In most parts of San Francisco, consumer spending isn’t close to where it was before the COVID-19 pandemic, but for three neighborhoods in the city, this is no longer the case. 

Citywide, San Francisco brought in 25% less sales tax revenue in the first quarter of 2023 than it did in 2019, even after accounting for inflation. Nearly all neighborhoods generated less revenue over this period, except for the Western Addition, Japantown and the Presidio, which saw 36%, 9% and 5% increases, respectively. 

Meanwhile, downtown neighborhoods have been hit hardest, like the Financial District (-32%), South of Market (-36%) and Tenderloin (-59%). 

Although sales tax isn’t a major source of revenue for the city, given that most earnings go to the state, it paints a picture of geographic consumer spending patterns. 

Ted Egan, San Francisco’s chief economist, said certain neighborhoods are seeing growth not because they’re the “hot new place” to be in San Francisco, but rather, “they seem to just specialize in areas of the economy that have recovered a lot coming out of the pandemic in terms of consumer spending.”

The over 30% growth in Western Addition is almost entirely due to new car sales from dealerships in the area, according to Egan. New motor vehicle dealers were the biggest source of sales tax revenue in the Western Addition in early 2023 at almost 70% of all sales, according to data from the California Department of Tax and Fee Administration. 

Car sales are a major contribution to sales tax, according to Egan, and with car prices — for both new and used cars — still at elevated levels, this has been a major boon to businesses in Western Addition.

Citywide, new car sales saw the second highest increase in revenue at 30% from the first quarter of 2019 to 2023, just behind jewelry stores at 41%. 

Japantown saw the second highest increase in sales tax revenue since 2019 at 9%. According to Egan, this jump is due to growth in the restaurant sector — a mix of new business openings and the recovery of customer demand. 

Sales tax data suggests that Japantown has a higher concentration of restaurants than other neighborhoods, Egan said, allowing the neighborhood to “ride the restaurant boom.” Indeed, over half of total sales tax revenue in early 2023 came from casual and fine-dining businesses, according to the CDTFA. 

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Additionally, the introduction of more parklets since the pandemic allowed restaurants in the area to increase their capacity, said Patti Mangan, executive director of the Fillmore Merchants Association.

Japantown’s positive sales tax revenue growth is a reflection of restaurant recovery citywide, which the Controller’s Office has highlighted as a bright spot in the city’s economic recovery. 

“Restaurants were so badly beaten down in 2020 that a lot of the growth of the last two years is just the reopening,” Egan said. “But there’s also been significant growth just from early 2022 to 2023 and there wasn’t much reopening then — that’s just the recovery of people wanting to go out to restaurants.”

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Egan attributes the Presidio’s 5% growth to new business openings in the area.

While certain parts of the city are recovering faster than others as a result of current economic trends like car sales and restaurant recovery, other industries in San Francisco, like retail, are still struggling to make a comeback. 

“(Recovery) isn’t just a downtown problem, it’s a citywide loss of population and loss of retail problem,” Egan said. “But there are definitely some bright areas.”

Reach Adriana Rezal: adriana.rezal@sfchronicle.com

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Dan Walters

A few days ago, the toll for driving on San Francisco’s Golden Gate Bridge took another jump. It will now cost motorists at least $6.75 to cross the entrance to San Francisco Bay — if they are using carpool lanes — and as much as $9.75 if they are invoiced for their crossing.

It appears the tolls are destined to climb even higher.

The iconic bridge is owned by the multi-county Golden Gate Bridge Highway and Transportation District, whose directors have directed a series of toll increases over five years. They were done to cover rising maintenance costs and — this is the most important factor — offset a decline in traffic since the COVID-19 pandemic began three-plus years ago.

It’s an aspect of a larger phenomenon that has upended the San Francisco Bay Area’s economy. Many workers, particularly those in technology and financial services, shifted to working remotely when the pandemic struck and the work-from-home tendency has persisted after the health threat eased.

Downtown San Francisco suffered what some call a “doom loop” of reduced in-place employment, wholesale declines in office space usage and closure of retail businesses.

Fewer commuters also translated into lower bridge toll income and very sharp drops in transit use and revenues, particularly on the Bay Area Rapid Transit system.

BART and other transit systems pleaded with Gov. Gavin Newsom and legislators for a package of state aid to offset declining farebox revenue and got a $5.1 billion, four-year commitment in the new state budget.

“Public transportation is easy to take for granted, but allowing it to collapse would have been devastating for our state’s future,” state Sen. Scott Wiener, D-San Francisco, said. “This budget extends a critical lifeline that will help transit agencies maintain service while making critical improvements to cleanliness and safety.”

