Beyond the Trends 2006

Table of Contents
2 Foreword
3 Executive Summary
4 Ten Years of Change
6 Real Estate Property Transactions
7 Commercial and Residential Development
11 Creative Edge
12 Small Business Center
14 Fashion District’s Role in the Los Angeles Economy
17 Economic Impact of Market Weeks
19 Ten Years of BID Service
21 Fashion District Forecast
23 Credits
110 E. 9th Street, Suite A-1175, Los Angeles, CA 90079
tel: 213.488.1153 fax 213.488.5159 web: fashiondistrict.org
ECO N O M I C C O N T R I B U T I O N S O F T H E L O S A N G E L E S FA S H I O N D I S T R I C T
May 20 0 7
Foreword
Welcome to the LA Fashion District. Located in downtown Los Angeles, the LA Fashion District
Business Improvement District (BID) spans 94 blocks and is the hub of the apparel industry
on the West Coast. Apparel retailers, wholesalers, designers, stylists, manufacturers, students,
shoppers and residents all converge here creating an exciting synergy that has become synonymous with “LA style.”
Exciting changes have evolved over the past ten years since the BID was initiated by property
owners in 1996. New developments, renovations and adaptive reuse projects have transformed
the LA Fashion District from an industrial area into a vibrant mixed-use district.
Benchmarking these changes is critical to the continued success of the district. The LA Fashion
District BID commissioned the consulting practices of the Los Angeles Economic Development
Corporation (LAEDC) and Economics Research Associates (ERA) to document the most important
“facts” about LA’s fashion industry and the exciting changes. We appreciate the many individuals,
companies and members of our Board of Directors that contributed to this landmark publication
and tribute to ten years of change in the LA Fashion District.
John van den Akker
Chairman, Board of Directors
LA Fashion District BID
ECONOMIC CONTRIBUTIONS OF THE LOS ANGELES FASHI O N D I S T R I C T
Kent Smith
Executive Director
LA Fashion District BID
T r a n s it i o n . Va lu e . Impa ct.
Executive Summary
1. Real Estate Values. Real estate property
values remain high and attract private reinvestment
because of the continually obvious vitality of apparel
business economic activity. Property values in the
LA Fashion District have more than tripled since the
BID formed in 1996. More recently, vacancy rates
have declined from 5.3% to 2.4% from 2003 to
2006. Average land prices increased from $198.10
per square foot in 2003 to $481.68 in 2006.
2. Building Area, Floor Space. More than 18 million square feet of building floor area currently exists
in the LA Fashion District. This equates to about
23% of current office, retail and industrial building
floor area in the Central City.
3. Dense Cluster of Business. There are literally
thousands of small enterprises and medium-scale
businesses in the district. It is estimated that a total
of 4,375 business establishments are currently
operating in the Fashion District. The estimate
includes 2,492 street level businesses and 1,883
upper story business tenants in low, mid and high
rise structures. Most are independent family-owned
businesses and employ less than five people. It is
estimated that over 37,000 people work in the LA
Fashion District.
4. Growth of Fashion District Area. The apparel
industry continues to expand beyond the LA Fashion
District BID boundaries toward the east, giving
evidence of continued growth. A 2006 survey found
2,068 fashion related establishments in the district,
including 1,187 wholesale/retail businesses, 758
wholesale-only businesses, 70 retail-only businesses and 53 other wholesale/retail businesses.
Overall, the number of business licenses grew by
32% for all types of businesses between 2003 and
2005.
5. New Developments. New construction and
renovated buildings from 2001 to 2006 account for
an estimated increase of 5,219,255 square feet of
floor space, with 27 new buildings constructed and
37 renovation/adaptive reuse projects. Development
has impacted more than a third of the commercial/
industrial space in the district. The number of residential units will double to over 2,600 by 2009.
6. Business Volume Estimated at $5.76 Billion
Supporting 66,000 Jobs. The measured shift away
from manufacturing has been largely replaced by
very high activity wholesaling at higher business
volume values. Conservative estimates place the
volume of business transactions in the Fashion
District at $3.5 billion to $3.8 billion during 2005.
About 35% of transactions do not seem to be
formally recorded, and when added in, takes the
annual business volume estimate to $5.76 billion
in 2006. This activity sustains 66,000 jobs in Los
Angeles County. Business revenue volumes are
forecast to grow by 3% per year to approximately
$6.7 billion by 2011.
7. Wholesale Center. The district now is the center
of 41% of Los Angeles County’s fashion wholesale
establishments. Wholesale jobs increased by 7%
in Los Angeles while falling 17% in New York from
1998 to 2004.
8. Retail Destination. Retail sales in 2005 were
estimated to exceed $495 million, topping sales
recorded for the Hollywood Entertainment District or
Rodeo Drive.
