In the wake of the COVID-19 pandemic, San Francisco is grappling with a recovery that has left many of its spaces, from downtown offices to waterfront attractions and neighborhood retail areas, eerily empty.
A recent influx of city officials and business leaders at the opening of a new all-you-can-eat buffet, Fire + Ice, at Pier 39, underscores the community’s hunger for positive developments.
Initially set to debut in 2019, the opening was delayed due to city regulations and the impacts of the pandemic, extending the timeline considerably.
District 3 Supervisor Danny Sauter, present at the event, expressed a desire to expedite the process for new businesses by proposing a one-stop shop approach to streamline the numerous city agencies involved in business openings.
Currently, aspiring business owners in San Francisco are required to navigate a complex maze of bureaucratic red tape, and Sauter, who has been in office since November, is discovering that the politics surrounding permitting are as intricate as the actual regulations themselves.
Teaming up with Mayor Daniel Lurie, Sauter and other city supervisors have initiated a series of reformative measures.
However, within his own district, Sauter faces a challenging task, as he balances the needs of vacant downtown offices, struggling Union Square retailers, and the concerns of neighborhood enclaves in North Beach and Chinatown.
While Sauter has successfully pushed through reforms to facilitate chain stores entering vacant spaces on Van Ness Avenue, he encounters resistance when attempting to implement similar changes in North Beach and Chinatown.
Proposed measures aimed at revitalizing empty neighborhood spaces often face opposition from small-business groups. These local merchant associations express concerns that certain proposed changes could undermine the character of their neighborhoods.
In July, to aid new businesses, Mayor Lurie extended a waiver for the first year of business fees, and the Board of Supervisors unanimously passed a law intended to reduce permit wait times and expedite openings.
Yet, the debate intensifies with further proposals working their way through City Hall. Supervisor Myrna Melgar has put forth legislation to eliminate size restrictions on commercial spaces in key locations such as the Castro, North Beach, West Portal, Pacific Avenue, and Polk Street.
Currently, businesses wishing to occupy spaces larger than 4,000 square feet must acquire special permits, a process that can be time-consuming and expensive.
Removing these additional requirements is aimed at alleviating the burdens and assisting new small businesses in opening their doors.
However, various merchant groups have raised alarms that relaxed regulations could lead to rising rents, making it harder for local, mom-and-pop shops to compete.
“Existing limits have been pivotal in ensuring the successes of our commercial corridors by preventing larger retail establishments from infiltrating,” stated merchant groups from neighborhoods like Castro, North Beach, and West Portal in a July letter.
Nate Bourg, president of the Castro Merchants Association, highlighted ongoing vacancies as a reason to prioritize filling existing spaces rather than larger ones. He pointed to the vacant Pottery Barn store, which occupies over 14,000 square feet, as a misfit for the neighborhood.
Maven Commercial, a top real estate firm, predominantly serves mom-and-pop clients seeking spaces between 4,000 and 6,000 square feet, according to managing partner Santino DeRose.
DeRose noted that larger spaces typically attract a narrower range of potential tenants, but refrained from expressing an opinion on the pending legislation, emphasizing that both lawmakers and community groups merely aim for the best outcomes for the city.
In the final session before the August break, the Board of Supervisors voted 9 to 2 in favor of a modified version of Melgar’s plan, which excludes the Castro due to requests from Board president Rafael Mandelman, who represents that district.
Melgar subsequently drafted a separate version that does include the Castro, possibly to keep options open for future discussion.
The supervisors will need to cast additional votes on one of the proposals once they reconvene in September.
Many merchants harbor fears regarding the potential encroachment of chain stores into their neighborhoods.
Formally referred to as formula retailers, these establishments are held back by stringent regulations in various neighborhoods.
Rosa Chen, director of policy at the Chinatown Community Development Center, has voiced concerns that larger spaces could open doors for chain stores to dominate the market, negatively impacting immigrant-run businesses, which often lack adequate capital and knowledge of the permitting process.
Chain establishments, including those that are homegrown yet have expanded, frequently encounter the significant challenges posed by San Francisco’s bureaucracies.
Amid efforts to alleviate these obstacles, Sauter and Supervisor Stephen Sherrill have introduced reforms on Van Ness Avenue that only loosen restrictions in a specific stretch of the roadway.
Simultaneously, Melgar is preparing new citywide legislation separate from the size limit initiatives that aim to broaden access for chain stores. This proposal redefines formula retail as establishments with a minimum of 11 locations within the U.S., as opposed to globally, and removes the need for comprehensive “impact studies” for larger retail establishments.
Despite these adjustments, chain stores will still need special permission from the Planning Commission, and potentially the Board of Supervisors, to set up shop in most neighborhoods.
The Chinatown Community Development Center’s Chen emphasized the need for regulatory safeguards, suggesting that while streamlining processes is beneficial, there must be mechanisms in place to protect local businesses from chain competition.
Opposition to neighborhood-specific permit reforms also stems from the sentiment of “if it isn’t broken, why fix it?”
Erick Arguello, president of the Calle 24 Latino Cultural District in the Mission, highlighted their district’s success, boasting the highest concentration of Latino-owned businesses in San Francisco and a vacancy rate lower than the city average.
The Mission district has not been included in Melgar’s plan for larger commercial spaces, with Calle 24 also signing on to protest Lurie’s permission reform strategy.
Arguello argued for allowing neighborhoods to manage their own unique circumstances without overarching changes imposed from City Hall.
Despite ongoing challenges, Pier 39 reports strong performance metrics, with 100% occupancy on its ground floor and over 85% on its second level, while sales figures have rebounded to pre-pandemic levels, according to spokesperson Sue Muzzin.
However, the shuttered Alioto’s restaurant serves as a reminder of the toll the pandemic has taken on iconic establishments in Fisherman’s Wharf.
Efforts like the debut of Fire + Ice are part of a broader revamp aimed at revitalizing Fisherman’s Wharf through an initiative labeled Fisherman’s Wharf Forward. This plan includes the introduction of contemporary businesses and increased public spaces, along with ongoing support for traditional fishing industries.
New businesses have already faced their own set of challenges. For instance, Fire + Ice’s journey from obtaining permits to opening took two years—while the brewpub Humble Sea only recently began operating after a series of permitting delays, with some processes taking up to six months.
Sauter’s remarks during Fire + Ice’s ribbon-cutting highlighted the need for a strategic approach to permitting reforms within his district.
When North Beach and Chinatown petitioned for exemptions from the Lurie permitting plan, Sauter advocated for their interests, resulting in the exclusion of those neighborhoods from the proposal.
He later indicated intentions to draft tailored reforms specific to varying community needs within his district.
While details on this new bill remain under wraps, Sauter has suggested flexible retail policies that dismantle restrictions on arts spaces, walk-up businesses, and unique retail combinations.
The aim is to reassure community members of the benefits that the permit program may bring to small businesses in District 3.
Moreover, local businesses find themselves grappling with city initiatives to make way for tens of thousands of new homes, impacting small enterprises and potentially displacing up to 50 each year—a significantly smaller figure compared to the city’s approximately 94,000 establishments, according to the city’s Office of Small Business.
As discussions around new zoning maps and protective measures gear up, much debate looms on the impending potential changes expected after summer ends.
The outcome of these deliberations could significantly alter the retail landscape and the way San Franciscans live, shop, and experience their neighborhoods in the months to come.
image source from：thefrisc
