A half-century after opening, the Capitola Mall still hosts familiar national chain stores like Macy’s, Target and Kohl’s. But with a redevelopment on the horizon, 50% of the mall’s businesses are now locally owned.
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From the outside, the Capitola Mall looks like any other mall in America. Located in the heart of Santa Cruz County along 41st Avenue, our busiest corridor, the nearly 50-year-old mall is wrapped by large department stores — Kohl’s to the north side, Macy’s and Target to the west and an out-of-business Sears to the south. From the outside, it’s easy to assume that the interior would be similarly filled with national chains, and, because malls across the country are struggling to attract shoppers, probably more than a few empty storefronts.
However, if you walk through the main entrance, past Ulta Beauty and Chili’s Grill & Bar, you’ll quickly discover that something different is happening inside the Capitola Mall. The bright yellow tiles of Bella Fruit & Drinks, a local vendor that sells fresh fruit seasoned with spice blends and housemade aguas frescas, might catch your eye. On that same aisle, long, colorful silks hang from the ceiling of Cirque Tumble Cheer, a locally owned studio that teaches tumbling, cheerleading, trapeze and aerial dancing. Giggles-N-Wiggles takes over three retail spaces with an arcade, bounce house and playground, with tables already set for a birthday party. A little farther down, Tasteeze Exotic Snacks sells salty and sweet treats from foreign countries. Next door, Rainbowz End offers an eclectic mix of everything from Grateful Dead memorabilia and musical instruments to healing stones, tarot cards and homemade CBD products.
These locally owned stores, driven by entrepreneurs based in Santa Cruz County, have become the rule rather than the exception.
Across the aisle, Santa Cruz artist Tim Ward displays his dreamy landscapes in an open gallery in what was once Kay’s Jewelers, with information on how to reach out to him should someone want to take a piece of art home. Knotty & Grain, a woodworking studio, showcases gorgeous cutting boards, furniture and plant holders and hosts classes on candle-making, resin-pouring and beginning woodworking.
Walk farther and you’ll find a puppetry institute for children and teens; a used bookstore run by volunteers that supports the Capitola library; the Capitola Chamber of Commerce headquarters; a secondhand clothing store; a hair salon; a ramen and sushi shop; the Santa Cruz Children’s Museum of Discovery, and a lot more — and, yes, all of them are locally owned businesses.
Mixed in are the national chains we’re familiar with, including Hot Topic, Claire’s, Journeys and Wetzel’s Pretzels, but they’re no longer the majority. Of the Capitola Mall’s 54 tenants, more than 50% are locally owned businesses.
How did this change happen?
Capitola Mall general manager Brian Kirk has led the way, with his vision of what a modern mall can be. As he guides me through the mall, pointing out successful local businesses next to empty storefronts that have yet to be filled, he emphasizes that reports of the Capitola Mall’s death have been greatly exaggerated.
Rumors that the mall would soon be demolished to create affordable housing have floated around for more than a decade. While partly true, Kirk believes that some community members have written off the mall too soon while it still has a lot of commercial life yet to give. “We know we have a lot of work to do and that the inevitable end result will be a redevelopment of the mall,” says Kirk. “I see no reason why we can’t make this once-beloved mall something special again for the community until that day comes.”
Kirk and his wife made the decision to move to Capitola from Seattle in 2018 after spending just one night in town that fall. They fell in love with the area instantly and “have loved living here ever since.” Originally from Southern California, he worked as a property manager and in retail management as a store manager at Williams-Sonoma, a role he says helped nurture an obsession with cooking and dining.
At some point in an indeterminate future, its owners plan a complete transformation of the Capitola Mall physical structure. The vision: More than 30 acres will be developed into a mixed-use venue that will include an open-air commercial space, 637 residential units and an underground parking lot. The artist’s renderings in Kirk’s office show a beautiful, modern space with many of the same retailers already in the mall in new, outdoor storefronts.
When might that become reality? That’s unclear.
Merlone Geier Partners, the company that owns the Capitola Mall, and its developer have not submitted a project or any new applications for redevelopment to the city of Capitola since 2019. Although Capitola city staff say they are in active communication with the mall, it’s impossible to speculate on a timeline until they are ready to move the project forward, Capitola city manager Jamie Goldstein told Lookout.
Kirk says he can’t comment on why the project has faced delays, except to say that with several different ownership groups involved, it’s a complicated, time-consuming process. That means it is still a few years away.
Between the eventual reconstruction and the brutal retail challenges brought on by a changing, online-driven shopping landscape and the pandemic, many national chains have already pulled up stakes. Other American malls have considered this retail flight the beginning of the end.
That timeline, though, has led to a local renaissance. The Capitola Mall’s eventual reconstruction has put it in a unique position to attract locally owned businesses in the interim. That’s where Kirk has put his energy for the past four years.
