‘Shocking’: The fall of Third Street Promenade, Calif.’s once-vibrant outdoor mall

A unique confluence of factors has stymied the Third Street Promenade, a car-free outdoor mall by the iconic Santa Monica Pier

A wide shot of Third Street Promenade in Santa Monica, Calif., on March 12, 2024.Ashley Hayes-Stone/SFGATE

By Paula Mejía, Contributing LA Culture Editor

May 21, 2024 (SFGate.cm)

For original source go to: https://www.sfgate.com/la/article/santa-monica-third-street-promenade-empty-why-19374158.php?utm_content=cta&sid=53b8a5219dbcd4db6500018b&utm_source=newsletter&utm_medium=email&utm_term=roundup&utm_campaign=sfgt%20%7C%20the%20daily&stn=nf

On a recent Sunday, the glittering coastline buffeting the Santa Monica Pier teemed with throngs of tourists. Visitors tried their hand at carnival games and rides on the waterfront, stopping to snap photos backdropped by the city’s arching blue-and-white sign. Others took in the sunshine while moseying around shops and dive bars around Ocean Avenue, which overlooks the vast azure expanse of the Pacific. 

Yet that same liveliness evaporated a mere three blocks over at the city of Santa Monica’s Third Street Promenade. Although the shopping and dining enclave is a car-free, open-air mall not unlike other heavily visited sites including Universal CityWalk and the Grove, only a small handful of people venture over to the outdoor esplanade these days. An estimated 10 million people visit the pier yearly; only a tiny fraction of them appear to be interested in the promenade. The leisurely Adirondack chairs lining the sidewalks sit vacant, the once-plentiful street performers have mostly vanished, and it’s not unusual to spot back-to-back-to-back retail vacancies along each nearly empty block.

It’s all one giant missed opportunity for Santa Monica, the standalone Los Angeles County city with the multimillion-dollar coastline. For decades, the promenade was seen as a masterful reimagining of public space, a rare pedestrian-only area in a region with underperforming public transit and too many cars.

It wasn’t always this bleak. In the mid-2000s, when Sally Koslov first began operating her mobile tarot card and palm reading cart along the promenade, the street was “jumping,” as she describes it. “There were never any places for rent,” she says. “There were so many people, I couldn’t even push this cart to get through the sidewalk.” She’s still here working on the promenade, though sales aren’t nearly as good these days.

Stephanie McCaffrey, the co-founder and co-owner of the indoor pickleball facility Pickle Pop, which opened on the Third Street Promenade in 2023, used to play professional soccer before she became a small business owner. When she and her teammates traveled to Los Angeles, they’d spend a day out shopping and eating along the Third Street Promenade.

“It was absolutely buzzing and super busy,” she says of the area back in the mid- to late 2010s. “So to go back five or six years later and see what happened was really shocking.”

The promenade once helped brand Santa Monica as an internationally known place — and for a while it fulfilled that promise, acting as a critical economic lifeline into the area. As one of the United States’ early outdoor malls, with nods to many famous and historic European esplanades, the Third Street Promenade was designed as a natural landing spot for tourists. In years past, the promenade also featured a bevy of mom-and-pop businesses mixed in with national retailers, bringing in locals who could run errands without a car.

Ultimately, a confluence of factors — some intentional, others unavoidable — led to the recent decline of the Third Street Promenade. In some ways, the downfall isn’t that dissimilar to the decline of other areas like Melrose Avenue in central Los Angeles. The difference is that the promenade is a car-free area in Southern California that’s decently accessible via public transportation. It’s also blessed with incredible access to the nearby ocean. But these days, not even the salty air has been able to stave off stagnation.

What went so wrong? 

‘Where traffic is taboo and the stroller is supreme’

In reality, this isn’t the first time the area has struggled. The Third Street Promenade emerged during the unshakeable rise of rampant American consumerism in the late 1950s. Back then, shopping centers were all the rage, which spelled trouble for traditional commercial stretches in city centers across the country, including downtown Santa Monica. To lure people back, the local Chamber of Commerce commissioned architect Victor Gruen to study the area and devise a plan that would cater to consumers’ evolving interests. The scope would be large, but no less robust than similar revitalization efforts of the day in other regions like Redondo Beach and Fresno.

