Keeping Life Downtown

L.A. needs knowledge-based industries, not arenas

The opening of Staples Center marks a new chapter in the evolution of downtown Los Angeles, but perhaps not in the way the new arena’s boosters may hope. Like other similarly spectacular developments over the past few decades-the Music Center, Bunker Hill towers and the subway-it could easily become another example of a well-intentioned but failed effort to revitalize a perpetually moribund downtown.

The problem isn’t that Staples is not a wonderful building. It is. Rather, Staples does little to correct the fundamental weaknesses that have prevented downtown from enjoying the kind of center-city resurgence experienced by several other U.S. cities.

These weaknesses revolve around a dearth of dynamism at the street level. Recapturing an urban core involves more than agglomerating edifices. It depends instead on attracting a large, growing constituency of knowledge-based industries and workers. Such companies thrive in other urban centers in the L.A. Basin, notably Santa Monica and Pasadena, but not downtown.

To get a better idea of what the potentialities are, it may be wise to examine the character of the revivals that have occurred in a handful of central-core districts, most notably, lower Manhattan, the lakeside of Chicago, the area south of downtown Boston and parts of Seattle and San Francisco. All these cities have experienced a rapid development of artists’ districts, graphics companies, Internet commerce firms and other high-end, creative business-service companies.

Most of this activity has unfolded in warehouse and manufacturing districts and pre-1950s office buildings, not in traditional high-rise office towers. These older spaces, with their high ceilings and other architectural accouterments, encourage interaction and the creation of flexible work spaces. They also let the light in, a valued commodity in cities often shrouded in fog.

These districts were not originally “discovered” by city officials or stimulated by the construction of spectacular arenas, museums or other city monuments. Instead, they are a largely market-based reinvention led by creative individuals, entrepreneurs and opportunistic developers. A classic case is Boston’s “cyber-district,” located south of the city’s high-rise financial district.

Its transformation began in the 1970s and ’80s, when Boston-area artists and nightclub impresarios, searching for low rents near the heart of the city, discovered a decaying industrial and warehouse district that mostly catered to textile and leather industries. As the Boston economy recovered in the mid-’90s, the district’s cost advantages and artsy ambience began attracting specialized media, advertising and Internet-software firms. High-income professionals working in these industries soon started moving in. This year, condominiums and offices are going for three times what they fetched just five years ago.

“When I bought this building, people looked at me as the crazy Israeli who bought this building,” says real-estate developer Ori Ron, referring to a restored leather warehouse on South Street. “Then the artists and photographers discovered what a great space this is. Then restaurants and nightclubs were looking for this kind of space. Now there are the Internet companies.”

The old “leather district,” which 10 years ago was nearly abandoned, now teems with high-tech firms that employ an estimated 3,000 computer, Internet and other information-related workers. The area around South Station, extending to Fort Point Channel, has become a postindustrial beehive of activity, where artisans of the digital age share ideas.

Boston’s cyber-district, like the Flatiron, Hudson Square, Soho and Tribeca sections of lower Manhattan and the South of Market area in San Francisco, has been particularly successful attracting the new urbanites who are increasingly central to downtown recovery. This predominately young, well-educated, single and childless group gravitates to spaces close to downtowns when they are perceived as both safe and “hip.” In many cases, these younger programmers, artists and professionals actually prefer such locales, shunning high-tech nerdistans on the suburban fringe like the Route 128 corridor and Silicon Valley. Their migration to cities’ central cores has produced the first important shift in software employment toward civic centers since the beginning of the high-tech revolution.

“It’s fantastic to be in this part of Boston,” says Rebecca Donovan, an MIT graduate who launched her on-line picture agency Opholio in the cyber-district. “We have a great connection here. There are photographers everywhere. People are opening businesses up and down… It’s a lot better than dragging people out to the suburbs.”

One thing the people whom Donovan recruits don’t care much about is that Boston, too, has a new arena, the Fleet Center, where the Celtics play. It’s doubtful their L.A. counterparts would be much impressed with the Lakers, Clippers and Kings playing at Staples, either. They want street life-live-music clubs, bars, restaurants, art galleries-not a culture or sports palace.

The experiences of Baltimore, Cleveland and Denver further illustrate why projects like Staples are not necessarily the way to revive dead downtowns. These cities’ similar mega-projects have not ignited powerful downtown revivals. Baltimore and Cleveland remain among the most poverty-stricken urban centers in the country; their downtowns are home to virtually no new industries and only a sprinkling of new residents. Even Denver’s much-ballyhooed Lower Downtown, according to one local developer, has attracted barely 600 residents and virtually none of the region’s burgeoning high-tech growth.

At best, the record shows that the project-centered approach has helped create a kind of Potemkin City, a showplace to relieve the embarrassment of elites and suburbanites when downtown but whose economic value doesn’t go much beyond the generally low-wage convention-and-visitors business.

Still, accomplishments like Staples Center should not be dismissed. Rather, they should not be the standard by which a city like Los Angeles judges itself. With its huge concentration of artistic and creative talent, its growing Internet industry and vast population base, the central city should be able to attract a significant core of knowledge-value industry and the talent to operate it.

But this requires a strong and sustained commitment by both private and public sectors to fight for the center city block by block. It demands a continuing attack on crime and homelessness, whose diminution has been critical to the success of other central cores. Most important, such a transformation must unfold in a climate that rewards the creative skills of developers, such as pioneering entrepreneur Tom Gilmore, who want to refurbish the many lovely, yet now often derelict office and warehouse structures littering central cores.

Gilmore, who recently bought St. Vibiana’s Cathedral as a possible site for an art school and a boutique hotel, understands that a vital downtown is, first and foremost, a matter of building neighborhoods. His attempt to capitalize on older structures along Spring Street’s “bank district” parallels successful efforts in Boston, New York and San Francisco. The presence of multimedia firms in some of his buildings, as well as the new L.A. Center studios, represent dramatic steps toward creating an economy for future downtown residents.

Yet, from a longer perspective, downtown L.A. should aspire not only to duplicate the successes of other revived central cores; it should also strive to set a new standard. Unlike lower Manhattan, San Francisco and Boston, Los Angeles has a successful and expanding industrial and warehouse economy-in food, fashion, jewelry and toys-in its midst. These economies-one largely driven by immigrants, the other by young professionals–could co-exist and cross-pollinate in exciting ways. Downtown could become a place where toy maker meets distributor, fashion designer lunches with manufacturer, restaurateur bargains with food wholesaler, “cheap chic” shopper haggles with merchants in the immigrant suk.

If such dynamic combinations ever congeal, it would create a multidimensional central core unlike any in the United States. Instead of always being derided as the last-place finisher, downtown Los Angeles could emerge first among America’s recovering central cores as the center of renewed urban civilization.

Joel Kotkin is a research fellow in urban policy at Reason Foundation