Did the pandemic (finally) signal the end of dreams for a vibrant downtown SJ?

After nearly a half-century and a billion dollars in taxpayer-funded redevelopment, downtown San Jose remains California's most moribund big-city downtown. And then: the pandemic. Is it time to finally give up on aspirations for a vibrant city center and try something else? Even S.F. has been hollowed out by COVID and progressive mismanagement. NY Times reports on what's next for America's downtowns.

“Imagine a forest where an entire species suddenly disappears,” said Tracy Hadden Loh, a fellow at the Brookings Institution who studies urban real estate. “It disrupts the whole ecosystem and produces a lot of chaos. The same thing is happening in downtowns.”

The city’s chief economist, Ted Egan, has warned about a looming loss of tax revenue as vacancies pile up. Brokers have tried to counter that narrative by talking up a “flight to quality” in which companies upgrade to higher-end space. Business groups and city leaders hope to recast the urban core as a more residential neighborhood built around people as well as businesses but leave out that office rents would probably have to plunge for those plans to be viable.

Below the surface of spin is a downtown that is trying to adapt to what amounts to a three-day workweek. During a recent lunch at a Mixt location in SF's financial district, the company’s chief executive, Leslie Silverglide, pointed to the line of badge-holding workers and competition for outdoor tables.

It was also, she noted, a Wednesday — what passes for rush hour. On Wednesdays, offices in San Francisco are at roughly 50 percent of their prepandemic levels; on Fridays, they’re not even at 30 percent.

The lunchtime business downtown is not, and may never be, what it used to be. 

The emptying of American downtowns after Covid was followed by a boom in exurban housing and in cities like Austin and Spokane, trends reflected in where Yelp’s work force has landed. Cortney Ward, 41, a Yelp product designer, bought a home in Austin after leaving her one-bedroom apartment in San Francisco’s Nob Hill. Yelp workers also invented new habits and left holes in the businesses that relied on them. When Diego Waxemberg, 30, a software engineer, left the Bay Area for Charlotte, N.C., he started lunching on leftovers instead of sometimes buying a $17 Mixt salad with tri-tip steak. Mackenzie Bise, 30, who works in user operations, moved to the Sacramento area, and during a recent online search discovered that her favorite San Francisco lunch spot had gone out of business.

During the height of the pandemic, Ms. Cerros-Mercado went through a spell of unemployment before landing at another restaurant chain and later at Mixt. But downtown business was still somewhere between lagging and nonexistent. Mixt laid off hundreds of workers, closed most downtown stores for more than a year and subsisted on business from neighborhood and suburban stores.

The city, and business groups like Advance SF, are trying to reframe the urban core as a more residential and entertainment district that draws from throughout the region and may in the future involve the conversion of office buildings to residential use. The motto is “Better Together,” and Advance SF recently hosted a forum with a guest economist to discuss new ideas for downtown. The guest was Richard Florida.

“When I started with the creative class, places didn’t care about young people, they were only trying to attract a family with children to the lovely suburbs, and I’m saying, ‘No, no, no, no, no,’” Mr. Florida said in an interview. “Twenty years later, people forgot about the families. And now here’s a whole generation leaving cities again, for metropolitan or virtual suburbs.”

The more businesses invest with that new reality in mind, the more likely that reality becomes self-fulfilling.

A year after being consumed by bankruptcy, Specialty’s, the cafe chain where Ms. Cerros-Mercado began her career, was reincarnated. The first new store sits in the Silicon Valley town of Mountain View, and as the company plots its next expansion it is eschewing the office-adjacent locations on which the original company was built for a more delivery-centric business that has a world of half-empty buildings in mind.

Back at 140 New Montgomery, the owners are experimenting with new ideas to get office workers to come in. The building has been hosting gatherings like an Oktoberfest celebration that included a raffle to win a beer stein with the building’s logo.

On the afternoon of the Oktoberfest party, a cluster of workers from a software company stood around eating sausages and soft pretzels.

“We hear a lot of buzz about this building,” said Veronica Arvizu, a senior property manager at the real estate company CBRE. “We hear it’s the busiest in the city.”

A few feet away from her, another group of young workers was playing Jenga. One by one, they took blocks away from the structure, making way for the inevitable collapse.

This article originally appeared in the New York Times. Read the whole thing here.

Image by Wikimedia Commons

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