In the first quarter of 2026, sales tax in the Tenderloin is off to a slow start, but officials say the data may not be fully representative of how business in the neighborhood will play out this year.
In the first three months of 2026, sales tax revenue dropped by 40 percent to $1.02 million compared to the first quarter of 2025.
Although it remains slightly higher than the first quarter of 2024, sales tax revenue is still far below its prepandemic level when the city reported $2.12 million in the first quarter of 2019.
But officials with the Controller’s Office say that revenue from one quarter alone may not be representative of the neighborhood’s economic prospects for the year, particularly since many businesses in the area often file sales tax information late, or incorrectly.
During the pandemic, the Tenderloin experienced one of the steepest drops in the city’s 37 neighborhoods. By the end of 2020, revenue had fallen to less than half a million dollars.
The pandemic hit Tenderloin businesses especially hard, said Kate Robinson, the benefit district’s CEO, because many of them relied on foot traffic from workers at local government buildings.
“A lot of it was attributed to the lack of city, state and federal staff members coming into the office,” Robinson said. Larkin Street, the busiest Tenderloin street corridor, starts where San Francisco’s City Hall and other government buildings end. “Bar and restaurant owners really relied on happy hour, lunch time and dinner time meet-ups right after work.”
Since then, in the Tenderloin’s true underdog fashion, sales tax revenue in recent years has bounced back quicker than in other San Francisco neighborhoods. The jump in sales tax of 20 percent from $4.58 million in 2024 to $5.5 million 2025 was one of the biggest neighborhood increases that year.
And, Robinson said that even if it isn’t showing up yet in the sales tax data, targeted efforts to bring more small businesses into the neighborhood’s vacant storefronts appear to be paying off. Those efforts started in 2023.
Most recently, the Larkin Street Revival project aimed at neighborhood beautification and safety efforts, also launched with a $5 million donation from cryptocurrency billionaire Chris Larsen. It is run by the Tenderloin Community Benefit District, ands so far it has installed decorative security gates for storefronts on Larkin Street and added lighting across the corridor. It also subsidized Live on Larkin, a series of block parties, with live music and other activities, that started in May.
And only last August, Mayor Daniel Lurie mandated city workers to be in office at least four days a week. That is bringing some of the foot traffic back, Robinson said.
Government efforts to bolster business should also begin to pay off. In 2023, the city’s Office of Economic and Workforce Development began the Storefront Opportunity program, which doled out up to $50,000 to business owners looking to fill vacant storefronts. This year’s version of the grant is giving out up to $100,000 — and now offers additional support for businesses in high-needs neighborhoods.
The reason for the expansion, said Office of Economic and Workforce Development’s Small Business Programs Administrator Jossiel Cruseta, is that sometimes the property owners are unwilling to lease out a space to a business owner unless the would-be tenant has a business plan, and enough money to retrofit the space, said the Office of Economic and Workforce Development’s Small Business Programs Administrator Jossiel Cruseta. Helping a small business owner with both can pay off in the form of increased sales tax revenue in the future.
This summer, four businesses received Storefront Opportunity grants to open in vacant storefronts in the Tenderloin: Tender Noodle coming to 721 Larkin St. and Ruru Kitchen, coming to 448 Larkin St., Reggie and Maude’s, coming to 460 Larkin St. and Tender Heart Thrift Store which will take over 683 O’Farrell St. All of these are still in the process of opening.
Out of the last round of grant recipients, Falafelland on 265 Golden Gate Ave. opened in December, bookstore-coffee shop hybrid, Niebla, on 374 Golden Gate Ave. opened in mid-August, and Sheba, a Middle Eastern clothing and speciality-goods shop at 318 Turk St, opened on Sept. 18.
LibreTe, another grant recipient, is still in the process of opening its 583 Eddy St. location.
The Office of Economic and Workforce and Development also created small-scale grants to help existing businesses in the years immediately after the pandemic.
In 2022, the office doled out nearly $120,000 in grants to business owners who needed interior or exterior improvements.
“During the pandemic, so many businesses had their windows smashed and they couldn’t get ahead of that,” Robinson said. These businesses began boarding up their windows, turning away more potential customers.
OEWD has continued to dole out these small grants. In 2026, it set aside $1 million for this, doubling its investments from the prior year.
It’s too soon to see the impact of any of these grants in the Tenderloin’s sales tax data. But Robinson said she’s already seen the positive impact. For the first time since before the pandemic, Robinson said, she’s seeing lines out the door at iconic restaurants like Saigon Sandwich and more people visiting the new bars and restaurants on the corridor.
“A lot of people don’t know the greatness that exists here,” she said. “We’re just going to keep going.”
