Downtown L.A. needs retail resuscitation. San Francisco’s subsidized shops offer a solution

As much of downtown Los Angeles remains dark and deserted, local businesses want the city to steal San Francisco’s secret to increasing foot traffic.

The tech mecca has begun to slowly emerge from one of the nation’s deepest declines in downtown retail, thanks in part to a program that flooded the city with subsidized temporary stores.

The Empty to Alive program transformed abandoned spaces into bakeries, bookstores, cafes, chocolatiers, galleries and more.

Local entrepreneurs were given months of free rent to set up shop, along with grants and support from the city and charities. The idea is to take advantage of empty storefronts to create excitement and attract more customers to the city’s sidewalks.

Although San Francisco is still far from its pre-pandemic highs, supporters say the program is brightening up struggling retail districts.

“We’re creating a window into what downtown could look like,” said Simon Bertrang, executive director of SF New Deal, the nonprofit behind Vacant to Vibrant. He said the void created by Covid-19 could be an opportunity to transform downtown San Francisco into “a mixed-use neighborhood with a lot of small businesses and maybe more housing.”

Both LA and SF have struggled to keep stores and restaurants in business districts since the pandemic emptied office buildings. While the majority of employees are working from the office again, a significant number are still working from home and many are not coming in every weekday. The dwindling presence of workers continues to challenge the lunch spots, bars and stores that rely on them to survive.

While it’s difficult to compare the health of businesses in each downtown, there are some indications that San Francisco grew more last year.

booking platform OpenTable says online reservations are up in Northern California city more than 20% compared to most months last year. Booking growth in Los Angeles remained below 10% for much of the same period.

Urban centers across the country need to find solutions, experts warn; Dark storefronts can lead to a negative trend as companies hesitate to rent office space in vacant areas.

Looking down Broadway from its intersection with 7th Street in downtown Los Angeles.

Real estate broker Derrick Moore of CBRE, who helps arrange commercial property leases, said retailers are already pulling out of downtown Los Angeles because of its slow recovery from the pandemic shutdown.

“Many operators choose to bypass the downtown area,” he said. “They rent space elsewhere where they think they have a better chance of selling.”

As downtown business fades, brands have turned to livelier, nearby neighborhoods like Echo Park and Silver Lake.

Downtown Los Angeles residents, businesses and other city supporters want to try to prime the pump by using a program like San Francisco’s to help small businesses take over vacant storefronts and turn the lights back on, said Cassy Horton, co-founder of the Downtown Residents Assn.

A pedestrian walks past a rental building on Broadway in downtown Los Angeles.

(For Etienne Laurent / The Times)

The group’s surveys found that what residents liked most about downtown was walkability, restaurants, bars and cafes.

“I like to live a lifestyle where I can run all my essential business a few blocks away,” Horton said. “I don’t have a car.”

Moore said downtown retail real estate vacancy could be as high as 40 percent, with some neighborhoods, such as the Historic Core, suffering more than others. Nike recently closed its store on Broadway.

A worker lifts a banner on Broadway. Retailers are already opting out of downtown Los Angeles because of their slow recovery from the pandemic shutdown, a broker said.

(For Etienne Laurent / The Times)

“Downtown’s commercial vacancy crisis is evident on every block,” a recent report from a neighborhood group of residents said.

The report called for a “safe sidewalks” public safety campaign to run alongside a plan to bring back retail tenants.

In San Francisco, participating businesses can get their feet wet with a three-month promotion to test the waters in a high-traffic location, with low financial expense and technical support from the SF New Deal and the mayor.

Businesses are offered grants to operate, assistance negotiating leases, assistance obtaining city permits, insurance, marketing support, business consulting and three to six months of free rent.

The goal is to turn most of the pop-ups into long-term rentals and create permanent fixtures downtown. So far, more than 10 of the 40 small businesses that started as temporary have moved to multi-year leases with landlords.

A boarded-up store on Broadway. “Downtown’s commercial vacancy crisis is evident on every block,” a recent report from the Downtown Residents Assn. in question.

(For Etienne Laurent / The Times)

Property owners who have storefronts to fill receive funds to cover the cost of preparing space for tenants and other property expenses, help with city permits and other support.

San Francisco launched the program in 2023 with $700,000 and contracted with SF New Deal, which focuses on supporting small businesses in the city.

The program is also supported by corporate philanthropies from Wells Fargo, JPMorgan Chase, Visa, Gap and others.

Among the first stores to open through the program was Devil’s Teeth Baking Co., a popular bakery in the Outer Sunset neighborhood that established an outpost in the moribund Financial District and brought with it a following. There was.

“On the weekends, there were suddenly lines of people waiting for breakfast sandwiches,” Bertrang said.

The bakery, like other graduates of the program including flower shop Mello, arts and crafts studio Craftivity and Whack Donuts, now has a long-term lease.

A pedestrian passes shuttered stores on Broadway in Los Angeles.

(For Etienne Laurent / The Times)

San Francisco’s business districts have been hit particularly hard by the pandemic, with tech companies quickly adapting to remote work and continuing to do so even as the crisis eases, triggering widespread office and retail vacancies.

“San Francisco had the worst return-to-work situation in the country,” Bertrang said. “This was the most extreme version of what Los Angeles, New York and other cities across our country were dealing with.”

Representatives of nearly 40 organizations in cities across the country reached out to him for advice on how similar programs could work in distressed neighborhoods.

Among them is the Central City Assn., a downtown Los Angeles business advocacy group that has called for Los Angeles to subsidize retailers’ rents to help fill vacant storefronts in key corridors. There was also. He is working with city officials and working on a program like Vacant to Vibrant for Los Angeles.

Nella McOsker, the association’s president, said adding businesses to streets while improving public safety “will help stem the downward spiral and turn this into a more virtuous cycle.”

“San Francisco showed this larger ripple effect of success,” he said. “This can really be done in targeted pockets of downtown,” he said.

Nick Griffin of the business improvement district DTLA Alliance said enabling storefronts is a worthy goal as long as the city first makes streets both safe and enjoyable for pedestrians.

He said the city must ensure clean sidewalks, street lighting and graffiti removal before consumers and businesses can return.

“San Francisco was the poster child for the doomsday cycle and the drive for downtown recovery,” he said. “We’re building that story right now.”