Mayor London Breed stood inside a promising beacon of economic development in Dogpatch, but her focus was firmly to the north.
Specifically, downtown San Francisco.
Breed spent much of her 2023 State of the City outlining a strategy to revitalize The City’s troubled downtown, which will range from new tax incentives to beefing up public safety.
The mayor assured the crowd assembled at Pier 70 that San Francisco would recover from this latest calamity, as surely as it did from two major earthquakes — one three decades and the other more than a century ago.
“The last few years have been tough, we won’t solve all of San Francisco’s problems in a year, and we can’t fear trying new things,” Breed said. "Because if we stand still, we fall behind. When we push forward, even if we stumble, we stumble forward.”
The cornerstone of Breed’s speech was the unveiling of a “roadmap” for the future of downtown San Francisco.
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It offers a fairly stark departure from the vision Breed outlined at the start of 2022, when it was widely expected that workers would return to the office — at least in some sort of hybrid fashion — as the COVID-19 pandemic receded.
Instead, many workers stayed at home, tech companies with a once-robust presence downtown shrunk their workforce and office footprints, and downtown’s prolonged struggle became the subject of national media scrutiny.
And while those trends became increasingly clear, Breed’s office spent much of 2022 scrambling for a Plan B. That plan is very much a work in progress, but Breed promised it would be substantive, and that downtown’s current state is a “call to reimagine what our future holds.
“San Francisco downtown, as we know it, is not coming back. And you know what? That’s OK,” Breed said.
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Legislation Breed plans to introduce in the coming weeks would include tax breaks aimed at both keeping existing companies here and luring new businesses to San Francisco.
San Francisco businesses across a swath of industries most acutely harmed by the pandemic — including food service and retail — would be spared the scheduled increases in The City’s gross receipts taxes over the next two years.
Companies in certain industries that open new offices in San Francisco will be rewarded with a discount on their gross receipts tax of up to $1 million for three years.
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The Mayor’s Office is also contemplating heading to the ballot in 2024 with a more substantive restructuring of The City’s tax code, but the makeup of that proposal remains in the works. It will be crafted with the Board of Supervisors and Controller’s Office, among other pillars of city government, she said.
City voters modified the tax structure with 2020’s Proposition F, but the tax code has come under criticism for failing to match the realities of the post-pandemic hybrid workplace. Breed said her measure will look to put an end to the cycle of “one-off” reforms by ballot measure.
The plan was met with immediate praise from City business leaders.
“Downtown's future is San Francisco's future. As we recover from the pandemic and revitalize our City, we have a once-in-a-generation opportunity to chart that path,” Rodney Fong, CEO and president of the San Francisco Chamber of Commerce, said in a statement. “I share Mayor Breed's vision of a safer, cleaner and greener downtown — a destination where residents, visitors and workers will want to spend time.”
The City will also look at ways it could rezone areas in and around downtown to allow for more development and mixed uses of existing buildings. It has also commissioned from SPUR and architectural firm Gensler an analysis of the potential of converting downtown offices into residences, a possibility that several supervisors have also expressed interest in.
Much of the plan elevates the existing plans touted by downtown leaders, such as encouraging outdoor dining and live events aimed at keeping workers downtown after a shift, or enticing new visitors.
The perception of downtown as a safe place to live and work will be key to downtown’s recovery. To that end, Breed said she is requesting $25 million to fund overtime shifts for police officers.
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The recovery will also require that The City address its housing shortage. Breed touted her recently announced Housing for All initiative, which outlines a plan to implement the Housing Element that the Board of Supervisors passed last month. The Housing Element lays the groundwork for the construction of 82,000 new units of housing across The City.
On homelessness, Breed lauded The City for reducing its unsheltered population, according to the most recent census of the homeless population. But she accused those who describe homelessness as a housing problem of often being the same people who resist new development.
“We must build, and we must build now,” Breed said.
Breed touted the successes of fellow moderates across a series of four city elections last year, which included the recall of three school board members and District Attorney Chesa Boudin.
She described the results as evidence of a “mandate to get the basics right,” and pledged to do just that.