The Future of Downtown San Francisco
Become a sustaining member of the Commonwealth Club for just $10 a month. Join today. Hello and good morning. I want to welcome you all here today to the Commonwealth Club and I'm happy and pleased to be the moderator for today's program. The Future of Downtown San Francisco. I'm a staff writer at the San Francisco Standard, which is a relatively new online news source.
SF Standard. COM Got to do a quick plug. My focus at the Standard is on the recovery of San Francisco's economy in the post pandemic.
So today's topic is of particular importance to me. This is my first time moderating a Commonwealth Club panel and I couldn't think of a more timely and relevant topic. There is perhaps no more important topic to San Francisco's future than this.
Quite frankly, we're at a critical juncture for downtown San Francisco. There was hopes that this fall would be a turning point where employees would come back and street That hasn't happened. While things have certainly improved from the near apocalyptic emptiness of the early days of the pandemic, today, many buildings remain quiet on most days, and human traffic on sidewalks and streets is still limited. Some people have returned to office offices, but hybrid work is becoming the norm. Recently, Mayor Breed Mayor London Breed publicly recognize that her push to have employees return to the office has had limited impact and begin to voice the need for new solutions to turn around and enliven downtown. And that's what we're here to discuss.
And let's be clear. We need a vibrant downtown and vibrant neighborhoods. It's not an either or. A vibrant downtown helps the city overall, including the payments and property taxes, which help fund the city's government and services. And it's clear we have reached a pivot point. We need new solutions and approaches to bring back downtown San Francisco.
And that's why we're here today with speakers inside and outside San Francisco city government who are committed to bringing back the area, turning the area into a thriving region once again. Yes, we want to talk about the problems we're facing. And there are many, but we also want to talk about what's being done and what is the path forward. We're starting with two of our speakers, Rob Silver, the head of the Downtown S.F. Partnership, and Laura Cressman, Out of Sight Lab.
But before we jump into a conversation, a reminder that we want our audience to ask questions. If you have questions for me or any of the guests. If you're in person, please write them on the question cards on your seats.
If you're watching online, please put them into the YouTube chat feature and questions will be given to me throughout the program. I hope to get to as many of them as possible. So. So. Let's jump in.
Robbie, I'd like to start with you. We're here to discuss the future of downtown San Francisco. And you are the head of the Downtown S.F. Partnership. Tell us a little about your organization and kind of give us a little scene center for what we're going to be discussing today. Sure.
Thank you, Kevin, for the introduction and great to see people in person. Good morning, everyone. I'm Robbie Silver, the executive director of the Downtown S.F. Partnership.
And for those who don't know, the city has 18 what we call community benefit districts. And we were formed in January of 20, 22 months exactly before the pandemic hit. We serve the financial district and Jackson Square neighborhoods. It's about 43 square blocks.
75% of my budget actually goes straight to our cleaning and safety. And these are my district boundaries on a screen. They're very hard to describe.
So that's why I put a visual. But as you can see, we cover most of the downtown economic core, which has just been completely devastated economically based on the pandemic. We need to re-imagine downtown. You know, this is a pivotal moment that we can actually make a difference and do something about it. Through our work with our board of directors, we decided that we needed to do something in the public realm as a start.
Why not do something that we can control, which is what happens on our alleys, on our back streets? There's so much layered history in downtown San Francisco. The waterfront used to come right up to Montgomery, you know, back in the day. There's buried ships underneath the financial district.
And that's a story, you know, that we can play out in the public realm to pilots that we've done so far to date. This is Battery Street, which was closed to vehicular traffic in 2020 as part of Better Market Street. Obviously, we didn't want this to be the representative of a new public space in downtown San Francisco. We work directly with the city and commissioned local mission based artist Claudio Talavera.
Beyond to paint a 1900 square foot mural right on the street. It took five weeks to complete, and here is an aerial shot. We now have new landscaping and we activate this on Tuesdays and Thursdays for lunch time. Another pilot that we did very successfully last year that we're bringing back this year, it's called Let's Glow, S.F..
It became the largest holiday projection mapping event in the United States, where we projection mapped light shows on four downtown properties for ten nights in December. This was a test case for us because we wanted to find out if we gave people a reason to come downtown, would they and would they come after 5 p.m.? Well, 40,000 people did.
We sent out a survey and had a QR code after each light show and we asked if you came downtown, did you go shopping? Did you go out to eat? Did you go out for cocktails? And we calculated about a $2.2 million economic impact. So we're very excited to bring back Let's Glow this year, December 2nd through the 11th, which will be on one bush, the stock exchange, the corner of Commercial and light a store and the historic Hobart building. But we knew doing pilots wasn't enough. We needed to have a strategic plan in front of us to guide us. What could we do in the public realm to make downtown San Francisco reimagined and more meaningful not only to the workforce, but how do we market and create a new destination to our own downtown or to our own San Francisco residents and folks throughout the Bay Area? This is why we brought on Laura Kress, Simoneaux principal, a lab to come up with a very comprehensive 150 page Public Realm Action Plan, which is on our website downtown.
ASPHAUG. So without further ado, I'll turn it over to Laura. Thanks, Abby. So I'm Laura Kress, M.A., founder of Site Lab Urban Studio. We are a studio about 20 urban designers, architects, landscape architects based in San Francisco.
