The Bay Area is sinking into the abyss

Last month, Whole Foods shut down a year-old flagship store it had opened in downtown San Francisco. Two weeks later, word broke that Nordstrom, the Seattle-based, high-end retailer that had a major presence in downtown San Francisco was shutting down both its Nordstrom and Nordstrom Rack stores. Today, news broke that T-Mobile is pulling out, too. It’s a retail exodus that is obviously bad for San Francisco. Significantly, it turns out that other Bay Area downtowns are imploding, as well.

The Whole Foods store shut down because the crime plaguing it was unsustainable, in terms of profits and worker safety. The same held true for the Nordstrom pullout:

“We’ve spent more than 35 years serving customers in downtown San Francisco, building relationships with them and investing in the local community,” Nordstrom told impacted employees.

“But as many of you know, the dynamics of the downtown San Francisco market have changed dramatically over the past several years, impacting customer foot traffic to our stores and our ability to operate successfully.”

Unibail-Rodamco-Westfield (URW), owner of the Westfield Mall where one of the Nordstrom stores is closing, slammed the current conditions in the city and said retailers are leaving in droves because of unsafe conditions that have dragged on, despite the company pleading with city officials to take action.

The latest major retailer to join the downtown San Francisco exodus is T-Mobile, which had a 17,000-square-foot store in Union Square, the heart of downtown San Francisco’s hotel and real estate district. T-Mobile hasn’t said why it decided to close the store, other than a “reshaped…retail strategy,” but it’s easy to guess that crime played a part.

After all, to stay afloat in San Francisco, a Target store had to put everything behind glass:

San Francisco is drowning in crime and filth, thanks to a city determined to give free rein to criminals, the drug addicted, and the homeless (and yes, those are often overlapping classes). None of this was helped by the fact that San Francisco embraced the lockdowns, so workers were sent home, where many discovered the joys of what I call the bunny-slipper commute: No more fighting traffic, riding filthy and dangerous public transportation, or spending your days locked in a vertical sardine can.

San Francisco’s office vacancy rate is almost 35% and expected to climb—and that’s the official rate, reflecting unleased property. It does not reflect property that is still under lease but without any workers inside. Last month, a downtown high rise in a formerly premium location sold for 75% off the original asking price. I doubt that building low-income housing in those vacant properties will help much.

Image: San Francisco at peak vacancy in 2021. YouTube screen grab.

A fascinating report from the Bay Area News Group says that it’s not just San Francisco that’s in deep trouble. In fact, all regional downtowns are suffering:

Police data may show otherwise — violent crime has actually fallen in San Francisco in recent years, though property crimes have spiked. And unlike most of the rest of the Bay Area, the city’s homeless population dipped slightly in 2022, according to the latest count. Still, there’s no doubt that San Francisco’s downtown is in crisis.

It’s not the only one. All three of the Bay Area’s largest cities are staring down huge setbacks to their efforts to revitalize urban cores hollowed out by a once-in-a-generation pandemic.

Last month, the Oakland A’s announced the team was decamping for Las Vegas, throwing into flux the city’s plans to redevelop Howard Terminal at the Port of Oakland. The team is leaving behind a $12 billion proposal for a gleaming waterfront stadium with new housing and retail at the site. In San Jose, Google recently announced it was reassessing the timeline for its sprawling Downtown West project, which city officials hope will add homes, shopping and office space for thousands of workers.

Incidentally, my guess is that crime and homelessness are down in San Francisco because, to mangle Willie Sutton’s alleged statement about robbing banks, criminals and the homeless go where the money is. Without workers in downtown San Francisco, why bother?

On the one hand, this decline couldn’t happen to more deserving cities, all of which self-immolated on a pyre of Black Lives Matter de-policing and decarceration and Fauci-esque lockdowns. On the other hand, as a San Francisco native, and someone who knew the other downtowns, too, I feel sad.

It’s like attending the funeral of a once glamorous friend who, because of an addiction to drink, drugs, and bad men, ended up dying on the street with a needle in her arm. It’s not just her death that’s sad; the loss of her potential is sad, too. Petula Clark’s “Downtown” hit song, which I, as a child, thought was about San Francisco, seems like an elegy, not a promise.

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