City Extends Moratorium on 24th St. Storefront Mergers

24th-and-Harrison

The market rate housing moratorium may have lost at the ballot, but earlier this week, the Board of Supervisors voted 10-1 to extend a 45-day pause prohibiting mergers of commercial spaces on the 24th Street corridor.  With the extension of the temporary moratorium, storefronts along 24th Street will be prevented from consolidating for another 10 months and 15 days.

First adopted on July 28 as a 45-day emergency ordinance, the pause applies to ground floor mergers resulting in spaces greater than 799 square feet that are located in an area roughly encompassed by Mission Street and Potrero Avenue.

“We are in the process of creating a special-use district around the 24th Street corridor that would recognize the Latino Cultural District that the board named last year,” said Hillary Ronen, legislative aide to District 9 Supervisor David Campos. She added that the proposal will likely be presented in January 2016.

Some local merchants and residents called for the pause after developers started coming in and combining small storefronts into larger spaces. In 2013, Librería San Pedro, a bookstore adjacent to St. Peter’s Catholic Church at 24th and Florida Streets, as well as the neighboring indigenous arts store G.G. Tukuy were nearly evicted when the Archdiocese of San Francisco was made a $100,000 offer by investors to replace the tenants with a high-end restaurant.

“That was an attempt at merging, but the community fought back and saved these small businesses from being evicted,” said Eric Arguello of Calle 24, a group of merchants, residents, and community organizers fighting to preserve the corridor’s economic and cultural diversity. At 24th and Harrison streets, Usulutan Restaurant and a small adjacent church were evicted a few months ago – Arguello said there is talk of merging the two spaces.

And at 24th and Hampshire streets, the french bistro Sous-Beurre took the place of two small retailers – one of them a discount produce store. On 23rd and Potrero Avenue, Arguello says that a grocery store owner approached him, worried that the landlord may have plans of merging his business with an adjacent space.

“We see the patters,” said Arguello. “What happens when they merge is that the rents triple, and the cost of rent increases for everybody along the corridor.”

But even now, not all agree that the moratorium is the best solution. And some, like Max Martilla, a muralist at Precita Eyes Arts Center at 2981 24th St, are  more concerned with the kinds of places that are coming in.

Looking out from Precita Eyes, Martilla says he can guess what will go into a ground floor space across the street that used to be a pupuseria and has now been vacant for nearly a year  a restaurant or a cafe.

“I’m so desensitized with all these new cafes and bougie restaurants coming in it’s stale,” he said. “If someone is going to gentrify this neighborhood with their business, I’d hope that they came up with something more clever than another cafe.”

As small businesses and mom-and-pop shops are disappearing from the 24th Street corridor, upscale restaurateurs and developers are quickly moving in. Snagging a space in what the city has designated a “Latino Cultural District” is so desirable that landlords are merging small adjacent storefronts into larger spaces, hoping to draw in those who can afford to pay more, say community advocates fighting against those very mergers.

“In the midst of the affordability crisis, small spaces with lower rents have made it possible for these smaller businesses to sustain themselves,” added Ronen. Traditionally dominated by Latino businesses, approximately 54 percent of the 24th Street Corridor’s 130 businesses are still Latino-owned. 

By ensuring that commercial spaces remain accessible to small businesses that are unable to compete with skyrocketing rents but add to the area’s diverse commercial fabric, the pause makes sense, argued Campos, who sponsored the ordinance.

Changing Businesses 

The merger moratorium is intended to level the playing field for small businesses in danger of displacement while the special-use district is being drafted. According to Ronen, many of the spaces that have been merged so far were “converted for restaurants.”

Arguello believes that the extension is a step in the right direction.

“In these times, this ordinance is desperately needed,” said Arguello. “This ordinance is one of the important steps that is gearing towards the special-use district.”

The Board of Supervisors seemed to share this sentiment, with only District 8 Supervisor Scott Wiener voting against the extension. He also opposed the ordinance when it was first adopted, deeming it too restrictive.

“He doesn’t believe that it is the appropriate policy for land use,” said Jeff Cretan from Wiener’s office. “Allowing mergers but requiring a conditional-use permit would have been the preferred process.”

