Latest news with #DanielLurie
Los Angeles Times
3 hours ago
- Business
- Los Angeles Times
There's one bright spot for San Francisco's office space market
SAN FRANCISCO — In recent years, San Francisco's image as a welcoming place for businesses has taken a hit. Major tech companies such as Dropbox and Salesforce reduced footprints in the city by subleasing office space, while retailers including Nordstrom and Anthropologie pulled out of downtown. Social media firm X, formerly Twitter, vacated its Mid-Market headquarters for Texas, after owner Elon Musk complained about 'dodging gangs of violent drug addicts just to get in and out of the building.' While the city remains on the defensive, one bright spot has been a boom in artificial intelligence startups. San Francisco's 35.4% vacancy rate in the first quarter — among the highest in the nation — is expected to drop one to three percentage points in the third quarter thanks to AI companies expanding or opening new offices in the city, according to real estate brokerage firm JLL. The last time San Francisco's vacancy rate dropped was in the fourth quarter, when it declined 0.2% — the first time since the COVID-19 pandemic, according to JLL. 'People wanted to count us out, and I think that was a bad bet,' said Mayor Daniel Lurie. 'We're seeing all of this because the ecosystem is better here in San Francisco than anywhere else in the world, and it's really an exciting time.' Five years ago, AI leases in San Francisco's commercial real estate market were relatively sparse, with just two leases in 2020, according to JLL. But that's since soared to 167 leases in the first quarter of 2025. The office footprint for AI companies has also surged, making up 4.8 million square feet in 2024, up from 2.6 million in 2022, JLL said. 'You need the talent base, you need the entrepreneur ecosystem, and you need the VC ecosystem,' said Alexander Quinn, senior director of economic research for JLL's Northwest region. 'So all those three things exist within the greater Bay Area, and that enables us to be the clear leader.' AI firms are attracted to San Francisco because of the concentration of talent in the city, analysts said. The city is home to AI companies including ChatGPT maker OpenAI and Anthropic, known for the chatbot Claude, which in turn attract businesses that want to collaborate. The Bay Area is also home to universities that attract entrepreneurs and researchers, including UC Berkeley, UC San Francisco and Stanford University. Venture capital companies are pouring money into AI, fueling office and staff growth. OpenAI landed last quarter the world's largest venture capital deal, raising $40 billion, according to research firm CB Insights. OpenAI leases about 1 million square feet of space across five different locations in the city and employs roughly 2,000 people in San Francisco. The company earlier this year opened its new headquarters in Mission Bay, leasing the space from Uber. OpenAI began as a nonprofit research lab in 2015 and the people involved found their way to San Francisco for the same reason why earlier generations of technologists and people pushing the frontier in the United States are drawn to the city, said Chris Lehane, OpenAI's vice president of global affairs in an interview. 'It is a place where, when you put out an idea, no matter how crazy it may seem at the time, or how unorthodox it may seem ... San Francisco is the city where people don't say, 'That's crazy,'' Lehane said. 'They say, 'That's a really interesting idea. Let's see if we can do it.'' Databricks, valued at $62 billion, is also expanding in San Francisco. Databricks in March announced it will move to a larger space in the Financial District next year, boosting its office footprint to 150,000 square feet and more than doubling its San Francisco staff in the next two years. It pledged to hold its annual Data + AI Summit in the city for five more years. The company holds 57,934 square feet at its current San Francisco office in the Embarcadero, according to CoStar, which tracks real estate trends. 'San Francisco is a real talent magnet for AI talent,' said Databricks' co-founder and vice president of engineering Patrick Wendell. 'It's a beautiful city for people to live and work in and so we really are just following where the employees are.' Several years ago, Wendell said his company was considering whether to expand in San Francisco. At the time, it was unclear whether people would return to offices after the pandemic, and some businesses raised concerns about safety and cleanliness of San Francisco's streets. Wendell said his company decided to invest more in the city after getting reassurances from city leaders. 'People are seeing an administration that is focused on public safety, clean streets and creating the conditions that also says that we're open for business,' said Lurie, who defeated incumbent mayor London Breed last November by campaigning on public safety. 'We've said from day one, we have to create the conditions for our arts and culture, for our small businesses and for our innovators and our entrepreneurs to thrive here.' Laurel Arvanitidis, director of business development for San Francisco's Office of Economic and Workforce Development, said that the city's policy and tax reforms have helped attract and retain businesses in recent years, including an office tax credit that gives up to a $1-million credit for businesses that are new or relocating to San Francisco. On Thursday, Lurie announced on social media that cryptocurrency exchange Coinbase is opening an office in San Francisco after leaving the city four years ago. 'We are excited to reopen an office in SF,' Coinbase Chief Executive Brian Armstrong wrote in response to the mayor's social media post. 'Still lots of work to do to improve the city (it was so badly run for many years) but your excellent work has not gone unnoticed, and we greatly appreciate it.' Santa Clara-based Nvidia is also looking for San Francisco office space, according to a person familiar with the matter who declined to be named. The news was first reported by the San Francisco Chronicle. Nvidia, which also has California offices in San Dimas and Sunnyvale, declined to comment. 'It's because of AI that San Francisco is back,' Nvidia Chief Executive Jensen Huang said last month on the Hill & Valley Forum podcast. 'Just about everybody evacuated San Francisco. Now it's thriving again.' But San Francisco still has challenges ahead, as companies continue to push workers to return to the office. While the street environment has improved, it will be critical for the city to keep up the progress. Lurie said his administration inherited the largest budget deficit in the city's history and they have to get that under control. His administration's task is to make sure streets and public spaces are clean, safe and inviting, he said. 'We have work to do, there's no question, but we are a city on the rise, that's for sure,' Lurie said. Times staff writer Roger Vincent contributed to this report.
