Marc Benioff Asserts Downtown San Francisco’s Irreversible Transformation: No Return to the Past

**Diversify or Die: The Reckoning of Post-Pandemic Downtowns**

San Francisco’s Downtown Struggles

San Francisco’s downtown, once a bustling hub of activity, has been hit hard by the COVID-19 pandemic. Jack Mogannam, manager of Sam’s Cable Car Lounge, experienced the decline firsthand as foot traffic diminished and business dropped by 30%. Empty storefronts, “going out of business” signs, and a rise in crime have transformed the once vibrant downtown area into a vacant and decaying space. However, San Francisco is not alone in this struggle – cities across the United States are facing a similar wake-up call: diversify or face further decline.

The Changing Landscape of Downtowns

As the pandemic struck in early 2020, people left city centers and turned to shopping and dining options in residential neighborhoods and suburbs closer to home. This shift in consumer behavior is likely to continue. Downtowns must adapt to become around-the-clock destinations for people to gather, rather than just central business districts. Richard Florida, a city planning specialist at the University of Toronto, emphasizes the need for downtown areas to evolve into hubs of innovation, entertainment, and recreation.

San Francisco’s Struggle to Recover

San Francisco is struggling more than most cities in its downtown recovery. According to a study by the University of Toronto, San Francisco is ranked dead last in terms of returning to pre-pandemic activity, with only 32% of its 2019 traffic. Hotel revenues remain at 73% of pre-pandemic levels, office attendance is below 50%, and commuter rail travel to downtown is at 33%. Office vacancy rates in San Francisco have also skyrocketed to 24.8%, far above the national average.

The Impact on Major Cities

While San Francisco heavily relied on international tourism and its tech workforce, other major cities like Portland and Seattle, which also rely on tech workers, are experiencing similar declines. Chicago, ranked 45th in the study, has seen major retailers close due to a lack of visitors. Midwestern cities such as Indianapolis and Cleveland, which lacked booming industries like tech, were already struggling with diminished downtowns before the pandemic.

Addressing the Downtown Crisis

San Francisco’s leaders are taking the demise of downtown seriously. Zoning rules have been relaxed to allow for mixed-use spaces, and legislation has been introduced to facilitate the conversion of office space into housing. Mayor London Breed has announced funding to improve walkability and attract businesses back to the downtown area. However, Marc Benioff, CEO of Salesforce, believes downtown will never return to its previous state in terms of workers commuting to offices. He suggests converting office spaces into housing and increasing police presence to enhance visitor safety.

The Importance of Downtown Housing

Chapple, a director at the University of Toronto, highlights the success of downtown housing in cities like Baltimore and Salt Lake City. Converting office space into housing could serve as a lifeline for struggling downtowns. Some cities, including New York and Pittsburgh, offer tax breaks to developers to encourage such conversions. However, housing alone may not be sufficient for downtowns to flourish.

Challenges and Potential Solutions

Downtown retailers like Daud Shuja, owner of Franco Uomo, have observed that customers are reluctant to visit locations plagued by homelessness and a deteriorating ambiance. While San Francisco officials remain optimistic about the downtown’s recovery, negative press and hesitation from visitors have created obstacles. The city is working to attract new businesses and change perceptions, emphasizing its beauty and welcoming atmosphere.

In conclusion, downtowns across the United States are facing a critical juncture in the post-pandemic era. They must diversify and evolve into vibrant hubs of innovation, entertainment, and recreation to thrive in the changing landscape. San Francisco, along with other major cities, is grappling with the challenges of recovering from the pandemic. However, with strategic planning, a focus on mixed-use spaces, housing conversions, and efforts to improve safety and attractiveness, downtowns can regain their former glory and become thriving centers once again.

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