Vacant and/or boarded-up storefronts outnumber active ones in many parts of San Francisco right now. And it is looking like the pandemic and recession may be reason enough to ease at least some of the restrictions that have kept chain stores of all kinds from populating empty retail spaces.
For over 15 years, San Francisco has banned chain retailers — defined as companies with more than 10 locations worldwide — from multiple neighborhoods in San Francisco. The legislation, which was supported and extended with a voter-approved ballot proposition in 2007, was intended to preserve the unique quality of San Francisco shopping districts like Hayes Valley, Chinatown and North Beach. (Other neighborhoods, including the Castro, have restrictions that require conditional-use approval, but don't have complete, outright bans.)
"You can interchange Fillmore and Chestnut streets [in the Marina] and Union Square. They’re all the same businesses," says Lloyd Silverstein, the head of the Hayes Valley Neighborhood Association, speaking to the SF Business Times. "What was so nice about Hayes Valley was we had such a wonderful, eclectic mix of hospitality."
But Hayes Valley, much like the Castro and North Beach, is suffering right now, and there's a growing list of empty storefronts with not a ton of interest coming from mom-and-pop operations.
As commercial realtor Pam Mendelsohn tells the SF Business Times, where she is finding interest is from mid-size chains — retailers with 10 to 30 locations — and she argues it's high time to relax those formula retail rules.
"When I have 15 vacancies on a street, I don’t know how we can’t be more relaxed," she says.
A drama erupted in Hayes Valley in 2013 over the opening of a Gant Rugger location there — the Swiss retailer had only a few U.S. locations at the time, but many more in Europe. Gant opened, but then Supervisor London Breed sponsored new legislation that made the formula retail law more strict, making it so that it said any business with 11 or more locations worldwide, or with a parent company that 11 or more stores, would also be considered formula retail.
Times have changed. Now Gant is closed, and so are over 20 other retail stores and restaurants that once made Hayes Valley a hopping destination. (Champagne bar The Riddler announced its permanent closure last week.) Even before the pandemic began, back in June 2019, SFist was reporting on the dismal retail situation in Hayes Valley, which mirrored what was happening in the Castro and North Beach.
Proponents of the formula retail restrictions argue that they help keep rents in check, taking away competition from big corporations that can afford to pay higher retail rents than small, independent operations. But that hasn't helped things in the Castro, where dozens of storefronts have gone dark in the past three years, many of them remaining dark as landlords find less and less interest from the kinds of independent businesses the neighborhood once thought it wanted.
Is something, even if it is a corporate chain, better than nothing when a neighborhood appears to be dying? This seems like something the current Board of Supervisors should have at top of mind as the city looks ahead to post-pandemic normalcy and economic recovery. The Board actually passed an ordinance last month to expedite conditional use permits, but it excluded formula retailers — and Mendelsohn tells the Business Times this was a mistake.
"I don't want my neighborhoods full of chains either, but there are good uses and bad uses," she says.
Photo: Justin Sullivan/Getty Images