Downtown LA’s economy was looking better, but these challenges remain

Adolfo Guzman-Lopez is an arts and general assignment reporter on LAist's Explore LA. team.

Published Jul 22, 2025 5:44 PM

A man walks along a sidewalk. In front of him is a blade-style sign on the side of a building that reads "Alexandria Hotel."

Listen 0:45

Downtown LA’s economy was looking better, but challenges remain

Increases in residents and entertainment options helped the area, but homelessness and immigration raids area affecting business downtown.

Downtown L.A.’s up-and-down economic outlook in the past 20 years appeared to be up recently. New hotels have opened, along with some new entertainment venues, such as the Bellwether. New residential units also added to downtown L.A.’s vibrancy and helped businesses.

Listen 32:50

What does the future of Downtown LA business look like?

That’s good for the city as a whole, because downtown contributes a large portion of the city’s tax base.

“When you look at just three categories of downtown contributions to the tax base for the entire city’s unrestricted revenue: hotel tax, parking tax, [and] business tax, downtown contributes about 30% of those tax categories,” said Nella McOsker, president of L.A.’s Central City Association.

So it’s important, downtown business leaders and others say, for L.A. to come up with strategies to keep the area economically healthy. McOsker and others who appeared on LAist’s daily new program, AirTalk with Larry Mantle, recently gave some updates .

Hotel tax, parking tax, [and] business tax, downtown contributes about 30% of those tax categories.

— Nella McOsker, president of L.A.’s Central City Association

Challenges remain

For most of its history, downtown L.A. has been an economic center that employed many people. McOsker said that before COVID lockdowns sent office workers home, nearly 50,000 public employees worked in downtown L.A.

“Those types of individuals sustained business' ability to stay open for lunch and have the higher foot traffic that we see Monday through Friday, 9 to 5,” she said. But many haven’t returned full-time.

Sponsored message

A look from above down to a street full of cars waiting at a stop light. Behind them are various large buildings including a bridge connecting two buildings.

Two recent examples of hard times downtown: the announcement that Cole’s, at Sixth and Main streets, would soon stop slinging French dips and drinks; and the impending closure of the nearly century-old Mayan theater, with its eclectic architecture and legendary nightlife.

Trending on LAist

LA city attorney accused of ethics breach before settling major case for $18M

Hydee Feldstein Soto called an opposing side’s expert witness for campaign money before a high-profile trial this fall. Her campaign says she didn’t know about the connection.
More higher-income LA County residents are struggling to buy enough food, study finds

USC found that 25% of those with food insecurity make more than 300% the federal poverty level.
As deadlines loom, fire survivors call for more mortgage help

A state law extended mortgage forbearance for up to a year, but survivors say there’s far more to do.

Meanwhile, recent protests, unrest, curfews and fears about federal agents have been among the factors leading some Angelenos to avoid unnecessary trips downtown.

A sun-drenched downtown L.A. street scene with the iconic vintage neon sign of Cole’s — "Originators of the French Dipped Sandwiches Since 1908" — glowing proudly above the sidewalk.

“That can have a cascading effect to a number of businesses that are already vulnerable,” economist Kevin Klowden said.

McOsker highlighted Mayor Karen Bass’s efforts to clear downtown homeless encampments and help people find housing. But it’s unclear, McOsker added, whether these efforts are having a positive effect on downtown’s economy.

Hey, LA listener!

Downtown LA’s economy was looking better, but these challenges remain

Keep up with LAist.

Challenges remain

Make your tax-deductible year-end gift today