Small businesses lost revenue after city promised big business for APEC

Small business owners in the APEC security zones in San Francisco have been vocal about the negative impacts of APEC, warning city leaders before the summit of their concerns for revenue. 

On Friday, business owners who stayed open said, that although the hotels were fully booked and 20,000 people were in the city for the summit, they lost revenue. 

Small business owners all over the city felt the impact, reporting losses of up to hundreds of thousands of dollars. They said most of the attendees did not visit their business and city officials also told locals to avoid the area.

With the heightened security and changes in traffic, business owners like Arash Ghanadan said he is "deeply disappointed" by the lack of support for small businesses, even sending a letter to city leaders on Monday expressing his concern.

"APEC attendees are here for diplomacy. They’re not necessarily here to see San Francisco," he said.

Barricades went up blocking the vehicle traffic in security zones, but leaving room for pedestrians to walk into businesses. APEC attendees would have had to leave the security zones and walk around the fencing to visit a small business in the security zones.  

Novela, a bar and lounge that usually has more than 130 reservations a night, had 136 reservations on Thursday, Nov. 2, and had an empty queue on Thursday, Nov. 16. 

"Monday for example, we had maybe 10 or 12 customers total," said Ghanadan, one of the owners of Novela. 

Ghanadan is a partner in three lounges. Novela is in the security zone. Madarae on Minna Street is on the outskirts of the security zone and Barbarossa Lounge is in North Beach. He said APEC impacted all three businesses.

He originally projected losses of up to $150,000 across his businesses, but said on Friday, "The impact is probably closer to $250,000 at this point."

We followed up with John Eric Sanchez, owner of Executive Order Bar and Lounge near Fifth and Mission Streets. He told KTVU in October about his concerns that the city was not preparing small business owners in the security zone.

"They told us to open up because business was going to be great for small business, and it wasn’t," said Sanchez.

Sanchez took the risk of staying open and spent $8,000 on labor, but only earned $1,800 in sales between Sunday and Thursday.

"I’d say maybe less than 10% of it came from anything APEC related," he said, a steep decline from the $20,000 he raked in the same time last year.

Sanchez said the city sold a bill of goods they couldn’t deliver.

"If I knew what I know today about 10 days ago, a week ago, I would have made the decision to shut down the business," said Ghanadan.

Jessica Rae said reservations at her dance studio, Rae Studios, started off strong on Monday, but she saw a decline in appointments as the week went on, affecting sales.


SF small business owners say APEC security has kept customers away

Before this week's summit, San Francisco said the influx of global leaders and CEO's would be good for local businesses. This may not be true for many who work near the APEC security zone and Chinatown. Business owners in the South of Market neighborhood and Chinatown say tight security measures such as road closures have kept customers away. The expected APEC boom has turned into a bust for Manny Ramirez, owner of Bocado located on Folsom Street near Moscone Center where the APEC Summit is being held.

"About 30% decrease in revenue," she said.

Rae said she received support in another way when her business was tapped to provide fitness and dance classes at the reopening of UN Plaza. 

City officials said an event of this magnitude is unprecedented, and it can be difficult to anticipate the impact. 

In a statement from a spokesperson at the Office of Economic and Workforce Development, they wrote in part, "APEC is giving San Francisco the opportunity to promote the City to the world and generate long-term positive economic impacts. Ultimately, as the City continues to build on the Mayor’s Roadmap to San Francisco’s Future, major global events like this will bring more visitors and more customers to our small businesses in the long run. We’re committed to this momentum so that every San Franciscan benefits."

The statement went on to say, "We understood there would be impacts and some disruptions throughout the week, which is why we launched a multi-agency outreach effort."

The outreach effort included teams engaging with merchants as the Secret Service and federal partners shared their plans for security, sharing information through flyers and community meetings, and listening to community concerns on a daily basis.

"This advocacy and work is ongoing, and as APEC concludes, the OEWD and Office of Small Business are working better to understand the full impacts to small businesses from APEC," said the city spokesperson.

"As a whole, APEC, in the long term, promotes San Francisco and brings more business, but in the short term for small businesses, the impact is very significant. Losing a week of business is significant," said Ghanadan.

Business owners told KTVU they want the city to find a solution and are asking for compensation for operating costs. 

The city’s spokesperson shared, "We'll be working with small businesses sector to examine how we can better serve them not only in the wake of this event but to better position them to benefit from future ones."