FIRST IN A SERIES
By TOM HONIG
Three days after the Loma Prieta Earthquake in 1989, the late Mardi Wormhoudt, then Santa Cruz's mayor, walked with President George H.W. Bush along the quake-shattered Pacific Avenue Garden Mall, explaining to him that Santa Cruz's downtown was a collection of small, locally owned shops. It was a description that has been at the heart and soul of Santa Cruz's downtown for years, affirmed by a 36-member citizens committee that got together and envisioned how Santa Cruz would recover from the earthquake.
That small, locally owned ethic has remained in the minds of locals since then: an image that fits nicely with how many Santa Cruzans feel about themselves.
But 22 years later, that image just might be tarnished. Santa Cruz's Redevelopment Agency and the Santa Cruz Area Chamber of Commerce have sought the help of a national retail expert, and he's throwing some cold water on some old ideas about how Santa Cruz's downtown should look.
The consultant, Robert Gibbs, has visited this week, and his research has focused on some harsh realities that will get both the city's government and its citizens thinking about whether change is in our future. His entire report is here, on the Santa Cruz Area Chamber of Commerce website.
Let's start with perhaps his most significant finding: some $1.8 billion -- with a "B" -- left Santa Cruz last year because people are leaving town to shop. Here's what his report says:
"Although the study area had an estimated 2010 total retail expenditure of nearly $2.16 billion by the residents of the study area, only $312.3 million has been captured by retailers within the city of Santa Cruz (according to sales tax records) – retail leakage of 85.5 percent."
That means that residents of Santa Cruz are spending their dollars elsewhere.
Here's why that's a problem: the local economy is missing out. A bigger problem: revenue from sales tax is going to cities outside Santa Cruz.
Former City Manager Dick Wilson for years worried that Santa Cruz is a low-revenue city, with city services suffering because of a lack of money. In California, local cities and counties depend mostly on sales-tax revenue more than any other source. And, sure enough, this year the City Council was not able to meet funding requests from non-profit, charitable organizations that look to the city for help.
Some might like Santa Cruz the way it is. Some no doubt appreciate that Santa Cruz doesn't have the chain stores that other communities have. But there's a cost -- and that cost is probably about equal to the $1.8 billion that's leaving the county.
What's the solution? Some fixes are easy: Gibbs recommends putting up better signs and maybe even changing the one-way configuration of Pacific Avenue. But others demand extensive planning and even some soul-searching. Will Santa Cruz make some basic changes and allow a different commercial mix in its commercial center?
The old-time image of Santa Cruz and the realities that we face may not jibe. And that's the discussion that the entire Santa Cruz community needs to have with itself.