{"id":22975,"date":"2022-07-13T12:33:09","date_gmt":"2022-07-13T19:33:09","guid":{"rendered":"https:\/\/occupysf.net\/?p=22975"},"modified":"2022-07-13T12:39:22","modified_gmt":"2022-07-13T19:39:22","slug":"twitter-is-in-turmoil-uber-and-block-are-leaving-heres-how-s-f-s-mid-market-could-bounce-back","status":"publish","type":"post","link":"https:\/\/occupysf.net\/index.php\/2022\/07\/13\/twitter-is-in-turmoil-uber-and-block-are-leaving-heres-how-s-f-s-mid-market-could-bounce-back\/","title":{"rendered":"Twitter is in turmoil. Uber and Block are leaving. Here\u2019s how S.F.\u2019s Mid-Market could bounce back"},"content":{"rendered":"\n

Roland Li<\/a><\/p>\n\n\n\n

July 12, 2022Updated: July 12, 2022 10:20\u00a0p.m. (SFChronicle.com)<\/p>\n\n\n\n

\"The
1of2The Twitter building was a furniture mart and showroom, seen in 2011, before the social media giant arrived.Jeff Chiu\/Associated Press 2011<\/figcaption><\/figure>\n\n\n\n
\"The<\/figure>\n\n\n\n

Just over a decade ago, Mid-Market was reeling in the wake of a global recession and years of neglect and disinvestment.<\/p>\n\n\n\n

Despite being a quick stroll to City Hall\u2019s stately dome, the five blocks on Market Street between Sixth and 11th streets were desolate. Office workers and residents were wary of walking late at night amid car break-ins and robberies. Entire buildings were empty, including the former Western Furniture Exchange and Merchandise Mart, which had ditched the neighborhood for Las Vegas after seven decades of operations.<\/p>\n\n\n\n

But a 2011 payroll tax break<\/a> for much of the neighborhood and an unprecedented tech boom transformed it into one of the world\u2019s premier office hubs,<\/a> home to the headquarters of Twitter, Uber and Block (formerly Square), along with Dolby, Zendesk and Reddit<\/a>. Some 10,000 jobs were added before the tax break expired in 2019.<\/p>\n\n\n\n

Times have changed. Elon Musk\u2019s termination last week of a $44 billion deal<\/a> to buy Twitter is another dose of uncertainty with Mid-Market at another crossroads \u2014 the pandemic and a tech worker exodus created an economic crisis with a tough path to recovery. Twitter, the area\u2019s biggest private tenant and occupant of the 1937 former furniture mart, is already letting workers stay home forever and recently enacted a hiring freeze and layoffs.<\/a><\/p>\n\n\n\n

One block west, at 1455 Market St., Uber<\/a> has left the neighborhood for a new Mission Bay headquarters and Block<\/a> will depart next year when its lease expires, citing the need for less office space in the age of remote work. With thousands of workers already staying home or leaving the city, Mid-Market has been hollowed out as a tech hub.<\/p>\n\n\n\n

The rise and fall of Mid-Market mirrors the struggles of downtown San Francisco in the age of remote work, and the concerns around public safety, homelessness and drug use that have afflicted the area for decades. It\u2019s been a relentless challenge for city leaders, local businesses and residents. But those who have worked in the area say a decade of investment means there\u2019s an opportunity to come back stronger with new residents and entrepreneurs.<\/p>\n\n\n\n

At the end of the second quarter, Mid-Market\u2019s office vacancy rate was 24.5%, with 5 million square feet of offices for lease, the third-highest percentage among city neighborhoods after Jackson Square and South of Market, according to real estate brokerage Cushman & Wakefield. The north Financial District, San Francisco\u2019s historic downtown, was faring slightly better at 23% vacancy.<\/p>\n\n\n\n

It\u2019s been worse: Mid-Market and its surrounding areas had a record high vacancy rate of 38.2% in early 2003, soon after the dot-com crash.<\/p>\n\n\n\n

With the pending departures of Block and Uber, whose leases expire in 2023 and 2025, landlords Hudson Pacific and Canada Pension Plan Investment Board are tasked with finding new tenants for around 80% of the 1 million-square-foot 1455 Market St.<\/p>\n\n\n\n

J.D. Lumpkin, Cushman & Wakefield executive managing director, is a leasing broker for the building. He said two of Mid-Market\u2019s biggest draws for office tenants are still there: an abundance of public transit, which is now augmented by the new Bus Rapid Transit system on Van Ness Avenue, and office rents that are still roughly 20% to 30% cheaper than downtown.<\/p>\n\n\n\n

\u201cThe neighborhood\u2019s come a long way,\u201d Lumpkin said.<\/p>\n\n\n\n

Lumpkin credits Mid-Market\u2019s proximity to the city\u2019s more residential neighborhoods like Hayes Valley, the Mission and the Castro, making it a convenient place for workers who want an office but don\u2019t want to venture too deep into downtown.<\/p>\n\n\n\n

\u201cIt\u2019s the gateway to the neighborhoods. It\u2019s right there for you,\u201d Lumpkin said. \u201cTenants that we\u2019ve had success with, they like it because it\u2019s not the central business district. You\u2019ve got access to where employees live.\u201d<\/p>\n\n\n\n

\u201cI think remote work is here to stay for sure,\u201d Lumpkin said, but he believes as longtime workplace policies are figured out, trends will begin to shift in favor of more time in the office.<\/p>\n\n\n\n

For now, Twitter has shown no signs of backtracking on its permanent remote-work policy. However, Musk is a foe of the practice and recently mandated office workers come back full-time at his other companies, Tesla and SpaceX.<\/a> He also fought to keep Tesla\u2019s Fremont factory open in 2020 in defiance of health orders.<\/p>\n\n\n\n

