ELECTION 2020
How’s this for cognitive dissonance? By the time a San Francisco plan called “Save Our Small Businesses” takes effect next January — that is, if voters approve it in November — thousands of local merchants will have called it quits, crushed by COVID.
With the pandemic looking like it will stretch well into 2021 and beyond, it’s a race against time for San Francisco’s small businesses, which before the pandemic employed about half the city’s workforce. Many merchants rely on tourists, conventioneers, and downtown workers who filled gleaming towers, but wide swaths of the city will feel empty for months, perhaps even for years to come.
As the economy has crumbled, the pace of help from San Francisco officials — both in the London Breed administration and the Board of Supervisors — has been uneven at best, leaving many small business owners and advocates frustrated, not to mention desperate.
”This is an emergency. How do we move forward more quickly, and convey that to the people making decisions?” said Maribel Ramirez, executive director of the nonprofit Excelsior Action Group, which advocates for businesses in a wide swath of southern San Francisco. “They might have urgency, but it’s not their livelihoods on the line.”
The wrong direction
As of early August, the city’s economic activity measured by credit card transaction volume was down 73% from a year ago, according to an analysis from the SF Chamber of Commerce. It was even worse for restaurants, at 84%. Ominously, about half of restaurants in the analysis were showing no activity at all.
The work-from-home policies of tech titans and others will have lasting fallout the longer offices stay shuttered. On June 30, the SF office vacancy rate was about 10 percent by one estimate, nearly 8 percent by another. Delis, cafes, and other businesses supported by downtown workers generally need an office vacancy rate below 8 percent to make it, based on experience during the previous recession, according to Jay Cheng, the SF Chamber of Commerce’s public policy director. Vacancies going in the wrong direction, he says, “suggest long-term economic impact.”
The city has taken some steps. Tax, fee, and rent moratoriums are keeping money from flowing out of merchants’ coffers. But they desperately need money to flow in.
[Update: After this story posted on Sept. 15, the mayor’s office called for an extension of California’s commercial rent moratorium allowance, which expires at the end of the month. Without that extension, San Francisco and other cities cannot order local moratoriums.]
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For some eateries, the Shared Spaces program, launched in June, has also been a lifeline, but there are no measurable indicators to show how well it’s working. Restaurants can apply to put tables on sidewalks and build dining nooks (“parklets”) in parking spots, and permits are free, but they still have to pay for materials and labor. Laurie Thomas, who owns two restaurants and is acting executive director of the Golden Gate Restaurant Association, spent $15,000 for parklets, and that’s with the savings of her handy husband doing most of the construction, she told The Frisc.
Help has come slowly for owners with limited English skills, limited experience with SF bureaucracy, or limited funds to make changes. “They don’t have the extra push,” said Juanita More, the drag icon, entrepreneur, and resident of Polk Gulch who also advocates for LGBTQ businesses. “That’s only happening in more affluent neighborhoods, not in minority communities.”
In July, soon after More spoke to The Frisc, the city’s small business commission amplified concerns about equitable access and called for the city to move faster to help businesses across more neighborhoods.
But not much has changed in the Excelsior, Ramirez told The Frisc last week: “Other than a few, our businesses have been scared to move outside, or they’re not aware how to do it.” She’s now trying to raise small grants to help them pay for parklets, personal protective equipment, and more.
Closed for dining
The city has also begun to close entire blocks of some streets for merchants, artists, and restaurants. Valencia Street in the Mission and Grant Street in Chinatown were first and anecdotally the moves seem to be helping. But the pace has been too slow, given the dire need for businesses.https://twitter.com/jeffreytumlin/status/1284653546181279747
“I give the city high marks for activating sidewalk and parking spaces, but I’m extraordinarily disappointed how they’re doing street closures,” said bar owner Ben Bleiman, founder of the SF Bar Owners Alliance and chair of the city’s entertainment commission. “They should have shut down streets faster.” (Bleiman noted that he was speaking as a private citizen, not as a city commissioner. He was outspoken about the plight of SF bars and restaurants well before COVID struck.)
City officials say they’re making progress. Multiple agencies must approve Shared Spaces applications, but they try to greenlight most requests within 72 hours, SFMTA director Jeffrey Tumlin said during his September 1 report. In August the number of permits topped 1,000, with more than twice that number “likely in the coming weeks,” according to Tumlin. (SFMTA began posting Shared Spaces data online in August.)
Starting this week, some businesses (but not yet restaurants) can open indoor spaces with strict limitations. Yet a spike in COVID cases could shut their doors again, which means outdoor space remains crucial to everyone’s survival. Those plans, cruelly, are hobbled by the dangerous air. But even when the smoke clears, outdoor services are no silver bullet, as The Frisc reported last week.
