LA's Fashion District Prepares For Its Next Act
Not long after Brookfield became majority owners of the California Market Center, a Los Angeles Fashion District icon and longtime hub of the city’s fashion business, it decided to renovate the center.
The 1960s-built structure looked like a run-of-the-mill office building from the outside, but Brookfield had plans to remake the three-building structure, upgrading the space not only for traditional fashion wholesaler tenants but creative office tenants.
The renovation of one of the buildings was completed last year, with the whole project slated for completion before the end of this year.
“CMC will soon reorient and redefine LA’s approach to the 21st-century workplace, drawing top office firms and fashion labels from across the West Coast,” Brookfield Properties Western Region Executive Vice President Bert Dezzutti said in a statement to Bisnow.
CMC’s redevelopment, announced in 2018, came at a time when the Fashion District, long synonymous with the wholesale trade, was beginning to draw attention from developers. Changes in the wholesale fashion industry meant that showrooms were facing competition from online sales. Proposals for new residential buildings and adaptive reuse projects were cropping up in the area, which had previously not seen the same high level of development as other parts of Downtown LA. But the neighborhood's next act is on the horizon as its present is still very much struggling.
In March 2020, the Fashion District Business Improvement District installed pedestrian counters at two main intersections in the neighborhood. Fashion District BID Executive Director Rena Leddy said that every month, the BID has seen increases in the pedestrian traffic from those counters, mounted at Seventh and Spring streets and 11th Street and Santee Alley. While Leddy is encouraged by the increase, she said that the numbers are still not back to normal.
The BID does a monthly walk-through to count ground-floor vacancies. The last one found 24% of street-level storefronts vacant. That doesn’t necessarily mean that those stores have closed completely. BID officials know that some of the businesses have moved to other spaces within the district, but they don’t have numbers on exactly how many have done so. Still, Leddy said the percentage of ground-floor vacancies is significant. The highest that Leddy had heard of ground-floor vacancy reaching prior to the coronavirus pandemic was 11%.
“These businesses are resilient, and they’ve hung on, but I think some of them are hanging on by a thread,” Leddy said.
Blue Moon Fabrics’ Savanaha Lamp says Blue Moon got lucky. Before the first pandemic-related shutdown last year, Blue Moon had planned to move to a new, larger location in the Fashion District. To gear up for the move, the company had focused on building its website and making sure it was outfitted for e-commerce.
“Thank God we had a fully functional website when all this happened,” Lamp said. “That’s what kept our business afloat the whole time.”
But Lamp acknowledges that not everyone in the district has been so lucky. Blue Moon was at its old location for over two decades. Lamp said in that time, the business made a lot of alliances with other businesses, often sending customers to them over the years.
“Now, when people ask us questions and we think about where we can direct them, honestly, we don’t know if some of those companies are still there,” Lamp said. As in other retail corridors, the businesses in the district that rely on a now-dwindling number of walk-in customers are struggling.
Lamp says Blue Moon’s new store is only open on weekdays, not on weekends, because weekend foot traffic numbers haven’t rebounded enough to justify staffing the store on those days.
The flower sellers at the Southern California Flower Market in the Fashion District were deemed essential right before Mother’s Day 2020 and allowed to open. Overall sales across the tenants in the market were off by about 60% to 70% for the first few months after reopening, Southern California Flower Market Executive Vice President Scott Yamabe estimates. He has heard from sellers that Valentine’s Day sales were better than those in 2020, which was before the effects of the pandemic hit LA. Valentine’s Day sales seemed like an indication that business was on the rebound, Yamabe said.
About 90% of the market’s business is wholesale, tied to weddings, restaurants being open, hotels being open and Hollywood parties. “Some of that stuff is starting to trickle in and our tenants are starting to feel more positive about the future,” Yamabe said.
Years before the pandemic, Yamabe was planning for the market’s future in a changing industry. The owners of the flower market submitted plans to redevelop the site, replacing one of the buildings on the site with a 15-story building containing 323 residential units, about 64K SF of office space, 64K SF of wholesale space and 10K SF of event space.
“We are not developers looking to build and sell,” Yamabe told a city committee at a 2019 hearing for the proposal. The redevelopment is a way for the business to remain relevant and stay in business “for the next hundred years,” he said.
For the last 15 months, the project has been held up in court by the AIDS Healthcare Foundation, which sued to stop the project from going forward. A trial date is set for early March, Yamabe said.
The Flower Market project is one of a handful of developments proposed for the area, and there is a likelihood that many more will be on the way. The Fashion District falls within the boundaries of a pending community plan update that would guide what can be built in Downtown LA over the next 20 years.
Much of the Fashion District is zoned to allow for commercial or industrial uses. Residential uses are allowed when existing buildings are converted to live/work units, though those conversions still need to receive discretionary approval from the city.
The pending plan proposes changing what is allowed in portions of the Fashion District. Some areas would have zoning that incorporates mixed-use projects as part of an effort to facilitate the creation of housing units for the estimated 125,000 people and 55,000 jobs Downtown LA is anticipated to add by 2040.
The zoning update would eliminate some of the existing hurdles for property owners in those areas who might have wanted to explore other uses for their buildings in the approximately 100-block district.
“When the community plan gets approved, it opens up the possibility of what people can do with their property,” Leddy said. The plan is expected to go before the city planning commission in the spring, but ultimately requires the approval of the full council.