The Downtown BID released its annual State of Downtown Report during a public forum at the W Hotel (515 15th Street) last month. Panelists William B. “Bart” Bush, regional commissioner of the US General Services Administration’s National Capital Region; David Mayhood, president of The Mayhood Company; Valerie Santos, deputy mayor of the Office of Planning and Economic Development; and Mitchell N. Schear, president of Vornado/Charles E. Smith provided a candid discussion on Downtown’s future and highlights from the 2009 State of Downtown Report. Richard H. Bradley, executive director of the Downtown BID, moderated the discussion, a synopsis of which is available at www.downtowndc.org.
The report shows Downtown’s economic performance was off from recent highs in many areas, with a slight decline in employment and office absorption for the first time in many years. Still, many areas of the Downtown BID area economy flourished due to federal government leasing and investment, record hotel revenues, increased investment in green buildings, an influx of new destination restaurants and increased visitor attendance. Strong Downtown BID partnerships with federal and DC governments, stakeholders and other businesses since 1997 continue to guide the area’s economic growth and vitality and move it toward recovery.
Information on each sector of the Downtown economy is summarized in the new report, published annually to update public and private decision-makers about the current and future status of economic development in Downtown. The report highlights the development, employment, office, residential, hospitality, tourism, culture, entertainment, restaurant, retail and transportation sectors. New this year is data on green buildings.
Some key findings:
- Downtown BID employment fell by 1,100 jobs but is expected to increase by 1,500 to 2,000 jobs per year over the next four years.
- Downtown’s office market has Class A rental rates of $61 per square foot, the nation’s second highest, and a Class A vacancy rate of 10.8%, the nation’s second lowest.
- About 5,000 new residents have arrived in the BID area since 2000.
- Downtown BID area visitors increased by 6% to 10.7 million.
- Downtown restaurants continued to grow in number and quality, with a net gain of nine, leading to a total of 131 destination restaurants.
- The Downtown BID area contributed significantly to DC’s fiscal health—when combined with the Golden Triangle BID, the net fiscal impact is about $800 million per year, about equal to the annual DC public and charter school operating budgets.
There were no major groundbreakings in the Downtown BID area in 2009 for the first time since 1995. Including the first quarter of 2010, the area has had six consecutive quarters without a major groundbreaking—partly because the Downtown is virtually built out. Only 18 of about 118 surface parking lots or redevelopment sites that existed in 1997 now remain undeveloped, and only five are large sites, including CityCenterDC.
Copies of the report are available at www.downtowndc.org/state.