Santa Maria business owner Lester Dalisay is hoping for a merry Christmas. In fact, he’s counting on one to save his hobby shop on Main Street.
Dalisay opened Big Boys Toys, a store specializing in remote-controlled cars and planes, after relocating in January. With the recession and online merchants teaming up to dwindle his profits to a pittance, he’s struggling to stay in the black.
“I’ve been in the hole for about the past six months,” he said. “I’m trying to get it rolling, but it’s really tough times.”
He’s watched four nearby businesses close up shop recently. Customers are heading to the south end of town, he said, where rents are beyond what he can afford.
“I see small business right now falling by the wayside,” Dalisay said. “Even the ones down on Broadway across the street from the car wash, all those buildings are going. Small businesses are getting pushed away by the big corporate stores.”
Small business is at a standstill in the city, according to City Planning Commissioner Etta Waterfield. However, not all news is bad.
Paul Miser, owner of Fatte’s Pizza, expanded his business to Santa Maria in July 2008. At his Grover Beach location, the recession caused him to lose 20 percent of business from last year. He’s not sure if the rough times are over yet, but he expects good things in his new venture.
“Santa Maria has been constantly growing for me. From day one, it’s still increasing in business,” Miser said. “It hasn’t gone up as quickly as I’d hoped or expected, but at this point we’re at last self-sufficient. It’s paying all of its own bills and everything.”
According to Waterfield, permits for more small businesses and retail are lining up on deck, waiting for things to get better.
“Once we start coming out of this economic downturn, we can get our entitlements placed and we can start moving dirt,” she said.
The good, the bad, and the ugly
As in most growing areas in the country, the foreclosure crisis and subsequent recession measurably impacted the city. Building permits issued for 2009 are at their lowest level in years, according to city spokesman Mark van de Kamp, and just three permits have been issued for single-family homes all year.
But the business outlook isn’t as bleak as it may appear on the surface, according to the city’s director of community development, Larry Appel.
“Things have slowed down considerably on the residential side, but commercial, industrial are still moving forward,” Appel said. “There’s a lot of work going on, and we’re keeping our inspectors busy.”
Appel and other city personnel are excited about the ongoing revitalization of the much-maligned Santa Maria Town Center. The mall saw its share of casualties during the recession—including the closures of retailers Gottschalks’ and Mervyn’s—but it’s now undergoing a transformation under the direction of new owner Greg Kozak.
Kozak bought the property in June 2008 and went to work on making improvements inside and out. The new owner said he sees in Town Center an opportunity to bring a previously “mismanaged” mall back to life. By focusing on securing local businesses, he’s confident he can turn it around.
“Our real mission is to make it the community center, not necessarily just another shopping mall,” Kozak said. “The days of big solid retail are over. We want this to be the place where people are hanging out, eating, and bringing their kids.”
In addition to an overhauled food court—complete with a Subway and a Dairy Queen—a 13-screen movie theater will soon fill the void left by Gottschalks’ departure. The mall has also welcomed 10 new tenants, including children’s barbershop Whipper Snippers, Lost World Pets, Tom’s Toys, and a Rockstar Fitness center.
Currently attending to major renovations, Kozak said he’s probably leased more space than any other project in California.
“It’s basically a local’s program,” he explained. “The design is to enhance and bring all of the local businesses together and give them an image that’s equal to or better than even a national tenant’s image.”
Other highly anticipated projects are beginning to get off the ground in the city. Construction is also moving forward on Windset Farms, a massive greenhouse facility near the intersection of Black and West Betteravia roads. The nearly 6-million-square-foot facility will produce tomatoes and other vegetables year-round and will create up to 400 local jobs, according to the Canadian company.
City planners said the facility could revolutionize the way agriculture is done in the valley.
“It’s going to be a completely new type of farming in Santa Maria, within the confines of a greenhouse,” Waterfield said. “Those wages are going to be higher than normal.”
Plans are also moving forward on a three-story, 37,000-square-foot Cancer Center at Marian Medical Center. Once completed, the facility will offer diagnostic testing, outpatient care, and chemotherapy for cancer patients.
“It’s basically going to be a one-stop shop for the treatment of cancer,” Waterfield said. “What’s great about this center being strategically located on the Central Coast is that the next facilities that offer that one-stop shop for cancer treatment are in San Francisco and Los Angeles, so we’re hoping to get really great medical doctors and specialists coming in.”
Further developments in the works include a 67,000-square-foot Spencer’s Market on Blosser, Lakeview Promenade, Vallarta Market (a Shell station with a deli), and the Central Coast Jet Center at the airport.
“There’s been a lot of things happening,” Appel said. “I’m excited that it’s still moving forward this way and that businesses are confident enough in the economy that they’re moving forward with their projects, and we’re able to take care of their needs and get the permits out now.”
Permission to land
Just three months into his job, Appel said he would like to streamline the permitting process and make sure it’s not a hindrance to businesses interested in moving into town.
“We’re really taking a hard look at how we do things here, and even when you think you’ve got something that’s working very efficiently, I’m still looking for ways that might make it better,” Appel said.
The process to obtain every permit needed to open a new business can be complex. Depending on the quality of plans and the number of corrections issued, average turnaround time from application to approval can take anywhere from 20 minutes for a re-roof to six months for a larger development, according to Bob Marshall, the city’s building division manager.
Permit costs can range from $40 for a simple alteration to tens of thousands of dollars for a single-family residence, Marshall explained. The plan checks themselves generally take two weeks, and then the Planning Department issues its corrections. If the plan is approved, the applicant gets a call telling the fee, usually on the same day.
