This is Part II of a multi-part series looking at the December 2006 study (the Retail Opportunities Analysis or ROA) on the Old Town Newhall Revitalization Project. In Part I, we looked at an overview of the Retail Opportunities Analysis. In this installment, we’ll look at the potential impact on existing local businesses in the Downtown Newhall area.

Local-Only Businesses Targeted for Removal

The December 2006 Retail Opportunities Analysis (ROA) very clearly focuses on adding retail sales to the Downtown Newhall area, which of course would bring an increase in sales tax dollars generated. The ROA goes on to say that they propose to "retain merchants who are currently producing acceptable sales levels." Although those acceptable sales levels are not defined, the only retail stores specifically mentioned as having "acceptable sales levels" are Billy’s and Roger Dunn’s Golf Shop. All others are assumed to be too "local oriented" to be worth keeping in the area.

In addition, the non-retail businesses (such as medical and other services, but excluding automotive services) currently make up 39% of the businesses in the area according to the study, and the planners want them to relocate elsewhere to make room for more retail space. In fact, the ROA states that the service-oriented businesses should comprise no more than 15% of the final tenant mix for Old Town Newhall. Just where are these businesses supposed to go, and how are those who are reliant on their services supposed to access them if they’re forced to move across town or out of the area?

Remember that some local businesses have already been presented with letters stating that they either have to accept the forthcoming "offers" from the City or face immediate legal action to enforce eminent domain. The City will be sending out its "appraisers" shortly to evaluate each business, and of course these businesses have no choice but to let these appraisers in.

In a recent interview published by The Signal, Paul Brotzman, the City's Director for Community Development, stated that the City would "completely cover the costs of the relocation to comparable facilities" and that this would "include not only moving costs, but the cost of acquiring another facility for those businesses" which should include both the costs of moving and the costs of acquiring a new facility.

Local business owners are very skeptical of the City’s stance at this point, and feel that the City has been completely unresponsive and insensitive to their requirements to continue doing business in the area. How does the City plan to compensate a business who currently owns its building and must now be turned into a renter due to lack of available commercial space for sale?

Drive-By Assessments of Local Businesses… Flawed at Best!

The decision as to whether these supposedly "local-only" services are serving a wider population than a 5-mile radius was apparently made by drive-by observations only. Are the planners intending to check the medical office patient logs to see what areas they’re truly serving? I know for a fact that many of these providers serve a population that has a much broader geographic base than the Santa Clarita Valley because their services and/or the quality of their care is hard to find anywhere, and we’re lucky enough to have them here. And it’s very likely that these visits to the local service providers also provide income to other local businesses, whether for gas or a quick lunch, or for a bigger shopping spree at the Valencia Town Center Mall while they’re in the area.

I frequent more than one of the medical services in the Newhall area, and yes, I drive more than 15 minutes to get there so I’m not "local" to the Newhall area as defined by the Retail Opportunities Analysis (ROA). Still, I choose to go there because the service providers that I know and trust are there, and now the City wants to tell us that those businesses need to move because they don’t provide enough sales tax revenues to the area?

One of these businesses, White Light Chiropractic Center, has been in the same location (and has owned the building they’re in) for over 20 years, and the Newhall Redevelopment planners have already given them notice that their building is scheduled for the wrecking ball to make way for a new public library and retail stores. Do the planners really think that a business like this only attracts Newhall locals? If so, they’ve truly got their heads in the sand, since businesses like this one often handle hundreds of patient visits per week from a wide-reaching area. But that’s not the real issue here, is it? Since the ROA is clearly oriented to increase sales tax revenues in the area and service-oriented businesses are usually not sales tax generators, the only way to maximize retail space is to force out the service-oriented businesses in the area.

The plan’s attitude towards existing service and automotive businesses is to "tear ‘em down and move ‘em out!" as shown in this quote from the Retail Opportunities Analysis: "As the Old Town District evolves, many service and non-retail uses will leave because space will become more desirable to quality merchants. Automotive uses should be minimized." In plain-speak, this means that they’ll either tear down the buildings that these businesses currently occupy (using Eminent Domain in most cases) or make it too expensive for them to remain by raising their rents as the buildings are either rebuilt or refurbished.

In all fairness, the buy-out proposals offered by the City of Santa Clarita may be reasonable in some instances, especially for those small localized businesses that are barely surviving as it is. However, for the more established businesses in the area, this whole plan is going to be a major nightmare as they start scrambling for new office space in an area where there's virtually nothing available.

Stay tuned for more! The next installment will cover the topics of Creating a Boutique Environment and Attracting Shoppers from an Extended Area. You'll find that these are some of the most flawed portions of the Retail Opportunties Analysis!