From hot dogs on a stick to local coffee
The downturn gave Kirk a unique window of opportunity to attract local businesses to these spaces with low rents, short-term leases and a can-do attitude to do what it takes to support local entrepreneurs. “We are absolutely focusing on bringing in new local businesses,” says Kirk, “with a goal of creating a community marketplace within the mall.”
The list of amenities the mall can offer its tenants is appealing: 24/7 onsite security, a central location with great parking, low up-front costs and a built-in customer base of existing mall store employees — Macy’s alone, he says, has 50 to 60 employees in the offseason. And Kirk says he’s open to new, imaginative uses for each space: “I can’t emphasize that enough. We want people to really think outside of the box and not limit the mall to what they consider a ‘traditional’ use.”
While he has an abundance of enthusiasm, Kirk’s biggest hurdle is perception. He believes shoppers incorrectly believe that the mall’s closure is imminent or that it’s already closed, so they no longer come in to see what’s new — and that stigma extends to businesses looking for a potential space. “That’s what we are trying to educate the community on, “ says Kirk. “We are open, we will remain open until the redevelopment progresses, and we have some great offerings for customers along with some amazing opportunities for local businesses.”
So far, the plan seems to be working. While 30% of the mall’s storefronts are vacant, that number decreases every month, he says. Last week, local coffee shop Festa Coffee opened in the food court in the space previously occupied by Hot Dog on a Stick. By the second week of August, Ela and Henry Crawford plan to open their first brick-and-mortar space for Sugar Bakery, a local bakery specializing in custom macarons and cakes.
Although less than two years old, Sugar Bakery grew rapidly and quickly secured contracts with New Leaf Market, Deluxe Foods, local restaurants and custom orders for self-taught baker Ela’s joyful creations. It soon outgrew its 120-square-foot commissary kitchen and looked for its own space for more than eight months before another mall tenant connected them with Kirk. The Crawfords were attracted to the mall’s central location in the county and were able to negotiate rental terms that “benefit both parties.” Now, they are getting ready to move into a completely remodeled 500-square-foot kitchen and storefront in the food court.
A Santa Cruz native, Henry Crawford believes the mall is about to go through a growth spurt. “The mall has a bad reputation because it’s been quiet, but it used to be such a beloved place, especially when I was younger,” he says. “So we’re excited to be on the ground floor for that.” Their long-term goal is to be a part of the redevelopment once the current mall is demolished.
Arden Russo operated Rainbowz End, a “magical emporium of wonderful things from all around the world,” in Ithaca, New York, for 18 years before she moved to the Santa Cruz area a decade ago to escape the cold. She first moved to her store downtown Santa Cruz, but after four years the landlord decided he wanted a restaurant in that space.
In search of a new location, Russo came to the mall, attracted by the large space available at what she considered to be a very reasonable price.
For the first few years, business was great. But since the pandemic and the mall’s subsequent four-month closure, her business has suffered. “It’s like people don’t realize the mall is there. I’m having a hard time breaking even,” says Russo. “It’s hard to make sales when there aren’t any customers.”
Russo would like to see an art show and other art focused events to draw customers into the mall and, she hopes, back into Rainbowz End.
Russo’s son, Zen Russo, didn’t let COVID dampen his entrepreneurial spirit. Inspired by YouTube videos of people taste testing different foreign snacks, he decided to open Tasteeze Snack Shop in January. The store is stocked with salty and sweet snacks, treats and drinks from Asia and he plans to expand his inventory to include fare from Australia, England and other countries. It’s so successful he’s even considering franchising his business.
Once the Capitola Mall’s application for a beer and wine license is approved, Kirk aims to invite community organizers to use the food court for events like comedy nights, trivia and live music. He’d also like to bring back holiday events. In 2020, the mall voluntarily upgraded its common-area HVAC systems filters to high-filtering MERV-13-rated filters in an effort to make the shopping and dining experience safer for mall employees and visitors.
Kirk sees possibility where others might see an eyesore — the empty department store space that once housed now-bankrupt Sears. In March, the mall opened the space for Capitola Collectacon, billed as the largest comic-con-style event on the Central Coast. Kirk would like to see the spot host other community events like a holiday makers market. Spirit Halloween occupies the space every year from early August through Halloween, but even that is a successful collaboration — Kirk reports that it’s one of the most profitable Spirit stores in the region.
He also believes it’s in the community’s best interest to keep the mall open. “I love Capitola,” he says. “I don’t think it would benefit from having a big shuttered mall. There’s no benefit to that.”
Now, after pauses due to several COVID surges, Kirk is starting to see more word of mouth in the community as mall business owners share their experiences.
“We’ve got a window here that we can offer people these great deals to come in and start their business or open a new location,” he says. “I think once people come in, have the ‘aha’ moment when we talk to them and they see it, they pull the trigger.”