Central Santa Ana residents remain a largely untapped economic resource and could bring an additional $137 million in spending to the city, according to a new study by urban development researcher Jeb Brugmann.
Brugmann found that central Santa Ana residents make only 32 percent of their so-called “wellness” purchases — groceries, meals, health and personal care products — in the downtown core, despite living so close and lacking cars to drive to more distant retailers.
That figure could be as high as 46 percent, according to Brugmann, if the city would do a better job of marketing the downtown as a Latino cultural destination.
But it would require a focused effort involving downtown business groups and city leaders to hold and promote events, and improve store practices to make Latino customers feel more appreciated, according to Brugmann. He says the downtown has “struggled to make a clear statement to the world.”
This comes as Latinos continue to be the nation’s fastest growing demographic group and businesses in the rest of the country race to tap into that market, Brugmann said. He points to Miami, which has a large Cuban population, as a city that has had no problem owning its Latino identity.
But Santa Ana seems to have “a bit of a complex” about its Latino identity because of an unfounded fear of alienating non-Latinos from the city, Brugmann said.
“People travel all over Latin America and Spain for a Latin experience, OK?” he said. “For Santa Ana to move forward, you need to own Latino.”
Brugmann and his firm, The Next Practice, were commissioned by the California Endowment to study the viability of a downtown economic development strategy focused on wellness goods.
“The brand message, the marketing message that too often gets out is the downtown doesn’t know what it’s there for,” said Brugmann, via a webcam, to a gathering of merchants and residents last Friday at the First Presbyterian Church on Main Street.
Brugmann was referring to the gentrification battle that has for years engulfed the downtown. A group of property owners and new businesses argue that Latino families abandoned the shopping district in favor of big-box retailers, and that downtown revitalization would best be focused on attracting a younger, more diverse generation of customers.
Yet, longtime merchants argue that the drop in business was due to the Great Recession, not abandonment by the Latino community, and say they are being unfairly pushed out to make room for upscale restaurants and bars.
In some ways, Brugmann agrees with both sides in this debate. He also argues they can co-exist.
Brugmann says its true that big-box retailers are poaching central Santa Ana residents. There’s the obvious challenge of the sophisticated marketing campaigns and cheap prices. But the retail giants also value their customers in ways that downtown merchants often don’t – like always accepting and refunding returned items, the researcher pointed out.
But Brugmann argues downtown businesses can woo enough Latino customers back to the downtown to dramatically increase sales, as long as all the players are on board with a “complete downtown revival strategy” that goes beyond a one-off program like façade improvements.
Raul Yanez, president of the Santa Ana Business Council and owner of Mi Moda suits on Broadway, said his association will meet and make plans to implement Brugmann’s recommendations.
“Santa Ana has already been a Latino cultural center. How can we get rid of what we have already?” Yanez said. “We don’t just want the hip-hop people with disposable money… we want everybody to come downtown.”
Ryan Smolar, a consultant for the business booster organization Downtown Inc., told the attendees that he agreed with Brugmann’s report and said that unless the “next Legoland” is built in downtown Santa Ana, most of the purchasing power remains in the hands of central city residents.
Smolar told a reporter after the briefing that newer business development downtown is also starting to bridge the gap. He pointed to the new restaurant Boldo Bol, an earth-to-table eatery on Fourth Street, as an example.
“It was literally like night and day… and I feel like now it’s starting to fill in some of the middle,” Smolar said.
Brugmann studied two other scenarios for increasing wellness business sales in the downtown – a “post-Latino” and tourism scenario. Both relied on assumptions of new clientele that were unrealistic compared to tapping into the central Santa Ana pool of residents, Brugmann concluded.
Right now, there is a big focus on the part of many to attract out-of-town twenty-somethings to the booming downtown nightlife. Brugmann argues this customer pool will be difficult to attract in huge numbers because they have adequate transportation and many other options.
However, by curating a “unique sense of place,” the downtown could attract both its existing Latino customers to shop more frequently in the area, and also the out-of-town “yuppies” who want to visit an exotic and fun place without having to travel to Central America, Brugmann told merchants.
He also questioned whether city officials are doing all they can to promote non-traditional vendors, like food trucks, which have been undergoing a renaissance across the country. Santa Ana, with its many food trucks and customers, is primed to take advantage of the new trend, he said.