Business

Empty Sunset Storefronts Still a Problem; New Law Requires Reporting, Fees

By Thomas K. Pendergast

Although the Sunset District is doing a little better than other districts, storefronts along its commercial corridors stubbornly remain empty. A new survey by the Sunset Beacon newspaper shows that many have been empty for more than a year.

The count focuses on shopping areas along Ninth Avenue, Irving, Judah, Noriega and Taraval streets, but did not include storefronts off of the main commercial corridors.

The first survey was conducted in January 2018. A new survey undertaken in April shows that, among all of the main shopping districts, a total of 52 storefronts are still empty more than a year later. 

Along Ninth Avenue and Irving Street in the Inner Sunset, 27 are still empty, four remain empty on Judah and another four on Noriega, while 17 remain empty on Taraval more than a year later.

The survey also shows a total of 34 stores have moved into spaces that were empty last year. On Ninth and on Irving, 13 stores have moved in, another four on Judah and four on Noriega and another 13 on Taraval.

On the other hand, since last year’s survey a grand total of 37 storefronts have become empty. Combined, Ninth and Irving have 10 storefronts which become vacant; seven have become empty on Judah, eight on Noriega and another 12 on Taraval. 

Recently the SF Board of Supervisors (BOS) passed legislation sponsored by District 1 Supervisor Sandra Lee Fewer to increase reporting requirements for landlords without tenants in their buildings. The legislation amends the building code to require the owners of vacant or abandoned commercial properties to pay annual registration fees, require annual inspections or to register abandoned or vacant storefronts and updated the penalties for violations of the registration requirements. 

Fewer is hoping that her legislation will increase the accuracy and effectiveness of the city’s vacant storefront registry by increasing the SF Department of Building Inspection’s (DBI) resources to monitor and enforce the new registration requirements and clarify the enforcement process. 

 “In 2018, only 40 storefronts registered and paid the vacancy registration fee in the entire city of San Francisco,” Fewer said. “This legislation is the result of months of collaborative work with small businesses and neighborhood leaders, as well as DBI. No one understands the importance of addressing this issue more than our local restaurants and small businesses.”

Cracking down on landlord scofflaws, however, is in only half of the challenge when it comes to filling empty storefronts. The other is finding people willing to take the financial risk of starting a new business, especially considering the complex processes that inexperienced entrepreneurs can encounter when navigating their way through the city’s bureaucracy. 

Cloe Kwan opened up Foam Tea House on Taraval in April, 2018. She said it took almost two years from start to finish to make it happen. Kwan said navigating the bureaucracy was difficult mainly due to the City’s unresponsiveness to her application for a change of use. 

She acknowledges that there are a lot of such applications being processed, but after trying to contact the city worker helping them to get their application for a change of use from retail to a restaurant, she finally got an appointment and discovered that her application was on the bottom of a large stack on his desk. 

She estimates that between renovation, infrastructure and rent, she’s invested about $150,000 into her small business already. 

She pays $2,000 per month for rent. However, she had to pay that for 18 months while the restaurant was closed waiting for her hearing for the change of use and other things. She said she is grateful that the landlord did not charge her any rent for the first three months after she moved in.

“She said she knew we have to wait for city planning, so she just gave us three months for free,” Kwan said. “She’s good. She’s very nice.”

Lucy Clark opened up an event space with a succulent plant nursery called Bold & Sprinkles on Noriega in August, 2018. She attributes making this happen to a landlord who was willing to work with her because of the condition the space was in when she first took a look at it. 

“It was more than dilapidated,” Clark said. “It was pink with fake doors, a rusty shower, a kitchenette that was enclosed and rusting and there was a gate in the front.

 “Because the landlord was willing to do the necessary capital improvements by replacing the floors, calling in a contractor to repaint and remove all the fake doors … the landlord paid for all the renovations. That’s why it worked out,” she said. “It’s a symbiotic relationship. If the landlord invests in his own property, I will invest in it as a shop keeper to make this as beautiful as I can.”

Annie Leong and her husband Gonzalo Del Cerro opened up Chalos on Taraval at 32nd Avenue a little more than a month ago. The coffee shop, which serves homemade empanadas, churros and other Argentine foods was greatly helped by the San Francisco Office of Workforce and Economic Development (OWED), which gave them a grant of $25,000 toward signage, furniture, new storefront windows and doors.

Leong noted that the cost of doing business in San Francisco is very high, between contractors and high rents and high labor costs, so it helps to have assistance from the city. It also helps if the landlord keeps the rent reasonable.

While in general a business owner has to pay more per square foot for downtown space, some Sunset landlords are trying to charge just as much.

“Rents are very unreasonable compared to what you’re going to sell,” Leong said. “A lot of the vacancies on Irving, Inner Sunset, Noriega, they’re charging these ridiculously high rents.”

And then there’s competition with online or Internet services, which offer consumers the option of not bothering to go to the shopping districts in the first place.

Joaquin Torres, the director of the OWED, said there are two overall challenges at play for that office to help small business owners, starting with helping them streamline the process of opening a new enterprise. 

“Making that process easier, simpler, to save a small business time and money because that can be an onerous process that can just cripple someone when they’re trying to fill a space,” Torres said. “The other one is what it takes to help a small business survive in this new environment.”

Categories: Business

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