How T-Mobile Evaded Chain Store Law for Four Years

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On a Thursday night in October at City Hall, T-Mobile was vying for the city’s approval to operate a store in the Mission, but recent history wasn’t on their side. Just a day before, dozens of people crowded into a room down the hall to oppose Jack Spade, another store that, while not technically a chain in the eyes of the city, found itself in the crosshairs of neighborhood activists and vitriolic protest when it tried to open a small, upscale menswear shop on 16th Street.

Yet it was smooth sailing for this T-Mobile franchisee’s cell phone megastore on the corner of 20th and Mission — among his 20 other locations nationwide. The project was approved in less than four minutes without discussion from the Planning Commission or without a single objection from the public. More interesting yet: the store had been already open and operating without the required conditional use permit for four years, Mission Local has learned.

Under the city’s formula retail restrictions, such a permit is required for any store with 11 or more locations in the United States to open and operate in the Mission District. The store must alert the neighborhood about the hearing at which the permit will be considered, which often stirs up pitched anti-chain battles.

In T-Mobile’s case, there wasn’t a peep.

Lax Enforcement

How did such a big chain go unnoticed by the city and anti-chain activists in the very heart of the closely guarded Inner Mission? City planners had tagged the store as operating illegally in a notice of enforcement sent on November 2009, but neither the franchise owner nor the landlord responded, documents obtained by Mission Local show. Their lack of response was enough for the store to continue business for four years without a permit — and without further hassle from the city.

In the meantime, the city potentially lost big in uncollected fines. According to Planning Department policy, a failure to respond to that November 2009 enforcement letter should have resulted in a notice of violation. That notice triggers a $250-a-day fee for noncompliance. In this case, the department never issued the notice, so wasn’t eligible to collect any fees, which could have spurred the store to take action to get the permit — or added up to $365,000 over four years.

As the city prepares to revamp its policy on formula retail, the unusual case of T-Mobile shows the shortcomings of the current law. The system relies on incoming chain stores to self-report as formula retail and secure the conditional use permit — a step that is sure to attract neighborhood attention, if not opposition. Or the Planning Department must flag and also hound the violator.

None of these things happened in the case of T-Mobile — and the 3,000 square-foot pink megastore on Mission Street evaded a law that more than 60 other chain stores in the city have complied with.

For Javier Solorzano, the permit expeditor hired by the landlord’s architecture firm in 2013 to finally apply for the formula retail permit for the location, T-Mobile was one of the easiest projects to receive city approval that he’s worked on.

The fact that it had been operating outside city law for four years failed to raise any problems in getting a permit. In fact, at the October Planning Commission hearing that approved T-Mobile’s conditional use permit, the commissioners never brought up the store’s four-year delay.

“What I noticed from the Planning Department is that as long as there is no community outcry their position is ‘nobody said anything, we will approve it’ — unless it’s a super monster,” Solorzano said. “Again, it’s a lot of politics, and it depends on who makes waves.”

Planning Commission president, Rodney Fong, who was among the five members who voted in favor of the permit, disagreed.

“That’s not the rule,” he said. “The commission and staff spend a great deal of time and effort. Obviously there is so much volume [of cases].”

Original Planner On Case Fired In Porn Scandal

T-Mobile never applied for the permit before opening in August 2009, replacing the chain music store Ritmo Latino that had opened in the mid-90s, grandfathered in when the city passed its retail formula law nine years later in 2004. The Planning Department sent an enforcement letter to the T-Mobile franchisee named Ritmo Latino Wireless, and the landlord, Edward Litke, three months after it opened, in November 2009, notifying them they must get the permit. (Ritmo Latino’s owner David Massry had converted several of his shuttered music stores to T-Mobile franchises across the country).

Both the franchise and the landlord  failed to follow up with the department’s enforcement notification and remained open until 2013 when a merchant planning to open a café in the adjacent space in the same property applied for a conditional-use permit.

The Planning Department again flagged the T-Mobile property, and Litke’s architecture firm hired Solorzano to finally get the formula retail permit. (T-Mobile’s franchise owner Massry did not respond to repeated emails and phone calls for comment, and the landlord’s spokesperson, Stefano Casalino, would not speak on the record).