And we work really across a scale of projects. We work on large scale plans like the Fifth and Mission Project, which just opened its first phase in a public park at Fifth and mission to work for Google. On going from an office traditional office park to a mixed use neighborhood environment, and particularly on public grounds, and how we bring together all of the parts that make cities, you know, places we want to be and that we know and love. And so we were personally invested, I would say, in engaging with Robby and his team on downtown and what the future is here downtown. I think we've all seen the ways in which neighborhoods have thrived and we've seen a return to the neighborhood and at the same time, downtown has a different role.
It is a center of gravity. All roads lead to downtown. It's a job center where we have capacity for, you know, over 200,000 jobs. And so it also is a historic hub. Right. And with as Robby mentioned, all these layers of history.
So there's these bones here that we want to think about what is its next life? It's been through actually many lives in San Francisco. We all know the impact of the pandemic that, you know, trips the trips to downtown have have have gone down. We've seen them creeping back up, particular alley for work, although in a different format than maybe we saw before. But downtown also used to serve for tourism and for as a social destination and as shopping destination.
And those trips have also taken a hit. And so we've been thinking about what is what does it mean, as Robby said, to think about this next era of downtown. We did a lot of research and we asked people, so we had a survey to the public with nearly 900 responses as well as on the ground observations and intercept surveys and other research.
And one of the interesting things to us was to ask people what they would want to see, what would make them come back to downtown or return to downtown more. And one of the interesting things to me is clearly we know that there are sentiments both real and perhaps perceived about cleanliness and safety. But interestingly, we put on the list the resolution of COVID. Would that be the thing that would make you come to work more? And it was nearly last on the list. And in fact, people wanted to see more like a kind of liveliness to downtown, more green, more restaurants, more gathering places, more art, more of that insight of greater social purpose to downtown.
And so a lot of this work, and I should note, as Robby did, that this is not the answer to all things for downtown or for the city of San Francisco. This is we are coming at it from one perspective, which is the public realm to start to plant seeds really for a different way of looking at our city and our downtown. And so how can downtown be more of a social destination and that social destination is for workers to have more reasons to come down to the office. It's a choice to come to the office now for many workers, not all, but for many, but also families, that that test case of let's go, would you come at night? Right.
What are the the reasons to come at night or stay after work or come on a weekend? So this is an image is really an illustration and provocation of actually a location at commercial in light staff where let's go will be happening. But it is really representative of a whole, you know, fabric that we have to work with. And in this case, actually, there are no public parks in this district. There are privately owned public spaces, plazas, and they are the streets that make up 30% of the land is streets and alleys. And in particular there is this great alley fabric. So we are looking at how do we reconsider that? Part of this plan is to say we need to move out from from move from one offs to campaigns.
And so how do we get more people together and think of this really as a public and private endeavor that we do together from improving those public, privately owned public spaces to just literally planting more trees, having, you know, more green to make this more compelling to walk down the street. And then we also did quite a bit of work on saying where would we have the most impact? So we identified a series of locations and you can see the first one here, action area, a as commercial and light staff as places where we see a combination of a lot of the ingredients that could be great hubs, great moments in downtown. So those have whether it's they have active restaurants, they have public spaces, they have kind of cool historic buildings, different.
They also have potentially investment already planned projects by the city. And so how do we bring that all together for impact? And in this example, commercial night staff, this is where we're starting actually. We're moving from that broader plan to our first pilot from that plan action area, a commercial and light staff.
And here you can actually see in that image that the historic coastline of San Francisco did run through this area. And those you may see those little black kind of dots are buried ships. So there's a really interesting story here, as well as restaurants and kind of current life. And we're hoping to see even more future life with San Francisco vendors and artists. So this is an image of that alleyway and historic building there that we think is just calling out for a kind of art and re conception.
And we are doing this as a coordinated effort with the downtown, as a partnership, as well as the city and the mayor's office in terms of being a pilot. So essentially, this is not a one off. This is actually setting up a model so that this can then be this idea of activity. Hubs can be catalyzed around the downtown to start to seed from the ground up with local business owners.
That kind of energy in the public realm that might compel people to rethink downtown and to come, whether it is for work or to bring your family on a weekend and evening. So I'm looking forward to the conversation. And with that, I will hand it back to Kevin. Awesome. Thank you so much, Laura. And I'm going to bring up Kate. So Office of the Office of Economic and Workforce Development, as Laura mentioned, the city maybe, Kate, maybe you can just talk a little bit about your reactions or your thoughts on this Public Realm Action Plan and what it could really do to transform some of these areas we're talking about here.
Thanks for having me. So I'm head of the Office of Economic and Workforce Development, which in normal times focuses on helping businesses who are here grow, helping people secure employment. And so in the context of all of that work and our response in the last few years to COVID, it is really an amazing moment in time where we will continue to do all of that. But really, I think, have come together with community, with our mayor to to deeply understand both the crisis but also the opportunity we have right now to really literally fill our vacancies in our economic core with new kinds of businesses, new kinds of activities. And of course, all of that sits within the public realm. So I think from where we are and our mayor shares his vision, we wholeheartedly agree that it is this this moment in time that we actually have to refill our economic core with what what we maybe thought, you know, that was kind of missing.
You know, and I can speak to my own personal narrative. I've been in the city now for almost 30 years. My kids are my teenage kids are born and raised here. We still live here. And one of the things that drew me and so many people I know to San Francisco was our creative culture.
