Downtown Rebound: Pandemic business recovery in Los Angeles
The COVID crisis shut down the entire country, hitting downtowns nationwide, including Los Angeles. Now new data is giving us a clearer picture of the past and a new view of how far we've come in L.A.'s "downtown rebound."
Three years since the pandemic began, it's the crucial question: How well have we recovered? These "downtown rebounds" are critical in every city's overall recovery, in fact, across the entire country.
We've now learned that Los Angeles isn't doing as well as dozens of other cities. But new data also tells us that L.A. is changing. And exactly what has changed is exactly what has kept the city alive.
Shoe Wiz has been the heart and "sole" of Downtown L.A. for nearly half a century. Their shoe leather, their every spray and shine keeping the city's foot traffic flowing, one pair at a time. And cobbler John Yanikian has seen almost every stitch of that history from behind his worktable.
Some days they used to keep 80 to 100 customers well-heeled. But in just one day, the sound of pounding in here and out on the pavement just stopped.
"Overnight, it was a ghost town," said Yanikian. "From one day to the next, there was nobody here."
How bad was it for you?
"Stressful. I think I got all my gray then," said Yanikian.
The streets themselves turned gray in March 2020 as the COVID crisis left them silent and left businesses at a standstill.
But now, three years later, the view from above, and at ground level, has changed.
After the entire world shut down, now everywhere -- including right here in Downtown L.A. -- is walking toward recovery. And we can see that by tracking where all the cellphone usage is.
The latest data says that out of 62 cities, L.A. is right in the middle, ranking 27th in recovery. The data also shows Los Angeles is back up to 65 percent of pre-pandemic levels.
Smaller cities actually had quicker recoveries, but bigger cities are very different. In fact, when it comes to the top five cities across the entire country, the cellular data shows L.A. ranks number two, just behind New York.
And there has been a dramatic shift in where people are in the city. Pre-pandemic, L.A. Live was one of eight hot spots when it comes to foot traffic, according to cellphone heat maps. It dips during the pandemic and then begins returning to normal.
And looking at where people were working before COVID, in hot spots before the pandemic, cellphone data shows there has been a dramatic shift.
L.A. didn't do so well. L.A., out of 62 cities, was number 27. Is that concerning?
"Right, right smack in the middle," said Nick Griffin, executive director of the Downtown Center Business Improvement District.
For a city like Los Angeles, a world-class city, is the middle good enough?
"Given what the bottom looked like, the middle is OK for now," said Griffin.
Nick Griffin points out that L.A. is better than "OK" when compared to similar major cities, and he says it's because of the ongoing shift to residential and entertainment from office space that is still lagging in recovery.
Just days ago, in fact, Fortune reported: "One of the biggest landlords in Los Angeles just defaulted on $755 million in loans for two skyscrapers as remote work keeps offices vacant."
What about businesses and office space?
"In the office sector, we're hovering around 50-percent utilization," said Griffin.
"The office sectors downtown are not doing very well at all," said Karen Chapple, professor of city and regional planning at University of California-Berkeley.
Chapple compiled and studied the downtown cellular data at U.C. Berkeley. She could not quantify how much crime and the crisis of homelessness factor in, but says they are clearly related.
"And then nobody wants to walk there anymore, and then the office workers are even more reluctant to come back," said Chapple.
The most significant factor she could measure, though, is residents: those now returning, and those riding the pandemic out.
"Those folks didn't go anywhere," said Chapple. "There wasn't a big outflux to the suburbs, to Riverside County or anything. People basically stayed in L.A. County, L.A. city, not like New York, and so that sustained the downtown."
Where are we today? Are you at the same level of residential?
"Ninety-four, 95-percent occupancy," said Griffin. "It was those residents that really carried us through and carried the businesses through, kept the community alive, kept the lights on during that period."
This path to recovery is no surprise to those following the footprints.
"Everybody was working from home, so they didn't wear their shoes down. It was mainly the residents that used our services as much as possible and kept our doors open," said John Yanikian.
One of L.A.'s oldest cobblers walked down a long path, always believing his path to success runs straight through Downtown Los Angeles, knowing by trade that this city is as tough as leather, and believing that despite a few scuffs, it can always wear a shine.
"We learn how to fix things, right? So, we're going to fix it. We're going to fix this problem and we're going to move on," said Yanikian.
The Downtown Center Business Improvement District just released its final report for 2022, and in it we see the same trends: Residential is at 94 percent of pre-pandemic levels. Hospitality is at 92 percent. And there were 30 new restaurants that opened. But office space is still lagging at 68 percent of what we had before COVID.
Business owners downtown say they need even more help from the city. So what is Los Angeles doing exactly to help?
We tried to sit down with Mayor Karen Bass for weeks to ask her about it, but she declined. Her office did send us a written statement that says in part that her administration is "bringing businesses and entrepreneurs together to cut red tape, incentivize growth and provide financial relief."
We asked for specific examples of those things. And, so far from the mayor's office, we have gotten zero.