From Boom to Bust

Dozens of once-thriving Pasadena and Altadena businesses fall victim to the recession

By Justin Chapman, Pasadena Weekly, 11/12/2009

Over the years, business at Twin Palms in trendy Old Pasadena boomed, the restaurant hosting parties during the holiday season and entertaining busloads of tourists in town for the Rose Parade and the Rose Bowl game New Year’s Day.

But this year, as local companies look for less expensive places to share their waning holiday cheer, the restaurant launched 15 years ago by actor Kevin Costner and his former wife Cindy — who have long since sold their interest in the business — is closing as of Nov. 25.

Twin Palms is far from alone in giving up the ghost. Dozens of established businesses in Pasadena and Altadena are no longer able to make ends meet — victims of a relentless and apparently worsening economic recession.

Empty storefronts are a common sight around town. Across the street from Twin Palms, for instance, the Daily Grind at the corner of Green Street and DeLacey Avenue closed in October, less than a week after the management at Twin Palms announced its closing. Other once-popular dining and drinking spots in Old Town have also recently been shuttered.

“The worst economy since the Great Depression is having a significant impact on all businesses everywhere — and especially those businesses in the entertainment and leisure space, such as restaurants,” said Twin Palms spokesperson Lisa Cohen.

Much the same goes for neighboring Altadena, where several enterprises on North Lake Avenue alone have already gone under, such as the Altadena Nursery, which closed its doors in October.

“I was there for 25 years,” said proprietor Al Toma. “There has been a nursery in the building since the 1940s. It’s the economy. Business was very slow and I have not been able to make the lease. I saw the first signs about a year-and-a half ago, but you keep on saying to yourself, ‘It’s going to get better,’ but then you get deeper and deeper in the hole as you wait.”

No customers

Ben McGinty, owner of the Gallery at the End of the World in Altadena, said local leaders in his unincorporated community don’t seem concerned about the problems facing small business.

“These businesses can’t afford to stay in business anymore,” McGinty said. “If the revenue was here, if you had the public shopping and supporting our local businesses, it would be better. It’s always been slower up here, and it’s never been a priority to cultivate local retail.”

If it were, he said, “and more money was going to the county, the county would pay more attention to us. We have such a little base drawn from sales tax that it makes it not worth their bother.”

Business is not exactly booming on the southern end of Lake Avenue in Pasadena, either, where the Lighthouse Christian Bookstore recently closed after 19 years — one of several small shops failing in the past few months. A little further down the street, signs displaying lease offers are splashed across the windows of at least 20 businesses south of Del Mar Boulevard.

“California — especially Pasadena — seems to be six months behind the rest of the country,” Pasadena Chamber of Commerce President Paul Little told the Weekly. “It took us longer to get here. Even when IndyMac Bank fell,” he said of the first bank in a long line to fail at the start of the recession, “the rest of our economy stayed strong while the rest of the country was seeing the beginning of the recession. The other challenge is — even with claims that the recession is easing — the unemployment numbers are staying high and out-of-work people don’t eat in restaurants or buy books and drink $3 cups of coffee. There are fewer customers out there.”

“We do know that a lot of businesses on [North] Lake Avenue are struggling,” said Altadena Town Council Chairman Gino Sund. “I am going to place it on our agenda so we can look into it more closely.”
At least 10 businesses have closed this year in Altadena.

Finding the exact number of businesses that have closed in Pasadena this year proved to be a difficult task, one requiring the paper to file a Public Records Act request to see the numbers.

The Pasadena Chamber of Commerce and the Old Pasadena Management District said they do not keep information tracking business closures. The OPMD faxed the Weekly a list of addresses of new businesses, and businesses that would be opening soon. But that list did not include information on the closed businesses previously at those addresses.

Representatives of the South Lake Business District did not return phone calls requesting information about the vacancy rate in that area, and representatives answering the phone in the city’s Business Services Division told the Weekly that officials in that office would know the information. However, an employee in that division called the paper back and said that the paper would have to file a PRA with the city attorney’s office before the numbers would be released.

