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Inside Downtown Los Angeles's Retail Boom

How DTLA became the coolest place in the country for fashion brands to open up a store.

An afternoon spent on South Broadway in downtown Los Angeles can be a pretty wonderful thing, if you like good food and good scenery and good clothes. Start with lunch at Grand Central Market, with its mix of old and new vendors: Traditional taco joints stand next to fancy cheese shops, juice bars and an espresso station that makes it own nut milk. Walk a few blocks down, and you’ll pass a Ross Dress for Less, the jeweler Joyas HEM and some old theaters, which look like they haven’t been touched since the 1940s. There might be a hawker or two on the street, but that pretty much dissipates when you get to the new Urban Outfitters, followed by a Two Boots pizzeria, an Aesop, an Acne Studios, a Tanner Goods and an Umami Burger. By the time you hit South Broadway and West 9th Street, you’ll see the Ace Hotel, which is sort of the crown jewel of the whole operation. Soon enough, A.P.C. will open stores in the neighborhood, as will Big Gay Ice Cream and Kinfolk Studios.

And that’s just one sliver of a neighborhood that, until a decade ago, had been all but abandoned. So, how did downtown Los Angeles go from looking like a broken-down movie set to attracting some of the biggest names in food and fashion?

A bit of incomplete background: Downtown Los Angeles, like many downtowns pre-white flight, thrived in the early 20th century. Suburban sprawl changed this. Angelenos wanted to live near the beach, and for those who worked in the film industry, near the studios. The area remained home to the West Coast fashion industry. There have always been plenty of factories in the area, plenty of showrooms, as well as the Fashion Institute of Design & Merchandising (FIDM). But DTLA also became a drop-off spot for California’s homeless population. There, Skid Row is not an idiom, it is a place on a map where many people live outside in tents and cardboard boxes. It covers 54 blocks, and it’s impossible to miss if you’re driving through the area. Other than the homeless people and some low-income housing, there just weren’t that many people living in DTLA. In 2000, the population was 27,849, according to the U.S. Census. Now there are more than 52,000 residents living in SoHo-style artists lofts in historic buildings. More than 500,000 people work in the city. “Downtown’s increasingly becoming a series of mixed-use neighborhoods,” says Kent Smith, executive director of the LA Fashion District BID. (BID stands for business improvement district, a group that was formed in 1996 to clean up the area.) “The residential population will likely reach 90,000 in the next five years, [almost] double what it is today.”

The transformation really began in 1999, when the City of Los Angeles passed the Adaptive Reuse Ordinance, which made it easier for developers to transform historic buildings into living spaces. People slowly began trickling in: artists who were attracted to the big spaces and still-affordable rent, banker types who worked in the nearby financial district. The Staples Center also opened in 1999, bringing a whole new sort of economy to the area. Residential living didn’t really start picking up, though, until right before the recession. The restaurant Bottega Louie, which opened in the Brockman Building in 2009, was really the first chichi spot to open in the neighborhood. “It singlehandedly put downtown Los Angeles on the map for dining,” says Brigham Yen, editor of DTLA Rising, a blog that documents the area’s development.

The downturn stalled things for a while, but people kept moving to DTLA. More restaurants opened, including Baco Mercat in 2011, its sister spot Bar Ama in 2012, as well as great Vietnamese place called Blossom. More recently, an outpost of the city’s popular Guisados tacos chain popped up, as well as Kazu Nori -- a casual offshoot of Sugarfish, the sushi empire fashion people love to frequent when they’re on the West Coast.

After the housing and food came the clothes. Always far ahead of its time, Comme des Garçons opened one of its famed "guerilla" pop-up shops in DTLA in 2008. And Santee Alley, an outdoor bargain market, has been a deal-seeker destination for destination for years. Fast-fashion retailers, including Zara and H&M, have reportedly done well on South Figueroa Street near the financial district. But it was the opening of the Ace Hotel in January 2014 that really caught the attention of Fashion with a capital F. Just as the Ace has helped to attract cool stores to the NoMad neighborhood in New York, including Opening Ceremony, Maison Kitsune and Dover Street Market, the fashion people followed to Los Angeles as well.

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A big reason for that is Jonathan Schley, a real estate broker who works for Tugsten Partners, which is a part-owner in the Ace Hotel empire. Schley’s job is to not only broker the deal on Ace Hotel spaces, but to also convince like-minded retailers to join them. "Organic development doesn't happen that quickly," Schley told LA Weekly in June 2014. "Development comes in waves, and usually it's residential first, then retail follows. We do it differently."

Tugsten’s strategy has resulted in a bustling intersection in an area of the city where people just didn’t go to shop before. The Acne store, for instance, is located half a block away from the Ace in the Eastern Columbia Building, a stunning art-deco relic designed by Claud Beelman in 1930. The store itself is beautiful, but its location makes it even more enchanting, and a real destination for design buffs. “It wasn’t our original intention to open in this part of Los Angeles, but we fell in love with the Eastern Columbia Building as well as the opportunity to do something beyond a flagship store,” says Acne Studios Chairman Mikael Schiller. “We feel that there is something vibrant and interesting going on in downtown Los Angeles, and we’re excited to become a part of this transformation.”

While there is something romantic about being an early DTLA adopter, it also seems to be a savvy business move. "I think it says a lot that both H&M and Zara chose to open their flagship West Coast stores here," Yen says. "Retailers are excited about Los Angeles having a center. They're willing to take that risk." The stats support that gut feeling. Median household income in 2013 was $98,700, a 10 percent increase from 2011, according to the Downtown Center Business Improvement District, and 26%  made more than $150,000. What's more, 56 percent of residents also work in the area. There have also, unsurprisingly, been increases in residential property prices. Condos in the area sell for a median $523.36 a square foot -- higher than Beverly Hills, according to Bloomberg

For those who haven’t spent much time in DTLA, especially in the past year or two, it can be hard to believe that it’s as buzzing as I’ve described it. But I can say, as someone who has spent probably a dozen days downtown over that period of time, that the feeling is real. What is also real, however, is Skid Row, which separates these vibrant city blocks from the Arts District, a cluster of warehouse buildings that are home to startups, indie shops, and plenty of great coffee shops and restaurants. When I stayed at the Ace for a couple of nights this past spring, my husband and I planned on walking two miles from West 9th and South Broadway to Bestia, which is at East 7th and South Sante Fe. As a person who has never had a license, I’m used to looking like a weirdo in Los Angeles, walking around West Hollywood and other areas where people do not typically walk. And two miles is not a short walk, even for New Yorkers. But the idea was shot down regardless because a local friend warned that it was flat-out unsafe.

You can’t help but wonder how it will all shake out. DTLA gentrification feels different from New York, probably because there are fewer people around to remind you of those you’re displacing. (While the homeless certainly make their way into the “cool” areas, Skid Row is fairly isolated because that’s where the help centers are also located.) “It’s becoming a very salient issue, at the forefront of everyone’s minds,” Yen says. “A lot of the community wants to have Skid Row decentralized.” In August 2014, Los Angeles city councilman Jose Huizar called for the appointment of a “homeless czar” to help better manage the city’s homeless programs. That same month, Operation Healthy Streets, L.A.’s $3.7-million initiative to clean up the Skid Row area, commenced.

What is clear is that the area will continue to attract high-fashion stores -- and their followers. A.P.C. will open soon on South Broadway. Who will be next?