Santa Cruz Struggles To Rebuild Downtown, Mend Political Divisions

WITH half of its downtown commercial core destroyed by last year's Loma Prieta earthquake, Santa Cruz now faces an uphill battle for survival. ``The belly has been ripped out of the city,'' says Lois Rittenhouse, president of the Downtown Association for the 50,000-resident coastal community. Long a tourist mecca, the city now greets visitors with rubble-filled lots, including the site of the original county courthouse building, a historic landmark demolished during post-quake safety measures. Pacific Avenue Garden Mall, the once picturesque retail center, resembles a war zone.

The Oct. 17 devastation has forced Santa Cruz onto a political course unthinkable a year ago. After a decade of hostile relations between conservative business leaders and liberal politicians over the city's no-growth policies, these groups have joined in a public-private partnership to rebuild the ravaged downtown center.

The task facing the city is enormous. Today only a handful of mall merchants remain open. Hundreds of businesses have been forced to relocate. Nearly three dozen retail operations, including a restaurant and flower shop, now occupy tent-like pavilions within a few blocks of Pacific Avenue, the city's main commercial area.

A speedy recovery is as important for city officials as it is for local businessmen. For fiscal year 1989-90, the municipality's quake-related revenue loss will be about 10 percent of the $23 million general fund. Losses from parking meters and citations alone are close to $500,000. Finance department projections show the city continuing to lose about $1 million a year from sales tax and other sources during the early '90s.

The future of Santa Cruz depends on a new cooperation between government and business. ``The question is not how you rebuild the Pacific Avenue Mall but how you rebuild a community that has become expert in conflict,'' according to Richard Bradley, president of the International Downtown Association (IDA), who has met with business and civic leaders here several times since October.

In the years just prior to the quake, the downtown economy had become sluggish, losing customers to other shopping centers. Pacific Avenue Garden Mall was symbolic of the conflicting goals of business owners and elected politicians. To many local merchants, the casual, park-like ambience of the mall thwarted development of a thriving retail center. Many locals, however, felt the sunny open gathering spaces embodied the city's community values.

Mayor Marty Wormhoudt says the city's no-growth policies of the '80s were essential. ``We have protected the city from becoming a sprawling suburb - now we must get socially and environmentally responsible private development in a very short time.''

To this end, Mr. Wormhoudt has led the City Council in creating the public-private partnership. In January, the council appointed a 36-member board of directors for the Agency for Rebuilding Downtown Santa Cruz. Charged with planning a new downtown, the board includes elected officials, business and property owners, and community activists.

One priority for board members is the development of high-density housing. Within the mall area 160 rental units for single-resident occupants were destroyed by the quake. Developers and politicians expect a new downtown will have more housing units.

Members of the agency must come to timely consensus on this and a host of other issues, and file preliminary proposals on housing, parking, and building-height limits in April.

Although some local property owners consider the partnership unwieldy, others are optimistic. Ms. Rittenhouse says, ``When the buildings collapsed, so did the existing political machine. The agency means a new agenda based on a sharing of power - it's an ... opportunity to transform Pacific Avenue into the economic backbone of the county.''

Gary Patton, chairman of the County Board of Supervisors, emphasizes the need to create a favorable environment for business. ``We must create new possibilities for economic returns. Compromises don't have to throw away values,'' he says.

The public-private partnership concept, while new to Santa Cruz, is already succeeding in Baltimore, Indianapolis, Richmond, and other cities faced with the need to renew downtown areas.

The IDA's Mr. Bradley concludes: ``By developing a shared vision, [Santa Cruz] could become a model for other cities. What is unique is that Santa Cruz must accomplish in a year what others [cities] might take a decade to achieve.''