By Jorge Casuso

November 13, 2013 -- Downtown Santa Monica has not only weathered the recent recession, its overall economy is stronger than it was before the national downturn, according to consultants and district officials.

Office occupancy is at 93 percent, tourists from around the world are flocking to hotels, stores and restaurants, and a prominent residential community has sprung up, according to the annual report issued in August by Downtown Santa Monica, Inc. (DTSM).

“We have made a great place,” Kathleen Rawson, the nonprofit's CEO, told a crowd of civic leaders gathered at the agency’s Annual Meeting on August 8. “It's a place where you can shop, eat, live and express yourself.” Downtown Santa Monica, she said, is “one of the country's best downtowns.”

Consultant Robert York, who has been charting Downtown’s performance for the past two decades agrees, noting that hotel and office sectors are making exceptionally strong showings, while retail is “at new highs.”

“The long-term trend has been very strong,” York said. “We didn’t suffer quite as much as other areas during the recent recession, but we took a substantial hit. Now we’ve surpassed the pre-recession peak.”

The number of people living in the district has more than doubled from 1,340 to 3,075 between 2000 and 2010, according to the DTSM 2012-2013 Annual Report sponsored by Santa Monica Place’s owner, Macerich.

Tourism in Santa Monica is thriving, with visitors spending $1.53 billion last year, much of it Downtown. The average office occupancy rate rivals cities such as San Francisco and Boston, while the district’s more than 27,000 employees are spending their money where they work.

“Workers don’t just sit in the office, they eat, shop, go out to movies,” York said. “It’s the diversity of our customer base that keeps the economy going. People are getting out, and Santa Monica is one of the preferred places to shop, live and work.”

Downtown’s popularity cannot be solely attributed to its location; high-tech firms are increasingly turning the area into Silicon Beach despite little new office development, Rawson said.

“We’ve built no new office space Downtown,” she noted. “Those offices have always been there, and Santa Monica has always been by the beach, so something did shift.
“The economy is what it is. We can’t impact that, but we can impact our desirability, and I think that’s what we did.”

Rawson traces Downtown’s economic upsurge to the creation of the Property Based Assessment District in 2009, which funds the Ambassador and Enhanced Maintenance programs and has allowed the agency to remake Downtown’s image and increase its marketing efforts.

“Property owners say there has been a substantial uptick in rents and the kind of clients coming in,” Rawson said. “We put all the investment into the nuts and bolts of making this a cleaner, crisper Downtown.”

A 2012 survey of Downtown property owners and businesses found that approximately two-thirds of the respondents believe the overall image, cleanliness and appearance of Downtown has improved, while more than 85 percent rated the services provided as “good” or “very good.” Some 60 percent said they were “very optimistic about the future of Downtown.”

The level of satisfaction is reflected in the frequent emails from visitors from around the world thanking DTSM for providing the ambassador service, Downtown officials said. Some even include pictures of the visitors posing with the ambassadors who helped make their visit more pleasant.

But Downtown officials acknowledge there is still plenty of work to be done. The district’s movie theaters are outdated, and traffic and parking remain top concerns. Much will also depend on the Downtown Specific Plan that will set guidelines for development and circulation over the next two decades.

“All indicators are positive,” York said. “We have to make sure we can deliver all those pieces that will keep these trends positive for the longer term.”

Top City officials are confident that the ongoing partnership between the City and DTSM will ensure that Downtown remains the strong engine that is helping fuel Santa Monica’s economy.

City Manager Rod Gould told the crowd gathered at the annual meeting, “With all of us working together, Downtown Santa Monica is assured a great future.”