As Downtown Long Beach has emerged from the pandemic, a stark increase in homelessness and ongoing office vacancies have continued to challenge Downtown’s growth over the last year.
City officials have taken notice, acknowledging the work that lies ahead.
“This year has been challenging for the Downtown, from the continuing economic recovery due to the COVID19 shutdowns to the homelessness crisis ever more present on our streets, we know this year has been tough on our residents, businesses, and stakeholders,” District 1 Councilmember Mary Zendejas said in a statement to the Business Journal. “We have a lot of work to do to fix our issues, and although we’ve done a lot of work, more needs to be done.”
Still, 2022 wasn’t all bad news for the Downtown area. Tourism in the area started to rebound, and community groups are focusing their efforts on revitalization.
The return of tourism
Over the past year, there have been some promising signs of growth for the city—2022 saw the return of events, large and small, in Downtown Long Beach.
Most recently, the annual tree lighting in front of Terrace Plaza had a record-breaking 6,000 people in attendance, and this year’s Long Beach Marathon and corresponding weekend events attracted about 15,000 participants, up from 10,000 last year.
For this year’s Shop Small Saturday in Downtown Long Beach, placer.ai, a third-party location analytics software provider that collects foot traffic data, showed 86,700 visits recorded that day across East Village, Pine Avenue, the Willmore neighborhood and the waterfront areas, about 10% higher than last year, and about 20% higher than in 2019.
Long Beach’s hotel industry, one of the sectors most impacted by the pandemic in 2020 and 2021, is also on the path toward recovery, with many local hotels nearing or even surpassing their 2019 occupancy levels.
Shifts in Downtown businesses
As tourism is on the upswing, some new businesses have opened in the area, such as Solita’s Tacos & Margaritas, which took over the former Rock Bottom Brewery location on Ocean Boulevard in July. Ruth’s Chris Steak House and Flavo Juice Bar also both opened in August.
In early December, Hardcore Fitness Bootcamp opened in the building previously occupied by Anytime Fitness on Pine Avenue, and Altar Society Brewing is anticipated to open in the next couple of months.
And for existing businesses, there is a potential for growth. According to a Downtown Long Beach Alliance report, 53% of Downtown businesses surveyed said they expected their businesses to expand in the coming year, a proportion that has remained the same for the past three years.
Other businesses, though, have struggled. For the 48% of Downtown businesses that are related to retail, food and personal services—industries that were particularly impacted by coronavirus restrictions—recovery has come with many challenges.
The closure of Pier 76 Fish Grill in May, meanwhile, was partially attributed to the loss of lunchtime traffic, while other business owners have threatened to close or leave the area if city officials do not adequately respond to the escalating challenges facing Downtown, which include jumps in homelessness and crime.
Regarding the loss of office workers, it may be necessary for restaurants to reevaluate strategies to reach those customers, Broc Coward, chief operating officer of the DLBA, told the Business Journal in October.
A decline in perceptions of safety
For many Downtown business owners, coping with a rise in property crime and other challenges due to the city’s rise in homelessness has been an immense challenge to navigate this year.
City numbers show Long Beach’s unhoused population spiked 62% since 2020, and overall property crime in Downtown increased 23% this year. In October, the city even temporarily closed the $48 million Billie Jean King Main Library due to security concerns.
Perceptions of safety in Downtown have decreased for both residents and businesses, according to a DLBA survey released earlier this year.
Specifically, respondents expressed safety concerns in public transit areas, parking structures, sidewalks and alleys, among other areas.
Open comments elaborated on the general frustration with homelessness and the perceived lack of action from local and state agencies, and many commented on increases in theft, property damage and erratic behavior due to mental illness or substance use, according to a DLBA statement.
According to Coward, the expansion of the DLBA’s safety ambassadors team is a step in the right direction for Downtown safety. The expansion comes thanks to the renewal of the Downtown Property Based Improvement District Plan earlier this year, which will allow the organization to widen the safety ambassadors’ area of coverage beginning Jan. 1.