This place where you could come from, a city like Buffalo, New York, where I grew up, where there wasn't a lot of economic opportunity, where my parents, who were symphony musicians, were struggling economically to make it work. And then here was San Francisco, this beacon of tolerance, this place where you could come and try new things, whether it's new things in technology or new things in the arts. So I think it is it is a critical moment, but also an exciting moment where we can seize the opportunity to create new kinds of experiences in our economic core. And there's both sort of the the landscaping in the hardscape, but there's also the programing. So a lot of what our office is doing in partnership with the Downtown Partnership is looking at how we can take some city investment to help more arts organizations have opportunities to either have pop up performances or installations or live music, or even how we can look at retail vacancies, restaurant vacancies as well on the ground floor. And again, as we are trying to have more dining experiences and more artistic experiences, how we can both have short term pop up programing as well as look for longer term tenants in those spaces.
I do want to say when when I speak about and use the word economic core and this is something we've been sort of trying to find the right language. When we at the city are looking at our recovery, we really have looked at a number of, let's call them zones that make up these parts of our city, the greater downtown, if you will, that have historically how so many of our jobs and our destination retail. So we think of it including the financial district. But we are also looking at, I think, you know, Ravi, you had it on your map at South of Market and Union Square and really Howe and down to Mission Bay how these three areas really work together.
So as I sort of respond to questions, I'm really always going to be thinking about downtown proper, but also how it relates to these areas immediately around it. So I want to bring up our final guest, Wade Rose here from Advance S.F.. It's my time. It's pretty good. Impeccable. I Good morning, Wade.
It's raining in Marin. Big time. There I am. Wade maybe you can just give a little bit of background on advanced S.F. itself and kind of what role you're trying to have at play in the revival of what we're talking about in the downtown core. Thanks, Kevin. So advance San Francisco is a grew out of a organization that's been around for maybe 40 years, which represents the interests of the larger employers in San Francisco.
And a few years ago, there was internal discussion about whether the typical way of representing interests of the business community, which primarily concerned tech tax policy and regulatory issues, was sufficient to really represent the interest of the business community. And the determination was that it wasn't and that we needed to, as a community, be concerned about the broad width of issues in San Francisco. So we changed and in January rolled out advanced San Francisco. It's chaired by Larry Baer and a person named Lloyd Dean. Larry, of course, is head of the Giants.
Lloyd is head of Dignity Health, which is a 140 hospital company, which was headquartered here in San Francisco since 1856. And what we are interested in is that the essentially the quality of life in San Francisco, because it has so much to do about the ability of businesses and for the economy to prosper here in the city. So we have three main concerns. One is safe and clean streets goes to crime and street behavior.
We are concerned about the affordability issues in San Francisco because it is literally the most expensive city in the country to live and work in. And we are very concerned about economic viability, which is the issue which all of us are working together on, has to do with the viability of the business district at the moment. But the viability of business overall in San Francisco.
So we are engaged with Kate and others, Robby, especially on working on these issues that you see here behind you to essentially repopulate the downtown area because we've lost approximately you may have discussed it. And if I'm repeating myself, repeating what you said, I apologize. But roughly 300,000 people per day, less than what we were experiencing in 20 2019. That's a lot of people. That's a lot of transactions which support middle income jobs. The ramifications of that population leaving San Francisco literally in a month, 90% of all office workers left in March 2020 is is gigantic and huge.
So that's one of the reasons we're all here talking about how do we build a new future for the city. Well, I want to touch on the Public Realm Action Plan first, 150 page report, I think 143 one of the people who read through it like so, you know, is part of that report. You talk about turning downtown to more of a pedestrian friendly zone. You mentioned some aspects that make it already pedestrian friendly. The fact that it's one of the flatter neighborhoods in the city, for example. But you also note that what is necessary to do that is a lot of temporary, but potentially permanent street closures.
Now, now that we have the both the public and private here on stage, what are you doing to kind of cut the red tape, streamline that process? I mean, we're already starting to see some of the issues that are coming when shared spaces are having to kind of move into this permanent phase. So how are we going to try to balance those concerns and make it easier to make some of these actual pilots happen? I'll go ahead and start. So in our plan, you know, we actually call it street openings because we're opening the street to pedestrians and visitors and workers alike. And, you know, we we are very thankful that the city stepped up.
You know, during the pandemic and actually brought out shared spaces. I think as community groups, we been waiting for a permit process like shared spaces, and it just provides a great foundation for any nonprofit, any community group to close down a street, to have a an activation, a festival, a block party. And, you know, as an active user of shared spaces, it's just been, you know, wonderful for us to use as as Laura mentioned, you know, 36% of our our streets and downtown, you know, is is our, you know, or our streets and I think that just leaves a huge opportunity to identify which streets, which alleys, which, you know, areas in the in the economic core. We can actually turn over to pedestrian activity.
And and the public realm plan, you know, is is a wide scope. And we're looking at, you know, all kinds of of activation, anything from new seating and greenery and art to other festivals and block parties. We're also looking at vacant spaces. You know, the vacancy rate here in San Francisco is continuing to be an issue and climbing. So the Public Realm Plan does address how do we re-energize the ground floor and also use the streets in front of those ground floor spaces to sort of a co activation space? Well, I might be able to just jump in from the public side of the house. You know, I think Shared Spaces is actually a great example of what is possible if the city is both being very focused on cutting through red tape on behalf of the private sector, but also importantly, if we're doing it in partnership with the private sector.
