Quick Take:

Business closures related to the pandemic hit downtown Santa Cruz hard: Approximately 30 retail shops have closed their doors since March 2020. But 15 new businesses have opened, while several others have reopened, moved to the area or are coming soon.

The small windows and sills adjacent to what used to be the entrance to the Poet & Patriot are coated in dust, the white lace curtains hanging still in the dark.

Inside, nothing remains aside from the furniture built into the walls and a lonely candy dispenser, a layer of what looks like M&M’s, about a half-inch high, remaining. The iconic, vibrant mural covering the pub’s sidewall provides a stark contrast to the lifeless interior.

The Poet & Patriot did not survive the pandemic.
The Poet & Patriot did not survive the pandemic. Credit: Max Chun / Lookout Santa Cruz

Just around the bend on Laurel Street, the Saturn Cafe and its marquee corner spot share the same unfortunate fate and the most notable of COVID-19 scars for businesses 一 the signature “For Lease” sign.

Yet, these less-than-glamorous sights don’t necessarily tell the whole story.

“I don’t think we’re anywhere done with short-term recovery,” Jorian Wilkins said.

Wilkins serves as the executive director for the Downtown Association of Santa Cruz. By her team’s estimates, 15 businesses have opened downtown since March 2020. Another six have reopened, relocated to downtown or are coming soon. This is compared to the around 30 or so that shuttered, according to a Downtown Association report.

The openings and closures around downtown include an increase in locally owned businesses and a decrease in corporate identities such as the vacated Starbucks and Peet’s Coffee locations along Pacific Avenue. The downtown Starbucks closed in early 2020, while Peet’s Coffee closed in spring 2021.

“I feel some of those corporate partners make those decisions based on numbers, locally owned [businesses] make decisions with their heart,” Wilkins said. “You can count on your hands how many corporate businesses there are, maybe a dozen out of 230.”

Wilkins acknowledges that during the height of the pandemic last March there were a lot of vacancies. While most of those have been filled, she said, there are others such as Palace Art & Office Supply that have succumbed to the decline in foot traffic and COVID-19 restrictions.

“Palace Arts was a big loss,” she said.

Those who hung in there adapted

Old School Shoes, sitting on the corner of Pacific Avenue and Cathcart Street, experienced its share of struggles, including the aborted launch of a new location.

“There was going to be a second location opening up on the Westside, but it was at the exact same time that lockdowns went into place,” said store manager Jose Jimenez. “So that got shut down pretty much right away.”

Despite being a local business, they also felt the effects of corporate downsizing when Converse closed out Old School’s account.

“We definitely lost a lot of business because of that,” said Jimenez, adding that Converse was one of the store’s most commonly sold shoes.

It’s not all bad, though. Old School’s still-reliable inventory and cozy shop filled with vintage tees and comfortable couches provide a certain atmosphere you don’t find just anywhere — a trait Jimenez believes convinces people to come back. When Old School checks its sales, they are seeing more and more weeks and months comparable to 2019.

“It’s more than just a shoe store,” said Jimenez. “This is a place where people like to kick back and relax while doing their shopping.”

Berdels at Pacific and Walnut.
Berdels at Pacific and Walnut. Credit: Via Berdels

Berdels, at the intersection of Walnut Avenue and Pacific, celebrated its five-year anniversary at the height of lockdowns in April 2020.

“Normally, five years of a business staying open means you’re doing well,” said owner and founder Bubb Rader.

Pre-COVID, Berdels heavily relied on in-store purchases. Overnight, that disappeared. Facing a closure of unknown length, they took that time to develop their website, an investment that has paid dividends.

“We’ve taken the website from basically nothing to a six-figure business,” said Rader. “We’re actually looking for a full-time web developer now.”

Additionally, Rader says the company’s youth might have actually provided an advantage in such a rapidly changing landscape.

“As crazy as it all was, our young age meant that we had the energy to adapt quickly,” said Rader. “In the future, we can look back and remember just how difficult it was and how hard we worked.”