Fixing more than streets
Officials could do more for immediate relief, but it isn’t coming soon. In June, “Save Our Small Businesses” officially became the November ballot measure Proposition H. Pushed by the mayor’s office, it contains a long list of changes to bureaucratic rules and processes, like a 30-day cap on reviews and inspections. (A synopsis of the measure is here; the full text is here.)
‘I love this legislation. We need this yesterday.’
— Sup. Hillary Ronen
‘There’s a lot in this legislation. We like to engage. That’s our process. Sometimes we have to balance urgency … with making sure voices are heard.’
— Ronen’s chief of staff, Amy Beinart, six weeks later
“We need immediate relief in a triage situation, but we also need to fix the foundation of this city so that after COVID small business has a fighting chance,” said Bleiman, who worked with merchants and city officials before the pandemic to gather support for what became Prop H.
Other Prop H changes, if enacted today, would help immediately, like slashing the permit time for a restaurant to open a backyard patio; allowing more pop-up shops; or letting restaurants in off-hours rent tables to workers. “You have to give people flexibility to pivot to do whatever they can to survive, and you can’t assume what’s going to work,” said Sharky Laguana, president of the Small Business Commission and owner of two rental-van companies.
If there was political will, some of those elements wouldn’t have to wait for the November vote. In July, members of the Board of Supervisors suggested as much. When the mayor’s staff walked the supervisors’ rules committee through the Prop H slate of reforms, committee chair Sup. Hillary Ronen gushed about it. “I really love this legislation.” She repeatedly emphasized the urgency of it: “We need this yesterday.”
She also asked why the board couldn’t take it up as emergency legislation and “make it as strong as possible.” Ronen questioned a couple elements but emphasized that the measure was “95% there.”
Her progressive ally on the rules committee, Sup. Gordon Mar, “applauded the goals” of streamlined permits and flexibility and called for action: “It makes more sense to move forward as legislation to get it in place as soon as possible.”
Two months later, nothing has emerged from the board. Barring a miracle, nothing will.
They had their chance
One big reason is politics. There is a lot of distrust between the progressive-led board and the mayor, which people in each camp acknowledged off the record.
There is also recent history between them on the small-business issue. At the July meeting, when Mar asked why the supervisors hadn’t been consulted about the initiative, the mayor’s liaison to the board Sophia Kittler answered that the board has had its chances to enact reform, but “frankly, pieces have been removed.”
Kittler was referring to legislation sponsored last year by then-Sup. Vallie Brown, an ally of the mayor. “It took me three tries to get it passed,” Brown told The Frisc via email. “Sadly it was gutted to the point that many things that would have helped small businesses had to be removed to get it through.”
Brown praised the mayor’s measure for bringing those elements back. (Brown, who lost her seat last November to Dean Preston by an eyelash, is running against Preston this fall to represent District 5.)
Ronen was not available to comment, but her chief of staff Amy Beinart told The Frisc that, despite Ronen and Mar’s words of urgency, emergency legislation isn’t going to happen. “There’s a lot in this legislation,” Beinart said. “We’d want to consult with our neighborhood merchant associations, and it may be that the timing would have been about the same. We like to engage. That’s our process. Sometimes we have to balance urgency with making sure voices are heard, and not push forward without rolling over people.”
Asked if the COVID crisis was reason to put aside normal process, Beinart put the onus on the state and its “overriding restrictions.” Beinart also defended the board, saying two separate pieces of legislation have addressed narrow elements of Prop H. (Like Prop H, both originated before the pandemic forced a citywide shutdown.)
One, sponsored by her boss Ronen, gives arts groups and nonprofits flexibility to move temporarily into empty storefronts. (Per health rules, those offices are not yet allowed to open, though.) The other, from Sup. Aaron Peskin, speeds up conditional use authorization for some businesses. It’s narrow and has loopholes, but Jay Cheng of the Chamber of Commerce said it has had “real benefit.”
In the Excelsior, Ramirez is using her ties to the food-entrepreneur incubator La Cocina, where she was catering manager, to try an experiment: bringing four retailers, including one food seller, together in a ground-floor space that’s been empty for four years. It’s not zoned for food right now. Prop H would loosen the restrictions, but without an emergency version between now and November, Ramirez said she will “push ahead now and be hopeful that it passes.”
All that said, even if the city and voters move heaven and Earth with permits and parklets and more, San Franciscans need to spend money down the street instead of reflexively buying from online giants. We can also put extra dollars in merchants’ pockets by picking up food instead of using delivery services, which take a big bite.
With COVID, wildfire smoke, and economic fears swirling, it’s a big ask. But that’s the ultimate goal, said the Chamber’s Cheng: “No policy can make up for lack of customers.”
Alex Lash is editor in chief of The Frisc.