In fact, people have said to me who haven't been to San Francisco in a while and we are actually starting to see a decent uptick in the return of tourism, still not where we want to be, but we're at 70, 80%, which is a lot better actually than where we have been lingering in the 40 to 50% range with return to office. But what people say is having all of these shared spaces for outdoor dining while it was a response to a crisis, turns out now that we have completely re challenged the idea that San Francisco is not an outdoor city and that's a wonderful thing. And and that crisis forced the city to have to work much more quickly and collaboratively across departments of shared spaces.
Again, as one example, we have a cross departmental team that is then in partnership working with the Golden Gate Restaurant Association, our CBDs, even as we make those spaces permanent. And so these cross-departmental teams, which include the Department of Public Works, the fire department, my office, etc., I think has been a really important teachable moment for the city. And that is really the same principle that we are now trying to apply to other kinds of activations, so very much around how do we stand up now a very similar approach for temporary activations, whether it's a pop up inside an actual built environment like a retail space or it's a pop up arts installation, like Let's Go. We were just talking about air. I love how you're saying at a street.
Opening. A street opening or. Open invitation. We have piloted other things like first year free citywide. We have Prop eight, which has allowed us to expedite permitting for small businesses across the city. So I think we're really going to be trying to take those learnings and and apply them directly now and into the economic core.
So we don't want to touch on on something with with you. You know, these sorts of activations really benefit from wide ranging corporate and philanthropic support. But the activity we're seeing from a lot of business leaders is not necessarily really sticking and claim it's leaving the city and often with the proverbial middle finger on the way out. I mean, what are we can you speak from the corporate perspective on how you're trying to get these people to, you know, really make a stake a claim and invest in what the future of the city can be? When they were, in a lot of cases, the beneficiaries of this last boom.
There's a larger group of companies and company leaders who are staying and want to see San Francisco built up. Then are leaving. And this plan here is exactly what we're looking for. We're looking for a set of activities which will grow the streets so that it is attractive not only to residents on the West Side or, you know, tourists, but also employees.
The companies we've been dealing with are very supportive and actively seeking just this type of activity because it helps them convince employees to come back because there's something to come back to. It's you have to treat employees as visitors and the the environment which they step into outside of their offices environment is as important as the office environment. So to the extent that we can redesign San Francisco so it's not such a monochrome of offices, but it's offices plus homes, plus parks, plus bars, plus clubs plus museums that that is an environment which make it much more easy for businesses to decide to remain here or come here because that's what will help them attract and employ employees. Well, I want to touch on that, because a topic on the top of mind for a lot of the general public and a couple of the questions that have already come up is this idea of conversion. A lot of the focus has been on office to residential conversion, but I'm kind of curious, should we be broadening our definition of what a successful conversion is? You know, we look at all this empty office space and automatically think housing, but are there other sort of commercial uses that can be used in some of these empty spaces? I can I'll throw it out to the panel.
Well, let me just quickly grab on that, because we've we've all talked about this. Yes. And a big deal will be art, such as what we're doing here in Leeds. Staff, to the extent that we can expand San Francisco's art experience is will make it hugely attractive to people to engage in. San Francisco used to have an arts district.
It was very well known especially for its expressionism back in the fifties and sixties and into the seventies. And we need to reinvigorate that down in the downtown area. In fact, identify a place where it could be an arts district. But in order to do that, you need affordable studio space, right? So New York is starting to do that.
Companies are making space available for free or a nominal dollar a year for artists to come in and utilize it. Very similar to what Oakland did then. Very successful. So the building up of the art community in San Francisco is very important to that. Just what you're talking about, Kevin, just a much more diversified reuse of the space.
And I would add to that that I think in the same way that Wade spoke about drawing an employee or a worker back downtown, like the benefit is that these things that we're talking about, art and culture and, you know, pedestrian friendly streets draw people right where we are talking about appealing to the human experience and that that applies to whether it's adding housing and converting to housing or diversifying or entertainment, which I think is another conversation. Arts, culture and entertainment, because we have particularly north of market in the district, it is predominantly office which actually makes it conducive to different kinds of entertainment and other uses because you don't have potentially that kind of conflict with residential or neighborhoods. So I think there are a lot of questions and from our side, we're trying to plant those seeds to say who who kind of grabs on to see to see the opportunity here. I mean, I think the point you make, which is a really important one, that if entertainment as an example and I personally do think that there's great potential for more entertainment, more nighttime vibrancy, more music, but that runs right up against residential if you're literally putting it in the same block. So in some ways, I see again with the broader core, the financial district as a real opportunity to bring in some of these other uses that will do better because there isn't the density of residential in the financial district proper. I do want to sort of maybe provocatively say that we actually have built a lot of new residential immediately adjacent to the financial district in the south of market area in Mission Bay.
And it's, I think, very important to recognize that when we compare our our downtown or our economic core to other major cities, whether we're looking at L.A. or we're looking at Manhattan, the scale is very different. We are a very compact place. And so I would push back a bit on the notion that the highest and best use of many of our office buildings is conversion to residential from what we are seeing and what we are having conversations with with building owners, I want to challenge that. There are many shades of gray of commercial use in the upper floors of these buildings for some of the oldest buildings that are really going to prove themselves difficult to reimagine to the way that modern workers want to interact.
