By Drew Sitton • Times of San Diego

Copyright timesofsandiego

DOWNTOWN – The Museum of Illusions, a recent edutainment entry in the Gaslamp, was filled with a diverse crowd on a Friday last month.

First dates, families and friend groups looked at the eye-deceiving installations. Staff members posed visitors for trompe-l’œil photos to make it seem like they were hanging sideways from surfboards or climbing a rope up an Old Town building or falling infinitely through a tunnel.

Blocks away, another museum geared up for a bash of a different kind the following evening. It was the final goodbye to WNDR San Diego, another museum blending entertainment and education through immersive art installations that operated for the past two years before closing for undisclosed reasons.

WNDR Museum was among multiple recent shutterings of renowned places in downtown San Diego, including celebrity nightclub Oxford Social Club inside Pendry Hotel and James Beard award semifinalist Roma Norta. Director Beau du Bois told San Diego Magazine that despite rave reviews, Roman Norte “couldn’t drum up the nightlife that any cocktail bar needs to be successful.”

The bar was near Seaport Village, which is celebrating the opening of over-the-water restaurant Shorebird after years of permitting delays. Gladstone and other entries are still under construction.

Difficulty doing business

With its concentrated population and visitor attractions, businesses come to downtown for big opportunities, but that is reflected in high rental costs and heavy competition. The area is also trying to stake out success without depending on the tumultuous office retail market that made the neighborhood feel so desolate in the early days of stay-at-home orders during the pandemic.

But now, the sidewalks outside both museums teem with people. Cars crowd Fifth Avenue a year after the end of a bollard program that turned the popular nightlife district into a protected promenade.

Michael Trimble, executive director of the Gaslamp Quarter Association, believes the neighborhood is still feeling the effects of the decision to allow cars to return to the former promenade.

“That is another black eye on downtown and it’s all based upon the city’s deficit,” Trimble said. “Measure E didn’t pass so everyone is paying the price for that sales tax increase not passing and a bulk of it’s happening on the backs of downtown workers and downtown businesses.”

He’s more worried about the new parking rules, which have set meter rates to as high as $10 an hour around Padres games and other big events at Petco Park.

For businesses, downtown is a mixed bag. It’s clearly a tourist destination with over 90% of the pre-pandemic visitor foot traffic having returned by Spring 2023. It’s also expensive to operate with ever-changing challenges from rising wages to vermin.

“No matter what you do, you’re sort of paddling uphill,” Trimble said. “It seems like every day there’s a new challenge to stay afloat in business downtown.”

By the data: A real recovery?

Two years ago, downtown San Diego was heralded as a post-pandemic success story that gained national attention.

The data that claim was built on turned out to be faulty.

Researchers from the Toronto School of Cities who used anonymized phone location data to make such a claim had to downgrade the assessment after discovering the geofence they used included the airport, which artificially improved San Diego’s marks.

Despite the downgrade, with its balance of residents, office workers and tourism, San Diego did better than downtowns in other cities that depended primarily on offices.

“That’s an older model of a downtown,” said Nathan Bishop, vice president of planning and economic development at the Downtown San Diego Partnership.

The partnership took issue with the new Toronto School geofence though, which primarily focused on the Core Civic neighborhood with bits of three other downtown districts: Gaslamp, Cortez and Columbia. East Village, Little Italy, and Marina were not included at all.

“From our standpoint, it did not reflect what is known to us or in the Downtown Community Plan as the traditional known boundaries of the neighborhood,” Bishop said. “It didn’t have Petco Park, it didn’t have the entire waterfront or Embarcadero, no Santa Fe Depot, no convention center, right? All these things that uniquely make up our downtown.”

He pointed to a different 2023 study from Center City District which combined residents, workers and visitors data of major cities. Those results placed San Diego’s recovery at third in the nation, thanks in part to its particularly strong visitor recovery.

Two years later, the partnership looked at Placer.ai data and found a 95% recovery rate in total foot traffic in the quarter ending June 30 as compared to the same quarter of 2019.

Resident foot traffic led that with a 157% recovery rate.

Bishop said 5,000 more people live in downtown today than in 2021 and residency rates keep growing as more units come online.

The weakest foot traffic in downtown comes from employees, only at 80% of pre-pandemic levels – a metric which includes industries from hospitality to office workers.

San Diego’s office leasing rates continue to suffer, with a JLL mid-year report finding that as law firms push for a return to the office, there is a shift in preference from being near the courts downtown. They prefer La Jolla UTC and Del Mar Heights instead.

A bigger blow for office leasing came with the announcement that Horton Plaza is in foreclosure and failed to sell at auction, dimming mixed-use redevelopment hopes that may have brought new people shopping, dining, renting apartments and buying condos downtown.

With the Campus at Horton’s failure to launch, Trimble said, “You take a lot of potential people that could have helped the neighborhood out of the equation.”

The office leasing does not worry Bishop as more office to housing or hotel conversions take place. Plus, several buildings have changed hands recently.

Core Civic, once home primarily to government and business offices with lunch retail to support them, has a growing arts focus with support from the Prebys Foundation. It could even becoming a formal arts district, Bishop said. That in turn, would bring in more visitors.

A few years after opening Park & Market in the Village, University of California, San Diego is expanding its downtown presence with The Depot, opening next year in the Museum of Contemporary Art San Diego’s former downtown outpost. That museum is now only in La Jolla.

Downtown an entertainment magnet

While its offices struggle, downtown’s entertainment offerings have never been stronger. The Museum of Illusions is just one of the options not found elsewhere in the county. Nathan Bishop of the Downtown Partnership says that he expects more experiential retail entries in the future.

“Downtowns have changed since the beginning of time, right? And this is one of those evolutions,” Bishop said.

Tourists still flock to the area, with Brick Hospitality founder Robert Rauch, in a July report, stating that San Diego hotel occupancy consistently leads California.

Locals, too, go for entertainment options not found elsewhere. North Park resident Linda Glevy spent her 28th birthday with a group of friends in costume to see Lindsey Lohan drag impersonators screening The Parent Trap at Rooftop Cinema Club. “It was right up my alley,” Glevy said. “Lots of fun.”

The club, at the Manchester Grand Hyatt, is on track to surpass last year’s numbers of 54,013 admissions, internal data shows.

However, visits downtown are not spur-of-the-moment decisions like many other options in San Diego, according to Glevy, who mentioned the price, nerve-wracking driving, parking, safety, crowds and tourists as factors to consider.

“It really takes more planning. I also feel like I need to mentally prepare,” Glevy said, estimating they go downtown once or twice a month.

However, there continue to be success stories.

A first-of-its-kind urban pickleball tournament in the Gaslamp sold out for multiple weeks, and the Padres have broken attendance records for three straight years with 2025 on track to beat last year’s 3,330,545 ticket sales.

Those, as well as the growth of the entertainment sector, offer hope to downtown San Diego. Yet despite its challenges, the area’s unique offerings continue to make it a hub for tourists and San Diegans alike.