Is State Street Becoming One Big Food Court?

This time last year, 32 commercial vacancies blighted State Street, the beating heart of Santa Barbara’s commercial core. The figure, even then, was alarmingly high. Now, with COVID upending the economy, the number of State Street vacancies has increased to 42. 

Based on previous counts, that appears to be a new modern record. “It’s not our finest hour,” said Radius Commercial Real Estate broker Brad Frohling during an economic forecast webinar this Tuesday. “It’s a really challenging time, and that’s just the truth of it.”

Many retailers are now complaining they have been blocked from view by new restaurant and bar patios erected along the State Street pedestrian promenade. Frohling said he’s heard from clothing boutiques, home goods stores, and other merchants who say they’ve been “backstaged” and are “getting killed.” State Street can’t survive as one big food court, he declared. “Other tenants need presence and to be supported.”

While Santa Barbara planners ought to be commended for pulling the promenade rip cord as an emergency COVID stopgap, Frohling said, they now need to think more strategically and sustainably. “Every week we’re shut down is really damaging to the retail climate,” he said. The holiday shopping season will make or break many.

Some landlords are willing to work with their renters, he explained. Others won’t budge. “They are of the mindset of ‘I’m not a bank and a lease is a lease,’” he said. Frohling urges both parties to negotiate. “Landlords and tenants need to work together,” he said. Nevertheless, he was optimistic about the future. “Downtown will get better,” he said. “People will reinvent.”

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