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Arts & Entertainment

Downtown San Francisco: Will soaring retail vacancies create room for fun?

Bartender James Bezaitis serves customers at the House of Shields in San Francisco. | Source: Isaac Ceja/The Standard

Can roller disco, light shows and winter wonderland displays save Downtown San Francisco? City Hall believes they can—and has put money behind them to make it happen. 

The Office of Economic and Workforce Development said it has begun issuing grants to support arts and entertainment activities Downtown as part of Mayor London Breed’s initiative to create an Arts, Culture and Entertainment Zone, also known as ACE. The idea is to encourage existing businesses with fee and tax relief, streamlined permits and marketing support, and provide “incentives to foster new arts and culture establishments.”

The strategy is part of the city’s “Roadmap to Downtown San Francisco’s Future,” an effort to break the notorious “doom loop” that’s left the city’s economic and cultural center riddled with underused office buildings and empty storefronts. 

The initiative is long on fun ideas and ambitious plans but short on specifics on how to achieve them. Six months on, the boundaries of the ACE zone have yet to be defined, and little to no progress has been made toward streamlining permits and easing fees, improvements business owners say are badly needed. 

Nor is it clear how one strategy will work across an area that includes several distinct neighborhoods with diverse challenges ranging from an exodus of office workers in the Financial District to high-profile smash-and-grab thefts in Union Square to open-air drug markets in the Tenderloin and Mid-Market neighborhoods.  

The process will take time, said Kia Kolderup-Lane, communications manager for the Office of Economic and Workforce Development. “There’s a lot of stakeholders involved,” she said. “And they all want to be part of these ACE Zones.” 

Tourist Trap

Amid all that dark news, city officials are clinging to a silver lining in the form of recent numbers showing tourism has been roaring back in the city. Union Square, San Francisco’s upscale shopping and hotel district, has enjoyed a comeback since the bleak days of the pandemic, with a 22% jump in foot traffic since last year. Visitor spending is also expected to continue to grow in 2023, up from the $522 million in tourism-generated fees and tax revenues delivered to the city last year, according to a report by San Francisco Travel. 

Nightlife and entertainment are clearly helping to drive this turnaround. 

The recent series of final concerts by Grateful Dead spinoff band Dead & Company brought in an estimated $30.9 million, with 18,296 overnight paid accommodations, according to the Destinations International Event Impact Calculator.

A composite image of Allan Nealis, left, shopping for tie-dye at a pop-up market ahead of the final Dead & Company performance outside of Oracle Park on Friday, July 14, 2023, and Dead & Company’s Bob Weir, right, performing onstage later that weekend. | Source: The Standard

“You couldn’t walk a foot without seeing tie dye,” said Jill Plemons, director of sales and marketing at the Beacon Grand Hotel near Union Square. 

While the average rate of hotel occupancy in San Francisco has hovered around 60%, it soared to 90% during the concert series weekend, according to Alex Bastian, president and CEO of the Hotel Council of San Francisco. The rate was just 8% at the height of the pandemic.

“You have to remember that was only 16 months ago,” Bastian said.

One-off events like the 125th anniversary of the Ferry Building and the March tulip giveaway in Union Square—where organizers were so inundated they ran out of blooms two hours early—and pop-up concerts by Sofar Sounds at the Beacon Grand Hotel’s new lounge have also drawn crowds. 

Hundreds of people are gathered on a lawn in front of a large domed building, with a stage and screens visible in the background, during a sunny outdoor event.
People gather in front of San Francisco City Hall to watch live performances during Pride weekend on June 26. | Source: Juliana Yamada/The Standard

A survey conducted after the second Bhangra & Beats night market revealed that people spent an average of $89 in the surrounding area, and the first two events brought more than 10,000 people each night. 

