Author Archives: mteahan

SFO, Airline Carriers Key to Economic Growth

In today’s global economy, economic growth depends on successful and robust air transit that can effectively move residents, visitors and cargo in and out of our region and state. That is why the Bay Area is so fortunate that the San Francisco International Airport (SFO) and its airline partners have planned and invested in infrastructure and service expansions that are allowing for continued passenger growth and enhanced trade and commerce across the region. In fact, if current projections hold true, 2012 will set new records, giving significant boost to the Bay Area economy.

As the region’s largest airport – and the 8th busiest airport in the nation – SFO has made substantial renovations to increase capacity and deliver an unparalleled passenger experience. While many improvements have been made to runways, transit and other airport structures, the recent reopening of Terminal 2 (T2), housing Virgin America and American Airlines, has set the new gold standard for the passenger experience. T2 has won accolades for its sustainability, modern design and human touches that make it a first-of-its-kind travel experience unmatched anywhere around the globe.

Other important airport upgrades are still underway. Architects, planners and engineers are actively working on the renovation of Boarding Area “E” in Terminal 3 (T3) and the complete upgrade and modernization of Terminal 1 (T1), which is used by a number of carriers including Southwest Airlines. Later this summer, representatives from SFO will be joined by their counterparts with Federal Aviation Administration (FAA) to break ground for a new Air Traffic Control Tower, which will bring yet another sleek and iconic landmark to the airport.

These continuing improvements have paved the way for unprecedented service expansions which are fueling passenger growth. Today, SFO offers non-stop flights to more than 31 international locations on five different continents by 28 international carriers. Recent service expansions include new non-stop flights to London, Paris and cities throughout Europe, as well as added service to Dubai, United Arab Emirates, and Lima, Peru. The airport will soon offer more than 74 non-stop U.S. destinations on 18 domestic airlines.

United Airlines in particular is responsible for much of SFO’s passenger traffic, carrying 45 percent of all passengers in and out of the airport. The recently completed merger with Continental Airlines has expanded United’s schedule throughout the northeast United States, Central America and the Caribbean. Internationally, United Airlines operates 50 daily non-stop flights from SFO to 17 different cities. Domestically, United offers 450 departures every day and serves 65 non-stop destinations, with multiple daily flights to key business markets such as New York, Chicago, Los Angeles, and Houston. United continues to grow at SFO, including a new non-stop Washington D.C. flight to Reagan National, which begins mid-May.

As the Bay Area economy continues to rebound, there is no doubt that SFO and its airline partners are playing a key role in the region’s future economic growth. The Chamber applauds SFO Executive Director John Martin and his staff for their vision and commitment to our region’s airport. We thank the regional municipalities and transit agencies that continue to support SFO. And we salute the many airline carriers that continue to set the standard and help make SFO and our region world-class destinations.

Vote with the Chamber on November 8

San Francisco’s election season is now in high gear. Across the city, campaign materials are filling up mailboxes, newspapers are making endorsements and early voting has begun. With just over two weeks remaining until Election Day, the Chamber encourages our members – and all city voters – to read up on the issues and consider the economic impacts of the November 8 Local Election.

Several propositions on the ballot will have a lasting effect on the city’s economy. Chief among them are two proposals to reform the city’s pension system. Propositions C and D both attempt to control growing pension costs and employee health care obligations. While both measures are good intentioned, the Chamber has endorsed Prop C. It will save $1 billion over the next 10 years by capping benefits, raising the retirement age, increasing employee contributions and reforming oversight of health benefits. While Prop. D also has the potential to reap significant savings, it may violate state law and puts the city at risk for a costly legal challenge we simply cannot afford.

It’s unfortunate that voters have to evaluate two competing pension reform measures. Even more unfortunate is the fact that voting for both measures will NOT bring the best of both worlds. The proposition with the most yes votes will take effect because of how the measures were written. As a result, the Chamber encourages members to vote YES on C and NO on D in order to tackle our city’s pension problem, which is now consuming one out of every seven city tax dollars.