The city has 10 days to respond to the newspaper’s request.

‘Everything is in crisis’

Once a major Southern California shopping district, South Lake Avenue is today littered with empty storefronts. Much the same goes for Lake Avenue’s northern portion, where Woodbury Road serves as the line separating Pasadena and Altadena.

More than 20 years ago — prior to redevelopment funds transforming Old Pasadena from a place full of rundown buildings visited mostly by pigeons, artists and people down on their luck into a prime shopping destination — South Lake Avenue, anchored by Bullock’s and a number of expensive restaurants, was actually the place to shop in Pasadena. The difference between that vibrant past and the misery of today is stark.

“It’s hard to offset things like losing [high-end garden supplier] Smith & Hawken,” said Pasadena City Councilman Terry Tornek, whose council district includes South Lake Avenue. “While it is true they closed everywhere and not just here, it’s still a closed store. The region has too much retail, which means the pie is sliced into finer pieces, and you don’t have to be a rocket scientist to know that if the pieces of the pie are shrinking, everybody hurts.”

“We’re in a crisis,” New York-based retail consultant Howard Davidowitz told the Weekly. “The American consumer is completely underwater. The economy is in horrendous shape. We have gone through a banking crisis, an automotive crisis, unemployment is at 9.1 percent, and if you add the people whose full-time hours have been cut to part time, we are at 17 percent unemployment. Everything is in crisis.”

The Altadena ‘problem’

And the shrunken customer base isn’t shopping in Altadena, according to Steve Lamb, a former member of the community’s Town Council and its Chamber of Commerce. But part of the reason is that new Altadena residents are instead shopping and eating in Pasadena.

“The newcomers are not accustomed to shopping here,” Lamb told the Weekly. “I meet new people that have been here four or five years that live close to Woodbury Road and they never head north to eat or shop; they head straight down to Pasadena.”

That lack of patronage forced CJ’s Wings at Altadena Drive and Lake Avenue to shut down at the beginning of the year.

“Altadena is stuck in a situation where we don’t have a government that is designed to be responsive to the people,” said Lamb. Three times as many people vote for LA County supervisor in Pasadena than in Altadena. And “Pasadena has three times the votes we do, so we have no sway with [Supervisor Michael] Antonovich — and Pasadena has an interest in keeping Altadena underdeveloped,” he said.

Former Altadena Town Council Chairman George Lewis is being forced to close his business, Ronnie’s Automotive, which has been in Altadena since 1914 and featured in 200 movies, including “Million Dollar Baby” and “Transformers.”

“I no longer want to give LA County money so they can hire more people to come out and find another reason to screw you, and then not do the job they’re supposed to be doing,” said Lewis, who said he feels that small businesses in Altadena were being targeted and fined by LA County so the county can continue making money, even during the recession.  

Efforts made by Altadena business owners to get help from the Altadena Chamber of Commerce have fallen on deaf ears, according to Lamb and Lewis, who for years wanted the chamber to appeal to the county to loosen zoning standards, thus relieving business owners of costly fines for such things as not having enough parking spaces and operating outside of specified business districts.    

“Everything for them has been about doing their mixers and their annual golf tournament,” Lewis said of the chamber.
Lamb said that his efforts to try and start business associations in Altadena to help small businesses in dire straits were not supported by the Town Council.

“So businesses are like ‘Why try?’ They’ve tried for the last 30 years, and anyone who’s been around for that long knows that it’s just a stacked deck that’s impossible.”

According to chamber member Robert Meyers, all the chamber can do is refer business owners to people who can offer expert advice on loans and marketing.

“Ultimately, it’s up to the individual store owners to do something like start a business association,” said Meyers, who himself is closing Webster’s Hallmark Store, which he and his wife have owned for the past two years. “All the chamber can do is lead a store owner to an expert for business advice. They can’t do anything from a financial aspect.

“It’s just sad to see small businesses — family businesses in Altadena that have been here for years — having to close their doors,” said Meyers.