Despite continuing unhappiness about the center bike lane from businesses along the Valencia Street corridor, that eight-block stretch appears to be doing more business than anywhere else in the Mission District, according to data from the San Francisco Controller’s Office.
New data shows that sales-tax revenue in July, August and September of 2023 was up 3.2 percent, compared to the same months in 2022.
During the period in which the bike lane was installed — construction began in April, but it opened in August — businesses along Valencia sold more goods than they had during the same period the year before.
The data covers sales tax reports from businesses on 15th Street, where the center bike lane begins, to 23rd Street, where it ends. While Valencia saw a slight uptick, sales tax revenue on the identical stretch of Mission Street fell by 0.9 percent. For the entire 94110 zip code, sales tax revenue dropped by 1.9 percent.
The pilot bike lane project along Valencia has been controversial from the start, with businesses and others unhappy with traffic and safety issues, plus the loss of parking. The dissatisfaction and anger among local merchants has not abated.
When asked about the discrepancy between merchants’ experience and the sales tax data, Sean Quigley, the owner of Paxton Gate, said the shop did not see a measurable change in sales before or after the introduction of the bike lane, but sales for the entire year dropped by 13 to 15 percent, month over month.
“To me, [it] means something else is going on alongside the bike lane,” said Quigley. The decline in sales across the zip code would suggest the same. Mission Local has been tracking the economic impact of the bike lane, showing how sales-tax data from April through June of last year, during the bike lane’s construction, was down 6 percent, not the 30 to 40 percent claimed by some businesses. The new data, including July through August, is presented below.
There’s quite a lot left out of my interview with Mr. Mautner, which I did by email for this reason. Here’s my full answer to his question about sales along Valencia:
“At Paxton Gate we did not experience a measurable dip in sales before or after the introduction of the center-running bike lane. But, our sales were down for the entire year by 13 to 15% month over month which, to me, means something else is going on alongside the bike lane. Personally, I’d point to the “doom loop” scenario the national press fell victim to, describing San Francisco like some post-apocalyptic wasteland. Where really, those of us who work and live here, know that things aren’t nearly as bad as they were saying. This meant fewer tourists in restaurants and shops and less money being spent. For us, things changed in December with the first two weeks being scarily slow. Sales were about 20% below last December, but then the final two weeks leading up to Christmas ramped up with December almost matching 2023. In the end, for the year we were about 9% down, which almost felt like a win. I think some places have it worse than others. Destination stores might not have felt the hit from the bike lane as much as services or restaurants since those types of businesses might be available closer to home or in neighborhoods where parking and driving isn’t such a challenge. So, maybe Paxton Gate got hit with a notable drop mostly due to a reduction in visitors to SF in general, whereas other businesses got hit by that as well as locals not bothering to come to their space for a drink, meal, or a cup of coffee.
I’ve heard from business colleagues that their sales were down 20, 30, even 40%. Anecdotally, it seems to be impacting restaurants, bars and cafes more, but I’m really just guessing. ”
When asked about the sales tax data not aligning with what merchants were saying, I replied, “The only thing I can think of is that some sales are not being taken into account in those figures. Businesses who provide services don’t charge sales tax so will not show up in that data. I believe there are some to-go food or beverage options that also don’t include sales tax. Also, sales tax is paid in a variety of ways, so I’m not certain the timing of receiving it will align exactly with the dates of construction and the pilot. My understanding is that some business pay more frequently then others. Whether sales tax is an accurate measurement of how the bike lane is impacting business is certainly something worth looking into.”
— Sean Quigley, Paxton Gate.
I appreciate your effort to be as objective as possible. Too many people are being very strident in their opinions around what is happening on Valencia, and that is not helpful in understanding what is working or not. Thank you!
It is not only the national press presenting SF with a doom loop. We have locals who spending a fortune to oust our leaders who are doing the same damned thing. Not very helpful to the city they claim to care about.
That aligns with my theory: the Mission has historically depended on a large amount of non-local business to survive, the doom-loop press plus honestly the general inconsistency at night on safety has depressed numbers.
