Downtown Alhambra Revival Stirs Up Business and Controversy

The big black words scrawled across the whiteboard in Julio Fuentes’ office say it all: “No guts, no glory.”

For several years, Alhambra’s city manager has been trying to restore his bedroom community’s downtown to its former eminence as a shopping and entertainment magnet for the western San Gabriel Valley.

It’s a common strategy among cash-strapped cities. But few are as aggressively chasing new business--obstacles be damned--as Alhambra.

When no one would buy or rent one of the city’s many vacant, crumbling buildings, the Alhambra Redevelopment Agency bought it, renovated it, then beat down the doors of retailers until someone agreed to move in.

When a potential taker seemed uncertain, the redevelopment agency arranged for financing and offered development subsidies and extra parking facilities.

When older shops didn’t fit into the city’s downtown master plan, the agency pressured them to move to make way for newer, more attractive businesses.

“What makes Alhambra different is that it’s acting as an entrepreneur, while other cities are less involved,” said Larry Bush, spokesman for the Western Pacific region of the U.S. Department of Housing and Urban Development.

Last year Alhambra was the only Southern California city honored with HUD’s Best Practices award for economic development for what Bush described as “government shouldering the responsibility to meet the economic opportunity needs of its own community.”

Fuentes said Alhambra had tried “the traditional approach to redevelopment”: making streets look pretty and offering subsidies. But no one was interested.

“Instead of feeling sorry for ourselves and telling the council that we failed, we thought, ‘Why don’t we try to become developers ourselves?’ ” he said.

Alhambra’s redevelopment is driven by financial necessity as well as local pride. Cities throughout California have been squeezed for revenue because of Proposition 13, the property-tax limitation initiative; the recession of the early 1990s; and Proposition 218, a recent initiative that further restricted cities’ ability to raise taxes without public approval.

Ask any longtime resident about Alhambra’s downtown and the air quickly fills with nostalgia. In the 1950s and ‘60s, when Main Street bustled with fashionable stores, everyone in nearby San Gabriel, San Marino, Rosemead and Monterey Park thought “going to town meant going to Alhambra,” said Talmage Burke, a councilman who has lived in the city for 78 years.

But in the ‘70s and ‘80s, customers flocked to suburban malls and left downtown behind. Business after business folded. By the early ‘90s, Alhambra was littered with abandoned buildings and vacant storefronts.

Nowadays though, the tree-lined Main Street is coming back to life with 28 new stores opened in the past four years thanks to redevelopment agency efforts and another half a dozen stores that moved in independently.

Charlie’s Trio, an Italian restaurant and caterer for the Los Angeles Dodgers, opened a new branch in Alhambra nine months ago. The abandoned hardware store has been transformed into a bookstore, a bagel shop and a Starbucks. Nearby, a microbrewery and a record store are under construction. Farther down Main, the derelict furniture warehouse that stood empty for more than 10 years is now a spanking-new L.A. Fitness gym.

“They’re opening up new things all the time,” said Charlie’s Trio manager Brian Sugita.

Five years ago, Alhambra collected $88 in sales tax revenue per resident, fairly close to the L.A. County average of $85, according to Hinderliter and de Llamas, a firm that monitors municipal taxes. Since then the city’s sales taxes have grown twice as fast as the county average and now stand at about $106 per capita, compared with $94 countywide.

While most business owners and residents say they’re pleased with the revitalization, some owners are feeling trampled.

Questions of Fairness

Robert Lai, owner of Cathay Aquarium on Main Street for 10 years, thinks the city shows too much favoritism to new businesses. “The parking problem has been getting worse,” he said, pointing to a lot near his store that the city reserved for Charlie’s Trio. “No one else can park there, which I think is unfair.”

The city’s response: It has opened additional public lots that have created more parking spaces overall than before.

To make room for the construction of a 16-screen movie theater and shopping complex on one corner of Main, the redevelopment agency is telling the mom-and-pop, mostly immigrant-owned businesses there to move or face eminent domain proceedings--forced sale at market value. Among the targets: a bakery, wig shop, dental office, liquor store and Vietnamese restaurant.

The agency chose that site because it is the commercial center of downtown, city officials said.

According to a written agreement earlier in the year involving the agency, Edwards Theater Circuit Inc. and Edwards Megaplex Holdings, the $20-million project’s developer, only certain businesses are “acceptable” for the new shopping area. The list includes primarily chains such as California Pizza Kitchen, Banana Republic, Victoria’s Secret and Tower Records.

“Their vision,” scoffs Arthur Wong, who owns a building that the city wants to raze for the Edwards project, “is to turn this into an Old Town Pasadena, a yuppie type of thing.”

Complains Rudy Aguirre, who has owned his law office building for 10 years, “They are displacing businesses that have been here and stuck it out with Alhambra during the bad times.”

The redevelopment agency has offered relocation assistance and is “bending over backward” to accommodate businesses being forced out, Fuentes said. But several owners say they feel coerced and would rather stay where they are because rent elsewhere in Alhambra is two or three times higher.

Wong is one of two property owners who are about to face eminent domain proceedings. “Everybody’s on edge in this block,” he said. “The city is playing hardball with us.”

City Pays Costly Inducements

Critics also object to the amount of public money Alhambra has spent on wooing the private sector.

For example, the redevelopment agency gave Starbucks a $136,000 “tenant improvement allowance,” using a HUD grant. Private developers sometimes offer financial inducements to Starbucks, but Alhambra was the first city in the state to do so, a company official said.

The redevelopment agency is giving Edwards $1.2 million the agency obtained from a HUD loan and a 43,000-square-foot parcel for its project.

Elsewhere along Main Street, the agency paid hundreds of thousands of dollars to existing businesses to renovate antiquated facades. Most of the money comes from a combination of HUD funding and increased property taxes that occur as the value of land in the redevelopment area rises.

“They’re all welfare businesses built at taxpayers” expense,” said Elizabeth Mack, who lost her bid Tuesday for a council post. She called the amount of public money spent on redevelopment “appalling.”

City officials, for their part, tout the economic and social benefits of redevelopment.

The Edwards megaplex, for example, is expected to generate $245,000 annually in new sales and property tax revenues to the city. The agency estimates that the new developments along Main Street will ultimately create about 300 new jobs.

The goal--says agency Chairman Paul Talbot, who was reelected Tuesday to the City Council--is for the private sector to one day go at it alone.

“Right now we’re just stirring the pot,” he said.

“We’re hoping that enough momentum will pick up so that we can step out of the picture . . . and let the free market take over.”

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Alhambra Development

Alhambra has been aggressively bridging many new businesses to its downtown as part of its redevelopment plan. Part of the redevelopment region is shown in the shaded area. The city is forcing some small business near Garfield Avenue and Main Street to vacate their prime downtown locations so the street can be widened for an Edwards movie theater and a shopping complex.

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Proposed site for Edwards Cinema shopping complex

Starbucks

L.A. Fitness

Charlie’s Trio