Everyday People 

But tourism alone can’t solve Downtown San Francisco’s problems, say local business owners. Many of them are struggling to keep their doors open. Destinations like the Tiki bar Pagan Idol and the jazz venue the Dawn Club have been staging comebacks thanks to the recent surge in out-of-town visitors, said owner Brian Sheehy, who owns 14 bars across the city, many of them clustered Downtown.

On the other hand, Sheehy said establishments he owns, like the Rickhouse on Kearny Street and Nightingale, which is modeled after a 1970s fern bar, survived in the past mainly on a happy hour crowd that no longer exists following the rise of remote work that has shaken Downtown San Francisco’s economy. Those spots have, in turn, fallen on hard times. 

Still, Sheehy remains an optimist, countering the negative press that has battered the city in recent months with ironic initiatives like “Doomloopin Bowling,” a cheeky game he organized to raise morale among his staff.

A composite image of Dawn Club co-owners Brian Sheehy and Doug Dalton presenting the Doomloopin Bowling trophy and Jorge Gutierrez rolling a ball toward the goal just outside the Dawn Club in San Francisco. | Source: Isaac Ceja/The Standard

Yet, Sheehy said he has been waiting for an outdoor seating permit at the Dawn Club since last November. He was echoing small business owners who have long complained about the excessive red tape imposed on them by city government. California lawmakers rejected a 2022 bill that would have allowed bars to stay open past 2 a.m. However, San Francisco officials are backing a proposed state law that would allow the sale of alcohol outdoors in designated “Entertainment Zones.”  

Sheehy and other business owners say such reforms can’t come soon enough. With retail and office vacancies exceeding 30% and San Francisco struggling with one of the slowest pandemic recoveries in the nation, local business owners say the negative press about the city has only hampered the efforts to resuscitate it. 

“We don’t need any more bars and restaurants; we don’t need more cafes,” Sheehy said. “We need to work on saving the ones that are barely hanging on right now.” 

A composite image of an exterior of House of Shields, left, and people enjoying drinks at the Dawn Club, right, in Downtown San Francisco. | Source: Isaac Ceja/The Standard

Max Young is another bar owner who has experienced San Francisco’s problems firsthand. He’s been operating drinking establishments in San Francisco since the 1990s, running popular spots like the Del Mar and the Bamboo Hut in North Beach. 

He opened the bar and club Mr. Smith’s on Seventh Street off Market Street about two decades ago when the neighborhood was up and coming. “It was like the United Nations,” Young said. “There was a little bit of everyone there.” 

He remembered watching the neighborhood improve: Yelp took off, smaller tech companies moved in, and the Federal Building was constructed. 

“I watched it come back after 50 years of nothing,” Young said. 

But things changed around 2015 when drug dealers multiplied, he said, and his customers and staff felt unsafe. Mr. Smith’s closed in 2019. 

“It became a full-time job to try to change this tide,” he said.

Guests drink at PianoFight’s bar in San Francisco in March. | Source: Michaela Vatcheva for The Standard

He wasn’t alone. PianoFight, a popular neighboring spot near Mid-Market, closed down this year, unable to recover from the effects of the pandemic. 

“Nightlife can help Downtown for sure,” Young said. “But it can’t be the only thing. It needs to be part of a much larger puzzle.” 

Whatever the challenges, some believe recasting Downtown as a fun place to go for nightlife and the arts is returning San Francisco to its former reputation as a bohemian haven for offbeat creatives. 

A man wearing black shirt stands at a bar.
Ben Bleiman, chair of the San Francisco Entertainment Commission, at Soda Popinski's in San Francisco. | Source: Juliana Yamada/The Standard

Ben Bleiman, who sits on the city’s Entertainment Commission and owns the San Francisco bars Tonic, Bullitt and Teeth, welcomes the idea of a central city hub that caters to the business and entertainment needs of the city’s locals rather than those of big companies, adding that his commentary was not on behalf of the Entertainment Commission. 

“Multinational corporations didn’t always own Downtown San Francisco,” Bleiman said. “Fuck them—they swooped into town and didn’t care about us.”