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Interview with Ryan Chase

This young executive talks about revitalizing Downtown Santa Ana, how corporate America both catered to and harmed Hispanics, and why his family has nothing in common with Hitler.

RALPH PALUMBO

Ryan Chase grew up in Irvine, went to USC and is in the development game. So what is he doing hanging out with graffiti and tattoo artists, unknown bands and chefs who can’t raise the capital to open a restaurant? “I’m not cool, but I surround myself with a lot of cool people,” jokes Chase.

In fact, he’s made it his job and passion to hang out with the cool, and bring them to Downtown Santa Ana (DTSA – it’s just cooler to say it that way) in an attempt to revitalize the area, and the city. Chase’s family is the largest landowner in Santa Ana, with ties to the city that date back to 1919. But, says Chase, their investments were stumbling financially, as was the city at large, following the sluggish economy and a fundamental shift in Hispanic shopping patterns. That’s about the time Chase came on board with a new and radical vision for the family’s Santa Ana Fiesta Marketplace: He proposed spending millions to create a hip, vibrant and eclectic project called East End, which bisects historic 4th Street between 3rd and 5th, and French and Bush.

Now into its third year and adding tenants constantly, East End has something for everyone, says Chase. And, despite some strong pushback from a small but vocal contingent, and some initial skepticism from his father and 95-year-old grandfather, he’s worked hard to make sure that’s true. In fact, East End has a concert venue, independent two-screen movie theater, one of Orange County’s best-reviewed restaurants (Playground) and a dozen other eateries on the way, unique retail (everything from tattoo and head shops to boutiques), and even a state-of-the-art 30-room music rehearsal facility for those soon-to-be rock stars.

It all stems from Chase’s distinctly un-Irvine love for urban areas and undying belief that Santa Ana is the truest melting pot in Orange County.

“I believe that ultimately, DTSA will be the epicenter of Orange County,” says Chase with his trademark rapid-fire passion. “It has the biggest stock of historic buildings in OC. It has a real downtown culture, architecture, a grid system, walkable streets, a civic center, a train station. It’s also centrally located right in the heart of Orange County. You’re surrounded by major freeways and huge densities. There are a lot of cool places in Orange County but nothing has the critical mass of Santa Ana.”

Looks good on paper. So we sat down with Chase to hear about the past, present and future of Santa Ana.

You grew up in Irvine, probably OC’s polar opposite to DTSA.
Yes. Irvine’s a great city to raise a family – great schools, great parks – but it’s sort of a bubble. I love it, but as I got older I started to want more. I’d always been a fan of big cities and urban areas and when I went to USC, from 2001 to 2005, downtown LA was really starting to happen. And that was perfect because I was in the realty program, so my classes were tied to economic development, revitalization and urban development.

When you graduated, you started managing the family’s downtown property, Fiesta Marketplace?
Yes. It was one of the first mixed-use properties in the country geared toward the Hispanic demographic, and since I was in seventh grade, I had worked on our Santa Ana property, emptying trash cans, painting, whatever. So I knew the area pretty well.

But things were changing. In ’05, the economy was cranking like no other, however the downtown was starting to see a decline. We saw declines in rents, sales numbers go down, more vacancies. It was perplexing. But the Artists Village was just a few blocks away and seemed to be doing well. So I looked to see what they were doing right, and also went all over the country to see what other marketplaces and urban areas were doing to survive.

What did you learn?
I discovered that downtowns were either thriving or they were dying. There was no in-between. And further, art was really driving them. Food, entertainment, film, visual art, digital art, music, apparel. At the same time, we noticed a fundamental shift in Hispanic shopping patterns. From the early eighties the Hispanic population was coming over in huge numbers for better jobs, better life. So for 20 or more years, DTSA thrived. Rents were pushing three to four dollars a foot, which at the time was probably higher than Irvine. It was ultra-successful.

What happened?
Corporate America finally figured it out.

What do you mean?
For decades, corporate America didn’t market to Hispanics. But corporate America figured out they were wrong. And the reason is the following: Hispanics are the largest demographic in the country, the youngest demographic in the country, the most loyal demographic in the country, the biggest families in the country. I mean, there’s no reason you wouldn’t want that demographic.

But how did corporate America figuring that out ruin downtown?
The fundamental thing was credit cards. If you came across the border and you were undocumented 15 years ago, you could not get a credit card. Today you can. So before, a lot of the traditional Hispanic businesses were surviving on offering credit, not off [the mark-up of] the goods themselves. Now, they’re gone.

What else?
Corporate America also started targeting Hispanic customers and drawing them to places like Walmart, Kmart, and traditional malls, which hadn’t marketed to them before. So traditional Hispanic shopping areas like DTSA, Huntington Park, Broadway in Downtown LA, San Fernando in the San Fernando Valley, were on the decline. During this time, our Fiesta Marketplace NOI [net operating income] got almost cut in half in two to three years. This was due to the fundamental shift in shopping patterns. Then the faltering economy put the hammer on it. So we had a decision to make as a landlord: We could do nothing. We could sell the buildings off chunk by chunk and make a lot of money. Or we could reinvent it.

You chose the last, and hardest, option.
Yes. And to be honest, I didn’t realize how hard it would be and how much work it would be to get to where we’re at. A vocal minority were not very happy with the direction we were taking. They wanted to keep it the way it was, and they were very concerned with gentrification. It got pretty ugly to the point where my dad’s nickname was El Diablo, and we got threatening voice mails.

It also went public.
About three years ago, we went in front of the City Council and one of the council members compared my family to Hitler, [implying] we were doing the same thing to the Mexican demographic [as Hitler did to the Jews]. Obviously we were blown away by the accusation. My dad’s parents were Holocaust survivors. I think my family does more for the Mexican and Hispanic community in DTSA than almost anybody. And my family has been in DTSA for nearly 100 years, much longer than most who were claiming we were the new guys in town.

