But Costello already appears to be helping turn the ship around, with employees reporting \u201can overall more positive and optimistic perception\u201d of leadership, which they said was \u201cmore open, communicative, and proactive than the previous leadership,\u201d the auditors found, though they reported that \u201crepairing the workplace culture and rebuilding trust will require time and sustained effort.\u201d<\/p>\n
\u201cWe\u2019re going to be providing an irresistible vision for people to get excited about, and I think that\u2019s going to be a way to really energize people to invest in the zoo,\u201d Costello said. \u201cWe are launching new initiatives, reconnecting with the public in new ways \u2014 new offerings, programs, special events.\u201d<\/p>\n
To support that trend and keep the zoo functioning until it gets fiscally healthier, The City might soon authorize a loan of up to $8.5 million to the nonprofit San Francisco Zoological Society, which runs the zoo under a lease and management agreement with The City.<\/p>\n
Much is riding on the prospect of a loan of giant pandas from China, meanwhile, with hopes high for a flood of zoo visitors coming from near and far.<\/p>\n
\u201cCollaborative\u201d talks have been ongoing with Chinese officials, said Supervisor Myrna Melgar, whose District 7 includes the zoo and who has been spearheading the loan initiative.<\/p>\n
\u201cWe can see the light at the end of the tunnel here,\u201d Melgar said Wednesday\u00a0during a hearing before the Board of Supervisors\u2019 Budget and Finance Committee\u00a0about the loan proposal. \u201cWe must partner together to make sure that we are successful.\u201d<\/p>\n
Melgar, who said her three daughters attended zoo camp, was the one who requested the audit, which she said in an interview showed the zoo had been \u201cpoorly run,\u201d though she said she was glad it found the zoo\u2019s animals had received good care.<\/p>\n
\u201cThe zoo is a very important institution for San Francisco, but it\u2019s also really important for the economy of the west side,\u201d she told her colleagues. \u201cIt brings visitors from the downtown core to the west side, and then they stay and eat in our restaurants and engage with our residents.\u201d<\/p>\n
Costello took the helm after a tumultuous period that led to the resignation of former zoo head Tanya Peterson last summer.<\/p>\n
A former city official and executive at San Francisco Travel, The City\u2019s destination-marketing agency, Costello is now the Zoological Society\u2019s CEO and executive director. She joined as chief operating officer in August of 2025 and immediately became interim co-CEO. She had previously been deputy director of property for city parks and a chief of staff to two supervisors.<\/p>\n
Mayor Daniel Lurie hailed her appointment when it was announced, and multiple people connected with the zoo testified Wednesday to increasing optimism since Costello\u2019s arrival.<\/p>\n
\u201cI can honestly say I\u2019ve never felt as hopeful for our future as I have since the current leadership started last year,\u201d said Patrick Schlemmer, the zoo\u2019s director of global conservation and a longtime employee. \u201cI think that we are now on track to make the San Francisco Zoo a world class institution.\u201d<\/p>\n
The audit said the primary cause of the Zoological Society\u2019s growing structural deficit has been decreasing attendance, a dynamic that was exacerbated by a lack of investment in marketing, educational programming and other strategies to improve the guest experience, such as repairing signs.<\/p>\n
It said that overall zoo attendance declined by 170,236 visitors, or 22%, between fiscal year 2018-19 and FY 2024-25.<\/p>\n
Between FY 2018-19 and FY 2024-25, operating revenues decreased 11%, from $22.3 million to $19.8 million, while operating expenditures increased from 14%, from $24.5 million to $27.8 million, the audit said. Meanwhile, it said, the Zoological Society\u2019s operating deficit grew by $5.8 million \u2014 from $2.2 million to $8 million.<\/p>\n
To cover its annual operating deficits, the organization relied on nonoperating revenue sources \u2014 many of which are highly variable and one-time, such as federal COVID-19 relief and estate bequests \u2014 and it has also drawn on its investment reserves, the report said.<\/p>\n
\u201cHopefully we can bring more people to the zoo and find ways to drive attendance and revenue,\u201d Costello said in an interview. \u201cThis is a time for people to lean in to support our beloved zoo, to believe in the future of the zoo.\u201d<\/p>\n
Melgar called Costello \u201ca breath of fresh air,\u201d and said she \u201cdid all of the right things in terms of crunching the numbers and being transparent with their financials.\u201d<\/p>\n
