With downtowns drying up, San Antonio owes more than empty promises about an NBA arena

Downtown office vacancy rates in big cities have reached unheard-of highs as workers who shifted to working from home during the pandemic stayed.

click to enlarge A trio of empty luxury condo towers in Los Angeles sit unfinished across the street from the Crypto.com Arena. - Heywood Sanders
Heywood Sanders
A trio of empty luxury condo towers in Los Angeles sit unfinished across the street from the Crypto.com Arena.

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Our doors are currently being kept locked, but we are open every day," the sign on the front door of a high-end clothing store in downtown Seattle announced. "Please ring the bell at right during store hours or call the store... ."

In the same city, visitors to Pacific Place — an upscale five-level mall opened in 1998 — were largely greeted by vacant storefronts covered with bright paintings or curtains.

On F Street in Washington, D.C., just a couple of blocks from the Capital One Arena, home of the city's NBA team, brown paper covered empty storefront windows and "Retail Space Available" signs dotted the landscape. A note on the former home of Pi Pizzeria, whose pies were served at the Obama White House, announced its closure, adding "due to the economic climate and remote work in DC and beyond, it was unsustainable. We did our best." At the empty and closed restaurant around the corner, chairs and tables remained in place as if awaiting nonexistent customers.

I sighted all of these things in the past month.

There were also vacant storefronts along Melrose Avenue in Los Angeles and West Hollywood, once home to European boutiques. After I tried the door of a Danish vintage furniture store and found it locked, the owner eventually opened up and shared stories of business failures and street crime.

And there were the trio of empty luxury condo towers in Los Angeles across the street from the Crypto.com Arena, home of the Lakers, Kings and Clippers. Police surrounded all three of the Oceanwide Plaza towers, a $1 billion project of a Chinese development firm. The venture ran out of financing in 2019, and now sits unfinished — multistory canvases for LA's graffiti artists, an international news story and an enormous civic embarrassment.

Developers built downtown malls in the 1970s and 1980s, promising that glossy upscale retail would lure suburban shoppers back to the city's urban core. In St. Louis, St. Paul, Milwaukee and other cities, they flopped within a decade or so, turned into office space. The St. Louis Centre was even converted into parking. Others, like Philadelphia's Gallery at Market East, went downscale, hoping outlet stores and off-price retail would at least lure less-affluent shoppers.

More recently even once-elegant Water Tower Place on Chicago's North Michigan Avenue, the "Magnificent Mile," has been turned back to its lender, which is now floating the idea of filling it with doctors' offices.

The ongoing collapse of retail activity in big-city downtowns is the result of both long-term trends and recent, more-radical jolts. The rise of online shopping, growing income disparity and continued suburban expansion have altered the retail landscape most everywhere.

Downtowns once were able to count on the patronage of office workers and visitors to insulate them from those shifts, but that's changed abruptly in the aftermath of the COVID-19 pandemic. Center-city office vacancy rates in cities including San Francisco, Chicago, Houston and New York have reached unheard-of highs as workers who shifted to working from home have stayed.

"Today, Downtown D.C. finds itself at a post-pandemic inflection point ... . Without intervention, underutilized commercial space and decreased activity are poised to fuel a self-reinforcing cycle of declining investment, property values and tax revenues," a recent analysis by Washington, D.C., business leaders surmised.

That city's DC Downtown Action Plan calls for more than $400 million in public spending to "kickstart the transformation of downtown D.C." And that's in a city that already has — at least for now — a downtown NBA arena.

San Antonio is far from immune to the broad shifts in business and retail activity that have reshaped downtown activity across the nation. We have seen Rivercenter mall, originally touted as the salvation of our central retail sector, turned into a complex of national chain restaurants and entertainment options — and it's still struggling.

A recent dinnertime walk down West Commerce Street and through Market Square revealed these once-lively places as forlorn and largely empty. Yet the plans for a new downtown arena for the Spurs, perhaps built at a Hemisfair site, seem to be barreling ahead with no real public input or serious planning and analysis.

Perhaps our business leaders are desperate and our public officials are grabbing for a simple answer. It's as if everyone involved somehow forgot that the Spurs once played their games at the Alamodome, and the team's presence couldn't even revitalize the Sunset Station area, let alone activate all of downtown. Following that, the franchise's move to the Frost Bank Center promised — and failed to deliver on — a "transformation" of its East Side environs.

Given the stakes facing downtowns everywhere, we have to think and plan better this time around. Empty promises of economic miracles from a new basketball arena won't undo the damage.

Heywood Sanders is a professor of public policy at the University of Texas at San Antonio.

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