Hawthorne, CA's Strategic Plan for Economic Growth and Development

On Tuesday night, the City Council of Hawthorne discussed future development and reviewed a presentation by representatives from Kosmont Companies concerning their economic development analysis of Hawthorne. This analysis, prepared in July 2025, provided a detailed look at the city's current economic landscape and outlined a strategic roadmap for future growth.

The Kosmont analysis highlighted several significant challenges facing Hawthorne's economic development:

• High Retail Vacancy Rates: Hawthorne's retail vacancy rate stood at 21.3% in 2025 (YTD), largely due to the closed Hawthorne Mall, which alone contributed 1.1 million square feet to the vacant inventory. Excluding the mall, the citywide retail vacancy rate was 4.3%, with the Hawthorne Boulevard corridor specifically suffering from a 45.8% vacancy rate (or 8.9% without the mall). The city had seen no new retail construction since 2020 and experienced negative net absorption since 2022, indicating a contraction in the retail market.
• Aging Hotel Inventory: The city's 18 existing hotels had an average age of 38 years.
• Limited Housing Development and RHNA Obligations: Since 2021, only seven new housing units had been developed in the city, and the multi-family housing inventory remained stable at 16,597 units since 2022. This minimal development sharply contrasted with Hawthorne's Regional Housing Needs Assessment (RHNA) obligation of 5,806 housing units, with 3,281 units needed for lower-income households. Only 739 of the existing multi-family units were classified as "affordable," demonstrating a significant shortfall. The report noted that rising housing demand was leading to increasing rents and potential displacement of lower-income residents.
• Obstacles to Redevelopment:
  • The Hawthorne Mall, despite its 27-acre size and central location offering "significant redevelopment potential," had experienced multiple failed redevelopment plans due to ownership issues and legal complications.
  • There was "reluctance from existing landowners and tenants" to engage in redevelopment efforts.
  • Financing for certain land uses, such as retail, office, and high-density multi-family, was deemed "infeasible".
  • "Perception issues" regarding past crime and blight negatively impacted the reputation of the mall and Hawthorne Boulevard.
  • Outdated zoning standards and a lack of robust incentives made lot consolidation challenging in older residential areas.
• Traffic Congestion and Safety: Hawthorne's location near major freeways and its role as a transit corridor resulted in heavy commuter traffic. Between 2019 and 2023, the city recorded 1,028 crashes, including 8 fatal and 72 severe injury crashes, with pedestrian-involved incidents more than tripling in fatal and serious injuries.
• Limited Vacant Land: As a built-out city, Hawthorne found it difficult to accommodate new housing without rezoning or redeveloping underutilized commercial and industrial areas.
• Economic Vulnerability: The city had a heavy reliance on a few large employers, including Tesla and Amazon, creating economic vulnerability and a need for diversification.

The Kosmont Companies analysis offered a series of suggested strategies and solutions for development to address these pressing issues:

