City Hall’s ‘incredibly hard’ budget is done. Here are the winners and losers

Following months of tough negotiations at City Hall, the San Francisco Board of Supervisors on Tuesday approved Mayor Daniel Lurie’s <a href="https://sfstandard.com/2025/05/30/san-francisco-budget-daniel-lurie-deficit-proposal/">$15.9 billion budget</a>, which required major belt-tightening to close a historic $782 million deficit.&nbsp;



The financial plan reflects <a href="https://sfstandard.com/2025/05/30/san-francisco-budget-screwed-lurie/">some of the most significant cuts</a> to San Francisco’s budget in nearly two decades, when the Great Recession decimated City Hall’s coffers. Lurie, a political neophyte who rose to power on promises to curb irresponsible spending, slashed nonprofit contracts, department budgets, and some city jobs.&nbsp;



The Board of Supervisors, which added several politically moderate members after last year’s election, navigated tricky waters in an effort to avoid the most painful cuts. Unions and community groups fought back against the austerity measures — to limited success.



Several of the board’s progressive members joined forces with moderates in a 10-1 vote to approve the budget. Lurie has until Aug. 1 to sign it.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" height="1668" width="2500" src="https://content.sfstandard.com/wp-content/uploads/2025/01/supervisors-fighting-for-presidency-a-black-horse-wins_aar_28.jpg?w=2500" alt="A woman with long dark hair and gold hoop earrings is seated in a formal setting, looking to the side attentively. A gold thermos and sanitizer are visible." class="wp-image-353124" srcset="https://content.sfstandard.com/wp-content/uploads/2025/01/supervisors-fighting-for-presidency-a-black-horse-wins_aar_28.jpg 7433w, https://content.sfstandard.com/wp-content/uploads/2025/01/supervisors-fighting-for-presidency-a-black-horse-wins_aar_28.jpg?resize=300,200 300w, https://content.sfstandard.com/wp-content/uploads/2025/01/supervisors-fighting-for-presidency-a-black-horse-wins_aar_28.jpg?resize=768,512 768w, https://content.sfstandard.com/wp-content/uploads/2025/01/supervisors-fighting-for-presidency-a-black-horse-wins_aar_28.jpg?resize=2500,1668 2500w, https://content.sfstandard.com/wp-content/uploads/2025/01/supervisors-fighting-for-presidency-a-black-horse-wins_aar_28.jpg?resize=1536,1025 1536w, https://content.sfstandard.com/wp-content/uploads/2025/01/supervisors-fighting-for-presidency-a-black-horse-wins_aar_28.jpg?resize=2048,1366 2048w" sizes="auto, (max-width: 2500px) 100vw, 2500px" /><figcaption class="wp-element-caption">Supervisor Jackie Fielder emerged as a vocal critic of the mayor&#8217;s budget proposal.</figcaption></figure>



Supervisor Connie Chan, who received accolades from the board and Lurie’s office for steering the negotiations as budget chair, said during the vote that the spending plan is not “something we all can fully celebrate.”&nbsp;



“But we must acknowledge how we have come together despite our differences to meet this moment,” Chan said.



Supervisor Jackie Fielder, a freshman lawmaker who has emerged as the board’s progressive leader, cast the sole “no” vote against the budget, saying it&nbsp;included cuts to programs that&nbsp;serve the city’s most vulnerable.



&#8220;For all these reasons, I cannot in good conscience vote in support of this budget,&#8221; Fielder said. &#8220;And I will be voting no — with disappointment, with frustration, but also with clarity about the kind of city we are fighting to become. We owe our residents more than austerity. We owe them dignity.&#8221;



Here’s a look at the winners and losers.&nbsp;



<h2 class="wp-block-heading" id="h-winner-with-caveats-mayor-daniel-lurie">Winner (with caveats): Mayor Daniel Lurie</h2>



Lurie entered the mayor’s office as budget <a href="https://sfstandard.com/2025/01/23/daniel-lurie-san-francisco-mayor-budget-cuts/">cutter-in-chief</a>. He didn’t get everything he wanted in the final budget deal, but the reduced spending is undoubtedly a small win for the mayor.



Lurie’s trims mean less funding for the network of <a href="https://sfstandard.com/2025/06/05/daniel-lurie-budget-cuts-san-francisco-nonprofit-grants/">nonprofits</a> that provide a variety of services to San Franciscans. In a hard-fought battle, the mayor successfully <a href="https://link.sfstandard.com/view/65c28f2e664d5a5d7e0849a8o1rqy.2h1/aba0897b">diverted some money</a> from a 2018 voter-approved proposition intended for homeless services to instead fund his goal of building shelter beds. Lurie was able to <a href="https://sfstandard.com/2025/06/26/san-francisco-mayor-daniel-lurie-layoffs-negotiation-budget/">get some of his requested layoffs into the budget amid pushback</a> from certain supervisors and unions.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" height="1667" width="2500" src="https://content.sfstandard.com/wp-content/uploads/2025/02/20250205_8393232314_budgethearing_asd_1.jpg?w=2500" alt="The image shows two people seated at a conference table with laptops and microphones. The focus is on a woman, appearing attentive, with blurred screens in the foreground." class="wp-image-363859" srcset="https://content.sfstandard.com/wp-content/uploads/2025/02/20250205_8393232314_budgethearing_asd_1.jpg 6414w, https://content.sfstandard.com/wp-content/uploads/2025/02/20250205_8393232314_budgethearing_asd_1.jpg?resize=300,200 300w, https://content.sfstandard.com/wp-content/uploads/2025/02/20250205_8393232314_budgethearing_asd_1.jpg?resize=768,512 768w, https://content.sfstandard.com/wp-content/uploads/2025/02/20250205_8393232314_budgethearing_asd_1.jpg?resize=2500,1667 2500w, https://content.sfstandard.com/wp-content/uploads/2025/02/20250205_8393232314_budgethearing_asd_1.jpg?resize=1536,1024 1536w, https://content.sfstandard.com/wp-content/uploads/2025/02/20250205_8393232314_budgethearing_asd_1.jpg?resize=2048,1366 2048w" sizes="auto, (max-width: 2500px) 100vw, 2500px" /><figcaption class="wp-element-caption">Supervisor Connie Chan helped shuttle City Hall through the budget process this year.</figcaption></figure>



The mayor continues to face difficult budget years ahead. This year’s blueprint addresses only a portion of San Francisco’s long-standing structural deficit.&nbsp;



“So, this budget year was incredibly hard,” Lurie’s planning chief, Sarah Dennis Phillips, said in a hearing last week. “Future budget years, probably for the next two years, will continue to be hard.”&nbsp;



San Francisco’s budget could worsen if President Donald Trump <a href="https://sfstandard.com/2025/04/10/san-francisco-lurie-budget-trump-2-billion/">follows through on promises to cut billions of dollars in federal funding</a> to sanctuary cities.&nbsp;



<h2 class="wp-block-heading" id="h-winner-law-enforcement">Winner: Law enforcement </h2>



The biggest winner of this budget season? <a href="https://sfstandard.com/2025/05/27/san-francisco-budget-cuts-district-attorney-public-defender/">The cops</a>.&nbsp;



Lurie followed through on his campaign promise to prioritize public safety by bumping the budgets of several agencies. The San Francisco Police Department received a roughly 3% funding boost to $849 million. The San Francisco Sheriff’s Department, which provides security for the city’s courts and runs jails, received a 7% bump to $345 million. The district attorney’s office got a 3% boost to $96 million.



Those increases prompted Fielder to rip into the mayor at Tuesday’s hearing over his decision to keep law enforcement funding intact while cutting community services.&nbsp;



&#8220;While programs serving immigrants, families, BIPOC and LGBTQ communities were gutted, law enforcement walked away with more money,&#8221; Fielder said.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" height="1668" width="2500" src="https://content.sfstandard.com/wp-content/uploads/2025/06/9334360850_icemissionprotest_053.jpg?w=2500" alt="A line of police officers in riot gear, wearing helmets and face shields, stands against a building. They appear alert, holding batons, with focus on one officer." class="wp-image-408648" srcset="https://content.sfstandard.com/wp-content/uploads/2025/06/9334360850_icemissionprotest_053.jpg 6481w, https://content.sfstandard.com/wp-content/uploads/2025/06/9334360850_icemissionprotest_053.jpg?resize=300,200 300w, https://content.sfstandard.com/wp-content/uploads/2025/06/9334360850_icemissionprotest_053.jpg?resize=768,512 768w, https://content.sfstandard.com/wp-content/uploads/2025/06/9334360850_icemissionprotest_053.jpg?resize=2500,1668 2500w, https://content.sfstandard.com/wp-content/uploads/2025/06/9334360850_icemissionprotest_053.jpg?resize=1536,1025 1536w, https://content.sfstandard.com/wp-content/uploads/2025/06/9334360850_icemissionprotest_053.jpg?resize=2048,1366 2048w" sizes="auto, (max-width: 2500px) 100vw, 2500px" /><figcaption class="wp-element-caption">Law enforcement saw budget increases under Lurie, who campaigned on prioritizing public safety.</figcaption></figure>



<h2 class="wp-block-heading" id="h-losers-some-commissions-and-departments">Losers: Some commissions and departments</h2>



Other departments did not fare as well as those related to public safety.



Notably, the <a href="https://sfstandard.com/2025/05/30/sf-status-of-women-human-rights-commission-budget/">scandal-ridden Human Rights Commission</a> saw its budget hollowed out by more than a third, to $27.9 million. The Department of Police Accountability saw a drop of 5% to $9 million.



Among others that lost significant chunks of their budgets: San Francisco Homelessness and Supportive Housing, the Office of Economic and Workforce Development, and the Ethics Commission.&nbsp;



<h2 class="wp-block-heading" id="h-partial-losers-unions-and-nonprofits">Partial losers: Unions and nonprofits</h2>



One of the fiercest fights to erupt during the budget negotiations was <a href="https://sfstandard.com/2025/05/28/san-francisco-mayor-daniel-lurie-budget-layoffs/">over Lurie’s proposed layoffs</a>. The mayor’s initial budget proposal cut roughly 100 filled positions and more than 1,000 unfilled roles from the city’s payroll —&nbsp;<a href="https://sfstandard.com/2025/06/26/san-francisco-budget-government-population-daniel-lurie/">a sliver of the total workforce of 34,800</a>.



The unions came out in force over the last several weeks to defend their workers. Late last month, the board restored funding for 57 filled positions, meaning 40 workers will get pink slips. Roughly 1,300 unfilled positions will be axed.



Nonprofits <a href="https://sfstandard.com/2025/06/05/daniel-lurie-budget-cuts-san-francisco-nonprofit-grants/">didn’t fare well</a> in the budget, which reduced city contracts by around $180 million. The cuts will affect numerous departments, including Homelessness and Supportive Housing, Economic and Workforce Development, and the Department on the Status of Women, all responsible for doling out grants to a vast network of local nonprofits.

Popular Sunset Night Market killed for 2025, thanks to bitter SF politics

A popular night market in the Outer Sunset will not return this year amid blowback over the Great Highway’s closure.