In the future, we can look back and remember just how difficult it was and how hard we worked. — Bubb Rader

New hope on the horizon?

Earlier this year, downtown vacancies among retail spaces were at 31.5%. Additionally, reports from Downtown Santa Cruz show fees based on square footage occupancy paid by businesses in the downtown district declined from $261,817 in the 2019-20 fiscal year compared to $221,962 in the 2020-21 fiscal year.

While the numbers are still not close to pre-pandemic levels, Wilkins remains optimistic that the area is on the right track, noting that several businesses are on track to open soon. This includes Twig’s Tap House in the former site of 99 Bottles of Beer on the Wall, which closed in March 2020.

The historic Del Mar Theatre also reopened recently.

“We’re hopeful that the reopening of the Del Mar will help contribute to the overall rebound and overall health of the downtown district. We’re happy to get reopened and be a part of a resurging economy,” Landmark President and COO Paul Serwitz said.

Serwitz acknowledged that the Del Mar has been a cultural gem for Santa Cruz and said his team was originally aiming to reopen in October last year, but had to postpone due to COVID-19 concerns.

The decision to reopen now was a mixture between positive commerce trends and a significant incoming crop of adult, indie and arthouse films releasing this upcoming fall and winter, he said.

Downtown Pops! and outdoor dining

Along with the reopenings and new businesses, one of the city’s pilot recovery programs, Downtown Pops!, is nearing completion of its first round of tenants.

Announced earlier this year, the program aims to help find commercial tenants for empty storefronts throughout the city’s business district. Tenants sign a six-month lease and have prioritized rent assistance, with the goal of helping to provide a foundation for a small business.

The program serves as a sort of incubator allowing business owners time to establish themselves with little overhead. The hope is that a tenant can secure a long-term lease and establish a brick-and-mortar business as a result of the program either in the existing space or elsewhere. In the process, the city also injects new life into the business district while eliminating unused space.

“For the right business it can help reduce some risk and activate property downtown,” Santa Cruz Economic Development Director Bonnie Lipscomb said.

Bonnie Lipscomb
Bonnie Lipscomb Credit: Kevin Painchaud/Lookout Santa Cruz

For the right business it can help reduce some risk and activate property downtown. — Bonnie Lipscomb

Lipscomb said her team is working on five leases with prospective tenants who would open up along Front Street and Pacific Avenue. The lease and permitting processes are the final stages of the program, she said.

An unexpected delay for the program has been caused by supply shortages and a lack of available contractors to help with building and construction improvements, Lipscomb said.

“A lot of these things are unavailable right now,” she said.

While the program continues to work with its first round of tenants, Lipscomb remained positive about business recovery, acknowledging the massive impact outdoor dining has had for restaurants and downtown commerce.

Last month, the Santa Cruz City Council voted unanimously in favor of extending the program until Dec. 31, 2022.

“One of the things we’ve seen is more activation in the street … that’s one of the major differences,” she said, adding that more than 40 businesses activated an outdoor dining extension or parklet.

“I think that gives us additional certainty for those businesses,” she said.

Downtown’s Lupulo combined existing outdoor seating with temporary parklets on Cathcart Street in this 2021 photo. Credit: Kevin Painchaud / Lookout Santa Cruz

That increased street activity has been a noticeable difference and a silent positive for both Lipscomb and Wilkins.

According to Wilkins, during the pandemic parking garages were between 20% to 30% occupancy and street activity was between 30% to 40% of previous rates. While the figures remain significantly lower than pre-pandemic levels, they are now nearing the 40-50% range, she said.

“We’re on our way back, but we’re not done. Recovery is far from over,” she said.

Follow Neil Strebig on: Twitter. A chef-turned-journalist, Neil has a track record for covering the hospitality industry and local businesses. Neil joins Lookout as a Report for America Corps member. Previously...

Max Chun is the general-assignment correspondent at Lookout Santa Cruz. Max’s position has pulled him in many different directions, seeing him cover development, COVID, the opioid crisis, labor, courts...