Another key issue on the ballot is the local sales tax. Proposition G will allow the city to impose a local one-half percent sales tax beginning in April 2012 to preserve vital public safety, health and human services. This measure comes after the expiration of the one percent state sales tax that was in effect earlier this year. Its passage will bring the city’s sales tax rate to 9 percent. The rate was previously 9.5 percent.

The Chamber does not take any proposal to raise taxes lightly. But after much dialogue and debate, the Chamber endorses Prop G. Before giving our endorsement, the Chamber worked aggressively to amend the measure to include a four-year rollback provision that ensures the city will revoke the tax if the state re-imposes its one percent sales tax. It is with this assurance that the Chamber can get behind this very difficult pill to swallow, which will help safeguard the city from the drastic impact the state budget crisis is having on San Francisco.

Other important measures on the ballot include a $531 million GO Bond to rehabilitate school facilities (Prop A), a $248 million General Obligation (GO) Bond for street repair (Prop B),  two good governance measures related to amending initiative ordinances and campaign consultant disclosures (Prop E & F) and  a school assignment initiative (Prop H).  The Chamber endorses all of these measures, which invest in our city, its families and the future.

While the Chamber does not endorse candidates, the mayor’s race is of critical importance. The next mayor will set the tone at City Hall and preside over negotiations with every major city union. The new mayor will also influence business tax reform, state budget realignment and key developments such as the California Pacific Medical Center (CPMC) rebuild and preparations for the America’s Cup. Many of our partner organizations do endorse candidates and we encourage our members to visit the websites of the Alliance for Jobs and Sustainable Growth and the Building Owners and Managers Association (BOMA) of San Francisco to get the business perspective on the mayor’s race.

San Francisco is at a cross roads when it comes to economic recovery. We remain a bright spot and stand to benefit from many recently-approved developments such as the Hunters Point Shipyard, Treasure Island, Parkmerced and several others. However, the upcoming election marks a critical juncture. We can either continue down a path towards jobs and economic growth, or lose our focus and slow the engines of recovery.

The Chamber encourages our members – and all city voters – to join us in voting for the measures and candidates that will create jobs and a better economic future for San Francisco. We invite you to view our Voting Guide and take it to the polls on November 8!

Early voting is available at the Department of Elections office on the ground floor of City Hall, Mon – Fri, 8 am – 5 pm and on Oct. 29, 30 and Nov. 5, 6.

Setting the Record Straight on the Central Subway

As cities across the nation vie for increasingly limited federal investments in transportation, San Francisco is close to securing a $942 million grant to complete one of its most significant transit projects – the T Line Central Subway extension. Unfortunately, this critical infrastructure project has been politicized in the heated mayoral race, unnecessarily putting significant mobility, economic and environmental benefits into question. It’s time to set the record straight.

The T Line Central Subway extension project will provide direct, rapid transit from the Bayview, Mission Bay and South of Market areas to the city’s dense downtown core and Chinatown. This fully-funded $1.6 billion project includes the Third Street T Line, four new transit stations and improved connections to Moscone Center, Yerba Buena and AT&T Park. It will also provide direct connections to BART, Caltrain and the future high-speed rail.

This once-in-a-generation project is an investment in our city’s future. In the short-term, the Central Subway has brought in nearly $90 million to local businesses so far and will create 30,000 jobs. The majority of these contracts are staying local, with more than $115 million already awarded to six local, disadvantaged and small business enterprises. An innovative trucking program is helping to ensure that 50 percent of all materials hauling for the project also go to local truck operators.

In the long-term, the investment will spark economic development along one of the fastest-growing urban corridors in the nation. According to new Census data, some 24,000 new residents have moved into the South of Market (District 6) area alone. An additional 10,000 housing units are planned at the Hunters Point Shipyard. And residential and commercial development in Mission Bay continues. As a result, the Municipal Transportation Agency expects the new rail line will accommodate 43,700 daily riders in its opening year and more than 65,000 in 2030.

