I’ve got a news flash for you. Reducing rents in downtown San Luis Obispo‘s retail spaces means businesses might actually stick around!
I know it’s rocket science but hear me out! The number of large vacant spaces along Higuera, Marsh, and Monterey streets downtown is a reminder that either times used to be better or rents used to be cheaper. I’m going to go with the latter. And maybe times are harder because rents are more expensive … or rents are more expensive because times are harder?
I don’t know. But what’s it going to take to bring those rents down?
If you’re the Shoe Palace, a simple negotiating request may have done it! Bring the rent down and we’ll stay, the retailer apparently told Jamestown Premier Property. And since Jamestown leases the space from the city and subleases the space to the Shoe Palace, the property management company simply passed on the request.
The city of SLO is prepared to do it. It’s going to bring down the rent!
Apparently, the 15,000-square-foot space that Shoe Palace occupies could rent for more than $25,000 a month, according to a city staff report about the lease. That’s insane! SLO states that the going rate for retail space downtown is $1.75 per square foot. So, when does the economic theory of supply and demand actually bring that price down? The demand for retail space downtown isn’t exactly outpacing supply, amirite?
I don’t care how much Downtown SLO tries to spin it, retail and restaurants aren’t exactly booming downtown. The data points that 29 new businesses opened in the first nine months of 2023 while only 19 have closed doesn’t do it for me.
The old California Pizza Kitchen is gone and the building is just vacant, serenading everyone with elevator music and empty windows. So is the building next door—where the bowling alley was supposed to go all those years ago. Passersby get to check out some cool posters about how awesome downtown SLO is, though!
The old Beverly’s just sits empty. Same for the old Ross. The old Charles Shoes. Those giant glass windows sometimes have murals on them to distract downtown’s guests from their hallowed hollowness. Hoorah!
Restaurants that left haven’t been replaced either. Splash Café is gone. Tortilla Town is gone. Mint and Craft is gone. Mo’s Smokehouse BBQ, gone. Big Sky Café, gone. Highwater is gone. The buildings are empty.
You want people to demand those empty retail spaces, you’ve gotta price it right, baby. At least the city and Jamestown have figured that much out, because market price ain’t exactly $1.75 per square foot if you can’t actually fill the square feet with something.
City staff is recommending that City Council approve reducing the rent on the Shoe Palace building, revenue that feeds into SLO’s slushy parking fund, from the almost $15,000 currently paid to $11,000 a month.
“Given the size and structure of the Shoe Palace retail space, if it were to become vacant it could remain that way for a significant period of time and may need significant investments in tenant improvements in order for a new tenant to move in,” a city staff report said.
“The city has received very little interest in the rental of this space due to the size and location,” the staff report said. “Virtually all of the retail space in the downtown in excess of 15,000 square feet is experiencing challenges or has remained vacant.”
Sounds like the Shoe Palace has the city by the balls!
And the Los Osos Sustainability Group might have SLO County by the balls, too. The band of homeowning water hawks has kept its eye on county-approved development in Los Osos for a few years now, speaking up whenever the county steps out of line.
It sued the county, the Board of Supervisors, and the Anastasi Development Company over a recently approved development project map—which has been in the works for more than three decades. Seems like the county didn’t comply with its own rules when it approved the map in October, and the sustainability group yelled, “gotcha!”
In 1990, the county put conditions on a tentative project map it approved for the 20-acre parcel that would be subdivided into 100 lots. The project needed to show it had an adequate water supply, something that doesn’t exist in Los Osos. And it also needed to show that it would be served by a sewer system that could handle the output of a fully developed project. Also something that doesn’t really exist in Los Osos.
The California Coastal Commission won’t even approve an accessory dwelling unit in town, there’s no way it would approve development on 100 lots.
The developer has received extension after extension from the various government bodies with land use authority in Los Osos. Just as the most recent extension was about to expire, the Board of Supervisors approved a final map!
It was a 3-2 vote, and the supervisor who’s been on the board the longest cried foul. Bruce Gibson, whose District again includes Los Osos, called out the project developer for its wishy-washy attempt to satisfy those 33-year-old conditions.
But the pro-development side of the board approved the map anyway.
Sounds like a 3-2 vote is going to cost the county a pretty penny. Δ
The Shredder is penniless after the holidays. Send loose change to shredder@newtimesslo.com.
This article appears in Jan 4-14, 2024.
Sounds like a lot of pain out there caused by the very smart but brainless governing parasites. The oblivious guaranteed tenured, salaried, pension, medical, holidays, vacations, unions, parental leave, etc. benefited blood suckers are killing their private enterprise hosts! We risk takers must produce an after-government-excisement – PROFIT to survive, let alone thrive.
Percentage leasing (look it up) would automatically adjust to changing market conditions and restore a mutually beneficial Landlord-Tenant partnership for sustainability and —yes Mayor— PROGRESS.
Jamestown can lose some income without sweating it due to their size. Since they are not local, they couldn’t give a rat’s behind what living conditions are like for the local community, so they will have their numbers and their profile for what they want, where, and since rents are already crazy high for such a small town in the relative middle of nowhere, they are playing that market. It’s also true, of course, that some local developers and landlords also don’t care all that much about the experience of community residents, but they might be more flexible, and definitely more reachable.
One of the advantages of being a geezer is a long period having seen things change. It is a natural process. Amazon and other online retailers are taking the business formerly going to shops, and restaurants and bistros come and go in popularity. Food delivery services take the business formerly going to restaurants. An expensive labor market makes having employees expensive, especially with the raises in the minimum wage laws, and the ever-increasing rules and regulations coming out of Sacramento and Washington also hurt. Property owners have previously enjoyed great demand, and have been able to raise rents, but now will have to adjust them downward to what the market will pay. Shanti Harris will be disappointed to learn that I neither drink chardonnoay nor live in an impecably restored Craftsmen.