Wanna do even better?:
Existing merchants and commercial property owners: collectively fund cleanup crews (from the community) and frequently power-wash the sidewalks. Blast SF311 with requests for poop cleanup and sidewalk repairs. Most of the photos on ML show storefronts with graffiti.
Call out the landlords who are not interested in revitalizing the nabe, because they keep rent renewals or initial leases at ridiculously high levels (what ever happened to the concept of supply and demand?). Don’t chastise or threaten the landlords, simply print their names with available public info. Kindly encourage them to be buenos ciudadanos vecinos. Or ask them to sell their properties to people dedicated to improving the neighborhood for all.
Small business owners & entrepreneurs: attend business classes at City College to learn how to sufficiently capitalize a business, financially survive, provide top customer service and manage your employees well.
It is strange that we have been schooled in “supply and demand” for . . . centuries? . . . and all of a sudden, in the 21st Century, San Francisco real estate comes along and says “JUST KIDDING!”
I suspect that Prop. 13 has something to do with this. If your property taxes are perpetually at 1980 rates, you don’t have a fire under you to make sure you’re tenanted.
Supply & demand theory works great in a vaccum, on paper, ceteris paribus. The little problem is that in the real world, nothing is ever ceteris paribus.
Prop 13 and other tax-dodging benefits, the highly-illiquid nature and interest rate-dependence of real estate, the competition of organic (i.e. live-in) buyers and renters with volatile inorganic demand (speculators, REITS and private equity, foreign capital flight, short-term rentals, pieds a terre, etc., etc., etc.), make real estate “sticky”, which is an anodyne way of saying that supply & demand theory doesn’t do a very good or timely job of modeling real estate markets.
Neo-classical, marginalist microeconomic theory is a useful tool for businesses to manage their inputs, outputs, and pricing, but neo-classical macroeconomics is a hoax that has been used to justify the massive redistribution of wealth over the last forty years from the millions of workers who create it up to to a small number of powerful billionaire oligarchs who benefit from a miseducated populace.
Trickle down? Deregulation? Free trade? Market concentration benefits consumers? LOL, Americans, you been rolled.
The Mission District lost a lot of high income techies who used to spend freely at our restaurants and bars. Also, the neighborhood is perceived as dangerous and therefore doesn’t attract as many locals from the East Bay or tourists. j
I hear so many different languages being spoken by tourists in the Mission, they are coming. Though maybe not always to Mission st in particular. And when did the Mission lose all the tech workers who moved here and raised our rents to ridiculous rates in this “dangerous” neighborhood?
The sales tax data isn’t that great. My shop’s in-store sales took a giant shit so we’re working extra hard to make up for it with online orders, which still pay out the same sales tax but are way more work and expensive for us to fill. Some of my neighboring businesses have multiple locations who all report taxes from their main Valencia St location though their Valencia sales are way down while other locations are doing better.
I am 100% in support of protected bike lanes on Valencia, but I want the discussion around it based on reality and not misleading data
You commented on another post about sales tax revenue about your “online orders.” Most businesses on Valencia (and generally) do not have those. Restaurants do not (you’re obviously not referring to Doordash/Grubhub, but shipped sales), though they pay sales tax. I have trouble, as I picture businesses up and down Valencia, picturing many who have online sales. Maybe Self Edge. Not Cherin’s. Not Black and Gold, I don’t think. Not Veo. And so on. So maybe the “online sales” tack is not a relevant one to measure against.
If the bike lane isn’t the problem, I wonder if it could be a bigger issue with retail?
Valencia is not a cheap place to shop nor be in business. As one friend mentioned, they charge Rodeo Drive prices in a number of stores. Yet Valencia, much as we absolutely love it, is not Rodeo Drive.
High of doing business + lack of high-end clientele could be the issue.
A common theme among the commercial vacancies on Valencia, and on Mission, as well as the bourgeoning residential vacancies throughout the Mission: Rent Too High.
The sidewalk experience along Valencia is worse than I’ve remembered in decades. So much graffiti and trash. It’s unpleasant.