Serving key convention and tourist areas like Moscone Center, Union Square and Chinatown, the Central Subway will also help to attract more lucrative convention business and organized travel to San Francisco. Generating $8.5 billion annually, visitor and convention spending is something we should all work to maintain and enhance for our city.

Recently, a few mayoral candidates seeking the spotlight have challenged the project calling it a “boondoggle.” They claim that the project’s costs have increased and that the new transit line will put a strain on Muni’s operating budget. These claims have since been publically debunked by multiple transit officials, community observers and media. The Board of Supervisors further validated the project with a new resolution affirming the city’s support for the Central Subway.

Now, nothing remains but the cold hard truth: San Francisco needs and can afford the Central Subway. Halting or redesigning the project now would only strain the city’s existing transit systems, cost $300+ million in lost and returned funding, and derail needed infrastructure that will accommodate the city’s growing population.

As a city that prides itself on its “Transit First” policies, it’s time to set politics aside and deal with only facts. The T Line Central Subway extension is not a “train to nowhere.” It is a fully-funded, sound investment that will enhance mobility, stimulate the economy and connect our communities for decades to come.

Progress on S.F.’s Economic Strategy

San Francisco is making progress on the economic development plan initiated seven years ago when voters passed Proposition I. Knowledge-based industries are growing. Experience industries continue to benefit from a healthy tourism sector. And investments in infrastructure are helping to drive future economic growth across the city.

This progress was the focus of the Chamber’s inaugural Forecast SF event hosted last week in partnership with the San Francisco Center for Economic Development. Deemed the city’s “job summit” by local media, the event brought together city and state officials with leaders from top Bay Area companies to discuss San Francisco’s economic horizon and the key industry sectors that will enable the city to sustain long-term prosperity.

One such sector is hospitals and health services. According to a new report unveiled at Forecast SF, the city’s hospitals and healthcare-related spending generate $15.3 billion annually and support nearly 99,000 jobs – approximately 18 percent of the city’s workforce. In addition to spending money on health-related wages, benefits and supplies, hospitals are responsible for 30,000 non-health related jobs and will create more than 47,000 construction jobs on upcoming retrofitting and expansion projects.

This is particularly important when you consider the city’s economic structure, which continues to grow jobs in information technology and professional/business services, but not in traditional blue collar industries. Wells Fargo Chief Economist John Silvia remarked at the event that this disconnect is making San Francisco an elite city which looks “a lot more like Paris and a lot less like Denver.”

The city can help address this divide in part through continued investments in infrastructure and tourism – two key components of its economic development plan. Investments in projects like the Moscone Center expansion and the America’s Cup will continue to make San Francisco a leading destination, attracting more than 16.4 million visitors each year who patron local hotels, restaurants, retail outlets and other businesses. Generating $8.5 billion in annual spending, tourism is also the single largest source of sales tax revenue for the city.

Indeed, San Francisco is making progress on economic growth, particularly when it comes to knowledge-based industries. But this does not mean our work is done. The city’s economic development plan rightly calls for tax and regulatory improvements to the local business climate. Governor Brown’s newly appointed Senior Advisor for Jobs and Business Development Michael Rossi suggested several potential statewide improvements at Forecast SF including the creation of a California “Department of Commerce” and a concierge-like system to attract new business to California.

The Chamber thanks the many employers, elected officials, advocates and residents who are working to grow San Francisco’s economy. We also thank the participants and supporters of Forecast SF: Wells Fargo, Catholic Healthcare West, California Pacific Medical Center, Degenkolb, Kaiser Permanente, Gensler, Lennar Urban, Microsoft, San Francisco State University and Webcor. San Francisco is making progress and it’s more important than ever that our elected leaders continue to focus on jobs and economic growth.