However, Wiener added, “the future of public transportation in the Bay Area is still under threat due to pandemic-related operational deficits that, without help, will lead to severe service cuts.”

Learn more about legislators mentioned in this story

Wiener and other Bay Area legislators are proposing a $1.50 per vehicle hike on motorists who use the region’s seven state-owned bridges to provide transit systems with more operating revenue. The nonstate Golden Gate Bridge would not be affected by the proposal but, as noted earlier, is already raising its prices.

The $1.50 toll increase has been amended into a Wiener bill, Senate Bill 532, that has already passed the Senate and is pending in the Assembly, which could lead to fast track (no pun intended) approval.

Auto tolls on the seven bridges are generally $7 now, so Wiener’s bill would boost them to $8.50, roughly in line with the new Golden Gate Bridge tolls.

“Bay Area transit ridership continues to climb, but it’s not happening quickly enough to make up for the loss of federal emergency assistance,” Wiener said. “SB 532 provides critical lifeline funding for our transit systems — ensuring they have the resources they need to provide safe, reliable service for our residents.”

How, one might wonder, would raising the already stiff tolls on Bay Area bridges impact a region that is struggling to recover economically from the pandemic?

Classic economics would say that increasing their commuting costs would make San Francisco’s workers even less likely to return to their cubicles and therefore hinder downtown recovery.

However, perhaps it would merely persuade them to take BART or other transit services, thus reducing auto traffic on the bridges, which in turn would decrease revenues from the new tolls.

Dan Walters has been a journalist for more than 60 years, spending all but a few of those years working for California newspapers. He began his professional career in 1960, at age 16, at the Humboldt Times. CalMatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics. He can be reached at dan@calmatters.org.

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President Biden delivers remarks on the economy Wednesday at the Old Post Office in Chicago. (Evan Vucci / Associated Press)

President Biden launched a new push Wednesday to sell his economic agenda and convince skeptical voters that the economy is thriving under his oversight, sending a message White House officials see as crucial to his 2024 election prospects.

Speaking in the huge lobby of the Old Post Office in downtown Chicago, the President laid out his vision for “bidenomics,” a catch-all for his strategy to invest in empowering the middle class and encourage competition to lower the cost of… reducing working families.

He tried to compare his plan to the trickle-down economics of his predecessor and potential Republican opponent for 2024, former President Trump. The trickle-down theory, popularized by former President Reagan, focuses on tax cuts and relaxation of regulations.

“This vision is a fundamental break with the economic theory that has failed America’s middle class for decades. … called trickle-down economics,” he said in a major speech announced by the White House. “It has failed America, it has pushed up the deficit and increased inequality. It has weakened our infrastructure.”

His comments were part of a broader effort by the White House to portray Biden as the architect of an economy that has defied expectations of a recession and continues to boast a resilient job market.

The latest economic numbers give the White House plenty to brag about. Unemployment remains at 3.7%, while inflation has fallen to 4% from a peak of 9.1% in June last year. But fears of a looming recession linger as prices slow their decline from previous highs.

READ ALSO: Biden Visits California To Speak On Climate And Raise Funds

Last week, the Federal Reserve paused its rate hike streak for the first time in its 18-month campaign to contain inflation.

But on Wednesday Fed Chair Jerome H. Powell warned that the aggressive campaign would continue due to a strong job market.

“More restrictions are coming,” he told a monetary policy forum in Sintra, Portugal.

Government officials complain that the economic recovery under his leadership is not attributed to the president. Biden’s handling of the economy has been a persistent thorn in his side since inflation hit a 40-year high last summer.

The story goes on

Just 34% of US adults approve of his handling of the economy, according to a poll by the Associated Press and NORC Center for Public Affairs Research released Wednesday. Similarly, the CBS News poll released this month found that just 36% approve of Biden’s handling of the economy.

The president blames the COVID-19 pandemic and the war in Ukraine for soaring food and gas prices, but Republicans argue it’s his government spending that has fueled the record-high inflation Americans have been feeling over the past two years stuck for years.

“I’m not here to proclaim victory for business. I’m here to say we have a plan that will turn things around incredibly quickly,” Biden said in his speech Wednesday. “We still have more work to do.”

On Monday, senior White House advisers Anita Dunn and Mike Donilon released a four-page memo outlining the president’s approach to building an economy “from the bottom up and from the middle out.” They declared Biden’s quest to end the era of the trickle-down economy as the “defining project of the Biden presidency.”

During his Chicago speech, Biden attempted to explain his economic vision, saying it was rooted in “investing in Americans, because when we invest in our people, we strengthen the middle class.” We see the economy growing. That benefits all Americans.”

