S.F. is facing its worst fiscal crisis in decades. Heres the citys 41-point plan for recovery – San Francisco Chronicle

From keeping parklets on city streets to reforming permits and simplifying help for job hunters, a San Francisco task force put forward a broad-ranging set of recommendations Thursday to boost the citys economy.

The Economic Recovery Task Force proposed 41 recommendations in its final report on strategies to revive the economy during and after the pandemic. The group called for immediate aid to artists and small businesses and reiterated long-standing goals such as more affordable housing and economic support for minority communities.

But with the city in its worst fiscal crisis in decades, achieving the goals could be tough if they require new funding. The city resolved a $1.5 billion deficit on paper, in the current budget using money expected from Proposition F. Officials need voters to approve the business tax ballot measure next month.

In response to the recommendations, Mayor London Breed said the city will provide $1.6 million to help neighborhood businesses reopen and $200,000 in legal support to help businesses negotiate leases.

The city also will allocate nearly $6 million for artists and cultural workers, including a universal basic income program that pays $1,000 per month to 130 artists for at least six months, starting early next year.

Fees and taxes are waived for businesses that remain closed, such as entertainment and nightlife venues that cant hold large events.

Breed also hopes to promote housing construction through the deferral of some real estate development impact fees, which fund affordable housing and transit improvements. Real estate developers face declining office and apartment rents and weakening demand while construction costs remain high.

The fee deferral requires Board of Supervisors approval and could be controversial. Some supervisors have pushed for higher fees. Based on previous deferral programs, 85% of impact fees would be delayed from the first building permit issued to when a building receives its certificate of occupancy, which allows it to open. The average deferral period has been around two years.

San Francisco is only at the beginning of what we know is going to be a long road to recovery, Breed said in a statement. We need to continue to translate these ideas into action so we can get people back to work and get San Francisco moving forward.

The task forces recommendations include stimulating the local economy; creating jobs; safely reopening businesses; cutting regulations for more business flexibility; instituting economic justice for low-income residents; investing in housing; providing basic needs like food, shelter and mental health; and boosting neighborhoods.

The report detailed widespread economic devastation during the pandemic.

BART ridership plunged 88% as of late September compared to the prior year. The citys office vacancy rate soared to 14.1% in the third quarter, the highest in nine years, according to brokerage Cushman & Wakefield.

The shift to remote work has emptied out downtown, where long-term effects could be devastating. The virtual freeze of leisure and business travel has crippled the citys largest industry, tourism. Hotel occupancy was down 86% in September compared to 2019, according to San Francisco Travel.

The city, which collects a 1% sales tax, saw receipts of $30.8 million from April to June, a drop of 43% from the prior year, a steeper drop than in other major California cities. Restaurant and bar sales were down 65% and even food and drugstore sales were down 8%. Based on the tax decrease, the report said the citys population may be declining. San Franciscos online sales were up only 1% in the second quarter compared to the prior year, while other California cities saw major gains as people ordered more home deliveries.

This pandemic and the economic impact its had is really unlike any weve seen before, said Carmen Chu, co-chair of the task force and the city assessor-recorder. Were still in the middle of an active health challenge.

The report calls for reform of a construction permitting process that is notoriously complex and opaque, with 18 departments involved. It calls for flexibility in retail spaces, which overlaps with Breeds Proposition H on Novembers ballot, a plan to reduce permit review times and allow additional ground-floor neighborhood uses such as nonprofit offices.

Other goals include investing in public infrastructure to support construction jobs, streamlining building permits, improving city contracts with small businesses, more public-private partnerships, supporting child care providers and buying hotels and other buildings to house the homeless.

If demand falls permanently for office, hotel or retail space, the report calls for studying the conversion of buildings into housing or community space or other uses. It acknowledges the uncertainty and said the recommendation could have limited value if a vaccine leads to a return to previous demand. Converting commercial buildings could also hurt the job market, according to the report.

Chu said that its too soon to say whether buildings will be converted. We dont know what the long-term effects of COVID-19 will be, she said. Were going to have to be flexible and adapt as a city.

The task force, formed in April, included over 100 members ranging from business leaders, city officials, labor unions, nonprofits and religious groups.

The city has issued over 1,600 Shared Spaces permits to date, including many for outdoor dining, leading to parklets with seating built over parking spaces and other areas. The program will continue through the local emergency declaration and the city plans to extend elements of the program beyond that, but details havent been finalized.

The task force calls for extending the program through 2023, adding more arts and entertainment uses and expanding it through more street closures and use of parking spaces.

Even with widespread outdoor dining and the return of indoor dining, the outlook for restaurants remains bleak as they grapple with both a health crisis and economic challenges.

Cassava, a restaurant in the Outer Richmond, tried doing outdoor brunch for two weekends but stopped because of health risks with too many customers to manage, said Yuka Ioroi, a co-owner and member of the recovery task force. Some customers still oppose masks, she said.

The restaurant is allowed to do indoor dining but isnt taking the chance because it has a small space with 28 seats. None of our staff feel comfortable, Ioroi said.

Cassava seats customers outdoors in parklets made possible by a local designer who worked for free to support the restaurant industry.

Cassava received a forgivable Paycheck Protection Program loan for $67,000 and a $460,000 Economic Injury Disaster Loan, which must be paid off over 30 years, the equivalent of a mortgage, she said. The city reimbursed the restaurant $5,000 for sick pay.

The restaurant hasnt had layoffs but had to slash weekly working hours from around 35 hours to 20. Tips are also down, so the restaurant increased base pay to $20 an hour.

Ioroi supports permanent outdoor dining but said its an inconsistent revenue stream, particularly with ongoing smoke from wildfires. Its better than dying, she said.

Ioroi said that future aid needs to be more widespread. I dont think its just fair to focus on the restaurant industry, she said.

A nearby massage parlor has been closed since March, and its renters face eviction. Homelessness has worsened.

They need to be rescued first, she said.

Roland Li is a San Francisco Chronicle staff writer. Email: roland.li@sfchronicle.com Twitter: @rolandlisf

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S.F. is facing its worst fiscal crisis in decades. Heres the citys 41-point plan for recovery - San Francisco Chronicle