Musk\u2019s agreement to purchase Twitter led to speculation that he would bring workers back to Mid-Market \u2014 or move its headquarters to Texas, as he did with Tesla. But if Musk and Twitter go to court, the company\u2019s remote work policies are unlikely to change for months or even years as the case is heard.<\/p>\n\n\n\n

The lack of workers and other shoppers has been a gut punch to the Market,<\/a> the grocery store and food hall on the ground floor of the Twitter building. Sales have fallen as much as 90% from pre-pandemic levels.<\/p>\n\n\n\n

Owner Chris Foley said the business is now closed on weekends and the meat department shuttered after a Whole Foods opened two blocks away earlier this year and offered lower prices. A plan to expand into an adjacent space <\/a>is on hold, though a couple new tenants have opened during the pandemic: popular ramen shop Mensho Tokyo<\/a> expanded the food hall and Chinese-themed bar Northern Ducks replaced Dirty Water, which closed in 2018.<\/p>\n\n\n\n

For now, Foley, who moved to the Bay Area before the 1989 earthquake, is hanging on.<\/p>\n\n\n\n

\u201cI\u2019ve been here a long time. San Francisco will recover,\u201d he said. \u201cI\u2019m a believer.\u201d<\/p>\n\n\n\n

Mid-Market does have an asset that was absent in the early 2010s: a wave of new housing projects<\/a> that include around 1,200 new apartments and condos on Market Street between Fifth and Eighth streets, which will help boost foot traffic, according to Mayor London Breed\u2019s office.<\/p>\n\n\n\n

Two blocks east of Twitter, the massive 1,900-unit Trinity Place had been in the works since 2003 and recently completed<\/a> its final building that includes the Whole Foods that is competing with the Market. Swedish furniture giant Ikea recently started construction<\/a> on a new store at 945 Market St., previously a mall project that was empty ever since it was completed in 2016.<\/p>\n\n\n\n

Randy Shaw, longtime executive director of the nonprofit Tenderloin Housing Clinic, was a strong supporter of the 2011 tax breaks and believes the neighborhood was on the cusp of a new, positive era until the pandemic hit.<\/p>\n\n\n\n

\u201cEverything would\u2019ve worked out if it hadn\u2019t been for COVID. The timing was just disastrous,\u201d he said. \u201cMid-Market was a long troubled neighborhood. A strategy was in place to turn it around.\u201d<\/p>\n\n\n\n

Now, Shaw believes most tech workers won\u2019t return, and he is more confident about the future of the Tenderloin, which relies on a residential tenant base, than Mid-Market.<\/p>\n\n\n\n

Shaw believes the city can also do something to directly benefit the neighborhood: bring government workers back full-time.<\/p>\n\n\n\n

Mayor London Breed\u2019s office said that around two-thirds of city workers, or 22,000 people, continue to work in-person full time. Recently approved labor contracts require at least three days a week in the office beginning Sept. 6 for all employees, up from the two-day requirement set last November.<\/p>\n\n\n\n

\u201cThe City is committed to providing workers greater flexibility in their schedules while also keeping the Civic Center and Mid-Market areas activated,\u201d the mayor\u2019s office said.<\/p>\n\n\n\n

Breed\u2019s current budget proposal includes $25.4 million over the next two years to fund Mid-Market and Tenderloin street ambassadors who guide visitors in the area. Breed is also proposing an $8 million Economic Core Recovery Fund to support events, public space improvements, the arts and pop-up businesses in empty storefronts in Mid-Market and downtown.<\/p>\n\n\n\n

\u201cIf we want to continue to make progress on homelessness, have police officers and firefighters responding to calls in all neighborhoods, provide vital support for children and families, and all the other priorities we all care about, we need a thriving Economic Core,\u201d she wrote in a recent post on Medium.<\/a> \u201cThere are no easy solutions here.\u201d<\/p>\n\n\n\n

Roland Li is a San Francisco Chronicle staff writer. Email: roland.li@sfchronicle.com<\/a> Twitter: @rolandlisf<\/a><\/em><\/p>\n\n\n\n

Fifth & Mission<\/a><\/p>\n\n\n\n

He was previously a reporter at San Francisco Business Times, where he won one award from the California News Publishers Association and three from the National Association of Real Estate Editors.<\/p>\n\n\n\n

He is the author of “Good Luck Have Fun: The Rise of eSports,” a 2016 book on the history of the competitive video game industry. Before moving to the Bay Area in 2015, he studied and worked in New York. He freelanced for the Wall Street Journal, the New York Times and other local publications. His hobbies include swimming and urban photography.<\/p>\n\n\n\n

\"San<\/a><\/figure>\n\n\n\n

RETURN TO TOP<\/a><\/p>\n\n\n\n

\"HEARST\u00a92022 Hearst<\/p>\n","protected":false},"excerpt":{"rendered":"

Roland Li July 12, 2022Updated: July 12, 2022 10:20\u00a0p.m. (SFChronicle.com) Just over a decade ago, Mid-Market was reeling in the wake of a global recession and years of neglect and disinvestment. Despite being a quick stroll to City Hall\u2019s stately dome, the five blocks on Market Street between Sixth and… Continue reading → <\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts\/22975"}],"collection":[{"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/comments?post=22975"}],"version-history":[{"count":2,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts\/22975\/revisions"}],"predecessor-version":[{"id":22978,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts\/22975\/revisions\/22978"}],"wp:attachment":[{"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/media?parent=22975"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/categories?post=22975"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/tags?post=22975"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}