Matthew Lynn reports for The (UK) Telegraph, May 7, 2023:
San Francisco should be one of the best retail centres globally; an easy place to sell every kind of luxury good, fashion essentials and high end electronics. The money is there, as well as the people to spend it.
Yet this week, the department store Nordstrom announced it was shutting its locations in the city, joining a growing exodus of big name retailers. Household brands are in despair over the damage inflicted by an ultra-woke local government….
Nordstrom’s announcement was yet another blow for San Francisco’s battered retail industry. The company told employees it would not be renewing its leases at the Westfield Mall, nor at the Nordstrom Rack across the street, due to the “changed dynamics” in the city.
The “deteriorating situation in downtown San Francisco,” Westfield Mall told the Washington Post, has left both customers and staff unsafe.
The retailer is hardly the first to put up the “closing down sale” signs. The upmarket grocery chain Whole Foods has shuttered a flagship store; the H&M, Gap and Banana Republic have all left. While some British high streets risk becoming boarded-up wastelands, they could soon look positively vibrant compared to what used to be known as “the golden city”.
There is no great mystery here. Under its ultra-woke Mayor, London Breed, San Francisco has been testing out a wide array of faddish, progressive policies. In the wake of the Black Lives Matter protests, Breed was one of the first to jump on the “defund the police” bandwagon, cutting $120 million from the law and order budget.
Sales and corporate taxes have been pushed up. Homelessness has been tolerated right across the city centre. Motorists reportedly leave car windows and doors unlocked to deter overnight break-ins.
Last summer, a groups of business officials wrote to officials threatening to stop paying taxes if politicians failed to clear litter from the streets and stop people from openly taking drugs….
The quality of life has deteriorated steadily in San Francisco, not least for those who cannot afford to escape to the wealthier suburbs. Businesses are shunning the city, perhaps deterred by an increasingly unfavourable local tax, social and regulatory environment.
In 2021, foreign direct investment into new projects in San Francisco fell to their lowest level since 2009. And as shops close, real estate prices are tumbling. Let’s not forget that one of the big reasons the San Francisco based First Republic Bank had to be rescued was because of expected losses on property loans. The city is slipping into a vicious cycle of decline from which it is hard to see any exit….
There is a lesson in the closure of Nordstrom in San Francisco. It is one of the wealthiest places in the world. It has a per capita income of $160,000 (£126,000), according to figures from the Federal Reserve….
It is often complacently assumed that businesses will just take any amount of punishment so long as there are still customers with money to spend. You can push taxes up to any level you like, let crime run out of control, turn the streets over to vagrants, and impose as many virtue-signalling rules and regulations as you can think of, and they will stoically put up with it all because they need the market. San Francisco is a warning that that is simply not true.
There is always a final straw. That was true of Nordstrom and the golden city…. Ultra left local governments can destroy even successful cities – and once it starts it is almost impossible to reverse.