The <a href="https://sfstandard.com/2023/04/03/asia-is-full-of-night-markets-san-francisco-may-have-one-this-summer/">Sunset Night Market</a> on Irving Street, which has drawn thousands since it launched two years ago, is not scheduled to return this summer, according to organizers and Supervisor Joel Engardio.&nbsp;



San Francisco’s notoriously ugly politics could be to blame.&nbsp;



Engardio, who spearheaded and helped secure city funding for the market, which was held in late August and late September last year, is facing a <a href="https://sfstandard.com/2025/05/29/joel-engardio-supervisor-recall-september/">September recall election</a> over his role in Proposition K, the ballot measure that permanently closed the Great Highway to cars and converted it into the park now known as Sunset Dunes.&nbsp;



Albert Chow, a supporter of the recall campaign and owner of Great Wall Hardware in the Sunset, said many in the business community have soured on the night market.



“[The merchants] just didn’t feel it this year,” Chow said. “Overall, there’s a sense that Engardio lacks leadership.”



Prop. K passed in November with more than 55% of the vote. But the measure was overwhelmingly rejected by voters in west-side neighborhoods such as the Richmond and Sunset, where more motorists relied on the highway.



Outrage over Engardio’s support for Prop. K came to a head in May, when the campaign to recall him submitted 10,523 valid signatures from voters in his district. A special election <a href="https://sfstandard.com/2025/05/29/joel-engardio-supervisor-recall-september/">on the recall is set for Sept. 16</a>.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" height="1560" width="2500" src="https://content.sfstandard.com/wp-content/uploads/2024/08/20240901-stinkytofu_010.jpg?w=2500" alt="A bustling street fair with numerous white tents and a large crowd of people. The lively scene includes colorful booths and various storefronts on both sides." class="wp-image-306878" srcset="https://content.sfstandard.com/wp-content/uploads/2024/08/20240901-stinkytofu_010.jpg 3594w, https://content.sfstandard.com/wp-content/uploads/2024/08/20240901-stinkytofu_010.jpg?resize=300,187 300w, https://content.sfstandard.com/wp-content/uploads/2024/08/20240901-stinkytofu_010.jpg?resize=768,479 768w, https://content.sfstandard.com/wp-content/uploads/2024/08/20240901-stinkytofu_010.jpg?resize=2500,1560 2500w, https://content.sfstandard.com/wp-content/uploads/2024/08/20240901-stinkytofu_010.jpg?resize=1536,958 1536w, https://content.sfstandard.com/wp-content/uploads/2024/08/20240901-stinkytofu_010.jpg?resize=2048,1278 2048w" sizes="auto, (max-width: 2500px) 100vw, 2500px" /><figcaption class="wp-element-caption">Crowds throng the Sunset Night Market on Aug. 30, 2024.</figcaption></figure>



That has made the night market politically radioactive and fueled speculation from Engardio supporters that recall proponents are intentionally scuttling the popular event to avoid handing the supervisor a win before the election.&nbsp;



Alice Liu, a Sunset resident and an Engardio supporter, said the night market has rebranded the otherwise sleepy neighborhood as a cool destination. She expressed anger at the recall campaign for disrupting the community and is asking the voters to vote against the recall.



“Losing the Sunset Night Market feels like a step backward,” said Liu. “It’s disappointing that a small group of angry people has caused so much chaos.”



Market organizers have <a href="https://drive.google.com/file/d/1QS6VECU8Xy3cUL3HpPrBPy0nt3GVPgYK/view?usp=sharing">proposed</a> using a smaller portion of the event’s funding to support and expand a <a href="https://sunsetmercantilesf.com/holidaysontaraval2024/">December tree-lighting festival</a>, and floated the idea of using the remaining money to relaunch a scaled-back version of the night market during the Lunar New Year.



Last September, a smaller night market<a href="https://sfstandard.com/2024/09/17/night-market-ocean-beach-great-highway/"> was held at the Great Highway in conjunction with the bigger Irving Street events</a>. But it is unlikely to happen this year amid pushback from Ocean Beach merchants who have <a href="https://link.sfstandard.com/view/6436ea099b26044931999510my0ry.qa/976e7434">opposed all commercial activity in the area</a>.



Engardio told The Standard the night market is expected to restart in early 2026.



“Politics should not be part of the night market. It&#8217;s about bringing people together and creating joy,” the supervisor said. “At the end of the day, most people say they love the night market.”



Over the last two years, the markets have drawn tens of thousands of visitors to food and art vendors lined up along seven blocks of Irving Street.



The markets have served as a way to highlight the Sunset’s rich Asian food and cultural scenes with events such as a <a href="https://abc7news.com/post/abc7-news-anchor-dion-lim-throws-down-sfs-3rd-sunset-night-market-durian-eating-contest/15369028/">durian-eating contest</a> and an appearance last year by celebrity chef Martin Yan.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" height="1667" width="2500" src="https://content.sfstandard.com/wp-content/uploads/2024/08/20240901-stinkytofu_018.jpg?w=2500" alt="Two people grill skewers at an outdoor market. Smoke rises from the grills, and a crowd gathers nearby, mingling around vendor tents." class="wp-image-306886" srcset="https://content.sfstandard.com/wp-content/uploads/2024/08/20240901-stinkytofu_018.jpg 5623w, https://content.sfstandard.com/wp-content/uploads/2024/08/20240901-stinkytofu_018.jpg?resize=300,200 300w, https://content.sfstandard.com/wp-content/uploads/2024/08/20240901-stinkytofu_018.jpg?resize=768,512 768w, https://content.sfstandard.com/wp-content/uploads/2024/08/20240901-stinkytofu_018.jpg?resize=2500,1667 2500w, https://content.sfstandard.com/wp-content/uploads/2024/08/20240901-stinkytofu_018.jpg?resize=1536,1024 1536w, https://content.sfstandard.com/wp-content/uploads/2024/08/20240901-stinkytofu_018.jpg?resize=2048,1365 2048w" sizes="auto, (max-width: 2500px) 100vw, 2500px" /><figcaption class="wp-element-caption">Khasan Mamatkhanov of Nafisa’s Table grills lamb skewers at the Sunset Night Market in 2024.</figcaption></figure>



But politics have clouded the event. Engardio said some merchants and opponents of Prop. K threatened to boycott last year’s markets unless he withdrew his support for the measure.&nbsp;



Chow denied that recall supporters are plotting to kill the night market but accused Engardio of trying to take credit for it, saying it is a community-led initiative. Engardio countered that he has always emphasized his partnership with community groups.



The recall campaign against Engardio said the supervisor should blame himself for the cancellation of this year’s markets.



“This is just another failure by Supervisor Engardio,” Jamie Hughes, the campaign leader, told The Standard.



Lily Wong, lead organizer of the night market and director of the Sunset Chinese Cultural District, said more organizers wanted to scale back the event, which some contend has grown overwhelming since its 2023 start. She blamed San Francisco’s bureaucracy, noting that the 2024 city payments to event organizers didn’t arrive until this year, causing financial strain.



The city’s Office of Economic and Workforce Development confirmed that it is reviewing the market’s current proposal and that $100,000 in funding is allocated to host the events. The agency also confirmed that last year’s funding, which amounted to $120,000, was disbursed in full by May.



Awadalla Awadalla, owner of Hole in the Wall Pizza on Irving Street and a prominent business leader in the Sunset, said it&#8217;s &#8220;very bad&#8221; that the night market is not coming back this year.



He pushed back on claims that business owners in the neighborhood aren&#8217;t interested in the market this year. Awadalla said the events put Irving Street “on the map” and drew people from across the city to the neighborhood.



“I felt betrayed,” Awadalla said. “I thought the night market was one of the best things to happen to the Sunset.”

Inside Lurie’s plan for the private sector to rescue downtown

San Francisco has spent tens of millions since the pandemic on programs aimed at reviving the hollowed-out downtown core. Now, amid a budget crisis, funding for those initiatives is on the chopping block. At risk are city grants for storefront beautification, small-business support, and entertainment meant to draw visitors downtown.



To offset the cuts, Mayor Daniel Lurie is looking outside of government to the wealthy individuals who make up his Rolodex to take on a role traditionally filled by the city. While those likely to be affected&nbsp; by the cuts say they understand that difficult choices are necessary to balance the budget, they express worry about entrusting such an important mission to individuals with little or no experience working with the city’s bureaucracy and have doubts as to whether such handouts can be a long-term solution.



“Part of the theme of the day right now for all of us is the unknown,” said Steve Gibson, executive director of the Mid-Market Business Association and Foundation. “What we do know and is pretty obvious is that there will be less money to give out.”&nbsp; 



City Hall’s efforts to boost downtown over the past few years could be characterized as a “spaghetti at the wall” approach featuring an array of programs — from <a href="https://sfstandard.com/2023/09/29/first-look-at-san-franciscos-pop-up-bid-to-save-downtown/">free rent</a> to <a href="https://sfstandard.com/2024/06/07/downtown-san-francisco-first-thursday-event-impact/">street fairs</a> — with varying degrees of success. Lurie campaigned on creating better street conditions, and part of his strategy is to outsource economic development programs to philanthropy and the private sector.&nbsp;



<figure class="wp-block-image alignwide size-large"><img loading="lazy" decoding="async" height="1667" width="2500" src="https://content.sfstandard.com/wp-content/uploads/2025/05/9159888103_525marketst_126.jpg?w=2500" alt="Two men in suits shake hands indoors near a window, with a leafy plant in the background. A microphone is in the foreground." class="wp-image-402263" srcset="https://content.sfstandard.com/wp-content/uploads/2025/05/9159888103_525marketst_126.jpg 3000w, https://content.sfstandard.com/wp-content/uploads/2025/05/9159888103_525marketst_126.jpg?resize=300,200 300w, https://content.sfstandard.com/wp-content/uploads/2025/05/9159888103_525marketst_126.jpg?resize=768,512 768w, https://content.sfstandard.com/wp-content/uploads/2025/05/9159888103_525marketst_126.jpg?resize=2500,1667 2500w, https://content.sfstandard.com/wp-content/uploads/2025/05/9159888103_525marketst_126.jpg?resize=1536,1024 1536w, https://content.sfstandard.com/wp-content/uploads/2025/05/9159888103_525marketst_126.jpg?resize=2048,1365 2048w" sizes="auto, (max-width: 2500px) 100vw, 2500px" /></figure>



&#8220;Government&#8217;s job is to create the conditions for business and our economy to thrive,” said Charles Lutvak, a spokesperson for the mayor. “We are doing that in this budget and every day by prioritizing the core services like public safety and clean streets that are driving San Francisco’s recovery.”&nbsp;



Lurie’s vehicle for bringing in private money is the San Francisco Downtown Development Corporation, a nonprofit public-benefit corporation <a href="https://sfstandard.com/2025/04/08/lurie-downtown-development-corp-nonprofit-david-stiepleman/">spun up by his allies</a>. To do this, the mayor’s office obtained a special waiver that allows public officials to solicit private donations for city projects or initiatives through the DDC.



