Merchants, shoppers returning to quaint Montrose retail area.

A few years ago, Montrose Shopping Park looked like it might become a ghost town.

Stores - and shoppers - had started abandoning the three-block-long shopping area with quaint, tree-lined streets for the Glendale Galleria. which opened in the early 1980s.

By 1989. anchor store JC Penney pulled out. As the recession kicked in, store vacancy rates hit 12 percent, according to Robert Vafaie of Dilbeck Realtors-Robert Vafaie & Associates.

Properties remained vacant for months on end.

But a funny thing happened on the way to obsolescence: Montrose bounced back.

"I think that people just got tired of the crowds elsewhere," said Paula Pierim, an employee at a local travel agency who has been coming to shop at Montrose for the last five years. "The open-air setting is more relaxed, more European."

Shoppers and merchants say that "going to the mall" isn't what it used to be - an assessment supported by changes in retail real estate across Southern California.

"Over the last couple years, the aggregate volume of enclosed-mall space has declined," said Allan Kotin. a principal from L.A.-based KMG Consulting. "And the volume of street retail is growing."

That trend has benefited smaller, "Main Street" areas like Montrose, where shoppers can avoid the crowds, traffic and parking tie-ups common to malls.

"Montrose is really quaint and I enjoy coming here," said Joanne Stipakes of La Crescenta, a mother of two young girls who shops at Montrose's children's boutiques.

As the area has regained its popularity, rents have risen accordingly - and vacancy rates have dropped.

"We can't even calculate a vacancy rate right now," said Vafaie. "There is only one unit available in the shopping park and it's going to be filled soon."

The Glendale Galleria currently posts a 7 percent vacancy rate, according to its General Manager Cindy Chong. Recent bankruptcies and mergers have pushed vacancies toward the high end, but Chong said that the vacancy rates will be down to around 2 percent or 3 percent by year-end due to increased retail activity around the holidays.

With store space in Montrose almost filled to capacity, property prices have risen. In 1993, the cost per square foot of retail space in the shopping park ranged from 80 cents to $1 per square foot.

"Desperate property owners would agree to even lower prices on occasion just to unload their storefronts," Vafaie said.

Now, retail property prices are up to $1.30 per square foot. Vafaie believes that prices will remain steady for now as property owners wait to make sure that the park's economic improvement continues.

But the rebound hasn't been the result of shopping trends alone. A group of merchants, organized as the Montrose Shopping Park Association, has been active promoting special events and fairs to bring more people to the area.

The Oktoberfest and art fair held the first weekend in October attracted 40,000 people - providing a shot in the arm to area merchants.

The city of Glendale, in which Montrose is located, has invested about $900,000 over the last year to upgrade the shopping park.

"Montrose is a real showpiece for Glendale," said Roy M. Lopez, a civil engineer for the city and project manager for the Montrose project.

Wanting to enhance its outdoor, old-fashioned appeal, the city installed gaslights along the strip - using real gas. It also repaved the road, relaid the sidewalks, added landscaping throughout the street and provided electrical outlets to support special-event lighting.

In order to compete with the free parking provided at other shopping centers, the Montrose Shopping Park Association convinced the city to remove meters from parking lots.

Frank Roberts, vice president of the association and a 21-year Montrose resident, said the city is now being asked to build a parking structure. While parking is adequate during normal weeks, the continued success of the park's special events creates greater parking needs.

The restaurant business in the area is also improving. Hip eateries help attract a different clientele and keep shoppers at the park for longer stretches of time.

Jeff Williams, president of Montrose-based California Fast Food Services. opened two of Montrose's trendy cafes - the Black Cow and the Star Cafe - to warm receptions. The Rocky Cola Care. a popular Montrose restaurant, even attracted media attention in June 1996, when President Clinton picked up a buffalo burger.

For the moment, Montrose's small-town atmosphere is likely to be preserved. According to Vafaie, the shopping park does not present the type of store configuration that attracts larger retail chains. The buildings have an old-fashioned layout with narrow sidewalk space and deep interiors - the opposite of the large front-window footage that chain stores want.

Ubiquitous chains like Banana Republic and Barnes & Noble are conspicuously absent. Instead, family-run stores line the street.

And as often as not, merchants won't ask to see your driver's license when you write a check.

"We're real friendly here," Roberts said. "We always give personal attention. That's something you just don't get down at those Glendale Galleria stores."