Large-scale deportations of immigrant workers lacking permanent legal status have pervaded Los Angeles for almost two months, casting a chilling effect on typically bustling neighborhoods as people take refuge at home.
For business owners in neighborhoods that have been hit especially hard, this sheltering in place means drastically decreased foot traffic and missing workers, resulting in decreased revenue that will impact bottom lines — and the ability to pay rent.
The western edge of the Fashion District
The situation is particularly acute in areas like the Fashion District, a corner of Downtown where wholesalers of fabric, flowers and apparel come together, where shoppers come to buy textiles by the yard or a dozen roses, fresh off the truck.
“This is a brick-and-mortar district,” Fashion District Business Improvement District CEO Anthony Rodriguez said. “People heavily depend on what they sell off the shelf. There are very few businesses that do any type of online sales.”
A high-profile immigration raid hit the neighborhood on June 6 amid a citywide crackdown that emptied neighborhoods often populated by immigrants, unauthorized or otherwise.
Visitors to the Fashion District fell sharply after that, from 386,000 people in the first week of June to 246,000 in the second, according to Placer.ai data provided to the Fashion District BID.
Slower foot traffic stuck around for weeks after that raid, the data shows, falling 32% in mid-July compared to the same month the previous year.
Those who spoke to Bisnow said a big part of what is keeping people away is the fear and uncertainty about when another raid will happen.
“People don’t want to come into an area where they’re afraid and/or feel insecurity and instability,” said I. Hassan, a commercial broker with Quantum Associates who does property management in the Fashion District and has an office in the neighborhood.
The BID considers the Fashion District to be the roughly 100-block area bounded by Seventh Street to the north, the 10 Freeway to the south, Broadway to the west and Paloma Street to the east. It contains the Flower District and shopping hub Santee Alley. The area used to be known as the Garment District.
It isn’t unusual for people to spend a whole afternoon or a whole day shopping in the Fashion District, Hassan said.
“You can get dresses for proms or quinceañeras, get flowers for Mother’s Day or Valentine’s Day from the Flower District,” Hassan said.
“You have wholesalers and retailers throughout. You get some amazing deals down here, and that’s why shoppers come.”
The BID doesn’t track sales data or receipts for the district and can’t quantify the exact impact of the drop in foot traffic, but it follows that significant decreases in shoppers would be mirrored by similar decreases in sales volume, Rodriguez said.
“If there are no people, there’s no one buying,” Rodriguez said.
On June 17, the LA County Board of Supervisors ordered the director of the county’s Department of Economic Opportunity to report on the economic impacts of the raids.
The total lost revenue for the county isn’t available, but an initial response to the supervisors’ request identified neighborhoods that were likely to bear the brunt of the impact due to their high concentrations of immigrant residents.
Santee Alley in the Fashion District
Koreatown, Boyle Heights, Pico-Union and Westlake are among them. Industries that are likely to be heavily affected by the raids include construction, manufacturing, professional and business services, and leisure and hospitality.
Some of those areas also saw immediate drops in foot traffic after June 6, regardless of whether immigration agents raided them. Boyle Heights and Koreatown, as defined by the Los Angeles Times’ Mapping LA project, all saw double-digit declines between the day before the June 6 raid and a week later, according to data from Advan Research.
Foot traffic in Westlake, where a Home Depot was also raided on June 6, declined 25% in that same period.
“Many small businesses in the area who rely on immigrant customers have seen a significant drop in business,” LA County Supervisor Hilda Solis said at a June 17 news conference. “You see it in the Fashion District, you see it in Little Tokyo.”
The Santa Fe Springs Swap Meet, an open-air market and venue just southeast of Downtown, furloughed 109 workers starting July 1 — just about two weeks after a steep drop in visitors to the popular spot that immigration agents raided in mid-June.
In a letter to the California Employment Development Department reviewed by Bisnow, the CEO of the owner, Newport Diversified Inc., cited a “drastic decline” in business following the immigration action there, which “caused customers to suddenly stop visiting our business.”
The impacts of immigration officers’ frequent appearances in the Fashion District hit the neighborhood hard because many of the retailers that occupy ground-floor spots in the district are small, daily businesses operating on tight margins — “sale to sale, week to week, month to month,” Rodriguez said. Many are on month-to-month leases and may not have any type of emergency reserve to help tide them over for extended periods of slow business.
Many landlords in the neighborhood are smaller, legacy owners. Some are still working to rebound from the pandemic and the rent relief they provided to tenants then.
One generational owner in the Fashion District has already lost a tenant since June 6. The owner requested anonymity because he worried about retribution for speaking about the negative impacts of immigration enforcement.
The June 6 raid and subsequent immigration actions in the neighborhood have created conditions that are working against his tenants, he said, adding that smaller-scale immigration detainments have taken place often in the neighborhood since early June.
“It created a crunch in cash flow,” he said. “Folks could not pay their rent as expeditiously as they normally do.”
He has two more tenants he says are “shaky” and considering closing up shop due to the double whammy of fear of more raids and the slowdown in business.
“Our tenants are really good. They’re loyal, as we are to them,” he said. “But this month was not — obviously, something happened outside the norm that none of us expected.”