Another business flees

[MaxPC]

You can start with the links I provided in this thread. You can also do an internet search for the various announcements by the companies regarding closures.

[Soloist]

You can start with the links I provided in this thread. You can also do an internet search for the various announcements by the companies regarding closures.

You really don’t like being asked questions about your sources do you?

[Josh]

Other reasons for closing:

- Astronomically expensive rents
- Myriads of bizarre SF-only taxes
- Employees feeling unsafe, unable to find safe parking, their cars vandalised, the BART / Muni is not safe either so they can’t safely get to work
- Employees don’t want to go to a place where nearby coffee shops, restaurants etc are closing/shutting down

Many “big tech” firms are shuttering buildings, such as Uber, which is now trying to sublease out its SF HQ building. Meanwhile they just opened a 1,000 employee office in Amsterdam.

[Soloist]

Max, I have whitelists on my phone, I don’t have an open browser. I rarely have time on work nights to look into it and I meant no offense, perhaps responding a little kinder would be a good Christian witness you should work on.

[Ken]

I think this has more to do with internet based sales then crime. Wages have risen dramatically in cities resulting in higher operating costs.

Also work from home and changes in office occupancy. Central business districts all around the country in cities both red and blue are suffering high vacancy rates in their central business districts due to pandemic-induced changes and the local retail and restaurants that relied on foot traffic from office workers are suffering. You can see the same headlines in every city.

For example, this is from exactly 2 months ago: https://finance.yahoo.com/news/houston- ... 19682.html

Houston and Dallas had 18.8% and 17.2% of office space sitting empty at the end of 2022, according to the figures from CoStar and JPMorgan, well above the national average of 12.5%. New York, San Jose, San Francisco, and Chicago had vacancy rates of 12.3%, 12%, 16.4%, and 15.1%, respectively.

Foot traffic in downtown Dallas is still only at 60% of pre-pandemic levels: https://www.bisnow.com/dallas-ft-worth/ ... ons-117829

Here's 19 restaurants that have closed in Dallas in the past several months: https://www.dallasnews.com/food/restaur ... d-in-2023/

Dallas retailers closing stores in the past several months (far more than 21): https://www.nbcdfw.com/news/local/dalla ... n/3247036/ and https://www.dmagazine.com/commercial-re ... il-sector/ and https://www.dmagazine.com/category/store-closing/

Businesses close for a wide variety of reasons, sometimes a particular location is no longer profitable. Sometimes a whole chain goes bankrupt like Bed Bath and Beyond even though a local store in a specific location was doing fine. Sometimes the rent in the building goes up or the landlord wants it for another purpose. Sometimes the owner is retiring and no one wants to buy it. But mostly it is because they aren't making enough money. And of course crime can be a factor but it is rarely the only factor. There are plenty of profitable businesses in high-crime areas and unprofitable businesses in low crime areas.

[mike]

SF businesses & commercial activities specifically citing crime as a reason for leaving, or considering leaving, SF locations:

Westfield Center https://www.cbsnews.com/sanfrancisco/ne ... et-street/

Small business owner: https://www.nbcbayarea.com/news/local/s ... o/3248975/

Hilton and other hotels: https://freebeacon.com/california/hotel ... dden-city/

ABC News live segment: https://www.foxnews.com/media/good-morn ... -dangerous

Another small business owner: https://www.foxbusiness.com/media/busin ... ership-fed

Another small business: https://www.dailymail.co.uk/news/articl ... 0-000.html

Multiple businesses: https://californiaglobe.com/articles/le ... t-and-why/

[Josh]

Businesses close for a wide variety of reasons, sometimes a particular location is no longer profitable. Sometimes a whole chain goes bankrupt like Bed Bath and Beyond even though a local store in a specific location was doing fine. Sometimes the rent in the building goes up or the landlord wants it for another purpose. Sometimes the owner is retiring and no one wants to buy it. But mostly it is because they aren't making enough money. And of course crime can be a factor but it is rarely the only factor. There are plenty of profitable businesses in high-crime areas and unprofitable businesses in low crime areas.

That's true, but the question at hand is why shopping malls, stores, and offices all seem to be closing in S.F. whereas retail stores and shopping malls and so on elsewhere in America (including the Bay Area) are doing just fine or even expanding. For example, retail is expanding and stores opening in Silicon Valley or even in San Jose, which isn't exactly a crime-free paradise, but has nowhere near the pathologies that SF does.

The COVID pandemic and work-from-home are irrelevant, because the rest of the Bay Area and the country experienced the exact same thing. (According to some people, SF handled the pandemic much better than, say, Holmes County, Ohio, yet Holmes County, Ohio has no problems at all leasing out commercial space and retail is booming.)

[Ken]

This whole thread is a textbook example of the logical fallacy of confirmation bias. From Psychology Today: https://www.psychologytoday.com/us/blog ... -brutality

Confirmation bias is the logical fallacy where one only looks for evidence that confirms the beliefs that they want to hold. It usually goes hand in hand with evidence denial, where one does the opposite with evidence contrary to one’s desired beliefs and ignores it.

Now it might well be the case that crime or municipal mismanagement is leading to business closures in downtown San Francisco. But simply finding anecdotal reports of business closures and pointing to them as evidence is nothing more than seeking evidence that confirms one's pre-conceived beliefs.

To actually measure this sort of thing one would have to look at the rates of business closures over time and across a wide variety of cities to see if San Francisco is even experiencing unusually high levels of business closures compared to the normal baseline in this economy. Cities are always evolving and changing and the economy is not static. No downtown looks the same as it did in 2000 or 1980 or 1960.

