Downtown Los Angeles is in the middle of a profound revitalization, one that is bringing new energy to a sprawling area that had long been written off as a cultural wasteland — and ghost town after 5 p.m. New residential construction has brought an influx of new residents into the area, with retailers and restaurants rushing in to meet the new demands.
“We have a 24/7 population of more than 55,000 that is expected to grow to roughly 77,000 over the next couple of years. With continued momentum, 100,000 residents isn’t too far off and we’ll need all the services, amenities, and retailers to satisfy that growing demand,” Carol Schatz, president and CEO of the Downtown Center Business Improvement District (DCBID) told Chain Store Age.
This renaissance is catching the attention of investors from around the globe who are committing billions of dollars to some of the largest developments ever in Downtown LA, including some much needed retail space.
“Today’s downtown retail market has never been more robust, with global fashion brands, boutique labels, and national chains alike racing to establish a foothold in the market,” Schatz explained.
Currently, there is 1.8 million sq. ft. of retail under construction and approximately another 1 million sq. ft. in the planning stages, according to Schatz.
“Despite its continued growth, the Downtown retail market’s vacancy rate has dropped to roughly 6%. As more retailers discover the market’s vibrancy, coming opportunities, and thirst for more, Downtown LA will once again be one of the retailing and fashion hubs of the region,” Schatz said.
So what prompted this renaissance?
Schatz attributes the revitalization of Downtown LA to the passing of the Adaptive Reuse Ordinance — which provided financial incentives to upgrade and convert obsolete and vacant office buildings — to mostly residential purposes, and the opening of The Staples Center in 1999.
“With the iconic arena being home to three professional sports teams and numerous special events, Staples Center exposed downtown to thousands of Angelenos who otherwise would never have considered the area as a place to eat, drink or be entertained,” she said.
The passing of the Adaptive Reuse Ordinance solved the long-standing ‘chicken and the egg’ conundrum, Schatz explained. It was responsible for bringing in the initial residential population needed to bring in early restaurateurs and retailers. Since then, Downtown LA has experienced unprecedented growth in attracting residents, as well as the retail and hospitality to cater to them.
Now, the only direction for Downtown LA is up. The City of Los Angeles has put its focus on preparing for the long term, which includes expanding and renovating the convention center; the continued expansion of the Metro, specifically the Expo Line’s extension to Santa Monica and downtown’s Regional Connector, which Schatz said will be game changers for the area.
Also, residents, workers and visitors will soon be able to take a one-seat ride to the beach, Pasadena, Long Beach, and beyond — returning Downtown to its rightful position as the central hub of the city.
“While we’ve succeeded beyond our wildest dreams in creating a thriving, living and breathing heart of the city, you cannot help but be taken aback by the enormity of the opportunities that still exist here,” Schatz said.
Get a closer look at what Downtown LA has to offer at the ‘DTLA: The Future of Urban Retail’ conference on Nov. 5, hosted by the DCBID. The full-day conference will feature retail industry leaders who will shed light on Downtown LA’s current retail developments and the upcoming opportunities in all corners of the burgeoning market; a restaurateurs panel and VIP luncheon; a guided bus tour of Downtown’s distinctive retail districts; and will conclude with a VIP cocktail reception.
Click here to register for the event.