What Downtown Leaders Say -Envisioning DTLA’s Bright Future
The Downtown Alliance Business Improvement District and Biznow Publications hosted a four-hour event to discuss downtown’s current and future state-of-affairs. As one wag put it during a panel discussion: “Things are never as bad as ‘they’ say nor as good as ‘they’ say.” This pretty well sums up the current condition of our city following the COVID debacle. We must recognize the pluses of our current existence as well as the negatives. Seems the negatives have been most visual lately, and this is a shame. John Nilsson and Debra Shrout of the South Park Neighborhood Association attended the event, and these are the highlights they took away from the speakers and panelists.
While retail and office vacancies have gone up dramatically and Oceanwide’s “Graffiti Towers” have been omnipresent in the downtown landscape, we haven’t heard much about the strong growth in new restaurant openings since COVID led to the demise of almost 90 restaurants in our neighborhood. Since losing our favorite and old favorite dining establishments during and after the shut-down, downtown LA has added over 130 new restaurants – a big net gain!
Also, hospitality entities have maintained an enviable occupancy rate of over 70% for four consecutive quarters stabilizing at pre-pandemic levels. These high occupancy rates are calling for developers to bring new hotels to the area – especially with the coming Olympics and FIFA extravaganzas on the immediate horizon. Further influencing the prospects for growth is the very recent approval for immediate expansion of the LA Convention Center which is projected to bring billions to the downtown/South Park area over the next 10 years!
Cassie Horton, one of the founders of DTLA RA, remarked that residential is the future of downtown and population growth is on a dramatic upward trend. “It is seldom discussed but the residential population of DTLA in 2000 was only 20,000. Now it is over 90,000 and new residential properties are being added yearly.”
The DTLA residential market has produced 22% of all new housing for the City of LA over the last 15 years with residential growth from 2010 to 2022 increasing by 37%! Current residential occupancy rates are over 90%, even as new inventory is being introduced. This industry high occupancy rate is driving the need for more rental and condominium inventory. In South Park alone there are over 6,600 new residential units in the pipeline waiting for economic conditions to improve. The DTLA 2040 Community Plan is calling for 100,000 new residential units resulting in 175,000 permanent downtown residents by 2040.
While the news has been routinely negative about the retail and commercial office markets downtown, residential growth is spurring a turnaround here too. Local commercial realtor Justin Weiss reported on a very active commercial leasing market downtown in recent months with several new restaurants and retail businesses signing up. He announced the signing of the largest commercial lease in ten years at the Downtown Bloc project. Also, it was disclosed that the very popular high end grocery operation known as Erewhon has purchased a site at Olympic and Hill for their fifteenth Los Angeles location. This is an indicator of the positive direction things are taking. As Nick Griffin, Executive Director of DTLA Alliance stated, “The more people move down here, the more desirable it is to live here. What’s interesting about that dynamic is that it then drives activity in other sectors too.”
It was highly encouraging to hear that everyone at the conference knew that things were definitely looking up and that there was a clear path to future improvement. What’s the road-plan from here? Panelists offered a list of next steps. First, we must work hard on safety and security issues. We must immediately change the perception that DTLA is not a safe place to live and work. Something must immediately be done about reducing homelessness and visible evidence of open drug use and mental instability on our streets. We must immediately promote an increase in permanent residents downtown. Adaptive reuse of currently under-utilized office buildings, turning empty commercial square footage into residential square footage, is an immediate goal. Finally, we must get people back in their downtown offices, especially city workers, who have stayed home to work. Getting more folks back in their downtown offices and spending money downtown again will yield spectacular results.
There is a lot of work to be done here in the next few years. But, the confidence level is high that the leadership needed to help DTLA reach its potential is obviously here and that both the public and private sectors recognize the needs and share a vision of how to meet the future of an abundant downtown Los Angeles.
By John Nilsson