Business was thriving when Marian’s Apparel first opened shop on 2046 Mission Street. But after 63 years of clothing and serving the community with its in-store credit system, the store was shut down in 2016.
“The economy, the internet, and all the competition” led to the store’s demise, according to Joel Anker, who managed the store along with his brother-in-law.
Two years, later the space remains vacant — an increasing condition along Mission Street: Mission Local counted 49 vacant properties along Mission from Duboce Ave. to Cesar Chavez.
But, as is true with so many storefronts that look empty, not all stand vacant waiting for a tenant. In fact, of the 49 vacancies, only 19 are for sale or lease; eight are not on the market, eight are undergoing renovations, and 11 recently submitted permit applications or were recently approved to make renovations. The status of three vacant storefronts could not be confirmed.
Mayor London Breed and Supervisor Vallie Brown last week announced the Storefront Vacancy Strategy, an initiative aimed at lowering the number of vacant storefronts across the city by streamlining the city’s response to the business permitting process.
The initiative will attempt to alleviate the struggles many realtors face when leasing storefronts along Mission Street, and it theoretically would allow for more creative use of space, but specific restrictions remain.
Large companies and businesses that sell alcohol, for example, will continue to face tightened restrictions in an effort by the city to fight gentrification and displacement in the area.
A microcosm of the vacancy problem
The addresses 2949, 2959, and 2967 Mission Street stand by side by side. Located between 25th and 26th Streets, the storefronts were most recently were known as The Fizzary, Mission Critter and Merlos Financial. Now they’re all vacant.
The Fizzary, a retail shop with hundreds of soda options, closed in 2015 after three years in business. The storefront was subleased later that year to someone operating an illegal gambling den. Records from March show property owner Roberto Sanchez applied to change the building’s use from retail to restaurant. The storefront remains vacant.
Mission Critter, a local pet shop, stood at 2959 Mission St. for five years. Then business slowed and Tim Costigan, the owner, closed shop in June, another victim of online shopping, according to Costigan. The 1,450 square foot space is ready to be leased for $2.75 month per square foot, according to Ed Maiello, president of Citivision Commercial Real Estate. He is working with HCM Commercial to lease out this space.
“It’s hard to rent the space out,” said Maiello. “It’s not on the best block of Mission Street.”
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Merlos Financial once stood at 2967 Mission St, but Mission Local couldn’t confirm how long the storefront has been empty. It was sold in March of this year for $2 million, according to property records. It appears to currently be off the market, and no recent permit applications have been filed for this address. Neighbors could not confirm the status of the building.
MAP KEY: For sale = yellow; For lease = red; For sublease = orange; Off-market = green; Renovating = brown; Permit in review or recently approved = black; Unconfirmed = purple.
What used to be a coffee house and bakery business at 3017 Mission between Cesar Chavez and 26th Streets has now been vacant for about two years. The building owner, Philip Fernandez, said he does not know why the business shut down.
After the bakery closed, new tenants planned to convert the space for restaurant use. But Fernandez said a contractor misled the tenants and they never managed to get the approvals needed to move forward with construction. It has remained without tenants for nearly a year now.
Fernandez said he is in no rush to put it back on the market.
The Board of Supervisors passed an ordinance years ago requiring properties left vacant for over a month to be registered with the Department of Building Inspection. Building owners would then be charged an annual fee as long as the space remained vacant. But the ordinance has largely gone unenforced.
Planning Commissioner Dennis Richards said enforcement is an issue with any initiative.
“When the Board passes something, they need to fund enforcing,” he said. “Without the enforcement funding, you have these rules that become kind of meaningless.”
This lack of enforcement might change with new legislation introduced by Supervisor Sandra Lee Fewer last week. If approved, owners of vacant storefronts would face tightened requirements, like paying four times the registration fee if they fail to register within the required time frame.
Fernandez said 3017 Mission Street, part of a four-story building filled with corporate and local businesses, will probably end up being a coffee house or bakery when he puts it up for lease at about $2 per square foot.
He blames the vacancy problem on Mission Street on tenants having to keep up with so many “regulations, rents, city approvals, and city fees.”
That complaint became a repeated chorus as Mission Local worked to figure out why vacant properties line Mission Street.
“The Mission is a very challenging place to bring new business,” said Santino DeRose, a managing broker at DeRose & Applebaum, a commercial real estate company.
He lists zoning limitations as the biggest challenge because “finding contractors to go through all this is very difficult.”
By “all this” he means the heavy permitting process that most realtors we spoke with want to be streamlined. It’s too early to tell if Breed’s new initiative will solve this. But restrictions are there.
At present, many of the ground floor vacancies are limited to local retail businesses, even though, according to the realtors we spoke with, larger companies tend to have the time and money required to get through the city’s permitting process.
“It’s the new entrepreneur that doesn’t have the money and time,” said Richards, referring to the long and expensive permitting process in the Mission and across the city. Those are the kinds of businesses the Mission community wants, according to Richards.
But even small businesses need to apply for permits to get their sites up to code. Permits depend on the type of business they want to open.
“I get what London Breed is trying to do, which is rethink our zoning,” said Louis Cornejo, president and founder of Urban Real Estate Group.
As it stands now, “the city is requiring more retail — more supply than there is demand,” said Cornejo. “I’d love for businesses to be spending more on the Mission, but only certain businesses can be here.”
Cornejo added that the large, narrow spaces available on Mission Street are difficult to fill — permit issues or not.