There’s a simple reason for the mayor’s focus on downtown recovery. Although it makes up a small portion of San Francisco’s footprint, downtown provides 40% of the city’s tax revenue and is the site of 40% of jobs. Critically, it’s often the lens through which outside observers judge the city’s overall health.&nbsp;



Previously, much of the downtown revitalization effort was run through the Office of Economic and Workforce Development, which is charged with boosting small businesses, training workers, and investing in commercial activity.&nbsp;



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OEWD is one of the departments that saw its budget cut most significantly in the mayor’s proposed budget — reduced by nearly $57 million, or 40%. The agency’s economic development division faces an even steeper cut of 62%.



A major portion of the OEWD cuts come from a $26 million ambassador program that is being moved to the Department of Emergency Management. Still, among the cuts is&nbsp; $15 million worth of grants and programs that went to downtown pop-ups, tourist-area patrols, and street-level improvements last year.



Lurie has also shaken up OEWD leadership, moving its executive director, Sarah Dennis Phillips, to head the Planning Department instead and elevating director Anne Taupier to replace her.



Downtown is also being singled out in the zero-sum battle for resources with other neighborhoods. Despite the cuts, the mayor’s office touted that the proposed budget has preserved funding for programs that support events and activations in the Mission, the Castro, and Chinatown.&nbsp;



<figure class="wp-block-image alignwide size-large"><img loading="lazy" decoding="async" width="1600" height="1600" src="https://content.sfstandard.com/wp-content/uploads/2025/06/9294606992_luries-privatization-of-oewd_spot-1.png?w=1600" alt="Two purple hands exchange a red key against a geometric background with a red dot and gold and brown triangles on beige." class="wp-image-412205" srcset="https://content.sfstandard.com/wp-content/uploads/2025/06/9294606992_luries-privatization-of-oewd_spot-1.png 1600w, https://content.sfstandard.com/wp-content/uploads/2025/06/9294606992_luries-privatization-of-oewd_spot-1.png?resize=150,150 150w, https://content.sfstandard.com/wp-content/uploads/2025/06/9294606992_luries-privatization-of-oewd_spot-1.png?resize=300,300 300w, https://content.sfstandard.com/wp-content/uploads/2025/06/9294606992_luries-privatization-of-oewd_spot-1.png?resize=768,768 768w, https://content.sfstandard.com/wp-content/uploads/2025/06/9294606992_luries-privatization-of-oewd_spot-1.png?resize=1536,1536 1536w, https://content.sfstandard.com/wp-content/uploads/2025/06/9294606992_luries-privatization-of-oewd_spot-1.png?resize=180,180 180w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



“Our administration is laying the groundwork for downtown to succeed, and we are leveraging every tool in our toolbox, public and private, to drive downtown’s recovery,” Lutvak said.&nbsp;



The DDC, which launched in April, is based in the Hearst Building at Third and Market. The nonprofit&#8217;s board — led by David Stiepleman, co-president of private equity firm Sixth Street — has since added three billionaires (Chris Larsen, Bob Fisher, and Meg Whitman), Tipping Point Community CEO Sam Cobbs, and influential union leader Olga Miranda.



The organization has raised seed money —&nbsp;although fundraising has yet to start in earnest — and is in the midst of hiring its first CEO. Tech executive and former Obama administration staffer Tyler Brandon was hired as chief operating officer.



Initially, the DDC will focus on the so-called Hospitality Zone — an area encompassing the Moscone Center, Yerba Buena Gardens, and Union Square. Lurie has already dedicated additional police units to the area, which frequently functions as a welcome mat for tourists and business travelers.&nbsp;



<figure class="wp-block-image alignwide size-large"><img loading="lazy" decoding="async" width="1600" height="1600" src="https://content.sfstandard.com/wp-content/uploads/2025/06/9294606992_luries-privatization-of-oewd_spot-3.png?w=1600" alt="The image shows a red grid-patterned rectangle on a gray background with white lines and shapes. It contains a quote about financial challenges by Steve Gibson." class="wp-image-412207" srcset="https://content.sfstandard.com/wp-content/uploads/2025/06/9294606992_luries-privatization-of-oewd_spot-3.png 1600w, https://content.sfstandard.com/wp-content/uploads/2025/06/9294606992_luries-privatization-of-oewd_spot-3.png?resize=150,150 150w, https://content.sfstandard.com/wp-content/uploads/2025/06/9294606992_luries-privatization-of-oewd_spot-3.png?resize=300,300 300w, https://content.sfstandard.com/wp-content/uploads/2025/06/9294606992_luries-privatization-of-oewd_spot-3.png?resize=768,768 768w, https://content.sfstandard.com/wp-content/uploads/2025/06/9294606992_luries-privatization-of-oewd_spot-3.png?resize=1536,1536 1536w, https://content.sfstandard.com/wp-content/uploads/2025/06/9294606992_luries-privatization-of-oewd_spot-3.png?resize=180,180 180w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Even though the DDC has been meeting with stakeholders in each downtown neighborhood, as well as OEWD officials, there are open questions as to what its role will be in determining the city’s economic development policies, according to sources who have met with the organization.&nbsp;&nbsp;



Gibson, who is trying to revive one of downtown’s <a href="https://sfstandard.com/2024/05/02/the-mid-market-faithful-life-inside-san-franciscos-office-dead-zone/">most beleaguered neighborhoods</a> with the Mid-Market Business Association, said his group has hired a consultant to pursue private funding in anticipation of leaner city support.



 “It&#8217;s not the most fun time to be an executive director,” he said.



In a recent interview at the Bloomberg Tech conference, Lurie described private dollars as start-up capital — meant to be replaced down the line by public funding once programs are off the ground.&nbsp;



“It’s not about being sustainable, it’s about giving us test cases,” Lurie said. “Those funds help kick-start something that we can continue to pay for in the out years.”



<figure class="wp-block-image alignwide size-large"><img loading="lazy" decoding="async" width="1600" height="1600" src="https://content.sfstandard.com/wp-content/uploads/2025/06/9294606992_luries-privatization-of-oewd_spot-2.png?w=1600" alt="A red starburst shape contains the quote, &quot;Government's job is to create the conditions for business and our economy to thrive,&quot; attributed to Charles Lutvak." class="wp-image-412206" srcset="https://content.sfstandard.com/wp-content/uploads/2025/06/9294606992_luries-privatization-of-oewd_spot-2.png 1600w, https://content.sfstandard.com/wp-content/uploads/2025/06/9294606992_luries-privatization-of-oewd_spot-2.png?resize=150,150 150w, https://content.sfstandard.com/wp-content/uploads/2025/06/9294606992_luries-privatization-of-oewd_spot-2.png?resize=300,300 300w, https://content.sfstandard.com/wp-content/uploads/2025/06/9294606992_luries-privatization-of-oewd_spot-2.png?resize=768,768 768w, https://content.sfstandard.com/wp-content/uploads/2025/06/9294606992_luries-privatization-of-oewd_spot-2.png?resize=1536,1536 1536w, https://content.sfstandard.com/wp-content/uploads/2025/06/9294606992_luries-privatization-of-oewd_spot-2.png?resize=180,180 180w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



It’s a similar playbook to the one he employed while running Tipping Point Community, where a $65 million donation from Charles and Helen Schwab helped develop the nonprofit’s <a href="https://sfstandard.com/2025/02/04/833-bryant-homelessness-housing-lurie-cockroaches/">homeless housing project at 833 Bryant St.</a> But public funding for that development has largely failed to materialize since the model used to construct the building is <a href="https://sfstandard.com/2024/09/24/daniel-lurie-833-bryant-campaign/">politically impossible to replicate</a> in San Francisco.&nbsp;



Those working on transforming downtown for the post-Covid era say changes will take place over decades, rather than on a quarterly reporting schedule.&nbsp;



That’s the kind of responsibility that has historically belonged to the government. For example, OEWD is leading a legislative effort to <a href="https://sfstandard.com/2025/03/02/san-francisco-incentivizing-office-conversions/">fund downtown commercial-to-residential conversions</a> using tax increment financing over the next 30 years. If approved, the plan would let developers use additional property tax revenue from new housing to offset construction costs.&nbsp;



That type of long-term planning might eventually be in the DDC’s purview. According to its website, one of the organization’s goals is to “identify long-term public financing tools to support downtown San Francisco’s health and evolution for generations to come.”&nbsp;

SF nonprofits brace for bloodbath as Lurie slashes grant funding

When she first came to San Francisco roughly a decade ago, Ermei Wu landed a job in a Chinatown restaurant to support her three kids. Like many monolingual immigrants, she didn’t have anyone explaining wage laws to her in the language she speaks, Cantonese.&nbsp;



She never knew to challenge her boss for what she later discovered was wage theft, until she joined the Chinese Progressive Association’s program, the Workers Rights Community Collaborative. 



“I knew I had rights as a worker, that I had paid sick leave, that there was minimum wage, that there was overtime,” Wu said through a translator. She pays it forward: “I tell all the people around me about what rights they have as a worker.”



In her next restaurant job, Wu was paid what she was owed. Last year, however, the Office of Labor and Standards Enforcement scaled back the workers&#8217; rights program by nearly $400,000, roughly half its budget. This year, the program is set to lose the other half and shutter entirely.



It&#8217;s not the only one. The pot of money funding San Francisco’s legion of do-good organizations is about to shrink.



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Mayor Daniel Lurie’s <a href="https://sfstandard.com/2025/05/30/san-francisco-budget-daniel-lurie-deficit-proposal/">budget would cut</a> roughly $154 million, or 9%, from the city’s grant programming next year, according to an analysis by The Standard.



Nonprofits are waiting in the dark to find out what will happen to their finances, as the mayor’s budget doesn’t contain line-item details to easily discern contract cuts. The Standard’s analysis offers a first view at just how devastating those trims will be.



Joe Wilson, executive director of the nonprofit Hospitality House, said Lurie’s proposal to gut grant funding may have disturbing consequences. Lurie has repeatedly pressed on the need for public safety, but when nonprofits providing food, shelter, and jobs are cut, people get desperate.