9. Fashion Markets. Trade show activity throughout
the year has increased. A conservative estimate is
that 53,000 buyers and exhibitors attend fashion
markets in the Fashion District annually.
10. Fashion Market Impact. Fashion market attendees spend approximately $50 million at Los
Angeles area hotels, restaurants, taxis, etc., aside
from the orders placed at shows for future delivery at retail stores in the U.S. and abroad. This
spending supports an estimated total of 1,370 jobs
directly and indirectly in Los Angeles County, earning
almost $30 million in wages and salaries. Los Angeles businesses realize more than $103 million in
annual revenues tied directly or indirectly to fashion
markets held in the district.
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Ten Years of Change
The LA Fashion District was the first property-based business
improvement district (BID) to be formed in Los Angeles after
passage of the authorizing state legislation in 1994. The first
LA Fashion District BID was formed in 1996 for a three year
term by property owners within the proposed boundaries in a
majority election process. The district has expanded considerably since its beginning in 1996 from an initial 56 blocks,
156 net acres and 14.6 million square feet of floor space
to it current size in 2006 with 94 blocks, 274 net acres and
18.8 million square feet of floor space. Efforts are already
underway to renew the current BID for a fourth term.
12TH Street
ECONOMIC
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Growth of the LA Fashion District
Business Improvement District (BID)
Ten Years of Change
The LA Fashion District was the first property-based business improvement district (BID) to
be formed in Los Angeles after passage of the authorizing state legislation in 1994. The
first LA Fashion District BID was formed in 1996 for a three year term by property owners
within the proposed boundaries in a majority election process. The district has expanded
considerably since its beginning in 1996 from an initial 56 blocks, 156 net acres and 14.6
million square feet of floor space to it current size in 2006 with 94 blocks, 274 net acres
and 18.8 million square feet of floor space. Efforts are already underway to renew the curhe LA Fashion District was the first property-based
business
improvement district (BID) to
rent BID for a fourth
term.
e formed in Los Angeles after passage of the authorizing state legislation in 1994. The
rst LA Fashion District BID was formed in 1996 for a three year term by property owners
Growthelection
of theprocess.
LA Fashion
District
Business Improvement District (BID)
ithin the proposed boundaries in a majority
The district
has expanded
onsiderably since its beginning in 1996 from an initial 56 blocks, 156 net acres and 14.6
million square feet of floor space to it current size in 2006 with 94 blocks, 274 net acres
nd 18.8 million square feet of floor space. Efforts are already underway to renew the curent BID for a fourth term.
operty-based business improvement district (BID) to
e of the authorizing
legislation
in 1994.
The
Growth
of the LAstate
Fashion
District
Business
Improvement District (BID)
d in 1996 for a three year term by property owners
ajority election process. The district has expanded
6 from an initial 56 blocks, 156 net acres and 14.6
current size in 2006 with 94 blocks, 274 net acres
pace. Efforts are already underway to renew the curPHASE 1 1996 - 1998
Ten Years of Change
ange
Approximately 56 City Blocks
750 Properties
411 Property Owners
$2.2 million program budget
155.7 acres
14.6 million square feet of floor space
rict Business Improvement District (BID)
PHASE 1 1996 - 1998
Approximately 56 City Blocks
750 Properties
411 Property Owners
$2.2 million program budget
155.7 acres
14.6 million square feet of floor space
PHASE 1 1996 - 1998
PHASE 2 1999 - 2003
PHASE 3 2004 - 2008
PHASE 2 1999 - 2003
• Approximately 82 city blocks
• Approximately
Approximately 56
56 City
city blocks
Blocks
• 1,072 properties
• 750
750 Properties
properties
• 580 property owners
• 411
411 Property
property Owners
owners
• $2.7 million program budget
• $2.2 million program budget
$2.2 million program budget
• 257.2 acres
• 155.7 acres
155.7 acres
4
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O F T H E million
LO S A N G Esquare
L E S FA S feet
H I O N of
D I ST
R I C T space
•S 18.63
floor
• 14.6 million square feet of floor space
14.6 million square feet of floor space
PHASE 2 1999 - 2003
•
•
•
•
•
•
Approximately 94 city blocks
1,356 properties
850 property owners
$3.4 million program budget
273.1 acres
18.8 million square feet of floor space
PHASE 3 2004 - 2008
ECO N O M I C C O N T R I B U T I O N S O F T H E L O S A N G E L E S FA S H I O N D I S T R I C T
Real Estate Property Transactions
Property transactions from April 2003 to August 2006 totaled
$570 million, for an average of $200 million per year.
