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

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.

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.

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. 

Office workers haven't returned to downtown at pre-COVID levels, one expert says.

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Samanta Helou Hernandez

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LAist

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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.

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

Cole's announced in early July that its final day serving French dips, pickled eggs and strong drinks would be Aug. 3.

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Courtesy Pouring With Heart

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“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.