Cars and Food Help Boost Taxable Sales

By Jorge Casuso

Oct. 28 -- Santa Monica's economy may be slowly recovering, thanks in large part to cars and dining, according to sales figures for the second quarter released this week.

The figures for the quarter ending June 30 showed a modest 2.8 percent gain over the second quarter last year, despite a slight drop in retail sales citywide, according to City Treasurer Dave Carr.

"It just really reflects that the economy is starting to recover a little bit after bottoming out," Carr said. "Things look like they're improving, but we still have a ways to go to get to where we were before. It's still a modest growth compared to the 10 percent growth three years ago that was extraordinarily high."

The modest increase is on par with the estimated 2 percent sales growth projected by City officials for the 2003-04 fiscal year, Carr said.

The increase was most marked in the City's commercial districts, where restaurants did a brisk business, and along Santa Monica Boulevard, where incentives offered by auto dealers boosted sales by 13 percent. Auto dealers alone contributed to a 24 percent sales tax hike over last year.

"Car sales have been strong through tough times," Carr said.

People eating out also contributed to the increase in taxable sales. Montana Avenue saw a 6.6 percent boost in sales thanks to a 10 percent increase among the same restaurants compared to last year. Main Street saw a 3.3 percent sales hike thanks to some new restaurants, Carr said.

"Restaurants are leading the way (on Main Street) primarily due to some new eateries in the market," he said.

The Bayside District, which includes the Third Street Promenade, did even better, with sales up 8 percent over last year, "primarily due to some new stores and some new restaurants in the area," Carr said.

Sales at Santa Monica Place -- which is anchored by Macy's and Robinsons May -- continued to slump, dropping 3.2 percent, which likely reflects tough times for department stores nationwide, Carr said.

"As other things are staring to turn around, they're still down," said Carr. "Department stores are down nationwide. People are looking more for specialty stores. It's just hard for them to compete with so many specialty stores and shopping areas."

Pico Boulevard also saw a 3 percent drop in taxable sales likely due to lower prices at the pump between April and June, Carr said. In addition, "some restaurants were off, and some restaurants closed," he said.

The hotel corridor along Ocean Avenue saw a 15 percent boost in sales, due more to a major hotel upgrade than any major boost in tourism, Carr said.

The transformation of the old Pacific Shore on the corner of Pico from a budget hotel into the jet-setting Viceroy likely accounts for much of the increase, Carr said.

"The hotel Viceroy is a much fancier place with a restaurant," Carr said. "That is the main reason."

Tourism has been unpredictable, although the nosedive the visitor industry took after 9/11may have reached bottom.

"It looks like we're past the worst," Carr said. "During the past four to six months, some months have been good, some bad. It's been inconsistent."