In 1960, Gruen proposed (among other things) that the city remodel aging buildings, expand Palisades Park along Ocean Avenue, and build a pedestrian-only, outdoor shopping mall on Third Street. The area would fit in nicely with the rest of the city’s new look, and would even boast a much-needed department store, according to the Los Angeles Times. Notably, these plans included “the building of a physical connection between the beach and the new mall section,” as the paper reported at the time, the latter of which would flourish with “kiosks, trees, bushes, flowers, music, special lighting, benches, fountains, and ramadas.”

Designed by Charles Luckman and Associates (one of the architecture firms behind the space-age Theme Building at LAX, as well as the Disneyland Hotel and Madison Square Garden), the mall opened in 1965 to fanfare and a celebrity-studded celebration. In one newspaper ad from the time, the promenade — known then as the Santa Monica Mall — promised “fun and fashions” to visitors in a rarefied space “where traffic is taboo and the stroller is supreme.” 

Phil Brock, a native of Santa Monica and the city’s current mayor, remembers when Third Street Promenade 1.0 became part of the coastal enclave’s fabric.

“They closed the street, made it into a mall, and for a while it worked,” he says. “It was amazing and different. And then it started to wane.”

In the 1980s, a new era of mallgoing had taken over American cultural life. In an effort to compete for relevance, the city tried to get visitors to the area by, quixotically, building an indoor mall named Santa Monica Place right at the southern end of the Third Street Promenade. Naturally, the buzziness of that new mall further drew people away from the promenade for a number of years, until another nearby West LA cultural mainstay, Westwood Village, started to see a decline in the mid-1980s. Coincidentally, the Third Street Promenade had undergone a new renovation around then, and the revamped outdoor mall “changed and became hot” again, Brock says.

But that success came at the expense of small local businesses, says Andrew Thomas, the CEO of the nonprofit Downtown Santa Monica, which aims to boost the city. “The promenade went through a period where there were many, many mom-and-pop [businesses],” Thomas says. “And then as it grew in popularity and became more and more desirable, the national [chains] came in and pushed out a lot of those mom-and-pops.”

The displacement of small businesses telegraphed a major problem that continues to vex the Third Street Promenade today: staggeringly high rental prices. “In a way, we’re a victim of our own success, because those national retailers were able to pay quite a bit more than the mom-and-pops, which drove up the rents and drove out the mom-and-pops,” Thomas adds, “And [that] left some of our local community feeling that the promenade … just wasn’t for them, because it didn’t have that same sort of local sense.”

Mayor Brock agrees. “In 2018/2019, we discovered that only 12% of Santa Monicans went to the promenade in an average year,” he says. “If you and I opened a restaurant together, we would need locals to come in every day. The tourists, the visitors, would be the gravy. But you can’t keep a restaurant booming if you don’t have the neighbors, and that’s what we lost.”

A new reality

The third (and current) decline of the Third Street Promenade began about a decade ago, coinciding with the retail apocalypse that swallowed up mainstay chain stores starting in the mid-2010s. The sales of stalwart national retailers on the promenade began sagging around 2018, Brock says, with names like Restoration Hardware and more recently REI departing the area in and around the outdoor mall. 

Around then, he adds, the lease for the gargantuan Barnes & Noble space came up for renegotiation, and the owners of the building sought to double the rent. “Barnes & Noble was like, ‘We can’t sell that many books, and in that case we’re going to leave,’” Brock says. After the bookstore chain vacated its anchor multi-story space on the promenade, the building’s owners weren’t able to lease it right away. The darkened building felt like a crater on the once bustling block. Eventually, the landlords were able to reach a new lease agreement with WeWork … until the co-working startup imploded and they pulled out too.

