SF approves $40M hotel subsidy (+ two dissents)

San Francisco
Board of Supervisors Meeting
February 24, 2026

TL;DR

• Board approved a $40 million Hearst Hotel tax incentive 9-2, with Supervisors Chan and Fielder opposed.
• City property is now off-limits for civil immigration enforcement under a new ordinance.
• A new Fisherman's Wharf Entertainment Zone covers nine streets plus Al Scoma Way.
• Portsmouth Square Garage is offering free one-hour parking through March 8, with free Muni on March 7 for the Lunar New Year Parade.
• The Castro LGBTQ Cultural District now includes Duboce Triangle.

What happened

1. Hearst Hotel gets up to $40M in tax incentives over 20 years
   1. The Board finally passed an agreement with Bespoke Hospitality for a new hotel at 5 Third Street and 17-29 Third Street. The city will give back a share of new hotel taxes the project generates, capped at $40 million in net present value over 20 years. The vote was 9-2, with Supervisors Chan and Fielder opposed.
   2. What this means for you: The $40 million isn't paid up front. It comes from future Transient Occupancy Taxes the city collects from the new hotel itself. The ordinance also waives parts of the Administrative Code and Labor and Employment Code for this project.
2. City property can't be used for civil immigration enforcement
   1. A new ordinance bars unauthorized use of city property and states that civil immigration enforcement is not a city purpose. The City Attorney can now sue anyone who uses city property unlawfully.
   2. What this means for you: Federal immigration agents can't use city buildings, land, or facilities to carry out civil enforcement. The City Attorney can take violators to court. The ordinance passed on consent with eight co-sponsors.
3. Fisherman's Wharf Entertainment Zone created
   1. The Board passed an ordinance creating a new entertainment zone covering Powell, Embarcadero, Taylor, Jefferson, Beach, Polk, North Point, and Larkin Streets, plus Al Scoma Way.
   2. What this means for you: This was a first reading, so a second vote is needed before it takes effect.
4. Free parking at Portsmouth Square through March 8, free Muni on parade day
   1. The Board appropriated $311,269 to cover free one-hour parking at the Portsmouth Square Garage from February 8 through March 8, plus transit fares for the Lunar New Year Parade on March 7.
   2. What this means for you: If you're heading to Chinatown for Lunar New Year events, the first hour at Portsmouth Square is on the city through March 8. Muni is free on parade day, March 7.
5. Castro LGBTQ Cultural District expanded to include Duboce Triangle
   1. The Board passed an ordinance extending the Castro Lesbian, Gay, Bisexual, Transgender, and Queer Cultural District to cover Duboce Triangle.
   2. What this means for you: Duboce Triangle now sits inside the formal cultural district boundary alongside the Castro.

Also happened

• Paratransit contract with Transdev extended two years through June 2028, increased by $30.8 million for a $339.1 million total ceiling.
• $18.5 million pulled from the Port Harbor Fund to stabilize and dispose of two failing dry docks.
• Vitalant blood products contract for SF General extended five years through September 2031, increased by $18.3 million for a $28.2 million total.
• Joice Street between Clay and Sacramento renamed "Tien Fuh Wu Way," recognizing her contributions to women's rights and anti-trafficking work in Chinatown.
• Two resolutions reaffirming the city's push to acquire PG&E's electric assets and urging Governor Newsom and the CPUC to hold PG&E accountable.
• Supervisor Chyanne Chen appointed to four regional bodies, including the California State Association of Counties and the ABAG Executive Board.

For any updates or corrections, please email steven@polisdesk.com