Downtown Los Angeles is in the midst of its biggest makeover in 25 years, with 154 projects costing $12.2 billion either recently completed, under way or in the planning stages, according to a study released by the Downtown Center Business Improvement District.
The study conducted by the Los Angeles Economic Development Corp. says the construction boom that began in 1998 should generate a total of 174,000 jobs and $25.9 billion in direct economic impacts.
Once the buildings are completed, revenues generated by all of the new businesses and residents are expected to reach $8 billion a year. That in turn will pump $180 million in tax revenues into local government coffers, the study said.
“This economic impact study not only confirmed but exceeded our expectations for the revitalization of Downtown and the impact it’s having on the city and county of Los Angeles,” said Carol Schatz, president and chief executive of the Downtown Center BID.
The study examined two categories of construction: private sector and civic/cultural building. About $8.7 billion is being spent on private sector building and the conversions and upgrades of existing buildings for new uses, while another $3.5 billion is being spent on civic and cultural projects like the proposed Grand Avenue project.
Since 1999, nearly 7,000 residential units have come on line; another 19,500 are either under construction or planned, the study says. When all these projects are completed and occupied, the residents will pull in $2.3 billion in income. Meanwhile, new business investment in the area will create 79,000 full-time jobs paying $2.2 billion a year in wages and salaries.
These figures assume that all the projects now in the planning stages actually get built, which is not certain given how the residential real estate market appears to have peaked.
As a reminder of how quickly things can change, 16 years ago the commercial real estate market in downtown and across the region abruptly tanked, forcing dozens of projects that were in the planning stages to be scrapped. No high-rises were built in downtown for the nearly the next decade.
Besides looking at building activity, the study also detailed the rebound in downtown tourism, noting that 12 million day and overnight visitors came to downtown in 2005, up 30 percent from 2003. (The Downtown Center BID did not report on tourism totals for 2004.) Those visits generated an estimated $1.2 billion in direct economic impact, including $28.7 million in annual hotel bed and retail sales taxes for the city of Los Angeles. They also supported about 13,200 jobs in the downtown area.