The planner who issued the 2009 notice of enforcement failed to follow up and was fired a year later after getting caught up in the Planning Department’s email porn scandal in 2010, according to press reports. The case then appears to have fallen through the cracks. The department has more than a thousand open cases and relies on complaints and due diligence of landlords to look into potential violations, a planning official said.

Planning Strikes Again — Four Years Later

It was planner Edgar Oropeza who discovered T-Mobile was operating illegally and then forwarded the complaint to Christine Haw, the Planning Department’s director of code enforcement, records show.

Haw says notes on why the case wasn’t followed up on in 2009 are missing, and concedes that the department was unaware, until 2013, that the store was still operating legally.

“[Project sponsors] think ‘the city is not going to pay attention to us,’” and continue the unauthorized use, Haw said after reviewing the file at Mission Local’s request. “It’s kind of unfortunate.”

Haw said she is unaware of any other formula retail store that is being allowed to open in the city without a permit, but that it’s not unusual for some landlords or project sponsors to be unaware of the city’s flurry of zoning restrictions.

“Because there are so many storefronts, we don’t know when a storefront opens,” she said. “It’s common for things to come back as complaints. It’s common to abate the complaints.”

Everyone Else is Doing it

Another trigger for the Planning Department to follow through with enforcement is neighborhood opposition. Since voters approved formula retail controls in 2006, the Planning Commission has approved several formula retail projects in the Mission including Pollo Campero, AutoZone, Fresh & Easy and AT&T. Voters approved Proposition G in 2006, which required all chains to go through a conditional use process before opening.

Many times, the projects face opposition for anything from wafting fried chicken odors in Pollo Campero’s case to the amount of affordable housing on top of the Walgreens at Cesar Chavez and Mission streets.

That’s not to say that activists won’t use whatever tools at their disposal to move their agenda, said Lesser, who worked on getting the Pollo Campero and Jack Spade projects approved.

“Depending on what your agenda is, if you can use the formula retail law to stop a project, you use that law — regardless of if your objection is formula retail or not,” he said.

In sharp contrast to Mission Street, Valencia Street has been a chain no-go zone. Merchants successfully fought against American Apparel and joined with neighborhood nonprofits to halt Jack Spade from moving near Valencia Street last year.

Lesser said the T-Mobile case is unfair given that other businesses have to follow the law — and sometimes get a black eye in the process. When contacted by Mission Local about the case, he was perplexed that the giant had sat without a permit for so long.

“That is so visible,” he said. “I don’t feel it’s the public obligation to police this kind of stuff.”

52 Comments

  1. pete

    It’s because the activists care about symbolism and not results or fairness.

  2. Bob

    It’s because it’s trashy looking, and that’s what activists like.

  3. Middle-aged

    The TMobile at 20th is hardly the only exception. There’s a Chase Bank at 14th and Valencia; the building was built in 2012 according to city records.

  4. two beers

    Pete and Bob– you guys do a lot of rabble-rousing in the comments sections on ML, criticizing, declaiming, insulting, attacking people you disagree with, and advocating for policies you favor. Seems like you’re activists, too — you’re just “activating” for different policies.

    You guys are agitators; I mean that descriptively, not derogatorily. You don’t like the objectives and methods of the people you label as “activists,” but you have your own set of objectives and methods, and you are activists, too.

    “Activism” is a dirty word to you, and you clearly despise the people you label as such, but, well, that shoe fits you, too.

    • ThatGuy

      … says twobeers!

      LOL!

    • marcos

      Difference being that these libertarian trolls have the full faith and credit of capitalism behind them while usual activists who would speak for ‘the people’ don’t go through the motions of organizing ‘the people’ so that their ‘activism’ is bolstered with the full faith and credit of ‘the people.’ That’s the asymmetry, the libertarians are setting the agenda and the ‘activists’ are reacting, reactivists.

      • John

        Activism is reactionary by definition. Activists spend far more time trying to stop things than trying to build things.

        Progressives would be better named “Regressives”.

        • two beers

          John, my point is that you are as much of an activist as the activists you decry; you merely have different methods and objectives.

          • John

            I’d argue there is a difference because I am much happier with the status quo than the average activist.

