A dollar goes a long way when it’s invested in a city’s downtown, more so than when spent on other parts of a municipality.
That’s according to a recent report by the International Downtown Association (IDA), the premier association of urban place managers shaping and activating dynamic downtown districts. Downtown Santa Monica, Inc. and its employees are members of IDA and participated in the report, contributing key data sets collected in the downtown Property-Based Assessment District and adjacent census tracts.
“The Value of U.S. Downtowns and Center Cities” report found that while downtowns, on average, represent just 3 percent of all citywide land, they deliver anywhere from 13 percent to 64 percent of citywide tax revenue, 11 percent of assessed land value, and 30 percent of citywide employment housed in 40 percent of the cities’ office space.
The findings reveal that each downtown function as leading economic drivers in each city and region, providing immense value, diversity, and a high quality of life for residents given a downtown’s dense blend of historical, cultural and entertainment assets.
Downtown Santa Monica is no exception. While Downtown Santa Monica comprises just 8 percent of the city’s landmass, this small geographic footprint generates 39 percent of the city’s total sales revenue, 42 percent of the city’s hotel tax revenue and 96 percent of the city’s total parking tax revenue. Downtown sales result in an annual allocation to the City of Santa Monica’s general fund of more than $12.5 million. Per square mile, downtown generates $178.5 million in sales tax — nearly five times the $37.5 million generated per square mile citywide.
And it’s not just about the money. Downtown Santa Monica is more diverse and affordable than other parts of Santa Monica.
Over 12 percent of the residential population downtown is African American, and another 12 percent is Hispanic. Twenty-six percent of residents downtown are foreign born, 23 percent are non-white. Downtown is also inclusive of residents of all ages. Sixteen percent of residents living in downtown are 35 to 44 years old, while 29 percent are professional-aged millennials (age 25-34 years old). Downtown is an attractive place for individuals of all ages and ethnicities to reside.
Continuing with diversity and inclusion, another interesting fact is the income breakdown of downtown Santa Monica’s residents. Downtown is home to 24 percent of the city’s households earning less than $20,000 and 12 percent of the city’s households earning greater than $150,000. It’s reflective of the fact that downtown has a higher concentration of good-paying jobs as well as affordable housing than other parts of the city. As more market-rate and low-income housing is being concentrated in downtown, this diversity is expected to continue.
Those future residents will find plenty of places to visit and things to do as downtown is home to one museum, four parks, three community centers, 16 event venues and more than 10 public art installations. Downtown is certainly a destination with appealing amenities for everyone, ranging from dense retail offerings to parks.
“This report, and all the great data that underlies it, helps to quantify what we’ve known for decades—that a vibrant downtown disproportionately supports the success of any great city. In terms of economic, social, and cultural vitality, downtowns punch orders of magnitude above their weight,” said Craig Lewis, principal of Stantec's Urban Places, which helped produce the report. “Our team is proud to have contributed to this piece of vital research. We look forward to our continuing partnership with the International Downtown Association to help downtowns and business districts—especially IDA members—tell the full story of their importance to city and regional economic performance.”
The research in the report will empower local leaders to work with the public and private sectors at multiple levels to encourage investment, and support the continued evolution of downtown.
“To maintain downtown’s economic impact, cities will need to continue investing in these areas where the tax revenues support the entire city,” the report states. “With shrinking federal funding, cities will be increasingly reliant on the local economic engines which are increasingly found in the downtown.”
The report was conducted over eight months with the help of 13 downtown place management organizations, including DTSM, Inc.
Data used to inform the report came from a variety of public and private sources, including pedestrian counts and retailer information collected by downtown place management organizations, the U.S. Census Bureau and FBI, and real estate data services. A data template was created using this information to provide a common set of metrics to measure downtown performance.
Among its key findings:
• Downtowns average just 3percent of citywide land, but account for 31 percent of citywide tax revenue. This means for every 1 percent of citywide land, downtowns contribute approximately 10 percent of citywide tax revenue.
• Despite the uncertain future of retail, downtown retail is still a significant presence – averaging 16 percent of citywide retail sales and retail offerings. On average, downtowns generate nine times more retail sales than their citywide counterparts.
• Downtowns continue to serve as major employment centers, accounting for 30 percent of citywide jobs and 40 percent of citywide office space. They are also adapting to workplace trends, containing 60 percent of citywide co-working space, 39 percent of citywide creative jobs, and 31 percent of citywide knowledge jobs.
• Residents aren’t just moving to cities – they are moving to downtowns. Downtown residential is increasing much faster than the rest of the city (38percent compared to 5percent). Downtowns also saw a 27 percent increase in residential housing units from 2010-2015, compared to the city’s average of 6percent.
•Downtowns are multi-modal hubs. Downtowns consistently had higher Walk Scores, Bike Scores and Transit Scores than their greater cities (85-90 compared to 52-57), had higher rates of non-single-occupancy vehicle (SOV) commuters (43 percent compared to citywide 28 percent).
To read the full report, click here