Despite the progressive policies of the bus company during the 1960's and 1970's, Long Beach's downtown, where the bus routes continued to be focused, declined. In 1978, a federal study found Long Beach to be among the most socially, economically and financially distressed cities in the country. Partially in response to that finding, Long Beach Transit received a large grant from the department of Housing and Urban Development in 1979 for a multi-modal transportation project, the first of its kind under the Urban Initiatives Program of the Carter Administration. Along with $14 million in federal funds came $8 million in state and local funds. Armed with $22 million, construction of a state-of-the-art downtown transit and pedestrian mall commenced.

The Promenade Tram, a Long Beach Transit service that connected Shoreline Village with the Transit Mall.

The key element and highlight of the Downtown Transportation Project, the Transit Mall, on First Street between Long Beach Blvd. and Pacific Avenue was completed and dedicated in 1982. It was devoted exclusively to public transit and off-limits to automobiles! It offered comfortable passenger shelters, computerized information monitors, and a transit service center staffed with professional customer service clerks. Other improvements in the 23-block project area included expansive sidewalks, decorative street fixtures, new traffic signals and streetlights, and coordinated landscaping with shaded rest areas. Another pedestrian-oriented feature, the four-block long Promenade, was constructed to connect a new Long Beach Shopping Plaza to Shoreline Village, with an open-air tram running between the two. In addition, an outdoor amphitheater was built adjacent to the Transit Mall to provide a forum for concerts and special events. Public transportation had come a long way since the G.O.P. one hundred years ago!

Located at First Street on the Promenade, International Square has an amphitheater for outdoor theatrical and musical presentations, public assemblies and "brown bag" lunches.

Developers, encouraged by this major commitment by the city towards its future, expressed their optimism in the 1980's in ways that have since become heralded by the media as the "Downtown Renaissance." The city skyline was transformed by the addition of major hotels, an expanded convention and entertainment center, office towers and the World Trade Center. Downtown Long Beach was once again a vibrant, growing city, and public transportation demand was back on the rise!