Downtown’s Real Story
We have read your publication’s special report on downtown Los Angeles (Oct. 5) and wish to address the following issues.
First and foremost, the implication that downtown should be written off as one of Southern California’s most prestigious business addresses is not an accurate reflection of the renewed vitality of the area or its continued importance as a hub for the regional economy. The other concern relates to the disregard for the role that arts, entertainment, sports and culture can play as catalysts in the rejuvenation of our city’s core. To dismiss the positive effect Disney Concert Hall or Staples Center will serve to re-energize downtown is to ignore the impact similar development has had on the centers of cities like Cleveland, Denver or Phoenix.
Your statistics on office vacancy rates, while accurate, present only one piece of the picture. Unarguably, downtown has battled back after being severely impacted by the regional economic downturn of the early 1990s. Yet nowhere in your article(s) do you cite the recovery made in the area’s office market as evidenced by figures that include: leasing momentum that has reduced the vacancy rate in class-A, tier-one towers to below 13 percent; rents that have climbed approximately 15 percent from a year ago; and average annual rates that currently stand at $24.70 per square foot in downtown’s premium properties, according to current data.
According to your own 1998 Book of Lists, the city’s five largest law firms (as well as eight of the top 10 legal practices) and the Big Five accounting firms are all based downtown. There will always be for a myriad of reasons relocations by businesses to other localities, including outside the city limits. However, downtown is aggressively seeking to retain its current tenant base and draw new businesses, as well.
The disappearance of corporate headquarters due to consolidation, acquisitions, and the like is not isolated to downtown Los Angeles, but is endemic to the region as a whole. Yet downtown Los Angeles is building for the future by attracting entirely new classifications of businesses to the area. Just as the Information Age becomes ever more important, downtown has become regional home to virtually every major and second-tier telecommunications company. In the past year alone, more than a half million square feet of office space, principally in class-A towers, has been leased to telecommunications companies. The solid rental rates these firms are paying certainly hasten the office-leasing recovery. Similarly, the impending construction of the new Los Angeles Center Studios, on the former Unocal Corp. site, will complement and expand downtown’s stature as the world’s most widely utilized location-filming destination.
The story’s characterization of downtown as a “cultural theme park” places an erroneous spin on an enormous positive: the development of a true, world-class center of our vast megalopolis. You have somehow construed that arts/entertainment and business are mutually exclusive propositions and nothing could be further from reality. In truth, downtown is building on its 100-year business heritage to create a true nexus of art, ideas, culture and commerce for the 21st century.
TIMOTHY H. WALKER
Chair, Downtown Center BID
STEPHAN D. SMITH
Smith & Hricik Development