In Lurie’s budget proposal, Hospitality House lost funding from the Office of Economic and Workforce Development that pays for a program on Treasure Island to help 500 job seekers, Wilson said.&nbsp;



“When there are fewer community-based health options, fewer community-based employment options, fewer community-based housing options, the city pays that cost, and it&#8217;s much more costly than the investments we&#8217;re already making,” Wilson said.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" height="1668" width="2500" src="https://content.sfstandard.com/wp-content/uploads/2025/06/20240126_homelesscountwewent_-2399_28da2458-c16a-11ee-bc93-fad3dbc5ec97.jpg?w=2500" alt="Three people stand on a dimly lit street corner at night. One person has a bicycle. They are next to a blue building with bags and a bucket nearby." class="wp-image-406800" srcset="https://content.sfstandard.com/wp-content/uploads/2025/06/20240126_homelesscountwewent_-2399_28da2458-c16a-11ee-bc93-fad3dbc5ec97.jpg 3000w, https://content.sfstandard.com/wp-content/uploads/2025/06/20240126_homelesscountwewent_-2399_28da2458-c16a-11ee-bc93-fad3dbc5ec97.jpg?resize=300,200 300w, https://content.sfstandard.com/wp-content/uploads/2025/06/20240126_homelesscountwewent_-2399_28da2458-c16a-11ee-bc93-fad3dbc5ec97.jpg?resize=768,512 768w, https://content.sfstandard.com/wp-content/uploads/2025/06/20240126_homelesscountwewent_-2399_28da2458-c16a-11ee-bc93-fad3dbc5ec97.jpg?resize=2500,1668 2500w, https://content.sfstandard.com/wp-content/uploads/2025/06/20240126_homelesscountwewent_-2399_28da2458-c16a-11ee-bc93-fad3dbc5ec97.jpg?resize=1536,1025 1536w, https://content.sfstandard.com/wp-content/uploads/2025/06/20240126_homelesscountwewent_-2399_28da2458-c16a-11ee-bc93-fad3dbc5ec97.jpg?resize=2048,1366 2048w" sizes="auto, (max-width: 2500px) 100vw, 2500px" /><figcaption class="wp-element-caption">Grant funding for nonprofit work, including from the Department of Homelessness and Supportive Housing, will drop next year.</figcaption></figure>



Lurie has repeatedly characterized the city’s spending as excessive, saying San Francisco must make structural cuts to resolve a staggering $782 million deficit. In his budget plan, public safety agencies like the San Francisco Police Department and district attorney’s office maintained their budgets.&nbsp;



The Standard’s analysis found:&nbsp;



<ul class="wp-block-list">
<li>Funding to the City Grant Program, a primary funding pool for nonprofits, will decrease next year for 17 of the 24 departments that have that as a budget line item.</li>



<li>Three departments are losing all grant program funding: the Department on the Status of Women, Building Inspection, and Elections.</li>



<li>The Department of Homelessness and Supportive Housing is facing the biggest reduction to its grant program, $83.5 million, though a portion of that is due to Our City, Our Home funding, which will be spent over five years, but was only reflected in last year’s budget.&nbsp;</li>



<li>At No. 2 is Economic and Workforce Development, which will lose $58.6 million. A portion of that is the movement of some major contracts to another department.&nbsp;</li>
</ul>



Some of the department-level reductions are straight-up cuts by Lurie. But in some cases, grants moved from one department to another. In others, the grant reductions are because federal or state funds dried up. During previous years, the city elected to shore up the loss of some state funding with local funding, but in this climate, that generosity is hard to find.



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<ul class="wp-block-list">
<li>Some nonprofit contracts fall under &#8220;non-personnel services,&#8221; a spending category for facilities management, insurance fees, and other expenditures. Non-personnel services spending will increase next year by 2%, or $69 million.&nbsp;</li>



<li>Twenty-five departments will get reductions in non-personnel services. Those include Juvenile Probation (a 75% cut), Ethics Commission (46%), Sheriff’s Department (24%), Public Works (36%), and Human Rights Commission (40%).</li>
</ul>



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In <a href="https://sfstandard.com/2025/01/23/daniel-lurie-san-francisco-mayor-budget-cuts/">a January memo</a> to city department heads, Lurie directed them to cut grants from the “least effective” organizations. But Sarah Wan, director of the Community Youth Center, said even outcomes that are difficult to measure can have real impacts.&nbsp;



CYC started its Bayview Services program in 2011. It provides connections to city and neighborhood services for the Asian American and Pacific Islander community in the Bayview but also offers bridge-building programs between Black and Asian neighbors, such as joint Lunar New Year and Black History Month celebrations, local history bus tours, and translators to help bridge the divide.&nbsp;



CYC is facing a $1.5 million budget reduction. The Bayview CYC location may shutter.&nbsp;



“It took us like 15 years to do that, to build that partnership,” she said. “I think we definitely helped build bridges across communities. It&#8217;s how to ensure everyone feels safe.”



A full accounting of how many organizations would be affected by the mayor’s budget is not available, as it contains only top-line numbers, not the line-item detail necessary to discern what programs may be axed. The People’s Budget coalition, a collective of more than 150 organizations, rallied Wednesday at City Hall to protest the coming cuts.



Despite the unknowns, one thing is certain: Nonprofits are expecting a bloodbath.

Lurie campaigned as an ethics crusader. Now he’s gutting SF’s top watchdog

On the campaign trail, Daniel Lurie vowed to vanquish City Hall corruption, promising to fully fund the city’s governance watchdog, the Ethics Commission.



Now, as mayor, Lurie just blew a gaping hole in the department’s budget, sparking an outcry from its leader.



“We need to spend money on the front end, before they become big problems,” said Patrick Ford, executive director of the Ethics Commission. “In that sense, an investment in ethics is a cost saver in the long run. Our department is tiny. And it is money well spent.”



The cuts may include axing the roles of four staffers in the 28-person department who identify loopholes in ethics rules and train city officials on the law. They are crucial to curbing corruption before it takes hold, Ford said.



In his proposed budget, <a href="https://sfstandard.com/2025/05/30/san-francisco-budget-daniel-lurie-deficit-proposal/">released Friday</a>, Lurie called for belt-tightening across city departments as part of an effort <a href="https://sfstandard.com/2025/05/30/san-francisco-budget-screwed-lurie/">to close a $782 million budget shortfall</a>. The Public Health Department, Office of Economic and Workforce Development, and Public Works, among others, are earmarked for budget cuts. Public safety agencies — the San Francisco Police Department, Sheriff’s Department, district attorney’s office, and public defender’s office — were mostly preserved.



Lurie’s budget requires approval by the Board of Supervisors; the deadline for reaching a deal is July 1. Supervisor Jackie Fielder said a robust Ethics Commission is key as Lurie steps up reliance on wealthy donors to fund city efforts around homelessness and the drug crisis.



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“This drastic budget reduction to the commission severely undermines the city’s ability to investigate misconduct, enforce transparency, and hold public officials accountable,” Fielder said in a statement. “As the city increasingly turns to wealthy individuals and foundations to fill budget gaps, the need for robust oversight and accountability has never been more urgent.”



The Ethics Commission’s workforce expanded from 21 to 28 in the wake of a major scandal in 2020, in which former Public Works director Mohammed Nuru was <a href="https://sfstandard.com/2022/01/06/mohammed-nuru-key-figure-in-sf-corruption-scandal-formally-pleads-guilty/">found guilty</a> of taking bribes from contractors, including a Rolex watch and a tractor.



More department heads were implicated as the scandal unfolded, leading then-Mayor London Breed to hire more Ethics Commission staffers to train officials in good governance — and to catch them when they ran afoul of the law.



In 2023, <a href="https://sfstandard.com/2023/06/05/san-francisco-ethics-watchdog-decries-severe-cuts-under-mayors-budget/https://sfstandard.com/2023/06/05/san-francisco-ethics-watchdog-decries-severe-cuts-under-mayors-budget/">she tried to cut the commission’s budget</a>, a move Lurie called out last year on the campaign trail.



&#8220;While the current mayor attempted to defund the Ethics Commission, I commit to fully funding it,” Lurie said in August.



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Soon after, Lurie’s campaign sent out a <a href="https://docs.google.com/document/d/1GHWzFiY3Nt0x9qB2eixwhhEC4CXgVFC425mehYnGSxM/edit?tab=t.0">press release</a> defining “fully funding” — essentially arguing that he meant he would fund certain divisions within the Ethics Commission, not the department as a whole.



&#8220;Mayor Lurie committed to fully funding the Ethics Commission by ensuring that the Enforcement and Audit Divisions had the staff and resources necessary to conduct investigations and audits,” the mayor’s spokesperson, Charles Lutvak, said Monday, citing the August press release. “Even facing an historic $800 million budget deficit, that’s exactly what this budget does.&#8221;



The four positions Lurie has proposed to eliminate — three of which are layoffs — are especially impactful considering the Ethics Commission’s tiny size relative to other city agencies, Ford argues. An analysis of staffing levels from the mayor’s proposed budget shows that the Ethics Commission may face a 14% cut to its workforce budget.



That’s the fourth-largest cut out of 53 city departments; by comparison, Recreation and Parks, which is budgeted for nearly 1,000 workers, faces a 0.3% cut to its staffing budget. Not all proposed reductions are to salaries and workers; some city departments may see steep reductions in grants and contracts.



One Ethics Commission position flagged for elimination is a policy analyst, who updates the city’s ethics laws and researches Board of Supervisors legislation in an effort to tighten the rules. Two other positions, senior program administrators, educate the roughly 6,000 city staffers who have to comply with financial disclosure requirements.



“If we don&#8217;t have the staff to create trainings and answer questions, you&#8217;re going to see people not fully understanding how to follow ethics rules, which can, over time, snowball into the kinds of major issues we&#8217;ve seen in recent years,” Ford said.



Lurie’s budget includes other funding that can tackle bad governance, including an inspector general, a position created via ballot measure last year that is tasked with rooting out government fraud.



When a Standard reporter asked Lurie about Ethics Commission cuts during a press conference Friday, the mayor deferred to his staff but added that he is “fully focused on ethics with this budget.”

Shedding staff, Urban Alchemy faces iffy future in SF’s Tenderloin

Hernandez gladly called the Tenderloin home for two decades. It was only when the pandemic hit, and fentanyl use surged, that she became appalled at the growing amounts of filth — needles, pipes, feces — her school-age daughters waded through by their door.



Even home was not an escape for Hernandez, who works as a janitor and wished to be identified by only her last name due to death threats from dealers. One evening in the spring of 2023, she stood at her stove, cooking garbanzos con pollo for the family. She looked down to see one daughter struggling to breathe.



The wafting scent of drug use from the sidewalk below had filled her lungs. Hernandez took her daughter to a local hospital. While she turned out fine, Hernandez shouted down the drug users outside her window, to no avail. They were there to stay.



The following year, the city contracted with Urban Alchemy to expand its unarmed ambassador patrols to Hernandez’s street.



Everything changed.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="2500" height="1667" src="https://content.sfstandard.com/wp-content/uploads/2025/05/8717806492_uanotl-08.jpg?w=2500" alt="A uniformed Urban Alchemy practitioner stands on a public street with a building behind him." class="wp-image-396248" srcset="https://content.sfstandard.com/wp-content/uploads/2025/05/8717806492_uanotl-08.jpg 2500w, https://content.sfstandard.com/wp-content/uploads/2025/05/8717806492_uanotl-08.jpg?resize=300,200 300w, https://content.sfstandard.com/wp-content/uploads/2025/05/8717806492_uanotl-08.jpg?resize=768,512 768w, https://content.sfstandard.com/wp-content/uploads/2025/05/8717806492_uanotl-08.jpg?resize=1536,1024 1536w, https://content.sfstandard.com/wp-content/uploads/2025/05/8717806492_uanotl-08.jpg?resize=2048,1366 2048w" sizes="auto, (max-width: 2500px) 100vw, 2500px" /><figcaption class="wp-element-caption">Urban Alchemy workers patrol the Tenderloin.</figcaption></figure>



The drug users thinned out. The family’s neighborhood walks felt safe.