The total net land area sold was 44.41 acres or an average of 13 acres per year. 2004 was
the most active year, with 41% of property land area and 52% of recorded sales amounts. The
average price difference between 2003 and 2005 was +$250.91 per square foot, or a 121%
increase. During this period, BID assessments increased an average of only 9%.
Summary of Real Estate Property Transactions
in the LA Fashion District and Comparison with BID Assessments
Average % IncreaseAverage Price/Land Area
Average Price/Land Area
2003
2004
2005
2006 January % Increase
BID Assessment
% IncreaseAverage % Increase
$198.10/sq. foot
$344.83/sq. foot
74%
$449.01/sq. foot
30.2%
$481.68/sq. foot
7.3%
0.00%
0.30%
2.6%
1.0%
Source: CoStar, Economics Research Associates, LA Fashion District
LA Fashion District Recent Property Transaction Volumes
Sales
Noted
% of Total
Transactions
Transaction
Types
2003 (9 months)
35
15.6%
10 Wholesale/Retail Condominiums
10 Single-Tenant Industrial Buildings
5 Retail Storefronts
3 Offices with Street Level Retail
7 Other Use Types
2004
112
50%
86 Wholesale/Retail Condominiums
4 Single-Tenant Industrial Buildings
5 Multi-Tenant Industrial Buildings
9 Retail Storefronts
3 Storefront Retail/Office Buildings
5 Other Use Types
2005
44
19.7%
11 Single-Tenant Industrial Buildings
11 Retail Storefronts
2 Storefront Retail/Office Buildings
2 C-2 Zoned Acreage
9 Other Use Types
2006 (8 months)
33
14.7%
2 Wholesale/Retail Condominiums
7 Single-Tenant Industrial Buildings
4 Multi-Tenant Industrial Buildings
7 Retail Storefronts
2 M-2 Zoned Acreage
2 9+ Story High Rise
9 Other Use Types
TOTALS
224
100%
103 Wholesale/Retail Condominiums
32 Single-Tenant Industrial Buildings
13 Multi-Tenant Industrial Buildings
32 Retail Storefronts
8 Storefront Retail/Office Buildings
2 C-Z Zoned Acreage
2 M-2 Zoned Acreage
32 Other Use Types
3-Year Cycle Equivalent
60 to 70 Properties/Year
Obvious Market for Wholesale Condominiums
Continuing Turnover of Retail Storefronts and Industrial Buildings
Source: CoStar, Economics Research Associates
ECONOMIC CONTRIBUTIONS OF THE LOS ANGELES FASHI O N D I S T R I C T
Commercial and Residential
Development
A considerable amount of commercial development has occurred
in the Fashion District, with more than 6 million square feet of
building renovations and new construction projects completed,
underway or planned since the BID was started in 1996.
Development has impacted more than a third of
the commercial/industrial space in the district.
Over a third of all buildings in the district have
been built or renovated since 1996. During the
BID’s first term of operation from 1996 - 1998,
840,000 square feet were developed – as
renovated or new space (280,000 square feet
per year). Investment swelled to 1.66 million
square feet in the district’s second term of
operation from 1999 - 2003 (332,000 square
feet per year). The first two years of the BID’s
third term (2004 - 2008) showed a remarkable
upsurge to 3.4 million square feet (1,700,000
square feet per year).
Three significant types of activity are evident:
•
Reinvestment and repositioning of
very large Fashion District display
and product marketing structures
including The New Mart and the
Cooper Design Space.
•
New construction of higher density
wholesale space – including very
successful condominium examples
at the San Pedro Wholesale Mart
and the San Pedro Wholesale
Mart Annex.
•
Adaptive reuse of older office and
multi-story commercial/industrial
buildings as residential lofts,
apartments and condominiums in
complexes such as Santee Village,
Pacific Electric Lofts and the
Tomahawk Building.
Much of the new construction has occurred,
and will continue to occur, on the east side
of the district. However, in the central part of
the district, developers have converted former
parking lots and demolished outdated buildings
in several locations including 6th Street and
Los Angeles Street, and 12th Street and Maple
Avenue. Additional new construction is also
underway directly adjacent to the Fashion
District boundaries.