We were we will and are actually looking at what I would call strategic conversions of some of those. But what we are also hearing is it's not that people don't want to come in to work anymore. It's the experience when they come in to work both on the ground, but actually in their work environment, needs to justify them coming in. So that means more spaces for collaboration, more team space, less cubicles and individual offices and also smaller companies. So, you know, what we're seeing is larger companies shrinking their footprint.
They're not all leaving, but they're right sizing to the amount of space they need. So we are looking at opportunities to help buildings on the upper floors, reimagine space, make smaller spaces. We are also starting to see pricing come down in our economic core, which is a good thing in the sense it allows us to recruit more diverse kinds of businesses from different sectors and expanding the kinds of sectors that we are hosting here in our in our downtown is an important part of the work that that our office is also undertaking. The last thing I will say, right before I came to the city a year and a half ago, I had come from running another nonprofit called S.F. Made and supports manufacturing, envisioning upper floors of buildings.
They can have artists, they can have manufacturing apps. I usually wear my Shinola watch, which was built on the sixth floor of an office building. A former office building in Detroit. Educational uses, life science. Any of these things are possible actually on the upper floors of our office buildings and our zoning is already very permissible in our downtown to allow any of these uses.
I'm actually going to go to an audience question. I think this one is really interesting. And, you know, I kind of in my intro, I talked a little bit about kind of the us against them mentality that can arise when you talk about downtown versus the neighborhoods.
But somebody in audience posed the question, is that an old way of thinking? Is centralization kind of the way of the past, particularly as these work patterns have changed and folks are doing more economic activity where they live? Is there a decentralized model or should we be thinking about kind of spreading out that economic activity across the city rather than sort of thinking about the downtown core as what it was in the era past? I'll jump in with that one and say and say, yes, the narrative of downtown versus the neighborhood here in San Francisco needs to end. You know, for us to be successful as one city moving forward together, downtown, we have to think of our downtown is as your neighborhood to imagine your downtown neighborhood becoming your destination for arts and culture, your destination for nightlife and entertainment, your destination for for dining. And, you know, we can do this, you know, together and changing that narrative and perception concurrently with our Public Realm Action Plan, we've also, as an organization rebranded.
So we used to be called the Downtown Community Benefit District. Now we're called the Downtown Partnership. You know, to really reflect of the work that we do and how we do it together. But once Let's Glow is over, you'll start to see new signage in the public realm that actually drops financial district and five die from our naming conventions and just focuses on downtown and again telling that layered history. And I think, you know, coming up with or moving away from, you know, being called the financial district and fired.
I, I think automatically you think you know 9 to 5 you know banks financial institutions, people on suits. But that's not downtown San Francisco and that's not what I think downtown your downtown San Francisco should be. Yeah, I'd like to say that just quickly that the idea of downtown being somehow not San Francisco is ridiculous. It's the the business district. Downtown is or is always been the heart of San Francisco.
What happened recently is this tremendous boom of the digital economy, kind of muffled that perspective or buffered or shouted it somehow. And now we can we have an opportunity to reengage. I remember coming up here, you know, grew up in a little town called Carmel, south of here. And when you were coming to San Francisco after, especially as a kid, after your parents took you to the zoo, they took it down to Union Square and that was the center of town.
All the stuff was there to engage in, whether it was gumption, its crazy little rooms that feel remember that which you could explore or buy a whole bunch of other stories is no longer exist. But downtown or the the business district, however you want to explain it, is everybody's and it needs to be. We need to remind folks of that. I also want to put that a little bit in a longer kind of historic perspective, which is that the reason we have cities, right.
Cities are for shared resources, right. That's this is like the history history cities are coming together for shared resources. And then downtown is almost like the further nesting of the concentration of resources.
And in the downtown, it is like as we as I mentioned this, you know, all roads live there. That is where like the biggest concentration of transit is. It is probably the most walkable place in the Bay Area. So there are all these things that have been designed into making downtown have a particular opportunity and capacity to serve the city and be that kind of concentration. And I think what we're talking about is actually creating that experience that you do feel the sharing of those resources and what those resources are our culture, our connection. It's a social experience and not just an economic one.
And I think that that is built into the fabric of the city. And I and we have had really I think it's more of a you know, with industrialization, there was this idea of you put you put work in one place and you put living in another place and you segregate all these things. And so I think we are, you know, maybe a little delayed in coming out of that to rethink that integration in our downtown. But it's not it's not a binary. Now, all the work happens in in the neighborhoods versus downtown. I think that's also important to state we have this city deliberately limited our commercial space production prop M as it's called for many, many years.
There is no other place in the city that can hold this concentration when people do choose to come out of their homes and to come to an event like if this event how many of you took transit here or came from outside of the city? How many of you would have still come to this event if I told you this event is going to be in the outer Richmond in a residential area. So we serve a regional role to and I think we cannot forget that we serve a regional role as an economic driver. And I have to wear again my city hat the tax basis of this this city, you know, the services, the more clean and safe our police officers that we're in the middle of trying to dramatically increase what has been a real shortfall. All of that gets funded through tax revenue. And we cannot the way our tax system works, it's very much based on places where people actually work virtual doesn't pay tax.
