Businesses unharmed by Palisades fire flames are getting burned by ongoing economic troubles

The Palisades Fire didn’t make it to Santa Monica but while the city was spared any physical damage, the repercussions from the blaze have become an ongoing disaster for local businesses.

Several restaurants have already announced closures prompted by the crisis and in interviews with the Daily Press, dozens of businesses said sales figures had cratered since the fires broke out in early January. For many, the toll on their stores was comparable to the early days of the Covid pandemic with some saying they were only able to stay afloat due to discounts in rent from their landlords or eating into savings.

While most businesses said they knew they’d lose some revenue for the days they were closed during the worst of the blaze, many said they were unprepared for the precipitous drop in customers that has spread far beyond the fire lines and lasted much longer than expected.

Santa Monica's beach businesses were among the hardest hit following the fire, with some reporting revenue drops of up to 90% as environmental concerns keep visitors away.

Richard Chacker, owner of Perry's on the Beach, said his business has been operating at just 20% of normal levels since the fire, with some days dropping as low as 10% of typical revenue based almost entirely on sales to nearby residents as visitor dollars have simply disappeared.

"If we did not have the locals, we would not be in business right now. We are so marginalized now that it is scary, scary, scary. Never, ever before has it been like this, this bad," Chacker said.

In some ways, the impact on Perry’s was more severe than many other businesses as the company operates locations north of the Pier that were inaccessible due to road closures and the need of emergency services to use the parking lots.

However, much of Chacker’s experience is indicative of larger trends: air quality concerns have torpedoed outdoor dining (the City of Santa Monica is responding with waived fees), mass cancelations of organized trips has crippled tourism businesses (Perry's alone lost nearly $90,000 in cancelled events for February and the relocation of the Genesis golf tournament from nearby Riviera Country Club has impacted local hotels) and pre-existing concerns over the city’s economy have exploded into a full-blown crisis for some retailers.

“We want people to know we're open for business, and we need your business," Chacker said. "Santa Monica didn't get burned out. We're here to help our neighbors, and that's what we're doing in every way we possibly can."

Montana Ave. has also seen losses as a direct result of the fires. As the economic area closest to the Palisades, much of its customer base has simply disappeared post-fire.

David Kianmahd with the Montana Ave Merchants Association said businesses along the street have absolutely felt the loss of Palisadian shoppers. While some remaining Palisades residents are now shopping on Montana due to the loss of their local businesses, there are far less of them compared to the number of customers who have been displaced from their homes. Of those who are still shopping, Kianmahd said they have other choices on the Westside that are just more attractive than Santa Monica.

“But a lot of those people actually just moved away, moved out of the Westside so it feels dire,” he said.

Kianmahd operates his Montana business, Divine Vintage, alongside Jennifer Rush and both also work at Blue Plate Taco on Ocean. He said business owners are working to create a welcoming space for anyone, fire evacuee or local, but ongoing issues around homelessness, safety and the cost of doing business make it difficult for Santa Monica to compete with other nearby retail zones.

“Myself and the owner Jenny of Divine Vintage and wine bar on Montana, we work so hard to turn that, like 800 square feet into, like, a little magical place where people can kind of escape and come and, you know, find cool wines and find cool vintage pieces,” he said. “And we're spending a ton of money on redoing our back patio area to give people a safe outdoor space where they can really enjoy nice weather without being in a parklet where there's a risk. I've had transients do some crazy things, so it's a safer space back there. So it's such a huge effort and such a huge lift on the business owners to keep business going. And we do it because we love people. We do it because we'd love to create a special time for people, but when the climate is difficult to do business in, it just becomes more and more of a ride, and it becomes harder to make those special moments for people.”

Santa Monica’s Economic Development Director Jennifer Taylor said the City has seen the problems and is working to support local businesses.

The city is waiving February outdoor dining license fees, a move that will cost approximately $80,000 in municipal revenue.

“We are waiving all outdoor dining monthly license fees for the month of February, just recognizing that so many of our restaurants, they're not doing as well as they were hoping to,” she said. “They really need the outdoor space. Customers want to use it, especially now that the air has gotten so much better, and the air quality is generally safe, but recognizing to that many of them weren't able to use it.”

In announcing the waiver, Mayor Lana Negrete said it’s part of a larger effort.

“The city is committed to supporting our local businesses, and as a small business owner, I understand first hand how a disaster can reverberate across a business community,” she said. “Waiving outdoor dining fees this month can provide much needed relief as we recover, and I encourage everyone to support our local restaurants, shops, hotels and businesses and enjoy everything our beautiful city has to offer.”

There are also resources available at the Chamber of Commerce on Main Street who are hosting the Small Business Administration.

“So that's a tremendous resource for our businesses, so that they can go in and talk one on one with a business advisor about financial support,” said Taylor. It's mainly loans for the most part, but there are resources available, particularly also for our businesses, even though they weren't directly impacted by the fires in ways that the Palisades or Altadena businesses were but they're definitely feeling impacts because of the fire.”

Taylor said tourism officials are working to counter international perceptions that Santa Monica itself burned, as some travelers have canceled spring break reservations and there are some silver linings, including displaced businesses from fire-affected areas relocating to Santa Monica. Sweet Laurel bakery, previously on Sunset Boulevard, has already opened a new location on Pico Boulevard and several schools are relocating to Santa Monica.

“We're fielding other inquiries from businesses and there’s a lot of word of mouth to our existing businesses who know of folks who might be looking for places,” she said. “So anyone who needs help, they can contact our economic development team so we can try and see how we can help support them here in our community.”

More information for businesses is available online at https://www.santamonica.gov/business-resources-for-palisades-fire.