East Village like ghost town after Padres season

Lured in by the promise of large-scale development in East Village, to be anchored by a state-of-the-art baseball stadium and filled with high-rise luxury condominiums, plenty of entrepreneurs took the plunge and opened businesses in the revitalized area known as the ballpark district.

It is a Tuesday evening, October 13, only a week after the Padres ended a forgettable 2009 season, and the neighborhood around the ballpark feels like a ghost town. Although the team drew a per-game average of 23,735, their lowest numbers since moving to Petco Park, it is evident that baseball fans — now that they’re not around — made a difference for local businesses. “It was a horrible season for us businesswise,” says the owner of a business who declines to give his name. “There were less people around, and they were spending less money. Sales were weak compared to the last two years. But you know what? There was still traffic. Now we’re on our own for the next few months.”

The streets are empty of people. On Tenth Avenue near J Street, just a block from the stadium, the businessman, whose dark hair shows signs of gray, stares at his neighborhood with tired eyes. He gives a sigh and continues, “We have dog walkers and homeless people pushing shopping carts. Aside from that there is not much foot traffic.”

The man points upward. “Look up at the condos.” As I glance at the windows of several high-rises, I see fewer than a dozen lights on, and it’s not even eight o’clock. “There’s nobody home,” he says.

“This is our neighborhood,” he continues. “It’s unfortunate, but I don’t believe there are enough people around here to sustain our businesses. That’s why so many of us are closing.”

Chad Cavanaugh, 36, still comes back to visit every now and then; after all, he called the area home for nearly three years. Tonight his six-foot-four frame makes him hard to miss as he walks around his old neighborhood, following his routine of checking in with local businesses and hanging out at his favorite shops. As a resident he was affectionately known by friends and neighbors as “the mayor of East Village,” a nickname earned for his penchant for learning everything about the area and befriending everyone who lived here.

In 2005, Cavanaugh sold units for the developer of the condominiums Fahrenheit, at Tenth and Island, and M2i, one block north. He purchased his own downtown loft. Eager to embrace the urban lifestyle, he subsequently became a downtown realtor specializing in the East Village. He describes the demand for condominiums in the area as “high” at the peak of the market. “There was a lot of high hopes for what this area was going to be with the ballpark going in.”

During the spring of 2004, Petco Park opened its doors. Many expected that the new central library, along with other commercial projects, would soon follow. “East Village was going to be the most self-sufficient neighborhood in downtown,” recalls Cavanaugh. “Seventh to Tenth Avenue on J was planned to be the restaurant row. The vision was huge.”

Today, restaurant row has several “Available” signs and vacant spaces. The site of the new central library, across J Street from Metrome, a mid-rise complex between 11th and Park Boulevard, is still an empty dirt lot. The sign on the fence announcing plans for the library has been taken down. Recent news is that the city council is still trying to get an idea of how much the project will cost. If the library’s built, early estimates have the completion date as sometime in 2013. As Cavanaugh tells it, “The main library was going to be a showpiece for the city itself. You have an area that wants to succeed. The potential was there.”

Jeremy Day, an East Village homeowner, also saw potential in the area. He moved into the Mark — a 32-story glass behemoth between Eighth and Ninth — in 2007. Not only did he decide to make East Village his home, but he also decided to start a business there. According to Day, he was attracted by the area’s demographics, mostly young professionals, who he believed would have spending power.

Day opened First Degree Tanning Studio in November 2008. It occupies a street-level retail space in the Fahrenheit building on Tenth. Now, a year later, Day acknowledges that business is very slow. “I think it has to do with several things, including the economy,” he says. “Most of the buildings are half full, or they’ve been bought by investors.”

Asked if he regrets moving in, Day at first says no, but then he says, “Well, it depends on what day you ask me. Lately a lot of regret, but it’s because we went through the summer, where every month was slower and slower, whereas the first six months were better and better, and I thought it was the best decision I ever made.”

Locked in by high lease rates and suffering from poor foot traffic, some businesses have pulled the plug. On the northeast corner of Tenth and Island is an empty storefront that once housed Market 32, a produce shop and smoothie bar that locals loved and that opened just this year. A long message taped on the windows partially reads, “We gave it our best shot but a combo of economic factors, lack of traffic and ultimately a lack of capital to keep the dream alive have all hurt us.”

The casualty list for the month of September alone includes Ninth Avenue’s Café Noir, a coffeehouse in the historical Hiatt House, built in 1886; Well Heeled, a salon in the Comerica building at Tenth and J; and Sluggers, an eatery on the corner of Park Boulevard and Market.

“It hurts us,” responds Day to the news of his neighbors’ closing. “If this whole block was filled out, we would be benefiting from our neighbors’ foot traffic. Different clienteles for different services. I’m thinking about diversifying my services. Surviving on tanning is going to work, but it’s going to take a lot longer to get on my feet.”

Just two doors down from the tanning studio is Mondo Gelato, whose owners signed their retail lease in 2006. As one of the first tenants to move in on the block, the management is familiar with the tough business environment. “When we first moved in, the economy was doing well,” says managing partner Jerome Chan. “The housing market was doing well. Everyone was buying and moving in to this area. Now everyone is moving out of this area. It’s pretty much vacant.”

According to Grubb & Ellis’s “Retail Trends Report — First Half 2009,” downtown had a vacancy rate of 8.3 percent, while the county overall had a rate of 5.6 percent. However, those numbers do not include subleases or vacant spaces that are not available on the market. Also, downtown covers a large area, including the much-coveted Gaslamp District. Chan, who is 27 years old, believes the vacancy rate for retail spots in the ballpark district is “around 40 percent.” While there are storefronts that have been recently vacated, others have been empty for about three years. Some locals believe that property owners need to stop holding out for high lease rates and simply cut their losses.

“They’re losing money every month, and they’re never going to make that money back,” says Jeremy Day. “Just cut the prices now and fill it up. Renegotiate later.”

Facing what they expect to be another slow fall and winter season, both Day and Chan are depending on salaries from other employment — Day as a firefighter and Chan as a software consultant. As Day puts it, “Fortunately, I have another job. Fortunate, because my business is probably not going to give me a paycheck for a while. But it would be nice to be a business owner and not be an employee somewhere else. It takes away from this tremendously. If this was my sole project, I could do a lot more. But I can’t. I have to work every day.”

Despite news of their neighbors’ closing, the local shopkeepers that I spoke with remain convinced that things in the ballpark district will turn around, “Hopefully sooner than later.” They remain optimistic that new buildings due for completion in 2010 and early 2011 — like Strata, a luxury apartment high-rise on the corner of Tenth and Market, and the Thomas Jefferson School of Law, on Island between 11th and Park — will bring more customers to their shops. In the meantime, according to one business owner, “We’re doing whatever it takes just to hang in there.” To attract more customers, First Degree Tanning Studio is planning on adding more services, such as manicures, pedicures, and spray tanning. Mondo Gelato is discussing the idea of offering goods on consignment from local bakeries.

“I have a hard time giving up,” says Day. “I put in too much time and too much effort to say, ‘I’m going to walk away with a loss.’ ”