Read more: In San Francisco, Biden says AI holds ‘enormous promise’ but comes with risks

Biden’s speech followed a White House event Monday that highlighted the more than $42 billion made available to states through the bipartisan infrastructure bill he advocates for high-speed internet projects. California received nearly $1.9 billion under the program.

The White House is deploying its top officials across the country to promote bidenomics and take advantage of the sweeping economic laws enacted since Biden took office

These include the $1 trillion Infrastructure Act, the $52.7 billion to boost domestic semiconductor production, and the President-signed Climate and Drug Pricing Act to boost clean energy projects.

Although Biden’s speech was more of an official event than a campaign appearance, it was difficult to ignore the politics. Following his speech, the President attended a campaign fundraiser hosted by Illinois Governor JB Pritzker at the JW Marriott Hotel. The minimum donation was $3,300 and a photo with the President was priced at $25,000.

“Guys, I’m actually looking forward to this campaign,” Biden told donors. “And you know why? Because we actually have a story to tell.”

According to Doug Sosnik, a longtime senior adviser to President Clinton, the fate of a presidential re-election typically depends on economic conditions, leaving Biden with no choice but to run on his behalf.

Biden’s recognition of his economic record signals the White House is confident Americans will soon see the impact of his efforts.

“There is enough time for the public to feel the impact of his performances,” said Sosnik. “He just has to stick with a sharp and repetitive message.”

Get the best of Los Angeles Times political coverage with the Essential Politics newsletter.

This story originally appeared in the Los Angeles Times.

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President Biden delivers remarks on the economy Wednesday at the Old Post Office in Chicago (Evan Vucci / Associated Press)

President Biden launched a new push Wednesday to sell his economic agenda and convince skeptical voters that the economy is thriving under his oversight, sending a message White House officials see as crucial to his 2024 election prospects.

Speaking in the cavernous lobby of the Old Post Office in downtown Chicago, the President laid out his vision for “bidenomics,” a catch-all term for his strategy to strengthen the middle class through federal investment and encourage competition to drive down costs working families.

He tried to compare his plan to the trickle-down economics of his predecessor and potential 2024 adversary, former President Trump. The trickle-down theory, popularized by former President Reagan, focused on tax cuts and relaxation of regulations.

“This vision is a fundamental break with the economic theory that has failed America’s middle class for decades. It’s called trickle-down economics,” he said in a major speech announced by the White House. “It has failed America, it has pushed up the deficit and increased inequality. It has weakened our infrastructure.”

The comments were part of a broader effort by the White House to portray Biden as the architect of an economy that has defied expectations of a recession and continues to boast a resilient labor market. The latest economic numbers give the White House plenty to brag about. Unemployment remains at 3.7%, while inflation has fallen to 4% from a peak of 9.1% in June last year. But fears of a looming recession linger as prices have slowed their decline from previous highs.

READ ALSO: Biden Visits California To Speak On Climate And Raise Funds

Last week, the Federal Reserve paused its rate hike streak for the first time in its 18-month campaign to contain inflation. But on Wednesday, Federal Reserve Chair Jerome Powell warned that the aggressive campaign would continue due to a strong job market.

“More restrictions are coming,” Powell said during a monetary policy forum in Sintra, Portugal.

The story goes on

White House officials complain that the economic recovery under his leadership is not credited to the president. Biden’s handling of the economy has been a persistent thorn in his side since inflation hit a 40-year high last summer.

Just 34% of US adults agree with his handling of the economy, according to a poll by the Associated Press and NORC Center for Public Affairs Research released Wednesday. Similarly, a CBS News poll released in June found that just 36% approve of Biden’s handling of the economy, while 64% disagree.

The president has repeatedly blamed soaring food and gas prices on the COVID-19 pandemic and the war in Ukraine, but Republicans argue that Biden’s government spending has fueled the record-high inflation that has bogged Americans down for the past two years .

“I’m not here to proclaim victory for business. I’m here to say we have a plan that will turn things around incredibly quickly,” Biden said in his speech Wednesday. “We still have more work to do.”

On Monday, senior White House advisers Anita Dunn and Mike Donilon released a four-page memo outlining the president’s economic approach to building a “bottom-up, middle-out” economy. They declared Biden’s quest to end the trickle-down era as “the crucial project of the Biden presidency.”

During his Chicago speech, Biden attempted to explain his economic vision, arguing that it was rooted in “investing in Americans, because when we invest in our people, we strengthen the middle class. We see the economy growing. That benefits all Americans.”

Read more: In San Francisco, Biden says AI holds ‘enormous promise’ but comes with risks

Biden’s speech followed a White House event Monday where he highlighted the more than $42 billion made available to states through the bipartisan infrastructure bill he advocates for high-speed internet projects. California received nearly $1.9 billion under the program.

