State Street Gets a More Polished Look : Santa Barbara: Seismic retrofitting law forces some merchants to relocate or go out of business. As a result, the city’s main commercial avenue is losing some of its small-town flavor.

SANTA BARBARA —  After 75 years of doing business here, Diedrich Auto Parts is moving out of its graceful, arching building on State Street and leaving town.

“This is a town for the newly wed and nearly dead,” store owner John Diedrich said, quoting a local aphorism. “Rents are too high and it’s not a town for my kind of business.”

Diedrich’s exit and other departures by dozens of businesses on this coastal town’s main commercial street have been prompted by the city’s efforts to strengthen about 250 unreinforced masonry buildings before the next big earthquake strikes.

The upgrading effort, along with other recent upheavals and disasters, is changing State Street’s character, giving it a more polished look--but at the cost of losing some of its small-town flavor.

Over the last seven years, the mix of businesses along State Street has been reshuffled and refined. Many of the longtime mom-and-pop shops and diners have closed or left town. In their places stand department stores, national chain outlets and tonier, more specialized retailers and restaurants.

“What you’re seeing is a face lift,” said Steve Cushman, director of the Downtown Organization, a group of lower State Street merchants.

The most recent round of musical stores was inspired by state legislation passed in 1986 that required all cities to deal with unreinforced masonry buildings. It led to Santa Barbara’s 4-year-old ordinance, which requires owners of unreinforced structures to either obtain a permit to retrofit their buildings or tear them down by July, 1996.

So far, about half of the building owners have improved their properties while reinforcing them, said Charles Evans, the city’s program coordinator.

As a result, the sound of hammers and drills rings along this retail row. Dust, dirt and 2-by-4s clog the sidewalks. Confusion reigns as patrons search for favorite businesses that have left town, moved or just temporarily closed.

“I was supposed to meet someone here,” said Ray Briare, who stood befuddled one afternoon in front of Chase’s Bar and Restaurant.

The city’s seismic safety program is projected to cost about $50 million. Because it comes on the heels of a string of man-made messes and natural disasters, some residents say the timing could not be worse.

“The sequence of events here has been unbelievable,” Cushman said.

State Street has been in turmoil for the last several years. In 1987, the local redevelopment agency bought and relocated businesses to make room for the city’s first downtown mall. The next year, construction began on downtown parking garages. At the same time, the lower part of the street was torn up and renovated.

Then, in 1989, work started on the $150-million, three-story Paseo Nuevo mall, which now houses Nordstrom, the Broadway and other national chains.

Other disruptions were not man-made. During this period, an eight-year drought parched this tourist town of 80,000 people and forced businesses to ration water. In 1990--while the drought was in full force--the city suffered its worst fire in history. The Painted Cave fire raged for four days and destroyed $500 million in homes and businesses, some of which are still being rebuilt.

Meanwhile, Caltrans crews had removed the mid-town signals along U.S. 101, closed portions of State Street, and forced many businesses to move. (The freeway project was completed in the summer of 1992, after four years and $60 million.)

Now, after seven years of nonstop hammering, comes the seismic program. A 1925 earthquake had razed this town’s commercial district, but many landlords denied that it could happen again, Evans said. And many landlords, stuck in a down economy, were reluctant to pay for the safety project.

On Jan. 17, the Northridge earthquake jolted people here into reality. Frank Breckenridge, a building official for Santa Barbara County, said: “There was no sense of urgency or drama until people actually saw others dying.”

Santa Barbara’s seismic program is designed to save lives, not buildings. In a typical retrofit, walls and ceilings are bolstered to install steel columns. Cement anchors, or grade beams, are laid beneath floors. Walls are bolted to floors and ceilings, forming a sturdy box.

The idea is to help buildings stand long enough so people can exit safely during an earthquake. “All we’re doing is buying a few minutes to save lives,” Evans said.

The steep expense of retrofitting has driven out some businesses. It can cost between $15 and $40 a square foot, and that does not include lost income during reconstruction.

Bob Phinney operated Ruby’s Cafe for eight years before he closed last year. “The building owner would have raised my rent $800 a month to cover his costs,” Phinney said.

Other landlords cannot secure bank financing for the work. With the real estate slump, commercial property values have fallen as much as 20%. “Many owners are over-leveraged,” Cushman said.

To assist them, the city organized a bond issue in which 25 building owners with $10.7 million in retrofit costs participated. Pledging their properties as collateral, the landlords agreed to pay down the bonds in biannual payments.

“We consider this a last-ditch resort for people who have no other resource,” said John Bridley, city redevelopment director. The bonds are considered liens against the property and precede other debts.

But 17 months into the program, the largest participant in the pool fell behind on payments. The owners had used $5.4 million in bond proceeds to fortify a $16.5-million building, Bridley said. Now, the city is foreclosing on the historic El Paseo shopping and office complex, which is more than 200 years old.

The Lobero Theatre has fared better. As a state and city historical landmark, the Spanish Colonial Revival style theater was designed in 1924 by architect George Washington Smith. The cost to upgrade the theater was $3 million--all of which was donated by individuals.

“A bank loan was not an option for us, and as a nonprofit we don’t have the excess revenue to pay off bond debt,” said Nancy Moore, executive director of the theater’s foundation.

While it is working on reinforcing the building, the foundation will modernize the theater’s lighting, sound and technical features. “The improvements bring the project to life for donors,” Moore said.

Because of these improvements, some pundits claim that Santa Barbara will have a more polished face once the debris is swept away. Already, pubs are replacing pawn shops and clothiers are moving into hardware stores.

Take Diedrich’s Auto Parts. He is leaving the 4,000-square-foot building and will concentrate on his stores in Santa Paula, Oxnard and Ventura. “It’s kind of a shame to see some of the old-time businesses go, but what are you going to do?” a resigned Diedrich asked.

His brother-in-law, contractor Dan Modisette, will retrofit the building. Come April 1, a local clothing manufacturer, Territory Ahead, will move its flagship store into the space. Modisette said he will increase the rent 100%.

“Even though it’s a financial burden to upgrade the buildings, it’s a time of renewal,” he said. “The new look should help the entire neighborhood.”