But that sense of relief was tenuous. Hernandez had heard that Urban Alchemy’s contract to patrol San Francisco’s most downtrodden streets would end in July. She fears her children will once again be scared to go outside.



“I’m afraid if Urban Alchemy leaves, the situation will collapse again,” she said.



Hernandez can rest easy — for the moment.



Mayor Daniel Lurie is renewing the organization&#8217;s contract, The Standard has learned. The timeline is still being worked out, sources said, and little is certain beyond one fact: Urban Alchemy will not abandon the Tenderloin and mid-Market in July.



But the organization’s long-term viability patrolling the streets remains very much in doubt. In recent months, city officials have increasingly scrutinized Urban Alchemy’s management, as the nonprofit has regularly gone over budget and asked the city for advances as it sheds staff, records show. The organization filed its second layoff notice just this month, threatening to lose an additional 50 staff, though a spokesperson said they&#8217;re looking to place them in other roles.



Meanwhile, the mayor’s office will soon restructure the city’s <a href="https://sfstandard.com/2024/10/15/homelessness-sprawling-nonprofits-crankstart-foundation/">myriad ambassador programs</a>, a source told The Standard. The multi-year plan would scale down Urban Alchemy patrols as the city ramps up other strategies, with the goal of making the nonprofit’s widely recognized ambassadors obsolete.



“Urban Alchemy is proud to continue our partnership with the city and Mayor Lurie to continue to bring more peace and safety to the Tenderloin and Mid-Market neighborhoods,” Urban Alchemy’s CEO, Lena Miller, said in a statement.



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Charles Lutvak, the mayor’s spokesperson, declined to comment on the organization&#8217;s future. He confirmed that the contract would be extended past July, for an indefinite period.



“As we continue working across departments and nonprofit partners to keep our community safe and connect people to help right now, our administration is taking a hard look at how we can make the most of every tool available to make that work successful long-term,” Lutvak said.



Urban Alchemy isn’t just a neighborhood guardian; it boasts 10 San Francisco public agency contracts. Its staff serve as attendants at BART elevators and the San Francisco Public Library, walk kids to school, and provide security at homeless shelters. 



However, it is best known for its unarmed ambassadors — called “practitioners” — who patrol the streets of the Tenderloin and mid-Market, offering aid to drug users and clearing them from sidewalks, where they can impede residents.



Like Hernandez, hundreds of city residents have lauded the practitioners for their efforts — but as Urban Alchemy’s finances struggled, it has pulled many of those workers from the streets. Emails between city staff managing Urban Alchemy’s contract and Mid-Market Foundation, a middleman for Urban Alchemy, reveal the depth of the cuts.



In November, Supervisor Connie Chan delayed the disbursement of $7.7 million to Urban Alchemy while demanding proof of the organization’s efficacy. Urban Alchemy <a href="https://sfstandard.com/2024/11/19/urban-alchemy-san-francisco-tenderloin-layoffs/">filed a WARN Act notice</a> that it would soon lay off more than 300 workers, which it ultimately did not fulfill.



To shore up its accounts, the Mid-Market Foundation sought a $2.5 million advance on its payments from the city and another $2 million after the Board of Supervisors delayed promised funding.



The foundation needed the money immediately, executive director Steve Gibson wrote in a Nov. 12 email to the city’s Office of Economic and Workforce Development and Department of Emergency Management, because “our vendor, Urban Alchemy, is trying to make payroll.”



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" height="1667" width="2500" src="https://content.sfstandard.com/wp-content/uploads/2025/05/inlined02_urbanalchemyclaim11102022.jpg?w=2500" alt="A uniformed Urban Alchemy practitioner stands near a portable toilet as someone enters it." class="wp-image-396164" srcset="https://content.sfstandard.com/wp-content/uploads/2025/05/inlined02_urbanalchemyclaim11102022.jpg 5760w, https://content.sfstandard.com/wp-content/uploads/2025/05/inlined02_urbanalchemyclaim11102022.jpg?resize=300,200 300w, https://content.sfstandard.com/wp-content/uploads/2025/05/inlined02_urbanalchemyclaim11102022.jpg?resize=768,512 768w, https://content.sfstandard.com/wp-content/uploads/2025/05/inlined02_urbanalchemyclaim11102022.jpg?resize=2500,1667 2500w, https://content.sfstandard.com/wp-content/uploads/2025/05/inlined02_urbanalchemyclaim11102022.jpg?resize=1536,1024 1536w, https://content.sfstandard.com/wp-content/uploads/2025/05/inlined02_urbanalchemyclaim11102022.jpg?resize=2048,1365 2048w" sizes="auto, (max-width: 2500px) 100vw, 2500px" /><figcaption class="wp-element-caption">City officials have increasingly scrutinized Urban Alchemy’s management.</figcaption></figure>



Chris Corgas, a deputy director with the Office of Economic and Workforce Development, agreed. “I think, and Steve would need to confirm, that if those final amendments were advanced it could potentially get them through January and part of February,” he wrote in the thread.



Even so, the staff would need to be reduced, Urban Alchemy told the city. A review of the nonprofit’s reports show consistent budget overruns of at least $100,000 some months, reaching as high as $490,000 in November.



In a December report, Urban Alchemy wrote that it planned for “potential reductions due to amendment uncertainty and contract end date in June 2025.” In a January memo, the organization said it was prepared to eliminate “approximately 50 employees to balance budget without losing program coverage area.”



From September to January, Urban Alchemy staffers worked 44,000 to 50,000 hours a month. That costs the city roughly $2 million per month, reports submitted to the Department of Emergency Management show.



In February, those practitioner hours were down to 28,000.



Miller, Urban Alchemy’s CEO, said deployment, and therefore its spending, is dictated “by the city and its needs. We pride ourselves in being a nimble organization that can quickly adapt to any situation.”



Not everyone agrees.



Timothy Phillips has publicly alleged that he was wrongfully terminated when Urban Alchemy began firing practitioners for seemingly minor infractions in order to meet a budget deficit.



Phillips started as a practitioner with the group in 2023. Whereas eating lunch in your uniform vest once got you a verbal warning, this year, it might mean losing your job, he claims.



Phillips said he served seven years in federal prison for unarmed bank robberies in San Francisco and the East Bay to feed his addiction to powder cocaine. He later turned his life around and joined Urban Alchemy upon his release. He was fired after documenting a tense encounter with a former practitioner while he was on leave. His managers did not explain why he was terminated, Phillips said.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="2500" height="1667" src="https://content.sfstandard.com/wp-content/uploads/2025/05/8717806492_uanotl-24.jpg?w=2500" alt="A man stands on Market street in a black hoodie with his arms crossed." class="wp-image-396249" srcset="https://content.sfstandard.com/wp-content/uploads/2025/05/8717806492_uanotl-24.jpg 2500w, https://content.sfstandard.com/wp-content/uploads/2025/05/8717806492_uanotl-24.jpg?resize=300,200 300w, https://content.sfstandard.com/wp-content/uploads/2025/05/8717806492_uanotl-24.jpg?resize=768,512 768w, https://content.sfstandard.com/wp-content/uploads/2025/05/8717806492_uanotl-24.jpg?resize=1536,1024 1536w, https://content.sfstandard.com/wp-content/uploads/2025/05/8717806492_uanotl-24.jpg?resize=2048,1366 2048w" sizes="auto, (max-width: 2500px) 100vw, 2500px" /><figcaption class="wp-element-caption">Timothy Phillips, a former Urban Alchemy ambassador, says he was wrongly terminated by the nonprofit.</figcaption></figure>



In one city report, Urban Alchemy told the city there is “assurance February will show more reduction” in its workforce. That’s the month Phillips was terminated.



Phillips lost his apartment and is living in a halfway house.



“Practitioners rely on Urban Alchemy for their lives,” he said.



The Standard walked the Tenderloin and mid-Market in late March, speaking to roughly 20 practitioners on the job. A handful said they were aware of firings for minor infractions. All had seen their teams reduced in size, often by half.



Jackie Thornhill, spokesperson for the Department of Emergency Management, confirmed that there was “accelerated attrition” due to the Board of Supervisors’ funding disruption, with layoffs for “other reasons that impacted overall staffing.”



One insider who spoke on condition of anonymity for fear of reprisal verified Phillips’ claims and said Urban Alchemy’s financial overruns are not unusual for a contracted organization dealing with budget uncertainty from the city.



“They were overstaffed. They were over budget. They [have] now tapered down to fit into the budget,&#8221; the source said. &#8220;It&#8217;s a little stricter management of their staff, yes that&#8217;s true.&#8221;



Miller said workers have been let go because they did not meet the “highest professional standards.”



“Like any workplace, accountability matters, and there are rules to follow. We are clear on what our standards are, and when issues arise, we address them quickly and directly,” the CEO said. “Decisions have consequences, and as a fast-growing, public-facing organization, we will keep improving our standards so we can deliver even more impact and success.”



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" height="1666" width="2500" src="https://content.sfstandard.com/wp-content/uploads/2025/05/featured_urbanalchemyclaim11102022.jpg?w=2500" alt="Uniformed Urban Alchemy staff carry dustbins walking through the Tenderloin." class="wp-image-396163" srcset="https://content.sfstandard.com/wp-content/uploads/2025/05/featured_urbanalchemyclaim11102022.jpg 5761w, https://content.sfstandard.com/wp-content/uploads/2025/05/featured_urbanalchemyclaim11102022.jpg?resize=300,200 300w, https://content.sfstandard.com/wp-content/uploads/2025/05/featured_urbanalchemyclaim11102022.jpg?resize=768,512 768w, https://content.sfstandard.com/wp-content/uploads/2025/05/featured_urbanalchemyclaim11102022.jpg?resize=2500,1666 2500w, https://content.sfstandard.com/wp-content/uploads/2025/05/featured_urbanalchemyclaim11102022.jpg?resize=1536,1024 1536w, https://content.sfstandard.com/wp-content/uploads/2025/05/featured_urbanalchemyclaim11102022.jpg?resize=2048,1365 2048w" sizes="auto, (max-width: 2500px) 100vw, 2500px" /><figcaption class="wp-element-caption">Urban Alchemy workers say practitioners are being fired for seemingly minor infractions in order to meet a budget deficit.</figcaption></figure>



In the Tenderloin, Hernandez has noticed the number of Urban Alchemy practitioners begin to drop. Through tears, she said her family needs Urban Alchemy’s presence to feel safe.



For now, her daughters freely take the bus to Ocean Beach, where they sit on the sand to play guitar and sing. Their latest obsession is a 1978 song by child musician Pedro Fernandez, “La de la mochila azul,” or “the girl with the blue backpack.”



“What’s wrong with you, little one, what’s wrong with you?” they sing in Spanish. “They tell me at school, and they ask me at home. And until now — I suddenly knew.”



