San Francisco's formula retail rules, est. 2004, don't themselves adhere to any one strict formula.
For example, while Hayes Valley, Chinatown's tourist corridor, and North Beach ban chains entirely, other parts of town simply subject every potential chain retailer and food operation to the conditional use permit process, with its automatically ensuing public hearing. That on its own weeds out many businesses, since they aren't likely to pass through planning if other chain stores are around the corner, and they aren't likely to pass muster with the public if people express the kind of outrage they did when Chipotle tried coming to the Castro or when Jack Spade threatened to move into the Mission. Remember when that was the only thing people could talk about? Moving on.
Right now, city planners and the Board of Supervisors are revisiting our Formula Retail Use laws with a particular eye toward subsidiaries of chain stores, as the Examiner reports. That's because last summer Supervisor Eric Mar introduced an expanded definition of the chain stores pertaining to their subsidiaries, which still needs Supervisorial approval.
According to Mar, "It’s a simple and elegant solution to address the problem that our neighborhoods face particularly when a particular chain store that owns subsidiaries are allowed to enter a commercial corridor without neighborhood input,” But others aren't so sure about it's simplicity or elegance.
Mar's amendment would apply to affiliates of chain stores that have at least 3 locations worldwide. For the record, the current definitional language on the subject is this:
"[A] retail sales establishment which, along with eleven or more other retail sales establishments located in the United States, maintains two or more of the following features: a standardized array of merchandise, a standardized facade, a standardized decor and color scheme, a uniform apparel, standardized signage, a trademark or a servicemark."
You can read all about SF Planning's Chain Stores (Formula Retail Use), but the point here is that there are plenty of specifics when it comes to the rulebook, which SFist revisited a few years ago. The question now is whether new changes in the form of Mar's amendment would finally corral or further complicate existing legislation.
The Planning Department doesn't like Mar's idea, and have in fact instructed the Planning Commission to shoot down the legislation in a vote on Thursday. They argue that regulating businesses by ownership rather than accounting for local impact might even be illegal.
According to San Francisco Chamber of Commerce senior vice president of public policy Jim Lazarus, “[Given] that this legislation would regulate businesses based on ownership rather than use, it is clearly illegal under land use control laws, which prohibit government regulations used to solely or primarily suppress economic competition.”
Also, it might just be too damn hard to execute. Determining whether a business is a subsidiary or not, Planning argues, would be a thorny question in every case.How much of a percentage does each investor have in a business? Then, do any of those investors have other businesses that are chain stores, of which the business in question might then be considered a subsidiary? “This type of regulation is entirely new for the Planning Department and outside of our area of expertise,” write city planners.
But Mar, who has apparently been working on the legislation since 2014, remains staunch. As he pointed out back then, "There is no shortage of chain stores in San Francisco. There are 1,250."
That doesn't, by the way, count subsidiaries.