The local Chinese restaurant needs white rice. SBC Park needs janitorial supplies. Starboard TCN needs copier paper. If the local government does not step in, will these provisions all be delivered via the Bay Bridge?
San Francisco is losing warehouse space at a rapid pace. Much attention has been given to the conversion of office buildings to residential space, but what will have a huge short term and long term impact on San Francisco is the elimination of warehouse space from the city.
In the strictest economic terms, warehouses in San Francisco no longer represent the “highest and best” use of space. The return on investment for maintaining an existing warehouse or constructing a new warehouse is simply not favorable when balanced against the land and acquisition costs necessary to purchase property in our city.
In addition, little or no warehouse space is available in South San Francisco either. South San Francisco is moving into biotech and residential development; the rest of the Peninsula is moving to larger-scale residential-type projects to capitalize on soaring real estate costs.
If a bakery cannot find a San Francisco warehouse in which to store bread and cookies, where will these items be housed? Most likely, Oakland, Fremont, and Hayward. These markets are strong warehouse support areas. As San Francisco business turn toward using the east bay to house supplies, more and more products will have to be shipped over the Bay Bridge and San Mateo Bridge, further congesting our already jammed freeways. This will come at a tremendous cost to San Francisco and the Peninsula in terms of lost jobs in service sector employment, lost job hours lost sitting in traffic, pollution, and every other cost associated with chronic traffic congestion.
San Francisco must deal with this problem immediately. Supervisor Maxwell successfully created an industrial zone near Showplace Square, but that is a band-aid. In San Francisco’s older warehouse and industrial sector, buildings no longer meet today’s business needs. The current building stock in areas such as Showplace Square must be modernized or torn down and rebuilt as modern warehouse and industrial structures. This makes no economic sense when pitting the cost of acquisition and development against actual rents. In addition, because residential development is already far along in these areas; it makes better sense to continue to develop such areas into residential structures.
What can San Francisco do? San Francisco needs to reach out to San Mateo County to create a regional plan to tackle this problem. New industrial zones must be created in areas currently underutilized, such as the Cow Palace and Sierra Point. Governmental incentives must be provided to developers to make it more attractive to build industrial properties. A regional plan must be created to deal with traffic congestion. Special delivery hours could be established that would allow trucks and vans easier delivery access.
If action is not taken soon, we can expect only higher costs of merchandise and even worse supply shortages. |
