When Bookshop Santa Cruz owner Casey Coonerty Protti learned that Borders Books, located on the 1200 block of Pacific Ave., announced that it was closing its doors back in Feb. 2011, Protti immediately emailed her customers, thanking them for their “loyalty and for [their] belief in the value of independent [businesses].”
“Downtown just couldn’t sustain two bookstores of our size,” Protti said. “It was nice to see the local, independent business come out as the victor, so in a sense, I do believe it was a ‘win’ for the local.”
Just 11 years earlier, when Borders moved into its downtown location, the store was immediately met with protests organized by local-business supporters. Despite customers who appreciated the alternative retail options offered by the big-box store, the corporation as a whole failed to survive — to the tune of $1.29 billion in debt.
Now, the self-proclaimed “phenomenon in the fashion world” known as Forever 21, or Forever XXI, is slated to open its doors this August in the 20,000-square-foot space vacated by Borders only a year ago.
After showing interest in the area for its market of students, locals and tourists, Forever 21 Inc. signed a 10-year lease with Redtree Properties for the 1200 Pacific Ave. location in early February. A deal with the clothing chain had been in negotiations for six months, said Doug Ley, managing partner of Redtree Properties, in a public statement. The retailer is currently working on its plans for renovation through the city’s approval process.
The company, best known for its inexpensive, “trendy” clothing targeted toward young women and teens, is worth at least $1 billion, according to a 2009 Forbes report. Operating nearly 500 retail locations worldwide, Forever 21 is considered one of the fastest-growing retailers in the United States.
The city of Santa Cruz, known for its left-wing politics and “hippie” persona, has been known to limit the development of larger, corporate retailers. However, this trend has slowly declined over the past few decades, as more and more chain stores have made their way into the community and the city continues to make plans for development and economic growth.
“Despite efforts to slow the town’s growth, Santa Cruz is very gradually turning into a big city with big city problems — congestion, crime, etc.,” said Frank Perry, director of the Santa Cruz Museum of Art and History. “The changes are not so noticeable over the course of two to three years, but over the decades, the changes have been immense. A few years ago, I met a man who grew up here and was visiting for the first time in 50 years. I still remember his comment: ‘My God, what have they done to my town?’”
Plans for the opening of the sartorially savvy chain revisit an issue that Borders also faced upon opening downtown: taking the city’s business identity for a turn, not for better or worse, but for development’s sake — economically and financially.
Chain stores have come and gone throughout the history of the Santa Cruz area and have been a result of past events dating as far back as the Great Depression, according to local historian Ross Gibson. Gibson said chain stores like Woolworth’s succeeded in building a positive relationship with the Santa Cruz community by selling locally-produced products, but added that the relationship failed to last due to a change in management and the implementation of a new “corporate business model.”
“During the Great Depression, downtown [property owners] found they couldn’t lease [their] buildings, and businesses invited in chain stores to fill the spots,” Gibson said. “A lot of people saw this as large corporations taking money out of Santa Cruz and not benefiting the community, while merchants were giving sweetheart deals to chain stores. Leasing went on for 50 years with depression prices, and that’s where this all really began.”
The 7.1 Loma Prieta earthquake in 1989 triggered a shift in the business locale after much of the infrastructure downtown was destroyed during the natural disaster. The quake caused $433 million in damages, injured 600 and killed six people in Santa Cruz alone. Among the ruined infrastructure were the former Pacific Garden Mall as well as The Cooper House restaurant and bar, which was known from 1972 to 1989 as a cultural hub and popular gathering place for locals.
A columnist in the Washington Post wrote that Santa Cruz lost more than physical infrastructure in the earthquake.
“A piece of the ‘60s went down when the quake struck this beach town last week,” she wrote, “and no amount of cement and plywood, no amount of government loans, can bring it back. The quake stole the only thing Santa Cruz had going for it — its past.”
Local businesses struggled to recover following the disaster and were forced out of the market due to rebuilding costs. The city, desperately seeking retailers to fill in the cracks left behind by the huge loss, welcomed big box stores in an effort to boost the local economy.
“In years prior to the quake, the downtown area was made up of historic buildings — buildings that were already paid for where lease prices were low,” Gibson said. “These were the lease prices that allowed local companies to start out in Santa Cruz, but after the earthquake, things needed to be rebuilt. [Since] that cost money, local companies couldn’t get into the market anymore, and those who did prior to the quake just couldn’t survive through it.”
Gibson attributed the struggles faced by local businesses following the earthquake to city council decisions made to completely remodel the infrastructure of downtown. The city was allegedly committed to “rebuild downtown to standards that made each building and the whole of downtown better prepared should another earthquake strike,” according to an executive summary of the Santa Cruz Climate Adaptation Plan from 2008.
