- By Owen Thomas | Examiner columnist |
- Jun 12, 2023 Updated Jun 14, 2023 (SFExaminer.com)
We’re thinking about the problem San Francisco faces in bringing people back downtown all wrong.
It’s not about the doom loop. It’s the prisoner’s dilemma.
Game theorists came up with this idea almost three-quarters of a century ago: It seeks to explain how rational people make collectively irrational decisions. Start with two members of a gang in prison: If both stay silent, they get a minimal sentence. If both betray each other, they get locked away for years. But if one refuses to talk and the other does, the silent one gets the long sentence, and the other benefits.
You see the problem: Cooperating gets the best result for both, but the immediate incentive goes against that, so both end up worse off if they do the reasonable-seeming thing.
Here’s how this applies to downtown: If one person works from home and the other goes downtown, the office worker bears the cost of the commute and has fewer restaurants and shops. If both go in, the inconvenience of getting downtown is outweighed by the opportunities presented — they could meet for coffee! And if both stay home, well, that’s the doom-loop scenario, right?
Multiply that by the estimated 265,000 people who came downtown daily every weekday pre-pandemic, and you see the collective problem we face. The more people downtown, the greater number and variety of businesses it can support. The more businesses there are, the more attractive the proposition of working downtown becomes.
What’s crucial is that we stop thinking about downtown space as raw square footage of offices. No project exemplifies this idea better than Michael Shvo’s ongoing reimagination of the Transamerica Pyramid.
The New York real estate developer has made a $1 billion-plus bet on San Francisco, starting with the $650 million he spent on the tower facing Montgomery Street and two nearby buildings on Sansome Street and an estimated $400 million on ongoing renovations.
There are offices, of course, some leasing for annual rents of $200 to $250 a square foot. Despite The City’s high vacancy rate, prime office space still commands a premium. But far more significant for me are the other aspects of the development: a private club, restaurants, a 28th-floor gym for office tenants who want to look at Coit Tower while getting their cardio on, and a bar on the 48th floor that’s currently rented out as conference space.
I’ve walked past the pyramid countless times, a neat halfway stop between home in North Beach and work downtown. It’s always puzzled me how a landmark can be so quiet. The Transamerica Redwood Park in the middle of the block is a hidden gem, dramatically underused given its location and beauty.
Shvo plans to expand the park and place ground-level stores along Mark Twain Plaza. Retail is historically appropriate for the stump of what used to be Merchant Street. It’s easy to see people flowing from the lobby of the pyramid to the park to shops; the present design is bizarrely hostile to pedestrians. The bulk of the renovations are expected to be done at the end of the year, except for 3 Transamerica, an expanded building at the corner of Sansome and Washington streets.
Absurdly, for the most recognizable building in The City, the public hasn’t had access to its views in decades. A 27th-floor observation deck closed in the late 1990s, replaced by a ground-floor “virtual observation deck” with views from cameras perched near the top. Given safety concerns — access to the spire requires a perilous trip — the building probably won’t accommodate tourists looking to go up, but there should be plenty to do on the ground floor.
That’s where Shvo faces The City’s version of the prisoner’s dilemma. “This will bring life into downtown,” he told Bloomberg recently. “And I hope it starts the next 50 years of downtown because I don’t want to be here alone.”
If more people commute into San Francisco, they’ll enjoy one-of-a-kind experiences, like that gym in the sky and lunch breaks among the redwoods. If they don’t, well, Shvo and others placing bets downtown will feel lonely.
It’s not just about one already-wealthy developer: It’s about the small businesses that will line Mark Twain and perhaps spill into the nearby alleys of Jackson Square.
One beloved local establishment is already set for a new home nearby, and hopefully, crowds spilling out from the offices Shvo plans to fill. Sai’s Vietnamese Restaurant, which was set to be evicted to make way for 3 Transamerica, got financial help from Shvo after an outcry from the community, and it’s set to fill the restaurant space that Bask is vacating at 42 Columbus.
Having eaten at Sai’s many times over the years, I can guarantee the pho will be worth the half-block trip from the pyramid.
Owen Thomas
Owen Thomas is a journalist and a longtime resident of San Francisco who has thought about tech’s relationship with The City since the first internet boom brought him to town. His columns appear weekly in The Examiner.