The White House is deploying its top officials across the country to promote bidenomics and take advantage of the sweeping economic laws enacted since Biden took office, including the $1 trillion infrastructure bill, $52.7 billion to promote the domestic semiconductor production and the President-signed Climate Protection Act Drug Pricing Act to promote clean energy projects.

Although Biden’s speech was an official event, it was difficult to ignore politics. Following the speech, Biden attended a campaign fundraiser hosted by Illinois Gov. JB Pritzker at the JW Marriott Hotel. The minimum donation was $3,300, while a picture featuring the President was priced at $25,000.

“Guys, I’m actually looking forward to this campaign,” Biden said of donors. “And do you know why? Because we actually have a story to tell.”

According to Doug Sosnik, former longtime senior adviser to President Clinton, the fate of a presidential re-election typically depends on economic conditions, leaving Biden with no choice but to run as usual.

Biden’s vigorous acknowledgment of his economic record signals the White House is confident Americans will soon see the impact of his efforts.

“There is enough time for the public to feel the impact of his performances,” said Sosnik. “He just has to stick with a sharp and repetitive message.”

This story originally appeared in the Los Angeles Times.

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ANKARA, Turkey (AP) – Turkey’s President Recep Tayyip Erdogan has appointed a former US bank executive to head the central bank…

ANKARA, Turkey (AP) — Turkey’s President Recep Tayyip Erdogan on Friday appointed a former U.S. bank executive to head the central bank, sending the strongest signal yet that the newly re-elected leader may be backing away from his unusual economic policies that many advocate blame the worsening cost of living crisis.

Hafize Gaye Erkan, 41, has a Princeton education and will be the first woman to head Turkey’s central bank. In 2021, she briefly served as co-chief executive officer of First Republic Bank, which became the second-largest US bank to fail last month as its wealthy customers pulled out their money during the broader industry turmoil.

Her nomination follows last week’s appointment of Mehmet Simsek, an internationally renowned former banker, as finance and finance minister. He was a former finance minister and deputy prime minister under Erdogan, returning from politics after a five-year hiatus.

The selection of two key financial positions has raised hopes that Erdogan, who was re-elected to a third term last month, is backing down from his insistence that lower interest rates will combat Turkey’s soaring inflation. The rate peaked at 85% in October and people are struggling to afford food, housing and other necessities.

Critics blame the cost-of-living crisis on Erdogan’s unorthodox approach that runs counter to conventional economic thinking – that raising interest rates would fight inflation. Central banks like the US Federal Reserve, the European Central Bank and others around the world are raising the cost of borrowing to curb consumer price inflation.

Erkan’s appointment “is an important step towards more credible economic policy and encourages President Erdogan to relax his grip on the central bank,” said Liam Peach, chief emerging market economist at Capital Economics.

“Recent political appointments must now be translated into policy action so investors can be confident that this shift towards orthodoxy is the real deal,” he said.

The next steps are crucial as the economy grapples with a plummeting currency and still-high inflation at 39.5%. The central bank will meet later this month to decide on interest rates – a key indicator of the course of Turkey’s economy.

In recent years, Erdogan has sacked three central bank governors for failing to comply with his rate-cutting policy.

“Erkan needs to be given the freedom to raise interest rates a lot,” Peach said. “A sharp rate hike from about 8.5% to about 20% would send a very strong signal that a credible policy shift is at hand.”

It must also show that it is important to keep interest rates high in order to curb inflation. While higher borrowing costs are meant to fight inflation, they can slow economic growth as borrowing becomes more expensive.

This could be another pain point for households and businesses whose food and energy costs have skyrocketed in the wake of Russia’s invasion of Ukraine and whose currency has hit record lows against the US dollar.

Erkan was CEO of investment banking firm Goldman Sachs and worked at San Francisco-based First Republic Bank, where he served as co-CEO for six months in 2021. JPMorgan Chase took over the failed bank after US regulators seized it in May.

She replaces Sahap Kavcioglu, who has overseen a series of rate cuts since 2021. Kavcioglu will now head the Turkish banking supervisory authority BBDK.

“The appointment of Kavcioglu – a proponent of Erdogan’s ‘new economic model’ – as head of banking supervision is a powerful reminder that Erdonomics can retaliate at any time,” said Wolfango Piccoli, co-president of London-based risk consultancy Teneo.

Erkan will have to rebuild the central bank “after years of mismanagement, purges and demotions,” Piccoli wrote in a note.

“Like most other important institutions, the (central bank) has lost its independence and has been undermined by Erdogan’s drive to centralize power, with key tasks being given to loyalists and cronies,” he said.