S.F. is a Bright Spot in Economic Recovery

As the nation’s economic recovery continues at a slow pace, San Francisco is a bright spot in region, the state and beyond. Recent indicators are encouraging, showing strong growth in key industries which are in turn creating jobs and moving the economy forward. This is good news, and we can keep the momentum going well into the future.

One critical measure of the city’s economic health is tourism, which generated more than $8.5 billion in spending last year. Thankfully, the 2011 summer tourist season did not disappoint. Activity at San Francisco International Airport hit a spring high with domestic air travel increasing 5 percent year-over-year. International flights have also seen a 6.5 percent year-to-date increase. This influx of travelers has given a needed boost to local hotels, restaurants, retail and other businesses. According to the City Controller, hotel occupancy, room rates and retail activity are all following positive trends.

The rapid growth of the high-tech sector is also giving a lift to the city’s economy. Commercial management firm Jones Lang LaSalle estimates the number of high-tech jobs in San Francisco will soon surpass the record of 34,000 set in 2000, accounting for 1 in 5 office jobs. Such rapid growth is fueling office occupancy, particularly South of Market. City-wide, vacancy is down to 13.6 percent in the first half of the year. Residential vacancy rates are also declining.

Although much of this success is driven by the high-tech sector, there is more cause for optimism ahead according to Dennis Conaghan, Executive Director of the San Francisco Center for Economic Development (SFCED). The recent Pow Wow event –which brought international tour operators to the city – will bring an estimated $350 million in international travel business to San Francisco over the next two to four years. The $56 million Moscone Center upgrade and renovation will be complete next July, helping to attract lucrative future convention business. The America’s Cup could draw up to 5 million spectators and generate more than $1.2 billion of new economic activity during the multi-year series of sailing regattas.

San Francisco is fortunate to have companies like Salesforce.com, Zynga and Twitter. These companies are actively planning for growth, adding new employees, expanding office space and deepening their engagement with the community. Saleforce.com announced plans to build a 14-acre campus in Mission Bay that could eventually house 8,000 workers. Thanks to the recently-passed Mid-Market Tax Exemption, Twitter will move into the San Francisco Mart building and may to add up to 2,600 jobs over the next six years. Zynga, and other high-tech companies, are also expanding.

Other current and planned construction will give further boost to the local economy. And while we have a long way to go to get back to pre-recession levels, construction cranes still dot the Mission Bay landscape and other areas. The city has broken ground on a new General Hospital. New land use approvals have been given to Hunter’s Point, Treasure Island and Parkmerced.

Economic growth does not happen by accident. San Francisco should be proud of the investments we’ve made and the good public policies we have adopted that have allowed our city to become a bright spot in economic recovery. The wind is in our sails. Now, we must keep the momentum going.

The Chamber will be discussing the city’s economic landscape and growth horizon at next Wednesday’s Forecast SF. Read more and register.

Read more and register: http://www.sfchamber.com/eventsprogs/events/forecast_sf/index.html

The Mayor’s Job should be about Jobs

The San Francisco mayoral race has gone from dull to dramatic this month with Mayor Ed Lee and Public Defender Jeff Adachi joining the slate of candidates vying to become the city’s next Mayor. Add to this dynamic, the fact that this is our city’s first truly competitive mayoral race to use public financing and Rank Choice Voting (RCV), and all bets are off when it comes to predicting who may occupy Room 200 come November.

Thus far, the media has largely focused on insider-politics and the “civility” of the race. Headlines of campaign banter have quite literally dominated the news the past two weeks. As our city continues to face lingering unemployment and persistent fiscal challenges, isn’t it time we shift the focus of the race to issues like jobs and the economy?

That’s exactly what happened Tuesday night at the Mayoral Candidate Debate hosted by the Alliance for Jobs and Sustainable Growth and broadcast by Comcast. Presented in partnership with the Chamber and other business and labor groups, the night’s discussion focused on job and economic issues such as the city’s business tax, pension reform and key developments like the California Pacific Medical Center (CPMC) rebuild and the Parkmerced project.

