Back in the day, West Hollywood had a thriving small business community. Vacancy rates for available storefronts were close to zero.
Prime locations were taken by successful businesses, and entrepreneurs would pay top dollar to ‘get into’ West Hollywood. Low supply and high demand resulted in skyrocketing commercial rents. Smaller, community-serving businesses were forced out.
An oligopoly of ownership developed, with a limited number of landlords owning multiple properties in this small city. Landlords donated generously to councilmembers such as John Heilman, and those donations were repaid with favors like outdoor patios and approving changes of use from general retail to a bar or nightclub.
Rules shifted from a parking credit system to the elimination of that system. Tenants were then free to convert general retail spaces, which created a significant upside in rents collected for landlords.
Commercial leases differ from residential leases, as they are generally long-term in nature. Most commercial leases are NNN (triple net), meaning the tenant and landlord establish the base rent, and the tenant agrees to pay a proportionate share of all building expenses on a month-to-month basis.
This proportionate share is called CAM (common area maintenance). Expenses like trash, water, and taxes are split equally among tenants based on the square footage they occupy. Candidates who advocate for a vacancy tax would increase the CAM costs for other tenants. Those candidates do not understand business — you cannot tax your way to affordability.
To open up the discussion on filling vacant storefronts, we must first address two classes of retail: those that require buildouts and those that can quickly adapt to general retail. There are two tenancy types: a) short-term tenancy and b) long-term tenancy. Each leasehold and tenancy will require a unique approach.
The lowest-hanging fruit consists of opportunities for general merchandise businesses that do not require major construction and can typically open within 90 days. This category is driven by soft goods (like fashion and trend products for the home) or hard goods (products that remain consistent season after season). These sellers offer the fastest opportunities to jumpstart new businesses. Threading the lease needle and mitigating the landlord’s risk with shorter-term thinking will cement this proposal. If the city steps up and offers incentives to new businesses, we will see a noticeable transformation of our retail landscape within an 18-month period.
One incentive I discussed along the campaign trail compares a grant made to a ‘Freedom Festival’ for their booth at WeHo Pride. The $300,000 grant went to support friends of councilmembers who do not live in West Hollywood. The same $300,000 could be offered to ten new businesses as a $2,500 rent credit for their first twelve months. The total of $30,000 for ten new storefronts would equal the cost of the Freedom Festival pride booth, and those 10 new businesses would offer services and local jobs to WeHo residents.
There are new approaches to re-build our small business community. A solid plan and committed stakeholders will help us rebuild. I stepped up to run because no candidate was offering ideas to help our business community. There’s a lot of talk about housing, which is a problem they cannot solve. I want to focus on the everyday challenges that can be solved.
There is a windfall of opportunity in those “for lease” signs. I’ll be laser-focused on exploiting those opportunities and directing my energy toward issues where a local City Councilmember can make a difference.
Item 6S (success) City staff will develop a listing of all available retail storefronts along major commercial corridors within West Hollywood. Each location will be classified into four categories: 1) available for rent without major construction for general retail use, 2) available for rent with minor adjustments — a) minor use b) major use, 3) expected major construction for new businesses, and 4) storefronts that can fulfill office or service-oriented business needs.
City Council should waive rules for short-term leases on new business openings that require major restroom upgrades. An operable restroom will still be required.
Small businesses need a voice on City Council. I’m excited to get to work.
I miss World Wrap, Don`t Panic!, Sports Connection and Tower Records.
The city is worried about a beautification project for Fountain Avenue. It’s Santa Monica blvd that needs the beautification project not Fountain Avenue. Fountain Avenue is full of large buildings where cars go in and out of parking garages. If bike lanes are added on Fountain we are going to have so many cars hitting bikes and injuring or killing riders. It’s one of the dumbest ideas I have heard.