Not only will the actual boundaries of the district expand, but the renewed plan will also include a homeless outreach management position, which will help coordinate services from other organizations and agencies and collect more data about people who are unhoused, including assessing needs that could be communicated to the city and local nonprofits, Coward said.
Zendejas noted that she has worked to convert two motels to Project Homekey sites, and in two years, grew the city’s shelter space by 500, with over 1,000 beds now. The 2023 city budget also adds 20 new officers, doubling the quality-of-life officers in each division, and adding four more officers on bikes, she said.
Outreach staff has also increased significantly. While there were four workers two years ago, there are now 27, said Zendejas. The city’s homeless teams are prioritizing Downtown, with a new mobile unit serving Lincoln Park.
“I’ve continued to support economic recovery on impacts to businesses and various social programs to help people from falling into homelessness, such as rental assistance and guaranteed income, and supporting recently incarcerated individuals re-entering society to be productive,” Zendejas said.
Record-breaking office vacancies
The year has also been marked by Downtown office vacancies. The area hit its highest office vacancy mark in 20 years, and the city has begun to examine other possibilities for those spaces. In November, the City Council voted for city management to explore options to draw more businesses to vacant Downtown office spaces or to convert those spaces into housing.
As of the second quarter of 2022, 22.4% of office space in Downtown was vacant, according to a report released by the DLBA in August. Some of the highest levels of vacancy were in the city’s largest office buildings like Landmark Square, which was just 53% occupied.
The main driver of elevated vacancies stems from the three Class A office properties in Downtown: Landmark Square, Shoreline Square Tower and One World Trade Center. These properties combined account for nearly a third of total Downtown office space, and together decreased from an average occupancy of 74% in the second quarter of 2021 to 66% in the second quarter of this year.
Despite rising vacancies, the DLBA found that, as of July, Downtown office rents grew by 3.6% in the prior 12 months. The organization’s report noted that the region remains one of the most competitively priced office markets in Southern California.
Development and challenges with affordability
On the housing front, the Downtown area saw some major projects open their doors this year.
In October, the Magnolia, a 142-unit mixed-use building opened in Downtown, and the Onni East Village, a 432-unit apartment community, is currently pre-leasing. More units are either in development or construction process.
However, some residents and housing advocates have voiced concerns over a lack of affordable housing, particularly as the city continues to develop luxury housing in the Downtown area.
As wealthier populations move into these luxury apartments, the median income rises, impacting future affordability, Sylvana Uribe, communications director of LiBRE, a tenants rights organization, told the Business Journal in November.
The Downtown Plan, adopted by the City Council in 2012 and intended to provide the framework for speeding up housing development, has contributed to a decreasing sense of affordability for both business owners and residents, North Pine Neighborhood Alliance member Leanna Noble said in October.
In the Downtown core, the average household income is $114,438, although in Downtown as a whole, the average income is $68,128.
Hope for revitalization
Despite the challenges facing the area, work to revive Downtown is underway.
The city’s revitalization efforts focused on Lincoln Park have encapsulated the community’s desire to gather—with regular classes and events, the collaboration between several agencies, including Studio One Eleven, the Department of Parks, Recreation and Marine, the Long Beach Community Foundation, the Downtown Long Beach Alliance and the Billie Jean King Main Library, hopes to usher in a return of an activated Downtown.
“It’s become a little community,” said Sinead Finnerty-Pyne, marketing director of Studio One Eleven, one of the groups behind the effort. “Friendships have been made. People are connecting, and that’s the whole point, to bring people together and create synergy.”
Officials like Zendejas are optimistic for what’s to come in 2023.
“With our new leadership on the Long Beach City Council, the time is ripe for new momentum and solutions to our most challenging issues, so I am hopeful going forward,” Zendejas said. “We will need to work together, as a city, and I am confident that we will meet the challenges ahead by addressing our homelessness crisis, making our streets safer, and moving forward, together.”