The same reason why want I touch on that. So we talk a lot about the conversion thing and I've heard some observers say that let's say we do convert all the housing that's possible 20 or 30% of the current commercial office stock. How does that handcuff? In a way, our ability to thrive as an economy? Because basically our entire budget is sort of focused and centered around the idea of a downtown as the central economic driver of the of the city. Well, the downtown produces roughly 75% of the city's GDP. It is a massive economic machine which makes roads possible, clean water possible increase in these schools possible. So in order for the city to prosper, the the the business district, downtown area, the center of the city absolutely has to prosper.
Otherwise the effects will be negative effects spread throughout the rest of the community, which we do not want. Now, that said, we still have to adapt to current times. Then we have to figure out how to pull that off in a way which meets modern expectations and what's possible within the economy.
When the recession hit 12 years ago, we got together and figure it out. Some policies which would attract private investment, which would meet the economic concerns that grew. Then, after the city had laid off 1400 people and the tax revenues had declined in some instances up to 40%. Now the city was in a bad place. The federal bailout money this time prevented that same experience, even though the decline in economic activity was more severe than 12 years ago. But in any case, the idea was to attract the digital world to come in and and locate and expand in San Francisco.
And it was phenomenally successful. It was too successful many ways, and there were concerns about it. But it was also we initiated a boom and bust cycle. Then we're on the bus side of that boom and bust cycle. So we have to reengage, but reengage in a way which continues with the viability and vitality of the city, but perhaps in more balance than it previously was.
So, yeah, I think, again, Kate, I've heard you speak before in the past about attracting these new industries. Whatever this next chapter of the city's economic development will be, whether that's green technology or, you know, biotech or something like that, things that hardware companies, things that to kind of be centered in a physical location rather than software. I mean, that sounds great. I wish we could just bring all those people in. But there's a wide gulf between saying that and actually making that happen. You know, when I was talking to a lot of companies in the pre pandemic era, they had three problems that was cost, cost, cost.
And I guess what are the levers the city can pool to actually or policy ideas? Are there tax incentives? Are there ways to actually bring these new industries in? Well, what I what I will say is nothing is off the table right now. And I think that's a very different place, certainly for me as a citizen looking in from the outside of where we have been historically, I think there is a clear recognition at the city that we have benefited from the vibrancy of our business sector. We have taxed significantly all bunch. Yeah. The private sector to support a lot of what we are so known for in terms of all the community support and nonprofits and all the other things that we're very proud of, but we recognize this is a pivotal moment where we actually need to fight for every individual business to both stay here or come here.
And so that said and sort of again, with my roots coming from a very different kind of a city that always has struggled economically, at least as long as I've been alive. Our team is is doing exactly that. But it is you're correct.
There's no silver wand. We're going to create the Twitter tax break and suddenly refill the economic core with climate tech companies. But what I would posit is we need to understand and we are actually undertaking right now a pretty deep dove in partnership with the Bay Area Council and KPMG, the Chamber as well as well as Advance S.F., to really understand what this city's particular sustainable, competitive advantages are.
In my perspective, we are not a place to come for folks that don't have a pretty high end value proposition in the work that they are, the business that they are trying to do. And so that means if you're a retailer, sure, we have some luxury brands and I'm proud of the fact we still do have some luxury brands. But we need to look at retailers now who want to be here because they have some hybrid of retail and experiential. And maybe they're also doing design and manufacturing locally to create something really unique. When we look at our office users, we need to look at advanced manufacturers that need to be here physically, but that actually might be open to being in a downtown location because our industrial stock, believe it or not, has almost no vacancy right now.
We actually have quietly been building this whole network of small design prototyping firms across life science and cross climate, tech, climate, tech and green, as well as consumer products. And when we look at small office users, again, they're going to have to justify why they would want to be here. As an example, we're right now recruiting a company from Australia that has a whole new software technology that allows cities, among others, to do 3D representations of what you might have looked here as a 2D model. They want to be here because they want to be around city governments on the West Coast that can sort of absorb the idea of technology more quickly than other kinds of cities in the U.S.
So I think it's really going to come down to our core competitive advantages versus other very expensive places. The last thing I will say, though, is housing, housing, housing. Right. There is clearly a recognized significant shortfall in housing in this city. We clearly have to do better as a city, public and private at actually moving forward and building housing. But I also think there's a recognition now that we have to look regionally as well.
We are not even if we could immediately unstick projects that have become stuck, whether in entitlement or for political reasons and get that forward. The key for me is also looking at the region and improving our public transit and our connectivity and connectivity into places where people are living so that we start to, you know, act more like a manhattan in the context of the five boroughs as opposed to trying to solve for everything within the seven by seven limits of the city. So regionalism, I think, is is another important part.
So that's part of the kind of the larger, broader vision of what can happen. I think right now we have a lot of small businesses in downtown that that are struggling. And, you know, I think there's a recognition from the city and from the city's budget office that hybrid work is here to stay. And I guess my question is, you know, I talked to a lot of these these pizzeria owners or what have you, and they're like from day to day, my business is not stable.
I could I could be normal one day and then be completely empty. The next is there a way to structure hybrid work in a way to actually create more stability for these businesses and for the city's economic health, create a benchmark to build on, rather than just having these sort of wild swings drawn on a day to day basis. Well, it's it's an interesting issue.