Then a series of calamities befell the struggling area: COVID-19 hit, and every nonessential business shuttered out of necessity. During those early pandemic days, businesses saw revenue fall to nearly zero while also battling a rash of break-ins. “A lot of the mom-and-pop stores were broken into,” says tarot reader Koslov of that time. “It really dampened their financials.” Some of those businesses never reopened on the promenade, even after lockdown mandates eased.

The homelessness crisis touching every part of Los Angeles County has also impacted Third Street Promenade, especially in recent years. From 2022 to 2023, the number of people experiencing homelessness in the city of Santa Monica increased 15%.

“This is a root cause issue with Los Angeles as a broader county, with regards to I think homelessness and crime, unfortunately,” says Pickle Pop co-founder McCaffrey. These concerns aren’t localized to Santa Monica, or even LA: San Francisco’s Union Square has been struggling in recent years with similar issues and major retailers leaving the area.

These gnarled problems have been further exacerbated by rising global inflation over the past few years. Even the post-pandemic “revenge travel” trend couldn’t buoy the Third Street Promenade’s woes, though Taylor Swift’s six-night stint at SoFi Stadium last year did bring an uptick in hotel rental rates in Santa Monica, says Downtown Santa Monica CEO Thomas.

Ahead of major cultural events landing in LA County — notably the 2028 Olympics — the city is investing more heavily in hospitality offerings. The nearby Fairmont Miramar Hotel is getting a major revamp, and the city has for years explored more renovation options for the promenade specifically. In many ways, fixing the outdoor mall problem is a core issue for Santa Monica, the proudly independent city that has never, like so many other municipalities, been swallowed up by the much larger city of Los Angeles.

Santa Monica is home to celebrities, the quietly wealthy and many large corporations, such as Hulu, Snap (of Snapchat fame) and video game maker Activision. Its beaches welcome millions of annual tourists, and the city sits as a gateway to areas like Malibu and Venice Beach. It has always been a place apart from the rest of Los Angeles, the city by the sea with its own public transportation and walkable streets. But today, a big, uncomfortable question mark sits at its civic center.

Filling the Third Street Promenade’s empty commercial vacancies remains a work in progress. While some rental rates along the street have fallen slightly since the pandemic, a handful of landlords along the promenade “have refused to accept the new reality and have not lowered their rent enough to attract new tenants,” Brock says. “That impacts not only them, but it impacts the entire promenade.”

According to the most recent data shared by Downtown Santa Monica, 73 of 97 ground-floor commercial spaces on the promenade are currently occupied by longtime leaseholders and pop-up businesses alike, meaning the overall vacancy rate shakes out to about 25%. That emptiness is especially pronounced in the promenade’s 1200 block, where more than 38% of spaces sit vacant. 

Part of the struggle is psychological. Businesses want to be around other thriving businesses, not a slew of vacancies, and customers want to be in a place that feels alive and vital, not empty and grim. But the promenade also faces a unique architectural issue that’s made it harder to find tenants, as opposed to other car-free zones like, say, the Grove. The commercial spaces along the Third Street Promenade are, for the most part, massive. While some commercial vacancies on the street currently listed on the retail leasing site LoopNet are in the ballpark of 2,000 square feet, others can balloon into tens of thousands of square feet. 

Those limitations impact the types of businesses that can command such a space, and rental prices tend to be exponential when that much square footage is involved — and when it’s that close to prime oceanfront real estate. That significant overhead doesn’t exactly help potential upstarts get in the game, either. So for now, many of the promenade’s largest and most important retail spaces remain stubbornly empty, with devastating downstream consequences.

The future is … ‘eatertainment’?

Even with these less-than-ideal circumstances, some up-and-comers have been able to make the promenade work — and leaders are hoping their success can potentially provide a model for other businesses moving forward. When McCaffrey and Erin Robertson (her partner in business and in life) were looking for a place to open their pickleball pop-up, they found a sweet spot on the promenade that was formerly an Adidas store. The 10,000-square-foot venue could accommodate various pickleball courts, as well as a lounge area where champs and benchwarmers alike could take a break with cocktails and bites to eat.