No, that won’t happen on Fountain, sorry. There far too few cyclists and fewer still will use Fountain bike lanes. There’ll be plenty of dead road space to exit the garage from but backed up traffic preventing you from reaching the roadway
First of all, you can start with arresting, incarcerating, and generally vanquishing public enemy number one, Monte Overstreet. That foul, disgusting, psychotically greedy crypt keeper skeletal mass of humanoid excrement needs to be severely punished for killing our city’s historical landmarks in favor of his psychotic insatiable greed, owning tens of millions of dollars in real estate and yet Destroying historic small business landmarks during the height of the pandemic. And landlords like him, and landladies, who sit on their ass all day and never do any actual work like all the rest of us, but just sit back and… Read more »
Where is Hollywood has seen a today it is nothing but on the decline. It’s very sad, but that’s what happened when you vote liberal
I mailed my ballot two weeks ago with my vote for you for just this reason. I’m hoping to get rid of these little boys and girl on the council and replace them with grown-ups, but it’s gonna take grown-ups to vote for them.
3 real issues; Weho is in a prime location geographically and real estate rents are reflective of this. Larry is correct that revenue from billboards often allow for a building owner to charge high rents or not really worry on renting a space. The Amazon effect, the hit to overall brick and mortar retail by online shopping is the biggest disrupter to a business sector in 50 years.
Turn empty store fronts into housing because no one wants to start a business in this economy !
Problematic – Homeless come and go in and out of weho. Opening closed store fronts for housing will draw a huge influx of homeless. One “housing for the unhoused” will make the few remaining shops & restaurants would close with the homeless in front making both unnatural and real threats of harm to customers. Also zoning won’t allow business being used for housing. Zoning can’t be changed without a huge bs filing with the County – pay offs – tada weho gets to build close to a billion to ruin weho park & a new library with no books and… Read more »
Larry displaying that he does not understand a City budget and he is being his usual cunning self by conveniently leaving out the “Women” in his reference to the “Freedom Festival.” It’s called The Women’s Freedom Festival. He knows this. Question is, why isn’t he asking us to defund JJLA’s Outloud music festival? Jeff Consoletti also doesn’t live in West Hollywood and he’s also friends with city council. Why does Larry always attack the women? This why it’s a NO VOTE on Larry Block. I think of all the little old ladies he’s tricked into voting for him. It makes… Read more »
It sounds like you’re the sexist. Do you really think you can tell us what someone thinks in their own head? No, you can’t. You just parrot out those old, tired sexist accusations that are laughable in this instance. I don’t know Larry except from reading this publication, and he’s always seemed very fair and open in his coverage. You’re just upset because he speaks the truth on things you don’t agree with, so you immediately jump to the lame “you’re sexist…” nonsense. Most sane people just roll their eyes at this nonsense nowadays.
I have known Larry for over twenty years as a neighbor and I never once heard him make a sexist reference. In fact he was really good to women seniors like Jeanne Dobrin and close to former Council deputy, Donna Saur. The notion that Larry hates women is just weird and without any foundation.
I’m sure Jean Dobrin and Donna Saur would love Larry’s idea to defund a festival that celebrates women.
Writing an op ed piece about defunding women’s pride programing is about as sexist as you can be.
You are trying to be sneaky, but you’re not that clever. You mentioned a “Freedom Festival” that received a $300,000 grant for their space at WeHo Pride. That would be the “Women’s Freedom Festival” you’re talking about. You’re also calling out Chris Baldwin and Madonna Cacciatore when you say friends of the City Council who don’t live in WeHo. Don’t deflect. You’ve been writing hit pieces about the Women’s Freedom festival and this op ed piece is just another hit asking to defund women’s programing. You’re actually saying the money can be better spent elsewhere. Notice no mention of the… Read more »
Lower taxes and minimum wage might help.
Property taxes on these buildings are below value due to prop 13 and minimum wage has no affect on what a landlord wants to charge for rent.
Small businesses are indeed the heart of many towns and more especially towns the size of West Hollywood. Charm and character of a town are built not just on its residents’ activities but on the variety and attractiveness of its businesses. I miss Ed’s Coffee Shp, Sloans
noisy old bar, George’s Shoe Repair, etc., etc.
The city no longer pro small business. To many empty storefronts and restaurants sit empty. IMO something like grand market Downtown would work well take for example the Sprout’s location – divvy its up into more ‘Stall like’ interior allowing small restaurants and a communal dining area ini the middle.
I like how you think and something like this would be a huge draw from near and far but this location could only handle about 8 vendors at most
These buildings are owned by private individuals or REITS, so the city has no control over the rents.