The City of Santa Barbara is letting the heart of their town, State Street, die. Empty stores, a struggling mall, and the homeless are the symptoms. The homeless are using the street as their crash pad: intoxication, panhandling, sleeping, urinating deter shoppers from enjoying this public space. It can be fixed but the City needs to show some leadership and rethink their approaches to the problems. They seem to be unable or unwilling to do that.
I love Santa Barbara’s State Street, the main drag and heart of the City. At least I used to love State Street. My vision of State Street was the State Street that was the bustling heart of Santa Barbara. Paseo Nuevo, the Funk Zone, crowded shops, movies, restaurants, and bars. You could walk up and down State among a throng people having fun.
That State Street has been dying. It’s not “dead”, but now it’s empty storefronts, struggling businesses, and home to the homeless. This isn’t something new, these problems preceded the pandemic. There are some bright spots, but, if there ever was such a thing as a death knell, the pandemic rang that bell loudly. For businesses to stay alive it took deep pockets, or debt, government checks, understanding landlords, and coming up with a way to keep going when the law said stay closed. Many didn’t make it, or, if they did, they are now wondering how to pay off their debts.
The City did respond to the plight of restaurants and bars on State by allowing parklets, those wood deck seating areas encroaching on the sidewalks and the street. They closed traffic from Victoria Street to Haley Street. The California Department of Alcoholic Beverage Control (ABC) temporarily allowed restaurants and bars off-sale privileges (drinking at outside seating).
The closure of State Street is a mixed blessing. Restaurants and bars love it, retailers don’t. The three blocks from De La Guerra to Haley is a success because of, well, it’s party central. The booze and music bring in a young crowd who want to put the fog of the pandemic behind them.
What’s the future of State? At some point things are going to get back to normal, pandemic-wise. We all know that. The question is: what will that “normal” be? The problems that were there before COVID will still be there.
The City hired a consultant to tell them what the problems were. This was before the pandemic. It’s not as if the problems weren’t known, they just needed some CYA from the consultants to frame policy.
In 2017 yours truly wrote two articles in the Sentinel (here and here) describing the causes and cures of State Street’s problems. Perhaps you will be shocked to know that they were about the same as the consultant’s and mine were free.
Some of the problems are fixable, some aren’t.
- Post 2008, the Great Recession, revealed that cheap Fed money and artificially low interest rates fostered a retail building boom in America. Retail was way, way overbuilt—more retail space per capita than any other country in the world. That’s why you are seeing malls fail all over the country. State Street wasn’t immune from this trend. Our own Paseo Nuevo got hit with vacancies and anchor tenants Macy’s and Nordstrom left town. Some of that can be fixed.
- There’s the reality of retailers competing with the internet. It’s only going to get worse for retailers. That is fixable. Let brick and mortar entrepreneurs loose and let them figure out what works.
- The City’s Community Development Department (CDD) is a major impediment to improving State. The City’s consultant (Kosmont report) pointed out the many deficiencies of the CDD in excruciating detail. For those reasons I call them the Department of No because it seems that their reflexive response to things is “no”. It feels adversarial. I hope it’s fixable.
- The homeless on State Street are a deterrent to bringing back State Street. It’s not a pretty sight. It is fixable.
The high cost of housing gets brought up frequently in the State Street discussion. It isn’t fixable and everyone knows it. It’s a given: Santa Barbara is an expensive place to live and it always will be. This is not a cause of State Street’s problems. Let’s focus on things we can fix.
There is only one real solution to State Street: thriving businesses. There are innovative entrepreneurs who are willing to take the risk to compete against an internet world. We need to do all we can to give them a chance.
In order to attract entrepreneurs three things are needed: (1) flexible landlords, (2) a major overhaul of the Department of No, and (3) control of the homeless on the street. These three things are the key to reviving State Street.
The City churns out words and committees to come up with solutions but that isn’t the way to fix things. Basically the City needs to get out of the way of entrepreneurs and let them do their magic.
There are entrepreneurs out there who want to be given a chance to try out their ideas. If landlords are unwilling to work with them on rents, lease terms, and tenant improvements, new businesses won’t get to first base. If they can’t get swift, inexpensive approval of their store remodeling plans, they will not even try to locate there. If locals and tourists are reluctant to visit State Street because of the homeless, businesses will shy away.
