Aug 7, 2023 - Business

Downtown Portland still struggling to bounce back

Downtown Portland foot traffic recovery
Data: University of Toronto; Note: Seasons are March-May (spring), June-Aug. (summer), Sept.-Nov. (fall) and Dec.-Feb. (winter); Visitors determined by counting unique mobile phones in ZIP codes with high employee density; Chart: Kavya Beheraj/Axios

Foot traffic in downtown Portland is still lagging compared to pre-pandemic levels, despite ambitious development projects and various attempts by city officials to bring people back.

Driving the news: Downtown foot traffic from March to May this year was just 36.9% of foot traffic during the same period in 2019. That's according to anonymized cellphone activity analyzed by the School of Cities at the University of Toronto.

  • This is the first spring in three years in which foot traffic has fallen, and is slightly worse compared to downtown activity from December 2022 to February 2023.

Why it matters: Downtowns are typically the beating economic heart of a city, with visitors spending money locally and revenue funneling into city coffers via property taxes and development fees.

Yes, but: In 2022, downtown Portland's annual property tax receipts fell for the first time since 2005, according to a report issued in February by downtown business interests.

Zoom in: City officials hope developments like the Ritz-Carlton, an extensive food cart pod revamp and the reconstruction of Darcelle XV Plaza (formerly O'Bryant Square) will help resuscitate downtown activity and combat petty crime, open-air drug use and a homelessness crisis.

Meanwhile, some business owners don't believe a few building openings will solve downtown's many issues.

  • "It'll take a while because there's still a reluctance for people to come downtown," Brad Popick, president of the Portland Outdoor Store on the corner of SW Third Avenue and Oak Street, tells Axios. "Plus there's not enough retail; almost every building has vacancies."

What they're saying: We spoke to Paul Higgins (no relation to the restaurant), who came down to the India Festival on Aug. 6 to see his daughter, who was performing with a dance group. He lives in SW Portland and works on NW 23rd, so he's nearby daily, but "I'm trying to think of the last time," he said when asked if he comes downtown often. "It's been a while."

  • "I didn't realize how many empty storefronts there are downtown," he said.

The big picture: Several cities with diverse downtowns — meaning a healthy mix of office space, housing, attractions and so on — have nearly returned to, or even exceeded, their pre-pandemic foot traffic rates.

  • For example, San Diego is at 88% of its pre-pandemic foot traffic. That's partially because the city's downtown has long been diversified and partially because tourism has rebounded, according to William Fulton, UC San Diego Design Lab visiting policy designer.
  • Cities with downtowns that almost exclusively catered to office workers are struggling mightily to recover in the remote and hybrid work era.

What's happening: It's increasingly clear that if cities in the latter group want vibrant downtowns, they need to transform those neighborhoods into something resembling those in the former.

  • While office-to-residential conversions are gaining popularity, Portland developers have said they want public assistance in order to successfully convert vacant office buildings into potential residential units.

The bottom line: What's been helpful for business owners like Popick are free public events — like the Women's World Cup viewing at Pioneer Square and the Rose Festival — that encourage people to walk around and spend money at restaurants and shops.

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