“The only available product on Mission is too large for most uses, and then it only allows very few uses for that space,” he said.
Take 2813 Mission as an example. It used to be a Western Dental, and then they moved down the street because they needed to renovate the space. “They found a better deal, and they didn’t want to renovate on their own,” said Alexander Kolovyansky, director of investment sales at Vanguard Properties.
The building Kolovyansky is leasing has nearly 3,000 square feet of space on each of its two floors, according to Loopnet.com, an online site for commercial real estate postings.
The large spaces are “not for everyone,” according to Kolovyansky. “The people who can take those spaces are the people who also face formula retail.”
Passed in 2007, formula retail restricts businesses with more than 11 stores anywhere in the world. If they want to start the 12th location in San Francisco, they must go through an additional public review process.
Although these chain businesses have previously been approved on Mission Street, many simply don’t think it’s worth going through the process.
“They just won’t go into the Mission because they’re scared of being rejected,” said DeRose. “And the neighborhood doesn’t really want them there, so there’s that.”
Many realtors we spoke with agreed that people would rather do business elsewhere.
“I really think San Francisco is in for a backlash of people leaving the city,” said Raoul Isaac, a real estate broker.
It’s a sentiment several other realtors echoed.
To alleviate these tensions, the Board of Supervisors recently approved a new Flexible Retail Use ordinance, spearheaded by Supervisor Katy Tang.
The ordinance would allow different types of businesses to run out of the same space, including pop-ups — and it might help solve the large-space issue may realtors run into.
This ordinance does not apply to the Mission District, but “each supervisor might want to consider this for their districts and make it city-wide,” said Richards.
As with other initiatives in the city, legislation enforcement will be needed for this new use of space.
That, once again, is also the case for another piece of legislation passed last week aimed at filling empty storefronts.
Initially introduced by Supervisor Norman Yee and passed unanimously by the Board of Supervisors, this new legislation will “help create affordable child care units for family child care operators in the ground floor space of new and existing mixed-use developments.”
The ordinance is meant to be a compromise between building owners with vacant storefronts and home-based family child care providers who need a space for their business after facing housing displacement.
Once again, permits will be needed to get buildings up to code. Child care facilities, per state law, must abide by additional, specific regulations to make buildings safe for children.
“The regulations are important for the safety of the children, but it takes a lot for places to qualify,” said Kolovyansky, who has previously worked to find spaces for preschool businesses.
“There’s a lot of good ideas but difficult implementation,” he said, because “unless it’s heavily subsidized, they still have to pay for a lot to keep the doors open.”
Richards agreed: “They can’t open unless they have the right things in place. You’re dealing with children, so it’s a life-safety issue.”
He likes the idea, though. “I hope that it’s successful. It certainly is a public use.”
Public use is something Richards thinks about often when reviewing new businesses. It’s one of the reasons he said office use is not being considered for ground floor storefronts.
“Office spaces aren’t active uses,” he said. “They aren’t open to the public.”
If a business wants to put office space on the ground floor they might be considered only if they make the space available to the public in some way.
He offered Umpqua Bank as an example. The bank, an Oregon-based corporation, has office space on their ground floor, but they also host night-time community events, making the building an active public use space.
Even if the demand for office use were high, Proposition M, passed in 1986, caps the amount of office space that can be approved every year.
And on Mission Street., the city’s planning code specifically restricts ground floor storefronts to active commercial use. No offices are allowed, unless they submit a permit application and undergo an extensive review process.
“You can’t just go out and rezone the city,” said Richards, when asked if the city would consider changing zoning restrictions to meet demand for office or residential use. “There’s a long process.”
The Storefront Vacancy Strategy sponsored by Mayor Breed and Supervisor Brown does not amend zoning restrictions, but it will attempt to revise parts of the city’s planning codes.
The strategy will be enforced with new legislation, new programs, and administrative reforms, according to the mayor’s office.
To enforce the new strategy, Mayor Breed and Supervisor Breed introduced an ordinance the day after the strategy was announced that would make amendments to the city’s planning code.
Businesses seeking to apply for a Place of Entertainment Permit, for example, would need to file an application with the Entertainment Commission who would forward the application to other departments who need to approve the permit. As it stands now, business owners need to independently seek approval from each department, lengthening the permit process.
Several realtors we spoke with also mentioned special interest groups in the Mission make it difficult for new businesses to enter the Mission.
Aside from zoning restrictions, “all the other impediments tend to be rooted in local special interest groups that try to make it more difficult,” said a realtor who declined to be named, citing company policy.
“You’ve got local groups that are harassing local tenants, telling them what they can and can’t do. It’s unfortunate,” said Kolovyansky.
Neither would name the groups they had in mind or provide further details. Others see such pressure as necessary to prevent the Mission from being overrun with businesses that do not serve the community.
For those already here, many fear their own businesses might be the next vacant storefront. They blame increasing rents, parking restrictions along Mission Street that many seem to hate, and a changing economy.
At Latin Bridal, business owner Silvia Ferrusquia, said she used to rent a space a few blocks away at 2631 Mission. She has owned the wedding and quinceañera dress store for 28 years.
Now at 2644 Mission, she said she’s on a month-to-month lease because the building owner refuses to let her sign a longer-term deal. The space next door is empty, and the owner wants to keep his selling options open.
With so many vacant spaces, she worries about the future of the Mission.
“En donde esta la identidad de la Misión?” she asked. “El barrio latino? El barrio chino?”
She doesn’t know how much longer she can stay open for business.