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Downtown San Francisco businesses fret over ‘storm of cancellations’ as APEC kicks off

Two people, standing far apart, standing next to a lowly lit bar with a large display of liquor along a mirrored wall.
A lone customer sits at the bar at Novela in San Francisco on Monday, November 13, 2023. | Source: Jungho Kim for The Standard

Monday is not one of the busier nights of the week at San Francisco cocktail bar Novela. Still, the watering hole themed around literary figures typically attracts its fair share of thirsty post-work patrons.

But this Monday was whisper-quiet. Workers shined glasses, wiped tables and made anxious small talk. The streets outside the bar at 663 Mission St. were bare, hemmed in by black security fencing erected along the sidewalk.

The feeling—as the city ostensibly opened its arms wide for an expected 30,000 visitors coming from around the globe for the Asia-Pacific Economic Cooperation summit—was anything but welcoming. Novela, just a block from the Moscone Center where APEC is happening, ended up closing three hours early, with its total customer count barely reaching the double digits.

An view of an empty outdoor seating are on a city block with a tall black fence on the opposite side.
Arash Ghanadran, owner of Novela, is seen walking into his establishment along security fence-lined Mission Street in San Francisco on Monday, November 13, 2023. | Source: Jungho Kim for The Standard

Initially, when details about APEC descending on the city started to trickle out, Novela owner Arash Ghanadan said he was optimistic that the gathering could function as a “tailwind event” for the South of Market neighborhood, which has struggled to rebound from Covid-era shutdowns and the work-from-home trends that have emptied offices.

RELATED: 12 Unmissable San Francisco Restaurants for APEC Visitors To Know

“We did consider shutting down for the whole week,” Ghanadan said. “The only reason we didn’t was for the slight hope … that we would get some business for APEC.”

Those hopes are turning into a more bitter reality as the event hailed as “epic” by city officials officially kicks off.

‘This Is Not a Typical Convention’ 

Ghanadan’s record of his customers and reservations on Mondays in October totaled 47 people. The same report for this Monday showed a lonely table for two. A recent Thursday showed 135 covers. This coming Thursday, on the other hand, has a single reservation for six.

Many nearby companies have given employees the option to work from home because of concerns about transit and transportation.

Ghanadan anticipated his normal customer base might be scared off by intensive security preparations but hoped they would be replaced or even exceeded by new visitors. But to date, he says, he’s seen a grand total of zero new business. 

The situation is similar at Ghanadan’s other SoMa cocktail bar, Madarae, which is also near Moscone Center. He estimates he’ll lose some $150,000 worth of business across the two locations over the course of the week. Ghanadan’s roughly 50 hourly workers have already started to see a reduction in work hours and are losing out on tip income.

Ghanadan sent a letter about his anticipated losses to Mayor London Breed that asks for a structured financial support program, in the form of direct grants or measures like tax breaks, designed for small businesses. 

In October, the Board of Supervisors passed a nonbinding resolution for the mayor to allocate $10 million to mitigate APEC’s impacts on small businesses and residents in the vicinity of the Moscone Center. But there’s been little indication to this point that the suggestion will lead to any dollars.

He contrasted APEC to other major Moscone events, such as Dreamforce or the RSA Conference, during which business often jumps 300% to 400%.

An empty, lowly lit lounge area with large curtain in the background.
Empty lounge seating is seen at Novela, a bar, in San Francisco on Monday, Nov. 13, 2023. | Source: Jungho Kim for The Standard

“Frankly, we rely on those things to survive,” Ghanadan said. “This is not a typical convention; it’s of a different nature. Perhaps with the enhanced security, you’re going directly to events, then going back to your hotel room and staying within the premises.”

Ghanadan said the picture started becoming clearer earlier this month as he received what he called a “storm of cancellations,” including two full-bar buyouts of 250 people each scheduled for Tuesday and Wednesday.

The city has touted a projected $50 million positive economic impact from APEC, but Ghanadan said that benefit has been unevenly distributed.