Yahoo
a day ago
- Business
- Yahoo
SF mayor's $15.9 billion budget proposal includes layoffs, service cuts to address deficit
The Brief The mayor's $15.9B budget proposal calls for 1,400 job cuts in 17 city departments. There are no cuts to SFPD or sheriff's department officers in the proposal. $400 million would be set aside to offset potential drops in state and federal funding. SAN FRANCISCO - San Francisco Mayor Daniel Lurie announced his $15.9 billion budget proposal Friday for the 2025-2026 fiscal year, acknowledging that it includes difficult cuts to jobs and services which he says are necessary to address San Francisco's $817 million projected deficit for the next two years. "This is a painful budget, but I am hopeful and I am optimistic about our economic future in San Francisco," Lurie siad. Mayor Lurie says there are structural problems with the city's finances, that have led to the city using one-time funding as a stop-gap measure to pay for services, as businesses have left and tax revenues have fallen. "Any job loss is difficult. I take no joy in this, and yet, I was elected to make hard choices," Lurie said. Lurie's 150-page budget proposal calls for cutting 1,400 jobs from 17 departments. Most of those positions have been vacant for more than two years, but 100 of them are filled and would require layoff notices. The proposal has no cuts to sworn officers in the San Francisco Police Department or Sheriff's office. It also maintains funding for the Fire Department, District Attorney's office, probation services, and the Public Defender's office. It would cut $100 million to nonprofit providers and contractors. Funding would be maintained for a 'First year Free' program that gives incentives and support for small businesses, by waiving their fees for one year. Lurie's plan also calls for setting aside $400 million in reserve to offset potential drops in state and federal funding. "Close to $2 billion comes through from the Feds to San Francisco through Medicaid and housing and other forms. So it's a big risk," Lurie said. "I'm going to focus on what we can control and that is prioritizing clean and safe streets, making sure we are bringing business back, conventions back, tourism back." Lurie said he couldn't comment on the city's costly legal battle with AirBnB, which claimed in a lawsuit that it should receive a refund from the city for over payment of taxes. Lurie also acknowledged that the city was in a dispute with the Federal Emergency Management Agency over reimbursements and future funding. "We're going to fight for every dollar our city is owed. Whether it's at the state or whether it's at the federal level," Lurie said. "There was a report and an ask by FEMA. We're going through a process where we appeal that, and so that will take a number of months to find out." What they're saying Labor unions issued a statement Friday saying the city should be more aggressive in raising corporate tax revenues instead of cuts to staffing and services. "Essential service jobs should never be on the line. Jobs should absolutely not be cut. I think the Mayor needs to hold these large corporations accountable," Sarah Perez, the San Francisco Vice-President of IFPTE Local 21 which represents some 6,000 city employees. "At the moment we prioritize investments in permanent housing. he wants to shift that into temporary housing, more shelters. Shelters are more expensive," Anya Worley-Ziegmann, Coordinator of the People's Budget Coalition said. The SFPD Police Officers Association president Tracy McCray said she was glad Mayor Lurie appears to be upholding his campaign promises of prioritizing public safety and increasing the police ranks. The Sheriff's Office also said it was pleased with Mayor Lurie's budget plan showing no cuts to sworn police officers or Sheriff's deputies. "We were asked to make concessions to help support the City's financial stability, including the elimination of several professional staff positions. Some positions in our Records and Personnel Units are currently filled with deputies, who will now remain in those role," Tara Moriarty, a spokesperson to the Sheriff Paul Miyamoto, said. What's next The San Francisco Board of Supervisors Budget Committee plans to address Mayor Lurie's proposal at their June 11 meeting. "We will prioritize clean and safe streets while keeping people housed, fed, and cared for, including individuals living on our streets. We can do this while cutting wasteful spending, reducing our structural deficit, maintaining city services, prioritizing critical city services, and preserving essential workers," Budget Committee chair and Supervisor Connie Chan said in a statement. "We will fight and protect our community against attacks from the Trump administration." "We need to fix the structural deficit. That's a real thing and the mayor is trying to do that. And this budget doesn't get us there either. Deficits continue to grow in the 3rd,4th, 5th year going out," Rafael Mandelman, SF Board of Supervisors President said. Click to open this PDF in a new window.
