Revitalizing Downtown and our Economic Core

How we are working to bring downtown and our economy back on track

Prior to the pandemic, San Francisco’s Downtown was the number one job generator for the City. Between tourists and workers, nearly one million people a day were circulating in our Economic Core, which includes Downtown, South of Market, Union Square, Civic Center, Yerba Buena, and Mission Bay. This created a tremendous amount of activity for the businesses located there — hotels, bars, restaurants, retail as well as general services like office supply, newsstands, and others.

As we all know, the pandemic changed all that.

The loss of office commuters and tourists has dried up demand for the businesses in our core and the jobs that they provide. While domestic tourism is improving, we will have little control over the return of international tourism from some of our key markets and economists are not predicting a full recovery until 2024. Our hotels are still only seeing a 70% occupancy rate and fewer than 40% of our office workers are reporting to offices.

Mayor London Breed welcoming Google employees back to their downtown office.

The impacts of this are real. Though our unemployment rate is low at 1.9%, that number is not dispersed evenly across the City, and our overall labor force remains below what it was pre-pandemic. There are thousands of hotel and convention workers still waiting to go back to work that won’t be able to return until hotel occupancy and event activity gets back to previous levels. Small businesses downtown continue to struggle to keep their doors open.

But this doesn’t just impact our physical downtown — it hurts our entire city. Our Economic Core fuels the sales tax, hotel tax, parking tax, and business taxes that fund programs and vital services that support the health and well-being of our city and our neighborhoods. If we want to continue to make progress on homelessness, have police officers and firefighters responding to calls in all neighborhoods, provide vital support for children and families, and all the other priorities we all care about, we need a thriving Economic Core.

Working to Support our Economic Core

There are no easy solutions here. Along with AdvanceSF, we convened small business owners, large employers, property owners, and arts organizations to begin identifying initiatives and policies to support the future of our Economic Core. Through our Economic Core Forum, we are exploring ideas like how we might attract new businesses and industries to San Francisco, how to improve transportation to serve the needs of an ever-expanding region, and how to make our downtown more resilient to economic shocks like what we experienced in the pandemic.

Mayor London Breed speaking to downtown office employees.

And as we do the longer-term work of looking at policies and what the future of work looks like, we are also making short-term investments. That is why we are launching our Economic Core Recovery Initiative. Here are our key goals:

• To drive people back to the core faster, so that the small businesses, service workers, and others that depended on the activity that tourists and office workers generate can stabilize and begin to recover.
• To accelerate the recovery of lost jobs from key sectors that have yet to recover — such as hotels and hospitality, retail shopping centers and department stores, and downtown bars and restaurants.
• To use these initiatives to support San Francisco-based artists, performers, festivals, cultural organizations, entrepreneurs, and small businesses to secure short-term and long-term space in our economic core.
• To attract more people to the core and fill vacant store fronts so we can continue to improve real and perceived cleanliness and safety on our streets.

Mayor London Breed visits the Ferry Building to see floral installations as part of BloomSF.

Economic Core Recovery Fund

In the budget I proposed and that is now moving through the Board of Supervisors for final approval, we created an Economic Core Recovery Fund to support this initiative.

This $8 million dollar fund will support programs that give people a reason to come to our downtown and maximize the number of people frequenting businesses in order to support the recovery of jobs and small San Francisco-based businesses and entrepreneurs. This will allow us to do things like:

• Funding new festivals: Whether it’s creating a single large event or several medium-sized multi-day festivals, we can create events that draw people on a national and regional scale, and give people new reasons to come back to the City. Look at what happens with large events like Pride, with people visiting from all over, or smaller events like Carnaval or the Cherry Blossom Festival, which show off our city and bring people in. We need more of this.
• Beautification, public space improvements, and local artist displays or performances: These investments will bring events to plazas, alleyways, and other public spaces on Fridays and weekends, bringing office workers back to the City and drawing people into downtown at times when they might not be coming.
• Storefronts from Vacant to Vibrant: To address storefront vacancies, we can pair property owners with artists and small businesses who can use the space for short-term activations that enliven the surrounding area and ensure the services and amenities visitors expect are available in our core. By supporting the permitting and compliance requirements and offering programming support, this program allows small local entrepreneurs, artists, and cultural activities to test the market with less risk — a key component to increasing equity.
• Visitor Attraction Campaign: We will target international, national, and regional visitors to come to San Francisco and remind the world of the culture, creativity, and beauty that make San Francisco a world-class destination.
• Entrepreneur & Small Business Attraction Campaign: One way to build on the future of downtown will be to proactively reach out to new sectors and businesses that bring new opportunities to our city about the office vacancies that are available in our downtown.

Mayor London Breed helps paint a new mural on a vacant storefront as part of the Paint the Void initiative.

As the budget is finalized over the next few weeks, we are planning our next steps in putting these funds to work. We know this is just a first step, and we are working on long-term strategies to support the vibrancy of downtown. But as we wait for those strategies to take hold, we need to do more to support our small businesses downtown and spur the return of jobs our residents depend on in sectors that rely on visitors and business. The best way we can do that now is by making our city a vibrant and exciting place for workers, residents, and visitors — a place where people want to be.

None of this will work if people don’t feel comfortable. We need to invest in public safety and ambassadors and continue to do the work to keep our city clean and safe. I will continue meeting with business leaders and workers, and doing everything we can to make our city more welcoming for everyone. San Francisco is a city of innovation and resilience. These are the values that will help us bring our city back from this pandemic.