Downtown Santa Monica businesses generated $1.2 billion in taxable sales in 2018, a 6.4% increase over the previous year.

Sales declined between 2015 and 2017 as downtown retailers struggled to keep up with the popularity of online shopping, but 2018 marked a return to growth, according to a report released Thursday by the area’s business improvement district, Downtown Santa Monica, Inc. (DTSM). The area also saw a net gain of 10 new businesses from 48 openings and 38 closings over the past year.

The Third Street Promenade and Santa Monica Place both generated 4% more in sales after several years of uneven or declining economic activity. The rest of downtown experienced a whopping 17% increase.

DTSM CEO Kathleen Rawson said although rising wages, rents and the ascent of online retail and food delivery services are impacting businesses, the organization is working to help businesses open and succeed.

“Our economic development arm is actively recruiting new, exciting retail and dining concepts, serving as a liaison to push projects through approvals and permitting in a timely fashion,” Rawson said. “We have created a business recruitment website loaded with pertinent information to guide those seeking to set up shop in our downtown.”

Last year’s economic outlook may have been rosy, but foot traffic continued to fall.

DTSM recorded about 9.3 million pedestrian impressions on the Promenade during the 2018-2019 fiscal year, an almost 11% drop from last year’s 10.5 million impressions.

Black Friday and the June 15 Pride on the Promenade festival drew the most pedestrian impressions, at almost 125,000 and 120,000 impressions each. The pride festival, a new event this year, was part of Santa Monica’s inaugural LGBTQ+ pride month.

Only 6% of Americans who visited downtown last year live in Santa Monica, and Santa Monicans generated about 1% of total taxable sales.

Slightly less than half of visitors live in Los Angeles County, 17% live elsewhere in California and 14% live in another state.

More than 29,000 people work downtown, earning an average of almost $87,000 annually. One quarter of them work in Silicon Beach, a fifth work in accommodation and food service and an eighth work in retail.

The Silicon Beach workforce, which grew by 5% last year, earned an average of almost $130,000, while service and retail workers earned about $32,000 and $38,000, respectively.

Although downtown restaurants and hotels employed 28% more workers in 2018 than the previous year, retailers shed almost 7% of their workforce.

Downtown’s resident population grew 2.5% last year, but its unsheltered population fell 19%, which the city of Santa Monica attributes to the efforts of its homeless outreach teams.

About 4,367 people live downtown in 3,096 households — an average household size of about 1.4. 73% of residents are white, 13% are Asian, 6% are mixed-race, 4% are black and about 3.5% are Native American, Pacific Islander or other. The average age is 39.

The average household income is $103,539. The median is $63,010, meaning half of households earn more than $63,010 and half earn less. Median income is projected to grow by 35% over the next five years, while the United States median income will grow 14% over the same period.

Downtown apartments rent for about $3,000 on average. Out of 3,739 units, 8% are vacant. 1,141 new units are in the pipeline.

“Rental rates are high for this region, but 45% of our residents earn less than $40,000 annually and DTSM will continue to support affordable housing in the district to ensure we are an equitable neighborhood for people with various income levels,” Rawson said.

Office space downtown rents for $5.24 per square foot and is 93% occupied. Retail space rents for $7.69 per square foot and is 94% occupied.

Parking occupancy in downtown parking structures and lots — which contain a total of 6,194 spaces — averages 66% on weekends and 61% on weekdays.

Average rents for office space fell 1% last year, while retail space is almost 7% more expensive.

The hospitality industry has held steady since last year. Downtown offers 1,400 hotel rooms for an average of $335 each, with an 85% occupancy rate.

madeleine@smdp.com

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