The Ground-Floor Window Into What’s Ailing Downtowns

Downtown San Francisco’s office buildings have been quieted by some of the highest vacancy rates and slowest return-to-office trends in the country. But when walking around the area, what makes it feel still so uninhabited is a different but related phenomenon downstairs from all those empty offices: the vacant ground floor.

It’s the windows with their shades tightly drawn, the phantom deli counters visible through dusty glass, the lingering signage for a Verizon store that doesn’t exist anymore. It’s the glum handwritten notes — “this location is closed” — and the brokerage signs trying to be cheery. Around nearly every corner, they’re seeking someone to lease 822 square feet of former coffee shop, or 5,446 square feet of empty bakery, or 12,632 square feet of what was once a Walgreens.

Like much of the office space above it, the ground floor will probably have to be reimagined in San Francisco’s business district and other downtowns that have long taken for granted a captive audience of commuting consumers. In fact, it will be hard to solve the problem upstairs without also solving this one. Because who wants to return downtown when its most visible spaces have been darkened, boarded up and papered over?

“There’s nothing worse than the butcher paper,” said Conrad Kickert, an urban design scholar at the University at Buffalo who studies storefronts and street life. “And only one step above that are these sad stickers with happy smiling people on them.”

These scenes have such an effect on us, Mr. Kickert said, because the vast majority of our interaction with architecture and buildings happens at the ground floor. It’s where we form our sense that a street is safe and vibrant, or that something doesn’t feel right. It’s where the city comes to life in its jumbled diversity: the cocktail lounge next to the dry cleaner next to the ramen shop, but also the financier next to the tourist next to the retail clerk.

The ground floor, ideally, is where we can be seen, and see so much.

“What do people like? They like to look at other people,” said David Baker, a San Francisco architect, citing a popular creed among architects and planners. “People sitting in there eating a burrito are much more interesting than even a good piece of art.”

A related truism: Walking down the street, you never see the empty cubicles on the 18th floor. But you can’t miss the closed burrito shop.

Filling so much empty ground-floor space may require cities to rethink what brings people downtown. It may force officials to change how they regulate buildings, and property owners to shift how they profit from them.

“The ground-floor restaurant or ground-floor coffee shop or bar should not be seen as the moneymaker for an office high-rise, but as a benefit to the community to serve anyone that comes downtown,” said Robbie Silver, head of the Downtown San Francisco Partnership. “That mind-set has not really happened yet.”

To the contrary, property owners may find a tax benefit in writing off vacant retail space. And they may be wary of lowering rents to fill those spaces, for fear of admitting to investors that a building’s profitability has declined.

Vacancies operate like a virus, though, Mr. Silver said. Each one makes it harder for surrounding businesses to stay afloat. And then empty streets undermine the sense of public safety, further driving pedestrians and retailers away.

In his district, 43 square blocks primarily covering San Francisco’s traditional financial district, Mr. Silver’s staff went door-to-door earlier this year and counted about 150,000 square feet of vacant retail. That’s a small part of the area’s 32 million total square feet of real estate. But it’s about a third of all the ground-floor commercial space.

In San Francisco and nationwide, traditional retail was struggling even before the pandemic with the rise of e-commerce. Many cities had also overbuilt ground-floor commercial space.

“You just can’t have healthy retail every inch of every corner of every city,” said Laura Barr, who leads the retail tenant and investor leasing business for CBRE, based in San Francisco.

Cities’ enthusiasm for retail had grown out of the perfectly reasonable idea that mixed-use buildings — commercial below, offices or housing above — have many benefits. They enable people to live and work above the things they need to buy. They can reduce all the driving that’s necessary when stores aren’t near homes or workplaces. And they can foster livelier streets than blank facades or parking garages do.

“I was one of those people running around the country saying ‘mixed use!’” said Ilana Preuss, whose consulting firm helps cities revitalize their downtowns. “The problem was we said ‘mixed use’ everywhere. And we spread it like peanut butter.”

That (and malls) helped give America more retail per capita than any other country. In retrospect, Ms. Preuss said, advocates and planners didn’t think enough about where they wanted people to actually gather. And while they thought about mixing uses vertically (an office on top of a restaurant), they didn’t consider it horizontally — a restaurant side-by-side at street level with office spaces, apartments and even modest manufacturing.

To fill vacant downtown storefronts now, cities will have to consider other such uses. Perhaps fewer coffee shops, and more health clinics, day care centers, university classrooms, live/work spaces and fabrication shops. Ms. Preuss today proposes filling vacant spaces with small-scale manufacturing that has the added benefits of paying more than retail and relying less on foot traffic. She doesn’t mean noisy factories, but people producing tangible things, like bottling hot sauce or roasting coffee beans.

Or maybe the empty storefront becomes something else entirely.

“What if there were just more public bathrooms?” said Kim Sandara, an artist living in New York. Or spaces for free cultural programming or city services, or artist studio space.

Some of Ms. Sandara’s art is on display in downtown Washington, concealing vacant storefronts. The business improvement district there asked artists early in the pandemic to submit pieces that could be reproduced over empty windows. One of Ms. Sandara’s pieces, “Chelsea’s Painting,” covers an empty noodle shop in abstract, vibrant blues and oranges.

“The first time I saw it in person, I felt such a grand joy,” Ms. Sandara said (a joyful painting is perhaps the highest form of the empty-storefront genre, well above the butcher paper and the faux-coffee-shop sticker). But of course the sight is bittersweet. “It feels very much like how the pandemic has felt since it started,” Ms. Sandara said. “We’re trying to find solutions that are hopeful, but the structure of things still needs work.”

For some of these alternative ideas to even be viable, cities would have to allow other uses where currently they require retail. They might have to give incentives to building owners, who typically prefer one 10,000-square-foot tenant on the ground floor over five small businesses dividing the same space. And building owners, as Mr. Silver suggested, may have to change how they view their economics.

Oliver Carr, a longtime Washington-based developer, said he no longer counts on turning a profit on the ground floor. He now views it primarily as adding value to the floors upstairs. A restaurant is worth keeping even at a loss, in other words, if it helps fill the offices above, or even boosts the rents there.

“Don’t get me wrong — if we can generate rent and profit on retail, we want to do that,” Mr. Carr said. “I’m just saying we’re typically not expecting it.”

Reimagining the ground floor would also require developers to treat it as more than an afterthought, or not just what can fit into the leftover space once the lobby, elevators, mechanical rooms and structural beams have gone in, said Jodie McLean.

“If we do the first 20 feet right, it will drive all the value upstairs,” said Ms. McLean, the chief executive officer of EDENS, which develops open-air retail and mixed-use projects that emphasize the ground floor.

There are signs that cities are starting to experiment, pairing vacant storefronts with pop-up galleries and businesses, courting college campuses, creating new grants and tax credits. Fundamentally, Mr. Kickert said, cities need to see the street level as less a place of transaction, and more one of interaction. And perhaps the people interacting aren’t buying anything at all.

That idea suits Ms. Sandara, whose art will hopefully come down one day, replaced by people inside, doing something. Just what goes into the space next will affect how bittersweet that moment feels, too.

“If it’s something that’s for the community,” Ms. Sandara said, “I’ll feel very happy that its era has ended and it’s served what it was supposed to serve.”

And if “Chelsea’s Painting” is replaced by, say, a Starbucks?

“It’ll just feel like, well, I had my time, I showed my work, some people experienced it. That’s nice.”