Moving

The geography of San Francisco’s bars is altering

The new bars in San Francisco are not headed downtown.

Liquor license data from the California Department of Alcoholic Beverage Control shows bars and restaurants with full-sale liquor licenses in San Francisco are popping up in different neighborhoods than before. A bar or restaurant must have a full-sale liquor license to sell beer, wine and liquor.

In 2021, the number of liquor licenses obtained by establishments in neighborhoods like Chinatown, the Marina, the Castro/Upper Market and the Inner Richmond all doubled compared to 2019. For example, Chinatown went from no licenses acquired by establishments in 2019 to six in 2021. In contrast, the Financial District and South of Market both saw a 40% decrease in the number of liquor licenses obtained in 2021 compared to 2019. The Financial District alone saw six fewer licenses in 2021 than in 2019.

We compared 2021 to 2019 because there were just 55 licenses obtained by new establishments in 2020 during the period of the strictest lockdowns, compared to 77 in 2019 and 87 in 2021. The state’s liquor license data does not include establishments that acquired a liquor license in 2019 and then subsequently closed, so our estimates are likely slightly underestimating the number of establishments acquiring licenses in 2019.

Between June 2020 and June 2021, only 11 new full-sale liquor licenses were actually distributed throughout the city, according to ABC data. The total number of on-sale licenses is currently capped around 1,050 due to a 1939 law that linked liquor licenses to a county’s population. However, existing licenses are bought and sold among businesses, which changes the geography of the bar scene within San Francisco. These transfers are causing a shift in the density of full-sale licenses in neighborhoods away from downtown.

“Downtown is a dense area of ​​office spaces that used to be the main area where people congregated to work, have lunch, enjoy a cocktail and have dinner meetings,” President and CEO of LiquorLicenseAgents.com Rob De La Torre said. “Since the change of environment has caused more people to work from home in local neighborhoods, the licensed locations that were successful before have lost business and opted to open new locations elsewhere or sell their liquor licenses to new establishments opening in the communities.”

Our analysis shows that prior to the pandemic, the Financial District and South of Market were seeing growth in license numbers. The Financial District added 9 more liquor licenses in 2019 than in 2017 and South of Market also more in 2019 than 2017. With both neighborhoods now trending downward, the data suggests the pandemic has played a role in shifting bars away from downtown San Francisco.

“Licenses go where the customers are,” CEO of Future Bars Group Brian Sheehy said. “And the customers-for the past years- have not been downtown.

However, Sheehy says downtown will see its comeback and soon. He says, although licenses have not come into the Financial District and South of Market in the last few years, things are already beginning to change. With the recent announcement of the end of California’s statewide mask mandate, Sheehy is confident this will help return full-sale liquor licenses to downtown San Francisco.

“Those types of licenses are needed in this part of town, and we are very confident that business is going to come back,” Sheehy said. “It is going to take a few months, but there is massive pent-up demand and we are seeing that, especially over the past week with the word getting out that the mask mandate is going to go away.”

The demand for liquor licenses is also showing up in the market. Prior to the start of the pandemic, liquor licenses in San Francisco county cost anywhere from $250,000 to $280,000. In the fall of 2019, these prices dropped about 30% to $190,000. However, with recent prices coming in anywhere from $220,000 to $250,000, De La Torre is optimistic about what this means moving forward.

Regardless of neighborhood, business owners who want full-sale liquor licenses have the same high price to pay. That is about the only thing they have in common, Sheehy says, as a neighborhood bar and high-traffic downtown bar provides two completely different experiences, though he notes the importance of both. Full-sale liquor licenses are always in demand, he says, leaving the future of neighborhood bars unknown if downtown rebounds as he predicts.

“The limitation on licenses- it frustrates a lot of people. But, I really think it is a system that works and it maintains a good balance. Every corner of San Francisco cannot have a license, and so you need to be a pretty good operator to be able to make it, because of the cost of doing business these days,” Sheehy said. “And of course, you cannot do it without these licenses, which are a very very valuable commodity, and the cost of these licenses is only going to go up as the economy comes back.”

Amy Coval is a San Francisco Chronicle staff writer. Email: amy.coval@sfchronicle.com Twitter: @amy_coval

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button