Copyright © 2023 The Associated Press. All rights reserved. This material may not be published, broadcast, written or redistributed.

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Don’t rely on California, especially when banks are involved.

The collapse of Silicon Valley Bank is widely discussed as a harbinger of the future, a sign of trouble at the tech companies that were its best customers. But this bank collapse actually fits a very old pattern – California is threatening the global economy.

Our state’s history of triggering economic crises is rooted in our need to get rich quick, a trait of our state since the Gold Rush.

The California Constitution of 1849 prohibited banking. But with the discovery of gold, banks grew fast – and collapsed faster. The history of San Francisco in the 1850s is one of financial panics followed by attempts to emerge from them. The Bank of California, the first commercial bank in the west, was founded in 1864 and had failed by 1875. (It was later reopened).

The catastrophe only spawned new banks. After the 1906 San Francisco earthquake, banker AP Giannini established a makeshift bank in North Beach. Eventually, he founded Bank of America, which was briefly the world’s largest bank in the 1980s.

Bank of America survived (but merged and moved to North Carolina). But for the past two generations, California has regularly caused crises and global recessions.

The savings and credit crisis of the late 1980s and early 1990s was in part the result of banking deregulation promoted by a California President, Ronald Reagan, and California legislators. The state’s thrift, under financial pressure from high inflation, sought to escape their woes through speculative investments, which only aggravated their problems.

This deregulation was most shamelessly exploited by the Irvine-based Lincoln Savings and Loan Association and its director, Charles Keating, who used depositors’ money for high-risk investments. Keating, attempting to bypass federal agencies and retain control of his thrift, compromised five US Senators, known as the Keating Five, including Californian Alan Cranston. Keating was eventually convicted of fraud but released on appeal.

Hundreds of savings and loan banks have been closed forever. The federal government intervened to protect some thrifts and depositors at an estimated cost to taxpayers of $100 billion.

The 21st century has seen two California powered busts. The first came in 2000, when the collapse of many tech startups and tech stock prices helped trigger a national recession.

But this recession turned out to be minor compared to the Great Recession of 2008. This global economic meltdown is often blamed on Wall Street banks. But it too was invented in California.

Then as now, the Golden State had the largest and most expensive housing market in the country. Our middle class, in their ambitious desperation to buy homes and maintain an unaffordable standard of living, has paved the way to ever-growing consumer and mortgage debt. Our banks and mortgage companies—including Calabasas-based Countrywide Financial, once the nation’s largest mortgage lender—led the way in originating bad subprime loans that left borrowers owing more than their homes were worth. Countrywide and its Wall Street friends have also ruthlessly securitized these loans; They were then traded in the markets, with many investors not understanding the risks.

As the housing market collapsed and foreclosures increased, the carnage included the collapse of stock markets, double-digit unemployment, record bankruptcies for people and local governments, huge federal budget deficits, and mass layoffs among public workers and across many industries. In California, family income fell, the middle class shrank, and income inequality rose to the highest level in at least 30 years, according to the Public Policy Institute of California.

Californians pride themselves on the size of their state’s economy, which will soon be the fourth largest in the world. But when an economy of this magnitude collapses, it expands across borders, adding to economic malaise from Madrid to Manila.

Because of this, world markets plummeted when news broke of depositors fleeing Silicon Valley Bank. California’s leading tech companies and their employees banked at these institutions, so many have assumed the contagion will spread as before. It remains to be seen whether the US government’s aggressive move to seize the Silicon Valley bank and even guarantee uninsured funds will contain the damage.

Today, major global institutions track and provide “systemic risk” or “mega risk” reports on the future of the world and its economies. The World Economic Forum has released a risk report covering natural disasters, inequality and its impacts, climate change, democratic decline, aging infrastructure, technological disruption, war, terrorism and infectious diseases.

Perhaps they should add California to the list with its flair for spectacular financial failures.

Joe Mathews writes the Connecting California column for the Zócalo Public Square.

Joe Mathews

Originally published Apr 15, 2023 at 7:30 am

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There has been a bloodbath of layoffs in the tech industry since last fall.

The Google parent company Alphabet has cut 12,000 jobs and thus terminated the 11,000 jobs announced by Microsoft. Salesforce plans to cut 9,000 employees while Meta parting ways with 11,000. Meanwhile, Amazon is cutting 18,000 people across the country. Yoy

The string of cuts, fueled by recession fears, could have a major impact on big-footprint cities like San Francisco, New York and Seattle, where corporate office workers make up an important part of the inner-city economy, observers say.

