Pandemic Hamstrings Downtown LA's Status As A Hot Spot

Pez Cantina co-owner Lucy Thompson Ramirez remembers lunchtime before the coronavirus pandemic, when the cluster of office high-rises in LA's Financial District would empty out onto Grand Avenue and hungry workers would flood the sidewalks on their way to her restaurant and the others lining the street.  

“It was like hundreds of people just crossing paths,” Thompson Ramirez said.

Grand Avenue is home to the Disney Concert Hall, The Broad, the Museum of Contemporary Art, the Music Center complex and a hub for offices. But thanks to the pandemic, the museums have been closed for months, and the office workers are now largely working from home. 

“Now, I mean, it really is like The Twilight Zone," Thompson Ramirez said. "Noon hits and it's four or five people walking around.” 

Downtown Los Angeles was headed into 2020 with a lot to look forward to. About 4,500 residential units came online in 2019, breaking the previous year’s record by 35%, the Downtown Center Business Improvement District said. A handful of high-profile projects, including a Frank Gehry-designed multi-use complex were underway on Bunker Hill. Downtown boosters had plenty to be excited about.

Instead, Downtown business owners from the Financial District to Little Tokyo got nine challenging months of grappling with a marked drop-off in foot traffic from office workers and visitors to the area, adapting to changing rules about how they can operate and walking a fine line between keeping their businesses open and prioritizing their health — and that of their workers and their customers. 

Businesses are juggling all these elements and more to stay open, attempting to make it to the other side of the pandemic so they can see a return of the foot traffic, though there isn't a sure answer for if or when that will happen. 

“Little Tokyo is a neighborhood that really relies on foot traffic,” Little Tokyo Community Council Managing Director Kristin Fukushima said.

The neighborhood is a short walk from City Hall, local and federal government buildings, and Metro and CalTrans offices. 

“There’s always been a big reliance on the lunch crowd,” Fukushima said. 

Little Tokyo's businesses noticed the pandemic’s effects immediately. Before the pandemic, LTCC was doing most of its work on community sustainability issues and fighting the displacement of local businesses, many of which have been open for 20 or more years. Now, the bulk of its work revolves around supporting small businesses: making and updating lists of businesses that are open, making lists of businesses that offer online shopping, promoting special collaborations and partnerships between businesses in the neighborhood, doing Instagram Live videos with owners to put faces to the businesses LTCC encourage people to support. LTCC has also started a small-business fund, which so far has raised $91K for local businesses.

“When we’re talking about supporting businesses, we’re talking about supporting real people who are part of our community, who are our neighbors, who are people that we love,” Fukushima said. “We’re talking about protecting people and each other, not just a business.”

The drop-off in office workers has had the biggest impact on Downtown businesses, DCBID Executive Director Nick Griffin said. Nearly 500,000 people work in Downtown, according to a 2019 report from the DCBID, which covers the Financial District, Bunker Hill, the Historic Core and the Jewelry District.

But the impact isn't just from the absence of office workers; it is the dearth of tourists and visitors too. A May report from the Los Angeles Tourism and Convention Board estimated that Los Angeles County would see about 22 million fewer visitors and lose more than $13B in 2020 in tourist spending because of the coronavirus. Downtown hotel occupancy in November 2020 was down more than 66% from the year before. 

“Until both of those populations return — and I’d put office first in terms of importance — retailers are going to keep struggling,” Griffin said. 

Robert Villanueva signed a lease in November 2019 for a 500 SF restaurant space in the Jewelry District. The foot traffic past the storefront on Seventh Street was what really sold him on the spot. 

“It was like, ‘Wow. This is amazing. There's people walking around day and night,'" he said.  

The restaurant, a Filipino eatery called Petite Peso, opened in April. Since then, Villanueva has adapted as much as he could. The restaurant did takeout and catering, considered an outdoor dining space — a measure the landlord vetoed, Villanueva said — and focused on its online store where customers can order merchandise and select food items. After a COVID exposure scare involving staff in mid-December, Petite Peso nixed takeout and is now solely operating the online store and catering. 

Villanueva said that the public response to Petite Peso had been so positive — it made the Los Angeles Times' 2020 list of 101 top restaurants — that he is focused on building awareness of the brand in advance of the shop’s eventual reopening and doing it in a way that protects the health of his staff and customers.

“We are definitely going to reopen, but we want to be able to be healthy enough to do so,” Villanueva said. 

Adapting has also been the theme of the past nine months for Pez Cantina’s Thompson Ramirez and her husband and business partner, Bret Thompson. They invested in heaters, planters and landscaping for their large outdoor patio but haven’t been able to use them because of the current halt of outdoor dining.

When the California Department of Alcoholic Beverage Control gave businesses permission to sell takeout alcohol, the Pez Cantina owners added over a dozen kinds of bottled margaritas to the to-go menu. They sell a salty-spicy seasoning mix for rimming margaritas or topping chips, are using “every delivery platform out there” and turned part of their kitchen into a ghost kitchen for a delivery- and takeout-only burrito concept that they also run. 

“We've really been trying everything possible to maintain business, to keep the kitchen warm, to keep our staff employed as much as possible, as many people [as] possible,” Thompson said. 

At the same time, a major component of Pez Cantina’s business came from things that aren’t happening right now: power lunches, office happy hours, catering corporate events, people stopping in on their way to or from the cultural institutions in the area. And it’s unclear when and to what extent those things will come back. 

When the landlord asked Pez Cantina’s owners if they thought about closing, Thompson gave him an emphatic no. On the contrary, Thompson and Thompson Ramirez have been considering opening a second restaurant — just not in a commercial area like Downtown, he said. It would need to be where the people are now.

“I'm talking to all my liquor suppliers, all my vegetables suppliers, all my meat guys, and I'm always asking, ‘Who's recovering faster?’” Thompson said.

His vendors' answers have him looking at a storefront in a heavily residential neighborhood.

But long-term optimism for Downtown's viability isn't dead. It just depends on the presence of people.

“I'm still very confident that Downtown will recover as soon as all this subsides,” Villanueva said. “Will it recover to its heyday, even to what it was a year ago? I don’t know. But we do feel that there is business to be had in Downtown once office gets better.”