One of Mayor Mike Johnston’s primary goals for 2024 is to revive downtown Denver as the economic heart of the city after the pandemic hit downtowns nationwide.

Nearly a third of offices downtown sit empty, many employees who used to work there still work remotely and some companies are moving into Cherry Creek instead.

Johnston has pushed to transform the Central Business District into a “Central Neighborhood District,” where people live, work and play — not just work.

In the next 18 months, the city has an “existential fight for the soul of downtown Denver to make sure we get back as the economic engine, not just for the city and the state, but really for the region,” Johnston said Wednesday.

Johnston gave an unofficial “state of the city” address at the annual University of Colorado Real Estate Forum at the Denver Performing Arts Center’s Seawall Ballroom. He told real estate professionals there’s a lot of change coming to the city and urged them to not miss out.

The mayor outlined several steps toward getting downtown back on its feet from improving safety, closing homeless encampments, speeding up permitting and converting struggling office buildings into housing.

Denver has pushed more than 1,300 homeless people from encampments across downtown into “transitional housing” such as tiny homes or converted hotels. Johnston told developers who have avoided downtown that a lot has changed in six months and it’s become harder to find tents in the area.

Johnston previously said addressing Denver’s homeless crisis is a crucial step towards more vibrancy in the city.

A key part of becoming a “Central Neighborhood District” is bringing in housing at an affordable price point, not luxury units, Johnston said.

It will be costly though, he added.

The city found 16 downtown office buildings suitable for converting into residential, according to a study published last year. With all those buildings, the study found downtown would have more than 5,000 units of housing. The mayor said his office is working on a pilot program to create sustainable incentives to make it easier for developers to convert offices to housing.

Downtown office vacancy rates went up to decade-highs after the pandemic forced employees to stop going into the office. A large number haven’t come back, even when the pandemic eased.

While companies can mandate workers to return to the office, many aren’t in a position to as the labor market is still tight, said real estate consultant John Burns. They risk losing workers to competitors who are more flexible.

“Work from home is a thing,” Burns said. ”That’s not going away unless you can figure out a way to get to 12% to 13% unemployment and strip high speed internet out of people’s houses.”

Downtown needs more people living in it if it’s going to make a comeback, Burns said.

“If people are living downtown here, they’re gonna work downtown,” he added.

Having housing will also help local businesses struggling with the demographic shift, Burns said, as retailers are performing better closer to housing than in downtowns.

Local developer Confluent Development sees Denver’s office market as stabilizing, said Celeste Tanner, chief development officer.

“Office is not dead,” Tanner said. “The rumors of their death are greatly overstated.”

There’s still many opportunities for offices to be strong performers in this high-vacancy market, Tanner said. The best ones have daylight, outdoor space, restaurants nearby and are places workers want to be in.

The problem is downtown has many aging buildings from the 1970-80s that lack some of the attributes workers today like, Tanner said.

“There’s going to be some tough decisions that have to be made,” she said.

The mayor emphasized to the real estate community that redefining the soul of downtown Denver will require a generational investment through a partnership between the government and private companies — and that the narrative is showing signs of changing.

“This is the moment that you should tell people about that,” Johnston said. “Because we are going to do everything we can to build an environment that’s going to be vibrant … But we need people to know and to come back.”

Denver Gazette reporter Noah Festenstein contributed to this report.