Where Did All the Business Go?

As visitors walk through downtown San Rafael, the streets are filled with the empty storefronts with "For Rent" signs and flyers covering the windows. 

"In my 30 years, vacancies are the highest they've ever been," said Peter Gettner, senior vice president of HL Commerical Real Estate, which leases a number of spaces on Fourth Street.

The struggle in downtown is a product of both the tightening of financial and credit markets, which makes it hard for new businesses to get the cash necessary for start-up, and the consumer spending slowdown, which leaves existing businesses without enough sales.

Fourth Street also has some unique challenges. The street has no large anchors, like a Macy's or Nordstrom, and many businesses either want smaller storefronts than are available or larger amounts of warehouse space.

"It's a mish-mosh, but it's a nice mish-mosh," said Gettner.

That mish-mosh is about to get some new additions, though, which city officials hope will revamp the area.

The Marin History Museum's Music Center, with the inaugural Marin Rocks exhibit, will open in late fall on the east end of Fourth Street. And, right next door, the once-popular George's Night Club, promises to reopen later this summer. Further down the street, Pizza Orgasmica will be offering beers and pizza. The See's location is now in escrow and there is talk of a wine bar coming to the street, as well.

And people have already been drawn to the recently opened co-op Arizmendi Bakery and the Marin Arts Council's gallery space. 

"We had a very warm welcome," said one of Arizmendi's founders Janet Cheunt. "To this day, we're still very busy."

Arizmendi, though, said Cheunt, gets far more business on weekdays from local residents and people who work in downtown than from tourists on the weekends. But, town-sponsored events like the upcoming Food and Wine Festival and the Twilight Criterium, a bike race, hope to draw more people to town on weekends.

"We think we still have a lot to offer," said Deputy City Manager Nancy Mackle.

The city and the Business Improvement District have been making an effort to draw visitors with over 30 events a year like the May Madness Classic Car Parade and the Italian Street Painting Festival, which recently prompted nearly 50,000 people to come to downtown to see the intricate chalk paintings.

The San Rafael Chamber of Commerce also meets once a month with the improvement district in order to talk about challenges businesses are facing and how they can work together to recruit more businesses to town, said Chamber Chairman Mike Kadel. The Marin Economic Forum, a year-old organization that works with the county Board of Supervisors and with different towns to encourage businesses, has also said it already experienced success after convincing a number of businesses to stay in Marin instead of moving to Richmond.

"They're making a real effort to encourage businesses," said Kadel.

Compared to some towns, which are experiencing huge numbers of vacancies and general deterioration, San Rafael still has plenty of restaurants and art galleries. The Rafael Film Center draws 1.5 million people to the theater a year. New public art installations give people a pleasant walk through downtown following a dinner out or a visit to the weekly farmer's market.

"We're lucky compared to others," said Mackle.

And, slowly, downtown is starting to fill its vacancies and regroup after the economic upheaval of the last two years. Though large spaces like the old Yard Birds remain empty, the consensus is that downtown remains on the path towards revitalization.

Kadel predicts that downtown is on a gradual upswing and should be back on track by the fourth quarter of 2011.

"I think we'll weather the storm," said Mackle.