The Mission District lost a lot of high income techies who used to spend freely at our restaurants and bars. Also, the neighborhood is perceived as dangerous and therefore doesn’t attract as many locals from the East Bay or tourists. j
Look at the situation around each of the BART station entrances/exits along Mission St. It’s madness. I can protect myself reasonably well and don’t often feel unsafe, but the scenes at 16th/Mission and 24th/Mission are pretty scary. If people don’t feel safe using BART, then the neighborhood is going to lose a ton of business from people wanting to visit the area.
Are you from the suburbs? I do not get why so many fear BART. I mean, sure there is some nutty folks there, but to be afraid to go there? I don’t get it.
One way to increase sales is simply increase prices. Sales tax revenue doesn’t reflect the number of transactions. Only their total value. e.g. Awhile back after reading rave reviews, I visited Hila on Valencia. I saw single scoop was $12 and decided the usual “gourmet” supermarket ice creams would satisfy my desires.
The narrative on the bike lane was set before it even opened, and unfortunately it’s difficult to change a narrative once its set.
I’m a regular user of it and love it – much much x1000 safer than the previous ‘bike lanes’. Looks like its good for business too.
Terrible and weak arguments, anyone with a little sense of economy can debunk what this “Biker” is saying:
1- Numbers can be presented at the most convenient form to support your narrative. (3% increase doesn’t mean more business, how many stores were actually open during the same time period before the lane, as a Valencia resident I can confirm that we have new business opening in the last 12 months? Does it account the gigantic turnover that happen after the “pandemic”?)
2- it doesn’t take in to account inflation, which means: I use to buy a burrito at senor sisig that was around $12, now it costs me around $17, real inflation it’s higher that the data that is a formula that gives a average for the whole economy. That being said the price inflation on this item(food) was ~41% that applies for sales tax but doesn’t mean MORE businesses!
3- BIASED- you are a biker, you’re just trying to prove a point to force your agenda.
4 – Majority of people 70% use car as their mean of transportation, pay taxes(gas), registration and insurance. Bikers just use the road for free and complain.
The analysis here is incomplete, like a high schooler did it. A couple of key points:
“Valencia Street corridor, that eight-block stretch appears to be doing more business than anywhere else in the Mission District”
This is not saying much. The entire Mission District is economically depressed due to anti-growth culture and policy.
“sales tax revenue in July, August and September of 2023 was up 3.2 percent compared to the same months in 2022.”
Inflation was 4% during the same time period. So sales tax revenue is actually down, not up.
As Mr. Quigley said, sales tax is not be an accurate reading of the health of a businesses, although it is important to the city. A 3.2 % increase may not cover the cost of living increase during that time. Soaring rents and other expenses demand higher profits just to break even. Companies can lay off employees or cut back on hours to boost profits, but that doesn’t mean the business is healthy.
If you have to use revenue to cover cost of living increases, it’s not profit. Profit is what’s left after your various expenses.
I wonder why rents would “soar” along a commercial corridor when the claims of decreased business would make owners reluctant to sign a new lease and potential owners wouldn’t want to move into a place where there’s a huge drop in business for along the corridor.
Maybe the “info” provided is wrong. Plus, if rents are soaring, the business owners should blame (or at least detail) that rather than the loss of a few parking spots.
Rents aren’t necessarily soaring now; rents have been excessively high since the wave of tech-fueled gentrification started in the late ’90s. Lots of neighborhood-serving businesses on Valencia closed as a result of the high rent because they couldn’t pass the rent increases on to their customers. As they closed, there arrived a wave of businesses catering to high-earning techie transients who didn’t think twice about waving their phones over the Square pad for their $12 boba smoothie. That cohort is now dribbling away to other cities in search of jobs, more affordable rent and cost of living, or a just respite on the parents’ basement couch while waiting hopefully for the next tech bubble to emerge. As a result, the Mission businesses that were able to pay the inflated rent are now feeling the pinch that the remaining neighborhood-serving businesses have been feeling all along.
Has inflation been considered in the calculation?Has the number of empty stores been considered?Has the number of transactions been considered?Has the number of parking tickets been considered?Has the average amount per transaction been considered?Has the number of non local patrons been considered?I do not care if a bike rider ‘feels’ safer.No parking, no sale for me.