San Francisco Chronicle
2 days ago
- Politics
- San Francisco Chronicle
Mayor Daniel Lurie proposes merger of two scandal-ridden S.F. departments
What once were two scandal-ridden San Francisco city departments will be one, if Mayor Daniel Lurie has his way. Included in Lurie's $15.9 billion annual budget plan he introduced Friday is a proposal to fold the Department on the Status of Women into the Human Rights Commission. Both agencies were the subject of high-profile scandals over the last year that led to the departures of their respective leaders. Lurie's official budget proposal said the combined entity would be called the Agency on Human Rights and it was intended to help 'improve outcomes for residents and grant recipients.' Consolidating the two departments would allow them to 'collaborate on community-facing grant services and their charter-mandated functions to defend civil rights,' the mayor's budget document said. The Human Rights Commission, the department that manages the city's social equity initiatives, oversees the Dream Keeper Initiative that former Mayor London Breed created to invest tens of millions of dollars in the city's Black community. But the department's former director resigned last year after news reports revealed problematic spending practices and highlighted her personal connection to the head of a nonprofit funded by the department. The Department on the Status of Women, meanwhile, has historically funded programs to fight gender-based violence but in recent years shifted to focus more on supporting women in politics. Its former director was removed in April following an administrative probe into a side job she held without making a timely disclosure and a contract her department awarded to a friend. The investigation found she had committed what Lurie called 'unlawful activities and mismanagement.' Lurie proposed folding the women's department into the Human Rights Commission as part of his plan to close the city's roughly $800 million two-year deficit, which must be reviewed and approved by the board of supervisors in the coming weeks. Details of the merger need to be worked out, but the two commissions that oversee the departments are expected to remain in place. Mawuli Tugbenyoh, acting director of the Human Rights Commission, acknowledged that the proposed merger was a 'significant change' but said it provided an opportunity to bring together two agencies with strong histories of advocacy. He said in a statement that there are 'no immediate changes to staff roles or day-to-day operations planned.' 'Over the coming weeks and months, HRC will work with staff across both departments to ensure we move forward together in a way that reflects our collective values, honors the expertise of our teams, and centers our shared mission,' Tugbenyoh said in his statement. He said his staff had already been through 'a year of enormous change and transition' and promised that 'we will navigate the way ahead with an eye on strengthening our ability to serve communities most in need." Officials from the Department on the Status of Women had not responded to requests for comment about the proposed merger as of late Friday afternoon. Lurie's office had no comment beyond the mayor's remarks about his overall budget plan, when he said he wanted to address the city deficit 'head-on.' 'A crisis of this magnitude means we cannot avoid painful decisions, and I am prepared to make those decisions,' Lurie said in his budget speech. 'We are doubling down on the core services that drive our economy, showcase the beauty and diversity of our neighborhoods, and enhance the quality of life for all San Franciscans.' At the Human Rights Commission, questions surfaced last year about then-Director Sheryl Davis' handling of the department after journalists revealed that she was living with the leader of Collective Impact, a nonprofit that was one of the biggest recipients of funding from the Dream Keeper Initiative. Stories also showed that the department flouted purchasing rules, revealed conflicts of interest and raised questions about whether Davis used her position to boost her personal brand. The stories led to Davis taking a leave of absence and Breed ultimately asking for her resignation, as well as an audit of the troubled department and the city canceling contracts with Collective Impact. Months later, the Department on the Status of Women was also enmeshed in scandal, after the Chronicle revealed that its director, Kimberly Ellis, had directed city funding to her friends and preferred organizations, including to a political group that later hired her as a consultant. After the Chronicle's investigation, Lurie asked the Commission on the Status of Women, which oversees the department, to remove Ellis. Ellis has denied the allegations as baseless and sued the city, arguing that she was the victim of a 'calculated campaign to remove her from office' for reporting misconduct by a subordinate.
