Commerce

Despite good economy, Richmond District storefronts still empty

by Thomas K. Pendergast

 

Almost 13 percent of storefronts along the major commercial corridors of the Richmond

District are now sitting empty, a little more than one out of seven, according to a

Richmond Review survey.

 

The survey looked at four major commercial corridors – Geary, Balboa, California and

Clement, between Arguello Boulevard and Ocean Beach.

 

Javaholics01 copy.jpg

The commercial space formerly occupied by a coffee shop, located
at Sixth Avenue and Balboa Street, has been empty for years. Photo: Thomas K. Pendergast.

 

The block-by-block survey was necessary because flaws in the City’s tracking system

appear to have grossly undercounted the number of ground-level businesses now sitting

empty, as city officials themselves acknowledge.

 

The significance of empty storefronts is not just limited to neighborhood blight and

graffiti, but also indicates jobs not available and tax revenues not being generated.

 

Clement Street seems to be hardest hit. Of the 260 businesses with signage on the ground

floor, 44 appeared to be empty, or just short of 17 percent of the total commercial

corridor.

 

Balboa Street is a little better, but not much. Of the 221 businesses with signage on the

ground-floor, about 17 percent, or 38 storefronts, appear empty. Geary Boulevard, the

Richmond’s longest commercial corridor, has about 361 businesses with signage on the

ground floor, with some 25 apparently sitting empty, or about seven percent.

 

California Street has about 46 storefront businesses, with six appearing empty.

 

Collectively, there are about 888 Richmond businesses with signage on the ground floor,

of which 113 are in need of a tenant.

 

One of the problems in trying to deal with the issue of vacant storefronts is the lack of

reliable figures calculated by the City, which came out at a Feb. 5 meeting of the SF Board

of Supervisors’ Land Use and Transportation Committee.

 

District 1 Supervisor Sandra Lee Fewer sat in on the meeting and asked officials from the

SF Department of Building Inspection why, as recently as 2016, the department showed ]

no vacancies anywhere in the Richmond.

 

“I beg to differ,” Fewer said of the statistic claiming no empty storefronts. “Just ask a

neighbor who lives near Balboa and Sixth Avenue.”

 

On the southeast corner of that intersection sits an empty four-unit commercial building.

According to city records, the last business to rent the site was a restaurant, which closed

in 2015. The former anchor business at the location, a popular neighborhood café called

Javaholics, served as a gathering place for many neighborhood residents since the

mid-’90s. It has been sitting empty for several years.

 

City records show the building is owned by Jeffrey and Sophie Lau. Sophie Lau appeared

before the Department of Building Inspection’s director’s hearing on Jan. 16 to explain

why the building has been sitting empty for so long after it was cited by the department.

 

“Due to online business, dotcom business, it’s very hard to find commercial tenants,” Lau

said. “So far, we have not found suitable tenants and we already filed the application

form (with the City), so I don’t even know why I am needed here today. According to the

rules, I believe I have a 270 day grace period. I believe the citation was written

in September of last year, so roughly about 270 days. So, somewhere by May or June of

this year, if the store’s not rented, then we have to pay something like $700.”

 

A department official raised questions about Lau’s efforts to find new tenants.

 

“We’re advertising and trying to get the proper tenants. I also contacted quite a few

commercial agents. I can submit all the names and phone numbers,” she said. “What is

the problem here? It is a disadvantage for us to not get income, to not get tenants.

So, while we’re suffering the vacancy, you’re trying to penalize us? That’s quite unfair,

isn’t it?”

 

“So, that means that you should have available the ability to submit records, copies of

your communications or listings with other brokers or agents,” the department’s

assistant director Ronald Tom told Lau. “You say you’ve actually put up signs on

all three storefronts, each one showing that they are available, that the conditions inside

currently are not in disrepair and that a potential tenant could walk in and not be

climbing over debris, climbing over something that’s not suitable for show. So,

that’s the situation you have now?”

 

“The store is rentable, yes,” Lau said.

 

Tom told Lau that if she finds tenants for three of the spaces by the end of the 270-day

period, she will not have to pay the penalty, which is $711 for each space.

 

After leaving the meeting, Lau elaborated more about her plans for the building.

 

“We’ll try our best to rent out the store, but anything is possible. If any developer wants

to buy the building we’re willing to talk, but in the meantime we’re looking for

commercial tenants to fill up the vacancies, so at least we don’t have to lose so

much income,” she said. “Two of the citations were for restaurants.

It’s not that easy to find another restaurant operator to take over.”

 

Lau addressed the space that formerly housed Javaholics.

 

“We are looking for proper tenants. If they don’t pay the rent that we feel is reasonable

enough, we’re not going to give (it) away.”

 

She declined to give specifics as to how much rent she is expecting for the

commercial spot.

 

“It depends on what kind of business, what kind of food. It all depends. And how long the

lease is,” she said.

 

Two ordinances have been passed in recent years to try and get a handle on the citywide

problem of vacant commercial storefronts, one in 2009 and another in 2014. The first

requires property owners to register vacant commercial and residential buildings with

the department and to pay a $711 registration fee once a year after the building has been

vacant for more than 30 days. Failure to register and pay the fee can result in a penalty

fee of $6,399.

 

A similar ordinance was adopted in 2014 applying to commercial storefronts that have

been vacant for more than 30 days. The $711 fee, however, is not due in these cases until

270 days have elapsed since registration of the empty storefront, to allow the owner time

to find a new tenant or buyer or make repairs and improvements.

 

The department says the buildings or storefronts recorded in its registries are mostly

identified through citizen complaints. Self-reporting by the property owner, as required

in the ordinances, results in fewer registry entries than citizen complaints.

 

“Complaint-driven is not going to work,” Fewer said at the committee meeting. “We have

to be more proactive. I’m astonished to see the report shows that I did not have any

vacant storefronts in my district. It’s just ridiculous.”

 

District 6 Supervisor Jane Kim took landlords to task for holding out to get higher rents.

 

“I lost so many small businesses (in District 6) last year, in a year that we were doing

incredibly well economically,” Kim said. “There are definitely landlords out there who

are completely unreasonable about their expectations for rent. Just as in Supervisor

Fewer’s district (on Balboa) where there was one landlord who evicted three tenants

because they wouldn’t pay more rent that she wanted to charge them.”

3 replies »

  1. Very informative article. I’ve only lived in the city and neighborhood for a year and wasn’t educated on the penalties of vacant commercial spaces. Thank you for conducting this research.

    Like

  2. This is an important topic that deserves a better story. Will we be able to retain local businesses in an era of soaring leases and online alternatives? The Richmond District is more crowded, but why aren’t entrepreneurs able to take advantage of the street traffic and available spaces? How about focusing on the big changes going on in our neighborhood instead of micro focus on a few locations?

    Like

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