Nella McOske, head of the Central City Assn. talks about struggling downtown businesses.
Businesses in downtown Los Angeles need the support and patronage of locals in these tough times, Central City Assn. President and Chief Executive Nella McOsker says.
Places that hadn’t yet come back from the cratering caused by COVID-19 are now dealing with rising costs from tariffs and employees worried they could get caught up in the crackdown on undocumented workers, she said in an interview.
The images of the violent downtown protests last month were another punch in the gut for the association’s members, she said. Some businesses have decided they just can’t take it anymore.
There has been growing list of recent restaurant closures in L.A., including the 117-year-old Cole’s French Dip downtown, soul food bistro My 2 Cents on West Pico Boulevard and natural wine bar Melody in Virgil Village. The most recent beloved venue set to close downtown: the Michelin-starred Shibumi.
Set up in 1924, the Central City Assn. is one of the top advocacy organizations in the Los Angeles region, representing the interests of more than 300 businesses, trade associations and nonprofits from a broad range of industries.
McOsker, who has been leading the chamber since 2019, spoke with The Times about how the lingering effects of the COVID-19 pandemic, the ongoing Immigration and Customs Enforcement raids and tariffs are affecting local businesses.
Businesses have been through a lot lately. How are they coping with the challenges?
There’s been a series of really compounding challenges. It’s hard to not start the story with the coronavirus pandemic. But in some ways, I think the challenge starts with COVID-19, and then a series of crises or a series of challenging scenarios compounds such that right now is largely an unsustainable state of affairs in downtown L.A. In some ways, it’s representative of a wider experience for Los Angeles business.
You think about three types of people that come into downtown: visitors, employees and residents. In the residential sector, there’s huge growth, actually. Downtown Los Angeles is one of the few downtowns across the country that saw growth pre- to post-pandemic. And there’s a potential for downtown to continue to become more of a neighborhood than just an office market. But the office market is challenged in the ways that every office market is across the country from work-from-home trends.
So, we’re already in a sensitive business environment, sensitive to perception, given the challenges of public safety and homelessness already, and sustaining yet another really tough blow. The message is, please come to downtown to support businesses here. Please use your patronage as a way to support local communities, support small businesses. We see far too many businesses shuttering because this is the last and final straw.
Has normalcy returned to downtown?
The impact is still going on.
It will help tremendously when there are reduced ICE operations that will help at least all of us who care about downtown to be in a position when we can change perception and really call for people to come back to downtown, and then focus on the things that downtown needs investment around any way in infrastructure, in safety, in abating homelessness.
What businesses have been most affected?
Hospitality, retail, food and beverage, entertainment. You see it, of course, in other sectors. I would say there’s challenges in construction and manufacturing, but you’re seeing the most present and real, the math no longer works because we can’t stay open if no one’s coming through and supporting the businesses in downtown.
How hard were businesses hit?
It depends on the neighborhood. I heard 30% drops in the Fashion District, and I bet you that’s even more so now. Little Tokyo had sustained some of the most damage after those first days of unrest and again, targeted criminal activity. How devastating that was because it’s a neighborhood built on families, immigrant families. Some of them have owned and operated the same business for several generations and shouldn’t be the target, especially by other Angelenos, to protest against these actions by the federal administration.
Are your members dependent on migrant labor?
Yes, absolutely. You could say this across almost all sectors of Los Angeles. We are a community of immigrants.
The impact of aggressive immigration enforcement actions has a chilling effect on business in a number of different ways. One is pausing projects. Some of this has to do with the layered impact of something like tariffs. It has a chilling effect in that the potential patronage of businesses no longer wants to spend money or go out or make that visit to an area that has been a site of these tactics.
And then it creates uncertainty. What every business in any place across the globe would say is that certainty is the best environment for planning ahead, for knowing how to keep doors open. And when you don’t have certainty, it’s simply impossible to manage your business day to day, pay your employees, get out those deliveries, do all of the daily operations that are necessary to make those thin margins often just work.
What impacts do your members see from the fluctuating tariffs?
Some of the businesses are closing down. One of them is Cole’s French Dip. Terrible. This is more than 100 years old. The owner operator has several different properties within the downtown ecosystem. He’s one of these investors, early investors and champions of downtown locations. And many of his beloved spaces are under turmoil, in part, again, because of these compounding challenges over the last five years.
How are your members doing about higher tariffs?
They’re doing with the best they can, by calling on residents or local Angelenos to come support them, by calling on the local government and state government to provide relief.
What we’re banding together to do right now is a very localized and locally controlled recovery plan. What would it look like for us to really call on Angelenos to come support these businesses? Maybe they don’t live in the downtown ecosystem. And that massive residential population are among the heroes who are coming out of their homes under curfew and to support their shop on the corner.
Are your members doing anything to support, accommodate or protect workers that might be targeted by the immigration enforcement efforts?
Yes. There are efforts to educate. There are efforts to create safe spaces within buildings or within physical properties. There are messages and communications of support for those that are known on various staffs and teams who may be undocumented or who are concerned about actions, regardless of status. There is a feeling, and I really saw a shift when we saw that aggressive action taken towards Sen. [Alex] Padilla. The mayor organized a press conference, and you saw a huge swath of L.A. sectors, nonprofit, business, faith organizations come together to articulate the fact that this has gone too far and this is enough.
We are reliant on each other’s health, wellness and protection to make it through this uncertain period.
