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Despite its charm, Del Mar Plaza’s income continues decline

DEL MAR – “The Plaza’s in trouble.”

Such were the words of Del Mar Plaza consultant Adam Birnbaum, when he and part-owner Patty Brutten presented sobering numbers reflecting the downtown fixture’s financial state at a March 4 City Council meeting.

Despite continued investment on the part of the owners, the Plaza experienced a net operating income decline of about 10 percent in 2018, with owners projecting an additional drop of over 13 percent in 2019.

As of 2017, the Plaza is operated and owned by Brixton Capital, a Solana Beach real estate investment firm founded by Marc Brutten — Patty’s husband.

The Del Mar Plaza has been a centerpiece of Del Mar’s quaint downtown for 30 years — few can resist the European charm of its maze-like corridors and staircases, or the unforgettable sunsets off the plaza-level deck.

Longtime Del Mar resident Jim Watkins called the Plaza of the 1990s “magic.”

Plaza owners are hoping to activate the Plaza’s quasi-public spaces – such as its ocean view deck — by allowing for outdoor cafes or coffee carts. The spaces are now frequently underutilized: an activity log submitted to the city revealed that few if any people were occupying the spaces at any given time during the months of January and February. Photo by Lexy Brodt

“It was ‘the’ gathering spot in town, and it was really a jewel,” he said.

To those who have visited the Del Mar Plaza in the past few years, its somber financial situation may come as no surprise: the commercial center’s once flourishing plaza-level esplanade is often quiet.

Four rental spaces are currently vacant and the quasi-public spaces are seldom if ever used — an activity log gathered in January showed that even on sunny days, the Plaza’s large ocean view deck is frequently empty.

Patty Brutten, who works as a consultant on the project, revealed that on top of the four tenants that have left since Brixton Capital took over in 2017 — an additional three “are threatening to leave.”

Now the Bruttens are taking steps on the city end to revive the beloved Plaza. Or as one meeting attendee put it — perform a “code blue” on the ailing property.

Plaza of old

The Plaza faced no small resistance from Del Martians when it was first proposed.

Then Cardiff residents David Winkler and Ivan Gayler purchased the property in 1983 when it was a strip mall, and underwent four years of extensive public feedback and hearings to get the project approved.

The Plaza was one of the only projects to face off with Measure B — a now defunct initiative that required projects of a certain magnitude to go to a vote of the people.

Former Plaza co-owner David Winkler called the Del Mar Plaza a “remodel that got out of control.” Winkler and Ivan Gayler purchased the property in 1983, when it was a strip mall. “It really didn’t take advantage of the views,” Winkler said of the old Del Mar Plaza.
Photo Courtesy of the Del Mar Historical Society

But after gaining approval and undergoing two years of construction, the project quickly became a community icon and a point of pride — a stairway plaque leading up to the plaza level reads: “with gratitude to the voters of the city of Del Mar for embracing the vision and the men and women who labored to make it a reality.”

Anchored by four restaurants with 35 shops total — including the ever-enduring tenants Il Fornaio and Pacifica Del Mar — the Plaza was the place to be for local residents and visitors to the county’s smallest city.

“It was artistic, it was creative, it was incredibly well-designed and built … it was new,” Brutten said.

But even then, the Plaza was hardly a budding enterprise.

“There was not one day of positive cash flow in 15 years,” former Plaza owner David Winkler told The Coast News. “ … I think because we spent way too much money to build it.”

Winkler called the Plaza a “remodel that got out of control” — the project cost over $400 per square foot in 1987 dollars.

Changing hands

Since Winkler and Gayler sold the Plaza in 1998, the city’s commercial centerpiece has not been able to revive the popularity of its glory days.

The Plaza passed through a couple of different hands before ending up with Brixton Capital — none of which were locally based.

Councilman Dwight Worden — who drafted Measure B in the 1980s — recalled attempting to communicate with the German ownership that presided over the Plaza before it was purchased by the Bruttens in 2017 for $45.4 million.

“They were just holding the property hoping it would appreciate in value and someday they’d resell it,” he said. “They just weren’t interested in keeping the Plaza vital and alive.”

In contrast, Worden described ownership under the Bruttens as “a breath of fresh air.”

“For them it’s not just a business investment, it’s a labor of love in their hometown.”

Obstacles, new and old

When asked what made the Del Mar Plaza of the 1990s successful, Brutten said that “at the time there was nothing else happening in North County.”

But now, almost 30 years later, The Plaza faces competition from all sides: Flowerhill Mall to the north, Del Mar Highlands and the soon-to-be One Paseo to the east — in addition to the advent of online shopping.

Due to competition, the Bruttens have had difficulty leasing the Plaza’s spaces — not to mention keeping their current tenants.

“We didn’t anticipate we were going to be losing tenants,” Brutten said. She pointed out that the Plaza’s rental rates are “below market.”

The Plaza also lost its longstanding marketplace, Harvest Ranch Market, in 2014 — a boon for a city with a plentiful base of restaurants but no grocery store. A condition of the Plaza’s approval in the 1980s was that it would provide a market for 25 years.

According to Winkler, rent was discounted to the point that the owners “basically received no rent off the market space.”

“Twenty-five years came and went,” said Brutten.

When asked about the current challenges of the property, Winkler said the Plaza must also contest with the detriment of its size.

The project was scaled down by 30 percent in an effort to gain voter approval in the 1980s, and at about 75,000 square feet, is “way too small,” said Winkler.

“It just isn’t a critical mass of retail to provide a destination,” Winkler said. “Basically the only things that work now are restaurants and service uses.”

The next steps

Now the Bruttens are looking at ways to bring new life to the Plaza — starting with an amendment to its approximately 30-year-old Specific Plan. The Specific Plan currently limits the ability for restaurants or vendors to serve food or beverages in the Plaza’s quasi-public spaces.

The Bruttens are looking to bring in outdoor cafes while still allowing the spaces to remain open to the public — allowing the underutilized areas to be “much more interesting and much more active,” Brutten said.

They have been developing an amendment to the Specific Plan for a year and a half in order to address such concerns, and also overcome certain constraints, such as signage.

None of the plaza-level tenants currently have signs at the street-level — making them virtually invisible to the average visitor or passersby.

“They’re struggling,” said Birnbaum at the meeting.

They are also looking at expanding their retail options and “thinking outside the box” — including in its draft amendment the potential allowed use of having a shop that would sell non-psychoactive cannabis products.

Such products are currently prohibited by the city’s municipal code, but during council discussion, council members were amenable to the idea.

Brutten said she envisions “a small boutique pharmacy that has CBD products — not a dispensary.”

Despite the hurdles the Bruttens have faced over the last two plus years, Patty Brutten said she is feeling optimistic. She said the Plaza is starting to attract calls from new potential tenants, and has secured a local restaurant group for the former Epazote’s space.

She said the Specific Plan Amendment will “make a complete change in what will happen (at the Plaza).”

The amendment will have to come in front of the Planning Commission and ultimately the City Council for approval. Residents at the March meeting urged the city to help the Plaza owners in whatever way possible, with City Council members expressing their hopes for the venue.

In an interview with The Coast News, Worden said the Bruttens may be Plaza’s last chance.

“We need to help them succeed … if we can’t make it work here at the Plaza with the Bruttens, game over,” he said.

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