Strategy

The greater the range of industries and sectors in a city, the better able it is to withstand economic shifts and disruptions. A diverse economy supports a wider variety of jobs accessible to workers with a range of skills and experience. San Francisco’s economy already includes a broad array of industries including finance and real estate, information and technology, healthcare, hospitality and entertainment, education, transportation, and more. We will bolster our existing businesses to maintain the strength of our economic foundation. As business models continue to shift, creating unprecedented office availability Downtown, we have a once-in-a-generation opportunity to recruit new sectors and businesses that will position us competitively for the future and add to our resilience. 

 The City has begun to advance a series of initiatives and will launch additional programs that support this strategy: 

• Support business recovery with ongoing tax relief and incentives in key sectors. 

• Explore business tax reform to adapt to shifting work patterns and make our tax base more resilient and competitive. 

• Complete a Competitive Industries Assessment to identify high-potential industries and supporting strategies.  

• Launch a business attraction campaign to bring new ventures in high-potential industries to San Francisco. 

• Continue attracting convention and business travel with the Moscone Recovery Fund. 

• Increase filming in Downtown to promote San Francisco’s image and develop the local film industry. 

 

Initiatives

 

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Tax relief and incentives

Downtown is grappling with high vacancy rates in its office market and ground floor storefronts as office tenant contract their physical footprints and the retail and service businesses that relied on office-generated foot traffic continue to struggle. 

• To support existing businesses still struggling to recover from the pandemic and attract new businesses to locate in San Francisco, Mayor Breed introduced new tax policy legislation in February 2023. 

• The legislation would extend Gross Receipts Tax relief for businesses in industries that were most impacted by revenue losses during the pandemic, including Retail Trade, Food Services, Manufacturing, Accommodations, Arts, Entertainment, Recreation and others. Under the legislation, these reductions, originally scheduled to expire in 2023 and 2024 would now go into effect in 2025 and 2026. 

• The proposal would also create an Office Attraction Tax Credit that provides a discount for new office-based businesses in the Administrative and Support Services, Information, Insurance, and Professional, Scientific, and Technical Services industries on their Gross Receipts Tax for up to three years through 2028. 

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Business tax reform

As Downtown evolves in the face of the shifting economic trends that have emerged following the pandemic, the City has an opportunity to adjust its tax structure in response.   

• In February 2023, the Mayor announced that the Controller’s and Treasurer’s offices will begin a comprehensive business tax reform process to explore a broad package of business tax amendments. These efforts will explore identifying tax adjustments that mitigate disincentives for in-person work, diversify the City’s tax base to reduce disproportionate dependence on a very small set of tax payers, stabilize the City’s finances, and allow San Francisco to better compete with its peer cities in attracting new businesses.    

• Adjustments identified through this process would be considered for inclusion on the 2024 ballot. 

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Competitive Industries Assessment

To prepare for the future, San Francisco must understand key trends and growth potential in various industries, what different industries might contribute to the city’s economy and range of job opportunities, and which sectors we are best positioned to attract. As we identify high potential industries that support the diversity and resilience of our economy, we must also know what aspects of San Francisco present advantages or challenges for these businesses.

• The Office of Economic and Workforce Development has commissioned KPMG and the Bay Area Council Economic Institute to identify high-potential industries where San Francisco appears most competitive, and identity best practices and recommendations that the City can employ to proactively recruit and attract these sectors. 

• Recommendations from this analysis are expected in summer of 2023.

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Business attraction campaign

Attracting new businesses and expanding the diversity of San Francisco’s economy will require proactive and coordinated efforts to recruit targeted businesses and sectors.

• The Office of Economic and Workforce Development will develop sector-based business attraction campaigns to target new or expanding industry sectors with a high potential for growth in San Francisco.

• The campaigns will be aimed at specific regions and entrepreneurs likely to start or expand their businesses to San Francisco through advertising within distinct markets that have strengths in our target sectors and activating influential channels and platforms to showcase San Francisco’s competitiveness to businesses in these sectors.

• The campaign is expected to launch upon the completion of the Competitive Industries Assessment in summer 2023.

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Moscone Recovery Fund

Conventions and the business travelers they bring to the city are a key part of San Francisco’s $10 billion tourism industry, and a boon to Downtown businesses - particularly the restaurants, bars and entertainment venues along with retail establishments that visitors support during their stay.

• In 2021, Mayor Breed announced $4.6 million in funding to support a return of conventions, conferences, trade shows and other large events to Moscone Center, San Francisco’s world-class convention center and host to Dreamforce, the annual Salesforce convention that is the largest annual software event in the world.

• The Moscone Recovery Fund covers the cost of reduced convention rates through 2024 to attract event organizers back to San Francisco, and is estimated to return up to 150,000 room nights of hotel stays to San Francisco, generating up to $173 million in direct convention spending and nearly $5 million in hotel tax revenue to the City.

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Increase Downtown filming

San Francisco’s Downtown has historically been a favorite for film and commercial productions – bringing economic activity to the city during shooting as well as promoting widespread interest from film viewers across the world.

• Film SF is developing new ways to market San Francisco and grow its brand. By activating local venues for film events and screenings, Film SF will invite more producers and others in the industry to San Francisco and generate increased interest.

• It will make it easier for filmmakers to choose San Francisco by connecting scouts to available real estate and shooting locations along with offering enhanced support in facilitating production activity.

• Film SF is also developing a strategy to help new film and media businesses make San Francisco their home to grow a locally-based film sector as part of the future for Downtown.

 

See our other economic recovery strategies

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