City seeks flexibility with retail vacancies
San Francisco Mayor London Breed is to announce plans Monday for legislation and permitting changes to make it faster and easier to open a retail business, in an effort to fill the empty storefronts that have deadened city neighborhoods for years.
“It’s really hard to do business in San Francisco,” Breed said. “When there’s too many layers of process and requirements and fines and permits and all of that, it can be quite discouraging. I think in some instances, it goes much too far.”
Proposals will include more flexibility around serving drinks and food in traditional retail spaces, cutting down city approval requirements, and easing rules for temporary pop-up stores and events.
The city is also allocating nearly $1 million for small-business subsidies, consultants and legal assistance, and research on the causes of local retail vacancies.
Rents and construction costs in San Francisco have soared, and businesses are grappling with competition from online shopping. Breed said the goal is to cut costs and speed the process of opening new businesses. The
effort mirrors the mayor’s housing strategy, which involves trying to streamline city approvals.
“We have to do more to come up with creative ideas,” Breed said. “When you have a vibrant commercial corridor, it means more business for everyone.”
Pilot studies will focus on vacancies in the Sunset, Richmond, Haight-Ashbury, Excelsior and Bayview neighborhoods. Outer areas were prioritized because tourist traffic is lower and vacancy rates are higher than downtown, Breed said.
District Five Supervisor Vallie Brown will co-sponsor legislation to increase flexibility, such as allowing multiple retailers to share a larger space. Other zoning changes could include allowing a restaurant to operate as a coworking space during the day, or allowing short-term uses at empty buildings before they’re demolished for new projects.
“We’re actually going through a lot of the planning codes, especially the ones that are archaic, and cleaning things up and doing new things,” Brown said. “It takes so long to open a new business. That’s not right.”
Breed said the city’s ban on chain stores in some neighborhoods will also be examined and residents’ opinions gathered. In some areas, a chain store could have a better chance of surviving financial challenges than a single operator, she said.
“I think it’s on a case-bycase basis,” Breed said.
The changes are encouraging to Nikki Cooper, owner of Two Jacks Nik’s Place, a family-owned soul food restaurant that has operated since 1977 in the Lower Haight. The restaurant previously received grant funding through the city’s Legacy Business Program and has also changed its menu to provide healthier foods to keep up with customer tastes.
“I think flex(ible) usage will help,” Cooper said. “I think we have to get creative, because small businesses are under a lot of pressure.”
Brown said one permit change could make it easier for Cooper to host events and live music in her restaurant.
The programs won’t include new taxes on landlords who keep spaces vacant, said Joaquin Torres, director of the city’s Office of Economic and Workforce Development. Last year, Supervisor Aaron Peskin asked the city attorney to study a tax on empty commercial and residential buildings.
“I think there are a lot of other tools out there,” Torres said. “I don’t believe right now that a tax is the right approach.”
The strategy is shaped by feedback from merchants who say the city has been too rigid with its current laws.
“It speaks to this national growing trend about people wanting an experience,” Torres said. “You walk into a flower shop, and there’s also coffee.”
Brian Yee, co-owner of City Smoke House, hopes the changes will allow his barbecue delivery business to open a takeout window next to its kitchen. Currently, he would have to offer a restroom to customers, which would require creating a pathway dividing the kitchen in two. That isn’t practical, he said.
Opening takeout “would be a great way to grow our business,” said Yee, whose company pays $10,000 a month in rent for its Sixth Street kitchen.
Salome Buelow owns a German cafe called Mauerpark that opened seven weeks ago at 500 Church St. She said permitting delays cost her nearly $20,000 and three months of extra paperwork.
“I’m never opening another business in San Francisco,” she said. “It has made it incredibly illuminating why there are empty storefronts along every street.”
Mauerpark, which is named for a park on the site of the Berlin Wall, seeks to provide a gathering place that brings people together.
“I felt that this was something that didn’t exist in San Francisco,” she said. “I love creating spaces.”
The difficulties included a lack of coordination among city agencies, such as the fire, health and building inspection departments, she said. At one point, the building department lost a page of her application and she had to replace it.
Buelow has spent almost $300,000 to open her 840square-foot cafe and is paying more than $5,000 in rent and operational costs a month.
“My positive attitude has definitely suffered,” she said. “I feel like I’m thwarted and not supported. It’s highly dysfunctional.”