Gibson said that local businesses could not afford the necessary remodeling of downtown’s infrastructure to meet new building safety standards. Additionally, infrastructure that was only partially destroyed was torn down, as opposed to being restored.
“Some people never forgave us for buildings coming down,” said Mardi Wormhoudt, former county supervisor and mayor at the time of the quake, in a Metroactive 2005 report, “which is understandable, but we made the best decisions we thought we could, given the evidence we had at the time.”
Gibson said the decision to rebuild instead of restore was allegedly made to prevent the homeless from living in the downtown area.
“After the earthquake, the city had a choice to save the buildings that were damaged,” Gibson said. “They chose to tear it all down and rebuild. Los Gatos saved every single building they could, and they bounced back in six to eight months. Santa Cruz turned its back on all the debris — they completely took out the Pacific Garden Mall and brought in a traditional streetscape of suburban sprawl. In that sense, I believe they made a mistake.”
Following the earthquake, the downtown area was completely rebuilt. Since then, various businesses, including local and chain stores alike, have come and gone. Peter Koht, current economic development coordinator for the city of Santa Cruz, said the plans to open Forever 21 were strongly influenced by an effort to introduce “anchor stores” into the downtown retail community. The addition of the fashion retail chain is also expected to keep shoppers in Santa Cruz from taking their business to neighboring cities like San Jose.
“The city of Santa Cruz produces a lot of sales, and these purchases don’t always happen in Santa Cruz,” Koht said. “By bringing the products and brands people want into the city’s retail environment, we can keep the sales here.”
However, Peter Beckmann, co-chair of Think Local First, a local volunteer organization that supports locally owned businesses, said bringing in corporate retailers is not the answer to boosting local sales.
“The better approach would be to find out in which industries revenues are leaving our area and then attract or strengthen the respective businesses,” Beckmann said. “Locally owned businesses provide part of the soul of a community. Towns with exclusively corporate businesses and big shopping malls feel empty, not made for ‘human consumption.’”
While Santa Cruz embodies the quintessential enclave of an independent beach town and has attracted tourists for decades, Koht said he believes that the trend toward bringing commercial retail into the downtown area will better serve changing consumer tastes.
“Downtown areas across the nation are making a move away from malls and that general kind of lifestyle to street retail, where residents show enormous support for the local retail community,” Koht said.
Koht said by moving “anchor stores” into the downtown layout, the area as a whole will better serve the types of stores and brands shoppers look for and generate more sales within the city.
The closure of Borders downtown was a contributing factor to the growing vacancies of commercial space downtown as stores go out of business. While independent booksellers downtown may have been able to regain some sales following Borders’ departure, the city lost out in significant tax dollars and took a step back in economic growth.
The news of the clothing retail giant moving downtown has been accepted with hesitation as local business owners, specifically in the garment industry, express their hope that Forever 21 will only bring more customers to the downtown area.
While many local businesses like Bookshop Santa Cruz advocate independent retailers over national chains, Protti said that big business is also able to have a positive effect on the community.
“A business closing is a loss for any community — with a loss of jobs and income,” Protti said. “Borders took away a huge part of our sales for 10 years, but at the same time, having a new business move in downtown, big box or not, will bring in jobs, bring in income, and ultimately draw more people to the downtown area and make all of [the businesses] successful.”
Toshiko Shek, manager of Sway, believes that customers will continue to stay loyal to her business and views the opening of Forever 21 as an opportunity to draw in new shoppers.
“Forever 21 obviously has a lot of clothes that are on the more affordable side, but at the same time, we have a lot of regulars that have shopped at our store for a long time,” Shek said. “Hopefully, people who come into town to shop at Forever 21 will spend more time here, walk around downtown and maybe discover our store. That’s my hope.”
Forever 21 is known for its practice of “fast fashion,” selling a majority of their hip and trendy styles of clothing, shoes and accessories for low prices — like $1.50 for a pair of earrings and $8.50 for a dress. The chain has also recently introduced men’s, children, plus-size and maternity lines at select stores.
“Forever 21 is definitely a better option for college students — especially given the current economic conditions — who want to shop but can’t because of the money,” said Amy Kwong, fourth-year American studies and psychology double major. “They offer prices that are a lot lower than what you can generally find in other stores downtown, like Urban Outfitters and Kurios.”
While the news of Forever 21’s grand opening was happily received by deal-hunting customers and supporters of a “balanced” retail community, the store’s arrival has also sparked controversy among supporters of local and independent businesses.
“I’ve been coming to downtown Santa Cruz for the last four years for the quaint, small shops,” said Brittany Smith, first-year environmental studies major. “So many of those shops will not be able to compete with Forever 21’s prices … Hardly any store would be able to compete. I feel like some shops have a hard enough time competing with Urban Outfitters.”