Thoughtful insights from the candidates were revealed throughout the evening. For example, when it comes to the city’s economic future, Board President David Chiu highlighted the need for wholesale business tax reform. Former Supervisor Michela Alioto-Pier suggested the city explore new job-boosting incentives, such as the successful biotech payroll tax exclusion. Former Supervisor Bevan Dufty discussed the decimation of African-American businesses and the need for a black agenda to help create jobs. Senator Leland Yee would like to assign case managers to businesses so that City Hall can better respond to potential problems before businesses decide to move out of the city.

Infrastructure and transportation were also recurring topics. City Attorney Dennis Herrera strongly advocated for the rebuilding of the city’s hospitals – especially (CPMC) – to meet seismic safety standards and to attract and retain an educated workforce. Mayor Lee came out against congestion pricing and suggested that programs such as SFPark and methods to incentivize public transportation use would be more effective in mitigating traffic. Assessor-Recorder Phil Ting said he supports Prop. B (The Street Repair Bond), but is still concerned the city is not setting aside enough revenue for maintenance. And nearly all the candidates expressed the importance of efficient transportation and pledged it among their priorities.

From condo conversion to family flight, Tuesday’s debate went beyond campaign pitch lines and engaged our leading candidates in a true dialogue about the issues important to our city. The Chamber applauds our business, labor and civic partners in the Alliance for Jobs and Sustainable Growth for organizing the debate. We also thank all the candidates who participated, and applaud them for making it a professional and thoughtful dialogue as voters begin to focus on the November election. Now, let’s keep the focus of this race on jobs, the economy and issues critical to San Francisco.

The Alliance for Jobs and Sustainable Growth Mayoral Debate is available on demand from Comcast on Hometown Network Channel 104.

Rethinking Professional Sports in the Bay Area

Now more than ever, the Bay Area needs a blueprint for a new generation of sports facilities that can meet the needs of all our professional teams and bring economic and community benefits throughout the region. The days of one-team, city-financed stadiums are long gone.  The future of professional sports lies in the creation of innovative, multi-purpose facilities that are developed with fans in mind, in partnership with the region, and with the strong support of the private-sector.

TheSan Francisco49ers will probably be the first Bay Area team to benefit from a “next generation” stadium.  While the team continues with plans to build its own stadium inSanta Clara, a shared 49ers/Raiders facility is looking more and more likely.  Serious discussions are now underway to bring the two teams together under one roof in a deal with the National Football League (NFL). Three cities –Santa Clara,San FranciscoandOakland– are actively putting plans in place to develop a state-of-the-art, joint-use stadium once a deal is inked.

What does the Bay Area have to gain from a shared football arena? Just ask the New York Tri-State Area, which last year opened the New Meadowlands Stadium in East Rutherford, New Jersey. The $1.6 billion joint-use stadium – home to the NFL Giants and Jets – is delivering economic benefits in its first year, and recently won its bid for the 2014 Super Bowl, estimated to bring in $550 million alone in economic stimulus. Seattle’s Qwest Field – home to the NFL Seahawks and Major League Soccer’s (MLS) Sounders – is another multi-purpose stadium delivering substantial economic and community impacts to the broader King County region in the Pacific Northwest.

But the Bay Area needs to think about more than professional football.  In a region that is home to 11 professional sports teams and more than 7 million people, we will need “next generation” facilities for basketball, soccer, and other sports. There are many possibilities. The Warriors could join forces with the Giants to develop a world class basketball arena nearAT&TPark. The antiquated Cow Palace could be demolished and the site used for tax paying residential and commercial development and many of its events relocated to the Oakland Coliseum Arena and other venues.

As the 49ers continue to move ahead with its plans for a single-team stadium inSanta Clara, the Bay Area is getting its wake up call when it comes to the future of professional sports.  Economic times, fan expectations and financing models have all changed.  It’s time for our region’s teams, mayors and other regional planning agencies to create a blueprint for a new generation of professional sports facilities that will benefit all Bay Area residents and communities for years to come.