One would also have to look at crime rates over time and across a wide area to see if crime is unusually high at this moment in time in downtown San Francisco. And, more importantly, if that crime is affecting business success. Is crime a symptom of the decline in foot traffic in an area as less office workers are out and about and criminals are moving into the empty spaces. Or is it a cause and the reason why there is less foot traffic and customers in an area. There is no way to know from the information provided. Nor do we have any information on the bottom line of the retailers in question. For example the first link that MaxPC provides citing the Nordstrom closure and only provides a single quote from a Nordstrom executive as follows:

"We've spent more than 35 years serving customers in downtown San Francisco, building relationships with them and investing in the local community," a memo from Chief Stores Officer Jamie Nordstrom read.

"But as many of you know, the dynamics of the downtown San Francisco market have changed dramatically over the past several years, impacting customer foot traffic to our stores and our ability to operate successfully."

Notably Nordstrom blames foot traffic and doesn't mention crime. The reporter who wrote the piece mentions crime earlier in the article but provides no evidence that this is actually why Nordstrom is closing. Nordstrom's specialty is actually higher-end business wear. So expensive business suits, dress shirts, blouses, and shoes for men and women. When I used to work in DC Nordstrom (and Brooks Brothers) was where higher level managerial types and attorneys would go to buy suits, ties, dress shirts, heels, etc. It is probably at least partly the case that a high-end business-wear retailer like Nordstrom was not well positioned in 2023 to deal with both the decline in business foot traffic in the area and also the increase in casual business dress, especially after the pandemic when people aren't so much returning to suits, ties, and heels even if they are returning to the office.

There was a famous study of bombers conducted during WW2 in which the British Government carefully documented returning bombers to see where they had been shot in an attempt to determine which parts of the aircraft needed greater armor and protection. What did the results show?



But of course the data actually do not show where planes need to be armored. In point of fact, the areas without bullet holes were those that needed to be armored because all the planes shot in those places (cockpit, fuel tanks and engines) were the ones that did not return to be counted.

Of course it might well indeed be the case that crime is the reason why some businesses are closing in downtown San Francisco. But it it also might simply be the case that crime is just a symptom of larger economic and demographic trends that are hurting certain businesses and not the actual cause of anything at all. One simply can't know from the evidence provided.

[Josh]

Here's another example, from yesterday:

Telecommunications giant AT&T will close the company's Downtown San Francisco flagship store, the company told The Standard.

“Consumer shopping habits continue to change, and we're changing with them,” AT&T spokesperson Chris Collins said on Thursday, confirming the closure. “That means serving customers where they are through the right mix of retail stores, digital channels and our phone-based care team.”

Collins said there are still two AT&T locations within one mile of 1 Powell St., the Financial District store at 425 Market St. and the Chinatown store at 851 Clay St. AT&T has over 10 stores and licensed retailers across San Francisco.

The closure isn’t unique to San Francisco. The Union Square store will shutter Aug. 1, a similar store in Chicago on Michigan Avenue will close the same day, leaving the nation’s only AT&T flagship store in Dallas.

Note that stores 1 mile away aren't closing - the problem is strictly confined to downtown San Francisco. Businesses there simply can't profitably stay open... yet they can just a few miles away.

[Josh]

This whole thread is a textbook example of the logical fallacy of confirmation bias. From Psychology Today: https://www.psychologytoday.com/us/blog ... -brutality

Confirmation bias is the logical fallacy where one only looks for evidence that confirms the beliefs that they want to hold. It usually goes hand in hand with evidence denial, where one does the opposite with evidence contrary to one’s desired beliefs and ignores it.

Now it might well be the case that crime or municipal mismanagement is leading to business closures in downtown San Francisco. But simply finding anecdotal reports of business closures and pointing to them as evidence is nothing more than seeking evidence that confirms one's pre-conceived beliefs.

This is not "anecdotal evidence", Ken, the amount of store closures in Union Square is one of the top news stories in multiple San Francisco news outlets, cf.: https://sfstandard.com/business/att-to- ... hip-store/

Here's a list from that article of the top 25 "notable" closures in the last 3 years:

Announced Business Address
June 2023 AT&T Flagship 1 Powell St.
June 2023 Cinemark Theater 865 Market St.
May 2023 Old Navy 801 Market St.
May 2023 Coco Republic 55 Stockton St.
May 2023 T-Mobile 1 Stockton St.
May 2023 Nordstrom 865 Market St.
May 2023 Nordstrom Rack 901 Market St.
May 2023 Saks Off 5th 901 Market St.
April 2023 Anthropologie 880 Market St.
April 2023 Office Depot 33 Third St.
March 2023 Amazon Go 98 Post St.
March 2023 Arc'teryx 300 Grant Ave.
February 2023 The RealReal 253 Post St.
January 2023 CB2 34 Ellis St.
January 2023 Banana Republic 256 Grant Ave.
January 2023 Athleta 255 Sutter St.
November 2022 The Container Store 29 4th St.
February 2022 Crate & Barrel 55 Stockton St.
January 2022 Abercrombie & Fitch 865 Market St.
November 2021 DSW 400 Post St.
August 2021 Disney 39 Stockton St.
February 2021 Uniqlo 111 Powell St.
January 2021 Marshall's 760 Market St.
November 2020 H & M 150 Powell St.
August 2020 Gap 890 Market St.

My podunk city in Ohio is able to keep open a Gap, an H&M, a Marshall's, a DSW, an A&F, an Office Depot, T-Mobile, AT&T, Old Navy, and Cinemark theatres. All of these closures are unique to both Union Square and to the CIty & County of San Francisco.

I also wonder when the last time you were actually in San Francisco or the Bay Area was, Ken?