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3M SF of Retail Coming to Surging Downtown LA

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With a diversity of neighborhoods, Downtown LA provides opportunities for all sorts of retailers, Downtown LA BID director Nick Griffin said in opening remarks at Bisnow's DTLA: The Future of Urban Retail event last week at Ratkovich Co's The Bloc. Noting that urban retail development requires density, he points out that Downtown’s evolution has produced a permanent population of 50,000. Residential units currently under construction are expected to bring the CBD’s population to 75,000, which along with nearby neighborhoods and daytime workers will provide nearly 1.1 million potential Downtown shoppers.

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“What makes Downtown retail dynamic is the synergy between groups—developers, creative types, entrepreneurs and a population of young professionals passionate about living in Downtown,” Nick says. A 2015 Retail Report prepared by the BID notes that retail receipts are up 36% over 2010. Existing retail inventory totals nearly 24.7M SF, and 2.8M SF of new retail is underway. Projects such as The Bloc, AT MATEO, the Broadway Trade Center and Oceanwide Plaza are adding another 2.8M SF of retail. Additionally, another 1M SF of retail is in the pipeline.

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LA Central City Association CEO Carol Schatz, who has made Downtown LA’s transformation to a 24-7 urban environment her professional calling, added, “Our population has reached critical mass and now we’re building on that. I’ve always believed that you cannot define a great city by a beach, two theme parks and a sign. We have created a real Class-A city," she said. “It’s not a dream and it didn’t happen by accident.”

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A panel of key people involved with development of The Bloc, a 400k SF outdoor shopping, dining and entertainment district fashioned out of Macy’s Plaza, discussed the genesis of this project. Studio One Eleven senior principal Alan Pullman (right with Macy's district VP Michael Ellmann), noted that this is a 1.8M SF development that also includes a 32-story office tower and Sheraton Hotel. “Office leasing has shocked and awed us,” he said, noting that 140k SF has been leased so far, all of which are creative tenants that have filled the space with Millennials.

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In transforming The Bloc’s office tower to creative space, Ratkovich COO Clare de Briere (center with Shangri-La Construction CEO Andy Meyers and Michael) noted The Hercules Campus in Playa Vista, a 28-acre creative office complex occupied by Google’s YouTube Next Lab and other creative tenants, served as a model. “We looked at how they are using the space, and what they did outside the office space—the amenities,” she said. “So we took those lessons and put them into a vertical context at a rooftop garden.” The project also is dog friendly and has CrossFit equipment, fitness classes and wellness programs offered outside in the square.

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The Downtown Macy’s has primarily been a men’s store, but Michael said the store is being reconfigured to make it more relevant to both sexes. “We’re the only department store in Downtown, and we’re pretty excited about that,” Michael says, noting millions are being invested in the store because of increasing foot traffic. “We used to close at 7pm, but now we have to kick people out at 9. This is a good problem to have.”

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Andy, whose company is redeveloping The Bloc, said the growing popularity of The Bloc’s current occupants—Macy’s, LA Fitness and others—had not been taken into account when the construction schedule was planned around business as usual continuing. “No one had anticipated the amount of people who would be coming here while the project is under construction.” (Shangri-La is also building Metropolis and the Hotel Fig.)