GOURMET BLEND IN L.A. THE GROVE, FARMERS MARKET A GOOD FIT.

Byline: Brent Hopkins Staff Writer

The David and Goliath of Third and Fairfax have turned out to be pretty good friends.

When The Grove, one of Los Angeles' most ambitious retail developments in years, opened one year ago Saturday, traditionalists feared that the upscale shopping center would stamp out the culture of its storied neighbor, the Farmers Market. Regulars groused about the anticipated influx of traffic, new customers and corporate tenants setting up near their belovedly quirky, fiercely independent retail community.

Those fears proved to be unfounded, however, as both sides report success in blending the very old with the very new.

``Our market contrasts very well with the Grove,'' said Bill Thee, president of Thee's Continental Pastries. ``There, it's new, glitzy chain stores. Here, we're classic L.A. I'm glad you can get all the razzmatazz there and come back here for what you've always expected.''

Thee very much represents the old guard. His stand's been cranking out palm leaf pastries and its famed pink elephant cake for 23 years - lots of butter, real whipping cream and fillings all made on site. While his business hasn't risen quite as sharply as those of other tenants, he's seeing more customers, younger faces who didn't normally frequent the market in years past.

The new crew has seen similar success, capitalizing off The Grove's high profile and enduring buzz. According to owner Caruso Affiliated Holdings, the center drew 20 million visitors in its first year, pulling shoppers from 78 ZIP codes.

Lucy Zahran, who lends her name to a fine-jewelry shop near the center's west end, traded in her 8-year-old shop in an equally high-profile locale for a chance to open at The Grove.

``I closed on Rodeo Drive and moved into a 3,000-square-foot store because I believed in what they were doing here,'' she said. ``And it was the best thing I ever did.''

Since opening, her sales are up 50 percent over 2000, the last strong retail year. Other stores report similarly positive numbers and The Grove's centerpiece 14-screen plush theater designed by Caruso became tops in Southern California its first weekend. The developer sold the opulent complex, styled after an Art Deco movie house, to Pacific Theatres in December for a reported $30 million.

The secret, according to Caruso Chief Executive Officer Rick Caruso, comes from the center's unique atmosphere. From the theater's marble entrance and premium leather seats to the shopping corridor's distinctive trolley, The Grove boasts an eye for detail not found in most other shopping locales.

``It's the experience,'' Caruso said. ``You can walk into a lot of Barnes and Nobles, but a book is a book. Our difference is it looks great, and that gives us a competitive edge. If you're going to spend your time shopping, you want to do it somewhere that looks nice.''

The design, and its effects on shopping traffic for both centers, has had a widespread impact on the retail world.

``It has raised the bar on retail development, not only in L.A. but throughout the country for what's possible and in terms of meeting consumers' needs,'' said Michael Beyard, a senior resident fellow for the Washington, D.C.-based Urban Land Institute.

``Los Angeles does not have many public spaces; it's a very private city,'' he said. ``Most American cities have spaces for people to mingle and gather, where they feel comfortable watching other people. L.A. doesn't have that except Farmers Market and now The Grove. They feel comfortable going there just to hang out.''

The center even won over its harshest critics, the regulars who mob the Farmers Market's tables. Prior to The Grove's opening, many regarded the arrival of the new corporate neighbor with suspicion, fearing that it would taint the character of their favorite gathering place.

Henry Strawder, a Fairfax retiree, settles into his regular table with his pal Leroi Blevins every day. After a morning stroll, they split a cinnamon doughnut from Bob's Coffee & Doughnut, enjoy a cup of java and talk philosophy.

``We have our coffee and solve the problems of the world - today it's the president's budget,'' Strawder said with a grin. ``We know everyone here, and since we're retired that's less time that we have to spend at home, washing dishes.''

And though he doesn't do much shopping at the Grove, he hasn't seen it hurt the Farmers Market at all.

``They're two separate things,'' he said. ``I came through Nordstrom and saw a shirt that cost so much I thought it ought to come with a suit, but I like it.''

The same goes for Yosef Admon, a fellow Fairfax dweller who counts himself as a 25-year regular, coming ``every day and all day.'' His friends grab tables midmorning and don't budge for hours, smoking cigarettes and gabbing as tourists wander past.

``I was concerned The Grove would hurt the Market,'' he said, slouched at his table. ``But it turned out to be the opposite. The more people who show up at The Grove, the more come here.''

Which has been a boon to shop owners like Virginia and Mike Jadidy, who've run By Candlelight in its present spot for 10 years. Her family has leased space in the Farmers Market for 60 years and traffic's now as strong as it's ever been.

``We've seen a lot more foot traffic, especially younger customers,'' she said. ``They tend to be more spontaneous, which is great for us.''

The Farmers Market property itself underwent significant changes in the past year, as well. Its owner, AF Gilmore Co., added 170,000 square feet of new space, enough for 15 new tenants including Cost Plus World Market, Sur La Table and Organized Living. It also introduced a validated parking system, getting rid of the cherished free spaces regulars enjoyed for years.

``We've been successful in maintaining it the way people remember it,'' said Mark Panatier, Gilmore's vice president. ``There was a lot of hand- wringing about it, but we consciously didn't make any substantial changes to the original (Farmers) market. The visible part looks the way you remember it 20 years ago.''

Not that every merchant's thrilled about the changes. Kyle Gilbert, manager of Charlie Sue's Coffee Shop, dislikes the longer hours the Farmers Market has adopted along with the expansion and thinks Gilmore's new tenant Marmalade Cafe and The Grove's sit-down restaurants are swiping his customers.

``We're still busy on Saturday and Sunday, but during the week, I'd say it's not as good,'' he said. ``That's when we have the regulars and they don't like the new parking. What's really hurt us is staying open until 9 p.m. We don't make enough to cover the extra wages.''

But for the most part, shop owners seem positive a year into the grand experiment. Stephane Strouk, owner of Mr. Marcel Gourmet Market, has seen such strong results that he's remodeled his corner on the southeast edge to include a high-end market, wine and cheese shop and French tableware. As a result, his sales are up 30 percent to 40 percent.

``With the opening of The Grove, I thought if they put millions into development, they must know what they're doing,'' Strouk said. ``I followed the big guy and it's been great. We're getting stronger every day.''

CAPTION(S):

3 photos

Photo:

(1 -- color) Bill Thee, president of Thee's Continental Pastries, frosts a cake at his bakery business inside the Farmers Market in Los Angeles.

(2 -- color) Yosef Admon, right, a 25-year regular at Bob's Coffee & Doughnut shop, says The Grove has been good for the Farmers Market.

(3 -- color) The Grove, with its variety of stores and restaurants, opened a year ago next to the Farmers Market in Los Angeles.

Evan Yee/Staff Photographer