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Pacific Coast Business Times: Local shopkeepers challenge the chains on State Street

May 02, 2014

Pacific Coast Business Times: Local shopkeepers challenge the chains on State Street

Santa Barbara, California – Published 5/2/2014
Pacific Coast Business Times
Pacific Coast Business Times: Local shopkeepers challenge the chains on State Street
By Marlize van Romburgh, Commercial real estate

Changes are afoot along the region’s main retail corridor, and for the most part its mom-and-pop shops that are giving downtown Santa Barbara a new lease on life. Let’s take a closer look.

  • Carrillo Plaza has officially traded the liquor for the lattes. The former Santa Barbara Liquor store at the downtown retail center now hosts a for-lease sign, but Tino’s Italian Market, a longtime local favorite, is relocating to the former Carrow’s restaurant space in the center. The Italian deli and specialty grocer closed its doors at 415 E. De La Guerra St. earlier this year after more than 67 years at that location. Longtime proprietor Valentino “Tino” Ziliotto was known for his “super deluxe” sub sandwiches. He died in January at the age of 86.
  • The Tino’s lease continues to breath new life into Carrillo Plaza. In 2012, the small shopping center at Carrillo and De La Vina streets brought Starbucks in as its new anchor tenant, hoping the coffee chain would act as a catalyst to draw more foot traffic. The aging center has long been home to an eclectic mix of locally owned small businesses including Spudnuts, Fancy Nails, Boost Mobile and a personal injury attorney’s office. Of the 13 stores in the center, four are currently vacant.

  • ZFolio Gallery has moved into a 2,400-square-foot retail space at 1013 State St. The business was started in 2003 by Zdena Jiroutova, who was born in the Czech Republic, and her husband and business partner Michael Mendizza. The couple opened the first ZFolio storefront in Solvang in 2006, then expanded in 2009 to Monterey’s Cannery Row. The gallery sells jewelry, art glass and photography.
  • Jersey Mike’s Subs hopes to have better luck with fast-food sandwiches at 1213 State St. The New Jersey chain is currently doing an interior remodel of the space, which used to be occupied by competitor Quizno’s.
  • Everybody’s trying to grab a slice of the quick-serve pizza concept, including Palo Alto-based Patxi’s Pizza, which signed up for 4,100 square feet of space at 515 State St. in downtown Santa Barbara. The chain offers a $10 lunch deal and also purports to have one of the few “true vegan” pizzas out there, along with Chicago-style, cornmeal pan crust, extra-thin, whole wheat and gluten-free options.
  • Outside of the downtown core, popular Mexican restaurant Los Agaves is opening a taqueria concept at 422 N. Milpas St., just down the street from its flagship restaurant. The family-owned chain, which serves up Oaxacan cuisine, opened a second sit-down restaurant at 2911 De La Vina St. in Santa Barbara last year. This summer, Los Agaves will open its first restaurant outside the Santa Barbara area at the new Shoppes at Westlake development in Westlake Village.

All told, there were 16 retail leases in Santa Barbara in the first quarter, according to Hayes Commercial Group. But, the firm noted, that’s a 53 percent drop compared to the same quarter last year and in 2012. “The most important factor behind this cooling trend is limited inventory. The vacancy rate in Santa Barbara is 1.96 percent, which is its lowest level since 2008. Goleta’s vacancy rate is even lower at 1.74 percent. There are tenants — including national retailers — looking for space on the South Coast, but the available options are relatively limited,” the Hayes team noted.

Radius Commercial Real Estate & Investments crunched the numbers a little differently. According to that firm, the South Coast’s retail vacancy rate nudged up to 2.3 percent in the first quarter, up slightly from 1.7 percent a year earlier. While that’s still very low compared to most retail markets, the number of available properties jumped from 65 to 77, Radius said, and in square footage terms, available properties ballooned almost 20 percent from 217,000 to 237,000 square feet by the end of the quarter. Retail landlords continue to raise prices, however, with the average asking rent climbing to $3.72 per square foot, up from $3.42 per square foot a year ago.

Radius said the largest empty storefronts in downtown Santa Barbara are the 11,500-square-foot space at 530 State St., vacated by Santa Barbara Consignment, and the 11,200-square foot space at 1117 State St. that use to house Rugs And More.

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