New clothing specialty retailers and restaurants along Monterey
Road appear to be doing well, and, according to the Morgan Hill
Downtown Association, this could be the answer to reviving Morgan
Hill
’s downtown and competing with other retailers sprouting in
neighboring Gilroy. “Stores that are unique, selling high-quality,
higher-end merchandise, these, we believe, are two keys for
developing a specialty retail niche downtown,” according to Dan
Craig, executive director of the MHDA.
New clothing specialty retailers and restaurants along Monterey Road appear to be doing well, and, according to the Morgan Hill Downtown Association, this could be the answer to reviving Morgan Hill’s downtown and competing with other retailers sprouting in neighboring Gilroy.
“Stores that are unique, selling high-quality, higher-end merchandise, these, we believe, are two keys for developing a specialty retail niche downtown,” according to Dan Craig, executive director of the MHDA.
Downtown merchants claim they’re doing just that and beginning to see the benefits.
“In the world of tobacco shops, we’re young,” said Steve Boyce, who opened the Morgan Hill Tobacco Company with partners Gene Palermo and F. Wyatt Miller during the Taste of Morgan Hill in 1997. “But word has spread and we have a good product. People make the trip to come here.”
Boyce said the pipe and cigar lounge in downtown next to the Granada Theater has finally become a destination for residents in the area. For the Tobacco Company, business is good, said Boyce, with many of his patrons being local, and quite a number coming from south San Jose, Hollister, Salinas and Gilroy.
Another secret of the Tobacco Company is keeping late hours, allowing them to attract patrons of local restaurants for a drink and a smoke after dinner.
“Restaurants help us make a night of it and we help them,” Boyce said. “After dinner, they come in here and have some port or wine with a cigar.”
Steve Peña, owner of Sinaloa Restaurant, said he’s found success by staying open later.
“We’re open until 9pm, and it makes a difference,” he said. “We’re busy till close.”
One reason behind the late night traffic could be the Morgan Hill Chamber of Commerce’s Friday Night Music Series, which concludes this week. Downtown merchants say the series has been a shot of adrenaline in the economic arm of downtown – bringing customers right to their doorstep.
“I think it’s absolutely wonderful that we are helping the downtown merchants,” said Chamber special events coordinator Michelle Naylor. “We’re glad to see the combined efforts of the Chamber are paying off. The Chamber’s goal is to support its members and we’re glad to see our efforts are indeed paying off. It’s a very well-mannered crowd at the event and very family-oriented.”
The Chamber has sponsored the Friday Night Music Series for the past 15 years, according to Naylor. Over the years, Naylor said the event has grown and estimates 1,200 people now attend the event – drawing an average crowd of 500 to 600 people – if they can find a place to park.
“Parking is lousy here,” said Mickey Reiff, owner of Michelina’s Haute Designs. “With events downtown, the parking lots get full quickly.”
Parking is the biggest worry on many of the merchants’ minds as the city has abandoned parking requirements for downtown developers in an effort to spur growth over the next two years. Commercial developments are exempt from building parking or paying into an in-lieu fund for future spots and residential developments do not have to build guest spaces. There are about three developers applying for mix-use development projects and about three others applying for residential units in downtown, according to Garret Toy, director of Business Assistance and Housing Services.
Though the move may encourage growth, many businesses worry a lack of parking will drive away customers.
“If customers don’t see parking, they just keep driving. I’d prefer angle parking (on Monterey Road),” said Boyce.
Unlike Boyce and Reiff, Pena doesn’t see parking as being a major issue for Sinaloa’s.
“If they really want to go some place, customers will walk an extra block. Those that won’t are the older people, and I’m concerned about that,” Pena said.
Goddess Bead Shop owners Shelley Fast and Pamela Foo believe customers will deal with a lack of parking if a retail sector has the power to draw customers.
“In many downtowns, there is no parking,” Fast said. “That’s just how it is in downtown. If you want to go to a destination, you will find parking, and you will need to walk.”
Overall, downtown businesses are optimistic for the future in spite of all the talk about downtown’s demise.
Victoria Herrera, owner of Blush Boutique, a high-end fashion store located in the Downtown Mall, said her business has done well since she opened in May.
“Business is great,” she said “The one thing that hurts us is the exterior of the building. It needs to be renovated. But I get constant foot traffic. I love being downtown and would not consider moving the businesses some place else.”
It’s a sentiment repeated by most downtown businesses.
But business isn’t great for all downtown merchants, according to Brad Jones, who owns BookSmart, Caffee Kaffee Vin and Thinker Toys. He believes the downtown has fallen on hard times since the rise of the Gilroy outlet mall and big-box retailers such as Wal-Mart and Barnes & Noble. He’s concerned these Gilroy merchants are siphoning spending from Morgan Hill and drawing shoppers away from their hometown. The city should do more to improve downtown so it can compete with the big outlets, said Jones.
“Downtown is in a perilous position,” Jones said. “The retail climate in Morgan Hill has taken a serious hit by the outlet and mall and thousands of dollars spent in Gilroy and Oakridge. The city has done literally nothing since they did the streetscape to try to enhance the retail climate in the downtown.”
Though city sales tax revenues were the highest they’ve been since 2001, retail sales tax receipts didn’t follow the trend of other businesses in Morgan Hill, such as restaurants.
Jones said while restaurants are able to capture customers, retail stores are having a more difficult time doing so. He mentioned stores such as the Art Scene and the General Store that have closed from lack of customers.
Craig echoed Jones’ concerns.
“Certainly there is the sense businesses here have been hit with the Gilroy outlets and Gilroy’s continued retail expansion and the Oakridge mall expansion was felt too,” he said. “Barnes & Noble has severely impacted independent local booksellers that can’t match their inventory and selection.”
Although the outlet stores have taken their toll, Craig said some downtown businesses are doing well.
“On the other hand, specialty retail stores seem to be doing real well,” he said. “You get to reach a high level customer base here if you can offer unique high-end merchandise.”
Ultimately Toy said the city would like to see downtown as an entertainment center, with restaurants, clubs and specialty retail stores, along with more residential units.
“We need a two-prong approach, more residential units downtown, which bring more people who can shop downtown, and we need specialty retail to give these downtown residents and the rest of the community a reason to come downtown,” said Toy.
The city’s mixed-use plan could be the saving grace for what Jones describes as a struggling downtown.
“It’s a sound and proven philosophy,” he said.