According to Radius Commercial Real Estate’s recent report on State Street, there are still many storefronts that are vacant or available for lease. They estimate the vacancy rate at 16%, still historically high. As of April 20, 2021, they counted 29 vacant storefronts from Sola to Gutierrez.
Landlords are adjusting to that reality. Rents on State Street have come down and tenants are getting better lease terms. Landlords with long-vacant spaces are more willing to give entrepreneurs a chance at success. A good example are the 10 pop-up shops that have opened.
Most property owners have come to realize that there are booms and busts in this business and nothing ever stays the same. We are seeing what is called “repositioning” which is converting spaces to different uses: retail to residences, large space to small arcades, office to retail, retail to office. Adapt or die. Landlords are adapting.
The Department of No
The Department of No (CDD) and the City say they have improved the permit process and have announced programs that are supposed to speed things up and make it cheaper for applicants. I went back and reviewed four years of my news clippings and every year or so the City announces some program that they say will improve the process. I have spoken to applicants who say things haven’t changed that much. The City’s consultant said the same thing.
Recently the City formed a State Street Advisory Committee to develop a Downtown State Street Master Plan. I would like to say that this is a good idea but it isn’t. Another committee isn’t the solution. Getting together the “stakeholders” for “community input” to create a “vision” for “synergy and connectivity” and “sustainable values” for a State Street master plan is not a solution, rather it’s another bureaucratic exercise going nowhere.
The City just announced that they have hired a new Community Development Director for the Department of No. That is a step forward and I welcome fresh eyes. But will he have the authority and willingness to overhaul the department? Unless the City Council and City Manager fully support major reform, I’ll remain the skeptic until it’s done.
The Department’s woes are well known. The entire process needs to be streamlined. Applicants need some certainty on what is required of them. Eliminate subjectivity, rein in the committees (such as the Architectural Board of Review, Historic Landmark Commission, Sign Committee), stop Building & Safety nit-picking, better coordination between the various entities signing off on a project, and put a time limit on each stage of the process which prevents them from revisiting the same issue. There needs to be more flexibility and more responsibility in decision making by staff members. The Department doesn’t need to learn how to smile, they need to approach each project with a “yes” and enable the applicant to get through the process quickly and cheaply.
We need a complete review of building codes that give too much power over the small things that plague applicants. At present, the de minimis exemption for work requiring a permit is $500. My guess is that amount has been on the books for 50 years and, in light of inflation and current building costs, it should be raised to at least $20,000.
Without intending to denigrate architects and planning consultants, the bureaucratic system has created an industry that thrives on a lengthy and expensive process. Neither the politicians, the staff, nor the planning industry seem to have an incentive to reform it. They all talk about the problems but nothing happens. No one likes to let go of power.
There are solutions to the homeless problem on State Street. One hears from City Council that the Boise case (Martin v. City of Boise, 9th Cir., 2019) inhibits cities from enforcing ordinances such as the City’s “no sleep, no lie, no sit” ordinance affecting State Street. A careful reading of the case states that “only . . . municipal ordinances that criminalize sleeping, sitting, or lying in all public spaces, when no alternative sleeping space is available, violate the Eighth Amendment.” A note in the Harvard Law Review (33 Harv. L. Rev. 699) says, “Already, lower courts are following the panel’s lead: under Martin, cities can clear homeless camps, arrest those who refuse to leave, and force those arrested to show that shelters are full. Put simply, the panel left cities ample power to police and punish homeless people, as well as regulate and restrict their access to public space.” By the way, I used to be a lawyer.
What is lacking is the will to enforce existing laws. That is not to say that the homeless problem is not complex and difficult. I’m not suggesting that it can be solved. And this is not about compassion for the homeless. It’s about State Street. The City has the power to reclaim State Street for its citizens who follow our social compact of behaving decently in public. It is not part of our social compact for a minority of bad actors to deprive the rest of us from State Street’s public spaces. The City needs to protect all of its citizens. State Street is proof of the City’s lack of leadership on this issue.