Last October, Downtown Inc. Executive Director Vicky Baxter proclaimed that 2012 would be “the year for retail” in downtown Santa Ana.

“We will do whatever it takes to help retail this year, because that was our plan,” Baxter said during a presentation to the Santa Ana City Council.

Baxter made that statement as Downtown Inc., a business booster organization funded by a special tax on downtown properties, was facing criticism for what many in the area considered too much emphasis on restaurants and bars and not enough on retail merchants.

This sense is especially strong among the Latino merchants along Fourth Street who believe that their long-standing family businesses are being neglected — even intentionally squeezed out — so the downtown’s young and hip nightlife scene can continue to grow.

One of the catalysts to this growing discontent was a seminar held by the Orange County Small Business Development Center aimed at helping the retail merchants. Tara Jimenez, owner of a store on Broadway called Drapes Vintage, was brought in to show the Latino merchants how they could make their stores more appealing to the downtown’s changing demographic.

Earlier this month, Drapes Vintage held its going-out-of-business sale, and Jimenez now is voicing the same complaints against Downtown Inc. as the merchants she was asked to help. “When people think of downtown Santa Ana, they’re coming to eat and to drink and to party,” she said.

When Baxter had presented Downtown Inc.’s case to council members, she said the organization was following a common plan for revitalizing downtowns. The plan, she had said, was to spend the first two years bringing the restaurant corridors to life, then to focus on retail shops.

But Jimenez says that the organization has done nothing to help her business, and she criticized what she described as its impersonal approach.

“I’m leaving right now, and I haven’t heard one person [from Downtown Inc.] come here and act like it matters,” Jimenez said recently. “Would anyone bring their business here if they feel isolated?”

Jimenez insists that the downtown is still at least two years away from being a retail destination and won’t be until a massive marketing campaign brands downtown Santa Ana as such.

In April, the owners of Calacas, a collectables store on Fourth Street that was seen as attracting a wider demographic, closed shop in April but kept a restaurant they had established at the location.

Unlike Jimenez, however, Calacas’ owners don’t blame Downtown Inc. for their store’s closure. They say retail is suffering everywhere in part because of the economy and competition with online outlets. But they say it’s also because Americans’ have transformed their spending habits and simply buy less stuff.

“Everyone wants a small business, and I always tell everyone I wouldn’t wish this on my worst enemy,” said Jackie Cordova, who along with her husband Rudy Cordova owned the retail store and own the cafe. “I don’t know if it’s a viable way of life anymore.”

Baxter did not return phone calls seeking comment, but in emailed comments she challenged any notion that the growth in downtown businesses has stalled.

“In recent weeks, I have had more interest in locating businesses downtown than in the last 2½ years since Downtown Inc was established,” Baxter wrote. “In fact, I am getting calls from my peers with California Downtown Association asking me what are we doing right in downtown Santa Ana that is getting so much attention from the business community?”

One example of new retail life is a shoe store called Blends that opened on Fourth Street earlier this month. Josue Urias, who works at Blends, said the store’s owners wanted to be part of the new downtown momentum. “We just want to be part of that wave,” he said.

A new streetwear shop called Crooks & Castles is also preparing to open next to Blends, Urias said.

Yet, as Baxter acknowledged in her email, restaurants still represent the majority of new businesses coming to  downtown. Four more are scheduled to open soon.

Meanwhile, a group of property owners is preparing to resume a fight to end the downtown property tax.

In the first move to restart the campaign, the group last month gave the “bruised and battered taxpayer” award to to the owners of Mega Furniture Superstore and the building that houses it, Arturo Arellanes and Claudia Arellanes. Along with the special downtown tax and penalties, the debt on their property tax bill ballooned to nearly $50,000, according to Claudia Arellanes.

Although Arellanes was beaming over the outpouring of sympathy, she was also frank in her reaction to the award. “I hope I never get that award again,” she said.

Last year, the City Council adopted Downtown Inc.’s proposal to shrink the boundaries of the tax district, taking out the furniture store and many other properties whose owners have been strongly opposed to the tax. The move was seen as an olive branch from Downtown Inc. leaders, but most of the anti-tax property owners have not been satisfied, as they demand no less than the end of the tax altogether.

Councilwoman Claudia Alvarez, who has been the anti-tax group’s champion on council, presented the award to the storeowners. Alvarez said her family owned a downtown business, which helped put her and her sisters through college. She said that it was wrong for others in the area to try to change the way merchants have done business for many years.

“For anyone to try to take away that from our families just because they have a different business plan is unacceptable,” Alvarez told the group.

The battle over the tax became increasingly heated last year as Alvarez pushed unsuccessfully to end the tax. During one particularly contentious council meeting, Alvarez made remarks comparing Jewish downtown property owner Irving Chase to Adolf Hitler, leading to accusations of antisemitism from Jewish leaders across the country.

Some of the property owners said they planned to begin attending council meetings to protest the tax again this month. Councilman Sal Tinajero said last November that the city should be allowed to consider dismantling the district without threat of litigation at that time. The law governing the district requires council members to vote annually on whether to continue the district.

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