Opponents to the moratorium argue that vacant storefronts along the corridor are not being filled for long periods of time, and that by prohibiting the combination of two smaller storefronts into one, restaurants which generally need larger spaces to operate are being unfairly kept out of the corridor. Martilla, from Precita Eyes, disagreed.

“I don’t think it’s discriminatory to not want upscale restaurants to move in here if people weren’t fighting for this neighborhood, it would lose its soul,” he said.

But views about how to achieve balance between preserving the neighborhood’s character, and the “benefits” that new businesses bring with them, differ along 24th Street.

Jordan, who works at Alley Cat Books on 24th Street, said that while prohibiting mergers may deter larger retailers and restaurants from moving in, he believes that the moratorium won’t keep out all businesses that are deemed “undesirable.”

“It feels like such a roundabout way,” he said. “In my head, it’s not related to the size of space upscale, affordable boutiques could live in small spaces and still discourage locals from shopping there.”

Although he does not want “the whole corridor to be bars and restaurants,” the bookseller believes that a balanced mix would be beneficial for everyone.

“One of the most important things in making a neighborhood safe and vibrant is more eyes on the streets bars and restaurants will help with that, whereas shops and retailers close at a certain time and leave the streets empty,” he said.

For Martilla, the muralist, “safe” is relative. “I don’t think that any brown youth are going to run into these new places if they are in trouble or in danger. They’ll have the cops called on them or be shooed away,” he said. “That’s the double-edged sword of gentrification it makes the neighborhood safer for some, but these kids are still living the same reality no matter how much things change around them.”

A few blocks down 24th Street, Daniel Felix worked the vegetable department’s organic section at Casa Lucas. Felix, whose uncle has owned the local supermarket for 35 years, said he initially didn’t know about organic produce, but had to learn when new customers started asking for it.

“You have to adjust to progress,” said Felix. He pointed to a regular customer who had just opted to purchase a stick of organic butter for $8.99 instead of the cheaper Berkeley Farms brand that Casa Lucas has been carrying for decades. “Our [Latino] community is catching on to what is good for them.”

While Felix supports small and Latino-owned businesses, he does not agree with legislation that  “keeps new businesses out [of the corridor].”

“More vacancies equals more trouble you have people hanging out, it looks run down, and it’s bad for business,” said Felix, adding that new businesses are not the enemy. “Yes, the community is changing, but people still find their way here. I think people are going to shop wherever they feel comfortable.”

This story has been updated. 

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5 Comments

  1. Kenneth Cory

    Question, it’s very clear who is for the pause, but when you say “Opponents to the moratorium argue that vacant storefronts along the corridor are not being filled for long periods of time…” who exactly are the opponents? You don’t really say.

    • Laura Waxmann Post author

      Hi Kenneth, a group called Open 24th were strong opponents to the halt on mergers for that reason. I was unable to reach them for comment at time of publishing, but will update the story if I hear from them. Thanks for your feedback!

  2. Erick Arguello

    One thing to point out is that 24th St. has one of the lowest vacancy rates in the city. What makes it hard for spaces to be filled are the high rents the landlords are asking. This is not to keep business’s out but to keep the playing field even, so more true Mom and Pop business’s could afford space. There is no moratorium on business’s on 24th, the community decided on the store front mergers because of the pattern of evictions on business that we see. Each case is different but the larger pattern was clear.

  3. Alisa Folsom

    Look, we have a formula retail ordinance already. And within that, we have businesses on 24th St. that have been there a long time whose owners moved to the suburbs long ago, like La Palma. I love that place, but try to get them to donate to a local public school fundraiser? You have to go in a month or more ahead because they will tell you the owners are out in the East Bay and don’t come in but once a month or less. Then you have some of the more recent and higher priced places. A lot of those folks live in the neighborhood and send their kids to the public schools, but they aren’t Latino, so there have been protests and vandalism against them. All of these businesses work hard to be successful. St. Francis isn’t latino but has been there longer than El Tomate. Does Erick Arguello get to decide their leases? If the Archdiocese really needed a hand with the morality of evicting long time tenant in favor of higher rent, then maybe everyone is focusing on the wrong problem.

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