City Hall’s answer to the Union Square retail exodus is to bring in new things that aren’t retail, and the Board of Supervisors just voted unanimously Tuesday to loosen zoning laws on Union Square and downtown commercial conversions.
Nearly all commercial retail news coming out of downtown San Francisco lately has been terrible news. The downtown office space vacancy-pocalypse has been well documented throughout the pandemic. And in just the last couple of months, Union Square has lost Anthropologie and the T-Mobile flagship store, while Old Navy announced it’s closing July 1. The Union Square Hilton and Parc 55 SF are surrendering their properties to to their lender, as is the Westfield Centre shopping mall, which is losing its Nordstrom and its Century 9 movie theater, and will be only 55% leased once the Nordstrom is gone.
So the San Francisco Board of Supervisors unanimously approved a measure Tuesday that would eliminate red tape for commercial and office space conversions, according to the Chronicle, making it easier to convert commercial spaces to office or housing uses.
“We are creating more opportunities to fill empty storefronts and underutilized buildings, whether that’s by creating much needed housing or trying out new ideas for businesses and event spaces that will invite people back downtown,” Mayor London Breed said in a statement picked up by the SF Business Times. “We need to make the process easier for getting our buildings active and full."
The measure that was passed addresses office conversion and retail conversion separately. Office space would no longer have rear-yard requirements to convert to housing, and the legislation also removes current bureaucratic requirements regarding “open space, streetscape improvements, dwelling unit exposure, bike parking, transportation demand management, dwelling unit mix, and Intermediate Length Occupancy controls.”
Union Square’s commercial exodus is addressed separately in the legislation, by loosening zoning laws. It allows for office space in upper-floor spaces that are currently zoned as retail-only, and loosens restrictions around indoor and outdoor entertainment.
And there are more restrictions still to be loosened, according to Supervisor Aaron Peskin. “Quickly crafting and passing this legislation has only been half the battle," he said Tuesday. "We're also going block by block to building owners to assess their potential to benefit from this incentive package, while connecting them to potential tenants from small businesses to arts organizations.”
We have our suspicions that to some degree, this “doom loop” narrative is just wealthy commercial real estate types not wanting to pay their bills as a negotiation tactic in a new landscape where their profits are not as gargantuan as they were pre-pandemic. That will all eventually shake itself out. But there’s no question that the pandemic and e-commerce have altered retail permanently. Meanwhile, the remote work trend coincides with a drastic need for more housing. So it’s encouraging to see that the business of getting creative to fill vacancies is underway, though these trends will likely take years to reverse.
Image: Tim Foster via Unsplash