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May 2, 2023City Council President Paul Krekorian200 N. Spring StreetLos Angeles, CA 90012 RE: DTLA2040 Community Plan (Council File 22-0617) Dear Council President Krekorian,             As a longtime Fashion District stakeholder, I am deeply concerned about the proposed amendments by the Planning and Land Use Management (PLUM) Committee to the DTLA2040 community plan. I am disappointed that the PLUM committee has ignored the economic feasibility analysis provided by City Planning, experts from HR&amp;A, and testimony from other stakeholders who have an interest in preserving the ecosystem of sectors and industries that exist/are emerging in the Fashion District and who want to allow our community to bare its weight in response to the housing and homelessness crisis. The proposed amendments will have several negative implications for the Fashion District, particularly affordable housing production that is critically needed in the region. The proposed regulations by the PLUM committee include a 1.0-floor area ratio (FAR) requirement of light industrial space and the need for freight elevators, loading docks, and loading bays for new developments in the IX2/IX3 Use Districts; both these provisions will have severe impacts on any future Fashion District developments. These requirements will impede housing development, ultimately harming the Fashion District’s economy and its ability to create a projected 12,000 new housing units, including 1,000-2,000 rent-restricted affordable units. According to the analysis prepared by HR&amp;A, development in the Fashion District is already economically challenging. For a project with an industrial space set-aside to be viable, rents would need to increase by 15-18%, or construction costs would need to decrease by 18-22%. This is more than double the change needed for a project without the set-aside. Additionally, there is already an 18% vacancy rate for existing manufacturing space in the area, which is high compared to the regional 3.5% industrial vacancy rate, indicating an oversupply of such space in the Fashion District that is already modestly priced at a monthly average of $2/sq ft.           To protect the vitality of the Fashion District, the City Council should: Remove or reduce to 0.5 FAR requirement for Productive Space in Use District IX2/IX3; remove the elevators and loading docks requirement.  The LA Fashion District has been experiencing a manufacturing exodus since the late 1990s. While industry regulations have sought rightful equity in manufacturing, this catalyzed many companies to move out of City, State, and Country. Buildings dedicated to manufacturing and wholesale currently have a vacancy rate of 18%, indicating an oversupply. Additionally, HR&amp;A has stated that “new residential construction subject to the requirement is unlikely to occur on a larger scale absent significant changes in market conditions…” making “it challenging to achieve policy objectives related to housing production and industrial preservation.” The Council should continue pursuing the targeted programmatic recommendations by Councilmembers de Leon and Hernandez; These motions will better support the garment manufacturing industry and jobs than zoning regulations. Remove CUP requirements and prohibitions on conversion projects (housing, live/work units, hotels, social service facilities, etc.) in the IX2 and IX3 Use Districts for buildings that have sat vacant or underutilized at a threshold of 60% for 2+ years. The adaptive reuse ordinance was instated to address buildings plagued by high vacancy rates that could be reused to address the needs of communities. That has never been truer than in the Fashion District. Buildings with extended vacancies (no longer viable) have become housing and bridge home shelters. In the IX2/IX3 areas, where there are many restrictions on conversion/adaptive reuse, the overall vacancy rate (per square foot) is a crushing 22%, and of that space, 27% has been vacant for 1000+ days. The City is in a housing crisis and experiencing highly unfavorable market conditions. The HR&amp;A experts have indicated that the feasibility of new projects will be unlikely in the short term, so we cannot allow vacant spaces to sit unused for an extended term. Do not exclude Creative Office as a qualifying use for the "work" portion of new Live/Work units and allow it to count toward the required FAR in Use Districts IX2/IX3/IX4 Productive Space. The Fashion Industry has been moving towards marrying production space with office. The most significant indicator is Adidas and Spark's entry into the community, bringing 800+ employees. Both are now tenants in a CX3 area that allows for the coexistence of office and production in the same space/unit, opting out of the IX2/IX3 Use Zones. In addition, given the transition to working from home during COVID-19, which has continued, we must reinstitute "office' for live/work units to allow for changes in the workforce. Remove mandatory inclusionary housing requirements and continue incentivizing affordable housing production through the Community Benefits Program. As long as the Hybrid Industrial area is a 3:1 base FAR, it cannot bear mandatory inclusionary housing AND employment space obligations. Per HR&amp;A, it is entirely unfeasible. The City Council must decide whether projects in Hybrid Industrial should reserve space for an industry when there is already an oversupply or provide the ability to create housing during a citywide shortage. Do not prohibit Entertainment Venues in new construction or existing buildings containing industrial use in the IX2/IX3 Use Districts that have sat vacant or underutilized at a threshold of 60% for 2+ years. As previously stated, buildings that experience high long-term vacancy rates should be allowed to meet a community’s use demands, including entertainment venues. COVID-19 demonstrated that access to live music is just as vital to the mental fitness of a community as public space. Prohibiting industries in the Fashion District prevents our community from developing a healthy and vibrant neighborhood.   Increase the base FAR to 6:1 in Form District HM1, HB1, DM1, DM3, and Use Districts CX3 and IX2/IX3. The delta between base and bonus in our district is too great, especially when DTLA2040 proposes mandatory inclusionary housing AND a production FAR requirement for new developments. In the short term, projects in the Hybrid Industrial area will find it infeasible to address both. Thus, an increase in base FAR is needed to address possible mandates.  DTLA2040 has the potential to provide 12,000 units of housing with 1000-2000 rent-restricted affordable units in the Fashion District and DTLA. I encourage the City Council to implement a community plan that ensures feasible projects and housing/preservation goals can be met. This plan must be flexible, inclusive, and equitable to all industries and stakeholders in our neighborhood. Please consider the needs and concerns of our community. You can help ensure the Fashion District remains a vital and dynamic part of the City's fabric for years.  Thank you for your attention to this matter.  Sincerely,

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