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USC U.V. $1 Billion Makeover Leaves Shop Owners' Future Uncertain

Chhaya Nene, Brianna Sacks, Kelli Shiroma, Byron Tseng |
December 10, 2012 | 12:53 p.m. PST

Staff Reporters

The small businesses at the University Village will be greatly affected by the proposed USC renovations. (Brianna Sacks / Neon Tommy)
The small businesses at the University Village will be greatly affected by the proposed USC renovations. (Brianna Sacks / Neon Tommy)

Even at 9 a.m., silence shrouds the University Village area, a place that used to be a blur of customer activity. With the exception of a few businesses opening their shops for the day, not a sound is heard down the worn, stone-paved streets.

Around this time every morning, as he has for the last 24 years, shop owner Gery Zokai unlocks the door to the Magic Machine University Graphics. The Magic Machine has offered copy and printing services to customers for 45 years. Zokai emigrated from Persia to the U.S. in 1987 and started working at the Magic Machine shortly after. 

Zokai says he has had some of the same customers for many years. Business usually slows down after the start of fall, and Zokai says that only five people come into the store on some days. 

Besides declining business, Zokai sees another threat looming across the street — the University of Southern California. He knows all the managers of the University Village shops and they share the same worry: Will they be among the shops that survive USC’s $1 billion remake of University Village or will they be forced to close? Zokai said he and the workers at the shops fear they won’t be able to pay the higher rents in the new center. This will be a drastic change for the local businesses, according to Zokai, who says University Village made up its “own close community” and “everybody [there] is friends.” 

“If you have to go to another place [because rent here is too expensive], you lose money because it’s hard to establish business,” Zokai said. “If I go to a new location and no one knows me, I won’t make it.”

About 25 shops currently comprise what is left of University Village, not including the food court. Empty, boarded-up storefronts and “caution” tape line the inner pathways of the Village. Chains like Burger King, Radio Shack and Starbucks occupy various corners, while small businesses like Zokai’s Magic Machine still display “Open” signs alongside empty, abandoned windows. And though the businesses range in size and nature, University Village shop owners remain united on one central issue — surviving the tough economy and wanting to stay in their current locations without paying higher rent, which will probably result from the USC renovations. 

Under the “Master Plan” that the Planning and Land Use Management committee approved during a meeting at Los Angeles City Hall on Oct. 10, USC will drastically change the look and feel of University Village to create a more upscale, commercial arena. The proposed makeover of the neighborhood shopping center will go before the City Council on Tuesday. The plan will also create more student housing will be created—and at least 3,000 new beds—and a revamped retail space called “The Village at USC.” 

The modernization of University Village is an extreme example of an ongoing gentrification process that has affected neighborhoods surrounding USC for the past few decades. USC’s transition from a commuter to a residential university demands more student housing and services, which ultimately raises rent costs for residences and businesses and has displaced a number of residents over the past 10-15 years. The University Village renovation project exemplifies the tension between a growing university and its surrounding low-income residential neighborhoods, and how an expanding student body inevitably alters the run-down areas that were established before USC came to be. 

And if University Village is torn down and mimics a more glamorous area like the Grove, the Village’s small businesses might be forced to relocate or close permanently. Zokai said that none of the owners want to lose their businesses as a result of being forced out of their current location. 

“Everyone [in University Village] has been here for a long time,” he said. “The hair salon [Best Scissors Cuts] has been here for 36 years … most of the food court [businesses] for 20 years.” 

Grace Morales from the Village Pharmacy store says the pharmacy has been in University Village since the 1970s. Morales, who has worked at the pharmacy for 19 years, says many people think that the University Village stores are already undergoing renovation, causing a drop in business. 

“Everything is going down,” she said. “More than 50 percent [has been] lost in business, but we have loyal customers that come and check in and make sure we are still doing OK and are still here.” 

SEE ALSO: Neighborhood Advocates Win $20 Million Fund To Soften USC Expansion's Impact

Dr. Kravitz Optometry, a business that used to be located in University Village but moved close to the intersection of Jefferson Boulevard and S. Figueroa Street, fled before being potentially ousted by the USC renovation plan. The store relocated just three months ago, according to office manager Daisy Castro, who has worked at Dr. Kravitz’s office for the past 27 years.

