Stanley Smalewitz, director of economic development for Huntington Beach, calls his city a “beach community in transition.”
For years, Huntington Beach’s charm has been its surf culture. The city fought Santa Cruz for the “Surf City USA” title and won. Now, the city wants to reach out to its upscale residents and wealthy tourists by developing luxury coastal stores, restaurants and hotels.
Projects include Pacific City, being developed by Newport Beach-based Makar Properties LLC, and The Strand by Los Angeles-based CIM Group Inc. Both call for pricey hotels and stores on par with those at South Coast Plaza, Irvine Spectrum Center or Fashion Island. Pacific City includes offices and homes.
Meanwhile, Huntington Beach is considering turning Main Street into a pedestrian mall,a move not all business owners embrace. More inland, the city next month is set to celebrate the grand opening of Bella Terra, formerly the Huntington Beach Mall.
Smalewitz has worked in economic development in Alhambra, Riverside, Inglewood and Los Angeles. He spent five years with Orange-based Urban Futures Inc., where he worked with cities and agencies on planning and development.
His focus these days is Huntington Beach’s coastal redevelopment. Smalewitz recently talked with the Business Journal’s Sherri Cruz about the changes.
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Downtown Surf City: city considering pilot closure to traffic |
Why are some businesses opposed to the pedestrian mall idea downtown?
I don’t know if all the owners have expressed an opinion. The downtown business improvement district board is very vocal. I assume they represent other owners in downtown. There’s been a history of this discussion whether to pedestrian mall or not. There have been proposals made in the past that have looked at everything from one block, two blocks to three blocks. But it’s never looked at the total picture.
There are real logistical issues. You’ve got the issue of deliveries on Main Street,how does that work? In the middle of downtown you have a post office that also does distribution. Part of the corner that the post office is on wouldn’t be closed off, but the entrance is on Main Street.
The one thing is we’re taking the anti-attorney approach. The attorney approach is to never ask a question if you don’t know the answer. I’ve been saying from the beginning that we don’t know the answer. The reason we established an ad hoc committee was to all work in unison to look at the issues. Whether or not to implement this pilot project or not is a council decision. The ad hoc committee is to study the idea of a closure. Consultants will have to be brought in.
Is Huntington Beach headed in a new direction?
When I got here, the council was in the beginning process of developing a strategic plan. Among the goals of the strategic plan was to develop the economy as a tourist destination.
Isn’t it already?
In a limited sense. The Huntington Beach Conference and Visitors Bureau did a study of why people come to Huntington Beach and the pier is the No.1 attraction. The beach and the pier, you can’t separate them.
What do you do with that information?
You look at projects that make this a place that people want to come to.
Do you connect it with the pier?
You don’t connect it to any one thing. Bella Terra is an attraction itself in neighboring communities. Look at Pacific City. Look at the Strand. They stand on their own and would be a destination even if there was no pier.
Knowing that the pier is the No. 1 attraction, how do you leverage that?
You pay attention to a coastal row. You pay attention to the market forces. That’s why I cited those retail projects. In some ways you try to harness lightening in a bottle. In other ways you try to channel certain businesses and services that you would like to see come into the city. All of a sudden you have a fallow piece of land and then The Irvine Company decides to build the Spectrum. Then it becomes a destination. You look at the 31 acres of the Pacific City project and you’re going to have 191,000 square feet of upscale retail plus a 165-room boutique hotel, plus 500 plus homes at $1 million plus. You’re creating an environment.
On top of that, with all the development, the natural mix of real estate prices and demographics of who’s coming into areas like Seacliff (near Bolsa Chica) means that there’s a demand for types of businesses that might not have been interested in locating here before.
What businesses would you like to see come in?
I had a meeting with a group of local residents. They said frankly they were tired of doing shopping outside town. It gets as basic as Bristol Farms, Gelson’s or a Whole Foods to some unique boutiques that they generally travel to Newport Beach, Costa Mesa or Irvine to shop at.
How do you find the businesses?