            Activists seek to achieve objectives mostly outside of the normal democratic channels. I am perfectly happy to trust the voters and not try and influence.any issue unduly.

            Moreover I take no part in any political activity or action other than offer my thoughts here. I think of myself as the voice of the silent majority who are not activists or advocates, because they are too busy living their life.

          • two beers

            “By living your life,” do you mean posting here fifty times a day?

            You call this your entertainment. Others see you as advocating for your self-interests, trying to suffocate conversations here that you don’t like, veering other conversations away form topics that reflect negatively on the policies you benefit from.That’s a form of activism. You are an activist.

          • John

            I’m not suffocating anything because I do not control the bandwidth here. If ML agreed with you that I was suffocating, they have my email address and can write me. They have not.

            What you are really angry about is that you want ML to be a hotbed of socialist propaganda and that is compromized by someone speaking up for the silent majority.

            I make no apology for preferring free speech and diversity to your tightly controlled press – a common feature of those places where the left did obtain power.

  5. Mel

    Isn’t there a T-Mobile on Valencia at 17th? Why focus this article on the Mission Street T-Mobile when the most obvious example contradicting this statement “In sharp contrast to Mission Street, Valencia Street has been a chain no-go zone.” is right on Valencia?

    • Blurpy

      Chains are OK so long as they sell cheap stuff. (I learned that from this website)

    • Ben

      I agree, Mel. And what about the McDonald’s, Burger King and Walgreen’s on Mission while we’re at it?

    • Middle-aged

      I think that TMobile was there before the formula retail law. The building was built in 2003, and I don’t recall anything else ever being in that space.

      The Burger King, Payless, Walgreens, and McDonalds were all there already in 2004 when the law was passed.

      • marcos

        Burger King, Payless, Walgreens, and McDonalds all serve existing residents of the neighborhood.

        • John

          So what? If a WalMart was built in the Mission, I feel sure that many “existing residents” would shop there.

          The test here isn’t whether residents would use it but whether the entity is ideologically acceptable to the people who think they should micro-manage shopping options.

          And what about Best Buy, OfficeMax, FoodsCo, Sports Authority, he Starbucks on Bryant, and all the stores at the Potrero Shopping Center on 16th?

          Oh, and CostCo although you can probably argue that is in SOMA.

        • pete

          They’re plenty of existing residents that would have shopped at American Apparel. Just not your preferred type of resident, I suppose.

      • eee

        I think that space used to be Ritmo Latino.

        • landline

          Middle-aged is referring to the T-Mobile at 17th and Valencia, not the one at 20th and Mission that replaced Ritmo Latino.

  6. John

    Wait, exceptions are routinely granted for stores where the consumer has little choice but to shop at a major chain.

    Examples are drugs (WalGreens), banks (BofA), food stores (WholeFoods) and so on.

    I’d categorize cell phone providers as being in that category, There’s no more than half a dozen major providers. Same for car rental places, insurers and very specialized and capital-intensive businesslines.

    Whenever economies of scale are necessary to provide better value and pricing, then surely there is a compelling case for exemptions.

    • Alai

      That makes no sense. There are plenty of non-chain food stores. And the economy of scale is just as important for shoes and pet food as it is for anything else.

  7. David

    Oh heavens! How dare we let a prosperous business sit for years, making money for San Francisco tax coffers and providing a service to customers. Let’s shut it down! I’d much rather have some run-down knick knack store at this location. Who would ever want a cleaner, more attractive Mission Street? This store needs to grow a beard and start smelling like urine before I can rest easy at night.

  8. nutrisystem

    I know this may sound crazy, but in an extremely overheated hipster commercial district, a few chain stores actually HELP.

    Placed next to, say, an faux-antique barber shop with its period signage and lovingly handcrafted sideburns, a Supercuts chain store is so painfully uncool that it spoils the “specialness” of the whole block, thus slamming on the brakes of commercial rent hyperinflation!

    Chain stores are sort of like chemotherapy – hard on the civic body, may cause nausea, but kill lots of greed cells. An imperfect therapy for sure, but, used prudently, one of our key weapons against hyper-hipster-specialness syndrome.

    And besides, there is no “locally owned mom and pop” cell phone network. If people want that category of product, they must see the corporate man.