LA Fashion District Cumulative Renovations
& New Development Growth of Square Footage
Term
Square FootageSquare Feet Per Year
First Three Years of BID (1996 through 1998)
840,434 sq. feet
280,000 sq. feet
Second Five Years of BID (1999 through 2003)
1,660,100 sq. feet 332,000 sq. feet
Third Five Years of BID (2004 through 2006)
(Developments known through October 2006 included)
3,395,905 sq. feet
Additional Renovations & New Builds Planned for 2006
1,700,000 sq. feet
455,000 sq. feet
TOTAL 6,351,439 Square Feet
Source: Economics Research Associates, LA Fashion District
ECO N O M I C C O N T R I B U T I O N S O F T H E L O S A N G E L E S FA S H I O N D I S T R I C T
LA Fashion District Development
Commercial Development
Mixed-Use Development
Residential Development
BID TERM 1996 - 1998
Commercial Development
Development
BID TERM 1999 - 2003
Mixed-Use Development
Residential
Development
BID TERM 2004 - 2008
ResidentialDevelopment
Development
Mixed-Use
BID TERM 2007 +
BID TERM 1996 - 1998
ECONOMIC CONTRIBUTIONS OF THE LOS ANGELES FASHI O N D I S T R I C T
BID TERM 1999 - 2003
BID TERM 2004 - 2008
LA Fashion Distr
There has also been an upsurge of interest in residential units
located in the downtown area.
Prior to 2001, the district’s residential stock
consisted of mostly affordable housing units.
However, the renovation of eight historic buildings in the Santee Village development project
set off a wave of residential conversions to
meet growing demands for market-rate apartments and condos.
In the last two years, 770 housing units have
been built in the Fashion District. Another 616
units are in the construction or planning stages
and expected to become available before
2009, bringing the total district housing stock
to 2,613 units. While the bulk of these units
are market-rate, another 130 affordable units
were added with the addition of the Dewey Hotel and The Yankee during this period. Recent
and planned residential development will better
balance the district’s housing stock between
affordable and market-rate units. If all goes as
planned, market-rates will equal the number of
affordable units by 2009, for a more balanced
residential neighborhood.
New projects are continuously being announced. Another 395 condominiums and 400
live/work units are planned to open as early as
2008 at Spring Street and 7th Street adjacent to
the northwest corner of the district. Redevelopment of a former multi-story manufacturing
building at Santee Street and 8th Street will further increase the housing stock. Adding to the
creativity the district possesses, live/work units
put an innovative spin on downtown living and
are attractive to designers and other creative
types who want to work from home.
Housing Construction in
the LA Fashion District
Housing Construction in the LA Fashion District
3,000
2,400
UNITS
In a recent study, “The Downtown Los Angeles Renaissance,” the LAEDC documented
all of the residential projects that have been
completed or are expected to be completed
between 1999 and 2015. The graph below
shows the number of existing residential
buildings and planned developments that are
expected to be available for rent or sale in the
LA Fashion District by 2009.
1,800
2,613
616
2006 - 2009
770
2004 - 2006
1,200
600
1,227
UNITS BY 2009
113%
increase
since
1999
Pre 1999
810 S. Spring Street
ECO N O M I C C O N T R I B U T I O N S O F T H E L O S A N G E L E S FA S H I O N D I S T R I C T
Santee Village
LA Fashion District Restaurants
and Art Galleries
Residents are
attracting new
business and
moving the
district toward a
24-7 environment
with new
restaurants and
art galleries.
Art Gallery
Restaurant
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ECONOMIC CONTRIBUTIONS OF THE LOS ANGELES FASHI O N D I S T R I C T
Creative Edge
The LA Fashion District is the creative center of the fashion
industry on the West Coast.
The district is a one-stop destination for anyone in the fashion industry, with more than
190 textile establishments including fabric
houses, trim shops and pattern and sample
makers. Apparel and accessory designers,
manufacturers, wholesale distributors, importers, exporters and design schools all call the
Fashion District home.
industry coming back. And the added convenience of the business clusters means easier
access for buyers and retailers.
The district contains over 130 flower businesses, many housed in the two major markets
located on the 700 block of Wall Street. Flowers of all varieties spill out onto the sidewalks,
adding to the color and life in the district. In
addition, these businesses attract a different
core customer to the Fashion District.
The district’s proximity to the nation’s largest
ports, railroads and transcontinental highways
give local firms ready access to the global and
national logistics and transportation networks,
Also located within and adjacent to the district
a competitive advantage in the fashion industry. are several fashion design schools that offer
training in both design and merchandising
A wide variety of activities takes place in the
aspects of the business. Educational opportudistrict, including textile, apparel and accesnities abound in the LA Fashion District from
sory design, pattern-making, manufacturing,
the prestigious Otis College of Art and Design
wholesale, retail and import/export. Data from
to training classes offered by Fashion Business
the U.S. Census Bureau (for ZIP codes 90014, Incorporated. Nearly 12,000 students attend
90015, 90021 and 90079) reveal that the
day and evening classes at three major design
Fashion District really is the creative core of
schools and training centers that exist within a
the Los Angeles County fashion industry. Within one mile radius of the district. New graduates
these four ZIP codes are 41% of the County’s
in design and merchandising and many famous
apparel & accessory wholesale establishments
alumni provide a constant flow of creative
and 17% of the County’s fashion designers.
ideas for the local industry.
