Santa Monica, California’s Third Street Promenade Prepares For Its Close Up
Third Street Promenade, an upscale outdoor shopping boulevard just blocks from the Pacific Ocean in Santa Monica, California, shows just how tough it is for retail centers across the country to draw customers these days.
Even with its scenic location, Third Street Promenade is preparing to undergo a significant facelift that business owners hope will make the once-popular destination more competitive in the harsh world of 21st-century retail.
The palm tree-lined, car-free street that stretches Third Street from Wilshire Boulevard to Broadway in downtown Santa Monica is home to a number of local and national chains including an Anthropolgie clothing store and Apple retail shop as well as street performers. It was once one of the most popular locations for retailers to open in greater Los Angeles, a major tourism city that borders Santa Monica, but now the street posts some of the highest vacancy rates in its history.
The street has not had a major renovation in the 30 years since it was first opened as a shopping destination, according to Kathleen Rawson, chief executive at the nonprofit Downtown Santa Monica Inc., which contracts with the city to manage downtown.
Now, her group is gathering input from the community and business owners about how to best update the street to bring in more foot traffic and retailers. In addition to infrastructure upgrades, potential changes include performance spaces, shared outdoor dining, interactive water features and new seating and gathering spaces. A detailed plan is expected to be presented to the City Council and the Downtown Santa Monica Board in the fall.
“It certainly is time to cast some new energy into the street and just modify how we’re doing things to adapt to people’s changing tastes,” Rawson said. “There were some nuts and bolts things that need to be addressed as with any aging infrastructure, but it was also time to look at the street itself. Look at it from an environmental sustainability perspective, from a community gathering place perspective.”
The plan illustrates just how much the retail real estate landscape has been forced to change over the past several years to focus more on public gathering spaces and experiences that shoppers can’t find online in order to stay relevant. The novelty the promenade brought when it was first transformed into a dedicated shopping street it is today is no longer enough to keep it as competitive as it once was.
Since retail has changed “pretty dramatically over the last couple of years,” Rawson said retail options also needed to be address to ensure there is a mix of the right retail for the street “and continue to make it an interesting place” for both tourists and locals.
Several prominent stores including bookstore Barnes & Noble have closed on the street in recent years, helping push the street to 7 percent vacancy rate overall. Many observers note that the street, which attracts about 15 million visitors a year and achieves more than $1 billion in taxable sales, seems to be falling behind other major shopping centers nearby in its ability to attract and retain retailers.
Competition has increased in the area in recent years, with the $1 billion renovation of Westfield Century City Mall, a sprawling outdoor luxury shopping center only miles away, for example, according to Rick Cole, city manager of Santa Monica.
But there’s also reason to believe there’s an opportunity to capitalize on improving retail nearby. Among the largest of these is the three-story mall Santa Monica Place, which is located at the south end of the Third Street Promenade, that underwent a $250 million renovation into an outdoor center with a number of restaurants, shops and entertainment options.
“When the mall was internally focused, they were in direct competition,” Cole said. “Now that Santa Monica Place has been opened up, there’s much greater synergy between the uses in Santa Monica Place and the Promenade, and people flow more easily between the two.”
Santa Monica Place, owned by retail real estate investment trust Macerich Co., is increasingly adding more experiential options including a movie theater and a children’s museum that is expected to open this year. Supermodel Tyra Banks plans to open a 21,000-square-foot interactive space called “Modelland” in the mall this year.
Other promising elements have already come to Third Street Promenade, including outposts of co-working spaces from WeWork and Work Well Win, and new entertainment experiences such as virtual reality, Cole said. The opening of the Metro Expo Line only blocks from the Promenade provides additional access to the street to people who don’t want to fight traffic to visit.
“It makes a ton of sense, and the timing seems right,” Steve Basham, senior market analyst at CoStar, said in an email. “The area is still a popular retail and tourist destination despite the lack of recent modernizing touches. But with increased accessibility to Santa Monica via the recently opened Expo Line stops, it’s a great time to add new features and attractions to take advantage of increasing foot traffic.”
Officials experimented with new additions and changes on Third Street Promenade last fall. In one, the street’s bolted down seating was removed and replaced with colored adirondack chairs, big umbrellas and a couple of pianos were added. Astroturf was laid down and oversized versions of games such as Jenga were laid out for use by shoppers.
It proved to be a hit.
“It’s like if you invite them to come, they will,” Rawson said.
They are also looking at doing more robust events in the future to help attract more shoppers.
“As it stands now, I think both property owners and the city are thinking we need to widen what’s possible and allow for a little greater flexibility to see what works without compromising the larger vision that this is an iconic, outdoor public space,” Cole said.
Downtown Los Angeles-based design firm Rios Clementi Hale Studios, downtown L.A. engineering firm KPFF and Copenhagen-based design firm Gehl Architects are working on the revitalization project with the group.
Author: Karen Jordan