A development surge in Downtown Los Angeles is transforming the skyline and reenergizing the city core, and there appears to be no sign of any slowdown on the crane-filled horizon. From 1999 through 2016, total investment across downtown residential, commercial and civic projects exceeded $27 billion — and that continues to climb, with dozens of additional projects now under way or at least being proposed, according to the Downtown Center Business Improvement District. “We are still in the beginning phases of this, and it is now a snowball effect,” said Carol Schatz, president and CEO of the Downtown Center BID.
This growth has been years in the making. The city first laid out its vision for revitalizing the center city in the 1990s. Two of the catalysts that helped drive that effort came in 1999, with the opening of the Staples Center sports and entertainment venue, and the introduction of an adaptive reuse ordinance that eased the conversion of historic buildings to housing and other uses.
“We realized that a key factor for us was going to be residential,” said Schatz. “We couldn’t attract retail or do anything until we had a critical mass of residents living downtown.” Developers have been busy converting vacant and underutilized buildings into trendy lofts, apartments and condos. The downtown residential population has more than tripled, from about 18,000 in 1999 to roughly 65,000 today. As of midyear nearly 9,000 market-rate apartment units and about 1,700 condos were under construction, according to the Downtown Center BID.
Bars and restaurants were the first to line up behind that growing residential base. And over the past five years, development has expanded to include retail, hotels and offices. One of the most significant projects to date is the 73-story, $1.2 billion Wilshire Grand Center, in the financial district. This building, completed in June, is the tallest on the West Coast. In addition to its 900 hotel rooms, it encompasses roughly 80,000 square feet of retail space and some 40,000 square feet of offices.
Development is now spiking across the retail, office and hotel sectors, with 2 million square feet of retail space now under construction, plus an additional 2.5 million square feet proposed, according to the Downtown Center BID. About 2.9 million square feet of offices and 1,156 hotel rooms are under construction too.
“Downtown L.A. has come a long way in the past 10 years,” said Ed Sachse, president of property services at Kennedy Wilson. “It is really evolving and changing.” Kennedy Wilson has charge of leasing the retail portion of the 1.4 million-square-foot Oceanwide Plaza mixed-use project, now under construction across from the Staples Center. The Collection at Oceanwide Plaza, as the retail component is called, will comprise some 153,000 square feet of retail and restaurant space. The site will also contain about 500 condos and a 183-room Park Hyatt hotel. Oceanwide Plaza is in fact one of four mixed-use projects now under construction downtown, the others being The Bloc, Broadway Trade Center and the second phase of Metropolis. “Oceanwide is a unique retail experience for downtown,” said Sachse. The project, which will include five open-air walkways, is slated to open sometime in the first quarter of 2019. The Collection at Oceanwide Plaza has announced no tenants yet, but the developer anticipates that restaurants and cafés, apparel stores and experiential retail concepts will be in abundance. “Retailers are looking at the changing demographic of downtown residents and downtown visitors as being very positive,” said Sachse.
Building boom Broadway Trade Center is one of four mixed-use properties under construction in downtown Los Angeles.
Development is vibrant throughout many neighborhoods in the downtown. Row DTLA is one major redevelopment project, spread across seven historic buildings on 32 acres in the arts district. This project will include 1.2 million square feet of offices and 200,000 square feet of retail. Phased delivery of its retail and restaurant tenants began last month. Row DTLA is attracting such star chefs as pizza specialist Chris Bianco and also a collection of independent merchants and fashion designers from around the world. Among these are Ahlem, a luxury eyewear vendor; Flask & Field, a purveyor of wine and home goods; and 13 Bonaparte, a contemporary menswear store. “We are quickly establishing ourselves as the centerpiece of where the better independent designers and chefs are locating, which is exciting,” said David Fishbein, a principal and co-founder of Runyon Group, which is handling the Row DTLA retail leasing. “We have seen a huge transition from having to educate merchants and designers about the neighborhood and what is happening,” said Fishbein, “to, now, a very significant awareness of both the arts district and downtown in how it has transformed.”
Of course, any building boom will create at least some concerns about oversupply. But so far, occupancies and rents here appear to be holding up, observers say. Downtown has become a stronger economic engine for the region, including the tax revenue, says Schatz. “What is happening downtown,” she said, “has been a hugely important development in the whole evolution of Los Angeles.”
By Beth Mattson-Teig
Contributor, Commerce + Communities Today
