This week in Santa Cruz County business: Downtown prepping for new retail spaces, local berry company gets fair trade certification

Quick Take

In her weekly roundup, Jessica M. Pasko examines the future of retail in rapidly redeveloping downtown Santa Cruz, news from California Giant Berry Farms and numbers and dates to know in local business.

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.

With downtown adding many new retail spaces, city and developers collaborating on tenants

Even as retail sales across the U.S. slump, a number of new developments in the city of Santa Cruz are poised to bring more retail space to the local market. And that begs the question, just who is being targeted for these spaces? The answer is still a bit of a work in progress.

The seven-story building at Laurel Street and Pacific Avenue is currently seeking residents not just for its 207 apartment units, but also for the retail spaces on the ground floor. A total of 12,000 square feet, divided up into three spaces, will be available as of July 1.

Executives with Anton DevCo, the project’s developer, said they’re not committed to any one type of commercial business, and that their real estate brokers are marketing to both local business owners and entrepreneurs as well as regional and national companies.

Those efforts include working with the Downtown Association of Santa Cruz, local chambers of commerce and the city’s economic development director, said Garrett Borges, director of development for Anton DevCo.

“Our role is connecting with the brokers and developers to help them, to see if there is data they can use to help bring in businesses,” said Rebecca Unitt, the city’s economic development manager. “We also get inquiries all the time from places looking for space, so we can also serve as a liaison.”

Unitt said her department has been doing “broker breakfasts” for the past two years to build stronger ties with commercial developers and forge tenant-developer matches. At the meetings, they discuss projects in the pipeline and evaluate what spaces they have available.

“We’ve had a lot of conversations with these brokers about potential tenants and they’re trying to work through lease negotiations, and really looking at the long-term viability of tenants and understanding the community’s preferences,” said Unitt.

In terms of the appetite for new businesses in downtown Santa Cruz, Unitt said her department sees the most interest from food-related businesses as opposed to more traditional retail, especially as the e-commerce shift continues.

“The other trend we’re seeing is the shift to a smaller floor plan,” she said. “Typically we’re seeing a 1,000- to 1,500-square-foot spot being the sweet spot. Those go very quickly; larger spaces sit around for a lot longer.”

While rental prices for corporate spaces downtown vary greatly, an analysis of current listings shows rates can range anywhere from under $20 per square foot to $39 per square foot.

In fact, Unitt said the city has been working with the developer of the Nanda on Pacific building near the confluence of Pacific Avenue, Mission and Center streets to help reconfigure the available retail spaces and make them more desirable to potential tenants. The building, which opened in 2020, includes 4,457 square feet of commercial space.

The mixed-use development going up along Front Street between Soquel Avenue and Laurel Street. Credit: Kevin Painchaud / Lookout Santa Cruz

Other new retail spaces in the downtown area set to come onto the market as part of new mixed-use developments include:

A proposed six-story housing project located at 530, 542 and 548 Ocean St. that would include stores and offices on the ground. The project, proposed by Workbench, also includes over 100 apartments.
The new affordable housing project at 525 Cedar St. next to Calvary Episcopal Church includes two ground-floor retail spaces.
Pacific Station South, which is slated to open this summer, includes ground-floor space for retail and community services, as will its sister project, Pacific Station North, which broke ground last week.
The eight-story, mixed-use housing development on Front Street between Soquel Avenue and Laurel is slated to include six restaurant-ready commercial spaces on the ground floor.

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

strawberries growing in a Watsonville field — Credit: Kevin Painchaud / Lookout Santa Cruz

Watsonville-based strawberry grower launches fair trade berries: California Giant Berry Farms is now a supplier of fair trade-certified strawberries. To achieve the Fair Trade USA certification, the company had to meet rigorous standards for fair compensation for workers and demonstrate that it complies with current labor laws, maintains safe, healthy working conditions and employs sustainable farming practices. California Giant Berry Farms is the first large-scale berry operation to achieve the certification for California-grown strawberries.
Joby Aviation partners with Saudi Arabian aviation company: Joby has inked an agreement with Mukamalah Aviation Company to bring electric taxis to Saudi Arabia. Mukumalah Aviation, a subsidiary of state-owned oil company Saudi Aramco, operates one of the world’s largest fleets of corporate aircraft. The partnership will allow Joby to sell its aircraft directly to Mukumalah, helping the Santa Cruz-headquartered company gain a larger footprint in the region.
Paystand hires new sales head: Scotts Valley-based payments company Paystand has hired Allison Grieb as its new chief sales officer. Grieb comes to the company from Recurly, a subscription management software company where she served as vice president of global sales.
Penny increase sought for downtown Santa Cruz business assessment fee: Businesses in downtown Santa Cruz pay an assessment fee to the Downtown Association that helps fund everything from marketing to cleaning and safety services. Last year, that fee was raised for the first time in 30 years, going from 47 cents per square foot to 54 cents. Now, the Downtown Association seeks an increase to 55 cents for next year. The assessment is based on the following formula: business area x rate x zone + $100. So, a retail or food business off of Pacific Avenue would pay a total of $430 per year, in two installments of $215, under the new proposal. Following approval by the Santa Cruz City Council, a public hearing on the fee increase is set for June 11.
Watsonville farm to settle with state for $100K in worker harassment suit: The California Civil Rights Department announced it has reached $100,000 settlement with a Watsonville-based farm in a sexual harassment case involving a seasonal strawberry picker. The complaint filed against Ayoquezco Farms accused the owner of sexually harassing a female employee in 2018, creating a hostile work environment that escalated after the employee made a report to her supervisor. The Civil Rights Department sued the farm in 2023 following its investigation. Under the proposed settlement, the farm must pay $100,000 to the former employee, establish new company policies and complaint procedures for harassment incidents and create new investigation policies. The proposal now goes to a state judge for final approval.

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

Looking at the numbers

23%: That’s how much ridership increased in the first quarter of 2024 compared to the same period last year, according to Santa Cruz Metro. The transit organization recently released highlights of the first phase of its three-year pilot project, Reimagine Metro. (See Max Chun’s article for more details.)

Save the date

Wednesday, May 29: The Cocoanut Grove at the Santa Cruz Beach Boardwalk hosts the annual Santa Cruz Launchpad event from noon to 7 p.m. The event, organized by Santa Cruz Works, couples a job fair with a student business pitch competition. Details and tickets available here.
Wednesday, May 29: MidPen Housing hosts a grand opening for Bienestar Plaza, a new affordable housing development, from 11 a.m. to noon. Located at 1520 Capitola Rd. in Live Oak, it includes 57 affordable apartments for families and individuals, including people with supportive housing needs. Details here.
Thursday, May 30: The Pajaro Valley Chamber of Commerce will hold its monthly mixer from 5 to 7 p.m. at the Alladin Nursery and Gift Shop, 2905 Freedom Blvd., Corralitos.
Thursday, May 30: Santa Cruz County is hosting its fourth annual career fair for anyone interested in opportunities to work for the county. Representatives from over 20 county departments will be at the event from 4 to 7 p.m. at the Santa Cruz County Government Center at 701 Ocean St., Santa Cruz.
Saturday, July 27: The Pajaro Valley Chamber of Commerce hosts its 2024 awards dinner and auction at the Santa Cruz County Fairgrounds in Watsonville. Details and registration here.