“This tech downturn is going to be devastating for Washington, and the long-term impact is going to be pretty profound,” University of Washington marketing professor Jeff Shulman told Bloomberg of the impact of cuts at Microsoft and Amazon. both of which have large employee bases in the state. “Tech companies have fueled so much growth and change that if they slam on the brakes and back up, everything else is in jeopardy.”

Cost-cutting at some companies like Salesforce and Meta includes explicit plans to slash expensive real estate, with the latter abandoning a recently built Manhattan expansion.

In 2022, rental demand was well below historical averages, with San Francisco’s office vacancy rate at more than 27 percent, up from 3.7 before the pandemic, and New York just 0.4 percent below the pandemic-era vacancy record of 19, 6 percent, according to a report by the CBRE Group.

Some fear the layoffs will not only reduce demand for office space, but also slow demand for housing overall.

“If people are afraid of being laid off, they will almost certainly put off making new, huge financial purchases — and buying a home is typically the largest financial transaction in most people’s lives,” said Patrick Carlisle, chief market analyst at Compass , opposite The Real Deal.

It’s worth pointing out, however, that even in places like the Bay Area, just because technology is laid off, economic apocalypse isn’t inevitable.

The story goes on

“So far, the job growth is positive and the unemployment rate is really very low, although that could change in the short term,” Stephen Levy, director and senior economist at the Center for Continuing Study of the California Economy, told the San Francisco Chronicle.

Mr. Levy also pointed out that some of the layoffs in the tech space have come as companies laid off additional staff during a pandemic-era boom, such as Salesforce, which nearly doubled its workforce as companies looked for new software solutions.

“So if they drop 10,000, they will still be 21,000 above pre-pandemic levels,” the economist added.

Still, landlords, from homes to businesses, could face tough times.

“It’s an extremely difficult time to be a landlord,” Ruth Colp-Haber, chief executive officer of brokerage firm Wharton Property Advisors, told Bloomberg. “All the costs of running their buildings are increasing, the cost of construction and labor is increasing. That’s all of their day-to-day costs just to open up their buildings for business. Then, on the income side, rents will fall. It’s a real witch’s brew.”

And in 2023, tech layoffs have already exceeded the pace of 2022, reports SFGate.

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Detroit, 2009. National and international headlines proclaimed the demise of a once great city, from its economy (“How Detroit Went Bottom-Up”) to the depletion of its population (“How Detroit, the Motor City, Turned into a Ghost Town”) to its housing market (“How Low Can Homes Go? Try $0”) and its crumbling infrastructure (“Feral Detroit: Nature is Reclaiming the Motor City”). The city would file for bankruptcy four years later. “For decades it seemed like everything had been taken from us,” said Detroit Mayor Mike Duggan. “Companies were moving out, car factories were moving out, gas stations and movie theaters were moving out, and people were moving out.”

The city’s black-majority neighborhoods were plagued by vacancy rates, some 70,000 in number, but Detroit’s handful of black developers failed to find appeal. “Two to four of us tried it,” says Clifford Brown, a longtime real estate entrepreneur and Detroit resident, “and all the deals we looked at were partnerships. We did not drive the developments ourselves and were unable to secure access to capital.”

In a city where 85 percent of the population identified as Black, there was an abundance of talented Black professionals—real estate agents, architects, lawyers, bankers, urban planners, carpenters, electricians, and plumbers. Nevertheless, there were hardly any black developers. This was and is consistent with the rest of the United States, where only 5 percent of real estate developers identify as Black.

The biggest barrier to entry for black real estate entrepreneurs has always been lack of access to capital. This is a problem for numerous reasons. It’s widening the racial wealth divide for another generation of young Black men and women. In an increasingly heated real estate market, it opens the city’s communities to development by outsiders who have no knowledge, loyalty, or love for them. After all, it means many of the people who believed in Detroit during its toughest years may not share in the fruits of its comeback. In his State of the City 2022 address, Mayor Duggan squarely asked, “Will Black entrepreneurs benefit fairly from Detroit’s recovery?”

To ensure this, JPMorgan Chase works closely with local Community Development Financial Institutions (CDFIs), including Capital Impact Partners and Invest Detroit. These partnerships provide the resources, expertise and inspiration to help a new generation of black developers rebuild Detroit.

In 2014, JPMorgan Chase made a landmark $100 million pledge (which has since doubled to $200 million) to fund the city’s economic recovery. But first, it listened to Detroiters—community partners, civic leaders, local experts, and residents. “We learned early on the importance of equity within the community – from allowing residents to build their own neighborhoods to supporting developers who reflect the city’s population,” said Pierre Batton, program officer for global philanthropy at JPMorgan Chase, based in Detroit.

