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Politics & Government

City Addresses the Loss of Retail Businesses

The council discusses ways to stem a rising vacancy rate in Beverly Hills' commercial properties.

Retail businesses have increasingly left Beverly Hills over the last two years, according to a staff presentation to the City Council earlier this month.

In 2010 and the first quarter of 2011, the city recorded a 14 percent vacancy rate for businesses such as restaurants and vendors of goods and services. Megan Roach, the city's marketing and economic sustainability manager, noted this compares with a 6 percent lack of occupancy in 2009.

The , including Robertson Boulevard, Olympic Boulevard and Beverly Drive, have experienced most of this economic exodus. The business triangle region between Wilshire and Santa Monica boulevards accounted for about 5 percent of the vacancy rate.

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Council members attributed a lack of parking as a main contributor to the retail decline south of Wilshire Boulevard.

Tracking vacancy rates "is really important because it provides insights into the local economy, and we do use it to identify trends as part of our forecasting during the budget process," Roach told council members at a July 7 study session. "Business activity contributes 74 percent of the city's general fund revenue, although only 9 percent of the land is commercially occupied."

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In an interview with Patch, Vice Mayor William Brien, who heads a task force established by Mayor Barry Brucker to make the city's permitting process less time-consuming and more efficient, said retailers "provide the tax base that allows us to have the great police, great fire and great services for both our businesses and our residents."

He called for streamlining the city's review and approval process for new businesses and land developments as a key step toward increasing retail occupancy. Brien said this move could also help attract large, office-based operations, which have big workforces that provide a market incentive for new, smaller service providers and merchants, and a refreshed customer base for existing businesses. 

Brien also noted the part that commercial real estate owners must play in attracting new businesses.

"We can't control what [landowners] lease for, and it's bad to have an empty building," he said, adding that those who own lease space are "going to have to participate in also figuring out ways that they can put something on the table that benefits the businesses ... because it can't just be a one-way street. It's going to have to be the city and the landowners working together for the common good."

At the study session Councilman John Mirisch, Councilwoman Lili Bosse and Brucker agreed on the need to find out specifically why businesses are leaving the city.

"Why are there vacancies?" Mirisch asked. "Some of that intelligence is something we can gather from exit interviews. We may find out for some of them the fact that it's difficult to get a permit could be a problem, but we may also find out ... that the rental rates simply are too high."

According to Roach's presentation, "The city utilizes several different approaches and partners to pursue business development objectives." She said officials are considering the following options to attract businesses:

  • Five-year Economic Sustainability Plan initiatives
  • Fee deferral programs for small businesses
  • Business expansion and attraction loans and grants
  • Broker commission program targeting vacant retail space
  • City-owned property lease terms for vacant properties
  • "Shop local" and other business incentive programs that have been enacted in cities such as Santa Monica and Lancaster

Anita Zusman Eddy, director of economic development and government affairs for the Beverly Hills , said that "a real uptick in activity" in the last few months may indicate that a recovery is on the horizon.

"Beverly Hills' retail environment was impacted just like every other community in the country by the recession, so we certainly saw vacancies and stores closing doors," she said. "But what we're also seeing now is a renewed interest in coming into Beverly Hills."

Eddy also described an annual business development mission that takes place each fall in which chamber executives and council members travel to New York to reinforce ties with core brands that occupy much of the business triangle district. The outreach effort also aims to attract new additions to the local business community.

Councilman Julian Gold heads an ad hoc committee established by Brucker to address the small business decline.

"We cannot be complacent—I'm very uncomfortable over the notion that because other stuff is going on, we're not going to stay focused on this," Gold said at the study session. "I see this as one of the cornerstones of what we have to do in order to keep this city healthy in this fiscal year and in the next."

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