San Francisco Chronicle

Recovery uneven for dining sector

City has more new restaurant­s in some neighborho­ods, with others lagging

- By Mario Cortez and Adriana Rezal

Nearly three years after the pandemic first wreaked havoc on San Francisco’s restaurant sector, closing old favorites and bringing new openings to a halt, has the city’s dining scene returned to pre-pandemic form?

Like the local weather, it varies by neighborho­od.

A November report by the San Francisco Controller’s Office pointed to restaurant­s as a bright spot in the city’s economic recovery, noting that the number of new restaurant openings across the city in October 2022 had matched pre-pandemic levels. That figure was cause for optimism among some restaurant industry experts.

“We have been heartened to see an uptick in new restaurant­s opening — a trend that reflects an optimism about the ongoing recovery in our community,” said Laurie Thomas, executive director of the Golden Gate Restaurant Associatio­n, an industry trade group.

But that recovery varied geographic­ally. In about a dozen, mostly non-downtown neighborho­ods, food business openings have indeed surpassed prepandemi­c rates, The Chronicle found by analyzing city business registrati­on data. But the city’s downtown core has lagged, that data also showed.

Those findings echoed a Chronicle analysis of Health Department data, showing which neighborho­ods had experience­d the most restaurant closures (as opposed to new openings).

To compare food business openings by neighborho­od, The Chronicle analyzed the city’s database of registered, tax-paying businesses, narrowing it to just the food service category (which includes restaurant­s, bars and other food service providers, such as catering companies or contractor­s).

Although the city’s downtown area — made up of the Financial

District and South Beach, the Tenderloin and South of Market — has seen a large overall number of registrati­ons, its overall recovery in 2022 trailed pre-pandemic figures. The Financial District and South Beach area had 110 new food service registrati­ons in 2022, down 25 percent from the pre-pandemic average of 147 yearly submission­s between 2017 and 2019.

The embrace of work-fromhome policies and delayed returns to office in San Francisco has made recovery in this central zone a relatively slow one for restaurant­s. “There’s a heck of a lot less people than there used to be,” said Thomas. BART data shows January’s expected ridership down 274,000 passengers compared with January 2019. On top of the lower foot traffic, area rent has remained high, Thomas said.

The Tenderloin had 56 new registrati­ons and was also down 25 percent from a pre-pandemic average of 75 registrati­ons. Neighborin­g SoMa was nearly level with its pre-pandemic average, seeing 83 new registrati­ons compared with an average of 76. SoMa was the only downtown neighborho­od to see more business openings in 2022 than its pre-pandemic average, at 83 and 76 registrati­ons, respective­ly — a 9 percent increase.

Downtown San Francisco is taking a harder hit with business openings in 2022 compared with non-downtown areas of the city. According to the data, the city’s downtown saw a nearly 16 percent decrease in business openings in 2022 from pre-pandemic times, whereas non-downtown areas had an average of only 12 percent fewer openings.

Still, some take the plunge into downtown. Eric Ehler, an alum of Pizzahacke­r and the Michelinst­arred Mister Jiu’s, moved his pizza pop-up Outta Sight into a permanent space in the Tenderloin in September of last year.

Ehler said rent in the neighborho­od is favorable compared with nearby areas, and business has been solid, with Civic Center workers and regulars popping in for a quick slice. “The community here is super strong, and we just want the area to thrive again,” he said. “The more (businesses) we have the stronger we will be. So it’s a risky investment, but it needs to be done.”

Despite loyal neighbors, Ehler admits, the shop has had to lean on delivery orders once foot traffic starts to wane.

Away from downtown, the Inner Richmond and Lakeshore neighborho­ods have notable opening numbers. The Inner Richmond had 30 new food service openings, a 38.5 percent increase compared with the 2017-19 average. Lakeshore, in the vicinity of Lake Merced, had 22 food service openings in 2022, up 26.9 percent from the pre-pandemic, three-year average of about 17 openings.

Predominan­tly residentia­l neighborho­ods have some advantages. “Sometimes you’re more inclined to go out to dinner in the neighborho­od because that’s where you are already,” Thomas said. Residents working from home and a dense base for deliveries through third-party apps are two boons for neighborho­od centric restaurant­s.

Cantina Los Mayas, a wine bar exclusivel­y pouring Mexican wines, opened in the Inner Richmond last year, when owners of the nearby Taqueria Los Mayas doubled down on the residentia­l neighborho­od. The good online buzz has helped bring in folks from outside the neighborho­od, which is always welcome.

“We get an interestin­g combinatio­n of people, and that’s fantastic, it suits us,” said wine director Joe Bonadio.

Quieter neighborho­ods far from downtown like Visitacion Valley and Portola show varied recoveries. Portola saw 11 openings in 2022, compared with seven in the 2017-2019 period. Visitacion Valley had five openings in 2022, matching its pre-pandemic period average.

The actual number of restaurant­s opening based on business registrati­ons is hard to track, as opening a restaurant in the Bay Area can prove difficult; a registrati­on filing is one of the earliest steps in opening a business, and might not point to a business that is yet active. A change in ownership can also trigger a new filing: The 42-year-old restaurant Magic Flute, for instance, registered as a new opening in 2022 when owner Joe LaCavera took over the business from his parents.

Farmers’ markets and other itinerant events can also bring the number of registered food service businesses up in residentia­l neighborho­ods. Vendors at these sometimes register at a market’s address, instead of their commissary kitchen or an owner’s mailing address. Such is the case for nine vendors at the Clement Street Farmers’ Market in the Inner Richmond, boosting the neighborho­od’s numbers.

Neighborho­ods seeing greater business activity than downtown might not just be limited to restaurant­s. Yelp data shows a nationwide threefold growth in activity in non-downtown areas compared with office-centric downtowns.

Still, the Golden Gate Restaurant Associatio­n was pleased to see the recent rise in overall opening figures, Thomas said. “We hope that trend continues throughout 2023.”

 ?? Stephen Lam/The Chronicle ?? Eric Ehler moved his Outta Sight Pizza restaurant into a permanent space in the Tenderloin neighborho­od in San Francisco’s downtown area last year.
Stephen Lam/The Chronicle Eric Ehler moved his Outta Sight Pizza restaurant into a permanent space in the Tenderloin neighborho­od in San Francisco’s downtown area last year.

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