As consumer spending continues to dwindle as a result of the economic downturn, the search for lower prices has put local, independent businesses up against both online and corporate competition. With the majority of closed businesses in Santa Cruz consisting of local, independent firms, the Borders closure remains a clear exception.
“Stores like Velvet Underground, Graphix, and Skate Works have gone out or are going out of business because student clientele look for deals,” Smith said. “Forever 21 will perpetuate this struggle for local businesses in the area.”
Kurios manager Lindsay Taylor, while acknowledging the economic value of the store to the city, sees the opening as a threat to the character of Santa Cruz’s “local aesthetic.”
“I was disappointed to hear about Forever 21 moving in downtown,” Taylor said. “I just moved here from New York to get away from the same things … At the same time, I understand why the city allowed them in, but I’m just hoping that any new businesses moving into the empty stores downtown will be for the better.”
The fashion retailer’s opening is also expected to restore community jobs that were lost with the closure of Borders last year.
“[Forever 21] will definitely create more jobs in the downtown area,” Taylor said. “I get about 10 applications a week, typically from younger students in college, and this will definitely be an opportunity for more people to find employment.”
Additionally, an estimated $6-8 million is expected to be earned annually by the fashion retailer, according to city officials. One percent of this projected revenue is expected to be recycled back into the city through the collection of local sales tax, which will fund city projects and repairs.
“Welcoming a retailer of this size and quality will have a huge impact on downtown, and raise sales all along the avenue,” said Bonnie Lipscomb, the city’s director of economic development, in a statement. “We hope that this announcement will spur other retailers examining our market to join Forever 21 and all our other outstanding merchants downtown.”
In compliance with development and remodeling plans completed over the years in response to natural disasters and a buildup of the tourism industry, growth within the city’s infrastructure has taken its toll on community spaces as more and more of the city’s infrastructure became commercial space in efforts to build and sustain the local economy over the years. Buildings once used as community centers downtown slowly became retail spaces as the commercial market in Santa Cruz developed.
“A lot of industrial buildings downtown were used to serve local artists within the community … but those began to disappear in the early 2000s as new businesses were coming in and making lease offers that [the artists] couldn’t afford,” said Gibson, Santa Cruz historian and lifelong resident.
Forever 21 is part of an influx of large-scale clothing retailers, restaurants and fast food chains that have joined the Santa Cruz area over the past few decades.
Among these businesses are Urban Outfitters, Gap, Jamba Juice, Cold Stone Creamery, Safeway, Target — set to open in Capitola in summer 2012 — and most recently, Panda Express and Chipotle Mexican Grill.
Mayor Don Lane founded the local Saturn Café in 1979, following his graduation from UC Santa Cruz. While Lane said he supports the local business effort, he also believes that larger retailers are necessary for the community’s success.
“The reality is that it takes the whole package for a community to succeed,” Lane said. “There needs to be a mix of local and non-local in order to build this economy. In general, I feel like an independent, local community is ideal, but it’s a mixed situation where a lot of smaller businesses downtown know that these larger stores will draw more people into the area.”
While the Santa Cruz community has been defined by its burgeoning counterculture values in the past, the city continues to be characterized not only by its unique people but also its business practices and politics. Despite the fact that the city has taken on a modernized, suburban design while approving more nationally and internationally recognized businesses, many local and independent businesses continue to put up a fight, thrive and survive as a result of local support.
“The more people believe [Santa Cruz] has a unique characteristic, it attracts people who want to be a part of it,” Gibson said. “Culture is a self-perpetuating prophecy, and this community will never lose its culture as long as it is survived through the people that came to experience it.”
When one business closes, it allows for another business to move in — this is a simple step of economic development. Whether new development is fueled by the birth of a fashion retail giant or a fast food burrito chain, one thing’s for sure: This city doesn’t take development lightly. It never has.
Even with Forever 21 making its entrance into the downtown shopping area, there remains an estimated 28,000 square feet of vacant commercial space downtown. Filling these empty commercial spaces remains a high priority for the city and its plans for economic growth. Maintaining this growth while allowing for the preservation of the city’s local businesses will remain a constant controversy.
“I keep thinking about the things I knew when I grew up here. These were the businesses that I really truly loved … it’s sad to see them go and watch the big guys take over,” Gibson said. “But we need to promote the nature, history and culture of this area. Santa Cruz’s legacy hasn’t died out — if it’s dying at all. It’s not going to be the same — nothing can stay the same — but we need to fight to maintain and defend the culture that is so completely Santa Cruz. That’s what’s important here.”