Commentary – Kevin Frazier

Turning vacancies into opportunities

A vacant storefront is like a missing tooth — sure, you can still chew, but with each new gap you’re going to lose some capacity (not to mention enjoyment). What’s more, a missing tooth is immediately a problem — you’ll know as soon as it’s gone that you may have to trade that chewy steak for some applesauce. In the same way, a vacant storefront decreases community vibrancy as soon as it occurs and leaves the community a little less cohesive and productive.

The Richmond is missing a lot more than just a single tooth. Analysis by this paper revealed that more than one in seven storefronts along the district’s major commercial corridors is vacant. High rent, slow permitting, and economic shifts have handicapped efforts to fill in some of these blanks.

If a storefront is indeed a missing tooth, then the underlying cavity is the decline of brick and mortar retail. Though the retail sector grew in the 2010s in San Francisco, it did so at a slower pace than the rest of the city’s economy (14 percent job growth versus 27 percent). Facing competition from online sales, clothing and accessory stores as well as general merchandise stores have faced headwinds that have impacted stores around the U.S. Meanwhile, as consumers look for more “experiences” to consume and share, restaurants and hotels have weathered some of the economic pressures facing other industries.

The remedy for the Richmond’s retail woes requires two actions: (1) enumeration and (2) experimentation. SF Supervisor Sandra Lee Fewer helped address the first action by passing legislation to ensure more accurate and timely counts of vacant storefronts. But this amounts to merely counting cavities rather than taking steps to root out the cause of decay. That’s why various forms of experimentation is required.

For one, it’s time to develop a framework for helping landowners identify temporary tenants. The City needs to help find a middle ground between the competing interests of landowners and tenants. Landowners understandably want to find long-term, stable tenants. Tenants don’t want to risk the financial capital required by a long lease only to find out that their offerings weren’t a good fit for the community. A middle ground could look like the City financially supporting shorter term, experimental leases that help a landowner’s bottomline while empowering tenants to test out their best ideas without exhausting their funds.

This sort of experimentation, though, requires the elimination of heavy-handed city policies that replace the will of the community. For example, San Francisco presently has some of the most strict formula (or chain) store limitations in the nation. Altering some of these limitations may prove beneficial to the economic vitality of an area while still allowing small businesses to thrive. An analysis prepared for the San Francisco Office of Economic and Workforce Development (OEWD) determined that “[a] unique combination” of businesses can create a “perception of a distinct, special place that tends to be more attractive to shoppers.” This “unique combination” cannot be predicted from a boardroom table, but instead requires residents and visitors to vote with their feet and wallets. This combination may include formula stores that, per the same OEWD analysis, often serve as anchor tenants that drive more foot traffic to an area.

Experiments to fill vacancies should also look beyond the storefront to consider the entire consumer experience, such as transportation and safety. The use of a broader approach to experimentation mirrors a dentist asking about what you eat and drink, rather than solely looking at the cavity. For example, business owners and residents alike would benefit from a better understanding of the appropriate amount of parking (or lack thereof).

Though many business owners have assumed parking and profits are positively correlated, empirical evidence often shows otherwise. In fact, research shows that parking should either be eliminated or at least more costly. A thorough analysis of parking and retail success in London, a comparably dense urban space, indicated that free parking can actually reduce shopper turnover. A Dutch study revealed that one way to increase turnover and, therefore, store visitors is higher parking fees; these fees can increase retail potential by incentivizing consumers to free up space for new visitors. The case for actually reducing parking receives support from the fact that storekeepers often overestimate the percentage of visitors that arrive via car as well as the economic benefit of those car-driving customers. Additional experiments could study the effects of various road closures, public transit rebates, and seasonal events.

Like a gap-filled smile, a community with vacant storefronts is quickly identifiable as in need of some assistance. The City is addressing the need to identify gaps but most go further in actively helping improve the economic vibrancy of our key commercial and community corridors.

Kevin Frazier is a law school student at UC Berkeley and a Richmond District resident. is sponsored in part by:

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