Empty storefronts filling up on State Street

However, take that same electric shuttle ride today from Sola Street to Gutierrez Street and scores of new business names can be seen in the windows of the shops that line Santa Barbara’s key commercial area.
“I’m from Las Vegas and remember coming here coming here 15 years ago when State Street was really something,” said Therese Watson, manager of the Blue Eyed Girl boutique, which opened Nov. 13 at 1021 State St. “I saw (the closed stores) two years ago and couldn’t believe what happened. It must be cyclical.”

Blue Eyed Girl owners agree with many other retailers who have brought their wares – some high priced, some not – to State Street: This is the time to do business. “This high-end, boho-chic boutique offers designer brands from Los Angeles, New York and Europe, such as Gypsy 05, Weston Wear, William Rast, Saivana, Laurie B, Free People, Hoss, Desigual,” said Dawn McKnight, who owns the chain with Tom McKnight.

During the past year or so, what has changed dramatically are so-called “triple-net leases,” which refer to rents paid to the building owner by the retailer and include payment for utilities and other services.

Many new boutique owners couldn’t afford the $3.25 per-square-foot triple-net lease three years ago. Now, they can pay 30 percent less on overhead and compete in one of the area’s most sought-after locations.

Compared to the last two dismal years, the music of cash registers is expected to ring loudly with the biggest retail season of the year set to start Friday. This is largely because of the lower leases and some creative business plans, commercial real estate brokers say.

One example of that is last month’s opening of prAna in partnership with the adjacent Santa Barbara Outfitters shop, 1200 State St. The locally owned shop and its best-selling brand, prAna, based in Colorado, have similar eco-friendly philosophies on what they sell, said Louisa Hyatt, who owns Santa Barbara Outfitters with her husband, Mark.

The Hyatts made the move after the adjacent 2000 Degrees pottery shop closed earlier his year. An arched hole was cut in the wall between the two stores. Louisa Hyatt said plans are under way to update her store, which already includes a rock-climbing wall.

For years, it has been common for State Street storefronts to be re-invented. Another example is Open Air Bicycles, whose owner closed it last year. But the shop at 1303A Sate St. was purchased by a new owner and reopened under the same name this year.

While a stroll down State Street might seem that all is well, some long-vacant spaces just don’t seem to attract long-term tenants. One example is the recently renovated building on the 1100 block that includes the Old Navy clothing store. A courtyard behind the store includes a scenic fountain, but the nearby retail spaces have been vacant for years. A restaurant used to occupy the largest retail space.

However, some unusual shops have opened in the past year on the 1100 block, including Morgan & Teach, which sells custom exotic wood flooring. The owners have moved the 15-employee company from Oregon to the Central Coast.

Across the street, the once-troubled La Arcada mall has come back with every vacant space in it now occupied, except for part of what used to be the Stateside Restaurant. Friday, signs of renovation inside that space could be seen by passers-by who eat their lunch at the turtle pond in front of the building.

Nearby, East Beach Wine Co. owner David Cable talks to his customers. He and his wife, Linda, moved their business to La Arcada from the construction site on lower Milpas Street near Highway 101.

Other recent arrivals in La Arcada include Encanto furnishings, Tracy Porter boutique and Peanuts maternity and children’s clothing shop.

Moving down State Street illustrates the churning of old businesses leaving and new ones moving in during the past two years. Friday, a construction crew worked on the interior of the store front at 1017 State St. where La Soie bridal shop plans to open soon.

Across the street, where Morning Glory Music once occupied 1014 State St., the space has been split three ways. Crankies bike shop, Mon Petit Bijou children’s clothing and Brazilian Ji-Jitsu have three distinct businesses in the same building.

At a recent Santa Barbara economic forum, Michael Martz, of Santa Barbara-based Hayes Commercial Group said compared to 2008 and 2009, vacancies on State Street are in decline as South Coast and national retail tenants are drawn to the thriving area.

On State Street’s 900 block, 16 of the 27 store fronts have changed hands since 2008, Mr. Martz said. Meanwhile, between the 700 to 1000 blocks, a 45 percent turnover has occurred during that time.

Many State Street retailers are discounting more of their goods as inventories rise, which is a good sign for the upcoming holiday spending season. “Consumers are buying things they can use more than once,” Mr. Martz said. Consumer habits are changing as retailers prepare for their big season.

Also in State Street’s “fashion district,” such shops as Plum Goods, 909 State St., have opened for business in the 2,175-square-foot space previously occupied by InSoul shoe store. “This is a prime example of a new local business setting up shop in the heart of Santa Barbara’s downtown retail district at a time when there has been more vacancy and less demand for space from national retailers,” Mr. Martz said.

Even a bank is getting into the act. US Bank plans to soon open a branch at 936 State St. Next door at 930 State St., the seasonal Yes Store is opened through the end of the year, but will close after it sells local artists’ works to charity.

Even Borders Books Music & Café;, 900 State St., set to close Jan. 7, will soon be occupied by a large retailer to fill up the three, story, 38,000-square-foot building, said Radius Commercial Real Estate’s Scott Glenn who represents the property’s owner.

On the next bock during the past year, clothing and accessories retailer, Tilly’s, 917 State St., opened. The G by GUESS clothing store, formerly Anchor Blue, opened at 820 State St. Those two key storefronts in the heart of State Street took more than a year to fill. However, a store front at 915 State St. remains vacant after more than two years.

Along the 900 and 800 blocks are a half dozen smaller shops, selling everything from $200 jeans at True Religion, 935 State St., to $15 clothing and accessories at Heavenly Couture, 927 State St.

Meanwhile, the outdoor mall that fronts the 800 and 700 blocks of State Street, Paseo Nuevo, has about every one of its two dozen spaces filled. Only Rudy’s Mexican Restaurant was closed for renovation. New additions in the mall include Art Shades by Leonard, Inspire Clothing, which replaced Anne Taylor Loft, and Viva Olivia, which sells olive oil and balsamics.

The opposite side of the 700 block of State Street appears to have the most vacancies, with the former Ruby’s Café;, 734 State St., Kozmo’s sandwich shop, 718 State St., and what used to be Left at Albuquerque restaurant, still empty.

Only one vacancy can be seen on the 600 block at 625 State St. Two vacant store fronts remain on the 500 block, 520 and 509 State St. Retroville used to occupy 520 State St. It was a quaint “pre-antique” shop, which opened in October, 2007, but shut down in less than a year. At 509 State St., where