Hearing: Impact of Downtown Business Closures on San Francisco’s Economy
By Supervisor Joel Engardio
San Francisco’s chief economist says our economic recovery has been weaker compared to other cities. A big reason is a lagging downtown, which accounted for nearly three-quarters of our city’s GDP. We can’t afford to give up on downtown.
That’s why I led a hearing on the impact of downtown business closures on our local economy, tax base, and city budget.
These challenges provide an immense opportunity to reimagine downtown. It can become a 24-hour neighborhood filled with housing, activities, and entertainment — all supported by transit.
But first, we need to embrace reforms that facilitate the adaptation and re-use of underutilized commercial space. We also need to take a hard look at our business and commercial tax structure.
If an entrepreneur or artisan has a good idea, City Hall needs to roll out the red carpet and cut the red tape so that idea can flourish.
Read my local economy and small business platform.
Read the San Francisco Examiner report on the hearing.
Hearing Details
Government Audit and Oversight Committee of the Board of Supervisors.
November 2, 2023
Watch the hearing here:
Video of hearing starts at 1:53:23
Presenters:
Ted Egan
Chief economist of the controller’s office at City Hall
Sarah Dennis-Phillips
Director of the office of economic and workforce development at City Hall
Opening Statement by Supervisor Joel Engardio
We need to understand the economic impacts and budget consequences from downtown business closures.
As a westside Supervisor, I represent the great Sunset District. It ends at the ocean and we are the furthest point from our downtown.
There’s a reason for the old joke that in the City and County of San Francisco, the Sunset is the County. We are known as San Francisco’s original suburb. And while some of the city’s commercial corridors are struggling, many of our neighborhoods are thriving.
The New York Times recently featured all the great things happening in the Sunset like the activities on the Great Highway when it is open to pedestrians on weekends and the 10,000 people who showed up to our new Sunset Night Market.
The article said “the Outer Sunset has flourished while downtown struggles.”
When Time Out magazine named the 40 coolest neighborhoods in the world for 2023, the Outer Richmond made the list — another San Francisco westside neighborhood near the ocean and far from downtown.
I agree, the westside is cool.
Yet our downtown hasn’t been as fortunate. As we emerged from the pandemic, hundreds of brick and mortar businesses have shuttered their doors. Office towers have cleared out. Many asked, what’s the point of downtown anymore?
While I believe the future of San Francisco runs through neighborhoods like the Sunset, we must acknowledge that downtown still matters very much.
Downtown generates nearly three-quarters of San Francisco’s GDP. The majority of our business and commercial tax revenues come from downtown. These funds pay for affordable housing, our parks and recreation, streets and infrastructure, and basic city services in our neighborhoods.
And our neighborhoods are more connected to downtown than we think. Nearly 30 percent of San Francisco’s workers across the city are employed downtown. When downtown struggles, our communities struggle.
I know evolving consumer purchasing habits and structural changes in retail forecast the imminent change to our downtown retail districts. With the shift to remote work, our downtown was overdue for a seismic rebalance.
We have an immense opportunity in front of us. Downtown could transition into a 24-hour, mixed-use and active neighborhood, supported by transit and surrounded by culture and entertainment opportunities.
San Francisco needs to foster this transition with every tool we have available. We need to continue to bring foot traffic and life to our streets with short term activations of empty storefronts and events in the street. We need to continue reforms to facilitate the adaptation and re-use of underutilized commercial space. We also need to take a hard look at our business and commercial tax structure.
If an entrepreneur or artisan has a good idea, City Hall needs to roll out the red carpet and cut the red tape so that idea can flourish.
When our downtown thrives, the rest of San Francisco thrives.