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The spaces between

Why the landscape of downtown SLO is changing

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Empty buildings have become part of the landscape in downtown San Luis Obispo, and the average passerby probably wouldn’t give a second look to the seemingly gloomy spaces. Through the lens of a dark and fairly twisted photographer’s camera, the many empty rental spaces in downtown SLO appear barren, but not lifeless. The hopes and dreams of past inhabitants seem locked away inside, waiting for someone to come along and bring them back to life. The spaces represent failure for some, but for most they reflect the economic realities that have beset a town sometimes called the happiest in the country.

Most of the empty spaces in downtown SLO have been uninhabited for several months, though some have been unoccupied for years.  Some locations appear inviting, with exposed brick walls and clean, barren floors, while others sit in different levels of retrofit construction with nails and two-by-fours sprawled about, seemingly begging to be finished.

Realtors, business owners, and city officials told New Times that while the dismal economy has created most of the downtown vacancies, there are more factors at work. City requirements that brick buildings be vacated for seismic retrofitting cast many businesses out on the street. Most of the retrofitting is complete, but the legacies still linger.

Also, rents are high downtown, and some small business owners say landlords keep the costs high in the hope they’ll find a more stable (relatively speaking) national chain store for a tenant.

A few of the empty spaces have been gutted, such as the old Verizon store at 742 Marsh St. The relatively small space has a disheveled appearance with crooked, empty shelves lining the walls and an abundance of wires and cords dangling like entrails from the ceiling. McNamara Real Estate, which owns the building, revealed Verizon moved because the building was being retrofitted and McNamara hadn’t found another tenant willing to lease the space.

Decades, a vintage clothing store, was in business for 15 years before shutting down a year ago. The store’s owners relocated to a new downtown location while the old spot was retrofitted but were forced to close soon after the move. The former Higuera Street location remains empty and desolate, a single counter presiding over the store in lieu of an actual human proprietor.

Although there are many different reasons buildings in SLO remain empty, there is one that dominates the landscape: the economy. Business owners say commercial bank loans are still very difficult to get. The tight credit market leaves some uninhabited places in a sort of building purgatory, needing to be retrofitted but without enough funds to get them going again.

“There has been a lot of seismic retrofitting, and often the tenants moved out, and that also happened at a time of recession,” said San Luis Obispo Chamber of Commerce President Dave Garth. It is a tough time for small business, probably the worst time in the past 20 to 30 years.”

With the current economic trend affecting small businesses owners, the door has opened for larger chains. With deep pockets and seemingly foolproof business plans, restaurant chains like Chipotle, Eureka Burger, and Habit Burger are settling in at their new downtown locations. Many of the old independent businesses are facing their end or have already closed.

“The chain stores tend to stick because they have higher sales per square foot,” said SLO City Councilman Andrew Carter. “And they’re able to make a healthy profit with the rent.”

According to Carter, local sales tax declined in every quarter between the third quarter of 2007 and the first quarter of 2010. Quarterly sales have increased recently, but still fall behind the peak the city experienced in 2005 and 2006.

In recent years, downtown has started to see a major shift in the nature of the businesses that survive. Restaurants are flourishing, while the number of retail shops is dwindling.

Mark Anderson, owner of property management company Anderson Commercial Services, said “most of the demand for rental spaces downtown is driven from restaurant tenants.”

The Wild Donkey Café, Nautical Bean, Luna Red, and many more food establishments have found spaces downtown, while clothing stores such as Bambini and Bloke are falling by the wayside.

Despite how slowly things move in this economy, there is a plan in motion for at least one long-empty location in downtown SLO. Chris Richardson of Richardson Properties is currently in the process of coming up with a second concept for the lot on the corner of Nipomo and Marsh streets. That space was supposed to undergo a major makeover, but the plan fell through. Richardson believes the first concept failed because of “the economy, the construction environment, the lending environment—they all proved not strong enough for the project.”

Heritage Oaks Bank currently owns the property, and Richardson believes his next concept will be a hit.

“The concepts we are working on are really spectacular,” he said. “It will be a great addition to downtown SLO and will be a huge improvement.”

Intern Jack Johnson can be reached via News Editor Colin Rigley at crigley@newtimesslo.com.

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