SAN FERNANDO—San Fernando Is Prepared for Next Economic Slump

Considering the high unemployment rate in the Northeast Valley and the fact that large commercial and projects are being put on hold or scaled back in other parts of the Valley, you’d think the economic outlook in the 2.4-square-mile city of San Fernando would be grim. Think again. The city’s rich immigrant history and a desire to revitalize existing businesses are said to have actually worked to insulate the city from economic slowdowns in the past. San Fernando City Administrator John Ornelas said the city has always remained strong during economic slumps, primarily because local businesses have worked for years to build a strong base of customer loyalty. “Historically, the businesses in the downtown area of San Fernando have been very stable, even through the last recession,” Ornelas said. “The businesses are predominantly mom and pop shops and they are very stable and do very well for the size they are.” With or without a recession on the way, plans to bring development projects on line are intact. Had it not been for the recent bout of soggy weather, the $2.7 million Library Plaza would have celebrated its grand opening earlier this month. The 20,000-square-foot project, now set to open in mid-April, will house a new library and retail center, including a coffee shop, fitness center, restaurants, florist, barber shop and a Mail Boxes Etc. Patty Navarro, owner of the San Fernando Florist, one of two local businesses moving to the new Library Plaza, said over the course of the 17 years she’s been in business she has never struggled during economic downturns. “We have a very loyal customer base and we don’t usually feel much of the slowdown other businesses do,” Navarro said. And, although a larger store will mean a higher rent for her, Navarro said she is not anxious about the move, considering what may be on the horizon economically. “I may have to open my business from six to seven days a week because we are going to be more visible and draw more foot traffic, but I have no plans to cut back,” she said. Home-grown solution The San Fernando-based Pueblo Contracting Services, Inc. lured a Mexico-based furniture retailer to the area. FAMSA Inc., a Mexico-based furniture retailer, opened its doors in December. So far, business is thriving, according to Pueblo founders Martha Diaz Aszkenazy and her husband Severyn. Aszkenazy said FAMSA, with 260 stores in Mexico and more than $600 million in annual sales, specifically picked the city because of its Latino roots. “FAMSA recognized the downtown San Fernando shopping district as being a very immigrant market, so they targeted it,” said Aszkenazy. “They are opening approximately 20 more stores in Southern California, but they made San Fernando their first location for a reason.” Aszkenazy said Pueblo has roughly 100,000 square feet of mostly retail development planned in San Fernando over the next two years and no intention of tabling any of it, regardless of which way the economy swings. “Because our economy isn’t a mirror of the rest of the nation, we can continue with our plans,” Aszkenazy said. “We are cautious, don’t get me wrong, but we are continuing with our plans.” Ornelas said he anticipates the Library Plaza project to generate interest from retailers and other developers. “Certainly the idea is our revitalization efforts would continue despite what the economy is doing or not doing,” Ornelas said. “Because success breeds success, we think.” But it’s more than loyalty. Joel Kotkin, a senior fellow at the Davenport Institute for Public Policy at Pepperdine University, said Latino communities typically do fare better during economic slumps because the businesses sell affordable items and, as consumers, Latinos typically are not big buyers of high-priced luxury items. “I know in the last recession a lot of businesses in Latino districts, like Huntington Park and parts of East Los Angels, weathered it better because their products tended to be less expensive,” said Kotkin. “Basically, working class Latino districts tend to be more durable during hard times in terms of maintaining sales, because the consumers are purchasing things they are always going to continue buying anyway.” A demographic safeguard Of the roughly 25,000 people who live in the city of San Fernando, approximately 89 percent are Hispanic, according to 1998 data provided by the Los Angeles County Urban Research Department. Certain Latino communities also tend to remain strong during a recession, said Kotkin, because immigrant communities tend to attract more immigrants, creating a steady influx of new consumers. “You have to remember that, particularly with Hispanic cultures, you always have more and more people coming into the community,” he said. But it’s not just the small homegrown shops in the area that are thriving. According to Ornelas, Home Depot is close to receiving approval from the city to expand. “Home Depot here does record sales in a very small facility,” he said. “It’s one of the top producers of all the Valley Home Depots. Home Depot spokesman Chuck Cifuentes said the store is a top performer in the chain and will move soon from 105,704 square feet to approximately 114,423 square feet.