“Right now, things are going along very fast,” Marshall said. “You can get a building permit quicker now than you could’ve two years ago when we were really busy.”
Though it took him more than a year to open Fatte’s Pizza due to a limited budget and squabbles with property owners, Miser said he could attest to the city’s prompt attention.
“Whenever I called them to come out and do an inspection, they were out in a couple of days,” Miser said. “I didn’t have a long time to wait for the city to do their portion.”
The city gets it share of complaints, too, Marshall said, but most developers and contractors understand that larger projects can take a long time to get finalized.
“Sometimes owners get antsy. It’s understandable—they just want to get their business going,” Marshall said. “We try to be as tuned into that as possible, we really do. We want them to get going, too.”
To get them on the fast track, Marshall said the city offers an express permit service, in which the plan-check fee is paid twice and guaranteed to process within two weeks.
“If money is not the object, then we will pull your plans out of the bin first and get you your plan check done very fast,” Marshall said. “It’s a popular program.”
“We’re not the big bad guys that a lot of people think,” he added. ”In a process such as this, there’s always going to be somebody complaining.”
Enterprising businessman Damon Boggs can relate. Boggs said he spent thousands of dollars on plans for his proposed Pacific Coast Garden and Landscape Center off of Santa Maria Way, just to have the plans considered by the Planning Commission. Vying with two other projects for the same space, the Commission passed him over.
“That’s a lot of money to spend for them to say no,” Boggs said. “It was frustrating, my first foray into politics. I couldn’t believe it. I thought, ‘Wow there’s a lot more to it. You can’t just go and open up a business somewhere.’”
Waterfield said she understands that the process of moving or expanding a business can be frustrating to business owners.
“When they hear all this, they assume the city is being unfair to them, and that’s not a fair shake to the city either,” Waterfield said. “It’s just a hard position to be in at times.”
Even so, Waterfield said, the city remains committed to uphold its reputation for encouraging business.
“Policy may have changed in regards to regulations coming down from state agencies and county agencies that the city has to abide by, but the city itself and city council are definitely pro-business,” Waterfield said. “That’s why Santa Maria has become the largest city in Santa Barbara County.”
The times they are a-changin’
Santa Maria has always been a special place for Harrell Fletcher.
When he opened his first business in the city in 1945, there was a recession then, too, but he was able to turn the tiny appliance shop into a success.
The 90-year-old former county supervisor said he wouldn’t have been able to do the same thing in today’s climate. There were no charges to start up a business in those days, and the city did more to encourage business to come, he said. The city has always been known for having a strong retail sector and being a cheaper place to build, Fletcher explained, so to keep the reputation, the city must adapt.
“As times are tough, we need places where people can get the best buys,” he said. “The city needs to be more pro-business and look at the needs of the community to see what can to be done to encourage business to move here.”
Fletcher, who handles business and home permitting for Fletcher-Cross and Associates, said the permitting process takes too long and is too expensive for the average person. He said the city should work on the “curb appeal” of downtown to make it more attractive to new business and look at lowering mitigation fees to keep the costs of opening a new business down.
“They say we need the money, but it’s better to have a smaller fee and get them to build then to have a high fee and they don’t build,” he said. “As high as they were, we never complained, because they were higher at the county. But now I think they need to look at these fees to make sure they’re not keeping businesses out that would like to come.”
Growth and traffic mitigation fees can be astronomical for a business, depending on the size of the project. But they’re also essential to new business development, according to the city’s director of public works, engineer Dave Whitehead.
New business, Whitehead said, creates traffic congestion and causes problems with the city’s existing infrastructure. Businesses used to have to pay for the necessary improvements to streets and surrounding areas, but the mitigation program changed that.
“It’s really a boon to the development,” Whitehead said. “Yeah, they have to pay a fee, but they don’t have to pay that huge cost, and it actually makes development happen.”
The program also allows the city to get grant funding for transportation projects, which benefit business owners and the city, Whitehead said. To reduce the fees would mean the city would have to eliminate planned projects or increase the developable area of the city.
The City Council is in charge of setting the growth mitigation fees every two years. In June, the council approved a reduction of the fees by seven percent, adjusted for the cost of living.
Whitehead said the city met with developers and local businessmen ahead of the council’s decision to ensure the fee amounts were in the community’s best interests.
“We want them to understand what they’re paying for and to be a part of developing the program and agree that the program is good for everybody involved,” Whitehead said. “The community has to support that, or else it’s not going to be successful.”
Community support is what Big Boys Toys’ Dalisay said would keep stores like his alive. He said he’d like the city to do more to encourage small businesses and promote buying locally.
He also wants the city to lower its standard permitting fees. When he opened Big Boys Toys downtown, Dalisay said he spent more than $15,000 in license fees and permits, putting him into a hole right off the bat. He said the city charged him $500 to inspect his sign to make sure it met requirements.
“There’s a lot of fees they’re taking from small business,” Dalisay said. “Without the local economy here, there won’t be any jobs.”
Fletcher isn’t worried about that happening. As a staple in the business community for 60 years, he’s seen boom and bust days come and go, and the city has always seemed to fare better in tough times than its neighbors on the Central Coast. He said this recession would likely be no different.
“I feel that we’ll probably pull out of it faster than anywhere else,” he said. “But I think city and county government needs to take a look at how they’re doing business today and know that they can’t do it today like they did yesterday.”
Staff Writer Jeremy Thomas can be contacted at jthomas@santamariasun.com
This article appears in Oct 8-15, 2009.