L.A.'S BOOMING DOWNTOWN WHO WINS? RIPPLE-OUT EFFECT BOTH WELCOMED, DOUBTED.

Byline: Rick Orlov and Brent Hopkins Staff Writers

A downtown Los Angeles building boom - sparked by construction around Staples Center and bolstered by a surge in residential projects - is expected to ripple throughout the region, ringing up an estimated $26 billion in countywide business revenue by 2015, officials said Thursday.

In the past five years, 32 buildings have been constructed or rehabilitated in the 65-square-block area, with permits pulled for 100 more projects, according to an analysis by the nonprofit Los Angeles Economic Development Corp.

The report authors estimate that if proposals for 154 private-sector and 32 cultural and civic projects are actually completed, they will create more than 174,000 jobs throughout the county and $169 million in direct and indirect tax and fee revenues countywide - $41 million just for the city.

``What we have done is breathe life into downtown,'' said City Councilwoman Jan Perry, who represents most of the area. ``And we are seeing the benefits spread to other areas adjacent to downtown and throughout the city.''

Perry said the growth downtown - some of it spurred by changes in city law that made it easier to convert buildings for residential use - has boosted jobs, investment and tax revenues.

``We have seen more money come in to help pay for services that benefit the entire city,'' Perry said.

Jack Kyser, chief economist of the LAEDC, said a successful downtown can be important to areas like the San Fernando Valley in everything from reducing daily commuter traffic and creating jobs to offering business-service opportunities and generating tourist dollars.

``I have friends who come in from Sherman Oaks every day to work downtown,'' Kyser said. ``The more people who work and live downtown helps reduce the traffic. The more tourists who come to downtown creates more jobs for those people who supply the hotels and businesses and are based in the San Fernando Valley.''

Valley professionals also can supply services to downtown companies in everything from architectural and construction consulting to legal and accounting work, according to Dan Blake, director of the San Fernando Valley Economic Research Center at California State University, Northridge.

``As they fill up and reutilize the buildings there, we're in perfect commuting distance with the Orange Line, so it'll certainly help residents of the Valley,'' Blake said.

``And with new construction comes new revenue. Anything that increases the fiscal health of Los Angeles helps extend services out here that have been delayed.''

Members of the Valley business community weren't so sure, however.

Although plans for a multibillion-dollar complex near the Los Angeles Convention Center - to be called l.a. live - sound enticing, Bob Scott, chairman of the Valley Industry and Commerce Association, questioned the impact on local businesses.

``Does what happens downtown help the Valley? It can,'' Scott said. ``But when resources are disproportionately focused on downtown, the Valley doesn't benefit until it hits critical mass.

``You've got to have real deals that really work and aren't just good for developers.''

The physical and psychological disconnect between the areas also prevents much spillover to local companies.

Although local companies might provide service to downtown business, there hasn't been enough to noticeably impact the region.

``I never hear anyone say: Thank God the Staples Center is downtown; that's really going to help us,'' said Nancy Hoffman Vanyek, chief executive officer of the Mid-Valley Chamber of Commerce.

``I hear much more about development over around CSUN or in North Hills. I haven't heard from anyone that downtown helps their businesses.''

For downtown, however, some of the boom has been spurred by a decision five years ago to concentrate on residential development, said Carol Schatz, head of the Central City Association.

``I think that decision did more to help us than anything else,'' Schatz said. ``With residents came the demand for the restaurants and shops and other services we see coming in to downtown. We are seeing the trendy shops and stores that make up a vibrant downtown.

``And what is happening is that we are generating more tax dollars that go to hire more police officers and firefighters who serve all the city.''

Newly inaugurated Councilman Jose Huizar, whose district also includes a portion of downtown, said the growth will lead to a new view of the city.

``What we are seeing is a mix of people who are settling in downtown Los Angeles, a city that was known for segregating itself,'' Huizar said.

During a Thursday news conference in the lobby of the newest residential building in downtown Los Angeles - the MetLoft Apartments on Flower Street, overlooking the Staples Center arena and the site for the l.a. live project - Schatz gestured toward the center.

``That was the key,'' Schatz said. ``Once they came in, they showed the potential for downtown Los Angeles.''

In recent months, Schatz said those trying to lure retail outlets downtown are finding a more receptive audience.

``We had been trying for years to get Trader Joe's to look at us, and they were never interested,'' Schatz said. ``It was the same with other companies. They wouldn't even pick up the phone. Now, they not only get on the phone, but they are calling us to come down and look for space.''

Schatz said city officials helped propel the boom by adopting an ordinance making it easier for developers to convert office buildings into residential units.

In 1999, she said, there were 12,000 residential units in the downtown area - about 75 percent of them for low-income residents. Since then, more than 14,000 units have been built at market rate.

``For downtown to continue to succeed, we need to broaden the middle class here,'' Schatz said.

Kyser said downtown's growth provides a lesson for other areas of the city.

``The truth is we have run out of land in downtown Los Angeles. We have run out of land in Los Angeles,'' Kyser said. ``When I drive around the city - from downtown to the northeast San Fernando Valley - I look at the land we have available and if we are making the best use of it.

``We have to see that it all is taken to its highest and best use.''

Rick Orlov, [phone]

rick.orlov(at)dailynews.com

CAPTION(S):

photo, 3 charts

Photo:

(color) no caption (Downtown Los Angeles)

Photo by staff photographer Gus Ruelas

Chart:

(1) COUNTYWIDE REVENUE

(2) JOBS

(3) WAGES AND SALARIES

SOURCE: LAEDC

Graphic by staff artist Gregg Miller