Axios
2 days ago
- Business
- Axios
Lurie rolls out sweeping cuts in proposed $15.9 billion budget
Mayor Daniel Lurie plans on making steep cuts in order to close a massive deficit after unveiling the city's budget proposal on Friday. Why it matters: San Francisco has faced severe fiscal challenges since its pandemic-driven downturn. The big picture: Lurie's spending plan totals $15.9 billion in the 2025-2026 fiscal year and $16.3 billion in 2026-2027. State of play: His proposal prioritizes public safety at the expense of some city jobs and nonprofit funding, a move he said was needed to preserve core services that "drive the economy" and "provide clean and safe streets." Lurie's plan calls for downsizing the city's workforce by 1,400 jobs — of which 100 are currently filled — and cutting $100 million meant for nonprofits to stave off an $817.5 million two-year shortfall. What they're saying:"Here's the bottom line: we have to stop spending more than we can afford," the mayor said in a statement. "Unfortunately, in a crisis like this, there are no easy fixes. We are facing some incredibly difficult decisions." Between the lines: The proposal avoids any cuts to public safety personnel, such as police officers, firefighters and first responders. It also sets aside $400 million in reserves, including for potential litigation as the city navigates federal and state funding cuts. $75 million would go towards maintenance projects such as fire station repairs and pothole or curb ramp fixes, and $50 million would be invested in 22 technology projects, including a citywide data management system. Other priorities include maintaining street cleaning funding and a $90 million commitment over three years for homelessness services and interim housing. Lurie has also made an ongoing effort to tap into the private sector to help pay for some mental health and homelessness services, amid other initiatives, to reduce the burden on the budget. The other side: Labor groups and nonprofits lambasted Lurie for initiating layoffs and gutting community-based services for homelessness, food access and legal support, which could now face "total elimination," said Anya Worley-Ziegmann, a coordinator at the People's Budget Coalition, which is made up of 150 local nonprofits and public sector unions. "Difficult choices have to be made in unprecedented times, but the mayor is taking familiar routes: balancing the budget on the backs of working-class San Franciscans while protecting the wealthy and powerful," she told Axios in a statement. "It is unconscionable to ask frontline workers ... to pay for a budget shortfall they did not create," added Kim Tavaglione, executive director of the San Francisco Labor Council. The intrigue:
CBS News
2 days ago
- Business
- CBS News
San Francisco Mayor proposes cutting 1,400+ jobs to help close the $800 million deficit
San Francisco Mayor Daniel Lurie says he is going balance the city budget by cutting more than 1,400 positions a move unions say will hurt city services. The Mayor's Office said positions are spread over 40 different departments. The majority of the cut positions are vacant but the mayor's office said about 100 people spread over 17 departments will be losing their jobs. "Unfortunately, in a crisis like this, there are no easy fixes. We are facing some incredibly difficult decisions that will impact our workforce and nonprofit partners," Lurie said. "We have worked hard to limit those impacts and are grateful for the contributions and sacrifice of these dedicated public servants as we work to reclaim our place as the greatest city in the world." Four unions representing thousands of San Francisco city workers pushed back on the proposed cuts saying the mayor needs to demand more taxes from large businesses. "We are deeply disappointed that the mayor has chosen to cut crucial public services that San Francisco residents and small businesses rely on, rather than working with city workers on the pathway forward that we laid out five months ago," said SEIU 1021 President Theresa Rutherford. The office said there will be no cuts to sworn police officers. The budget does show an increase in police and fire department spending. City officials say that is due to a 7% pay increase and money for police overtime staffing. There will be cuts to civilian roles in those departments. The office said personnel cuts will save the city approximately $40 million. In addition to staff cuts Lurie said the city will be saving $100 million by bringing grants and contracts back to pre-pandemic spending levels. He also said they will be holding non-profits accountable for how they spend city money. "As we get our fiscal house in order, we are revisiting contracts across city government and bringing grants back in line with pre-pandemic levels. Going forward, funds will be allocated with the expectation of increased accountability and measurable results," Lurie said. Other key budget takeaways: 50% cut in the city travel budget $60 million reduction in FEMA reimbursements $400 placed in a reserve due to uncertainty around the federal and state budget $75 million for capital projects and maintenance The San Francisco Board of Supervisors will now provide recommended changes to the proposed budget. It is expected to be approved in July.
