The Salesforce Tower dominates the San Francisco skyline. At nearly 1,000 feet tall, it occupies a prominent position in the center of the city. But the imposing rocket-shaped building, which is lit up above, has a problem: it’s practically empty.
The business administration firm — the number one employer in this city of tech companies — was struggling to get its 12,000 employees back into the office. After decreing the abolition of working hours from nine to five hours in 2021, Salesforce has now said goodbye to its hybrid model that combines remote work and face-to-face work. This month, the company pledged to donate $10 to charity for every worker who physically comes to the tower, which sits between Mission Street and First Avenue. Since February, Salesforce has managed to get about 40% of its workforce back into the office.
Just a few blocks away on Second Avenue are the ruins of the Alexander Bookstore. Last April, the independent bookseller celebrated 32 years since it opened in one of San Francisco’s most touristy areas, just steps from the Embarcadero — the city’s eastern waterfront. Today the bookstore has a large orange sign that says “Closed”.
“We’re sorry to have to close and leave San Francisco with one less bookstore, especially in this neighborhood,” reads a note on the door for anyone who hasn’t heard of the massive riots. Three floors of books – 50,000 titles – were sold at a 25% discount in a store sale.
The space to the left of the bookstore is advertised as rented space and kitchen equipment—waiting for someone daring to open a restaurant in an area that was lively just a few years ago. History repeats itself with the building on the right, a former bank branch. Jones Lang LaSalle — a local real estate agency — announces it has nearly 11,000 square feet of space for rent. These types of billboards can be seen in dozens of buildings within several blocks.
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The area is no longer good for business. Mike Stuppin — one of the bookstore’s owners — says these blocks have lost half their foot traffic in recent years.
“Since the pandemic, it’s been quite a challenge to place these properties due to increased telecommuting and also due to some of the issues that San Francisco has had in recent years,” real estate agent Ben Lazzarechi said in an email. He has several properties for rent in this area.
A late June report by a real estate consulting firm estimated that a third of downtown San Francisco’s offices were vacant by the end of the second quarter of 2023. “That percentage has increased over three years,” says Max Sander, another industry analyst. He mentions that the vacant buildings could result in a $200 million deficit in the city’s budget by 2028 if current trends continue. Some City Council members have likened it to seeing an iceberg on the horizon – an iceberg that could cause catastrophe for the city’s finances.
It’s hard to count how many people downtown San Francisco has lost. According to estimates by the authorities, around 245,000 people worked there before the outbreak of the Covid 19 pandemic. Last February, a report commissioned by the city council found that at least 147,000 people stopped visiting the area due to the change in dynamics caused by the health emergency. Some have returned, but the character is not thinking about another crisis: the economic crisis. Dozens of tech companies have cut their payrolls since last year. According to website Layoffs.fyi, dozens of companies — including Amazon, Meta, Google and Salesforce — have laid off around 200,000 employees so far in 2023 (although not all jobs were based in the city).
A man cycles past several closed stores in the Chinatown neighborhood of San Francisco May 24.
Downtown San Francisco’s agony is most noticeable in retail. The crisis worsened in mid-June. Westfield — one of San Francisco’s premier malls — recently announced it was closing after 20 years near Union Square. This is one of the must-do stops for tourists visiting the San Francisco Bay Area. The company has defaulted on the $558 million loan for the property, which includes more than 1.5 million square feet of shops and offices. Westfield has said it intends to transfer ownership of the company to another company … but so far no one is interested.
Westfield cited “difficult operating conditions in the downtown area” as the rationale for the closure, which has resulted in a sharp drop in sales (due in part to increases in online shopping), foot traffic and rents. Department store Nordstrom — which occupied 20% of the space — has reported it will not renew its lease and is closing its doors after 35 years in business.
A cycle of ruin
While Westfield’s announcements do not detail the adverse conditions faced by the mall, they are well known. In fact, locals refer to these states as the “doom loop,” where one problem triggers another, setting off a cycle of ruin. These include the crisis caused by a population of almost 8,000 homeless in the city of about 800,000 people. These individuals are concentrated in the Tenderloin neighborhood in the heart of the city. Drug abuse in broad daylight, the mental health crisis of many people and the increase in juvenile delinquency are factors that have caused difficulties for companies. Merchants in downtown San Francisco are facing increases in theft of goods and vehicles well above the national average. Homicides and other violent crimes, on the other hand, are below average.
This situation was used as a “trump card” in the 2024 presidential campaign. Ron DeSantis — the Florida governor trying to wrestle Donald Trump into the Republican nomination — was filming a campaign spot… in San Francisco in late June. “Here we are in the once great city of San Francisco. [But] We walked in and saw people defecating in the street. We’ve seen people use heroin. “We saw people smoking crack cocaine,” says the politician in the clip. He has solidified his strategy in fighting the progressive politics that California has championed for decades.
Although DeSantis is committed to a far-right discourse, the San Francisco electorate seems to partially agree with his criticism of left-wing politicians. In a June 2022 referendum, voters removed the city’s district attorney from office because they felt he was too progressive. Sixty percent of voters voted to fire Chesa Boudin, rejecting some of the measures he implemented, such as not requiring prison sentences for minor crimes, to stem prison overcrowding. This year, the former prosecutor – the son of two radical left-wing militants – was hired as director of the Criminal Law & Justice Center at the University of California, Berkeley.
Several businesses in downtown San Francisco are closed. Carlos Rosillo
Boudin’s dismissal was a signal to politicians in the Democratic stronghold. Since then Mayor London Breed has opted for a more moderate picture. Back in May, she announced that California State Police would be patrolling the troubled streets of Tenderloin to arrest heroin and fentanyl dealers. Fentanyl – an opioid – has created a nationwide epidemic. In just a month since the latest operation began, state police have cooperated with local authorities in 115 arrests and seized 17 pounds of drugs.
Authorities have avoided disclosing the exact number of officers who took to the streets. However, last Thursday, Democratic Gov. Gavin Newsom — a former San Francisco mayor who has a political rivalry with DeSantis — announced that he would double the number of agents to “continue to fight crime and address the fentanyl crisis.” that has spread”. the city.” His government has invested $1 billion in reducing the effects of opioids in California, the most populous state in the United States with over 39 million people.
Whether these efforts can bring oxygen to the torturous heart of San Francisco remains to be seen. At a forum hosted by Bloomberg at the end of June, Mayor Breed called for the business closures to be stopped. “It’s time to rethink downtown,” she told the audience.
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