Niche Spots on Valencia Nearly Gone as Restaurants Rule

Valencia Street is in flux, with seven new restaurants opening within the next few months, including Pizza by Farina; Mexican restaurant Tacolicious; an Asian restaurant from the owners of Thai House Express; Indian restaurant Amber Dara; Cyan, a Greek, Egyptian and Turkish restaurant; The Chapel, an upscale restaurant serving New Orleans and Southern food; and its adjoining Second Line Cafe.

But Vince Donovan and Michael Shindler, who want to open a niche business on Valencia Street — a corridor renowned for small businesses — discovered that the most difficult part would be finding, well, a niche. “It quickly became obvious to me that the only vacant spots real estate companies had on offer were really big places,” said Donovan, a freelance database designer. Moreover, prices for any space had jumped from the $1.50 to $3 a square foot of a few years ago to as high as $5 a square foot.

There was, for instance, Studio Z Gallery, with 4,000 square feet at $5 per square foot, which Donovan said “was completely out of our league.” He and business partner Schindler needed only 1,000 square feet for Photobooth, a place they imagined as a store to sell vintage Polaroid cameras by day and a Polaroid portrait studio and gallery by night.

So, instead of going through brokers or for the obvious vacancies, Donovan decided last August to bike up and down Valencia Street searching for abandoned places with paper-covered windows.

Donovan’s predicament, and his discoveries along the way of higher prices, fewer small spaces and some landlords unwilling to rent to anyone, underscore how tight the Valencia Street real estate market has become.

At present, there are only four spaces available for rent or sale, compared to 11 in March of 2009. All of them are large, including the former Modern Times bookstore at 888 Valencia Street (3,000 square feet), the former Z Barn at 560 Valencia Street (4,950 square feet), 657 Valencia Street (2,400 square feet), and the former Slingshot Gallery at 890 Valencia Street (5,200 square feet).

The number of available smaller spaces has diminished as those that are left quickly find a tenant, like last year’s B3 and Zeytoon. With its 1,200 square feet, 563 Valencia, until last year home to Hideo Wakamatsu Luggage Store, was rapidly snatched up. In early May it became an expansion of Bar Tartine. With the work happening in phases, it will make its debut in September as Tartine’s new sandwich shop.

Donovan’s hunt began with Jungmann’s Appliance, a shop close to Ritual Coffee — a location that would assure crowds.

From the outside looking in, it looks like a storage space — a cluttered storefront with a collection of dust-covered stoves, refrigerators, washers and dryers that is rarely open. His call to the owner was met with an angry no.

The owner of the space next to Esperpento at 22nd Street and Valencia, abandoned for the past 10 years, was equally unwilling to rent out his shop.

But Donovan wasn’t easily discouraged. In November, a hand-printed sign on the bright blue Chinese and Alternative Medicine space next to Restaurant Baretta at 1193 Valencia street caught his eye. He called the number. Weeks went by before Mayumi Yanagi, a Japanese pianist and the property owner, called back.

Formerly married to a photographer, she liked the idea of Photobooth and showed Donovan and Shindler the now-vacant space that had been home to a medical acupuncture practice. In no time, they rented it and will open in July.

For others, Valencia’s big vacant spaces are no obstacle but rather — with enough start-up capital and the right permits — a business opportunity.

Sean P. Quigley from Paxton Gate spearheaded what could become a trend on Valencia Street when he subdivided his space and sublet it because he could not find a small store for his kids’ shop. In 2010, property owner Ron Mallia turned the former McAlindon’s Auto Repair space into storefronts where Arizmendi Bakery and antique store Gypsy Honeymoon moved in last December.

777 Valencia is the latest to undergo such a rescaling.

Currently, Jack Knowles, owner of À Côté in Oakland, is working on turning 777 Valencia Street, the old New College building, into different venues. In November 2010, Knowles received the green light for plans for what will be Jazz Preservation Hall West — 2,575 square feet of performance venue and 4,581 square feet allocated for The Chapel, an upscale restaurant serving New Orleans and Southern food, and Second Line Café, which will offer more casual and moderately priced dining. But the project has been slow to start construction and has not yet obtained all the permits. Knowles hopes to open by the end of this year.

741 Valencia

Restaurant owner Joe Hargrave is also opting to subdivide his newly rented space. The 4,000 square feet he is leasing from Jack Knowles will be broken up into a second location for restaurant Tacolicious, a commissary kitchen to help with catering operations and his newest concept, a tequila bar called Mosto. With all the permits in place, it is set to open sometime this summer.

696 Valencia

The former Amore Animal Supply has made space for F.S.C. Barber, opened by San Francisco natives Sam Buffa and his brother and local musician Jonah in May 2011. They are bringing their old-school barbershop concept, which began with shops in New York City, back home to their 1,200-square-foot store. A small branch of the Freemans Sporting Club menswear store (500 square feet of storefront) is right next door.

446 Valencia

For many years, 446 Valencia was the home of Intersection for the Arts, and it hasn’t stayed empty long. Theater will continue to be performed in this space, according to Ty Mckenzie, director of Stage Werx, a company currently located at 533 Sutter that rents space to various troupes, solo performers and other acts. They also hope to sublease one of the upper spaces to another company to help pay for the space. Having signed a long-term lease, Stage Werx will open its doors on Valencia in September.

Aside from size, obtaining the right permits is the biggest challenge for entrepreneurs hoping to set up shop on Valencia Street.

Retrofitting and getting the permits required to meet Americans with Disabilities Act standards and code requirements, as well as making the building earthquake-proof, can take months.

Changing the use of space from a retail business to a restaurant is particularly challenging.

974 Valencia Street

It took Henni Desouki more than six months to get the permits and start construction to transform the former Valencia Interiors, which closed in 2008, into Restaurant Cyan. He plans to open the Greek, Egyptian and Turkish restaurant this summer. His wine bar will offer the best wines from these regions, including Morocco and Lebanon.

530 Valencia

It took eight years to obtain the permits to set up a restaurant in this space, formerly a laundromat. In July of 2011, Paul Meeriyagerd hopes to open the latest culinary addition to Valencia Street. The name and concept are still under wraps, but it will be related to the Thai House Express at 599 Castro Street, which Meeriyagerd and his parents own.

680 Valencia

Vijay Bist, owner of the restaurant Amber India, with locations in Mountain View, San Jose’s Santana Row and San Francisco’s SOMA, will be opening a new Indian concept called Amber Dara this summer, giving a new use to a space that has been vacant for approximately 10 years. The previous use was a retail grocery and specialty food store. In 2009, Naveen Singha had plans to open an Indian restaurant here but defaulted on his property tax payments.

Those who take over restaurant spaces have an easier time starting construction.

508 Valencia Street

The buzz about the former Mariachis Restaurant is that it is to be the latest branch of Grandeho’s Kamekyo Sushi, which has locations at Fisherman’s Wharf, Japantown and Cole Valley.

557 Valencia Street

The former Las Ramblas tapas bar opened in April as Locanda restaurant, a Roman osteria and the latest addition to Craig and Annie Stoll’s restaurant empire, which includes Delfina.