Dario Hadjian is keeping a eye on his neighbors. The owner of the Piazza Pellegrini restaurant across from Washington Square Park, the heart of North Beach, has watched the count of vacant storefronts climb, often where his fellow restaurateurs worked for decades, and he sees less diversity and density and choice for customers.
“I’ve grown to be bulletproof at this point, I survived five years of construction next door,” he says, pointing to the former site of the Pagoda Palace Theater, now new condominiums.
We’re sitting one balmy October morning on his restaurant’s outdoor patio, which occupies a triangular slice of real estate as if it should be topped with pepperoni.
A few tourists have already grabbed cappuccinos and pastries from the patio’s walk-up window. “The more of us that are active, the better for everybody here. All the empty spots are an eyesore,” Hadjian says, pausing to sign an invoice a delivery man puts in front of him.
“Are you going to come here just because of me? If there’s 10 of us, it’s going to be exciting, it’s going to be fun. My spaghetti and meatballs are totally different than my neighbors’ spaghetti and meatballs.”
Famous as the center of the city’s Italian heritage, full of cafes, bars, eateries, and home through the years to artists, poets, strippers, and jazz musicians, North Beach in the gentrified new millennium has been hit hard by retail vacancies. You can find them up and down the main drag of Columbus as well as on side streets like Grant and Powell. The vacancy rate has shot up to double digits in the past three years.
While San Francisco has avoided the full-blown apocalypse that is blowing through America’s largest retailers and gut-punching gentrified shopping districts, other neighborhoods and the Union Square shopping district — long the city’s hoity-toitiest retail destination — are worried.
It’s not just online commerce and Netflix keeping customers at home. Small business owners in San Francisco are also quick to mention bureaucratic red tape, trouble finding and keeping staff, landlords either jacking up rents or sitting on empty spaces, and the city’s parlous street conditions. North Beach is no different.
It’s unclear what can reverse the trend. Online shopping isn’t going away. A modest revision to zoning policy in some neighborhoods, allowing businesses to share a location — say, a bookstore and a bar — and less regulatory hassle for storefronts moving from one business to another, is up for a vote today before the full Board of Supervisors. A yes vote means that the rules take effect in the districts — 1, 4, 5, 10, and 11 — whose supervisors cosponsored the legislation.
[Update: The Board has passed the ordinance unanimously, according to outgoing District 4 supervisor Katy Tang via Twitter Tuesday night; Tang was the original sponsor.]
Tang told the Planning Commission last month: “We in the outer neighborhoods are struggling to find tenants to fill vacant storefronts, and we need a number of tools to make traditional retail or retail in general more attractive to business owners.”
The colocation idea drew nearly unanimous support in a new informal survey of North Beach residents by neighborhood group North Beach Neighbors, but District 3 supervisor Aaron Peskin hasn’t yet signed on. (His office did not return a request for comment before the board hearing Tuesday.)
Meanwhile, North Beach has doubled down on the city’s formula retail (read: chain store) restrictions, issuing a complete ban in 2011 that won’t even contemplate a chain store on a case-by-base basis. In the new neighborhood survey, nearly half the respondents wanted to keep those restrictions as-is, with just 28% open to revision. The rest were unsure. But if a chain’s roots happen to be in San Francisco, the respondents were 70% in favor of easing restrictions. (Then again, when asked which specific brand or company they’d like to see, respondents’ top mention was the national chain Whole Foods.)
“Perhaps there could be easier paths for very specific categories, like grocery stores or ‘homegrown’ companies that have more than 10 locations just in San Francisco for example,” says Danny Sauter, president of North Beach Neighbors.
The Union Square district, home to the city’s grand palaces of retail, has solid vacancy data. While lease rates are up to $58 a square foot, 50% higher than the citywide average, vacancy rates are too, especially on the second and third floors where today’s shoppers less frequently venture.
Seems a lot of people want to go out and do things with their families. I don’t know if shopping is one of them.
Tracy andreassen, owner of rendezvous
But the city doesn’t have good data for the mostly ground-floor, mom-and-pop neighborhoods. The city doesn’t even actively collect it. Landlords with empty storefronts are supposed to self-report and pay a fee; it’s clear that they don’t. A third-party group says the citywide vacancy rate is 3.2%, but folks in the neighborhoods aren’t convinced.
