Monday, October 17, 2011

Happenings: City Upset That Newhall Fills Vacancy

This is written in response to Leon Worden's article from SCVNews[1], which broke the story of the phoenix-like rebirth of an American small business. He, however, used somewhat more pejorative terms. The article can be read here. Be sure to check out the helpful map.

Automotive Technology, Mike Hagerty’s shop in Newhall, employed about a dozen people, did well over a million in sales, had several 5-star reviews online (and one one-star review, to be fair), and managed to keep its doors open through the recession[2]. Quite logically, the City of Santa Clarita decided to kick them out of town. In an article from The Signal[3] last year, Hagerty reacted to being evicted by the City, his new landlord:

"'With the old landlord, it was a handshake, a phone call,' Hagerty said. 'I was 15 days late to renew the five-year lease, according to the paperwork. So it’s out by the first of December. Merry Christmas to our family and everybody else around here. What did Automotive [Technology] do that was so bad?'"

Now, Hagerty has beaten them at their own game. He was made to shut down shop in downtown Newhall, but is right back again--right back in downtown Newhall. The City and Redevelopment Agency are not happy about this[4].

You see, the powers that be want downtown Newhall to become a place for a night out. They envision a land of theaters, wine bars, galleries, cafes, and boutiques. They do not want it to be a place that meets the more mundane, day-to-day needs of Newhallians, such as auto repair. Leon Worden elaborates in his article published yesterday:

"Current city codes prohibit the types of businesses that would impede that vision of a pedestrian-oriented shopping, dining and entertainment corridor. Banned from the five blocks of Main Street are auto shops, big-box stores, medical clinics, print shops, movie sound stages, drive-through restaurants and other businesses that interfere with a window-shopping and outdoor patio dining experience."

Indeed, Automotive Technology interfered with the sacred “window-shopping and outdoor patio dining experience.” To get them to leave town, the City bought (well, technically your tax dollars bought) a whole block that included the space Automotive Technology rented. The City evicted them and paid out a settlement of $255,000.

Automotive Technology found a new place to do business, and they started leasing there. The brilliant bit is that the new space is a stone’s throw away from their old shop, within sight of the new library, the nascent crown jewel of Old Town.

They managed this coup by moving into a vacant space formerly occupied by a motorcycle repair shop. Property owners can lease to “forbidden” tenants (vehicle repair shops, in this case) if done within 180 days of the other tenant leaving. This seems like a common-sense provision so that owners don't lose too much money waiting around for a more "desirable" business to rent their space.

While Worden calls the 180-day provision a "loophole" and sees a story of look-what-they-got-away-with!, I see it as a story of an-underdog-finally-won!. The City/Redevelopment Agency wields unprecedented power in Newhall. They are owner and landlord of more than a full block of town, they are generally successful in dictating what kind of business can and cannot set up shop, they spend taxpayer dollars on events to woo shoppers into town (events not lavished on other parts of the City of Santa Clarita), they have sunk millions of dollars into a library to replace an existing one mere blocks away, and they have used the power of eminent domain to forcibly take property. When a small business manages to persist with such uneven odds, it's hard not to cheer.

Now we just sit back and wonder whether more eminent domain awaits...

[1]SCVNEWS. Compare this with the story from The Signal (linked in footnote 3), which is far more sympathetic to the evictees.
numbers are from BizFind and may be outdated (or inaccurate--it's the Internet, as they say); there's simply no indication of how current they are. At least they serve to give you a ballpark estimate of the scale of the business.
[3]From The Signal for additional background and quotations.
[4]I base this inference on Gail Ortiz's quotation that they are trying to stop a similar event from happening again.

1 comment:

Anonymous said...

It's baffling that in this economy the city wants to drive good businesses out, and jobs along with it. I know they have been after the stereo installation guy for some time as well. They passed some sort of ordinance that they cannot work on cars in their carport, as they did for years. This would have driven the guy out of business, but he gutted the whole inside of his shop/showroom so they could work on the cars inside.

I have talked to at least 7 other businesses who said they are fighting to survive. It just isn't happening in Old Town.

There are a few gems here, but they are few and far between.