San Francisco has had its long battles with chain stores. And dueling proposals aiming to tighten chain store restrictions will be considered by the Planning Commission today at noon.
One draft city ordinance was created by the Commission. The other was put forth by Supervisor Eric Mar. Though both proposals for the most part make it harder for formula retail businesses to open new locations in San Francisco, they take slightly different approaches. Currently, stores that have a standardized appearance and 11 or more U.S. locations are considered chains, or “formula retail.” Mar’s proposal expands that definition to include stores with 11 locations worldwide. The Commission’s proposal allows for 19 worldwide locations before a store is considered a chain.
A proposed Mission location for Jack Spade, a subsidiary of the chain clothing retailer Kate Spade, was at the center of a controversy over chain store restrictions last year. Under Mar’s proposal, if a formula retail parent owned more than 50 percent of a store, that subsidiary would also be considered a chain.
Currently, only some kinds of stores are considered formula retail—mostly places that sell tangible goods, like bars, cafes, liquor stores, movie theaters and banks. Both Mar’s and the Commission’s proposals would expand the types of retail that would fit this chain definition. Future restrictions could apply to ATMs, hotels, hair salons and smoke shops, among others.
Before the Commission considers the proposals, the city’s chief economist, Ted Egan, will present an Economic Impact Report (EIR). Released in February, the EIR predicts that either of these increased chain store regulations will not expand area economies.
Egan’s report also recommends that the Commission and Board of Supervisors consider input from the public and respect their wishes about what kinds of stores they want in the area.
The Commission adopted a recommendation for approval for both draft ordinances, with a few amendments. This means both proposals will go before the Board of Supervisors’ Land Use Committee in September and later to the Board of Supervisors itself.
Kanishka Burns, who manages the Commission’s formula retail project, said the provision to regulate subsidiaries of chains had been removed from Supervisor Mar’s proposal. Instead, Mar’s draft ordinance, if enacted, would result in a six-month study of subsidiaries and how to address them. The study would also include an examination of how best to structure legislature requiring Economic Impact Reports from formula retail stores.
Commissioner Cindy Wu said the Commission liked elements of both proposals, but that there was some disagreement on the number of locations that would define a store as formula retail. Three commissioners supported 11 locations, while four supported allowing 19.