In the Richmond District, about as mom-and-pop as it gets, Supervisor Sandra Lee Fewer and the local blog asked for reports of vacancies and eventually tallied 156, Fewer’s aide Ian Fregosi told The Frisc. At press time it wasn’t clear if the city had verified that count, or what percentage of District 1 storefronts those vacancies represented.
In North Beach, a coalition of neighborhood groups took matters into their own hands and released a survey this summer. They estimated the vacancy rate at 10.25%, more than double the rate three years ago. (Context for that 10.25% rate: Audrey Butkus of the San Francisco Planning Department recently told the Planning Commission that the citywide target rate is between 5% and 10%.)
That figure doesn’t count the businesses knocked out by the devastating St. Patrick’s Day fire, or the new ones due to open in the Palace condominium building next to Piazza Pellegrini. It also doesn’t account for what Matt Holmes of the brokerage Retail West calls “unstated vacancies,” struggling tenants looking to leave a location. “There’s quite a bit of that; it happens a lot in restaurants and [main street] retail.”
Spokeswoman Gloria Chan said the city’s Office of Economic and Workforce Development will soon update the State of the Retail Sector report it released in February.
Even if city legislation allowing pop-ups, colocations, and more isn’t coming soon to District 3, merchants see the vacancies around them and understand that retail has to get creative to survive.
At Gallery 1317, on a stretch of Grant Street hit hard by vacancies, an architect’s office sits in the back, the gallery hosts revolving artists and sells local-themed clothing; co-owner and DJ Mauricio Vazquez has lined the walls with thousands of funk, soul, and hip-hop records. Velazquez spins for parties in the space, keeps the doors open late, tries to think local (“tourists aren’t buying records and art”), and always rotates the window displays. “I’ve been in the city 30 years, you have to morph with the technology,” he says.
His co-owner, architect Jeff Gard, first shared the space with a fashion designer. “It would be great if the zoning laws could change,” he says.
On Powell Street, near the Joe DiMaggio Playground and across from the schoolyard attached to Sts. Peter and Paul Church, Rendezvous sells used clothing (owner and sole employee Tracy Andreassen prefers “gently loved”), both vintage and modern. Andreassen also hangs local art on the walls and hosts evening workshops for things like flower and wreath arranging; 60% of ticket sales go to the artists. They don’t get a cut of the clothes she sells during the events, but attendees get a discount.
Andreassen moved to North Beach three years ago and has always wanted to open a shop. (She’s also a mother and a working nurse; the shop is open when she’s not working a shift at CPMC.) “My son goes to Garfield” — the public elementary school three blocks away — “so I’d pass this day after day and thought, OK, let’s see if we can make something happen, a space where people can shop and gather as a community.”
It’s a low foot-traffic block, but anyone passing by with a spare moment couldn’t help but peek into her light-filled shop. In fact, she has already benefited from tourists who wander up to North Beach from Fisherman’s Wharf. An Austrian woman tried on a dress one day then ordered it once she got home. Her name was, in fact, Maria, “and I did wrap it in a paper package tied up with string,” says Andreassen.
Another woman, from Italy, saw a handmade dress through the window. “It was a perfect fit,” adds Andreassen. “She said ‘I’m getting married next year, and when I saw that dress I really wanted it.’ Now it’s going to be her wedding dress.”
In the new survey, 37% of North Beach locals said top priority for new business was food and beverage retail; about 30% wanted books, clothing, and other non-food retail; and another 30% answered places to eat and drink. Andreassen’s shop isn’t the place to pop in and get school clothes for the kids (although she sells T shirts that say “I Love North Beach”).
Rendezvous would be more at home in Hayes Valley, Union Street, or would be an elegant alternative among the funky vintage purveyors on Haight Street. Andreassen is worried about the North Beach demographic. “Seems a lot of people want to go out and do things with their families,” she says. “I don’t know if shopping is one of them.”
That’s one thing about local stores: Locals may swear up and down that they want them in their neighborhoods, but if they’re not patronizing these businesses, people are getting exactly what they pay for.
Alex Lash is editor in chief of The Frisc.