The convenience of having all these resources
in one place keeps members of the fashion
OTIS COLLEGE OF ART AND DESIGN
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11
Small Business Center
It is estimated there are a total of 4,375 businesses operating in the
Fashion District.
Most of these are small family-owned businesses. The estimate includes 2,492 street level businesses and 1,883 upper story business tenants in low, mid and high rise structures. Very few
“chain” stores currently exist in the district and the majority of those are fast food franchises and
coffee houses.
Looking at street level businesses only, a 2006 survey found 2,068 fashion related establishments,
including 1,240 wholesale/retail businesses, 758 wholesale-only businesses and 70 retail-only businesses.
According to the City of Los Angeles, overall, the number of business licenses in the Fashion District grew by 32% in both wholesale and retail sales categories between 2003 and 2005.
LA Fashion District
Business License Tax Reporting Trends 2003 – 2005
2003
2004
2005
Businesses
Recorded
3,151
3,702
4,144
Business Volumes
Recorded $1.2 Billion $1.3 Billion $1.5 Billion
Business License
Taxes Paid
$1.1 Million $1.3 Million $1.4 Million
% Change
2003-2005
+ 993 Businesses
+ 32%
+ $338 Million
+ 29%
+ $354,000
+ 34%
Source: City of Los Angeles, Economic Research Associates, LA Fashion District
LA Fashion District
Largest Reported Business License Tax Groups 2003 – 2005
Change
2005
Wholesale Sales
Firms
Gross Volumes
Business License Tax
Retail Sales
Firms
Gross Volumes
Business License Tax
All Groups
Firms
Gross Volumes
Business License Tax
% Change
2003-2005
1,887
$1.1 Billion
$926,000
+ 30%
+ 25%
+ 32%
1,050
$138 Million
$137,824
+ 29%
+ 46%
+ 32%
3,890
$1.5 Billion
$1.3 Million
+ 32%
+ 28%
+ 32%
Source: City of Los Angeles, Economic Research Associates, LA Fashion District
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ECONOMIC
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Business Clusters in the LA Fashion District
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Fashion District’s Role in the
Los Angeles Economy
The la Fashion District plays a significant role in the economy of
los angeles.
The district’s direct economic impact is measured by business revenue, employment and earnings
generated. However, the Fashion District’s economic impact is felt well beyond its boundaries. Firms
doing business in the district have suppliers located elsewhere in the region, producing goods and
services for use or sale inside the district. Many of the employees working in the district commute
to their jobs from other communities in the region and spend much of their earnings nearer home.
Conversely, some of the district’s new apartment residents work – and spend – in other parts of Los
Angeles County even though they live in the Fashion District. Thus, the LA Fashion District generates ongoing indirect economic impact that spreads throughout the City and the County.
LAEDC estimated the Fashion District’s annual contribution to the Los Angeles economy. The
results are significant. Using the low end of ERA’s ranges for employment and business sales volumes, the 35,000 workers in the Fashion District support a total of 66,000 full-time equivalent
jobs (including their own) across Los Angeles County.
• All of these jobholders earn an estimated $2.16 billion annually in
wages and salaries.
• An estimated $5.7 billion in annual business revenues is tied directly
or indirectly to the economic activity taking place in the district.
• If the informal transactions are added in, activity in the Fashion District
supports as much as $8.8 billion in total (direct and indirect) business
revenues and 101,000 FTE employees across Los Angeles County.
A comparison of Los Angeles and New York wholesale job counts
shows apparel wholesale job counts rose by 7% in Los Angeles
between 1998 and 2004, but they fell by 17% in New York. And
Los Angeles had 11% more fashion establishments employing
37% more workers than New York in 2004.