Pickle Pop opened last year on a pop-up lease at a price far below market value, McCaffrey tells me. Their business has been so successful (mainly stemming from corporate buyouts and parties, though players can rent the courts on an hourly basis, too) that the owners have not only signed a lease to remain there for at least another year, but they’ve also outgrown their space.

“I don’t know how much more revenue we could do out of that size facility,” McCaffrey says, adding that Pickle Pop has exceeded expected revenue several times over. When we touch base over the phone, in fact, McCaffrey is on the road scouting other, bigger locations to hopefully open other Pickle Pop outposts both in and outside California. 

When I ask McCaffrey why she thinks Pickle Pop has succeeded where others haven’t, she partially attests it to the popularity of “eatertainment,” or competitive socializing writ large. (Think Topgolf, pingpong and other venues combining restaurant concepts with low-stakes, sporty fun.)

“Just seeing pickleball as a use, it strikes me as probably the future,” says Thomas. He sees businesses like Pickle Pop as vital to the city’s larger plans, particularly the desire to get more people living in the city full-time. Thomas says that at the moment, the city has about 2,300 units of housing that are either under construction, approved or pending approval, with more in the application phase.

“So many more residents are living here downtown, [it’s] such a great captive audience,” he adds. “They’re going to want experiences and they’re going to want places to eat, and they’re not going to want to drive to get there.”

The city of Santa Monica hopes that the promenade’s fortunes will further shift given recent legislation that has loosened zoning laws in the area. By easing up on restrictions that limited the likes of arcade games, amplified music and dancing, as well as alcohol exemption permits, more businesses can open on the promenade. That’s why a tattoo parlor has emerged in recent years on the promenade, and Brock says a cannabis lounge or dispensary will probably open there eventually.

McCaffrey says that the alcohol exemption eligibility meant that even as a pop-up, Pickle Pop nabbed conditional use permitting for a liquor license right away. The lack of red tape proved to be critical in those early days of building their business. 

Some of the street’s long-gone linchpins are returning, too. This summer, Barnes & Noble is slated to come back to the promenade, though it’s reopening at another location. Thomas says “there’s probably another half dozen businesses” opening their doors along the Third Street Promenade over the next few months. Former competitor (and current companion in Santa Monica’s economic uncertainty) the Santa Monica Place is hard at work on a new location of mega-popular chain Din Tai Fung, too, which would definitely bring more customers in from Ocean Avenue. Thomas says the city is optimistic that tourist numbers will have “fully recovered” by 2025 to pre-pandemic levels, with that data exceeding expectations the following year. 

“I feel like we took a big chance on becoming a pedestrian mall a long time ago, and it’s really been great for us,” Thomas says. “And we’ve been copied many times. I think about the Grove, the Americana … and in those places, I’m not saying they aren’t fun, [but] I wouldn’t call them authentic like we are.

“Downtown Santa Monica, this is an experience when you come here. And it’s real.”

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May 21, 2024

Paula Mejía

CONTRIBUTING LA CULTURE EDITOR

Paula Mejía is a Colombian American writer and editor from Houston, Texas. She is a contributing culture editor at SFGATE, and was formerly the arts editor at the Los Angeles Times and a Senior Editor at Texas Monthly. Her writing has appeared in the New Yorker, the New York Times, GQ, Rolling Stone and more. A co-founding editor of “Turning the Tables,” NPR Music’s Gracie Award–winning series about centering women and nonbinary artists in the musical canon, she is also the author of a 33⅓ series installment on the Jesus and Mary Chain’s 1985 album Psychocandy. She teaches graduate arts writing at USC’s Annenberg School for Communication and Journalism and lives in Los Angeles.

2 thoughts on “‘Shocking’: The fall of Third Street Promenade, Calif.’s once-vibrant outdoor mall”

  1. Thanks mike, I had my office there the year they transitioned from mall to promenade.

  2. What an eye-opener re. urban dynamics. It’s been many decades since I was on Third Street, but It’s still surprising that it could have seen so many ups and downs!

    Clearly, and of course, Santa Monica has changed dramatically since The Prosperos’ Inner Space Center was over the furniture store on Fourth Street in downtown.

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