City Questions Role of Banks in Neighborhoods

A First Republic Bank will take over the corner space formerly occupied by a frozen yogurt shop. The storefront has been vacant for more than a year.

A First Republic Bank will take over the corner space formerly occupied by a frozen yogurt shop. The storefront has been vacant for more than a year.

En Español.

Planning Commissioner Hisashi Sugaya hasn’t been inside a bank in more than a year, he told his colleagues on Thursday. With online banking and ATMs that accept check deposits, banks have simply made it easier to do everything without ever having to see a human face, he said.

“I don’t understand why banks continue to have branches in neighborhoods when they are pushing everyone not to come into the branches,” Sugaya said.

These and other arguments were heard by commissioners as they considered a proposal to open a branch of First Republic Bank on the corner of 24th and Sanchez streets in Noe Valley. In the end, the commission voted 5-2 to approve the project — it will be the sixth bank branch within five blocks — because they felt it was neighborhood-oriented. This started a conversation about the role of banks in neighborhoods.

It could just be the beginning. Commissioners will likely hear more arguments like this, since the Board of Supervisors has approved an ordinance that requires banks and other financial institutions to seek neighborhood input before opening. Currently banks can open in some neighborhoods, including the Mission, without the community input the city requires when approvals are sought for other so-called “formula retail” businesses, like American Apparel and Starbucks.

The ordinance passed with an 8-3 vote last week. Supervisors Carmen Chu, Sean Elsbernd and Mark Farrell were the dissenting votes.

“It is not a ban, and it gives formula retail financial service institutions a chance to move into areas where there is community support for their presence,” stated a press release from District 1 Supervisor Eric Mar. “It just ensures that financial institutions play by the same rules as all other businesses.”

Supervisor Scott Wiener, who represents Noe Valley, voted in favor even though he doesn’t entirely agree with the legislation because it would make Hayes Valley and North Beach off-limits to banks, since neither of those commercial districts allows formula retail.

“A bank tends to close in the afternoon; when you have too many banks it really undermines the vibrancy of the neighborhood because it becomes dead space for much of the week,” he said.

Wiener said he encourages banks to occupy second-floor spaces instead.

The new First Republic branch will occupy what some residents consider a “cursed” storefront because it has been vacant for more than a year, and some commissioners believe the bank would be a good addition to the neighborhood.

Sugaya argued that storefront businesses like cafés and restaurants create more traffic than a bank would.

“It seems like the whole push for banking must be because Chase is coming in and all these banks,” Sugaya said.

Chase Bank is currently in expansion mode in San Francisco, a spokeswoman told Mission Local last month. In the last two years it has opened two branches and is eyeing one more, on Valencia Street.

The number of opponents and supporters at the Planning Commission hearing was even, with about five speakers from each side. One Noe Valley resident who spoke in opposition said that commercial institutions contribute to the loss of neighborhood character.

One resident said he didn’t have a problem with the San Francisco-based bank, but that he is concerned about retail space going to a commercial entity as opposed to a small business.

“I would like to see Bank of America or Wells Fargo removed from the neighborhood and [First Republic] allowed in that space, because comparatively, they are Harry Potter to Voldemort,” he said. “I am concerned, as the little shops leave the Valley and more and more financial services move in, we lose the neighborhood character and just serve a dollar.”

Commissioner Sugaya agreed.

“By having strict regulations and control, we top the balance in the favor, hopefully, of small businesses,” he said. “Almost every conditional use permit that comes before us has been approved, so I don’t think it should be looked at as obstructionist.”

Commissioner Gwyneth Borden said there is no reason not to support a bank that is community-oriented in a space where many other small business have failed. She also disagreed with Sugaya’s assertions that fewer people go inside banks these days.

“We should not mistake our own banking habits with that of others. I was always shocked, particularly on the weekends on Chestnut Street — my fiancé always goes into the branch and always waits in line,” she said. “At least in the Marina, people use their banks.”

In the end, that is what the legislation attempts to achieve, supporters said — identifying which neighborhoods want banks.

“I think this is a good conversation we are having,” said Commission President Rodney Fong. “It is one of the first of many to come. I think this commission will find its way through this.”

9 Comments

  1. nocorp

    We need more neighborhood credit unions. Not more corporate banks. Credit unions have members, better rates for customers and put much more value back into communities. Not banks. Banks have customers that they nickel and dime. ANd then the banks won’t make small business loans. SF keepers should stop aligning themselves with the expanding Chase® empire (walmart o’banks). I was so happy to dump BoA 20 years ago. I’ll never put money in a bank again.

  2. Reality Checker

    Um, why the photo of Noe Valley?

    • Profile photo of Rigoberto Hernandez Rigoberto Hernandez Post author

      Because the First Republic Bank, which was approved by the planning commission on Thursday, will occupy the corner of 24th and Sanchez streets in Noe Valley. Best, RH.

  3. Truth

    First Republic is a wealth management bank. They only serve rich clients. They are owned by venture capital. This is not a nice little fuzzy bank.

  4. Peter

    I agree credit unions would be favorable and Wells Fargo, US Bank (relatively new to the west coast), and Chase are a bit of an eye sore but I need atms to get money and would rather get money from them than a corner shop. I know no one likes building owners but they have to fill their vacant spaces with something. It’s true I personally don’t require walk in bank services but what I do need is a safe atm, stamps (wells fargo), and foreign currency (US Bank on Castro). It would be nice if these billion dollar banks would contribute more to our neighborhood however and I don’t see why we can’t ask for that. To get more credit unions we would have to “court” them to come here I think.

    • nocorp

      Credit unions have ATMs (you’ll also find credit union atm’s now in walgreens, rainbow and good spots more and more). Eyesore isn’t the issue for me, it’s community-sore. A credit union will give better interest rates, both for savings and loans. Savings are protected (by the government, for what that’s worth haha) just as they are in banks. Credit unions are far more personalized, localized and from personal experience, will answer the phone and fix things. Why would you need to ‘court’ credit unions into SF? Go to dinky places like Felton or Boulder Creek — as many credit unions there as banks, with far less population draw. I believe it is something in the arcane and good-ol-boy policy in SF which actively discourages them or there would be more of them here. Support the people who support you. That is how you prosper anywhere. Corporations are not people and will never be there for you without a service charge. Fire them.

  5. Charles

    Every business for the past five years at that storefront has failed. Maybe this one will make a go of it.

  6. Lollypop

    Can everyone please look at the web site for this bank. It ONLY serves the ultra rich! It is owned by venture capital with the sole purpose of serving only the richest of the rich.

    • marco

      That sounds just about right for Noe Valley — after all, shouldn’t a neighborhood bank serve its neighbors?

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