A number of major hotels are full because of APEC attendees, including the St. Regis, the Hotel Zelos and the Westin St. Francis. Ghanadan relayed an anecdote he heard from the beverage director at a nearby luxury hotel who was giddy at the amount of alcohol orders for the delegation staying at the property.

“On the level of the city, you could argue they are seeing a good financial benefit from this, but it’s the small businesses that are significantly impacted,” Ghanadan said. 

He added that impacts are not just limited to businesses in the immediate vicinity of the Moscone Center. Ghanadan is also the owner of the Barbarossa Lounge in the Financial District. That location, too, has seen a mass dropoff in bookings, he said.

Ghanadan hasn’t been sitting on his hands. He’s been proactively trying to create APEC-themed promotions and marketing campaigns and sharing the efforts with the Mayor’s Office and business groups to expand their reach, with little effect.

He attributes part of the problem to the lack of coordination and unified messaging to help small businesses take advantage of the opportunity, or at least mitigate its toll.

“For these other conferences, nobody ever says don’t come to the city, even though there are street closures and traffic issues,” Ghanadran said.

two flyers side by side, on the left is a skyline of San Francisco on the right is the Transamerica Pyramid.
Bar owner Arash Ghanadan has been trying to organize specific APEC promotions and events to little avail. | Source: Courtesy

Nate Haas, the owner of SoMa cannabis dispensary Barbary Coast echoed that point and incredulously referred to an SFGate news story that quoted a California Department of Transportation spokesman who said “don’t go” to Downtown San Francisco during the conference.

Haas is taking what could be termed a “cautiously pessimistic” view of the event.

“I’d rather set expectations that this is going to be a total disaster and be pleasantly surprised,” Haas said.

Workers erect black security fencing along California Street near Powell Street in San Francisco on Sunday ahead of the APEC meeting. | Source: Julie Makinen/The Standard

‘The Scene Gives Me a Lot of Anxiety’ 

Jessica Rae, the owner of Rae Studios, which offers dance and fitness classes at 414 Mason St. near Union Square, said she has a “love-hate relationship” with APEC.

Starting with the positive, Rae has been enlisted to teach workout classes in U.N. Plaza’s new Fitness Court, which was hastily opened alongside a skate park in time for APEC. She said she’s seen a mass effort to get streets cleaned, projects completed and issues in order.

“I’m trying to think very positively here about ways to jump on the bandwagon,” Rae said. “As someone who has been in this city for 13 years, I’m thankful for the opportunity for something like this.”

The other side is a drop in class bookings from folks who are nervous about driving into the city or the change in transit schedules. A regular event she does in collaboration with Equinox called Boombox Sundays, which would regularly bring in 100 people, ended up at less than half that number.

Her studio’s normal classes were also looking light in terms of pre-bookings; a few walk-ins meant that attendance was down around 30% on Monday. Thankfully, she said, that meant she didn’t have to cancel any classes.

Additionally, outside of her business, Rae has been personally affected by the extremely intensive security preparations around the Fairmont Hotel, which is close to her home in Nob Hill.

A large white pavilion is erected in the middle of a street behind a black security fence.
A security checkpoint is set up at the corner of California and Taylor streets near Huntington Park in San Francisco's Nob Hill neighborhood on MOnday. President Joe Biden is staying in the neighborhood for the APEC summit. | Source: Julie Makinen/The Standard

“I take my dog regularly to Huntington Park for walks, and with the barricades and other security preparations, I’m avoiding it,” Rae said. “It sucks for my dog, but the scene gives me a lot of anxiety as an individual, and I just kind of want to get away from there.”

The business owners said because of the unprecedented nature of APEC and its preparations in San Francisco, they’ve yet to understand the full impact of the event on their operations and sales, but all were in support of city aid to backstop the losses when the accounting comes due.

“I sent that note out of frustration. I needed to raise my voice,” Ghanadan said of his letter to the mayor. “I don’t want the city to take a position that we didn’t know about it. I wanted to make clear there was an impact. Whether they choose to do something about it or they don’t, that’s their decision.”