    • John

      Good to see a liberal supporting nasty chain stores over quirky eclectic local boutiques out of a belief that they deter gentrification.

      Then again, nothing new about liberals fragmenting and infighting over arcane policy issues while the wealthy make bank either.

      • nutrisystem

        Liberal? No. I could best be described as an Eisenhower Conservative, who is willing to resort to some Franklin Roosevelt style social experimentation when dire situations call for it.

        • marcos

          The spectrum has been so libertarian-right shifted that center-right is now projected as liberal.

          • nutrisystem

            No doubt. GOP Eisenhower’s expansion of Social Security alone would have him labeled “socialist” in today’s environment, let alone his support for a 90% marginal income tax rate!

          • two beers

            Ironically, people are more liberal than ever, on issues such as increasing taxes on the rich, protecting the environment, decriminalizing drugs, providing universal health care. preserving social security, re-regulating Wall St, limiting the NSA’s domestic spying powers, and getting out of our foreign wars of imperial aggression.

            But while the populace has moved dramatically to the left, both “parties” (in quotes because there really is only one party, with two branches with different positions on hot-button social issues) have moved dramatically to the right. Obama is to the right of his self-proclaimed hero Reagan on many, if not most issues. Compared to Obama, crazy old Nixon was a pinko.

          • marcos

            Who can forget Nixon’s “wage and price controls?”

            But seriously, democracy has been hijacked by these two facades of the neoliberal finance/war party.

            Here’s what “Freedomworks,” a Tea Party front group sent out to its members today:

            “American taxpayers have to pay Insurance companies one TRILLION dollars. That’s right $1 Trillion.

            And Obama still wants to bail these insurance companies out with YOUR tax money. Obama thinks he’ll get his way. But we can stop his latest bailout. Marco Rubio and Tim Griffin have introduced legislation that will permanently stop the ObamaCare Bailout.”

            Now you tell me who’s left, who’s right, what is liberal and what is conservative?

            To my mind, either you’re with Wall Street, Finance, Insurance and Real Estate or you’re a real American, it is as simple as that.

        • John

          Ike also was comfortable with segregation and the denial of gay rights. Are you sure you want to hoist your ideological flag on his mast?

          Marcos’s comment can be validly reversed:

          “The San Francisco progressive political spectrum has been so left-shifted that being a moderate Democrat is now projected as being a rabid republican right-winger.

          Analogously, I think that Goldwater was quite moderate by today’s standards.

          • two beers

            Ah, the old tu quoque fallacy, John.

            You have a tendency to paint those you disagree with as hypocrites because they aren’t 100% consistent in everything. The tu quoque fallacy, in other words.

            Nutrasystem is a hypocrite because Ike had flaws and didn’t have all of the liberal social values that have become more prevalent over the years since.

            Opponents of Jack Spade are hypocrites because there’s been a Walgreens down the street for decades.

            I think Wall St should be re-regulated and the criminals Blankfein and Dimon tried, but I’m a hypocrite because I have a bank account with a top ten bank.

            You do this so frequently and methodically, that I suspect you have studied attack rhetoric, and know full well that you are using logical fallacies and kinder, gentler ad hominems.. Where did you get your training in tu quoque?

            Goldwater can only be seen as “moderate” because Democratic standard-bearers like Obama and the Clinton’s have outflanked him on the right. So, relatively, you’re correct that he seems “moderate” by today’s standards, but objectively, Goldwater was an extreme right-wing conservative. Or are you just a relativist?

          • John

            two beers, I actually think it is possible to hold a belief that, say, meat is bad for you but still occasionally binge on a steak just because you get a craving. No argument from me.

            But the fact that a logical form of an argument can be used wrongly and therefore be a fallacy does not mean, ipso facto, that all arguments of that form are fallacious.

            Specifically, if you really feel strongly about the big banks, you could bank with a credit union.

            If you really think that chain stores are toxic, then why not drive out the existing ones?

            Consistency may be the hobgoblin of small minds but saying one thing and doing another can rightly be seen as the essence of hypocrisy.

            But for the record, my positive assessment of Goldwater (from reading – I’m not old enough to remember him) is that he was an old school republican i.e. from before a time when the GOP became riddled with religious dogma and pious pomp.

