advantage of nearby city parking lots and have some sort of residential permit program in your city parking lots on the top floor?” Casey asked.
The city of Santa Barbara recently launched an expedited plan-check, permitting and design review process for stores that have frontage on State Street. Currently, 51 properties are already trying to take advantage of the expedited process. Sixteen design review applications have been submitted to the city and 13 have already been approved along with six building permit plan checks.
Another growing concern about State Street is safety. The city has been taking measures to increase uniformed presence in the corridor, not only with police but with ambassadors that can provide more of a presence, answer questions and report illegal behavior.
There are also the yellow-shirted community liaisons that work with homeless individuals to help them get the services they need. The Santa Barbara Police Department has also adopted a volunteer policing program to add presence and help uniformed officers deal with some of the nuisance issues.
“In looking at State Street and what we have as a retail environment, I think it is important to appreciate what we have. We have got a beautiful canvas and we just need to make some changes to get the most out of downtown,” Gene Deering, senior vice president at Radius, said at the forecast.
Other city initiatives include the installation of new signage that will help visitors find their way to the waterfront, Funk Zone and State Street. There will also be a reevaluation of short-term loading and pick up areas both for retail stores like Nordstrom’s, which is attempting to start an online pick-up sales strategy, and the consolidation of areas where ridesharing services like Uber and Lyft can pick up passengers.
“I think what has played out recently has brought the community together,” Maggie Campbell, executive director of Downtown Santa Barbara, said. “I expect we will see incremental change but it is going to take some patience.”
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Summary of market insights and analysis from Q2 2019 South Coast commercial sales and leasing activity: Download the complete report here …