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LA Fashion District
Annual Economic Impact of “Top Eight” Types of Businesses in 2005*
Type of Impact
Conservative Case
High End
Direct Impact
Indirect Impact Total Impact Total Impact
Business Revenues (Millions) $3,300
Employment (# of FTE Jobs) 35,000
Wages & Salaries (Millions) $1,230
$2,400
31,000
$930
$5,700
66,000
$2,160
$8,800
101,000
$3,300
Source: Economics Research Associates, Los Angeles Economic Development Corporation
* In descending order of activity data: (1) Showrooms/Marketing/Display; (2) Apparel/Accessory Stores (Retail
– Wholesale); (3) Wholesale Trade only; (4) Apparel and Other Textile Products Manufacturing; (5) Wholesale
Trade (Durable Goods); (6) Business Services; (7) Miscellaneous Retail; (8) Eating and Drinking Places
LA Fashion District
Estimated City of Los Angeles Revenues 2005
Tax Source
2005 Revenues
Property Tax
Sales Tax
Business License Tax
Utility User Tax
Parking Tax
$ 2,853,210
$ 3,772,500
$ 1,394,854
$ 4,963,200
$ 983,577
SUM TOTAL
$13,967,341
Source: California State Controller Reports on Cities & Redevelopment
Agencies, Los Angeles County Assessor, Economics Research Associates,
LA Fashion District
LA Fashion District
City Parking Tax Revenues 2003 – 2005
2003
2005
% Change
# Parking Sites
48 to 56 65 to 71
+ 48%
Gross Annual
Parking Revenues
Reported (Millions)
$7.9 m
$10.9 m
+ 38%
Parking Tax
Receipts
$708,000
$983,000
+ 39%
Source: City of Los Angeles, Economics Research Associates, LA Fashion District
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Transportation and logistics are important for the fashion industry. Textile and apparel products are often shipped from around the world to the district, and then
re-shipped to stores all over the United States. In this regard, the district’s close
proximity to the nation’s busiest ports is a huge asset, giving local firms fast and
frequent service to and from Asia. Not surprisingly, the district’s fashion industry
base is quite diverse, with a multitude of international contacts and business
dealings. In addition, the district area is well served by the local transportation
system with easy access to major regional highways and rail yards for deliveries.
PORT OF LOS ANGELES
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ECONOMIC CONTRIBUTIONS OF THE LOS ANGELES FASHI
FASH IO N D I S T R I C T
Economic Impact of
Market Weeks
CALIFORNIA MARKET CENTER
Fashion related shows and market weeks bring large numbers of visitors to the LA Fashion
District each year. Fashion industry professionals estimate the number of people who attend
the shows in the four designer wholesale apparel buildings (California Market Center, Cooper
Design Space, Gerry Building and The New Mart) and how much they spend locally on lodging,
transportation, food, etc. (in addition to their purchases of apparel at the market events):
• A conservative estimate is that 53,000 buyers and exhibitors attend fashion markets in
the Fashion District annually.
• About half of the retail buyers come from California. Over 70% arrive from 15 states in
the Southwest, Mountain and Far West regions of the U.S. Almost 5% of buyers come
from outside the U.S.
• Aside from the orders placed at the shows for future delivery at retail stores in the U.S.
and abroad, fashion market attendees spend approximately $50 million at Los Angeles
area hotels, restaurants, taxis, etc.
This spending supports an estimated total of 1,370 jobs directly and indirectly in Los Angeles
County, earning almost $30 million in wages and salaries. Los Angeles businesses realize more
than $103 million in annual revenues tied directly or indirectly to fashion market weeks held in
the district.
Business to business commerce is also important in the Fashion District. Buyers for local retail
stores come regularly – monthly, even weekly – to check out and purchase the latest styles for
their customers. The district buzzes with activity during the five market weeks held each year.
Enormous numbers of retailers and buyers descend on the district to view and order the next
season’s selections from exhibitors showing thousands of lines of apparel and accessories. At
the Holiday/Resort Market in August 2004, wholesale buyers selected seasonal fashions from
4,525 different lines of clothing. These are displayed in numerous booths and showrooms fitted
especially for the occasion.
ECO N O M I C C O N T R I B U T I O N S O F T H E L O S A N G E L E S FA S H I O N D I S T R I C T
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Los Angeles Fashion Markets Economic Impact
Type/Source of Spending
Business Revenues
Wages/SalariesEmployment
(FTE Jobs)
Out of Town Attendees
$59,100,000
$17,100,000
740
Local Area Attendees
$ 8,000,000
$ 1,900,000
80
Exhibitors
$36,100,000
$10,500,000
550
$103,200,000
$29,500,000
1,370
Total Impact
Source: Los Angeles Economic Development Corporation
Spending by Fashion Market Attendees
Out of Town Attendees
Direct Spending
Hotel Rooms
Food & Drink
Ground Transportation
Retail Miscellaneous
$16,300,000
$ 7,200,000
$ 4,200,000
$ 1,200,000
Sub Total
$29,000,000
Southern California Residents
Direct Spending
Food & Drink
Ground Transportation
Retail Miscellaneous
$1,300,000
$1,800,000
$ 900,000
Sub Total
$4,000,000
Exhibitor Entertainment, etc.
