State legislation to add new liquor licenses in downtown San Francisco will increase momentum to the city's economic recovery, lawmakers hope. The bill, introduced by gay state Senator Scott Wiener (D-San Francisco), would create 20 new liquor licenses in a new hospitality zone to cover the areas around Union Square and Moscone center.
At a February 18 news conference announcing Senate Bill 395, Mayor Daniel Lurie, who is sponsoring the state legislation, also committed to supporting an entertainment zone in the LGBTQ Castro neighborhood – the result of a separate measure from Wiener to allow alcohol sales for outdoor consumption at special times. (See related story.) It needs to be approved by the San Francisco Board of Supervisors, which is expected to vote on it next month.
"We're going to work with Rafael Mandelman, board president on that," Lurie told the Bay Area Reporter. "It's in the early stages, but I'm very supportive and look forward to working with him on that."
Mandelman represents the Castro as District 8 supervisor, in addition to being president of the board. There are already three entertainment zones designated by the city – on Front Street in the Financial District, Thrive City by the Chase Center, and Cole Valley.
It's hoped a Castro entertainment zone would allow bars to sell liquor to be consumed outdoors at events like the annual Castro Street Fair and the new Castro night markets. The next such event will take place the evening of March 21, per the website.
The downtown hospitality zone covered under SB 395 is something different, however. Last week, Lurie announced the creation of a task force to improve safety and economic recovery from Union Square to the Moscone Center. Lurie spokesperson Charles Kretchmer Lutvak told the B.A.R. that for this legislation, "the idea is to look at" the boundaries the task force is currently using – which are Folsom Street on the south with Second and Fifth streets as the boundaries south of Market Street, and Kearny Street on the east, Bush Street on the north, and Mason and Taylor streets on the west north of Market.
That places the hospitality zone one block at its closest point to the Leather and LGBTQ Cultural District, which showcases several queer bars and nightclubs in the South of Market area. LGBTQ bar Ginger's in the Financial District borders the hospitality zone, as it is just east of Kearny Street. The proposed zone is also adjacent to the boundaries of the Transgender District.
Once a county's allotment of liquor licenses is exhausted, as San Francisco's has been for eight decades, according to a news release from the mayor's office, the only way to acquire one is on a secondary market, where they can go for hundreds of thousands of dollars. Wiener's bill would allow new bars to open if located within the boundaries of the hospitality zone.
The Department of Alcoholic Beverage Control would be authorized to issue up to 20 new, on-sale liquor licenses within the district if the bill is passed by the legislature and signed by Governor Gavin Newsom, himself a former San Francisco mayor. The license fee would only be $20,000. The department stated to the B.A.R. February 18 that it "does not comment on pending legislation."
A Wiener spokesperson stated that they haven't engaged with the ABC yet, but will do so "later in the legislative process."
"Our office sees a strong pathway forward for this legislation," the spokesperson stated.
Entertainment Commission President Ben Bleiman, founder of the SF Bar Owners Alliance, said during the news conference that prohibitive costs of liquor licenses have stymied bar owners who might have wanted to open up downtown.
"A lot of our best nightlife, a lot of our best restaurants and hospitality and clubs, they actually don't start downtown or [in] SOMA," Bleiman said. "They start in the outer neighborhoods all over the city, but a lot of those operators have felt priced out from downtown. It's really hard for them to get a foothold here, and I expect that many people who kind of thrive in other areas of the city will take a look at this and say now is my chance to move down here."
An owner of several San Francisco bars, Bleiman said, "If downtown is the circulatory system, Union Square is the heart. As Union Square goes, the entire system kind of is dependent on it."
Bleiman spoke to the need to reinvigorate the downtown area, which has not fully recovered from the COVID pandemic lockdowns. The streets, bereft of office workers, many of whom are still working from home, highlighted open-air drug use and sales in the eyes of the public and the media. Combined with issues concerning car break-ins, and organized retail theft, businesses began an exodus. According to a report from the Institute of Governmental Studies released in 2023, downtown San Francisco ranked last among 62 North American cities in recovering from the pandemic. A more recent report from the institute found San Francisco was No. 11 in its improvement on the number of visits from May 2023 to May 2024 after that number rose by 15%.
The city Controller's office reported last month that for the first time since 2020 the office vacancy rate dropped, albeit "slightly." The job market grew 1.4% from October to December 2024 and regular visits by employees rose – but the formation of new businesses and "occasional visits" trended downward.
Just before Ginger's re-opened last year, the LGBTQ nightclub Club OMG in the Sixth Street corridor shuttered.
"It brings a ton of economic activity – tax dollars that get spread around the city – and also a vibe," Bleiman said of downtown. "It's energy, it brings people, it brings all sorts of intangible things. ... Nightlife, entertainment, performance, art are not going to be a crucial part of re-envisioning downtown. They're actually going to be the main driving force because without them people are simply not going to want to visit downtown."
Lurie is continuing the efforts of his predecessor to change the perception of downtown San Francisco. Numerous speakers at the news conference touted the holiday weekend confluence of the Lunar New Year parade and the NBA All-Star game as a massive success – and indeed NBA Commissioner Adam Silver stated on the mayor's very active social media over the weekend that the city is experiencing a "renaissance" and a "sense of optimism."
"I've sensed more energy these last several days here than I've experienced in a long time," Silver stated.
Wiener quipped the weekend was such a whirlwind that, "I was exhausted looking at his [Lurie's] social media, between the All-Star game and, from my perception, the largest crowd for the Chinese New Year parade I've ever seen."
"San Francisco is back and is getting stronger and stronger by the day," Wiener said. "We need to continue to build on the progress we have made and we know that downtown, the Financial District, Union Square, South of Market, Yerba Buena, is absolutely essential for San Francisco's recovery, for our economic vitality."
Lurie said that he hopes legislation like SB 395 will make busy, fun times for visitors and residents alike more common.
"Every time I visited the streets were packed and teeming with people," he said. "To get our economy going again, all of downtown needs to be at full strength, and this weekend was a great way to get people here. Now, today, we are taking the next step with permanent solutions for this neighborhood."
District 3 Supervisor Danny Sauter, who represents Union Square, said that he's "really proud to support this effort."
"I see it as the next piece of the puzzle to bring Union Square back," he said. "On my way over here today, I saw many of those pieces in action. We have ambassadors who are working to keep this neighborhood friendly and safe, we have our SFPD here with a concentration in the new hospitality zone. I was told about 200 days of programming now in Union Square, bringing people back into this square, giving people more reasons to come here."
District 6 Supervisor Matt Dorsey represents the south side of the hospitality zone by Moscone Center. He was not at the news conference and declined to comment when contacted by the B.A.R. February 18.
Updated, 2/19/25: This article has been updated with more on the process with the ABC.
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