Redevelopment Plans Paint Bright Picture for San Pedro Businesses

Like many merchants in downtown San Pedro, Warren Gunter remembers how bad it was a few years ago, when the traffic all but disappeared outside his small jewelry store on 6th Street.

“You could walk across the street with your eyes closed,” he said.

Shoe-store owner Zivan Milivojevic watched his sales drop 20% in a year, causing fears he would lose his business. A few blocks away, Joanne Applegate watched as shop after shop locked the doors and whitewashed the windows. She imagined dark times ahead for the small lighting store she still manages.

“There was nothing,” she said of business. “It was dead.”

But today, nearly two years after 50% vacancy rates spawned a push for revitalization, a new wave of optimism has appeared among many San Pedro merchants. Despite a slow start and a raft of unsolved problems, including poor visibility, deteriorated buildings and heavy competition from newer malls and commercial areas, many merchants and property owners are now predicting a boom for the 50-year-old business district.

Huge Redevelopment Projects

Much of the optimism, they said, is the result of huge redevelopment projects planned for just outside the commercial area--among them an eight-story, 216-room hotel on Beacon Street, a 1,357-slip marina at nearby Cabrillo Beach and a World Cruise Center for commercial boat lines at the Port of Los Angeles, less than a mile away.

At the same time, a newly completed, 18-month planning study has established ambitious goals and a glowing economic forecast for property located inside the business district, where $700,000 in federal and city grants already has been set aside to help pay for revitalization.

The study, released last week by Mayor Tom Bradley’s office, gives merchants a tentative list of recommendations for using those funds and provides them with their first market analysis of the area’s potential. According to the report, the San Pedro market could support nearly fives times the business district’s current yearly retail sales volume if the area were properly refurbished and promoted.

In other words, the report said, the area could be generating $77 million per year in sales, rather than the $15.8 million it is now doing, even without the aid of surrounding commercial growth.

Chance to Resurrect Area

The emergence of that growth, combined with a strong existing market, could give merchants a chance to resurrect the area during the next 10 years, the report said.

“(The) degree and character of change . . . will be dependent on the ability of the . . . merchants, property owners, community residents and governmental agencies to capitalize” on the improving market, the private consultant’s report concluded. “The outlook . . . is extremely positive.”

Not everyone agrees with the projections of $77 million in annual sales--”I don’t see how that’s possible,” one store owner said--but most merchants said they are eager to begin work. A 30-member corporation of merchants and property owners was formed earlier this year to help put recommended improvements into effect and to plan cooperative marketing efforts that could get under way in the next few months, said Larry Montgomery, who directs the city-sponsored organization.

Already, the organization has adopted an logo--a cruise ship silhouetted against the Palos Verdes Peninsula--and a slogan, “San Pedro . . . Our Town,” to help advertise the area.

Skipped by Development

San Pedro, one of 10 commercial areas in Los Angeles to have qualified for revitalization funds, is a town that was somehow skipped over by the extensive coastal development that characterized the 1970s in Southern California, Montgomery said. Now the area, with its soft sea breezes and a view of Los Angeles Harbor, is considered ripe for that development, he said.

“That is now the bright spot on our horizon,” Montgomery said.

Grants and low-interest loans offered through the revitalization program are expected to result in extensive storefront remodeling, a trend toward higher-quality shops and a broad range of other improvements along 6th and 7th streets and Pacific Avenue, which form the heart of the business district, officials said.

By September, Montgomery said, the group hopes to select an architect and to begin sorting out the priorities among the many projects recommended by the planning study.

Better Parking, Wider Streets

Those recommendations call for larger and better-labeled parking lots, wider streets and sidewalks, and new public benches and drinking fountains. By the end of three years, the report suggests, the business district should have an aggressive cooperative marketing program and be part of a proposed shuttle-bus route connecting the new Cabrillo Beach marina, the World Cruise Center and the nearby Ports o’ Call village.

In addition, there should be new signs, more clearly labeled auto entryways into the district and cooperation between merchants and builders to preserve an open, pedestrian atmosphere at Beacon and 6th streets, where the new hotel would adjoin existing shops, the planning report said.

Long-range portions of the plan, to be developed over 10 years or more, also call for up to three multilevel parking structures--to be financed through parking meters and special assessment districts--and the construction of two large retail, restaurant and office centers. One of those, a $20-million proposal for 6th Street, would stand next to the existing county courthouse; the other, a $17-million project on Pacific Avenue, would replace commercial buildings that now occupy the west edge of the district.