“We were at University Village for 30 years,” she said, “but when they [USC] told us they were going to rebuild the Village, we were afraid to lose a place near the school. We wanted to make it easy for the students [by being close to campus] — you would prefer to go to a closer doctor because you don’t have transportation, or if you want to come during your break or lunch time.”

Individuals from both USC and the surrounding community go to Dr. Kravitz Optometry, Castro says, and business was always good for the store when it was located at University Village. While Castro says it’s “still premature” to give a final answer, she believes the store’s business remained steady since it moved. Castro also said that, although Dr. Kravitz did not want to disclose the store’s exact rent, its current rent is definitely higher than what it was when the store was at University Village. 

“We’re more exposed to the public here [since we’re near the street],” she said. “But rent [at University Village] was three times less than it is now … it’s more expensive here.”

In contrast, Zokai said that Magic Machine’s rent at University Village is not very expensive compared to some of the other businesses’ rents, and every store pays a different amount.

“Rent goes up about 6 to 7 percent every year since USC bought University Village about 20 years ago, but that is expected,” he said. “Our rent is in the $2,500-$3,000 range a year.”

When it comes to relocating local businesses, community members have many questions and opinions regarding USC’s decision to revamp the University Village region. 

“Are they going to relocate all of the vendors who have stores here?” said Dave Berry, who frequently visits the Starbucks at University Village. “How much of the area are they taking out? Are they taking out all of the stores or is it just this small quadrant up here [by Starbucks]?”

“I think they [USC] should have just remodeled without making the dramatic change that they’re planning to do,” Castro said. “It’s [the University Village] a historical thing that’s been there for so many years.”

“Some of the businesses they [USC] might bring [into University Village] might be big chains like Chase Bank or Whole Foods,” said Connie Gomez, manager of Village Costumes, a seasonal store in University Village. “A lot of people in the community are not used to going to those types of stores. That’ll affect Market Superior, the only affordable market around this community.” 

Chain businesses may be better off in terms of relocation than the individually run small businesses in University Village. Managers of food chains like Denny's, Burger King, 21 Choices Frozen Yogurt and Starbucks do not know much about the future of their stores and are waiting for more information from corporate offices. 

Denny’s manager Frank Arias recently started working in University Village and has received no word about his branch closing or relocating, or about its financial history. Nevertheless, he says that business has been good — Denny’s is usually crowded during the week lunch hours and during the weekends. 

Martiza Garcia has been the manager at the University Village Burger King for two years. Like Arias, she says that business has been good, but doesn’t know about the restaurant’s plans in terms of relocation.

“We are not planning to relocate, [but if renovations do go forward], we will just get transferred to another store,” she said.  

Manager Tracy Lee has worked at 21 Choices Frozen Yogurt ever since it opened in University Village three years ago. She says that most of 21 Choices’ clientele comprises college students, who usually come in during the store’s evening hours for customized fro-yo creations.

“I do think the renovations are a good thing because this place is run down and, as a whole, we don’t see lots of people around,” she says. “We want to stick around USC, but we don’t know where we’ll be once the renovations happen … and we don’t even know when these renovations would be done, because they’ll probably take a while.”

Starbucks’ manager Isaiah Gutierrez has no qualms about the proposed renovations because it is standard for Starbucks stores to get remodeled every 5-10 years. Starbucks has been in University Village for 13-and-a-half years and Gutierrez says the store will be there for a while longer. 

“Our lease doesn’t expire until 2019, so we’ll still be here and we’ll have another store,” he said. “We’re not going to do any renovations right now; we’re just going to wait until it’s time to.” 

Smaller businesses’ lease agreements are not as solidified, and many will be forced to relocate if the renovations cause a great increase in rent. Juan Urteaga, owner of L.A. Bikes, supports change in the University Village area, but feels that the changes in the USC renovations should include the small businesses like his that have been there for years. If the proposed renovations do take place, Urteaga says he will be forced to shut down his 13-year-old business, unless USC can refer to him a new location with subsidized rent. 

