Three years after the city of San Francisco first helped open more than 70 businesses by directly giving cash to merchants, the effort to fill commercial vacancies appears to be a success.
Of the 74 businesses helped with the program’s first two tranches of funds in 2023, only 11 subsequently shuttered. Earlier this summer, the city disbursed between $50,000 to $100,000 to another 39 business owners to continue its efforts to improve the retail economy on certain blocks.
Most businesses in the new cohort are still in the process of opening, though at least one of them, Chicken Fried Palace in the Mission District, launched briefly and immediately closed — the owner cited sidewalk problems and a health scare.
Freshroll, another recipient, used a $100,000 grant to open a third location downtown. Compton’s Coffee House will use the money to open its third location as well, in a Financial District building that was most recently a Starbucks.
Owner Aidan Compton said that “years and years” of neglect at the storefront made it difficult for another business to step in, but with city grant funding his team hired an architect and contractor to design and finish the build out.
Since 2023, the city’s “Storefront Opportunity Grant” program has given $5.3 million to business owners like Compton looking to start or expand a business in San Francisco. The program has gone through three cycles since it first debuted. Of the 70 businesses in the first cohort, 55 still remain open at their original location; 11 closed and three relocated.
For Andy Morales, the grant was a chance to fulfill a dream. By 2023, he had spent five years repairing vehicles out of a one-car garage in Potrero Hill, slowly saving up money to open his own full-scale mechanic shop. But that felt far away.
He then found out about the Office of Economic and Workplace Development’s program, which debuted in 2023 and offered up to $50,000 to support budding business owners. Morales applied, and was granted $25,000 — enough to cover the move to a bigger garage on a busier thoroughway in Bayview.
His business has flourished since.
“It gave me a lot of breathing room,” Morales said.
Staff with the city’s workforce office say the program started after the COVID-19 pandemic to help fill the storefront vacancies exacerbated by it, and to respond to rising costs associated with opening a small business in San Francisco.
The office says some closures are to be expected, and shouldn’t be viewed as a total loss.
“When we make these investments, businesses go into a space and they put a lot of resources into capital improvements,” said Kate Patterson, the office’s director of internal affairs. “If the business doesn’t succeed, those resources have made a space more conducive for a new business to move into.
Retrofitting a space and then permitting it is often the most expensive part of opening up a business, owners and the city office say. It’s especially difficult in San Francisco, where many legacy businesses hold on to storefronts for decades, outlasting a multitude of updated building codes that new owners would have to adhere to.
Immediately after the first cohort, the workforce office opened another round exclusively for Tenderloin businesses, where owners say street conditions make it difficult for businesses to remain long-term.
The four businesses given grants in the second cohort in the Tenderloin came with business support.
One of those was Falafelland, a Yemeni restaurant now open on Golden Gate Avenue. The instability of running a business in the area is a struggle its owner Billy Alabsi knows well.
In 2018, Alabsi owned a successful restaurant by the same name and received praise for his food. He was asked by Twitter to move his business to a larger location where the company was housed on Market Street.
Then the pandemic hit, and Alabsi lost the restaurant when he could no longer make rent. He lugged his cooking equipment with him as he moved — he knew he wanted to open another restaurant.
“If I started all over, I would have to spend six times for that equipment,” he said. “It’s gotten more expensive … and everyone’s gotten more broke.”
The $50,000 from the city helped Alabsi create dining room furniture by hand. But before he could put any of the furniture together, the city helped him with the leasing process, including going with him to view potential storefronts before selecting his Golden Gate location.
The third cohort, which the city announced earlier this year, also focused on high-needs neighborhoods like the Excelsior and Tenderloin, and split businesses into two tracks based on their needs and challenges.
Those in the highest-needs neighborhoods — the Tenderloin and Excelsior — received grant money, brokerage services to help them find a place to rent, and six months of support from a business expert to help owners solve problems when their businesses open.
The second track, offered to business owners in Bayview, Chinatown, downtown, Fillmore, Mid-Market and at port-owned properties, was for businesses that already had leases. These will get grant money and then the six-month business assistance when they open.
Evan Mather, owner of Custom Fit, is preparing to open his fourth gym location downtown. The $50,000 grant he received helped purchase equipment, complete the buildout and cover labor costs related to opening.
“Those expenses occur well before a new location generates revenue, so support at [this] stage makes a real difference,” Mather said.