            Since you asked about my training, I have a degree in logic and I won prizes for debating at college. Ironically I do not participate in politics. I prefer to merely observe and comment from the gallery. I need nothing from the government save to leave me alone, and so do not participate, only philosophize. I often don’t even bother to vote.

          • marcos

            The only legitimate conflict of interest is a direct financial conflict of interest, otherwise tu quoque is just ad hominem gussied up in fine latin.

          • two beers

            I thought I detected a rhetorician. However, you use your knowledge off rhetoric disingenuously: most of your arguments seem like they were cribbed from the Fox handbook of attack by logical fallacy. There’s no way you could be trained in rhetoric and _not_ know that you are deploying an arsenal of logical fallacies. I’ve seen you use a host of them, all the greatest hits: circular reasoning, straw man, fallacy of composition, reductio ad absurdum, false dilemma, appeal to authority, tu quoque, red herring, post hoc ergo propter hoc….all these and many, many more!

            I can’t believe that you can use these fallacies so facilely and blithely but somehow don’t know that you are utilizing spurious rhetorical arguments. That you have a degree logic yet use it so duplicitously makes is the mark of cynicism, deceit, and arrogance.

            But, really, If you don’t know that accusing someone of hypocrisy is not a valid logical argument, then you should sue your alma mater for malpractice

            .

          • marcos

            Translation: At some point that I declined to mention, another poster used X, Y and Z logical fallacies. Therefore anything that poster says is wrong. Reductio ad Tu Quoque.

          • John

            A straw man argument is simply a reductio ad absurdum argument that is deemed false.

            The real logical fallacy is trying to frame a sound argument against you as having a flawed logical form, so as to not have to counter the substantial point.

            But in the end, this is just entertainment for me. For you, more, I sense. And for marcos, his entire life, evidently.

          • poor.ass.millionaire

            Hey, I want in on this! Getting back to where the center shifted over the last 30 years, basically it has shifted away from gov-run-everything and more towards private enterprise. Sure, it’s not perfect, but most Americans prefer the private shift, as it’s yielded less overhead waste and bloat. Remember, I’m talking relative to post 1980 corp deregulations, etc. I know liberals disagree, but most of the country does agree (not just nuts right wingers.)

          • John

            Agreed, poor.ass, the Reagan revolution happened but the SF left never noticed.

            The popular mindset changed around 30 years ago from government being the solution to government being the problem.

            Also, the idea that the two major US parties are similar and that they are both far more right-wing than the people is laughable.

            They only seem that way if you are in the leftmost 1% of the American population

    • marcos

      Artisan chemo, lovingly hand crafted according to heirloom techniques passed down through the generations, locally sourced.

    • Alai

      Parking requirements! It worked for other cities: when you require new businesses to provide parking, they can’t move in to existing storefronts, so they’re abandoned. Eventually they deteriorate to the point that they’re demolished and turned into parking lots, which allows new businesses to open in the remaining structures. But at that point the area is so unpleasant that no one wants to be there and the rents go way down.

      Hey, it worked for just about every city in the Midwest.

  9. Guillermo Davidos

    Mr. Hernandez, was there not a better use of your time than on this story?

  10. godzuki

    I do think SFers are pretty inconsistent about chain stores. Haight Street freaked out about Urban Outfitters but were fine with Wells Fargo. I, too, am fairly “anti-chain” when I can be, but some of the backlash has to do with stores with similar items not wanting the competition. Which I understand….but it’s I feel like “just call it what it is…”

  11. Pamela

    What about an outcry of all the check cashing places which are all part of Western Union as well as T-Mobile & other phone shops plus McDonald’s & other chains proliferating in the Mission District. Besides being chains, Besides being a magnet for crime, several were check cashing places & phone stores were recently shut down in the Mid-Market area, the decrease in loitering, addicts, vagrants, etc. is amazing. You can almost feel safe walking there now, unlike Mission Street, which is a giant dumping ground of schlock shops.

    • godzuki

      Most of the “shlock shops” (I’m assuming you mean dollar stores?) are independently owned. There’s a difference between a chain store and just something you don’t like or wouldn’t shop at.

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