Funding Limits

Funding limits may prevent adoption of all of the recommendations, Montgomery cautioned. But he said many of the short-range goals, such as a shuttle-bus stop and extensive street improvements, are likely to occur in the next three years, and interest in the revitalization has already brought new businesses into the area.

Along 7th Street, whitewashed windows now mask a row of low-profile operators, like cabinet makers and stained-glass artisans, who so far have not used their display space, he said. Although the current vacancy rate is unavailable, Montgomery said, it is lower than the 50% rate estimated nearly two years ago, and many property owners are beginning to make improvements to their shops.

The San Pedro Chamber of Commerce expects to conduct a new vacancy survey in the near future, he said.

Ray Howell, the new chairman of the Downtown Business Assn., a volunteer group of merchants and property owners, undertook one of the first major refurbishments when he reopened the 1,500-seat Warner Grand Theater last November. His investment in restoring the 1930s Art Deco style theater, on 6th Street near Pacific Avenue, will probably top $100,000 by the end of the first two years of work, Howell said.

Began Operating at Profit

But the movie palace, which featured “Rambo” this week, along with a free Wednesday matinee of “Superman III,” began operating at a profit after only three months--putting it eight months ahead of schedule, he said. He said that is a testimony to the area’s potential.

By September, Howell said, the theater is scheduled to begin offering Friday and Saturday night vaudeville shows, which could bring additional crowds back to the area.

“The more you learn about San Pedro, the more you learn it’s a sleeping giant,” Howell said. “I don’t know how anyone can feel other than excited about the downtown area.”

Merchants acknowledge that there have been snags in the effort. Howell said some business operators have disagreed on whether the business district should be patterned after a fisherman’s village, a quaint shopping village or whether it should encourage large retail and office structures. That is an issue now in the hands of the revitalization corporation, he said.

Fair Cancellation

Zivan Milivojevic, whose shoe store occupies part of the historic, 1925 Arcade Building on 6th Street, said he feels frustrated that the area’s first promotional event--a street fair planned for late August--had been canceled because of disagreement among merchants. Downtown businessmen voted 22 to 2 to conduct the fair, for which they planned to close 6th Street to auto traffic and offer outdoor sales and entertainment, Milivojevic said.

But the two dissenters convinced members of the corporation, which must approve cooperative promotional efforts, that the blockage of auto traffic could hurt their revenues, he said.

“Culver City . . . Santa Monica, they hold the same thing and say it is fantastic,” he said. “You start to ask yourself, ‘What’s going on?’ ”

On Tuesday, Howell said the revitalization corporation took a new vote and approved the event for September 14.

Despite the uncertainties, Milivojevic, like other merchants, said he remains encouraged by revitalization plans and by the prospects of surrounding development, notably the Beacon Street hotel and the new cruise-ship center. He attributed some of his optimism to improvement of the national economy in the last two years and said he already has filled out preliminary applications for 6% city loans under the revitalization program, which would help him install new carpeting and light fixtures in his shop.

New Seismic-Safety Laws

Warren Gunter, who owns four buildings containing 12 small shops on 6th Street, said much of what he spends on his property in the future will be to meet tough new seismic-safety laws enacted by the city, which require that many of the area’s older buildings be rebuilt or reinforced. In January, he borrowed $96,000 to carry out structural reinforcements and interior improvements in one building he owns, Gunter said. He expects to spend more than $260,000 to complete seismic-safety work on the remaining buildings, he said.

But Gunter said relatively low property values in the area make the expense worthwhile. For most property owners, he said, safety inspectors will not require the work for several more years, by which time rents--and profits--may have sharply increased.

“Where else are you going to find beautiful oceanfront property . . . with a new hotel, new office buildings?” Gunter said. “You can see the market coming. You can see the frenzy building.”

One of the area’s problems has been that attractive, successful shops were located near thrift stores and other lower-quality merchandise houses, according to the planning report. But some merchants said they expect that to change as landlords can charge more rent for their buildings.

‘Rosy Future’

“Eventually, it will be too expensive for the Salvation Army-type stores,” said Al Kaye, whose war-surplus store on 6th Street is considered one of the area’s biggest retailers, with 15 full- and part-time employees. “I think 6th Street has a rosy future. It will be an attractive area.”

Milivojevic said he does not expect that the area will ever compete with new malls like Del Amo Fashion Center in Torrance, which draws customers from the San Pedro market. But after his 6-year-old business almost closed two years ago, he said he has come to believe in the revitalization effort.

His profits are up, he said. “This is the best year I’ve ever had.”