DOWNTOWN NOW A PLACE TO LIVE, WORK AREA BOOSTED BY HOUSING.

Byline: Gregory J. Wilcox Staff Writer

Downtown Los Angeles will continue to benefit from a residential housing boom and population increase, but the area should see only modest economic growth this year, according to an economic forecast released Monday.

The report from the nonprofit Los Angeles County Economic Development Corp. noted that employment in the area should total 503,800 jobs this year, up from 501,100 in 2002.

``There are things that are happening downtown, but there are a lot of problems,'' said Jack Kyser, chief economist for the enterprise that tries to recruit and retain businesses in the region.

``You've got an area that's generally misunderstood. It's an interesting area. Somebody out in the far West Valley would probably say why do we care about downtown? You have to say it's an important business center, and, for better or for worse, people use it for the lodestone of Los Angeles.''

The report notes that, between the 1990 and 2000 census, the Central City's population increased 12.7 percent to 2,834 residents. While that is much greater than the 6 percent increase for the city, it is off a smaller base.

Nevertheless, the numbers show that downtown is becoming a trendy living address, especially in the past several years, as the area undergoes ``substantial'' redevelopment that includes both new, market-rate apartments and the conversion of older office buildings into loft-style units, the report noted.

Kyser said there are 16 projects under way downtown, and three of them are new structures. ``The running count of market-rate units completed or under construction is up to 6,700. There is also a large list of planned residential projects in the area,'' he said.

Once dominated by white-collar enterprises like banking, law, accounting and energy, downtown's business base now also features industry clusters of apparel/textiles, flowers, jewelry, produce and toys.

The government sector remains the area's largest employer, with 271,211 workers.

The report also found that downtown continues to attract new money. There were a dozen major business deals, a lease or construction value of $1 million or more recorded in 2000, 17 in 2001 and 10 last year.

But the area also faces problems like the homeless issue, the pressing need for a convention center hotel and the need for a better effort to energize the tourism trade.

Larry Kosmont, founding partner of Kosmont Partners, a consulting firm, does not entirely share Kyser's optimistic outlook for the area.

``I'm disappointed. I see the results of that report saying the employment picture is pretty flat, though I'm encouraged by the housing growth,'' he said.

Most of this is in rental units, and Kosmont said the test would be whether developers will build owner-occupied product and whether buyers will pay the price it will likely command.

Elaine Gaspard, economic development manager at the Los Angeles Downtown Center Business Improvement District, said the area is in line for better time.

The area's fortunes dipped when terrorists attacked New York City and the Pentagon.

``Going into 9-11, we had a pretty good pipeline of projects considering downtown and a lot of interest,'' she said. ``When 9-11 hit, everything stalled, and it took some time for projects to get back on track. There has been an increase in activity in the last six months.''

Gregory J. Wilcox, [phone]

greg.wilcox(at)dailynews.com