Extensive sidewalk and curbside renovation along Castro Street in 2014 coincided with a 13 percent drop in tax revenues from affected businesses.
San Francisco merchants affected by long-term or delayed construction projects may see some economic relief from The City.
At a hearing on Wednesday at the Board of Supervisors Government Audit and Oversight Committee, supervisors suggested grants programs, direct assistance loans, and possibly a tax reduction to businesses seeing a slowdown in sales from impacts of construction projects.
Supervisor Jane Kim said other cities like Los Angeles have programs to help businesses impacted by construction projects, and would like to see The City have a program as well:
“Many of these businesses operate on small margins and they just don’t have the cash flow that enables them to get through the hard times.”
Kim added that while completed projects may bring economic growth to a neighborhood over the next couple of the years, some small businesses may not be able to wait:
“They’re not Target. They’re not Walmart. They can’t make it through the two or three years that it takes.”
City Controller Ben Rosenfield presented early findings of a report that looked at how construction projects can affect merchants. The report looked at projects at Balboa Street, Jefferson Street, two projects on Polk Street, West Portal Avenue and Castro Street.
Of the early findings, Rosenfield said the West Portal and Castro merchants saw a decrease of 12 and 13 percent in sales tax revenue.
The West Portal project lasted for 16 months, which involved repaving and resurfacing, sewer main work and installing pedestrian bulb outs. The Castro project took 11 months, including work on the Muni overhead wires, paving and installing bulb outs.
The City’s Office of Economic Workforce does offer programs to help businesses struggling in The City, but supervisors said the help would serve as little more than a bandage.
Supervisor Norman Yee said:
“This soft mitigation stuff, for businesses that is drowning, is not going to do anything for them.”
Board President London Breed suggested to the Controller’s Office to also look at possible tax reductions for businesses while in the process of possibly receiving compensation from The City as part of its research and study.
Karin Flood, executive director with the Union Square Business Improvement District, said she appreciates the investments being made into Union Square, including the addition of the Central Subway, but said retailers are hurting as the project continues on for another two years:
“We lost at least three businesses.”
The most talked-about project, the San Francisco Municipal Transportation Agency’s Central Subway, is facing delays because of construction at the future Chinatown Station on Stockton Street, which means more construction disruption for Chinatown merchants.
Supervisor Aaron Peskin, who represents the Chinatown neighborhood, said he plans to redirect some general budget funds to help merchants during the latest project delay.
Multiple city agencies appeared at the hearing, including the SFMTA, Department of Public Works and the Public Utilities Commission, who are working together to minimize impacts to businesses, said John Thomas, deputy director of infrastructure for Public Works.
SFMTA officials said they are improving communication with merchants and residents on construction projects during the beginning phase of projects.
Last modified September 25, 2017 9:45 pm
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Handing out money is never a good deal because once you start you'll never be able to stop and the costs of projects will continue to grow while number of businesses impacted will continue to rise. Think, first it'll be businesses directly impacted, then the one around the corner, and then the one down the street. Subsidizing business is not a good deal for taxpayers.
That said, businesses need to step up to the plate and say hey, maybe I should just accept longer construction hours or reduce traffic for a short duration if it speeds up construction in the long run. If shutting down a street for a week shaves off a few weeks of intermittent disruptions, maybe it's worth it. Right now we're slowing down construction because we want contractors to bend over backwards to maintain parking and through vehicle traffic. What about the people!
Stop playing politics and work on real solutions. How do we get this work done faster, better, less disruptive. We cant hand out money for every water, sewer, and electrical line that needs to be replaced. It's that time where our infrastructure needs replacement. There is going to be construction. If you want to hand out money, have all businesses pay into a fund to support them in a time of need. It's like social security for business... and that's exactly what's being proposed, but without a funding mechanism. Even with our huge city budget, we do not have excess money to fund our existing liabilities. What about the trees, the schools, the playgrounds.... Paving streets, fixing 911, cleaning up the streets and getting homeless into housing.