Concerns escalate over San Francisco's rising crime hurting business

There are concerns San Francisco's rising crime is negatively impacting the city's businesses.

Hamid Moghadam, the CEO of the San Francisco-based real estate company Prologis, was robbed outside his home at gunpoint in broad daylight in June. He subsequently sent a letter to city and state officials about the incident. The letter, viewed by FOX Business, called for government leaders to take "action around crime in our city."

"It is now difficult for me to tell potential candidates that they should move to San Francisco," he wrote. "We pay some of the highest taxes, local and state, in the nation, yet we have no sense of security. 

"Protecting public safety should be the government's top priority — that is the foundation of a successful city. Only in a community where people feel that they and their families are safe will jobs and culture flourish."

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Moghadam, who is also on the board of directors for the Bay Area Council, added he was "deeply concerned" the city "may be so far down the path toward decline that we may never recover — or at least not for a long, long time." 

The total number of crimes in San Francisco through Sept. 18 rose 8% from last year, according to statistics from the San Francisco Police Department. Crimes in the city that have seen increases from last year include rape, robbery, assault, motor vehicle theft and larceny-theft.

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Moghadam has concerns about the safety of his employees and the possibility of companies being driven out or deterred from moving to the city, he recently told KPIX.

Bay Area Council CEO Jim Wunderman told FOX Business one of the reasons workers in the city don't want to return to the office from remote work is the "perception around crime."

"It's not the only thing, but it's one of the things, and so as we think about getting a vibrant economy back that we want to have here, we're going to have to address the crime issue," he said.

Wunderman said he thinks there's a perception "almost anything can happen anywhere. And you can be walking down the street doing your own business, and you can be accosted by someone." He said he thought that "image" was "overblown" and "overplayed" to some extent.

"I get all kinds of San Francisco jokes when I travel the world," Moghadam told KPIX. "It's almost embarrassing, and that's the perception. And that affects tourism and convention business."

In late August, the Castro Merchants Association called upon city leaders to "take action" on crime, homelessness and other issues affecting the San Francisco district, threatening to stop paying taxes and fees, according to the San Francisco Chronicle.

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Wunderman said crime is "on the minds" of the city's businesses and the public.

"I know it's not unique to San Francisco or the Bay Area, but it's not at a level that's acceptable to us, and we need to work on ratcheting it down," Wunderman said. 

The San Francisco mayor's office told FOX Business that Mayor London Breed is "focused on making San Francisco a place where people want to live, do business and work." The office pointed to Breed's budget, which included funding to fill 200 police officer positions, and new regulations meant to curb the stolen goods market and give police better access to live footage for investigations.

Breed also appointed District Attorney Brooke Jenkins, who is "taking a more aggressive stance on public safety, including holding repeat offenders accountable, targeting open-air drug markets and addressing theft," the mayor's office said.

The city's homicide rate remains "near historic lows," but there is still a "lot of work to do on property crime and other public safety issues," according to the mayor's office.

Additionally, Breed has funded a study by the Bay Area Council and KPMG to research the impacts of the COVID-19 pandemic on the downtown area that the mayor's office said will "lead to recommendations for actions San Francisco can take in order to support its economic health, including strategic sectors to recruit." They said they are also looking into possible incentives and tax structures that could be amended.

"Our work is ahead of us to reinforce the image of San Francisco as a safe, clean, desirable, fun city, and some of that has been eroded," Wunderman said. "If we don't, then I think it's going to have a future impact on business in San Francisco and in the region too.

"At the end of the day, this is still a really great place," he added. "Our job is to ensure the problems we do have get addressed, and that's what we're doing."

Business leaders in other cities have raised concerns about crime.

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In a speech Wednesday at the Economic Club of Chicago, McDonald's CEO Chris Kempczinski said rising crime and other challenging economic conditions have made attracting employees to the Chicago-based company more difficult. He said crime has also made employees hesitant to report to the office and helped drive other companies from the city.