Fri. April 17, 2015
WASHINGTON, DC— The Downtown economy is leading the region in many economic sectors amidst a changing regional economy, according to the DowntownDC Business Improvement District’s (BID) 2014 State of Downtown Report released Friday.
[Download the report “Leading a Changing Region” here.]
Downtown experienced a decline in federal employment and a historically soft office market in 2014 as did the rest of the region. However, Downtown also set records in 2014 for hotel revenues, total employment and net increases in the number of destination retailers and restaurants.
Ward 2 D.C. Councilmember Jack Evans, during his presentation to Downtown stakeholders Friday at the BID’s State of Downtown forum at the Newseum, highlighted Downtown’s role for Washington, D.C. “It really is the engine not only for the city, but the region,” Evans said.
BID Chairman Michael McCarthy at the forum offered a presentation on the report, reviewing its findings and analysis. “A theme of this year’s report is that the mix of uses in Downtown continues to grow, and may have accelerated in 2014,” McCarthy said. “In fact, over the past 20 years, 35 percent of Downtown development has been a mix of non-office uses.”
Panelists Brian Kenner, Deputy Mayor for Planning and Economic Development (DMPED), Valarie Dollison, Vice President Store Manager for Macy’s, Gregory B. Meyer, Executive Vice President, Washington D.C. Regional Head, Brookfield Office Properties, and Wendy Rieger, News4 at 5 Anchor shared their personal experiences observing the evolution of Downtown.
“I feel like I’ve moved to a new city,” Rieger, a new CityCenterDC resident, told the audience Friday.
Kenner noted that today, Chinatown is filled with a “younger crowd” of millenials who eat out more than their older counterparts and shop more. “It is a unique retail destination,” he said of Chinatown, noting Walgreen’s decision to open a store Downtown, “met their urban audience needs.”
Dollison announced that Macy’s has decided to keep their doors open later in direct response to their Downtown customer base—noting an increase in late afternoon sales—to shop later in the evening. As of May 24, the store will be open until 9 pm instead of 8 pm.
Downtown generated an estimated net fiscal impact of $1.05 billion in 2014, which is equal to 100 percent of the city’s Judiciary and Public Safety budget. Downtown generates 25 percent of local tax revenues and spends only 10 percent of local tax revenues. (Downtown, in this instance, is defined as combination of the DowntownDC BID and the Golden Triangle BID.)
Development stories of the year in Downtown included the completion of Phase One of the CityCenterDC site and the completion of the Marriott Marquis Convention Center Headquarters Hotel, adjacent to the BID. McCarthy, who is also VP/Director of Acquisitions for Quadrangle said that the Marriott Marquis Hotel has already booked over 1 million room nights over the next nine years.
In the office market, there were some significant wins in the past year, including The Washington Post’s decision to remain in Downtown and Fannie Mae’s decision to move their headquarters Downtown. However, with a significant amount of office vacancy in the suburbs, the increasing cost advantage of the suburbs may prompt some tenants to move.
“The 2014 State of Downtown Report shows that Downtown is diversifying and is successful as a diverse economy,” said DowntownDC BID Executive Director Richard H. Bradley. “Employment is up, as are restaurant, hotel and entertainment sales. We are moving beyond an office-centric downtown, which is good news as we face current challenges and prepare for the future.”
Downtown’s employment total was a record 184,000, or 24 percent of D.C.’s record 754,000 payroll jobs. The reduced reliance on federal government jobs was evident as federal job losses totaled 7,700 in D.C. but private job growth grew by 10,000.
A residential construction boom and apartment absorption continues in D.C. where a record 4,469 multi-family units broke ground in 2014, and another 2,680 multi-family units are scheduled to break ground in the first quarter of 2015.
Panelists Friday also discussed the need for stakeholders and the city to come together to help solve homelessness. “The private sector, the business community does get it and they are ready and willing on the issue,” Meyer said Friday.
The State of Downtown Report is an economic report researched, created and produced annually by the DowntownDC BID and explores the following economic sectors and economic development topics: current development, employment, office market, retail and restaurants, culture and entertainment, population and housing, infrastructure and sustainability, D.C.’s financial condition and quality of life.
The DowntownDC BID also announced the launch of its first-ever interactive online version of their annual State of Downtown Report utilizing the Tableau platform.
[Access the State of Downtown interactive dashboard here.]
This dashboard allows a user to explore, analyze and even download the data found in the State of Downtown right from their personal computer.
The interactive graphics, or data visualizations, from the 2014 report establish a framework for future data. Moving forward, the DowntownDC BID’s Economic Development team will update these graphics as data becomes available. Each graphic will be dated with its latest update for user convenience. Statistics related to Downtown development, jobs and more can be found on the website.
About the DowntownDC BID
The DowntownDC Business Improvement District (BID) is a private non-profit organization that provides capital improvements, resources and research to help diversify the economy and enhance the Downtown experience for all. This special district, where property owners have agreed to tax themselves to fund services, encompasses a 138-block area of approximately 520 buildings from Massachusetts Avenue on the north to Constitution Avenue on the south, and from Louisiana Avenue on the east to 16th Street on the west. As a catalyst, facilitator and thought leader, the DowntownDC BID promotes public/private partnerships to create a remarkable urban environment. For more information, visit www.DowntownDC.org or follow us on Twitter @downtowndcbid.