This, Hernandez knows: Without Urban Alchemy, or an alternative to replace its practitioners, the Tenderloin may become unlivable again.

Exclusive: Lurie reels in Laurene Powell Jobs, Google’s Ruth Porat to lead new civic group

Mayor Daniel Lurie’s administration has been quietly recruiting a murderer’s row of Silicon Valley and Wall Street luminaries to lead a pair of initiatives meant to revitalize San Francisco’s hollowed-out downtown and moribund economy, according to sources with knowledge of the plans.&nbsp;



The first initiative, which has not been previously reported, involves three women at the highest echelons of tech and finance: Katherine August-deWilde, a former president of First Republic Bank; Laurene Powell Jobs, founder and president of the Emerson Collective and one of the country’s top philanthropists; and Ruth Porat, president and chief investment officer of Alphabet, the parent company of Google.



Like the mayor who assembled them, all three are fabulously wealthy, own lavish homes in San Francisco, and have had scant involvement in the city&#8217;s governmental affairs.&nbsp;



Dubbed Partnership for San Francisco, the group is being organized by August-deWilde, a board member of Tipping Point Community, the anti-poverty nonprofit Lurie founded 20 years ago. The former bank chief is modeling the consortium after Partnership for New York City, which was formed in the dark economic days of the late 1970s.&nbsp;



In addition to naming Powell Jobs and Porat as co-chairs, August-deWilde has been recruiting a roster of high-powered members in recent weeks. The list of CEOs set to join includes Sam Altman of Open AI, Jony Ive of LoveFrom, Parker Harris of Salesforce, Richard Dickson of Gap, Michelle Gass of Levi Strauss &amp; Co., Tony Xu of DoorDash, and 20 or so others, according to sources familiar with the discussions. 



<figure class="wp-block-image alignwide size-large"><img loading="lazy" decoding="async" height="1668" width="2500" src="https://content.sfstandard.com/wp-content/uploads/2024/11/20240918_lisssamaltman-me-35.jpg?w=2500" alt="A person with light hair is sitting in front of a lush green plant, wearing a blue shirt under a darker green sweater, against a blurred indoor background." class="wp-image-333616" srcset="https://content.sfstandard.com/wp-content/uploads/2024/11/20240918_lisssamaltman-me-35.jpg 3000w, https://content.sfstandard.com/wp-content/uploads/2024/11/20240918_lisssamaltman-me-35.jpg?resize=300,200 300w, https://content.sfstandard.com/wp-content/uploads/2024/11/20240918_lisssamaltman-me-35.jpg?resize=768,512 768w, https://content.sfstandard.com/wp-content/uploads/2024/11/20240918_lisssamaltman-me-35.jpg?resize=2500,1668 2500w, https://content.sfstandard.com/wp-content/uploads/2024/11/20240918_lisssamaltman-me-35.jpg?resize=1536,1025 1536w, https://content.sfstandard.com/wp-content/uploads/2024/11/20240918_lisssamaltman-me-35.jpg?resize=2048,1366 2048w" sizes="auto, (max-width: 2500px) 100vw, 2500px" /><figcaption class="wp-element-caption">OpenAI&#8217;s Sam Altman is among the 20-plus CEOs who have signed on as early members of Partnership for San Francisco.</figcaption></figure>



A second group, also being revealed for the first time by The Standard, is a public-private entity to be known as the San Francisco Downtown Development Corp., which aims to raise hundreds of millions of dollars for the beleaguered central business district. Like Partnership for San Francisco, the group echoes a concept pioneered in New York, the Lower Manhattan Development Corp., created in the aftermath of 9/11, which Lurie<a href="https://sfstandard.com/opinion/2024/11/18/could-daniel-lurie-be-sfs-michael-bloomberg/"> has signaled he’d try to emulate</a>.&nbsp;



Its leader will be David Stiepleman, co-president of investment firm Sixth Street, which Lurie’s chief of staff, Staci Slaughter, advised after leaving the San Francisco Giants. Stiepleman, a lawyer by training, previously worked for Goldman Sachs at the same time as Ned Segal, Lurie’s head of policy for economic development and housing, who was an investment banker. As the mayor’s emissary to the business community, Segal has been instrumental in organizing both entities.



Taken together, the groups represent Lurie’s latest efforts to attract well-heeled individuals into civic affairs and to try new approaches to reversing the city’s economic malaise. San Francisco officials across the political spectrum have long lamented the lack of involvement by local business titans, particularly those from the tech world.&nbsp;



August-deWilde, Stiepleman, and representatives for the mayor’s office all declined to comment.



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The initiatives are likely to rankle at least two sets of local political players: business-focused organizations like Advance SF, which represents large employers and may feel muscled out by the Partnership for San Francisco, and progressive officials and activists, who have long objected to efforts by the wealthy that are perceived to benefit their own interests.



The formation of both groups was anticipated by a report prepared this year by a group of business interests calling itself the Downtown Economic Core Collaborative, which includes Advance SF. That report, obtained by The Standard, was authored by Ben Rosenfield, former city controller, and Kat Daniel, a former official in the city’s Office of Economic and Workforce Development. It recommended the establishment of a “civic table” of leading executives and the creation of a quasi-public development agency funded by the city and philanthropic sources.



The two new groups have been working for weeks under the cover of secrecy. Both have been coordinating closely with the mayor’s office, although each aims to operate independently of City Hall — and of each other. Lurie hopes to establish both as permanent civic institutions that will continue their work after he leaves office, like the New York groups after which they are modeled.



The mayor’s team has been discussing something like the Partnership for San Francisco at least since a week after his election in November. That’s when a group with that name incorporated itself with the California secretary of State’s office.&nbsp;



Partnership for San Francisco will be a dues-paying organization funded by the companies whose leaders are participating; membership is expected to be passed on to succeeding CEOs. It is designed to present the mayor with CEO-level views on policy, as opposed to being simply a booster for the city and its top politician.&nbsp;



It is unlikely that members will commit a significant amount of money to the partnership; its heft and prestige are expected to outweigh its finances, say sources. Partnership for New York City, for context, had a 2023 budget of $8 million.



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The new group treads on the turf of Advance SF, a collection of the city’s top employers. Sources say that Segal, Lurie’s economic development chief, asked Advance SF and other business-focused groups to stand down on any competing initiatives. So far, said sources, such groups appear willing to back the Partnership for San Francisco, hoping to stay on the good side of a popular new mayor whose mantra that “San Francisco is open for business” they widely support.



The contours of the new San Francisco Downtown Development Corp. are less clearly defined because of key unresolved issues, including how much money it will raise and from whom.&nbsp;



Presented confidentially to the mayor’s office in January, the Rosenfield-Daniel report&nbsp;suggested initially financing a development agency with $600 million, about a third of which would come from the city’s general fund. That amount of city funding now seems unlikely given San Francisco&#8217;s $840 million, two-year budget deficit, leaving open the question of how much Stiepleman and his team could raise privately.&nbsp;



<figure class="wp-block-image alignwide size-large"><img loading="lazy" decoding="async" width="2288" height="1218" src="https://content.sfstandard.com/wp-content/uploads/2025/03/screenshot-2025-03-16-at-3-28-44-pm.png?w=2288" alt="A mountain silhouette under a star-filled sky reads &quot;SF DDC&quot; and &quot;Launching Soon,&quot; with a &quot;Contact Us&quot; option below." class="wp-image-378605" srcset="https://content.sfstandard.com/wp-content/uploads/2025/03/screenshot-2025-03-16-at-3-28-44-pm.png 2288w, https://content.sfstandard.com/wp-content/uploads/2025/03/screenshot-2025-03-16-at-3-28-44-pm.png?resize=300,160 300w, https://content.sfstandard.com/wp-content/uploads/2025/03/screenshot-2025-03-16-at-3-28-44-pm.png?resize=768,409 768w, https://content.sfstandard.com/wp-content/uploads/2025/03/screenshot-2025-03-16-at-3-28-44-pm.png?resize=1536,818 1536w, https://content.sfstandard.com/wp-content/uploads/2025/03/screenshot-2025-03-16-at-3-28-44-pm.png?resize=2048,1090 2048w" sizes="auto, (max-width: 2288px) 100vw, 2288px" /><figcaption class="wp-element-caption">The homepage of the San Francisco Downtown Development Corporation.</figcaption></figure>



Like August-deWilde, Stiepleman has been meeting with financial and philanthropic players with an eye toward assembling a board for the new organization, which has a <a href="https://sfddc.org/">“launching soon” website</a> and has filed articles of incorporation with the state.&nbsp;



According to sources, any private donations to the development corporation might trigger the need for so-called behested payments waivers, which give the mayor’s office permission to seek donations, including from entities that have business before the city.



This story has been updated to reflect the involvement of Parker Harris from Salesforce in place of Marc Benioff.

Short of giving away money, SF is trying everything to juice office conversions

San Franciscans are fed up with vacant real estate sitting unused. 



A recent Chamber of Commerce <a href="https://sfstandard.com/2025/02/26/san-francisco-mayor-daniel-lurie-chamber-commerce/">poll</a> found that 87% of voters favor “transforming underused malls and stores” to “revitalize downtown.” At an event Wednesday with the city’s business elite, Mayor Daniel Lurie bragged about how he and the Board of Supervisors are meeting that demand.



The mayor pointed to <a href="https://sfgov.legistar.com/LegislationDetail.aspx?ID=6875718&amp;GUID=0607A97D-42AC-4FF3-8462-F04A7A0E265E">an ordinance</a> that passed the day before with a 9-2 vote that would exempt certain conversion projects from development impact fees, inclusionary housing fees and would remove application deadlines.&nbsp;



The city&#8217;s analysis found that those fees — which fund infrastructure improvements and affordable housing development — add $70,000 to $90,000 in additional construction costs to each new housing unit.&nbsp;



“Transforming vacant offices into housing will help drive our recovery downtown while creating new homes for San Franciscans,” Lurie said. “This is a win-win for our city.”