“We are not against development,” he said. “We understand that they [USC] have big plans to bring in 12 to 14 sit-down restaurants and a huge market … but unfortunately, we [small businesses] are not a part of it [their plan]. They [USC] only appease the big franchises like Subway, Yoshinoya, Wendy's and the residents who will be displaced; they don’t talk to businesses like mine.”

USC students have mixed feelings regarding the renovations. Although some students welcome the change, others don’t want to see the businesses leave.

“I’m bummed that they’re [USC] buying everybody out,” said Zach Cianci, a USC student who goes to University Village to get his bike fixed at L.A. Bicycles. “It’s not fun to lose business, but it’s part of the culture we live in.”

“I don’t think it [University Village] looks good [currently],” said Niru Gadagottu, a USC student. “I never really enjoyed being there. I think it’s useful to have all the stores, but it’s not a nice place or anything. It’ll look aesthetically nicer after [the renovations].”

Although some individuals were ambivalent about the status of University Village—and some did not even know about the proposed renovations—many were vocal about the increase in housing close to the University.

“It’s good because students will have more apartments and that will maybe reduce traffic [in the area],” Gomez said. “But it’s [the renovations] bad because it’s going to effect the community as far as jobs go and displace a lot of people.” 

“My daughter’s doing grad work here and I would love to see her be able to have a nice place off campus,” said Berry. “Most places here [surrounding USC] wouldn’t be acceptable down in Compton [because they are so run down]. We have students paying $65,000 a year to live in a rat’s nest.”

While it will lead to drastic changes, the USC “Master Plan” is not something that has taken community members by surprise. A report released on April 30 by the Human Impact Partners and Esperanza Community Housing Corporation suggests that the gradual upscale commercialization around the USC campus has been an ongoing trend over the last few decades. Historically, residents of this area are displaced faster and more often than other L.A. areas, due to a greater influx of students wanting to live closer to campus, the Human Impact report states. The report also says that the South Los Angeles community surrounding the USC campus has undergone community conversion and renovation at a more rapid pace than other Los Angeles communities for two main reasons: 1) USC's conversion to a residential rather than commuter institution without providing for the housing needs of students attracted to the area, and 2) city revitalization efforts that have spurred development south of Downtown.  

The report also points out that the population of Blacks and Hispanics around USC has significantly decreased from 2000-2010, but grew in other parts of Los Angeles, highlighting the steady displacement of long-time residents around the USC campus. The Black population around USC decreased 20.3 percent, and the Hispanic population 15 percent. On the other hand, the area saw 24.7 percent increase in the population ages 20-24. Regardless, local businesses and residents still fear that construction will ultimately gentrify the area, making it completely unaffordable for lower-income residents. 

USC should include fixed, affordable housing options to avoid an exaggerated result of the past and current trends of gentrification and displacement seen over the past 10-15 years, according to the report. Among various other suggestions, the report states, “USC should “[consider] a rental assistance program for lower-income” and USC should “[use its] financial strength to help community organizations develop affordable housing in the University Park neighborhood.” There is emphasis on having the University make spaces available for local residents to open small businesses alongside the new commercial developments. 

With the additional housing options provided through this renovation, other off-campus apartments not owned by USC—including University Gateway, the newly opened Icon Plaza and soon-to-open Lorenzo Apartments—will be affected by the competition. Supervisors from these companies declined to comment on the USC expansion, saying their corporations did not permit them to do interviews with any form of the press regarding this subject. 

College students and local residents are not sure what changes will result from the approved USC plans for renovations, but for certain individuals, these modifications will be life changing. For now, though, the small businesses at University Village continue to operate day to day — at 6:30 p.m., Zokai closes the Magic Machine and he and his other employees head home. Zokai is still awaiting updates from USC about the upcoming renovations, leaving him feeling helpless about his business’s future.

“I have no idea what I will do [with the store]; I feel the decision is out of my hands, and all I can do is wait,” he said. 

Check out our photo gallery and video of the University Village businesses.

Reach Chhaya Nene here, Brianna Sacks here, Kelli Shiroma here and Byron Tseng here.  



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