The Morning Report
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San Diego’s core neighborhoods have been building on top of themselves – remodeling and transforming into vibrant strips of boutiques, gastro pubs and coffee shops.
North Park went from a place where you wouldn’t want your car to break down to a hipster’s theme park. The northern part of South Park became a place for families to walk. Adults enjoy craft beer and children play in sand boxes.
Sometimes change is good. Sometimes change is hard, and not at all welcome. Just ask people in Ocean Beach. The neighborhood’s very structures and character are making it so only large corporations can seem to fill some of the empty spaces.
And that is clashing with OB’s character.
OB is San Diego’s answer to “what if nothing happened after 1976?” That’s not an insult. It’s a lively beach town, with colorful locals, legendary food and relaxed nightlife. We know the people of OB for their sense of community, togetherness and events that celebrate their culture. OB might not be everyone’s cup of tea, but everyone is welcome.
Unless you’re Target. More specifically, Target Express. It is the latest megacorporation working to fill one of the community’s historic structures. It may be the only entity that can.
Over the last month the owners of the Newport Avenue Antique Center, one of the larger buildings on OB’s historic Newport Avenue, have been looking for a buyer, or at least a tenant.
The owner of the property is an OB local, Craig Gerwig.
“He’s been an upstanding member of this community for a long time. I mean, this guy puts in 12-hour days helping set up the OB Chili Cook Off every single year,” said Tony Franco of Franco Realty Group, the agency in charge of finding new tenants for the 18,000 square foot building.
“The owners have done everything to find local people that might be able to take over the space and keep it intact. So far no one has stepped up.” Franco said. “We’ve tried for a long time, and explored so many options, but nothing that would actually work.”
Franco and others involved mentioned groups wanting to install a bowling alley or a brewery.
Franco said the best local offer would only take up 3,000 square feet.
“That would be so expensive for the owners to split up the building like that. They would have to build new walls, electrical, bathrooms, and plumbing. The rental price would have to go up if that was the case,” he said.
And, what is the price? Anyone interested in buying the property, which is 30,000 square feet including 33 on-site parking spots, would need to come up with $6.5 million. The leasing price is $30,000 a month, which roughly works out to be $1.67 per square foot.
“That’s almost an entire dollar below market value for a property like this in San Diego.” Franco said. He’s right: Market value for business real estate is roughly $2.19 per square foot, that doesn’t include a building located on a historic beach strip. “No one is looking to get rich or scam the town,” Franco said.
Even with the below-market price, finding a tenant that can take over the entire space has been difficult, and that is where Target comes into play.
“We know it’ll be a lease agreement,” said Gretchen Newsom, president of the Ocean Beach Town Council. “Target wouldn’t be buying the property outright, but either way, we don’t want them here.”
Newsom, along with a lot of OB natives and longtime residents, are known for being staunchly anti-corporation; a lone holdout despite the ever-changing economic landscape inching in from every border.
“I don’t want any corporate logo taking up space on Newport Avenue,” Newsom said.
I asked her about the new CVS in OB.
“We weren’t able to stop them from coming in, but we worked hard with CVS to build a community benefits package and that agreement was the first of its kind in this state.” Newsom said.
Back in 2001, when Starbucks moved in, it was basically like an invading foreign superpower trying to overtake the village army. OB fought hard, but eventually the mermaid-laden titan took root and has been a fixture on Newport Avenue ever since.
“The sale of the [Newport Antique] property will displace a hundred independent vendors, and replace it with what Target has told us will be 30-60 part-time jobs. These are jobs without health care, and wages that are slightly above the minimum.” Newsom said.
An OB businessman who knows something about displacement is Saad Hirmez, whose Apple Tree Supermarket was pushed out of its original location in OB and taken over by the CVS. He has since opened a new Apple Tree location in OB, but even his massive store only covers 9,500 square feet.
Hirmez also owned Gala Foods in South Park, which was forced to close its doors in 2014. The tenant that took over Gala? Target Express. The residents of South Park protested Target’s arrival, but the real issue was the lack of customers at Gala.
“A Target Express offers no real value in OB. We have great clothing stores and we have grocers. Liquor? We have plenty. If you do need anything else, I just think Amazon,” Newsom said.
So, why do corporations move into areas full of locally owned businesses? It’s hard to find a case in which the reason involves purposefully putting smaller stores out of business, and is often as simple as the corporations can make larger spaces profitable. They do thorough economic research and calculated spending trends, supply and demand and residential growth, and then decide if there is a market in which they can succeed. Starbucks still stands, but so does Lazy Hummingbird, Jungle Java and the often-full Newbreak Coffee and Cafe.
That’s because locals have chosen to continually support those places instead of only spending money there when they’re facing threat of closure.
A lot of neighborhoods are more protective of their architecture – and the things like parking that go with it – often forgetting about the local brands inside. That leaves only a few large corporate entities with the means to make the spaces work. To counteract it, local entities will have to reach levels of success that can compete for those spaces.
It seems like fewer protests and more celebrations of local commerce might be beneficial. I was recently invited to a Facebook event called “Shop At Newport Antique Center Day,” which is a step in the right direction, but a step that should have been taken long ago.
Correction: An earlier version of this post misstated the Ocean Beach business that moved in 2001; it was Starbucks.