Downtown L.A.'s future: prosperity but few people?

Like powerful tycoons fallen on hard times, once-prestigious buildings in downtown Los Angeles stand silent, with "for lease" signs awkwardly imploring passersby for a little help.

Brother, can you spare a tenant?

For decades, Los Angeles has struggled to revitalize its downtown. It is America's second-largest city, after all. Why wouldn't companies want to move here? The answers: corporate mergers and downsizing, urban turmoil, and a shift in demographics that tilted prosperity toward suburbia. The old buildings emptied. At best, L.A. became a 9-to-5 city, a discarded urban husk.

Now, however, there's a new kid in town and, by all accounts, he's spending lavishly on the old folks. But this new sugar daddy brings problems of its own.

Telecommunications companies eager to locate switching equipment as close as possible to downtown L.A.'s network of fiber-optic cables have found just what they were looking for - lots of floor space at a good price. Yet while the telecoms have brought money and machinery back to downtown, what they haven't brought, so far, is people.

So will 21st-century L.A. simply be a monstrous cathedral of humming wires - not the teeming mass of humanity in "Blade Runner"? Probably not, but some local officials are concerned all the same.

"It's a mixed blessing," says Kenneth Bernstein of The Los Angeles Conservancy, the nation's largest local historic preservation group. "Telecom can be a last-ditch savior for some historic building that would otherwise be demolished."

"[But] there may be too high a concentration of these facilities in historic districts," he says. "[That] may choke off converting older commercial buildings to artists' loft space and other residential uses essential to creating a 24-hour-a-day downtown."

There has even been some talk of a city ordinance reserving ground floors for human use only, says Mr. Bernstein.

The issue came to a head recently when a Colorado-based telecom called Level 3 began serious discussions with the US Post Office over its old Terminal Annex. The building is a magnificent New Deal-era structure adjacent to the meticulously restored Union Station. It's also only a brief walk from the 19th-century buildings of Olvera Street - the historical and emotional heart of the city.

So concerned was Mayor Richard Riordan that he pressured the Postal Service into opening the negotiations to other parties, including a major art-and-design college and the Los Angeles Unified School District.

The future of the annex remains uncertain, but real estate experts say the city shouldn't worry about the dot-com explosion. The next wave of telecom deals is likely to bring more people along with the computers, they say.

Broker Hayden Eaves IV, of real estate powerhouse Cushman & Wakefield, points to the rapid expansion of dot-coms that are employing more and more people to man computer-sales terminals. In addition, larger firms are relocating their administrative staffs to be closer to the electronics.

Moreover, telecoms can be an asset to the city if the mix with other businesses and residential projects is carefully thought out, says Deputy Mayor Rocky Delgadillo, Mr. Riordan's point man on the telecom issue. Indeed, for all the newness and explosive expansion of the telecommunications industry, the problem for those seeking to revitalize central cities remains what it always was: a question of balance.

"Most cities have to deal with the question of business mix," says Judy Hull, executive director of the Special Business District in Columbia, Mo. "Too many bars and nightclubs and you're dead during the day. Too many offices and you've got a great lunch crowd but nothing else."

In L.A., telecoms ranging from industry giants like MCI WorldCom to virtually unknown Internet start-ups currently account for an estimated 1.2 million square feet of space in Los Angeles's 40 million square-foot market.

By this time next year that figure will increase by a million square feet, estimates Howard Sadowsky, vice chairman of Julien J. Studley, Inc., a real estate brokerage.

"I'm very concerned that we don't turn these buildings into peopleless factories," says Mr. Sadowsky, "But with moderation, I think we'll be fine."

(c) Copyright 1999. The Christian Science Publishing Society