For 15 years I’ve been a member of International Council of Shopping Centers. You find out who’s expanding. What’s the prototype of their stores? We do a letter writing campaign, follow up with a phone call. We find out how they perceive Huntington Beach. Part of my job is to tell the Huntington Beach story. We developed a brochure, which details the demographics and talks about the projects in development today. So if the broker is in Dallas or Chicago and he doesn’t really know the area, hopefully they’ll assign it to one of their local brokers.
What is your short pitch on Huntington Beach?
It’s a beach community in transition. The demographics are dramatically changing. We’ve got upscale projects coming in that are dramatic.
Do you have any concern that Huntington Beach will lose its “Surf City” charm?
Only 4% of the town is in the redevelopment area. That’s 96% that doesn’t really involve us. Companies will make business decisions. All we’re doing is encouraging them to take a look. We don’t control the marketplace. We would like to draw attention to this market and champion its positives. Surf City is a marketing concept,the pier, downtown, the beach,those are parts of the mystique. We would only want to enhance the experience once you get here. The (Convention and Visitors Bureau) does a far better job of marketing the charm and history of Surf City. So I leave the charm factor to them and our planning department, which administers the downtown specific plan.
What do you think of incentives for businesses?
It’s an important part,if it’s an incentive that’s targeted, that makes economic sense and that’s geared to giving a business incentive to locate here sooner rather than later.
It doesn’t seem like it would be difficult to attract people to the city’s redevelopment areas?
This started off as an oil town. A lot of the land has become contaminated and it needs to be remediated. While it might be a desirable location, it doesn’t make sense to put a development in if there’s a substantial cost to remediate. The end result is a potential business or project, which might be a perfect match for the city, doesn’t get built because it doesn’t make economic sense at this time.
Are there still pieces of land that are contaminated?
There definitely are. There are places that have oil tanks that were shut down. Next to the generator (on Pacific Coast Highway) is a dump. To remediate that would cost millions of dollars. We have the ability to reach out and look at federal and state brownfield funds.
More than anything there seems to be demand for a high-end grocery store.
We have a lot of Albertsons and Ralphs.
What about Trader Joe’s?
We have a Trader Joe’s in town at the Five Points Plaza. They’ve actually talked to me and are interested in adding a couple more. For me, I wish we had as many as there are Starbucks.
So Trader Joe’s says it’s interested. Now what does the city do?
We try to get an idea of where they want to locate, then we actively look around for possible sites. Or if they’ve identified sites, we get them together with planning and building and public works to identify issues. The most obvious one is zoning.
From my previous experience, a Home Depot is a great thing. But it’s a noisy, active business. They usually pile their wood products outside. Unless conditioned, it doesn’t make sense to back up to residential.
Businesses think it might be a good idea to locate on Beach Boulevard. You have a lot of small lots, different owners and from a development perspective, it’s shallow. The lots are too shallow to meet parking requirements and they back up to residential.
What is happening with the former Montgomery Wards building at Bella Terra?
The same developer (J.H. Snyder) who did phase one submitted alternative proposals of what they’d like to develop on the site. We’re reviewing the pro formas, seeing what’s involved. I tentatively have scheduled Oct. 2 a study session. I’ll give a presentation to council of the pros and cons of each proposition.
Can you say what the proposals are?
They range from a mixed-use, to a full retail proposal to a single use proposal. They all have their own economics and their own impact on the city. The bottom line,what the economic development department should be doing is growing the revenue streams to send back to the city, so the city can do the basic things the city does: fix pot holes, police and fire, make sure the traffic lights are working, parks are clean, and libraries are open. And that takes money.
Has a hotel been named for Pacific City?
They haven’t identified the flag. The Strand has though. The Strand has come to a tentative agreement with Joie de Vivre. They’re predominately in Northern California.
What businesses contribute most to the city’s income?
Auto dealers are definitely very important.
Can I bring in another BMW dealer? No, Sterling is already Newport Beach. Can I bring in Lexus? No there’s one in Westminster. Can we pursue the new DaimlerChrysler Smart Car? We’ve already reached out and started that process.