Direct Spending
Food & Drink at Showrooms
Dinners for Customers
$ 5,700,000
$11,000,000
Sub Total
$16,700,000
Total Direct Spending
$49,700,000
Source: Los Angeles Economic Development Corporation
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ECONOMIC CONTRIBUTIONS
CONTRIBUTIONS OF
OF THE
THE LOS
LOS ANGELES
ANGELES FASHI
FASH IO
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DIISSTTRRIICCTT
ECONOMIC
Ten Years of BID Service
Over ten years have passed since a 12-block
clean and safe service pilot project gave owners a sample of how a business improvement
district could improve a distressed neighborhood. Back then the area was known as the
garment district and desperately needed a new
look. Trash filled the streets, graffiti competed
with store signage for attention, property
values were plummeting, and there were very
few shoppers and pedestrians brave enough to
walk the streets. Without a good revitalization
plan, the area clearly would not stay competitive with national wholesale fashion centers
and the thousands of other retail shopping
options in Los Angeles.
The success of the pilot project is clearly
evident today. The LA Fashion District is now
one of the most important creative centers
of the apparel industry in the United States.
Designers, students, shoppers, retailers, buyers, business owners, employees, developers,
and residents are creating a location that now
attracts international attention.
It all happens here because Fashion District
property owners continue to support the business improvement district management plan
fund through annual special tax assessments.
With these funds the BID works to set the
stage for economic growth with a safer and
cleaner public environment throughout the 94block district.
The LA Fashion District Board of Directors,
comprised of district property owners, is
involved with day-to-day management of the
BID. The BID works hand-in-hand with the City
of Los Angeles to enhance their services by
providing additional clean and safe programs.
Increased destination marketing programs,
special projects and advocacy for the entire
district attract thousands of pedestrians to the
district every day. The benefits of BID activities
in the business community are clear.
The LA Fashion District BID is a nationally
recognized success story. Through important
partnerships with City officials and service departments, the Board of Directors will continue
to dedicate their time and energy to ensuring
that the work continues and evolves as the
area grows and changes.
LA Fashion District Pedestrian Count Summary 2000-2004
Location
2004 8-Hour Weekend Count
Weekend Pedestrian Traffic
2000 and 2004 Comparison
Los Angeles St. between 5th & 6th Streets
Santee Alley between 11th & 12th Streets
Maple Ave. between 12th St. & Pico Blvd. Pico Blvd. between Main St. & Los Angeles St.
San Pedro Blvd. between 11th & 12th Streets
16,872
26,700
16,308
8,232
2,028
87% Increase
27% Increase
52% Increase
121% Increase
77% Increase
Source: LA Fashion District ECON
ECO NOOMMI CI CCCOONNTTRRI BI BUUTTI O
I ONNSSOOFFTTHHEELLOOSSAANNGGEELLEESSFA
FASSHHI O
I ONNDDI SI STTRRI CI CTT
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BID by the Numbers
1997
56 Blocks
2003
82 Blocks
2006
94 Blocks
21,594
65,368
72,513
Graffiti Tags Removed
2,629
5,595
6,675
Trash Removal (Tons)
1,006
2,741
2,647
Website Hits
N/A
8.3 Million
28 Million
Marketing Dollars Leveraged
N/A
$3.4 Million
$8 Million
Average Assessment
Increases
0.00%
0.00%
1.00%
Safe Team
Contacts with Public
Source: LA Fashion District
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ECONOMIC CONTRIBUTIONS OF THE LOS ANGELES FASHI O N D I S T R I C T
Fashion District Forecast
Looking ahead, winners in the industry’s
evolution are likely to be: companies with
headquarter functions such as design, marketing, finance, purchasing and logistics; and
also wholesalers involved in both imports and
exports. These trends are already visible in the
Fashion District. Indeed, the growing importance of offshore apparel production offers
Los Angeles the opportunity to become a focal
distribution point for Asian products in the U.S.
Despite the general move of manufacturing
to lower-cost offshore locations, there is still
good demand for “quick turn” manufacturing
– producing short runs of popular fashion items
needed immediately by retail stores that run
out of stock and want to replenish supplies of
“hot” items before demand fades. The success
of “flash fashion” retailers like Zara and H&M
– who turn their stock and designs as often
as every two weeks – will only increase the
demand for this type of capability. Most of this
activity will occur in manufacturing areas in Los
Angeles County outside the Fashion District.
The location of the entertainment industry in
Los Angeles is a competitive advantage for the
Los Angeles apparel industry. Los Angeles has
been and will continue to be the global capital
of “pop” culture, not only in entertainment but
in apparel as well. The public watches what is
worn on the red carpets at awards shows and
reads magazines to see where in Los Angeles
the current star of the month shops.
PLANET
LA Fashion District Pedestrian Count Summary 2000-2004
A comparison of 2000 and 2004 pedestrian counts
reflects the enormous amount of pedestrian traffic in the area.