Conversions have long been touted as an obvious solution to the twin challenges of a housing shortage and a downtown bereft of office workers. But even with years of a simmering real estate crisis that have led to <a href="https://sfstandard.com/2024/12/28/san-franciscos-next-real-estate-wave-is-starting-to-take-shape/">record-high vacancies</a> and <a href="https://sfstandard.com/2024/08/26/navigating-the-bottom-of-san-franciscos-office-market/">plummeting real estate values</a>, only one San Francisco project has started construction since the pandemic: the Humboldt Building on Market Street.&nbsp;



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Developers boil it down to a lack of financing and, ironically, available inventory. Of the city’s nearly 90 million square feet of office space, <a href="https://www.sf.gov/sites/default/files/2024-02/Transfer%20Tax%20Exemption%20Economic%20Impact.pdf">only 13%</a> of those buildings are viable candidates for conversion, according to the controller’s office.&nbsp;



The ordinance is the latest in a series of steps started by previous administrations which <a href="https://sfstandard.com/2024/09/15/sf-is-cutting-deals-to-unfreeze-housing-but-developers-have-to-do-their-part-too/">aided private developers</a> by <a href="https://sfstandard.com/2023/10/17/mayor-london-breed-pitches-tax-breaks-for-downtown-san-francisco-office-conversions/">cutting transfer taxes</a> and <a href="https://sfstandard.com/2023/03/27/new-law-could-kickstart-downtown-office-to-housing-conversions-but-its-only-half-the-battle/">rezoning blocks</a> of commercial buildings.&nbsp;



“This was the single biggest thing we can do as a city,” Anne Taupier, director of joint development at the Office of Economic and Workforce Development, said of the fee reduction. “Developers are telling us that they can now start looking at building acquisitions. This is a signal to lenders that they can come back to San Francisco. We are worth the risk.”&nbsp;



Next up is creating a special financing district that would essentially freeze property tax values for 30 years, thus guaranteeing more returns for investors. Assemblymember Phil Ting’s <a href="https://calmatters.digitaldemocracy.org/bills/ca_202320240ab2488">AB 2488</a>, which was signed into law last year, has paved the way for this in downtowns across the state.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" height="1667" width="2500" src="https://content.sfstandard.com/wp-content/uploads/2024/10/20241001-officeconversionribboncutting-es-16.jpg?w=2500" alt="A man in a hat sits reading at a desk in an empty office with several rows of desks and chairs, large windows, and overhead lights." class="wp-image-317507" srcset="https://content.sfstandard.com/wp-content/uploads/2024/10/20241001-officeconversionribboncutting-es-16.jpg 3000w, https://content.sfstandard.com/wp-content/uploads/2024/10/20241001-officeconversionribboncutting-es-16.jpg?resize=300,200 300w, https://content.sfstandard.com/wp-content/uploads/2024/10/20241001-officeconversionribboncutting-es-16.jpg?resize=768,512 768w, https://content.sfstandard.com/wp-content/uploads/2024/10/20241001-officeconversionribboncutting-es-16.jpg?resize=2500,1667 2500w, https://content.sfstandard.com/wp-content/uploads/2024/10/20241001-officeconversionribboncutting-es-16.jpg?resize=1536,1024 1536w, https://content.sfstandard.com/wp-content/uploads/2024/10/20241001-officeconversionribboncutting-es-16.jpg?resize=2048,1365 2048w" sizes="auto, (max-width: 2500px) 100vw, 2500px" /><figcaption class="wp-element-caption">The Humboldt Building&#8217;s abundance of windows and floor plans made it a good fit for conversion.</figcaption></figure>



OEWD has to complete a fiscal and building eligibility analysis for the district to take effect in San Francisco, Taupier said. Then, the Board of Supervisors would have to pass a resolution establishing a governing board for the district.&nbsp;&nbsp;&nbsp;



The final step will be for that body and the Board of Supervisors to approve a finance plan to govern the district’s activities. Taupier said OEWD expects the resolution to be introduced this spring and the finance plan to be adopted by late summer or early fall.



Efforts to incentivize office-to-housing conversions in San Francisco started in earnest in 2023, Taupier said. As new construction <a href="https://sfstandard.com/2024/04/08/san-francisco-new-housing-permits-pace/">crawled to a standstill</a>, OEWD partnered with the Planning Department and private developers to strategize what the city could do to <a href="https://sfstandard.com/2024/07/26/bay-area-housing-group-solves-affordable-homes-math/">bring down construction costs</a>.&nbsp;



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Marc Babsin, president of Emerald Fund, a San Francisco developer that in 2015 converted an insurance office at 100 Van Ness into housing, called the new ordinance a “vital piece of the puzzle” in unfreezing the construction pipeline.



“Today the conversation with lenders is short,” Babsin said. “But with this [slate of reforms], I believe investors are going to see that these projects are more financeable. We’ve reduced the infeasibility gap.”



He added that an office building with the “right characteristics” could be converted to housing for 30% less of the cost of ground-up, high-rise construction. The aforementioned Humboldt Building — which is being redeveloped by Forge’s Richard Hannum and the property’s owner — achieved savings through federal grants and financing that incentivize clean-energy development. 



Joy Ou, CEO of Group i, once owned a prime candidate for conversion: the historic Warfield Building at 982 Market St. In 2022, the developer proposed to <a href="https://sfstandard.com/2022/12/22/historic-sf-building-could-be-first-office-to-homes-conversion-since-the-pandemic/">convert it</a> into 34 apartments.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" height="1730" width="2500" src="https://content.sfstandard.com/wp-content/uploads/2022/12/GettyImages-1408471856-scaled.jpg?w=2500" alt="The image shows a building entrance with a golden awning frame. The word &quot;Warfield&quot; is displayed prominently, and the number &quot;988&quot; is visible above." class="wp-image-106452" srcset="https://content.sfstandard.com/wp-content/uploads/2022/12/GettyImages-1408471856-scaled.jpg 2560w, https://content.sfstandard.com/wp-content/uploads/2022/12/GettyImages-1408471856-300x208.jpg 300w, https://content.sfstandard.com/wp-content/uploads/2022/12/GettyImages-1408471856-2500x1730.jpg 2500w, https://content.sfstandard.com/wp-content/uploads/2022/12/GettyImages-1408471856-768x532.jpg 768w, https://content.sfstandard.com/wp-content/uploads/2022/12/GettyImages-1408471856-1536x1063.jpg 1536w, https://content.sfstandard.com/wp-content/uploads/2022/12/GettyImages-1408471856-2048x1417.jpg 2048w, https://content.sfstandard.com/wp-content/uploads/2022/12/GettyImages-1408471856-650x450.jpg 650w, https://content.sfstandard.com/wp-content/uploads/2022/12/GettyImages-1408471856-370x256.jpg 370w, https://content.sfstandard.com/wp-content/uploads/2022/12/GettyImages-1408471856-800x554.jpg 800w, https://content.sfstandard.com/wp-content/uploads/2022/12/GettyImages-1408471856-450x311.jpg 450w, https://content.sfstandard.com/wp-content/uploads/2022/12/GettyImages-1408471856-185x128.jpg 185w, https://content.sfstandard.com/wp-content/uploads/2022/12/GettyImages-1408471856-740x512.jpg 740w, https://content.sfstandard.com/wp-content/uploads/2022/12/GettyImages-1408471856-20x14.jpg 20w, https://content.sfstandard.com/wp-content/uploads/2022/12/GettyImages-1408471856-400x277.jpg 400w, https://content.sfstandard.com/wp-content/uploads/2022/12/GettyImages-1408471856-1600x1107.jpg 1600w, https://content.sfstandard.com/wp-content/uploads/2022/12/GettyImages-1408471856-225x156.jpg 225w, https://content.sfstandard.com/wp-content/uploads/2022/12/GettyImages-1408471856-900x623.jpg 900w, https://content.sfstandard.com/wp-content/uploads/2022/12/GettyImages-1408471856-69x48.jpg 69w" sizes="auto, (max-width: 2500px) 100vw, 2500px" /><figcaption class="wp-element-caption">A developer once tried to convert a section of office space in the Warfield into 35 apartments.</figcaption></figure>



But Ou said the project never got off the ground because of high costs. This month, the Warfield was sold to the Community Arts Stabilization Trust for $7.3 million. As a result, the property will remain an office building, with public radio station KALW <a href="https://www.sfchronicle.com/realestate/article/downtown-sf-warfield-kalw-20154126.php">as the anchor tenant</a>.&nbsp;



Ou said that if San Francisco wants to help developers further, the city could take on a more active role providing financing directly. But with a ballooning deficit and an uncertain economy, that idea seems unlikely.&nbsp;



“Finding capital is still tough,” she said. “Lenders have been scarred from the past [five years], and they’re afraid to get burned.”&nbsp;

Scandal-ridden SF nonprofit Collective Impact loses contracts

A troubled San Francisco nonprofit whose executive director <a href="https://sfstandard.com/2024/09/12/san-francisco-dream-keeper-initiative-sheryl-davis-james-spingola-nonprofit/">shared a home with a former city official</a> has lost grants after two city departments pulled their funding.&nbsp;



The nonprofit, Collective Impact, has not been barred from doing business with San Francisco in the future, and it is unclear if the city will honor its remaining outstanding invoices.



The cancellation is the latest fallout from <a href="https://sfstandard.com/2024/09/17/london-breed-dream-keeper-initiative-sheryl-davis/">a scandal that has roiled San Francisco’s sprawling network of nonprofits</a> and badly damaged Mayor London Breed&#8217;s showcase initiative for the Black community.&nbsp;



The Human Rights Commission and the Office of Economic and Workforce Development will cancel five contracts worth millions of dollars, citing a conflict of interest between the former head of the HRC, Sheryl Davis, and Collective Impact.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" height="1667" width="2500" src="https://content.sfstandard.com/wp-content/uploads/2024/12/20241213collective-014.jpg?w=2500" alt="A woman with long dark hair stands against a light-colored wall, looking thoughtfully to the side. She's wearing a black top, and sunlight illuminates her face." class="wp-image-342204" srcset="https://content.sfstandard.com/wp-content/uploads/2024/12/20241213collective-014.jpg 3000w, https://content.sfstandard.com/wp-content/uploads/2024/12/20241213collective-014.jpg?resize=300,200 300w, https://content.sfstandard.com/wp-content/uploads/2024/12/20241213collective-014.jpg?resize=768,512 768w, https://content.sfstandard.com/wp-content/uploads/2024/12/20241213collective-014.jpg?resize=2500,1667 2500w, https://content.sfstandard.com/wp-content/uploads/2024/12/20241213collective-014.jpg?resize=1536,1024 1536w, https://content.sfstandard.com/wp-content/uploads/2024/12/20241213collective-014.jpg?resize=2048,1365 2048w" sizes="auto, (max-width: 2500px) 100vw, 2500px" /><figcaption class="wp-element-caption">Sheryl Davis resigned from the Human Rights Commission after The Standard reported that she had approved contracts with Collective Impact while sharing a home with Spingola.</figcaption></figure>



Davis <a href="https://sfstandard.com/2024/09/13/sheryl-davis-resigns-san-francisco-human-rights-commission/">resigned from HRC</a> in September after The Standard reported that she had approved multiple six-figure contracts with Collective Impact while sharing a home and car with James Spingola, who leads the nonprofit.



As part of an ongoing investigation, the city determined that Davis had a financial interest in Collective Impact as the organization had purchased her books and covered costs related to her podcast.



It is unclear how this might affect the status of executive director Spingola, who told The Standard he had yet to hear the news. 