Previous zoo leadership had been \u201cantagonistic\u201d to the audit process, but Costello has been the opposite, said Melgar, who called the audit \u201ca roadmap to success.\u201d<\/p>\n
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UCSF aims to address the increasing number of cases of colorectal cancer in young people, which has become the leading cause of cancer death in young people<\/p>\n <\/p>\n
For 25 years, MTT helped lift San Francisco Symphony into the upper echelon of the world\u2019s orchestras with his passion for the art form<\/p>\n Under Costello\u2019s leadership,\u00a0the Zoological Society agreed to all of the audit\u2019s recommendations and to the lengthy terms of the proposed ten-year city loan, which include that it must:<\/p>\n Immediately reduce operational expenses by a minimum of 10%. The zoo has already cut expenses through measures that include freezing raises, bonuses and promotions, Costello said.Not assume new financial liabilities or animals requiring capital habitat investment or staffing resources (with the exception of giant pandas, an exhibit of which has been estimated to cost $27.5 million).Develop with a specialized zoo consultant a financial plan and annual budget that balances expenses with revenues. The plan must consider different scenarios regarding the prospect of receiving two giant pandas on loan from China.Develop with a qualified zoo consultant a five-year strategic plan to improve attendance and revenue, including any major additions, removals or renovations of exhibits.Participate in a long-term visioning process with city staff and others.On a quarterly basis, report to The City progress on attendance, new member acquisition, fundraising, expenses, financial records and the giant-panda project.<\/p>\n \u201cIt\u2019s all stuff that any modern nonprofit of that size needs to do,\u201d Melgar said. \u201cI\u2019m positive they can do it.\u201d<\/p>\n Costello was upbeat about her new role, outlining various initiatives to strengthen the zoo\u2019s operations and its conservation and education mission, and to attract more visitors \u2014 for instance, with an upcoming animatronic dinosaur display.<\/p>\n As the zoo approaches its centennial, Costello said, \u201cIt\u2019s a really exciting time to think about, what does the next 100 years look like?\u201c<\/p>\n Costello said she was excited to be launching \u201ca strategic and business planning effort, as well as a master plan.\u201d<\/p>\n \u201cWe\u2019re all rowing in the same direction, and it feels really good to have this tangible momentum,\u201d she said. \u201cWe appreciate the thorough work of the audit team and welcome recommendations that will strengthen the Zoo\u2019s operations and long-term sustainability.\u201d<\/p>\n The need for cash from The City is immediate. The Zoological Society is projecting a two-year net operating-cash deficit of $11.89 million between January 2026 and December 2027, according to a city report.<\/p>\n The loan plan The City is considering would provide money as terms are satisfied, with $6.5 million made available through the second quarter of 2027. Another $2 million could be available if the zoo successfully renews its American Zoos and Aquariums certification in March and city officials find that it \u201chas made sufficient progress towards financial stability and its long-term goals.\u201d<\/p>\n Established in 1929, the San Francisco Zoo & Gardens is a 100-acre park with nearly 1,500 animals of more than 225 species, according to zoo data. The zoo and the animals are owned by San Francisco, and it is under the administrative jurisdiction of the Recreation and Park Department.<\/p>\n The City pays the Zoological Society an annual management fee of $4 million \u2014 about 17% of the zoo\u2019s projected revenues in FY 2025-26. That amount that has not been increased since its lease was signed in 1993. Melgar and Supervisor Connie Chan both pushed Wednesday for Recreation and Parks to take steps toward revisiting that 33-year-old agreement.<\/p>\n The Zoological Society has about 180 employees and more than 30 members on its board of directors. Oversight is provided through the Joint Zoo Committee, which consists of three Zoological Society board members and three city park commissioners.<\/p>\n The City analyzed the cost and complexity of immediately terminating the Zoological Society\u2019s lease and determined that caring for the zoo\u2019s animals while finding them new homes would not be \u201cfeasible or financially prudent,\u201d a proposed resolution<\/a> supporting the loan plan said.<\/p>\n
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