Nightlife major business for SF
by Matthew S. Bajko
San Francisco has long had an international reputation as a fun-loving city, and now city leaders have some idea of the economic boost nighttime entertainment provides.
The city's "other 9 to 5" economy is a major contributor to San Francisco's coffers, generating $4.2 billion in spending in 2010 and at least $55 million in tax revenue. The findings are part of an economic impact report the City Controller's office released this week.
"Nightlife is a major source of jobs and also an economic driver for the city," Ted Egan, the city's chief economist, told a Board of Supervisor's committee Monday, March 5 as he described the report's conclusions. "These types of businesses draw people to San Francisco and pump money into San Francisco's economy that otherwise wouldn't be there."
The data comes from restaurants, bars, nightclubs, art galleries, and live theater spaces that are open after 8 p.m. In 2010 there were more than 3,200 businesses that fell under the various categories, employing 48,000 people in San Francisco.
The bulk of the spending, nearly 80 percent, came from sales at restaurants. The controller's report pegged spending at such establishments at $3.2 billion.
Bars and theaters accounted for 8 percent each, while nightclubs contributed 4 percent. Spending at bars amounted to $240 million, while nightclubs took in $220 million.
Nightlife advocates heralded the report's release and view it as ammunition they can wield to fight back against policies that could negatively hurt entertainment businesses.
"We are thrilled with this study," said Alix Rosenthal, co-chair of the California Music and Culture Association, a San Francisco-based lobbyist group for the industry. "We can now put a finger on the tax revenue and jobs created by nightlife businesses."
Rosenthal told reporters at a press conference prior to the hearing that when politicians talk about "jobs, jobs, jobs" they should have entertainment venues in mind.
Jobs in the "other 9 to 5" could be higher, said Rosenthal, "if local and state leaders supported this industry."
District 8 Supervisor Scott Wiener called for the report last year shortly after he took office. A gay man who represents the Castro district, a major nightlife destination for locals and tourists, Wiener has staked out a role as a champion of late-night entertainment on the board.
Though he stressed that, "This report does not in any way provide justification for nightlife spots not being accountable. We can support nightlife and at the same time say everyone has to play by the rules."
At the news conference Wiener said he asked for the report so that politicians are not legislating entertainment "based on stereotypes," but instead are "making data-based policy decisions."
"The numbers are pretty stark," said Wiener.
He also added that he hopes the report sheds light on how zoning decisions "can have a dramatic impact on nightlife."
Wiener specifically pointed to the fighting over rezoning a portion of 11th Street as an entertainment district where housing would be a prohibited use.
"A plan for more housing there on 11th Street may end up driving out some venues," said Wiener. "That may impact jobs and all these other benefits."
But Jim Meko, a former member of the city's Entertainment Commission, told the Bay Area Reporter in an interview that the report's findings could undercut claims made by industry representatives about the economic importance of some late-night businesses.
He pointed to the relatively small slice of the economic pie that nightclubs contribute.
"I am not at all surprised nightclubs make up 4 percent of the spending," said Meko, a gay man who chairs the SOMA Leadership Council and supports seeing more housing along 11th Street. "Nobody should be surprised most of the spending comes from people out of town and that most of the money is spent in tourist trap areas. And most of that is done in restaurants."
Yet Egan said nightclubs play an important role in attracting visitors who live outside of the Bay Area. In surveys the controller's office conducted with people at various nightlife venues, 31 percent of tourists not from the Bay Area said nightclubs were their main reason for going out at night.
"It is an important contribution for what they spend in San Francisco and they spend more than San Francisco residents," said Egan.
The report found that, on average, tourists spend $206 per evening, compared to $120 for Bay Area residents and $70 for San Francisco residents. More than half of the $4.2 billion spent on nightlife came from people who do not live in the Bay Area, according to the report.
"If it wasn't for these businesses drawing in tourists and other Bay Areans, we would be losing that money," noted Egan.
The report did not break down patrons who answered the surveys based on their sexual orientation. But patrons at a number of LGBT venues, such as Castro nightspots the Cafe, Twin Peaks, and the 24-hour eatery Orphan Andy's, took part.
The bulk of the city's nightlife businesses are clustered in neighborhoods that have drawn LGBT visitors and residents for decades, from the Castro, Mission and South of Market to the Tenderloin, Polk and North Beach.
SOMA accounted for 14 percent of the spending detailed in the report, while the Mission, Potrero and Castro areas made up 8 percent.
"As a queer person, I know how important nightlife is culturally to us," said Glendon Hyde, a gay man whose drag persona is Anna Conda.
As the neighborhood representative on the city's Entertainment Commission, Hyde said his main focus is trying to bring residents and business owners together to solve problems. He hopes the reports findings show that nightlife is not something people "should fight against."
Wiener told the B.A.R. that the next step is to now review the city's various codes governing nightlife businesses and see what changes, if any, should be considered so they are "less byzantine."
And industry representatives are asking for additional reports to be conducted on the economic benefits that the city's various street fairs and festivals generate. They were not included in the report released this week since each would require their own study, said Egan.
The report does note that, "events and festivals generate a significant amount of economic activity for the city."
It pointed out that the Folsom Street Fair attracts between 350,000 and 400,000 people to the annual leather fetish event, with 40 percent of attendees coming from outside of the Bay Area.
"Folsom is a major driver on its own," in terms of economic impact, said Egan.
And a recent study done by San Francisco State University on behalf of Another Planet Entertainment estimated that the concert promoter's Outside Lands Festival generates $60.6 million in spending in the city.
"Nightlife was under attack and now street fairs are under attack," said Terrance Alan, a former entertainment commissioner and club owner.
An economic report looking at street fairs, predicted Alan, "would be very eye opening."
DJ and party promoter Tom Temprano, a co-founder of the popular Hard French dance parties, told the panel that the report also overlooks the important role nightlife venues play in supporting the city's vast array of nonprofits and community-based service providers. Most have lost significant public funding over the years and have received financial help from bars and nightclubs.
"As federal, state, and local governments have slashed funding, nightlife came out to contribute that back," said Temprano, whose party last weekend raised $1,000 for art supplies at a local middle school. "We are here to be good neighbors just as other businesses are."
The full report may be downloaded at http://co.sfgov.org/webreports/details.aspx?id=1394.