Harding, Larmore
Kutcher & Kozal, LLP
By Jorge Casuso and Jonathan Friedman
Second of 2 parts
September 16, 2014 – Launched on September 16, 1989 as an experiment in urban planning, the success of Santa Monica’s Third Street Promenade soon spread to neighboring streets.
New restaurants began lining Ocean Avenue, new hotels opened in or near Downtown, and new apartment buildings began rising on the outlying streets.
“The Promenade’s success was a tremendous shot in the arm for the rest of the Downtown,” said Peggy Curran, the City’s planning director in 1989 and currently the City Manager of Tiburon, Calif. “It became a more desirable place to go. It felt like a more fun, hip, lively destination.
“Between the Third Street Promenade and the rebuilding of the Santa Monica Pier, we had a critical mass of attractiveness for tourists in a beautiful setting,” Curran added. “That spurred hotel development.”
Before the Promenade, Downtown’s old hotels – some of which had been built in the 1920s as hotel-apartments for wealthy vacationers – were no longer serving overnight visitors, and few, if any, new hotels were being built.
“Many of the hotels had converted to long-term care or apartment buildings,” said former mayor Denny Zane, who was the council liaison the Third Street Development Corporation, the non-profit agency that developed the Promenade. “These hotels had stopped being hotels because the City had not been attracting visitors at all.”
“About the same time the Third Street Promenade planning was underway,” said former City Manager John Jalili, “nobody was interested in building a hotel. The Promenade’s success sparked that interest.”
Lured by the Promenade, tourists flocked to Santa Monica, many staying overnight. Last year, visitors spent $1.53 billion, much of it Downtown, and pumped $42.3 million in bed taxes into the City’s general fund.
After the Promenade took off, high tech companies began hunting for office spaces Downtown, where the district’s more than 27,000 employees can take a stroll to the world-famous strip and spend their money where they work.
“Workers don’t just sit in the office, they eat, shop, go out to movies,” said Rob York, a longtime consultant to Downtown Santa Monica, Inc. (DTSM), the private non-profit that manages and promotes Downtown on behalf of the City.
“It’s the diversity of our customer base that keeps the economy going,” York said. “People are getting out, and Santa Monica is one of the preferred places to shop, live and work.”
The success of the Promenade also fueled a housing boom that has been rapidly transforming the heart of the city into a full-fledged neighborhood. In 1996, after the City Council voted to offer developers incentives to build housing Downtown, new apartment buildings started going up on 5th, 6th and 7th streets. So did affordable housing developments and high-end condos.
Between 2000 and 2010, the number of people living in the district would more than double, from 1,340 to 3,075, according to the Downtown officials.
“The incentives made it economically viable and attractive to bring new housing,” York said. “It addressed a market need and really created a full community, which is still an ongoing process.”
Over the past decade, new shopping and entertainment venues have cropped up around the region. But few, if any, have been able to emulate what makes the Promenade such a special place.
“The Promenade has a diversity of look and feel,” York said. “It has that authenticity that feels good to people from every background. You hear four or five languages on the street, and it is still used by local residents.”
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Despite its astonishing success, Downtown officials caution that it is not wise to assume the Promenade will continue to thrive in the face of growing competition. And they have been taking major steps to insure the strip remains one of the LA area’s premier destinations.
In 2007, the City Council and property owners approved a Property Based Assessment District that generates approximately $3.5 million a year. The money is used to fund the Downtown Ambassador Program and boost maintenance and marketing efforts.
The Assessment District, which could be expanded next year to prepare for the arrival of the Expo light rail in 2016, has had a noticeable impact. A poll of more than 800 residents and visitors conducted last fall found that both groups noticed the streets were cleaner and that sidewalks, lights and signs had been fixed.
To keep up with the new image of Downtown, the agency that launched the Promenade changed its name in 2011 from the Bayside District Corporation to Downtown Santa Monica, Inc. (DTSM). The new brand reintroduced the Downtown and Promenade as a vibrant destination for both residents and tourists, celebrating its inherent fun.
“It’s not just for shopping and dining out, it’s for living,” then Mayor Richard Bloom told the crowd gathered at the official launch. “This is our city’s living room.”
Since the Promenade opened, the movie theaters that helped bring the initial crowds have long become outdated. Attendance has dropped as moviegoers flock to state-of-the-art theaters in neighboring venues. That, too, is about to change.
Earlier this year, the Council unanimously approved plans for two new theaters Downtown that will add as many as 29 screens and 4,200 seats over the next two years.
In addition to the new theaters proposed by ArcLight Cinemas and Santa Monica Place-owner Macerich, two existing movie houses are slated for upgrades.
“It’s fitting that we will once again offer a fantastic movie-going experience for those who live, work and visit Downtown,” said DTSM, Inc. CEO Kathleen Rawson.
As Santa Monica celebrates the Promenade’s golden anniversary, Downtown and its world-famous strip stand at a threshold.
City officials are hammering out a Downtown Specific Plan that will help fine-tune Santa Monica’s economic engine for the next quarter century. The train will soon arrive, linking Downtown to the region by rail for the first time in more than 60 years.
Downtown stakeholders are confident the Promenade will be celebrating its 50th birthday in another 25 years.
“Streets tend to go through phases. They ebb and flow,” York said. “We’ve chugged along fairly consistently, through recessions and the 1994 earthquake.
“They didn’t have a lasting effect because we had good momentum and fundamentals.
We’ve been very cognizant of competition, and it’s forced us to keep sharp and up our game.”
“The whole process,” reflected Jalili, “started when residents were complaining they had to go outside the city to make purchases. Now, everybody outside comes into Santa Monica.
“That’s as big a turnaround as you can have.”
