SAN FRANCISCO — San Francisco Mayor Daniel Lurie spent his first five months in office trying to crack down on crime, clear homeless encampments, and bring back tourists.
Now, he’s turned his attention to attracting tech companies and luring back retailers who drifted away from the Golden City, thanks in part to the COVID-19 pandemic and poor policies of the past. He wants to “get loud” about it and encourage investment in the city’s future.
“I’m a mayor that is picking up the phone and calling CEOs,” Lurie said during TechCrunch’s StrictlyVC event last month. “I’m calling entrepreneurs and saying, ‘How can we keep you here?’ or ‘How can we get you back?’”
Lurie, the billionaire heir to the Levi Strauss fortune and the founder of the anti-poverty nonprofit group Tipping Point Community, pledged to slash unnecessary regulations, take only a $1 salary, and promote good governance if elected. Even though he had never held elected office, the city, which had been going through some tough times under previous administrations, was ready to bet on him.
To be sure, while San Francisco is cleaner, it is hardly showroom-ready. Crime is still a problem, there are still homeless people lying on the streets, and tourists don’t have to go very far to see an addict with a needle stuck in their arm. Nonetheless, the city is slowly turning a corner with Lurie at the helm.
He recruited OpenAI’s Sam Altman to be on his transition team and reached out to tech friends, some with very deep pockets, to help. If the plan were to succeed, it would have to be a public-private partnership, Lurie said.
Altman, along with San Francisco Giants CEO Larry Baer and leaders from DoorDash, Salesforce, Chime, UCSF Health, and Apple, among others, have organized themselves into a CEO council of sorts called Partnership for San Francisco. The powerhouse group of business leaders has the goal of “restoring [San Francisco’s] status as a global leader in innovation and economic opportunity.”
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Among the first things Lurie’s administration did was announce PermitSF, a new effort to streamline San Francisco’s permitting process, which has been slow and laborious at best. PermitSF focuses on speeding up approvals for small businesses and improving permit tracking technology. Lurie also wants to implement a “shot clock” that would limit the time the city can review permits, with the goal of shortening the lengthy application process, which can sometimes drag on for years.
Lurie has also suggested he’s willing to give tax breaks to companies in the city and said he’s already working with leading artificial intelligence companies to expand in San Francisco and hold their international conferences there. He’s convinced Databricks to keep its AI conference in the city through 2030 instead of moving to Las Vegas.
Lurie has also introduced a new zoning proposal, the first in the city since 1970, allowing taller buildings to be erected. “We want our entrepreneurs starting businesses and then staying here,” Lurie said, adding that streamlining permits makes opening a restaurant, bar, or startup easier.
“Mayor Lurie’s push to center San Francisco as an AI hub should come as no surprise,” Jeff Le, managing principal at 100 Mile Strategies LLC and former deputy Cabinet secretary to former Gov. Jerry Brown (D), told the Washington Examiner. “His election and subsequent transition was supported by tech giants, and he came in with a mandate from voters to strengthen the city through economic revitalization and strong public safety measures. To do this, more revenue needs to come in, and the major AI companies can help with the math. To do this, his PermitSF effort to streamline permitting efforts and his Family Zoning Plan can bring in sorely needed tax dollars and activate more vibrant community building. This two-prong approach could spark deeper AI company investments in San Francisco.”
It’s a much-needed turnaround for a city that has seen a string of legacy stores, including Macy’s, Bloomingdale’s, Old Navy, Nordstrom, and, as of May 10, Saks Fifth Avenue, leave the tourist-heavy Union Square.
“While the closing of Saks marks the end of an era, this was not an unforeseen development considering their recent changes to an appointment-only model, and Neiman Marcus acquisition,” Will Reisman, a spokesman for the Union Square Alliance, said. He added, “We expect the path to downtown revitalization to have its twists and turns — still, we are extremely optimistic about the future of Union Square.”
Part of that optimism comes from Altman’s World Network company, whose retail location opened earlier this month.
“Today we are launching flagship stores in five cities, including the one nearest and dearest to me, San Francisco, California,” said Trevor Traina of Tools for Humanity, talking about World Network.
Another big retail win is Nintendo, which opened on May 15. It will be the Japanese video game giant’s second store in the United States, the other being in New York City. Nintendo will occupy an 11,000-square-foot storefront facing Union Square. Its last tenant was BCBG Max Azria, a women’s clothing brand which left in 2017. Nintendo’s opening weekend is expected to bring in so much traffic that the store requires customers to make reservations to get a glimpse inside.
One of the biggest supporters of the new store is Ivan Bekichev, a high jewelry expert at luxury retailer Bvlgari. He told the Washington Examiner that San Francisco’s crime and drug problem limited how the companies in the area did business.
“We couldn’t really conduct business the way it was,” he said. “There was a lot of crime, there was a lot of activities that we could not explain.”
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Bekichev, who is from Russia, said he would go to clients’ homes or fly them to other showrooms across the country, but that it wasn’t an option for smaller businesses that were losing customers and forced to close shop. He has seen San Francisco go through really tough times, but is optimistic that the AI turnaround, as well as efforts to bring more retailers into the fold, will help the city get back on its feet.
“It’s a shift towards positivity because some kind of change needed to be in downtown,” he said. “We needed to create a different narrative. San Francisco is such a beautiful city. It’s still a great destination, and for me, it was love at first sight, and it has become my second home.”