Downtown San Luis Obispo businesses are struggling to stay afloat in the face of changing times 

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• PHOTO BY ADRIAN VINCENT ROSAS
• STILL EMPTY Relatively new restaurants like Highwater and longtime businesses like Beverly’s (which closed in 2020, and this storefront remains vacant) have closed in recent years, leaving business owners in SLO concerned about the future of their prospects downtown.

Walking along Higuera Street in downtown San Luis Obispo, it's hard to miss the empty storefronts—especially large ones like the abandoned Beverly's Fabrics, which closed in 2020 after 48 years of operation in the heart of the city.

It's a monolith, sitting there waiting for something, anything to happen and help take it into the future, and it's not alone.

"What [the city] is doing right now isn't working, and we need to adapt before we lose even more of these businesses," Robin Wolf said. "Because those are the businesses that make SLO the unique and vibrant place we love."

In 2021, Wolf and her husband, Matthew Hanson, decided to open up Highwater—a place she described as being guided by the express goal of bringing cocktails, eats, and tunes with a vintage flair and an inclusive vibe to downtown SLO.

"We celebrated the local community, hosting events for local groups like the SLO Museum of Art, SLO Wedding Planners, GALA Pride and Diversity Center, and Race Matters SLO, among many others," she said. "We fought long and hard through a very challenging time to open a restaurant and made the difficult decision to close our doors in June of 2023."

Because Wolf has first-hand experience seeing a business suffer and eventually close because of what she sees as the city's lack of adaptation, she believes that SLO has its work cut out to keep places open and new businesses interested in coming in.

Other downtown restaurants that have recently closed include Big Sky Cafe, Mo's BBQ, Creeky Tiki, and Mint and Craft.

"There's almost always myriad elements at play in the closing of a business, especially a restaurant," Wolf said. "Loss of business through city flooding and storm damage earlier in 2023 was certainly big [as well as] substantial increases in both the cost of goods and utilities."

There's also the elephant in the room, one that many city residents—including Wolf—believe plays a role in downtown businesses suffering: parking. In July, SLO raised downtown parking rates to $4 an hour to help offset the cost of a loan the city took out to cover a new parking structure on the corner of Nipomo and Palm streets. The city has plans to increase those rates even higher in the future.

"The issue of downtown parking policies, and the corresponding drop in visitor traffic was certainly a factor in the success or lack of many downtown businesses, ours included," Wolf said. "I can't express the frustration of working every day to build something in the town I love [and] to have to fight something like parking restrictions driving away guests."

SLO Economic Development Manager Lee Johnson sees eye to eye with Wolf on some of her observations, especially the multifaceted reasons that local businesses have been struggling.

"A wide variety of factors impact business downtown. We certainly understand that the impact of inflation combined with labor shortages, rising wages, changing consumer behaviors, and changes to downtown parking can create challenges for businesses," Johnson said. "We also know locals want to support downtown business, and the city wants to help."

But he noted that the struggles experienced by local businesses are unfortunately part of the natural flow of an economy.

"While we all feel the loss when a longtime business or restaurant closes in SLO, it's important to remember that the economy and local business environment is dynamic and ever-changing," Johnson said. "From January to August 2023, 16 storefronts have closed and 23 new businesses have opened according to recent data collected by our partners at Downtown SLO."

That isn't to say the city has no intent on helping local businesses with the changing economy. He noted that the city made significant investments in the local economy over the last fiscal year and plans on doing more.

Some of these programs included grants providing funds for things like art and culture ($22,000), holiday events ($150,000), promotional efforts to market what's available downtown to those outside of the city ($100,000), promotion of local business for those inside the city ($85,000), and more.

"Last winter [November 2022 to January 2023], the city invested $125,000 in gift cards to local businesses for our Buy Local Bonus and Eat Local Bonus program," Johnson said. "These gift cards were offered as incentives for anyone who spent over $100 on local retailers or restaurants, resulting in $951,197 in directed local spending. This winter the city will again invest $125,000 in this program to encourage community members to support local business."

Johnson added that the city would be addressing the rising issues associated with the increases in parking fees that many local businesses say are driving away customers.

"After community feedback and careful analysis, City Council will consider offering some relief on parking costs during its Nov. 7 public meeting, including subsidizing the first hour of parking for everyone in all downtown parking structures," he said. "The city will continue to find creative ways to support local community members and our downtown businesses."

According to Johnson, some of those other efforts include maintaining the cost for employees' parking downtown, providing one hour of free parking to residents through a new program, working to improve the parking app experience, and creating incentives for businesses to use the validation system.

Johnson said that the biggest factor in helping keep local businesses around are the residents of SLO.

"Local business will thrive with support from local community members," he said. "That means shopping local, dining local, supporting local. ... We encourage the community to continue to show up for the business they love."

However, part of showing up for local business, according to Wolf, is understanding how painful it is to watch something residents have built fall apart due to external factors.

"It's incredibly disheartening to watch so many amazing locally owned small restaurants, both old and new, closing their doors," she said. "It's easy to feel powerless [so] I think the best thing we can do is patronize these businesses and also to understand that sometimes, in order to survive, things need to change and evolve."

Wolfe hopes that through continued outcry and action by the city, the days of multiple closures will soon be a thing of the past.

"It's something we have to do," she said. "We need to address the prohibitive nature of our current parking policies and listen to both businesses and residents who both agree this is not the way to support a robust and flourishing downtown." Δ

Reach Staff Writer Adrian Vincent Rosas at [email protected]