Quick Take

In her weekly roundup, Jessica M. Pasko talks to Santa Cruz's economic development manager about how the city is trying to boost downtown business, notes struggles for wharf restaurants and passes along names, numbers and events to know.

Each week, we’re taking a closer look at the movers and shakers, the growth of industries, and what’s really driving the Santa Cruz County economy. I’ll be spotlighting some of the biggest areas for opportunity, updates on local development and all things underpinning the regional business scene each Wednesday.

Got ideas? Send them my way to news@lookoutlocal.com with “Business News” in the subject line.

Amid recent retail closures downtown, Santa Cruz economic leaders look to get creative to fill vacancies and encourage business

Retailers around the country have taken a significant hit in the post-COVID years, with retail closures surging in 2024. According to Coresight Research, more than 7,300 stores closed last year and that number could surge to as many as 15,000 this year. National chains are rethinking their footprints amid changing consumer habits that have seen online commerce grow rapidly. 

Locally, the downtown Santa Cruz retail community isn’t immune from these trends. Two national retailers (O’Neill Surf Shop and Rip Curl) shuttered earlier this month and Forever 21 is closing its doors for good this week. 

The amount of vacant space downtown (7.6 %) is slightly up from last year (5.3%), in terms of total square footage of empty, ground-floor retail space, according to Rebecca Unitt, economic development manager for the City of Santa Cruz. Her department keeps track of vacancies using a corporate real estate database, regular conversations with local brokers and walking streets to keep track.

Unitt said her department is working hard to help fill some of the vacancies and find creative ways to work with both business and property owners. That includes plans to potentially expand the “Downtown Pops!” program, which was launched in 2021 to help revitalize the local economy hit hard by the pandemic. It’s aimed at removing barriers to entry for independent business owners who want to open a brick-and-mortar while also reducing the risk for property owners. The city enters a master lease with the commercial property owner, provides a guaranteed minimum rent and then subleases the spaces to various pop-up tenants for a six-month term – with the option to negotiate longer lease terms.

As part of that program, the city is currently seeking applicants for the 1,320-square-retail space at 701 Front St., formerly home to Front Street Vintage and before that, Botanic & Luxe (before the plant and home goods shop moved to its current Cooper Street digs). 

“We’re looking to change it [the Downtown Pops! program] to give us more flexibility,” Unitt said. “Can we be more creative or spend a little more [money] to occupy more spaces?” 

Her team also spends a lot of time speaking with local brokers to learn what property owners are looking for and provide ideas for what can be offered to potential tenants. In general, “smaller spaces are turning over faster,” and “larger spaces (4,000 square feet or more) are harder to fill due to changing retail dynamics nationally,” as more people shop online instead of going to brick-and-mortar stores, said Unitt. There can also be challenges with the shape of certain spaces, which, again, requires creativity and flexibility in the approach. 

That means a lot of conversations with brokers and landlords to help them think about things like subdividing or shorter-term leases, while also encouraging a mind shift away from national retailers to local businesses, she added. 

Hook & Line opened on Walnut Avenue in downtown Santa Cruz in April.
Hook & Line opened on Walnut Avenue in downtown Santa Cruz last April. Credit: Kevin Painchaud / Lookout Santa Cruz

Despite the recent high-profile closures, new businesses are continuing to open in the downtown area, including more than 15 in 2024, according to Jorian Wilkins, executive director of the Downtown Association of Santa Cruz. Among those are vintage store Tumbleweed Found, new record shop Offshore Sounds and buzzy restaurants like Pretty Good Advice’s second location and chef Santos Majano’s Hook & Line.

ICYMI: “Scarier than COVID”: Wharf collapse cost nearby restaurants hundreds of thousands of dollars

The Santa Cruz Municipal Wharf fully reopened 12 days after a 150-foot section collapsed into Monterey Bay on Dec. 23, but businesses on the wharf are struggling from the ensuing financial loss. As Lily Belli reported, the week between Christmas and New Year’s Day is one of the biggest weeks for restaurants on the wharf. That boost helps them get through the slower winter months and without it, some say they’re struggling. Check out her full piece here.

Ch-ch-changes: Openings, closings and other developments

Emily Ruvalcaba of Santa Cruz County Bank. Credit: Santa Cruz County Bank
  • Santa Cruz County Bank hires Silicon Valley banking leader: Emily Ruvalcaba has joined Santa Cruz County Bank as the senior vice president and regional president for the Silicon Valley region. Based in Cupertino, her primary focus will be expanding the bank’s presence throughout the Bay Area and providing personalized financial solutions for businesses. She previously worked for 22 years at Bridge Bank, including holding roles as executive vice president and division manager for corporate banking, senior vice president for commercial banking and regional director in commercial banking.
  • Santa Cruz Works looking for next executive director: After nearly six years at the helm of Santa Cruz Works, Doug Erickson will retire as executive director in June. Erickson joined the nonprofit, which was started 15 years ago to create a hub for local tech, as a board member in 2018. He took the lead role in 2019, helping oversee and run programs like the annual Tech Titans awards, the CEO Works luncheons and the Santa Cruz Launchpad, an annual job fair and pitch competition. The organization is seeking applications for its next leader by Feb. 15. Erickson has spent decades working in the tech industry, helped start the Santa Cruz New Tech MeetUp community and, more recently, launched Santa Cruz Ventures, a venture fund specifically focused on technology companies in Santa Cruz, Monterey and San Benito counties. (Check out my interview with him from 2023 about how the local tech landscape has changed in the past several years.)
  • Alderwood Santa Cruz shutters permanently: Alderwood Santa Cruz, which opened in downtown Santa Cruz in 2018 in a former Erik’s DeliCafe, announced last week it was closing. The closure comes after the restaurant’s parent company, Santa Cruz Sky, has closed three other restaurants: Alderwood Pacific and two locations of Flashbird, in Scotts Valley and Pleasure Point. 
  • Seabright thrift store moving down the street: Forever Thrift at 1622 Seabright Ave. will be closed for part of this week as it expands to the nearby space recently vacated by Hart’s Fabric (which moved to the former Midtown Surf Shop on Soquel Avenue). The new address is 1616 Seabright Ave.
  • New restaurant inches forward for Santa Cruz Municipal Wharf: The Santa Cruz City Council on Tuesday approved plans for a new Miramar restaurant for the Santa Cruz Wharf. The restaurant closed in 2015 and the previous building was demolished several years ago because it – and the wharf beneath it – needed extensive repairs. More recently, Humble Sea Brewing has used the site as a pop-up beer garden. Mark Gilbert, owner of Firefish, Woodies, Gilberts Gift Shop and the former Dolphin Restaurant, has been working on plans for a new, two-floor restaurant on site, but sought a lease with the city before moving forward.

Got hires, promotions, or departures to report? Send them to news@lookoutlocal.com with the subject line “Career changes.”

What’s new on the Lookout Job Board

Want more? Browse all openings on our job board.

Hiring? Post your job today!

Looking at the numbers

  • 6.3%: That’s the unemployment rate in Santa Cruz County for December 2024, higher than the state rate of 5.5%. It also marked an increase from 5.8% in November 2024. However, unemployment was less than in December 2023, when it ranked at 6.7%, according to the latest numbers from the state Employment Development Department.

Business news worth reading

Have something to say? Lookout welcomes letters to the editor, within our policies, from readers. Guidelines here.

Jessica M. Pasko has been writing professionally for almost two decades. She cut her teeth in journalism as a reporter for the Associated Press in her native Albany, New York, where she covered everything...