Location
2004 8-Hour Weekend Count Los Angeles Street between 5th & 6th Streets
16,872
Santee Alley between 11th & 12th Streets
26,700
th
Maple Avenue between 12 Street & Pico Blvd 16,308
Pico between Main Street and Los Angeles Street
8,232
San Pedro Blvd between 11th and 12th Street s
2,028
Weekend Pedestrian Traffic
2000 and 2004 Comparison
87% Increase 27% Increase
52% Increase
121% Increase
77% Increase
Source: LA Fashion District ECO
ECONNO
OM
MIICC CCO
ONNTTRRIIBBUUTTIIO
ONNSS O
OFF TTHHEE LLO
OSS AANNGGEELLEESS FA
FASSHHIIO
ONN DDIISSTTRRIICCTT
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LA Fashion District Five Year Development Forecast 2006 – 2011
Forecast
Concepts to Consider
Employment
Business District Activities
• Fewer manufacturing jobs
• More combined wholesaling/retailing
• Extend “day” hours from 15 to 18 hours
• More efficient parking and small delivery
• Move from 37,000 jobs towards 39,000 jobs Firms and Establishments
vehicle fleets organization
Design and Manufacturing
• May grow from 4,375 firms to 5,000
Business Volumes
• Move up from estimated $5.76 billion toward
$6.7 billion (3 percent per year, assuming no
price inflation)
• “Green” clothing
• Sun protection fabric
• “Walk-in”/“day design” unique garments
for mid and higher end customers
District Expansion
• “Fast Plants”
• Extended stay or “serviced apartments”
• Grow from 273 net acres to 325+ acres
• Grow primarily to the east toward Central Avenue
• Increase of building floor areas from 18.8 million
toward 21+ million square feet
Real Estate Products
• “Design Lofts”
Property Opportunities
• Some portions of the 37 acres held by
public entities may become available
for use
• Potential for conversion of some
larger multi-story existing buildings to
additional residential uses
Source: Los Angeles Economic Development Corporation, Economics Research Associates
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ECONOMIC CONTRIBUTIONS OF THE LOS ANGELES FASHI
FASH IO N D I S T R I C T
Credits
The LA Fashion District BID wishes to thank the following organizations
and individuals for their contributions to Economic Contributions of the
LA Fashion District: Beyond the Trends 2006:
LOS ANGELES ECONOMIC DEVELOPMENT CORPORATION (LAEDC)
Jack Kyser, Senior Vice President & Chief Economist
Nancy D. Sidhu, Vice President & Senior Economist, Project Lead
Michael Montoya, Consultant
George Huang, Economist
ECONMONICS RESEARCH ASSOCIATES (ERA)
David A. Wilcox, Senior Vice President
Lance Harris, Associate
MEMBERS OF THE INTERSECTION
California Market Center - John Kim, Jonas Walker
Cooper Design Space - Steve Hirsh, Mona Sangkala
Designers & Agents - Ed Mandelbaum
Gerry Building - Mary Peng
The New Mart - Ethan Eller, Roni Klein
CITY OF LOS ANGELES, OFFICE OF FINANCE
Mary Maher
INDUSTRY INFORMATION SOURCES
I. Hassan, The Quantum Associates
Larry Hudson, Designer Sample Room
Ilse Metchek, California Fashion Association
Ed Rosenthal, CB Richard Ellis
Jen Uner, LA Fashion Awards
LA FASHION DISTRICT BOARD OF DIRECTORS
John van den Akker, Chair - 1127 Maple LLC
Mark Chatoff, Vice Chair - MAK Holdings
Barry Gold, Treasurer - DAK Enterprisess
Laurie Sale, Secretary - SCS Building Fund
Laura Aflalo, A & H Management
Sharen Emrani-Bekhrad, Venice Investments
Ethan Eller, The New Mart
Steve Hirsh, Cooper Design Space
Sina Kangavari, KI Group
John Kim, California Market Center
Lance Kluger, Maple BK Properties
Alex Moradi, ICO Development
Steve Needleman, ANJAC Fashion Buildings
Justin Remeny, Remy Leather Fashions
Mark Weinstein, MJW Investments
LA FASHION DISTRICT STAFF
Kent Smith, Executive Director
Joanna Cheatham, Administrative Assistant
Jose Gonzales, Finance Manager
Lynn Myers, Managing Director
Jackie Sanchez, Operations Coordinator
Katherine Schmidt, Marketing Director
Randall Tampa, Operations Director
ECO N O M I C C O N T R I B U T I O N S O F T H E L O S A N G E L E S FA S H I O N D I S T R I C T
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ECONOMIC
ECONOMIC CONTRIBUTIONS
CONTRIBUTIONS OF
OF THE
THE LOS
LOS ANGELES
ANGELES FASHI
FASH IO
ON
ND
DIISSTTR
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