Businesses from retail stores to major corporations have left California in droves over the past few years amid rising crime and skyrocketing drug use, costing the city up to $200 million a year.
San Francisco has witnessed significant increases in crime over 2023, with a 10% rise in homicides, a 14.7% rise in robberies and a 5.4% rise in motor vehicle thefts per data from the city’s police department. That increase, which has translated into large-scale larceny at storefronts in the city, often without police intervention, has led to many businesses closing their establishments in the city altogether.
On Thursday, telecommunications company AT&T announced that it would close its flagship store in the city’s Union Square shopping area, according the San Francisco Standard. While the company’s CEO did not explicitly cite crime as the reason for closure, AT&T’s departure makes it the 25th major company – joining other major retailers such as Whole Foods, the Cinemark Theatre, GAP, Nordstrom and Banana Republic, among others – to leave the shopping hub since 2020, which is known for retail crimes, according to the Standard.
Many businesses and business owners, however, have credited declining safety as the reason behind their exodus.
“If we feel we can ensure the safety of our team members in the store, we will evaluate a reopening of our Trinity location,” said a spokesperson for Whole Foods.
“Due to ongoing organized retail crime, we have made the difficult decision to close five stores across San Francisco,” said Walgreens.
Equity… thieves in San Francisco are robbing the last few remaining stores before they close down. pic.twitter.com/fXetvNazhR
— @amuse (@amuse) June 15, 2023
AT&T’s decision followed Monday’s announcement that the Westfield Shopping Center, a prominent mall in the city, would close after sales at the property fell by $157 million between 2019 and 2022, even as the company’s sales in California increased by 26% over that period, per CBS News. Occupancy levels at the mall also dropped to 55%, compared to 93% at U.S. malls nationally, as patronage declined amid crime levels.
“Everyone is [expletive] pissed. The mall has been in decline for a while now,” said a Cinemark employee to the California Globe. Speaking of the reasons for departure, a business consultant told the Globe that “[i]t could be crime, taxes, a bad lease, a mix.”
“[In San Francisco] we have lawlessness, we have youth without vision, without opportunity and they’re taking it out on the residents and the businesses…,” said Tom Wong, who owns a private security firm and recently relocated out of the city, to Fox Business.
Apart from its rising crime, San Francisco is one of the most expensive cities in the United States, with a cost of living that is 79% higher than the national average, per Bankrate, a fact often attributed to the presence of big technology companies in the city that leads to high inflation.
Companies have often pointed to the “safety of their employees” or “local business conditions” as the reason for their departure, while they are frequently the victims of mass thefts that have often been documented on social media, where many individuals run out of stores with large amounts of merchandise. In 2022, the city’s police department paid over $2.2 million in overtime to officers for enhanced patrols in the area, per the SF Chronicle.
Experts often point to the high cost of living in the city as pushing low-income workers into crime and homelessness, which has risen by 32% over the last decade, per the Heritage Foundation. Others cite progressive policies, such as unconditional cash stipends to the homeless and free housing programs, as exacerbating the crisis, per the Hoover Institution at Stanford University.
“Compassion is killing people,” said London Breed, the Mayor of San Francisco at a public meeting in May regarding crime in the city, referring to the city’s left-wing policies to deal with drugs and homelessness. She added that there was a “humanitarian crisis on our streets.”
In 2020, Democratic then-District Attorney Chesa Boudin announced that he would not prosecute “quality of life crimes” such as prostitution, public urination and public camping as part of his left-wing campaign platform, instead preferring “pre-trial diversion” efforts that seek to mitigate criminal behavior without jail. He was removed from office in a recall campaign in 2022 after property crimes increased rapidly, with new District Attorney Brooke Jenkins promising to crack down on crime.
Additionally, San Francisco Police Department officers often do not respond to petty crimes such as larceny and theft, citing budget constraints and the sheer number of complaints they face, per a Chronicle report in August of last year. It also reported that small businesses in the San Francisco Bay Area have had to spend in excess of $20,000 on enhanced security measures, which sometimes cost more than the items stolen, making it uneconomical.
The confluence of issues led San Francisco to be ranked by WalletHub, a consumer research group, as one of the “worst-run” cities in the United States in 2022.
The exodus of business and its causes are costing the city, which is expected to face a $1.3 billion deficit in 2028 due to a decline in property tax revenue, which is costing the city up to $200 million per year, per the Chronicle, relying on data published by the city. San Francisco has also seen its population decline by 6.3% between 2020 and 2023, the largest decrease in California over this period, per the World Population Review.
“It just [isn’t] the same city it used to be. In the 80s and 90s, there was still something to it. People were proud of the city, and while there was crime and everything, it wasn’t that big of a worry. You could also walk down the sidewalks, as no tents were there,” said Frank Russo, a business owner and fourth-generation resident of the city who left the city, to the California Globe.
Breed and Gavin Newsom, the Governor of California who once served as mayor and is from the city, have been contacted with a request for comment.
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