The Salesforce Tower dominates the San Francisco landscape. With its more than 300 meters high, the building claims a prominent position in the center of the city. But the imposing missile-shaped building with a lighting installation at the top has a problem: it is practically empty. The business management company, the main employer in the technology city, has suffered headaches for months to get its 12,000 employees back to the office. After having decreed the death of working hours from nine to five in 2021, Salesforce has reversed a hybrid model between face-to-face and teleworking. This month he promised to donate $10 to nonprofit organizations for every worker who physically comes to the tower between Mission Street and First Avenue. Salesforce ensures that since February it has managed to get 40% of its workforce back to the office.
Just a few blocks away, on Second Avenue, are the Alexander Ruins. The independent bookstore celebrated 32 years in April since it opened its doors in one of the most touristy areas of San Francisco, just a few steps from the Embarcadero, on the eastern shore of the city. Its showcase today sports a large orange sign with the word “closed”. “We are sorry to have to close and leave San Francisco without one more bookstore, especially in this neighborhood,” says a note taped to the door for the clueless who did not find out about the sale on its three floors of 50,000 titles with a 25% discount. discount.
The space to the left of the bookstore advertises that it is for rent and has kitchen equipment waiting for someone to dare to put a restaurant in an area that was vibrant a few years ago. History repeats itself with the building on the right, a former bank branch. Jones Lang LaSalle real estate announces that it has available almost 1,000 square meters. These types of posters can be seen in dozens of buildings in several blocks around.
The area is no longer a good business. Mike Stuppin, one of the bookstore’s owners, says that these blocks have lost half of their foot traffic in recent years. “It has been quite a challenge to place these properties since the pandemic due to the increase in telecommuting and also due to some problems that San Francisco has had in recent years,” says real estate broker Ben Lazzarechi, who has several properties in his portfolio, in an email. in the zone.
A report from the end of June by a real estate consultancy estimated that a third of downtown offices were empty at the end of the second quarter. “This percentage has grown period after period over three years,” says Max Sander, another industry analyst. This specialist mentions that the unoccupied buildings could open a gap of 200 million dollars [unos 183 millones de euros] in the city budget by 2028 if the trend continues. The scenario has been compared by some members of the City Council as the sighting of an iceberg that could cause a catastrophe in the city’s finances.
It’s hard to count how many people downtown San Francisco has lost. Before the covid-19 pandemic broke out, the authorities estimated that some 245,000 people worked there. Last February, a report commissioned by the City Council assured that at least 147,000 people had stopped going to the area due to the change in dynamics forced by the health emergency. Some have returned, but that figure does not contemplate another crisis, the economic one. Dozens of tech companies have cut back since last year. According to the website layoffs.fyidozens of companies, including Amazon, Meta, Google and Salesforce itself, have laid off some 200,000 employees so far in 2023, although not all the positions were based in the city.
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The agony of downtown San Francisco is especially noticeable in retail businesses. The crisis worsened in mid-June. Westfield, one of the most important shopping centers in San Francisco, then announced that after 20 years it will stop operating the business a few steps from Union Square, one of the obligatory stops for tourists visiting the San Francisco Bay. The company has defaulted on the $558 million loan for the property, which has 140,000 square meters of shops and offices. And it has announced that it seeks to transfer the business to another business group. So far, no one has been interested.
As justification, Westfield cited the “difficult operating conditions of the center”, which have resulted in a drop in sales (partly due to the increase in purchases online), occupation and pedestrian traffic. The Nordstrom department store, which occupied 20% of the space, has reported that it will not renew its lease and will close its doors after 35 years.
The cycle of ruin
Although he does not mention them, the adverse conditions Westfield refers to are well known. In fact, they are known among the locals with the term “doom loop”, where one problem triggers another causing a cycle of ruin. Among these is the crisis caused by a population of almost 8,000 homeless people in the city, which has about 800,000 inhabitants. They are concentrated in the Tenderloin neighborhood, located in the heart of the city. The abuse of narcotic substances, which can be observed in broad daylight, the mental health crisis of many affected and the increase in juvenile delinquency, cause difficulties for businesses, which face an increase in theft of merchandise and vehicles over from the national average. Homicides and other violent crimes, on the other hand, are below average.
This situation has been used as a trump card for the 2024 presidential election campaign. Ron DeSantis, the Florida governor who is trying to wrest the Republican nomination from Donald Trump, filmed an ad at the end of June from San Francisco. “We are in what was once a great city… We came and saw people defecate in the streets, use heroin and smoke crack”, says the politician, who has based his campaign on a battle against the progressive policies that California has championed for decades.
Although DeSantis is committed to a radical discourse, the electorate seems to share part of the criticism of left-wing politicians. In a June 2022 referendum, voters removed the city’s district attorney from office as too progressive. Chesa Boudin was fired with 60% of the vote, a sign of suspense for some of the policies he implemented, such as not requesting jail time for some minor crimes as a way to combat prison overcrowding. This year, the former prosecutor, the son of two militants of the radical left, signed for the University of Berkley as director of the Center for Justice.
Boudin’s dismissal sent a signal to politicians in the Democratic stronghold. Since then, London Breed, the mayoress, has opted to give a moderate image. In May, she announced that California State Police would join patrols on troubled Tenderloin streets to apprehend dealers in heroin and fentanyl, the powerful opioid that has sparked a national epidemic. In one month since the start of the operation, the state police have collaborated in 115 arrests and have seized eight kilos of drugs.
The authorities have avoided revealing the exact number of officers who have taken to the streets. This past Thursday, however, Governor Gavin Newsom, a former mayor of San Francisco who maintains a political pulse with DeSantis, announced that will double the number of agents to continue the “fight against crime and tackle the fentanyl crisis that has gripped the city.” His government has invested 1,000 million dollars in reducing the impact of opioids in California, the most populous state (more than 39 million) in the United States. Whether these efforts can inject oxygen into the agonizing heart of San Francisco remains to be seen. In a forum organized by Bloomberg at the end of June, Mayor Breed asked to stop lamenting business closures. “It’s time to start reimagining what downtown can be,” she told the audience.
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