'Never Going Back to the Way It Was': Salesforce CEO Marc Benioff Has a Grim Outlook on a Once Bustling Downtown Major retailers like Whole Foods, Uniqlo, Gap, and Nordstrom Rack have closed their downtown San Francisco locations. Other city centers are facing similar challenges in a post-pandemic environment.
Key Takeaways
- Data shows that San Francisco's downtown activity is at only 32% of its pre-pandemic level, highlighting the severity of the situation.
- One small business owner calls it a "ghost town."
Opinions expressed by Entrepreneur contributors are their own.
San Francisco's downtown area, once vibrant and bustling, is increasingly filled with empty storefronts — and Salesforce CEO Marc Benioff says we all should get used to it.
Benioff said San Francisco is "never going back to the way it was" in regard to pre-pandemic norms of workers occupying the downtown area, per the AP, adding that, "We need to rebalance downtown."
Jack Mogannam, manager of Sam's Cable Car Lounge in downtown San Francisco told The AP that standing outside his bar at 10 p.m. used to look like a party on the street.
"Now you see, like, six people on the street up and down the block. It's a ghost town," he said.
Mogannam added that business is down nearly 30%.
Unfortunately, it's not just small business owners like Mogannam that are feeling the exuberant decline in foot traffic. Major retailers like Whole Foods, Uniqlo, Gap, and Nordstrom Rack have all closed up shop.
However, while San Francisco has gotten its fair share of bad press, attributing the exiles to rampant crime and open-air drug use, the truth is that several downtown areas across the country are also grappling with post-pandemic woes.
A vacant storefront in the Union Square shopping district of San Francisco. Jason Henry | Getty Images
The pandemic accelerated the shift from city centers as people no longer commuted to work every day, leaving a striking gap in foot traffic for businesses that once thrived off of consistent revenue from workers in the area.
Related: Anchor Brewing, America's Oldest Craft Brewery, Shuts Down after 127 Years
Richard Florida, a city planning specialist at the University of Toronto, told the AP that city centers need to understand the changing conditions of the current environment, as it will prove vital to their long-term survival.
"They're no longer central business districts. They're centers of innovation, of entertainment, of recreation," Florida told the outlet. "The faster places realize that, the better."
Cities like Portland, Seattle, Chicago, Indianapolis, and Cleveland, which also depend on tech workers like the Bay Area, face similar challenges.
New York City, historically one of the nation's biggest city centers, has also been grappling with a shift in office work patterns, with workers predominantly returning to a hybrid work schedule rather than five days a week, per Bloomberg. The change has led to a significant decline in spending, with Manhattan workers spending $12.4 billion less annually due to fewer office days. Economic consequences manifest in office vacancies as well as financial challenges for the transit system, prompting concerns about the city's value and tax revenue.
"If less income tax is being paid in New York City," Comptroller Brad Lander told the outlet, "then it's hard to figure out how to capture enough value to maintain the subways and invest in the schools and keep the city safe and clean and all the things that really matter."
Still, San Francisco's downtown has struggled comparatively more than other cities, with only 32% of its pre-pandemic activity level according to data from the University of Toronto.
The city's leaders are addressing the declining environment of downtown by relaxing zoning rules, facilitating mixed-use spaces, and investing in infrastructure upgrades.
Benioff, whose company, Salesforce, occupies the tallest skyscraper and is the city's largest employer, advised San Franciso's mayor, London Breed, to convert office space into housing and increase police presence for visitor safety, per the AP.
Related: Westfield to Give Up San Francisco Mall Due to Challenging Operating Conditions
Still, some locals remain optimistic.
"When you're making your plans to travel, and you're like, 'I've always wanted to go to San Francisco, but I just keep reading all this stuff.' When in fact, it's beautiful. It's here to welcome you," Marisa Rodriguez, CEO of the Union Square Alliance told the outlet. "I just hope the noise settles quickly."