Today, Detroit’s residential and commercial districts are gradually coming back to life. What’s happening with the help of Capital Impact and Invest Detroit is the opposite of gentrification: developers—increasingly black developers—are revitalizing communities, not for wealthy newcomers, but for the people who live in them.

To support these developers, Capital Impact partnered with JPMorgan Chase to launch the Equitable Development Initiative (EDI), an annual training program, in 2018. EDI’s mentors and advisors, including Clifford Brown, educate BIPOC developers through the early and mid-career stages of project development and finance, help demystify the market for them and, crucially, give them access to low-cost after graduation to raise capital. Capital Impact leveraged JPMorgan Chase’s support of more than $32.5 million in dedicated loan funds for Capital Impact’s national program. In 2017, as part of its ongoing investments in Detroit’s recovery, JPMorgan Chase committed $500,000 to the EDI over a two-year period. The company continues to support the program, not only in Detroit, but also in the metro areas to which it has expanded: Washington, DC, San Francisco and Dallas.

In four years, more than 200 developers have been trained by EDI or are currently involved in its programming. The Detroit program alone has more than 100 alumni.

“We’re already seeing graduates progressing and doing their second, third, and fourth projects,” says Batton.

Graduates of the program bring specific values ​​and goals to their ventures. “They not only want to grow as developers,” says Jeff Mosley, Capital Impact’s national program director for EDI, “but also create housing that meets the needs of their communities – so that their work has social relevance. ”

This is evident in EDI alumnus Marcus Jones’ $1.3 million development project, funded by Invest Detroit and JPMorgan Chase through the Strategic Neighborhood Fund, in a long-abandoned commercial building in the borough of Livernois-McNichols.

The project Jones undertook with his partner and Detroit roommate, Akunna Olumba, shows exactly why local developers are so important to Detroit’s recovery. The construction team was more than 98 percent based in Detroit. The subcontractors—welders, plumbers, and electricians—were 90 percent black. The 6,000-square-foot restaurant, Detroit Pizza Bar, opened in 2022 and 97 percent of its employees live within a two-mile radius. “We knew that not having a car, license or insurance to drive often prevents people from accessing a quality job,” says Jones.

The restaurant’s energy costs are partially offset by solar panels and high-efficiency appliances; Operating costs are partially offset by tax breaks from the City of Detroit. “Invest Detroit really believed in us,” says Jones, “and they convinced the city to have our back as well.” The rooftop overlooks a new $7 million overhaul of the McNichols streetscape.

The picture in Detroit is brightening. The city’s housing market is stabilizing, with more than 50 percent of units owner-occupied, up 7 percent from 2019, and black developers like Brown and Jones are playing an increasingly prominent role. Near the end of his State of the City 2022 address, Mayor Duggan celebrated 33 black developers in Detroit who have collectively invested more than $500 million in residential, mixed-use and commercial properties across the city. “Black developers with black ownership are rebuilding this city,” he explained.

To date, Clifford Brown has completed projects in four different Detroit neighborhoods and continues to invest in real estate across the city. He recently broke ground on the Brooke on Bagley, a $23 million development that will include 78 apartments — 80 percent of which are designated rent-restricted — and 2,105 square feet of retail space. “I would argue that Detroit is probably the best place in the US for color developers to start,” he says. “Obviously there are amazing opportunities elsewhere. The challenge is that you don’t have Capital Impact and Invest Detroit. I spent six months trying to make a $23 million deal work. I called Capital Impact Partners and within two weeks they said, ‘We’re going to be a senior lender.’”

In an increasingly affluent Detroit, there are significantly more black real estate entrepreneurs than in 2009, and there is a growing training and funding infrastructure to help them succeed. “We’re creating equitable and inclusive opportunities that didn’t exist before for black developers, architects, designers and craftspeople,” Batton says. “Now we will just keep gaining momentum.

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South San Francisco’s economic advancement center, a resource hub for residents and business owners in north San Mateo County, will receive $500,000 from the recently passed $1.5 trillion federal appropriations act, officials announced this week.

The downtown center opened late last month to house programs providing job training and business and entrepreneurship courses. Mayor Mark Nagales said the center complements the city’s other initiatives, like guaranteed income, that aim to help underserved communities.

“People are looking for jobs, and they are also looking for the assistance in terms of placement,” he said. “This is going to be a long-term commitment from us, from the city.”

The city partnered with Bay Area nonprofits JobTrain and the Renaissance Entrepreneurship Center in July last year. Since then, Renaissance has already served 91 clients and secured $86,700 in capital for 19 client businesses in Daly City, San Bruno and South San Francisco, according to the city. Meanwhile, JobTrain has helped 73 clients, 22 who have found job placement with an average wage of more than $22 per hour.

