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Restaurants and bars are relying on city money to liven up SF’s downtown. Now the future of that funding’s uncertain

Mayor London Breed speaks at a press conference before a neighborhood walk regarding the state of businesses in the SoMa district of San Francisco, Calif. on Wednesday, June 8, 2022. | Camille Cohen/The Standard

Andrew Chun has a remarkably upbeat take on the survival of San Francisco’s downtown—whatever the future may hold for the neighborhood. 

To hear it from him, the area is too central and too beautiful to languish. Plus it hosts the bulk of the city’s major tourist hotels and convention centers. 

“The real question,” according to Chun, the managing partner of Sidecar Hospitality, which owns four downtown restaurants and bars, “is whether any of us around now will survive to see whatever that next phase is.”

But funding to the Office of Economic and Workforce Development in Mayor London Breed’s proposed budget meant to help support local businesses and liven up the area with events and pop-ups has become a sticking point for members of the Board of Supervisors responsible for reviewing the city’s spending plan. 

Supervisors have called into question the specific focus on the downtown neighborhoods and the lack of detail in OEWD’s plans to breathe life into the area. 

Of the $6 million proposed for the 2022-23 budget for the Economic Core Recovery Program, the bulk is split among activations of ground-floor retail space through pop-ups and other short-term measures, as well as programming for “anchor events” meant to drive more visitors, tourists and office workers downtown. A small portion is meant to support arts programming through local Community Benefits Districts (CBD). Another $2 million in funding is slated for 2023-34.

“I’m just having a lot of doubts about the programming,” District 1 Supervisor Connie Chan said at a Budget and Appropriations Committee meeting on Wednesday. “It’s not clear for me what it is for and where it is going.”

The money is part of a larger package proposed for downtown recovery and safety that includes more money for community ambassadors. The package has also drawn scrutiny from the supervisors. 

Chun said while business has picked up from the depths of the pandemic, the lack of office workers and associated foot traffic means sales can vary widely from 25% to 75% of the pre-pandemic normal. Fridays, which used to be the busiest day of the week, have essentially slowed to the pace of another weekend day.

The most recent bright spot for his business was the Golden State Warriors victory parade, which Chun said was a critical example of how the city could attract more people downtown. 

“If we don’t take an active step, the narrative that San Francisco is dead, dangerous and dirty will be framed around downtown,” Chun said. “I don’t want the city to be the 21st-century example of urban blight.”

More than 42% of San Francisco’s small businesses and 30% of its total employment are located within the area defined as the city’s economic core, according to data from the Controller’s Office. That includes the city’s downtown, as well as areas like Mission Bay, Union Square and Mid-Market. 

Prior to the pandemic, the area was responsible for generating more than 45% of the city’s sales tax. Since then, the neighborhood has seen some of the largest declines in sales tax revenue, with some ZIP codes experiencing a more than 50% drop between 2019 and 2021.

Tourists and San Francisco residents stroll the Financial District and Union Square on Feb. 1, 2022. | Camille Cohen/The Standard

OEWD Director Kate Sofis said planning events is still in its early stages, but pointed to a potential “music week” that would build on the city’s SF Live program meant to support entertainment venue operators.

District 9 Supervisor Hillary Ronen took issue with the idea of CBDs receiving public money. CBDs, sometimes known as business improvement districts, are nonprofits funded by an assessment on property owners in a particular area.

“CBDs are a group of property owners who say that city services aren’t enough for us,” Ronen said. “They tax themselves more so they can have special individual benefits for just them.”

Sofis pointed to the Downtown SF CBD, which successfully self-funded last December’s “Let’s Glow SF” event, a projection mapping display that brought thousands of people to the area. The organization also recently hired Mission-based artist Claudio Talavera-Ballón to paint a 1,900-square-foot street mural on Battery Bridge.

She said building a formalized program would spur similar efforts, while meeting demands from the supervisors to hire local artists and engage local businesses for the work.

“It’s a very deliberate opportunity to retake the downtown with our creatives and artists from our neighborhoods,” Sofis said. 

Downtown SF CBD Executive Director Robbie Silver said with the city seeing some of the lowest return-to-office numbers in the nation, new ideas and programming are critical for a neighborhood revival.

“Downtown SF firmly believes that placemaking by highlighting the best of what the city has to offer in arts, culture, and hospitality will drive a new downtown economy,” Silver said.

Laurie Thomas, executive director of the Golden Gate Restaurant Association, estimated that 40% to 50% of the organization’s membership lies in the economic core. And she said local businesses and service workers will be the beneficiaries of the funding. 

“I wish I had a crystal ball and a magic wand and knew all the answers, but I don’t,” Thomas said. “All I know is we can’t be ostriches and hope when we take our head out of sand that things will be OK.”