The compromise legislation approved unanimously by the Board of Supervisors on Tuesday — a melding of two separate proposals by progressive Supervisor Eric Mar and Mayor Ed Lee — leaves most of the city’s current rules in place. Those rules require large stores with more than 11 locations to get a special permit from the city before moving into any of San Francisco’s neighborhood commercial districts.
Cap on outlets
In a win for small businesses and left-leaning politicians worried that the influx of big stores will ruin the character of neighborhoods and drive out mom-and-pop businesses, the city will not raise that cap from 11 to 19, as Lee had wanted, and will now count businesses’ total worldwide locations, not just their U.S. stores. “This is a change that strengthens, updates and modernizes our city’s formula retail ordinance,” Mar said Tuesday. “Our formula retail controls are working in San Francisco, and we did not need a radical overhaul but rather some thoughtful tinkering. One thing that was very important to me was to ... ensure stronger neighborhood voices in the process, and I think we have accomplished that.” Mar said he hopes the legislation will make neighborhood commercial districts less attractive to large multinational corporations and help push down rents for smaller businesses. Under the current rules and the legislation approved Tuesday, once a retailer breaks the 11-location cap, it must receive a conditional use permit, which routinely takes four to six months to obtain and cost tens of thousands of dollars. But Mar said the city doesn’t want to punish homegrown businesses with multiple locations that are looking to expand their footprint, and said he will be working with the Planning Department on follow-up legislation that would allow medium-size retailers to grow without facing an expensive, drawn-out permitting process.
Philz Coffee, a homegrown business, currently has 14 locations, for example, and would need a conditional use permit to add any more locations in San Francisco, which can mean paying rent for months on a yet-to-open location while waiting for approvals. “We are looking at specific ways to expedite the process for companies like the San Francisco Soup Co. and Philz Coffee, which many people feel are different than larger chains,” Mar said. The compromise bill also removed professional services — banks, insurance companies, real estate offices — from the law, a change the San Francisco Chamber of Commerce had pushed for. The law exempts grocery stores as well. And the two sides split the difference on a provision that calls for some proposed formula retail stores to first conduct an analysis gauging the impact on the city’s economy, including employment, wages and commercial rents. Mar proposed that any proposed store above 3,000 square feet undertake such a study — the Planning Department had suggested 50,000 square feet. The legislation calls for any formula retail businesses 20,000 square feet or greater to conduct the study. In a letter to supervisors in advance of Tuesday’s vote, Chamber Vice President of Public Policy Dee Dee Workman called the 20,000-square-foot threshold a “reasonable compromise that should not burden small businesses trying to get a foothold in a neighborhood retail district.” She also praised another provision that would allow chain stores taking over a space that was previously used for formula retail to avoid the full conditional-use-permit process and instead undergo an administrative review that could move more quickly. But not everyone in the businesses community was pleased. Ken Cleaveland, vice president of public policy at the Building Owners and Managers Association, which represents commercial property owners, told a supervisors committee last week that changes were unnecessary. “The current restrictions are working,” Cleaveland said. “Why do we need to make them even more restrictive?” Supporters of the changes, such as affordable-housing advocates, agree that the current law is working — and say the changes will further strengthen protections for small businesses. Peter Cohen, co-director of the Council of Community Housing Organizations, called the city’s restrictions “incredibly successful” and pointed out that chains represent just 12 percent of the city’s retail — a number that is even lower in many neighborhoods. Nationally, chain stores represent 32 percent of all retailers.
Seeking chain stores
Supervisor London Breed, who has helped bring some chain stores to her district — at the request of residents — said she believes there is a “time and place” for formula retail and that the tweaks approved Tuesday strike a fair balance. “I think this is a good, solid piece of legislation. A lot of work has gone into it, and in the future, if we determine some things in the legislation create barriers to getting services that some in the community want, we should revisit the legislation,” she said.
Article and Photos Sourced From: http://www.sfgate.com/politics/article/Compromise-reached-on-San-Francisco-s-chain-5870444.php#photo-2906449