The city committed $2 million over two years from its American Rescue Plan Act funding to the center. Another $1.1 million was granted by the US Economic Development Administration, and the county pitched in $200,000. Genentech contributed $50,000 and Lane Partners gave $10,000. Nagales said the city is continuing to explore additional funding sources.

North County residents can stop by the center to receive résumé and interview help, vocational training and be connected with employers. Small business owners or those interested in starting a business can take courses, network and receive help applying for grants. Services are free and available in both Spanish and English.

The new federal funding will go to the JobTrain program, adding classroom training and enabling expansion of service to at least 50 people, Nagales said. The greater Bay Area is slated to receive $73 million of the appropriations act for various uses.

“We are so incredibly grateful for the efforts of Senators Feinstein and Padilla, and Congresswoman Speier for fighting for the needs of our residents and surrounding communities,” Nagales said. “This money will dramatically improve access to job training and placement services for the region’s most vulnerable residents.”

East Palo Alto is also planned to get a center offering similar services. JobTrain, based in Menlo Park, is partnering on the effort and will provide services at the new location that will be constructed in coming years.

The South San Francisco center is located at 366 Grand Ave. and is open 10 am to 4 pm Monday to Friday.

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South San Francisco CA February 28, 2022 Submitted by City of South San Francisco

The old US Bank on Grand is now home to the Economic Advancement Center

Today the City of South San Francisco officially opened the Economic Advancement Center (EAC), strategically located at 366 Grand Avenue, to offer workforce development and small business and entrepreneurship services to residents of South San Francisco and throughout North San Mateo County. The goal of the Economic Advancement Center is to provide much needed economic recovery tools to some of the most vulnerable residents and small businesses, offering support in both English and Spanish.

One of South San Francisco’s partners at the EAC is JobTrain (www.jobtrainworks.org/south-san-francisco-career-center), a nonprofit accredited in vocational training, academics and essential skills development for adults of all ages to help move unemployed and underemployed individuals to successful and self-sufficient employment with skills development. Since the city’s partnership, JobTrain has served over 73 clients, had 22 job placements (14 full-time, 6 part-time and an average hourly wage of $22.65/hour), and nine clients pursuing training and education.

South San Francisco also partnered with Renaissance Entrepreneurship Center (Renaissance)(www.rencenter.org/mid-peninsula/), a nonprofit who works with individuals who want to start a small business and helps them successfully do so by offering training on a variety of topics, such as business planning, access to capital, as well as offering ongoing assistance to the business owner. Services offered by Renaissance are currently being offered to all small businesses in North San Mateo County (Daly City, Pacifica, Colma, San Bruno, Millbrae, South San Francisco, and Brisbane). Since starting the partnership, Renaissance has served 91 clients, secured $86,700 in capital for 19 client businesses in Daly City, San Bruno, and South San Francisco, and offered 45 consulting classes and workshops and English and Spanish.

Mayor Mark Nagales announced at today’s grand opening that the City of South San Francisco has been selected to receive a $1.1 million grant through the United States Economic Development Administration (EDA) to support services offered by Renaissance at the the EAC. This grant is estimated to create 372 jobs, retain 748 jobs and generate $43.7 million in private investment. The City has committed $1 million in American Rescue Plan Act (ARPA) funding for the EAC, and has received $200,000 in funding from the County of San Mateo, $500,000 in federal funds through Congresswoman Jackie Speier and private donations from Genentech and Lane Partners. City staff and its partners continue to pursue additional funding sources to expand and sustain all services offered to the community.

“The initial idea of ​​the EAC was introduced at a City Council meeting less than one year ago, and now that we are here celebrating the grand opening is incredible. So much work has been done between city staff, contractors, and our non-profits, and it’s amazing how many residents this center has been able to help even before the doors officially opened,” says South San Francisco Mayor Mark Nagales.

“Securing this grant for entrepreneurship services was a huge undertaking and our application being awarded shows not only the rest of California, but the entire nation, what amazing things we are doing here in South San Francisco. This will put us on the map in terms of economic development” says South San Francisco Mayor Mark Nagales.

All the services offered at the EAC are free to residents. To learn more about the EAC, please visit www.ssf.net/EAC. To learn more about JobTrain and workforce development services, please contact Julia Horiuchi at jhoriuchi@jobtrainworks.org, call (650) 505-4727 or visit the EAC at 366 Grand Avenue. To learn more about Renaissance and entrepreneurship services, please contact Amanda Anthony at amanda@rencenter.org, call (650) 321-2193 x 1103 or visit the EAC at 366 Grand Avenue.

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