How did your family handle that?
After that, my family wanted us out. My grandparents, my sister, my wife, my wife’s family, my friends… They all said, “What the hell are you doing? You could retire tomorrow and go sit on the beach. So why are you putting yourself and your family through this?” It made me think a lot. I questioned if it was really worth this heartache, and stress, getting death threats, a swastika put on one of our businesses. But in the end, it motivated me more. My family owns property all over the country so this was not something we had to do. We did it out of love of the city and a passion for the community. Of course we think in the long run it will be very financially advantageous for us, but we put a lot of resources, time, and money in that’s going to take a lot of time to make sense financially.

What do you say to the more reasonable opposition?
I do see their side of the argument. That yes, in any redevelopment project there will be some people who don’t win. But what’s the answer? Leave it the same and let it die so everyone loses? I’m doing what I think is best for the city in the longterm. Downtowns are the heartbeats of cities. If the downtown is successful and healthy, generally so is the city. For a long time Santa Ana was like the brain drain: if you’re successful you leave. But guess what, people are now staying. All of a sudden DTSA is starting to get a cool reputation and it’s starting to bleed out into other parts of the city.

So let’s talk about the specifics of East End and what people can find there. What was your goal?
I noticed successful downtowns were filled with cool, cutting edge, networked people, and they thrived off one another. These places had independent film theaters, concert venues, record stores, barbershops, bars, restaurants, cool independent boutique retailers, and a real synergy. So I tried to find those kinds of tenants.

Your first project was the Yost Theater, a venue for every kind of music concert. Why?
Music is something that crosses all divides. I don’t care if you’re black, white, yellow, or green, you appreciate music. A music venue will bring a wide demographic of people from a wide range. People probably won’t drive from San Diego to go to a restaurant, but people will drive to see a musician they like. So we thought if we have a wide range of music – ska one night, punk another, then rock, pop, etc. – we could bring in a wide range of people. If we have 25 events a month and each one has 1,000 people, that’s 25,000 people a month discovering downtown.

Next was, of all things, a barber. After Yost Theater opened I got a call from George Mendoza, who owned American Barber Shop in Corona, and he liked what we were doing. He moved in about three years ago and started with two barbers. He has 15 barbers today. You go there on a Friday afternoon and you wait an hour. It’s a very welcoming, very bilingual place. He has guys coming up in Bentleys and guys who take the bus. And that goes back to what a downtown should be. It should be diverse, it should be welcoming, it should be a cross-section of Orange County and America.

East End is very focused on dining as well. And it started with Playground?
Yes. Jason Quinn, chef from The Lime Truck and winner of Food Network’s “The Great Food Truck Race,” wanted to open a burger and beer place. And I thought that was cool, I mean who doesn’t like burgers and beer. Then a month before they were to open, they came to me and said, “We’re not doing burgers and beer anymore. We’re doing a cutting edge, small shared plates, locally sourced, change-the-menu daily, chef-driven place.” I said, “Oh sh@#!” It really scared me. Because they were our first restaurant and if they didn’t work, we had a real problem.

But you let them go ahead.
Yes. And it worked so well that a year and a half later they opened up Playground 2.0, and they’re now opening a bakery next door and a lounge bar upstairs, plus four new concepts in the Fourth Street Market. He’s drawing people from everywhere, from LA to Riverside.

You’ve embraced street art as well.
We have brought in graffiti artists and muralists to help build upon the art scene and urban experience. These artists are from Santa Ana and OC/LA, as well as Japan and Texas. Where else in OC do you see this? Again, we want to be a destination and offer something unique and different that you would find in major cities throughout the world.

Talk about the Fourth Street Market coming this summer and how you came up with it.
This to me is the most compelling project to date. We looked at [markets] all over the country: Pike Place Market in Seattle, Grand Central Market in Downtown LA, Chelsea Market in New York City, West Side Market in Cleveland. The conclusion was we wanted it to be all food. Food was always the driving force. But part of the challenge with cutting-edge food businesses is that these chefs are very cool and very hip, but they don’t know how to run a business and they have no capital.

So we created an incubator type concept to help defer a lot of the start-up costs and overhead these chefs face when they want to open a restaurant.

How?
We built turn-key, Health Department-certified spaces where the refrigeration, the prep tables, the sinks, almost everything is provided. Chefs pay a flat rent per month that includes PR, marketing, bathroom supplies, the maintenance of the grease interceptor... The idea is to make it as simple and clean as possible so these chefs have a chance to open their own place with very little start-up money. We have 10 of those and a waiting list a mile long.

I understand that you also did a lot of creative things with rents and incentives in other projects.
That goes back to what it takes to revitalize an area like this. You cannot just put a few new tenants in. Some of the rents we were giving were percentage-based going to fair market after a few years, or helping with tenant improvements, or marketing. We had to be creative because we had to make sure these entrepreneurs succeeded. We want that cool factor, we want the cutting-edge entrepreneurs, and most of the time, they don’t have credit. So we had to do some creative stuff that we had never done.

Was it hard to convince your family?
Yes. We have corporate leases across the country. Chase banks, Home Depots, McDonald’s, stuff like that. So when we started doing this my grandfather didn’t get it at all. He thought we were crazy when he saw our investment of time and money in the area. When we went to the Yost Theater for the grand opening, he asked “How much did you pay all these people to be here?” When I told him Playround 2.0 has a 40-course meal for $250, he thought I was joking. He said “no one will pay that much.” I said, “They actually have a waiting list.” So he’s starting to get it.

LEARN MORE
For more info on East End
and DTSA, you can visit the
website.
:: eastendsantaana.com


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