Success in a Changing Hermosa Beach Downtown

We are closing in on the 20th anniversary of the ribbon-cutting ceremony for the opening of Pier Plaza in downtown Hermosa Beach. What may have started as an “experiment”, in the words of one former city councilman, has had a profound impact on the city. In some ways it is like watching chaos theory playing out in real time. Businesses had great success in the early years. However, this resulted in more noise, crowds and general disturbances that elicited a strong reaction from the community. City leadership took several measures to increase the safety and enjoyment of the Plaza for everyone. Business revenues have been declining since and there remain ongoing concerns about safety. The opening of the Plaza, it would seem, triggered a wide range of actions and reactions, that have left the city, business owners and residents struggling to find an underlying order to it all.

Any effort to determine if opening the Plaza has improved the city is likely to elicit a range of responses. Objective measures are clearly mixed. The city budget continues to grow. Property values and commercial lease rates are at an all-time high, which would suggest that the demand for space here is as strong as ever. On the other hand, business turnover is relatively high as revenues continue to decline. This may be an artifact of classic business cycles playing out or it may be a sign that some businesses have been slow to adjust. Regardless, change is inevitable and businesses may need to adapt moving forward.

It has been almost seven years since the unveiling of the EPA award-winning Upper  Pier Avenue Beautification Project in early 2010. In spite of this successful project, sales tax revenues for the city have continued to decline at a time when they are rising in neighboring Manhattan Beach. Theories abound for the falloff in revenues, but simple explanations remain elusive. Yet, within this chaos, some businesses are thriving.

Sharkeez opened on the Plaza in June 1997. The ownership identified an opportunity to add a second concept there in late 2011 and a third one this year. I had a chance to speak to Greg Newman, president of the restaurants, about the changes in Hermosa over the past 20 years and the huge risks they have taken with Palmilla and Tower 12. He noted that there was “way more foot traffic 15 years ago” and since then a “lot of effort has been expended by the city and business owners to keep the area safe from trouble-makers but it has impacted business”.

As for today, “It takes money and wherewithal to succeed”. Before opening Palmilla, they did “extensive research”. The food had to be excellent and the décor stunning. They hired a “kick-ass chef” as well as a world-renowned designer to help with this and it has worked out brilliantly. Tower 12 evolved very differently and presented even more risk, being on the second floor. There was no doubt that the food had to be exceptional and so an “unbelievable investment had to be made” in the kitchen. The design pulled on Newman’s experiences growing up in Hermosa and is proving to be a hit.

Palmilla and Tower 12, which both were significant departures from what has worked on the Plaza in the past, have “substantially exceeded expectations” and have demonstrated that seeing past the chaos of the ever-changing business environment can yield unqualified success. Within the chaos of any business climate, it is still possible to find a genuine need and to fill it.


As seen in Easy Reader / Photo © Easy Reader
Photo: Mayor Pete Tucker cuts the ribbon during unveiling of the Upper Pier Beautification Project on October 6, 2010. The mayor is flanked by (left to right) City Manager Steve Burrell, Councilman Sam Edgerton, Planning Commissioner Dan Marinelli, Councilman Michael DiVirgilio, Planning Commissioner Dean Nota, Councilman Kit Bobko, Planning Commissioners Kim MacMullen, Pete Hoffman, Jerry Gross Janice Brittain and Councilman Jeff Duclos.

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