We had a previous meeting in April, and a person was addressing this concern that companies were not making employees come back. So he turned to a person across the table that you have to make your employees come back. And the other person turned to him so that both scaled, which means the business models have changed and they're not going to change back. And it's because companies, especially in the digital realm, found out that their employees could work from home and they really didn't miss a beat on productivity. In fact, they made a pretty good sizable income from reducing their operating expenses.
And that just the light bulb went off, which is we can do this. Now, the question is there are other factors which come into play, such as friends and partnerships and culture within a company experience and experience of the broader quality of life when you're outside of the office. So it looks like three days a week roughly Tuesday, Wednesday, Thursday, with Friday and Saturday being flexible. There are variations within that, but it's not to be what it was.
So I think we're a few years away from understanding really what the pattern is going to be. And the problem with that is, is the transactions people who work in offices engaged with, engage in when they leave the office and they go to lunch or they come in early for breakfast or they go to a store. And that's why I come back to the issue of repopulation, because that the health, the economic health those transactions provide for the city are really based on numbers, not necessarily only office workers. Right? So we really we need to change this area so that it's much more populated, which are much more diverse set of undertakings, people, what why people are in downtown. You know, the kind of piggyback off of that is there's no question are our small businesses and our restaurants have held on for for dear life. Right.
But they're not I want to be clear, they're not done fighting yet. And, you know, to what point they're operating, what they normally would operate, you know, five days a week they're operating Tuesdays, Wednesdays and Thursdays, three out of out of five, three out of seven days a week, which is not sustainable for any restaurant in town. And then you add the difficulty with hiring the ridiculous inflation just costs of doing business. The math just doesn't work out. So what I go back to is doing what we can can we can do, you know, in the public and how do we diversify that portfolio? Mondays, Fridays after 5 p.m., I think San Francisco, I don't know the timeframe, but it could become a 24 hour, you know, downtown if we want it to.
Right. But we have to work at that. A way to diversify our portfolio is and I believe that there are bipoc owned businesses that have just been completely priced out of being able to operate and downtown for four decades. And we now have a wide range of vacancies on the ground floor on second and third floor. I think our prime to open those doors to people that have been completely closed off before. I know my my team is committed. I'm committed in in a new campaign after the holidays.
We're calling it pop into downtown. And I'm actually talking to a arts and culture institution this week and talking to a property owner and just, again, having a casual conversation and saying, you know, this this space has been vacant for three years. It's probably to be vacant for a little bit longer. Why don't you give me that space for 6 to 9 months? Let me put somebody in there who can operate as a pop up.
Maybe we can provide some grant money, you know, for them to do so. You can market the space as something, you know, different to a potential tenant and give that, you know, that small business, that museum, that arts and culture institution, just that opportunity that they never had before. So I'm going to address one of the elephant in the room because I'm going to get a lot of questions about this.
You know, we're talking about downtown. You're talking about economic core being 24 hour city, 24 hour type of neighborhood. You know, one of the barriers to that is what people have been bringing up public safety issues, homelessness, some of the crime issues. And it's clear that that will need to be addressed or improved if we're going to actually make these things happen. And what is the actual pathway to that? I know the mayor recently put in more money for community ambassadors, but it seems like we need a larger strategy to kind of deal with this. If this is the way that we're going to think about this neighborhood going forward.
I'd just say from our perspective, it's the number one issue and we're not going to be able to get at the good stuff until this issue is managed and, you know, choose your numbers. I think Washington, D.C. has 60 police per 10,000. New York 52, San Francisco 17. Yet it doesn't work that way that that level of perception of safety and security doesn't reduce anxiety on the streets.
And there's too many stories of people being afraid to come to place at night, people who are nervous about their experience during the day in Union Square, people running into people smoking crack in front of City Hall. It just can't it can't continue. If the goal is to restabilize San Francisco, that includes issue of sufficient mental health services. There's been some expansion of that recently, but it's it's not enough. So
and there's possibilities doing more. But it's a obviously it's almost a 50 year issue now started with Mayor Agnew's trying to tackle it and it's very controversial, you know, lots of opinions. But in the at the end of the day, people have to in general perceive, see that the streets are safe. And because of that, they have there is no second thought or compunction about coming into the heart of the city.
So I would offer it's sort of a multipronged strategy now. Right. So I think recognizing and certainly from where we sit at the city, we recognize that, you know, here I am running a department called Economic Development, but a lot of the welcome ambassadors that we've talked about, both in the economic core that work in partnership with some of the Cbd's ambassadors as well as urban alchemy, which works in the Civic Center and Tenderloin and mid-market. My department supports those contracts that funds those folks.
So so I am much more deep into to clean and safe than I ever thought I would be when I took this job. Here's a couple of things I'll offer. So the first is having people come repopulate our downtown, come to a lecture, go to the theater, go to work, come downtown to check out some cool performance. That's actually part of the solution.
And this is not to make excuses, but it is to say that many U.S. downtowns are struggling with the very similar dynamic. It's just that we're very compact. So if you go Las Vegas, for example, you get to the Strip, it feels great on the strip, right? You go two blocks off of that strip. Scary.
