Council Tables Measure to Limit Promenade Chains

By Jorge Casuso

Nov. 12 -- Tabling an ordinance Promenade landlords predicted would spell the economic doom of the booming strip, the City Council Tuesday night voted 4 to 1 to have Downtown officials study other ways of restricting chain stores on the outdoor mall.

The proposed interim ordinance, which spurred several threats of legal action, would require each new or expanded business to obtain a "use permit" after a likely lengthy process to determine if it is a "formula business." Landlords predicted the new law would discourage merchants from moving to the Promenade and lead to chronic vacancies.

Under council direction, the Bayside District board, which sets policy for Downtown, will study the thorny issue of how to limit the national chains threatening to nudge out the independent stores and restaurants and turn the Promenade into a faceless mall. The board has nine months to come up with recommendations.

"I think there is some need out there, that people are concerned the big national chains are taking over the Promenade," Councilman Ken Genser, who was "open" to the ordinance before hearing the testimony, said after the meeting.

"I thought the ordinance at best was imprecise," Genser said. "After hearing it, I think it's going to create a lot more problems. Just the process of having to go through the process to determine whether you're a chain" would be problematic.

One after another, Promenade landlords and their attorneys -- who said they got wind of the agenda item hours before the meeting -- testified that the proposed ordinance would cripple a strip competing with other shopping venues and lead to millions of dollars in lost tax revenues for the City.

"We think (diversity) is a very important issue," said Kathleen Rawson, executive director of the Bayside District. "At the same time, we think it's a very complex issue. The ordinance you have tonight has had public exposure for four days.

"It does not have in-depth analysis. It does not have sound economic backing," Rawson said. "You deserve that. The community deserves that before moving forward on something that could have a very serious impact on the Downtown… Certainly we're going to have very extensive vacancies."

The proposed ordinance, landlords and their representatives warned, would be "deadly" and "devastating to the area.""

"The City would be losing millions of dollars," said Vivian Benjamin, who represents a family with property on the Promenade. "It's a very dangerous message you're sending to the business community. Why should they come to Santa Monica?

"You're going to be sending their business in droves, killing this area," she said. "You have a vibrant lively Promenade. Why are you going to mess that up?"

"This shopping area is not a privately owned mall," said Janet Morris, an attorney for the Romanos, who own several large properties on the Promenade. "It is not an isolated town. Constitutional rights and free market extends to the Promenade. The City will likely face legal challenges.

"It is not fair, it is not right and it is not in the best interests of the citizens, the retailers, independent or national, the consumers, or the property owners," Morris said. "This ordinance would be deadly."

Joe Romano, who has owned property on the popular strip for more than 30 years, warned against meddling with market forces that have proved a boon to the City.

"Any time the City interferes with free market enterprise, it creates more problems than it solves," Romano said. "The City should concentrate on the health and safety concerns of its citizens and not dictate what they can buy or not."

Others warned that it is the national retailers that are at the heart of the Promenade's transformation from a dead, empty strip you could roll a bowling ball through into a major shopping and entertainment destination teeming with visitors.

"National retailers drive traffic," said Simon Honey Bone, who represents the Federal Realty Investment Fund, which owns properties Downtown. "Without national retailers, local retailers would not survive.

"The people are going to drive what's on the street," he said. "If the retailers aren't selling goods and services, they're going to have to go away."

Chris Harding, a prominent local land use attorney, noted that cities "typically regulate uses, not users" and warned that the proposed ordinance -- which would require chain stores to "preserve the unique character and ambiance of the Promenade" -- was too vague.

"You would be empowering the zoning administrator to make a decision as to what is a good retail store and what is a bad retail store," said Harding, who was representing the Central District Commercial Organization. "You open yourselves up to charges of favoritism, if not outright corruption."

Several Bayside Board members questioned why the council was taking up a measure the Promenade Uses Task Force -- which included three council members -- had taken up and defeated 7 to 1.

Instead of restricting "formula businesses," the task force, which spent more than a year hammering out recommendations on how best to balance uses on the Promenade, suggested limiting frontages to 50 feet, an ordinance the council recently passed.

"I'm at a loss because of the inconsistent action," said Bayside Board member Wally Marks, whose family owns property on the Promenade. "It isn't in the spirit of the Promenade that has evolved."

In the end, Councilman Bob Holbrook strongly opposed the proposed ordinance, while Mayor Pro Tem Kevin McKeown was generally in favor of the measure. With Council members Pam O'Connor and Michael Feinstein absent, it was clear the necessary four votes were not there.