retail

Sunset Storefronts Empty Despite Good Economy

By Thomas K. Pendergast

 

More than eight percent of storefronts around the major commercial corridors of the

Sunset District are sitting empty, about one out of 12, according to a Sunset

Beacon survey.

 

The survey looked at Irving, Judah, Noriega and Taraval streets, plus Ninth Avenue in the

Inner Sunset. It 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 impact of empty storefronts is not just limited to neighborhood blight and graffiti,

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

 

In terms of percentage, the shopping district along Taraval Street seems to be the worst

hit at this point. Of the 251 commercial spaces and businesses with a significant presence

or signage on the ground floor that was counted, 27 appeared to be empty, or 10.7

percent of the total.

 

In terms of aggregate numbers, Ninth Avenue combined with Irving Street, between

Fifth Avenue and Ocean Beach, appears to have the most empty storefronts. Of the 406

commercial spaces with a significant presence or signage on the ground floor of those

streets, 38 appear to be empty, or about nine percent.

 

By comparison, Judah and Noriega streets are doing much better. In Noriega Street’s two

smaller shopping districts – one between 19th and 27th avenues and the other around

30th and 34th avenues – the street appears to have only nine empty storefronts out of

196 commercial spaces.

 

Judah’s shopping area near Ocean Beach appears to have only six empty storefronts out

of 94 commercial spaces with ground floor commercial space.

 

Collectively, there are about 947 commercial spaces with a significant presence or

signage on the ground floor of all of these shopping districts or commercial corridors, of

which 80 appear to be empty.

 

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

reliable figures calculated by the City. This came out at a recent meeting of the SF Board

of Supervisors’ Land Use and Transportation Committee meeting on Feb. 5.

 

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

problem, one in 2009 and another in 2014. The first requires property owners to register

vacant commercial and residential buildings with the Department of Building Inspection

and 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 more recent ordinance sponsored by District 4 Supervisor Katy Tang was adopted in

2014 and applies to commercial storefronts that have been vacant for more than 30 days.

The $711 fee, however, is not due in these cases until after 270 days have elapsed since

registration, in order to allow the owner time to find a new tenant or buyer, make

repairs and improvements.

 

An official from the Department of Building Inspection, assistant director Ronald Tom,

told the committee that the buildings or storefronts recorded on its registries are mostly

identified through citizen complaints.

 

In a report requested by District 7 Supervisor Norman Yee, the board’s budget and

legislative analyst said self-reporting by property owners, as required in the ordinances,

has resulted in fewer registry entries than citizen complaints.

 

“Complaint-driven is not going to work,” District 1 Supervisor Sandra Lee Fewer said at

the committee meeting. “We have to be more pro-active.”

 

“I know that there’s a lot of work that we all do in our respective supervisors’ offices in

conjunction with our other city departments in trying to both recruit and retain

businesses in our commercial corridors,” Tang said. “And I know that each of our

corridors have their own sets of challenges for attractiveness, especially when you throw

into the mix the changing face of retail and that there’s so much e-commerce going on

right now. I know that it’s a conversation we all need to have as a city family, in terms of

whether we need to reconsider how it is that we zone our city and our commercial

neighborhoods, how it is that we deal with our vacant and abandoned properties and

so forth.”

 

Yee spoke about past efforts to address the issue.

 

“Though we passed vacant building regulations in 2009 and again in 2014, we have not

seen the kind of improvement that we had hoped for,” Yee said. “Commercial vacancy

issues can potentially be addressed through zoning. High rents and the rise of

e-commerce are challenging traditional retailers in San Francisco and elsewhere.”

 

In an analyst’s report requested by Yee, six policy options were recommended to deal

with empty storefronts:

 

• The Board of Supervisors could enhance funding for the City’s existing small business

loan programs to assist property owners in leasing their vacant properties;

• The board could request that the SF Planning Department and SF Planning Commission

consider and report back on possible zoning and SF Planning Code changes that would

allow for more flexible use of commercial spaces, possibly reducing the size of

commercial spaces, especially on the ground floor, so the space could be used

for housing;

• The Department of Building Inspection could improve outreach on Vacant Building and

Commercial Storefront registration requirements and reduce barriers to reporting

vacant commercial properties by the public and city agencies, like creating online portals

for the public to report vacant buildings and storefronts;

• Existing ordinances can be amended to raise fees and penalties, particularly for non-

registrants of properties with extended vacancies, to serve as an incentive for property

owners to self-report vacant properties. Such fees and penalty increases would also

generate more funding for the department to cover the costs of enhanced

enforcement efforts;

• With a combination of improved identification, reporting and monitoring of vacant

properties, the department could leverage Housing and Urban Development (HUD) data

to identify areas that have high commercial vacancy rates and proactively track changes

over time;

• The Vacant Building and Commercial Storefront registries could be made available

to the public. The problem of empty storefronts is a city-wide issue, and Union Street

Merchants Association executive director Lesley Leonhardt gave her take on why

even in a relatively good economy stores are still sitting empty.

 

“The last 10 years has been very challenging and the reasons are multiple,”

Leonhardt said. “We have high rents and, unfortunately, an attitude of greed from

certain people. They will not rent out until they get a certain amount, and that is

very unfortunate. Oftentimes, we’ve found out that we have offshore owners of these

buildings and they’re hard to contact. They are unresponsive.”

 

She also noted that many of the old buildings are not compliant with requirements

of the Americans with Disabilities Act and the construction required to fix them is

sometimes discouraging or even prohibitive to new businesses.

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