The concentration of open air drug use and homelessness and street behaviors is staggering. It makes us look tame by comparison. If you go to Chicago. Chicago right now is currently experiencing a a tremendously scary wave of murders and assaults happening on their street.
So a lot of major U.S. cities are struggling with stuff, but we are unique in that we're all kind of on top of each other. We have the Tenderloin and it's right next to Union Square and it's right next to our financial district.
That's right across from our south of market. So what are we doing about it and how are we tracking progress? So the first is absolutely actively recruiting folks into our police academies. That is the key right now. We actually do have more budget in our budget and I expect that with the next budget we will continue to support budget for PD, but we now actually need to play catch up by filling more folks into the police academies. And that's part of my workforce development capacity, is to try to recruit those folks. The second thing that's going on are these ambassadors, and ambassadors are not.
People say, well, what's the end game here? Like how many more ambassadors can you put on to the street? It really isn't about putting more ambassadors out there and just moving people around, pushing people around. But the reality is right now, we sort of need to to hold the beachhead, if you will. So the purpose of more ambassadors is to provide more safety and evenings.
You know, it's time it's going to change next weekend and it's going to be dark earlier. And it's the holiday shopping season. And we want you all to come here and spend your money and enjoy your your holidays here. So we have seen success already with our ambassadors.
When we have Mosconi Center events, we basically line the streets around Mosconi and provide safe passage from hotels to the to the convention center. We've actually been providing now support all the way into the evening around the major theaters of Golden Gate, the Orpheum, to to provide more of a sense of safety in the evening so ambassadors can be eyes and ears. And one of the important parts of this most recent announcement from the mayor is that we are now going to be having ambassadors go down into the major transit stations. So on my way here came from Civic Center. There was some stuff going on.
PD was down in there and taken care of that. So it's been really, again, this collaboration where we now have Bart and Muni and my office and PD actively working I think is the key. And then the last part is more of the centralization of our services to help people in distress. And part of the announcement last week is our Department of Emergency Management, which is where the 911 calls come in, is now actually going to take on a coordination role of of all of our outreach services. So our homeless outreach, our public health response.
And I think that coordination is essential because we aren't always coordinated. And I think that all of that has to work together while we also get more of you and more of me and more of you to spend more time doing wonderful things in our core. So it kind of has to work together. I appreciate the question because without doing, you know, the public space activation and the beautification, we we have to have the space clean and safe first. You know, first and foremost. And, you know, going back in time, as I mentioned before, as a community benefit district, we formed again in January 2020.
The pandemic hit virtually every ground floor. Space was completely boarded up, broken glass everywhere. And you would see graffiti that would span a whole sides of buildings and walls. And that was my first job was just cleaning up downtown. And we rolled up our sleeves with a group of Ford ambassadors at the time, and we spent about 6 to 9 months as providing a or establishing a baseline level of of cleanliness in downtown. And it took a while because we wanted to prepare for when people came back, because at the time we lost 96% of our pedestrian activity in downtown.
So all those cleanliness issues were completely exposed last fiscal year, we spent about $2.1 million on cleaning and safety efforts through our our property assessments. And we've actually seen a dramatic decreas in in our downtown area. We tracked about a 41% decrease in quality of life issues, close to a 90% drop in graffiti.
Our role thumb is graffiti needs to be cleaned up in less than 24 hours. My role, less than an hour. The longer that an issue is out on the street, it just breeds more blight. So we are very proactive in our cleaning and safety operations starting at 6 a.m., you know, before business opens up for the day.
We also hire a nonprofit outreach group to go out and really provide that passionate care to those who are struggling on our streets. And I'm really proud to say that we've reconnected 17 unhoused individuals on our streets with their long lost family and friends. It's it's pretty remarkable meeting somebody on our street and realizing that they've been on the same corner for 10 to 20 years. I'll never forget my first experience doing Street Outreach, and I met an individual same quadrant, same corner, living, panhandling and such.
I just asked him for his name. How long has he been here? Where is he from? And he he was displaced and from 2005 because of Hurricane Katrina and came to San Francisco to find a safe haven and was still living on our street, you know. And so when we think about, you know, our our, you know, unhoused population, you know, we we very much take a very compassionate approach, you know, with our operations. And that's certainly been been been helping as well. I'm going to take this question from the audience and then we're getting to the end of our time. Somebody, the person asked, can somebody address the trend in commercial property tax revenue downward assessments? And I'll I'll I'll kind of do the sort of second order question on that.
You know, all these things we're talking about bringing in new types of folks, new types of industries sort of require as rents changing, costs changing. And it will require probably property tax or property values declining and property tax value declining, at least in the short term. And yeah, I feel like it took a while for the city to officially recognize that hybrid work was here to stay. And I'm kind of curious on, you know, what is the recognition that maybe some of this short term pain is necessary for a longer term transformation and where the city and where its citizens can kind of play a role in helping ease that transition.
It's well, it's starting with requests by commercial property owners to reassess the value of their property, similar situation happened 12 years ago, and the city is actively considering the feasibility and and the, you know, whether the requests warrant attention. Likelihood. Yes, there will be significant property devaluations as indicated by tax reassess reassessing. And how much that will be is unclear. I think what is clear, even though murky, is that this process will take a few years. It's not going to just be, you know, at the end of like the summer of 2023, we'll have gone through that process.
We might just be at the fron
2022-11-05 11:03