• Mixed-Use Redevelopment: A primary strategy was to promote mixed-use redevelopment opportunities in key corridors and opportunity sites, notably the Hawthorne Mall. This approach aims to create vibrant communities by integrating residential units, retail spaces, and entertainment venues to stimulate economic growth and enhance the city's tax base.
• Zoning and Land Use Strategies: The report recommended modifying the Downtown Hawthorne Specific Plan to allow blended-use/mixed-use development on street-facing parcels along Hawthorne Boulevard and promoting medium-low density housing along Hawthorne Boulevard through an overlay zone. It also suggested that the city's General Plan Update would define a preferred land use scenario and explore new opportunities for future RHNA cycles.
• Incentives and Funding Mechanisms: The analysis advised establishing incentives to attract private development. It highlighted "Value Capture tools" like the Development Opportunity Reserve (DOR®) to enable additional density in exchange for community benefits. The use of Tax Increment Financing (TIF) districts, such as Enhanced Infrastructure Financing Districts (EIFD) or Climate Resilience Districts (CRD), was also recommended to fund infrastructure by capturing increased property tax revenue. Pursuing state and federal grant funding for infrastructure, climate resilience, and housing (e.g., Community Development Block Grants (CDBG) and Low-Income Housing Tax Credits (LIHTC)) was emphasized, particularly for affordable blended-use projects. The city's Housing Department had significant blanket purchase orders for FY 2025/26 to fund various affordable housing and rehabilitation programs, including HOME Affordable Housing Development and the Housing Rehabilitation Program, totaling over $6.9 million.
• Retail Revitalization and Business Attraction: To address high retail vacancies, the report proposed improving existing retail offerings through economic development initiatives. This included offering grants/incentives for façade improvements and using a "Business Expansion Attraction Retention" (BEAR) strategy to attract and retain businesses. Marketing critical vacancies at industry events like ICSC and creating parklets and outdoor seating areas were also suggested. The analysis also advised repositioning underutilized retail by encouraging adaptive reuse and allowing transitions to higher-demand uses like tech, biotech, and logistics.
• Airport Redevelopment: Considering the reactivation of portions of the Hawthorne Municipal Airport property was noted as an opportunity. The City Council was, in fact, set to consider awarding a contract for the resurfacing of Runway 7-25 and taxiways at the airport, partially funded by an FAA grant. The proposed contract amount for this work was approximately $2.48 million.
• Tourism and Events: Maximizing Transient Occupancy Tax (TOT) and sales tax revenue was crucial, especially in anticipation of upcoming international events like the FIFA World Cup and Olympics. Renovating older hotel rooms was seen as a way to improve tourism and visitor spending.
• Transportation and Connectivity: Promoting higher-density, mixed-use, and transit-oriented developments (TOD) was a key strategy, particularly around the Hawthorne/Lennox Station and Redondo Beach Station. Enhancing walkability, "bikeability," and transit access was also a focus. Strengthening connections to Inglewood’s stadium district through improved transit links, shuttles, bike lanes, and park-and-ride options was identified as a critical opportunity. To improve traffic safety for residents and students of the nearby York Elementary School, the city planned to establish a four-way stop at the intersection of Oxford Avenue and 118th Street, with a construction cost of $800 for signs and pavement markings.
• Economic Diversification: The city aimed to diversify its economy beyond its heavy reliance on aerospace and logistics by expanding into clean technology, creative industries, advanced manufacturing, entertainment, and healthcare services.
• Citywide Branding Strategy: Developing a cohesive brand that reflects Hawthorne’s history, cultural vibrancy, and forward-looking vision was recommended to strengthen its regional presence, attract investment, and build civic pride.

Hawthorne is actively cultivating a fertile environment for developers, presenting significant opportunities for investment and growth across its urban landscape. Developers are encouraged to engage in mixed-use redevelopment, particularly at the 27-acre Hawthorne Mall site and along the Hawthorne Boulevard corridor, integrating residential, retail, and entertainment spaces to create vibrant communities. Further opportunities exist in Transit-Oriented Developments (TODs) near key Metro stations like Hawthorne/Lennox and Redondo Beach, as well as through adaptive reuse of underutilized retail and industrial areas for higher-demand sectors such as tech and logistics.

To facilitate these projects, the City is committed to offering flexible zoning and dedicated staff support, along with incentives such as density bonuses, reduced parking requirements, and development fee waivers. Value Capture tools (DOR®) and Tax Increment Financing (TIF) districts are also being promoted to enable additional density in exchange for community benefits and to fund essential infrastructure. These efforts, bolstered by pursuit of state and federal grants for housing and infrastructure, are designed to bring a multitude of benefits, including stimulating economic growth, creating jobs, increasing the City's tax base through new housing and diversified industries, and ultimately enhancing the quality of life for residents by improving housing options, transit connectivity, and community amenities. The ongoing General Plan Update will further solidify this strategic framework, aligning development with the City’s long-term vision for a more resilient and prosperous future.