What to Do About State Street

MIT Forum Discusses the Caruso Way and 'Click and Order' in 'Brick and Mortar'

The audience assembled for the MIT Enterprise Forum titled "Retail Reinvention" on September 20 wanted to know if State Street could be closed, as it is for the Farmers Market on Tuesday afternoons, to form a more attractive environment and bring tenants to empty storefronts.
Paul Wellman (file)

The most questions during a recent, well-attended MIT Enterprise Forum were directed to Kloe Colacarro, there representing Caruso, a real estate development company. And it wasn’t the Miramar hotel that people wanted to know about. It was how Rick Caruso — who bought the Miramar property for north of $50 million in 2007 and has been dragging it through county permits and construction ever since — has managed to have “growth” each year at The Grove and The Americana at Brand in Los Angeles.

The topic of the night was how to revitalize Santa Barbara’s downtown core: State Street. Joining Colacarro were Gordon Seabury of Santa Barbara clothing designer Toad & Co.; Dave Pandratz, who with his twin brother opened and closed a skateboard shop in Santa Maria when they were 19 years old before coming up with a winning plan; and Nina Johnson, who’s been bird-dogging State Street for the city.

Seabury and Pandratz addressed retail from opposite sides of the loading dock: the manufacturing end and in-store sales and stock. Both said they’d responded successfully to the strength of online sales by joining the enemy — offering online product availability in their stores was what was saving them. In-store, any size or color of a Toad item was available to order online, said Seabury, and shipped straight to homes. And, for many of the other lines they carried in their stores, the deal was the same.

For Pandratz, this was today’s model of retail: to offer the ability to order what you held in your hands in exactly the shape and color you wanted. His Exchange Collective in Santa Maria collected web cooperation with the vendors at the board shops he and his brother, Dan, operate. They called the resulting collaborations “click and order in brick and mortar.”

Toad, which cultivates a green, eco-ethic for the clothing line it manufactures, also runs four stores. What made them successful, said Seabury, was knowing the local scene — they tried hard to keep themselves relevant to all the interests of young shoppers. They emphasized hiring people knowledgeable about the area’s hiking spots and other sports, and they offered information, as well as coffees. In Portland, Oregon, they added live music.

Once the floor at the Cabrillo Pavilion opened to questions, however, the audience demanded to know what the city was going to do about high rents and empty storefronts. What drew applause was whether the city would close State Street to cars. The city’s Nina Johnson — who’d talked about the city’s revitalization intentions, among them creating art at the 101 underpass and reducing lanes; adding residents to downtown, perhaps in a mixed-use way at Macy’s; and creating a fast lane for downtown permits — acknowledged the city was interested to know how many property owners supported the idea and was willing to experiment, if that was the general sentiment.

One audience member asked for Colacarro’s opinion. Colacarro had made a disturbingly good argument for Caruso’s Disney-esque brand of retailing, which emphasizes “grass, trees, trolleys, and fountains.” People were busy, she said; you had to create a “destination” that offered more than mere acres of shops — she gave The Americana’s concierge picnic service as an example. A picnic could be ordered for pickup and enjoyment on their grounds, and a concierge would do the organizing and assembly for free.

The Grove, near Los Angeles’s famed Farmers Market, also has LAPD presence at all times, Colacarro said, housed in a small building based on a Japanese police box. Flexibility was needed at the mall as well as security, she said. Even during a three-day vacancy, she’d put a pop-up into a store spot. And innovation was a draw. For instance, she said, when Ray-Ban opened its pop-up, they’d made sunglasses specially branded for the store and covered the ceiling with thousands of lenses.

Asked about turning a city street into a mall, Colacarro gave the example of the Pacific Palisades project Caruso had embarked on. It was nearing completion, she said — as is the Miramar, expected to open next summer — and included closing a city street lined by 21 different landlords. The Palisades project was in its ninth year of development, she added, but proved it could be done.


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