The mayor’s office declined to comment. In a statement, the Human Rights Commission called the decision &#8220;difficult news to deliver to a community which has recently experienced unquantifiable loss.&#8221;



The statement continued, &#8220;The Human Rights Commission remains committed to working with the City’s enforcement agencies to ensure fair treatment of and equity in supporting our community-serving nonprofit organizations, so that they have a clear understanding of their legal obligations when doing business with the City and receiving taxpayer dollars.&#8221;



<h2 class="wp-block-heading" id="h-contracts-worth-millions-nbsp">Contracts worth millions&nbsp;</h2>



Collective Impact has three contracts with the Department of Economic and Workforce Development, worth a total of $8.1 million, that were set to expire in 2025, according to the city’s Open Book <a href="https://openbook-report.sfgov.org/OBMiddleware/report.aspx?reportname=4#Pf152acbd414c4856b14b45b47903405a_4_45iT0">system</a>. The two HRC contracts, set to expire this spring, totaled $2.5 million.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1564" height="1043" src="https://content.sfstandard.com/wp-content/uploads/2024/07/dreamkeeperinitiative_03.jpg?w=1564" alt="Three people stand on a stage with the words &quot;Dreaming Forward&quot; in the background." class="wp-image-287850" srcset="https://content.sfstandard.com/wp-content/uploads/2024/07/dreamkeeperinitiative_03.jpg 1564w, https://content.sfstandard.com/wp-content/uploads/2024/07/dreamkeeperinitiative_03.jpg?resize=300,200 300w, https://content.sfstandard.com/wp-content/uploads/2024/07/dreamkeeperinitiative_03.jpg?resize=768,512 768w, https://content.sfstandard.com/wp-content/uploads/2024/07/dreamkeeperinitiative_03.jpg?resize=1536,1024 1536w" sizes="auto, (max-width: 1564px) 100vw, 1564px" /><figcaption class="wp-element-caption">From left, Dream Keeper Initiative director Saidah Leatutufu-Burch, Mayor London Breed, and Davis on Feb. 9, 2023.</figcaption></figure>



Under city contracts, nonprofits typically do not receive all funds upfront. Instead, they spend to do the work promised, then send the city a purchase order requesting reimbursement. Collective Impact is waiting to receive $4.6 million in payments from the city, Open Book shows.



In a statement, a spokesperson for HRC said the agency plans to &#8220;withhold payment of all outstanding invoices until their ongoing audit and investigations are complete.&#8221;



Collective Impact runs programs for low-income and at-risk youth in the Western Addition. The cancellation of funding could cripple the nonprofit, one of the major recipients and distributors of the Dream Keeper Initiative. That program, created by Breed, has come under scrutiny for how city funds have been managed and spent. She launched the initiative in 2020 in collaboration with Supervisor Shamann Walton to redirect funds to economic and cultural development in Black communities.



<h2 class="wp-block-heading" id="h-growing-scandals">Growing scandals</h2>



Founded in 2007, Collective Impact received some $7.5 million through the Dream Keeper Initiative, the second-highest amount among roughly 350 recipients.&nbsp;



Collective Impact’s most recent filing with the Internal Revenue Service shows $7.47 million in revenue in 2023, with nearly 90% of funding coming from government grants.



Between 2021 and 2022, Collective Impact received $1.5 million in contracts approved by Davis during a period when she and Spingola shared a home.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" height="2500" width="1668" src="https://content.sfstandard.com/wp-content/uploads/2024/12/20241213collective-011.jpg?w=1668" alt="A smiling couple stands on a pink carpet, with a vibrant floral wall behind them. The woman wears a red top and pink sneakers, and the man sports a blue tropical shirt." class="wp-image-342201" srcset="https://content.sfstandard.com/wp-content/uploads/2024/12/20241213collective-011.jpg 2668w, https://content.sfstandard.com/wp-content/uploads/2024/12/20241213collective-011.jpg?resize=200,300 200w, https://content.sfstandard.com/wp-content/uploads/2024/12/20241213collective-011.jpg?resize=768,1151 768w, https://content.sfstandard.com/wp-content/uploads/2024/12/20241213collective-011.jpg?resize=1668,2500 1668w, https://content.sfstandard.com/wp-content/uploads/2024/12/20241213collective-011.jpg?resize=1025,1536 1025w, https://content.sfstandard.com/wp-content/uploads/2024/12/20241213collective-011.jpg?resize=1366,2048 1366w" sizes="auto, (max-width: 1668px) 100vw, 1668px" /><figcaption class="wp-element-caption">Davis and Spingola attend an HRC reception Oct. 6, 2023, at San Francisco City Hall.</figcaption></figure>



While Davis later recused herself from approving contracts for the nonprofit, she did not inform the city about the living situation, despite rules requiring such a disclosure. 



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The nonprofit also failed to inform state officials about the potential conflict of interest, documents show. Davis in 2021 <a href="https://sfstandard.com/2024/10/03/san-francisco-dream-keeper-initiative-scandal-sheryl-davis/">received payments from Collective Impact,</a> according to internal financial documents obtained by The Standard, in a potential violation of the law. Records show Davis collected more than $5,000 in reimbursements for software subscriptions and other expenses from Collective Impact while approving the organization’s contracts.

OpenAI’s Altman is lobbying City Hall — and advising its new boss

OpenAI’s revenue <a href="https://www.nytimes.com/2024/09/27/technology/openai-chatgpt-investors-funding.html">has almost tripled</a> over the last year. Its valuation is ballooning by billions.&nbsp;



At the same time, it repeatedly lobbied the city for a tax break, records reviewed by The Standard show. Mayor London Breed’s administration didn’t give the company what it wanted.



That was then. Now, it doesn’t take advanced artificial intelligence to compute the golden opportunity gift-wrapped for OpenAI by San Francisco’s mayor-elect.



OpenAI CEO Sam Altman is the star addition to Daniel Lurie’s transition team, even as his company lobbies the city to tweak its taxes. OpenAI’s lobbyist, longtime City Hall insider Alex Tourk, is still on the payroll.&nbsp;



Altman will not only have Lurie’s ear on policy issues germane to San Francisco and its business climate, but the arrangement puts him in a position to recommend mayoral staffers who may agree to a more tech-friendly tax environment.&nbsp;



Breed said no to Altman’s company. Will Lurie?&nbsp;



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“We have not discussed any tax breaks,” Lurie told The Standard in an interview Tuesday. “We talked about their investment in arts and culture, investing in the city. He’s all in on our city, just like every co-chair on the transition team.”



Former San Francisco Ethics Commission president Paul Melbostad said Altman’s presence in Lurie’s transition team is a red flag.&nbsp;



“I think it would be wise not to include him on the transition team if the company is currently lobbying for a tax break,” Melbostad said. “It creates an appearance of undue influence and special access, even if Mayor Lurie and Sam Altman have the best of intentions.”



OpenAI is a San Francisco darling. Artificial intelligence is one of the few glimmering stars in the city’s otherwise dim economic outlook, and OpenAI signed a lease for 350,000 square feet in the <a href="https://sfstandard.com/2024/09/20/open-ai-expands-in-mission-bay/">former Old Navy site in September</a>. That brings the company&#8217;s office presence in San Francisco to nearly 1 million square feet, a sorely needed anchor as businesses exit the city.



That star power didn’t bring OpenAI a sweeter tax deal, however.&nbsp;



Instead, voters may take more blood from OpenAI and similar companies with the approval of <a href="https://sfstandard.com/2024/10/31/sf-election-2024-prop-m/">Proposition M</a>. The measure reforms business taxes to lessen the burden on the city’s largest and smallest companies, in hopes of stimulating the economy.&nbsp;But someone’s got to make up the lost revenue: Midsize companies, which may pay more under Prop. M. The overhaul may also reduce how much taxes are calculated on business payrolls, and weigh them far more toward sales.



So if a middle-size company is about to skyrocket — say, a tech firm expecting a boost in revenue — it will pay higher tax rates than under the previous scheme.



Enter Tourk, OpenAI’s San Francisco lobbyist. In March, he met with the city’s Office of Economic and Workforce Development and chief fiscal officer to discuss tax reforms, lobbyist filings at the Ethics Commission show. He came into City Hall for the first meeting with Breed, then hopped on Microsoft Teams with her staffers in April, May, and September to discuss tax reform. In October, he met with the Office of Economic and Workforce Development yet again.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" height="1668" width="2500" src="https://content.sfstandard.com/wp-content/uploads/2024/11/20241108_mayorlurieannouncement_jason_-0852_ea68c1.jpg?w=2500" alt="A man in a suit is shaking hands in a crowd outdoors. He is surrounded by people taking photos and smiling, with tall buildings in the background." class="wp-image-331522" srcset="https://content.sfstandard.com/wp-content/uploads/2024/11/20241108_mayorlurieannouncement_jason_-0852_ea68c1.jpg 3000w, https://content.sfstandard.com/wp-content/uploads/2024/11/20241108_mayorlurieannouncement_jason_-0852_ea68c1.jpg?resize=300,200 300w, https://content.sfstandard.com/wp-content/uploads/2024/11/20241108_mayorlurieannouncement_jason_-0852_ea68c1.jpg?resize=768,512 768w, https://content.sfstandard.com/wp-content/uploads/2024/11/20241108_mayorlurieannouncement_jason_-0852_ea68c1.jpg?resize=2500,1668 2500w, https://content.sfstandard.com/wp-content/uploads/2024/11/20241108_mayorlurieannouncement_jason_-0852_ea68c1.jpg?resize=1536,1025 1536w, https://content.sfstandard.com/wp-content/uploads/2024/11/20241108_mayorlurieannouncement_jason_-0852_ea68c1.jpg?resize=2048,1366 2048w" sizes="auto, (max-width: 2500px) 100vw, 2500px" /><figcaption class="wp-element-caption">Mayor-elect Daniel Lurie pledged to build a &#8220;world-class&#8221; team, starting with his transition advisors. </figcaption></figure>



Prop. M is done. Why are they still lobbying? Still in question is how to figure out what a San Francisco sale means for a company that sells something intangible, like software. It’s a complicated rule-making process going through the Treasurer &amp; Tax Collector’s office.&nbsp;



The tax office is less easily lobbied. Treasurer Jose Cisneros was reelected breezily, and it&#8217;s well-known that lobbyists have little sway in the department.



But another way a lobbyist can negotiate a tax benefit is by going to the Board of Supervisors or mayor’s office to seek a carveout. One carveout that may ring bells is the “Twitter Tax Break,” which was seen as a sweetheart deal for tech companies in mid-Market that failed to improve the area in the long term.&nbsp;



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Lurie tried to dispel any whiffs of impropriety, circulating a code of ethical conduct for all members of the transition team to sign, which notes, “I will take all steps reasonably necessary to avoid abusing or misusing my position with the Transition Team for personal gain.”



In a statement, an OpenAI spokesperson said, “Sam has not discussed tax reform with Mayor-elect Lurie and will comply with the ethics pledge required by the transition team. San Francisco is where OpenAI got started and we’ll continue to advocate for policies that ensure the city remains a hub for innovation.”



Melbostad called that ethical pledge “meaningless” in a legal sense. He served on a transition team for Mayor Art Agnos in 1988 and knows how influential the position can be. The shape of the new administration flows from such a team, he said.&nbsp;



“The people appointed to the transition team know people who have skills that would be helpful to the incoming mayor,” Melbostad said. “The purpose of the transition committee is not to allow persons or entities seeking influence to obtain tax breaks to have an inside track.”

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