STOREFRONT VACANCIES IN NORTH BEACH LOWEST IN NEARLY THIRTY YEARS

Based on a survey completed last week through the cooperative efforts of the North Beach Business Association (NBBA) and the Telegraph Hill Dwellers (THD), the number of storefront vacancies in North Beach is lower than in nearly thirty years, with almost 70% percent fewer vacancies in the North Beach Neighborhood Commercial District (NBNCD)[footnoteRef:1] today than there were in 1986, the year before legislation to establish and protect the NBNCD first went into effect. [1: The NBNCD boundaries include most of the commercial establishments north of Broadway (which is in its own district) and south of Francisco, on Columbus, Grant, Green, Powell, Union, Vallejo and Stockton.]

Vacancies Have Decreased Dramatically Based on longitudinal surveys of the retail spaces within the boundaries of the NBNCD conducted by THD in 1986, 1999, 2008, and again in 2015, vacancies have continued to decrease. From 1986 to 1999, vacancies decreased 16% from 45 to 38 vacant storefronts (interesting note: mostly after the Embarcadero Freeway was closed in 1989). Vacancies continued to decrease an additional 21% between 1999 and 2007 to 30 vacant storefronts. Today, there are only 15 vacant storefronts in the NBNCD, representing less than 6% of all existing storefronts. Of these, only 8 are actually listed as being for lease, including two vacancies that resulted from recent rent increases.

New businesses are replacing the former tenants in ten storefronts that were quickly re-leased. These include 561 Columbus (to reopen as Bar Nua Irish Pub), 703 Columbus (opening soon as North Beach Bauhaus, an artists space and gallery), 704 Columbus (to open as Rialto-Mercato, a specialty grocery store), 1314 Grant (leased to Un Fil A La Patte, a new French bakery), 1318 Grant (leased to DIP, a new limited restaurant), 1534 Grant (to reopen as a new gallery and retail store), 565 Green (opening soon as Belle Cora , a new wine and food bar), 622 Green (under construction for a new brew pub), 478 Green (under construction for a new restaurant and bar to be called The Barbary Coast), 1415 Stockton (under construction for a new tenant), and 625-29 Vallejo (leased for a second Mama's restaurant/shop).

There are a number of storefronts that, while not vacant, do not contribute to business activity as commercial storefronts. These include at least 3 that are being used as storage for adjacent businesses, one that has been kept vacant by choice of its owner since before 1986 (the old Victors Restaurant at 1556 Grant), and at least 17 former ground floor retail spaces that have been converted to residential use, including 9 such conversions since 2008.

Conversion of Retail Stores to Restaurants and Bars has Slowed DownThe North Beach Neighborhood Commercial District ordinance enacted in 1987 was specifically intended to stem the loss of neighborhood-serving businesses by requiring conditional use (CU) authorization[footnoteRef:2] from the Planning Commission for new restaurants and bars. A proposed new use requiring CU authorization is only allowed upon a finding by the Planning Commission at a public hearing that the use is necessary or desirable for, and compatible with, the neighborhood. [2: Conditional Use Authorizations are governed by Sec. 303 of the San Francisco Planning Code. ]

The original controls did little to stem the rate of Planning Commission approvals for new restaurants and bars in North Beach. Of the approximately 68 CU applications filed for new restaurants and bars between 1987 and 2006, the Planning Commission approved 91% of them. The result was revealed in the 2007 survey: Restaurants and bars had increased overall by 34% since 1986, occupying approximately 31% of all ground floor uses in the NBNCD, or roughly 1 out of every 3 retail spaces. The same survey revealed that on the 4 blocks of Grant Avenue, restaurants and bars increased by 82%, primarily due to a 100% increase in restaurants.

Because the CU process was not working as intended, new legislation was enacted in 2008 to prevent new restaurants and bars from occupying any space formerly occupied by a basic neighborhood sale or service needed by residents and workers in North Beach (such as hardware stores, grocery stores, shoe stores, stationary stores, clothing stores, personal services, bakeries, to name a few). New restaurants and bars were automatically allowed and encouraged to occupy vacant spaces that were previously occupied by restaurants and bars provided they did so within 3 years (extended from 18 months) of the vacancy.

Based on a survey completed this week, the 2008 legislation worked as intended. First, the number of vacancies in the NBNCD is lower than it has been in nearly thirty years. Spaces that were vacated by existing restaurants and bars were quickly filled by new restaurants/bars. The updated survey shows that between 2008 and 2015 approximately 30 spaces that were vacated by restaurants and bars were filled with new ones. This trend is continuing. Of the 4 currently vacant restaurant spaces, 3 have been vacant for less than 2 months, including Capps Corner (1600 Powell), HDR (523 Green) and Little Garden Sea Food Restaurant (750 Vallejo).

Second, no new restaurants or bars filled any spaces previously occupied by a neighborhood serving sales or services until 2013 when amendments sponsored by Supervisor Wiener changed the NBNCD ordinance to allow limited restaurants to replace such spaces upon a CU authorization. Following Supervisor Weiners amendments, the Planning Commission approved two new limited restaurants in spaces formerly occupied by neighborhood serving uses. By the Planning Departments own calculations, the most recent CU approved by the Planning Commission for a new restaurant at 1318 Grant Ave. increased the concentration of eating and drinking uses within 300 linear feet of this storefront to 74.2%, even though the threshold set by the Planning Code states that such concentration should not exceed 25% of the total commercial frontage within 300 feet of the subject property.[footnoteRef:3] [3: Planning Code Section 303(o).]

While this brief update focuses on storefront vacancies, THDs Fall Semaphore issue will contain a much more comprehensive analysis of the results of the updated commercial district survey.4