Just about every California city is facing hard times, but old-fashioned charm seems to have softened the economic blow to Pacific Grove.


Sure, America’s Last Hometown still struggles with out-of-control CalPERS costs and bickering political camps, but real estate values have held relatively steady. And the downtown commercial vacancy rate has dropped from about 25 percent last year to half of that, according to P.G. Chamber of Commerce President Moe Ammar.


Rabobank recently filled the former World Savings Bank space on Lighthouse Avenue, he says. And The Alliance on Aging just signed a lease to run a high-end consignment shop in the old Hallmark building, which sat empty for almost five years. Other new retailers include a doll shop, a teen clothing store and two art galleries.


A recent chamber survey found that of 90 downtown businesses, 70 percent had owners living in P.G. “We’ve seen a lot of small mom-and-pops opening up,” Ammar says. “Things are looking up right now.”


Tourism’s getting a boost from the chamber’s new info center near the Monterey Bay Aquarium, which reports an average 135 visitors per day since its May 11 opening. And on June 30, the MST trolley returned to P.G. for the first time in six years, shuttling tourists from the Aquarium to Asilomar State Beach, with a stop on Lighthouse.


Ammar credits P.G.’s resilience to a loyal customer base and a foodscape of locally owned restaurants (thanks in part to a 1982 city law prohibiting new fast-food franchises). “We’re not entertainment-driven,” he says.


The city also works to balance the needs of locals and tourists. “We have a unique mix of businesses you aren’t going to find anywhere else,” City Planner Dee Von Donselaar says. “Lighthouse Avenue is within walking distance of the ocean and lots of homes. It could be a great pedestrian downtown.”


Mayor Carmelita Garcia expects a surge of business during the summer art, wine and music walks, beginning July 22, and the Feast of Lanterns celebration on their heels. 


“That should bring in a lot of people, and hopefully they’ll return,” she says.


Of course, it’s not all ice cream and candy-cane barbershops in P.G.’s downtown. The under-used Holman Building, which now houses an antique mall, is on the market. And public charrettes have identified a need to make Lighthouse more attractive and safer for pedestrians. The Downtown Public Improvements Committee is working on those details, with help from a $309,000 bequest from Jeanette McIndoo to fund new landscaping, street lamps and other accents.


“Everybody has been impacted by the recession,” says Von Donselaar, who sits on the committee. “Everybody would like to have more.”


Tom McMahon, chair of the Downtown Business Improvement District and owner of Monterey Bay Laundry on Lighthouse, is encouraged by the new leases on Lighthouse, but worries that the annual tourist influx seems later and lesser than in previous years.


“The business climate is improving. It’s not the doomsday a lot of us might have thought it was a few years ago,” he says. “There are steps heading in the right direction, but it’s smaller and fewer steps than we would like.”