Outside the context of crime: loitering, yes, foot traffic, not really. It's possible this particular phrase is a euphemism used in crime reporting, I don't know, but if it is I don't know why they wouldn't just say "officers no longer suspected dealers were using this place" / "informants/word on the street was that distribution moved to xyz ... "

That sentence read strangely to me as well; I think foot traffic is great and my favorite places in America are built around promoting it.