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What do empty shops on Marsh mean?

Some blame location, but others cite the trickle-down effects of a struggling economy

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FEELING EMPTY :  Several shops on San Luis Obispo's Marsh Street have called it quits, but there's no one reason for the closures. - PHOTO BY STEVE E. MILLER
  • PHOTO BY STEVE E. MILLER
  • FEELING EMPTY : Several shops on San Luis Obispo's Marsh Street have called it quits, but there's no one reason for the closures.

# Just how much difference does one street make? In downtown San Luis Obispo, the answer may be a whole lot.

With a spate of recent business closures, Marsh Street, just one block over from Higuera--artery of trees and lights and Farmers' Market--doesn't appear to be sharing the success of its busier brother.

"Certainly those locations on Marsh Street are more difficult for businesses," said Claire Clark, the city of San Luis Obispo's economic development manager. "They're just off the heavily trafficked section of town."

If Higuera is considered downtown's main vein, it may seem reasonable to assume that Marsh Street shops should be able to survive from the consumer spill over--much like a roadie for the Rolling Stones.

Indeed, plenty of businesses thrive on Marsh, to the point that just six months ago Marsh Street seemed to be on the verge of contending with Higuera for the title of downtown SLO's favorite road.

But in the past month, three neighboring retail locations on one block of the street, between Broad and Garden streets, have called it quits or announced plans to. While some blame the closures on location, others say the problem stretches well beyond downtown SLO and stems from the struggling national economy.

"Downtown SLO is perfect for business, but it's expensive and the economy is not in its best time," said Black Sea Gallery manager Moe Sari, whose Marsh Street furniture store is closing down. "The first couple of years the numbers were where they were supposed to be. But the last year the numbers went under their overhead. After that, we started looking for different options."

Apparently, so did other local business owners.

Lil Groms, a surf and snow clothing store for infants and toddlers, and The Waggin' Tail Cafe and Barkery, a boutique for pets, both recently closed their doors.

While Sari believes that his furniture business was negatively impacted by the sagging economy, Lil Groms' owner Lonnie Zavala has a different theory about why his and other businesses have met their demise.

"With the amount of money they're charging in downtown SLO, it's not feasible for a small business to make it," said Zavala, who paid $4,250 in rent a month.

"Only big, corporate stores are going to be able to afford that. Where does that leave the little guy? What does that say about San Luis Obispo? Downtown Anywhere USA--that's what it's turning into. But don't forget why everyone comes to this town--because it's quaint. Not because it has every store on the planet like everywhere else."

The furniture, toddler surf, and pet businesses are part of a four-store block that's expected to be demolished to make room for a large mixed-use retail, condo, and hotel project. The project, dubbed Garden Street Terraces, is being developed by Hamish Marshall's WestPac Investments and is expected to begin construction within a year or two.

Both Sari and Zavala say Marshall's plans weren't a factor in their decisions to close their respective businesses.

Marshall believes that his project, along with similar developments, will bring new life to downtown.

"The further development of Chinatown and our project will bring more and more vitality downtown," he said. "It will strengthen the foundation of downtown and anchor it for the next 15 to 20 years."

"What's happened on Marsh Street is the economy is a little soft for retailers," said John Rossetti, broker for Rossetti Company--the group that manages and leases the properties. "The reason those businesses closed is two separate reasons. The furniture store was somewhat a victim of a slowed-down housing market. As for the other two stores, they were start-up businesses that for some reason just couldn't get established."

According to Rossetti, the owners of Lil Groms and The Waggin' Tail Cafe & Barkery were both let out of two-year leases early. He said that his company plans to offer those retail spaces for short-term leases at below-market rent.

Rossetti said that his company manages and leases 90 percent of the brokers' market share of retail properties in San Luis Obispo.

"I don't think the failed businesses were any kind of reflection on Marsh Street," Rossetti said. "With the new project [Garden Street Terraces] coming, I believe the future of Marsh Street is very good."

Indeed, Central Coast Surfboards is opening a shop on Marsh sometime next year, and there are many businesses located on the downtown San Luis Obispo street that are financially thriving.

Take Jamba Juice, which often sees lines of customers stretching outside the door. An employee there said that business is on the same track as last year, thanks in part to its location across from a parking structure.

Still, the recent closures are a worry for city planners.

"The effects of what's happening in the economy is a concern," Clark said. "There may be some long-term troubling trends."

But if that happens, it won't matter what street you're on.

Staff Writer Kai Beech can be reached at kbeech@newtimesslo.com.

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