Jack Spade Opponents Win a Rehearing

In a decisive victory for the group opposing Jack Spade’s arrival on 16th Street, the Board of Appeals voted 4 to 1 Wednesday to rehear an earlier appeal that failed after it ended in a split vote.

This means that the group of Valencia merchants opposing Jack Spade will have one more opportunity on December 11 to argue why the luxury retailer should be considered a chain store and thus undergo a stricter approval process.

In the rehearing request considered Wednesday night, the Valencia merchants had to prove there had been a “manifest injustice” in the process that  previously upheld Jack Spade’s right to the building permits allowing it to renovate the space it plans to move into.

After detailed arguments by Valencia Corridor Merchants Association spokesman Jefferson McCarley and 20 testimonies from the public during a comment period, four out of five board members voted for a rehearing on the question of whether Jack Spade was formula retail and thereby subject to a longer approval process that involves community input.

“I’m prepared to support a rehearing,” said commissioner Frank Fung in a change from his previous position. At the appeals hearing on August 21, Fung was the minority dissenting opinion in a 3-2 vote. Four votes were needed to strike down Jack Spade’s building permits. “The issue of escalating rents leads to a manifest injustice.”

Vice President Ann Lazarus, the sole “no” vote on Wednesday, also voted to uphold Jack Spade’s permit in August.

The issue of rent has come up frequently throughout the debate on Jack Spade moving into the neighborhood. Merchants have testified that Jack Spade’s connection to a larger corporate parent, the women’s designer Kate Spade, and its connection to the larger company Fifth and Pacific, means it can pay rent that is significantly above market rate.

In her testimony to the board, Jack Spade VP Melissa Xides said the company is paying a fair market rate of “$3 to $4  per square foot” for the space formerly occupied by Adobe Books. When prompted, she said the space her company is leasing is “about 2000 square feet.”

“We did not evict Andrew McKinley,” Xides said of Jack Spade’s relationship to the space’s former tenant.

Brett Lockspeiser, a member of the Adobe Books Collective, which has moved to 24th Street, told the board that he disagreed with Xides.

“We made a bid to pay market rate,” Lockspeiser said. “But we were told that our bid was not being considered seriously because Jack Spade was offering well above market rate.”

Following the board’s decision, Xides said she was disappointed that Frank Fung changed his mind, especially regarding rents. “The only reason Adobe’s lease wasn’t granted is because no one individual wanted to a put a name on the lease, that’s why they were evicted,” Xides said.

But Lockpeiser held his ground on Adobe’s lease. “That is just false. We had an individual on a new lease that we signed, we had one name.”

In addition to the increased details about raising rents, Wednesday’s hearing included significant opinions from the original architects of San Francisco’s chain store, or formula retail, law.

The opposition presented the board with a letter from former Board of Supervisors President Matt Gonzalez, who drafted the original 2006 legislation Section 703.3 of the Planning Code. They also heard from a letter written by Assemblyman Tom Ammiano, the author of Prop G, the voter-approved ballot measure that called for stricter chain store regulation.

“In order to fulfill the clear intent of the law in a common sense manner, it will be necessary, in some cases, to consider corporate ownership/structure,” wrote Gonzalez, suggesting that Jack Spade’s relationship to a larger corporate entity be considered when determining whether or not it is formula retail.

Board president Chris Hwang said the two letters from the architects of the formula retail provisions were persuasive and voted once again on the side of the Valencia merchants. “From my view, Jack Spade is formula retail and doesn’t belong in the place it wants to move,” she said.

Like the two previous hearings regarding this issue, the night featured impassioned testimony from a swath of Mission residents, teachers, business people and representatives from various nonprofits.

“I don’t feel that a business like Jack Spade cares about my community,” said Pia Lopez, a public school teacher raised in the Mission. “The Mission is becoming a playground of people not from the neighborhood. Jack Spade will make a really bad situation even worse.”

Carmen Costello, one of two people who spoke in favor of Jack Spade during the public comments, said she was a 72-year resident of the Mission and felt that the Valencia merchants were unfairly harassing Jack Spade.

“We’re trying to get the Mission cleaned up, there’s drugs, bums, alcoholics and prostitutes,” Costello said. “We want a good business on 16th Street.”

The debate about Jack Spade, which has polarized the neighborhood around 16th Street and even garnered national media attention with a piece in The New Yorker’s blog, is part of a larger one that involves the entire city’s relationship to chains.

The Board of Supervisors is currently working on legislation initially drafted by Supervisor Eric Mar about strengthening the city’s definition of formula retail, making it harder for businesses like Jack Spade to move into certain neighborhoods in the future.

Jack Spade’s specific future on 16th Street will be determined next on December 11 when the Board of Appeals rehears the question of whether Spade should be considered formula retail.

Correction: A previous version of this article stated that the Board of Appeals scheduled a rehearing for December 12. The article above has been corrected to reflect the actual date of the rehearing, Wednesday, December 11. Thanks to commenter Rebekah for spotting the error.