Small Promenade Shops Fenced in By Landlord

By Josh Grossberg

Even on a warm summer day when the Third Street Promenade is so busy its adjoining parking structures are filled to the brim with cars, a few
stores remain without customers, their owners waiting patiently for a
trickle of patrons to wander in.

It's easy to see why: Plywood boards were erected a few days ago around a small cluster of tiny shops along a corridor on the Promenade between Arizona Avenue and Wilshire Boulevard that make them virtually invisible to pedestrians walking by.

Why? Unlike the new Banana Republic being erected a few doors down, there is no construction underway. Indeed, the businesses, which include a cigar shop, a shoe store, a book store and a bikini shop, have been in
place since before the Promenade underwent its amazing transformation 10 years ago.

The owners of these small independent stores can see only one reason why the boards went up, bringing business to a halt: They are being punished by the property owner for fighting what they say is an unfair eviction.

"The only purpose of the boards is to prevent us from doing business,"
said David Hazan, who has run the PrimaDonna bikini store for 12 years.
"No work is being done and this is the high season."

Trouble began, several of the business owners agree, about a year ago
when the property was taken over by a new owner, the CIM Group. They say that sometime at the end of 1998, the new owners told the tenants that they could stay put for at least a year, which means they could enjoy another busy summer and Christmas season.

So Hazan, as well as the owners of the Santa Monica Promenade Cigar Shop and My Way Shoes spent thousands of dollars on inventory that they planned to sell when the weather turned warm. But in April, the owners surprised the tenants by telling them they had to be out by Aug. 15.

"We bought more merchandise and spent $20,000 to decorate," said Abraham Menejian, whose son runs the cigar and shoe stores. "And now they are punishing us. Who's going to spend that kind of money if they have to leave? I'm not a kid."

Calls to the CIM Group Thursday were not returned.

The store's leases are month to month and they have nothing in writing to
prove that any agreement is in place, but they all agree that the new owners said they could stay at least until the end of 1999. They vowed to fight the eviction in court.

And that's when the boards went up. In addition, a back door of the
plaza that connects the alley to the Promenade was fenced in, a move
that caused the Santa Monica Fire Department to declare the area a
safety hazard.

Hazan said he would have moved to a new location if the owners had only told him at the beginning of the year.

"He told me in April," he said. "It was too late. In the winter I built
up a lot of debts."

With a Barnes & Noble bookstore, a Pottery Barn and a Restoration
Hardware nearby, these shops are among a growing number of independent stores along the Promenade whose days seem numbered. And with the new owners planning to turn the site into an Old Navy store, the area will lose even more of its local charm, Hazan said.

"It's turning into another mall," he said. "We are the last of the indis
on the block. You bring a tourist to see the pride of Santa Monica and
they say, 'Oh, you have a Gap. You have a Starbucks. You can take me
home now.'"

A consultant for the Bayside District, which oversees the Promenade,
said the goal is to maintain a balance between large chain stores and
small independents, but judging by the look of the place, it's an uphill
battle.

"It's a matter of working with the property owners and tenants," said Rob
York of the Fransen Company, a retail and real estate consultant firm.

"Some buildings have capital requirements that a small tenant cannot
handle. We're trying to make sure there are opportunities for the
smaller tenants as well. But as the economics change, you may see them
stepping off and becoming pioneers on Second and Fourth streets. Those
locations are not dissimilar to where Third Street was 10 years ago."

That's fine, Hazan said. But what about all the money he's losing now?
And what about all those bikinis he bought that no one will want to buy
once the weather starts to cool down.

"This isn't the wild west," Hazan said. "It's not fair to do this."

Anyway, he said, it's too late for him to do anything but to stay put
and fight.

"If you are crossing a river and are two thirds across and are too tired to
continue, you don't turn around and swim back," Hazan said.