La Jolla Vendors Fight to Survive in Changing Market

LA JOLLA â€”  Fred Scott admits it: He’s worried.

For 35 years, hundreds of loyal families have outfitted their children at the venerable downtown La Jolla clothing store that bears the family name, driving from as far away as Point Loma, Del Mar and Rancho Santa Fe for the goods and personalized service his business provides.

But recently, that steady base of patrons has begun to erode. Weary of fighting the notorious traffic that snarls La Jolla’s streets, convinced that they won’t find a parking spot and distracted by the plethora of malls popping up around the region, many of Fred Scott’s dedicated customers are beginning to spend their money elsewhere.

So far, the veteran merchant has weathered the slump. Scott has adjusted his inventory to appeal to a broader clientele and even subleases space in the 7,000-square-foot store to a sporting goods dealer. But in the long run, Scott concedes, such measures may not be enough to keep his business alive.

“I’m trying to adapt and find a way to survive, but I’m convinced that when it’s time to renew my lease I’m going to have a real problem,� said Scott, a soft-spoken, bespectacled man who founded the Girard Avenue store with his father in 1951. “I’ve got a good lease now. But when my landlord calls a local broker and finds out what they’re getting for rents around here, I’m doomed.�

La Jolla: With its well-to-do populace and international reputation as a tourist mecca, the palm-studded town would seem a retailer’s dream. Instead, it’s got a 15% retail vacancy rate, high merchant turnover and a growing reputation as one of the toughest places in San Diego County to do business.

Explanations for the community’s economic jitters abound. A building boom has created a glut of retail space. Traffic and parking woes are scaring off local shoppers. Two heavily promoted malls on the edge of La Jolla--anchored by six department stores--provide an array of options that downtown proprietors are hard-pressed to rival.

But more than anything, real estate brokers and business owners say, the escalating rents for retail space in the picturesque village have created competitive conditions in which only the savviest and most well-financed merchant can succeed.

“Unrealistic Expectations’

“It’s tough, no doubt about it, and many people come in here with unrealistic expectations, thinking they’re going to make it big with no sweat in a matter of months,� said Mike Slattery, a commercial real estate specialist with Coldwell Banker who has worked in the La Jolla market for six years.

“The truth is, a merchant will only survive if he’s unique, distinctive and has a superior product that will appeal to both La Jollans and outsiders,� Slattery said. “Without that combination, plus some staying power, it’s risky at best.�

There have been many casualties of the town’s changing business climate, but the hardest hit have been stores such as The Scotts--mom-and-pop outfits that have formed the very heart of the shopping district for years.

Most of these stores were established in an era when property values were lower and downtown land was controlled largely by local interests. But as La Jolla’s property values have soared, much of the downtown territory has changed hands and is now held by national and foreign groups whose biggest concern is the return on their investments, Slattery said.

Rents Tripled

In many cases, rents that only five years ago were less than a dollar a square foot have been doubled, even tripled as leases come due, brokers say. Today, $5 per square foot is not uncommon in La Jolla, and Slattery is negotiating a five-year lease for space on busy Prospect Street at $6 per square foot. By comparison, retail rates in local malls rarely exceed $3 per square foot; on-street space in downtown San Diego is in the $1.50-per-square-foot range.

“At these new rates, you simply can’t run a five-and-10 store,� said Bob Warwick, the tall, scholarly looking owner of Warwick’s book and stationery store, founded in 1902. “You just can’t sell enough pencils. So, we’ve seen almost all the family businesses in town go under. I’d say all but three or four of the originals are gone.�

Changes Downtown

The exodus of these family run, community-oriented shops is changing the face of downtown La Jolla. The hardware stores, pharmacies, dime stores and fix-it shops that once formed the backbone of the village shopping district have been replaced by high-fashion boutiques, gift shops, art galleries and other tourist-serving businesses, plus a few chain stores such as The Gap and Banana Republic.

That shift, many observers say, may be good for the town’s thriving tourist trade. But some fear that it is stripping La Jolla of its value as a shopping destination for residents.

Though Scott and fellow merchants insist that residents can still fill most of their needs in the central shopping district, they worry that as the number of hard-goods stores dwindles, it becomes harder to persuade La Jollans that it’s worth their while to come downtown.

Different Viewpoint

But there is another school of thought on the issue. Despite many merchants’ contention that high rents are forcing out established tenants selling wares that everyday La Jollans need, some observers believe that businesses have died because they simply failed to provide a product the community wants.

“I think it’s kind of a cop-out, quite frankly, for people to blame high rent for their business failure,� Slattery said. “The bottom line is many merchants in La Jolla have not kept up with the marketplace. The world has caught up with them, and they don’t want to adapt. So now they’re complaining.�

Mike Townsend, president of the La Jolla Town Council, has a similar view.

‘Old Days Are Gone’

“It may make many of us sad, but the time has come for things to change in La Jolla,� said Townsend, whose family owns Geri’s Liquors on Pearl Street. “The land is too valuable for a lot of the resident-serving things like hardware stores and shoe-repair places. And there’s demand for these Paris boutiques and pricier establishments. I’m afraid the old days are gone for good.�

The La Jolla Town Council, concerned about the health of the economic climate in the village, has embarked on a campaign to assist retailers and boost the shopping trade downtown.