Faced with an alarming number of vacancies in the Castro business district, some community members are proposing a ban on formula retail. Others advocate lifting the ban on new bars and clubs.

District 8 Supervisor Bevan Dufty is pushing his own initiative, which would market the neighborhood as a whole to both local and national retailers as a way to draw new stores to the Castro.

Backers of a formula retail ban argue it would bring down commercial rents in the city's gay neighborhood and help more locally owned stores afford to open their doors.

"If you put a formula retail ban in, it will make landlords more reasonable about their expectations. They won't hold out for these outrageous rents and it gives an opportunity for local-owned businesses to come in," said Castro resident Demian Quesnel, who is a member of several neighborhood groups involved in the discussions.

The idea is similar to those bans adopted in other neighborhoods such as Hayes Valley, which feared its Parisian-style charm would be ruined by an influx of formula retail spaces. Both the Harvey Milk LGBT Democratic Club's land use committee and the Castro Coalition, part of an affiliation of eight Castro neighborhood groups, have been discussing whether to pursue enacting a ban.

"The rents have gotten to the point where they are sustainable for only corporate types of tenants. They are setting a threshold too high for our businesses to thrive and flourish," said Milk Club President Brian Basinger, who heads the AIDS Housing Alliance and attends the Castro Coalition meetings.

Some residents support a ban covering the entire Upper Market business area, while others favor banning chain stores solely along Castro Street between 18th and 19th streets, viewed as the heart of the LGBT neighborhood. Paul Moffett, outgoing president of the Merchants of Upper Market and Castro, predicted business owners would be divided on enacting a ban.

"It would be a very mixed reaction. There are good chain stores out there," said Moffett, whose group has successfully negotiated community benefits such as meeting room space from those national retailers moving into the Castro.

Dennis Richards, president of the Duboce Triangle Neighborhood Association, said his group has not discussed passing a ban. Richards, who chairs the Alliance of Upper Market groups, expressed doubt about the benefit of restricting chain stores in the Castro.

"We like neighborhood-serving businesses; we like gay-owned businesses, but we need to be realistic," said Richards. "We don't want to have the Castro look like every other street in America. But you are going to have to have some chain stores to fill out the big spaces. And if they bring in traffic to help other businesses, perfect."

To help launch a new initiative to market the empty spaces, Dufty secured $25,000 from the Mayor's Office of Economic and Workforce Development and is asking the Castro community benefits district to match the funding at its April 12 meeting.

Ken Stram, the LGBT Community Center's director of economic development, developed the marketing proposal to help landlords advertise their buildings to prospective tenants. Dufty said he asked Stram to create the plan after seeing the owner of the vacant Tower Records space have trouble finding a new tenant for the Market Street storefront.

A gay-owned furniture company passed on the site; Cost Plus retrenched from opening a Castro store this year; and office supply store Staples has expressed concern that the space may be too big. The landlord, Kent Jeffrey, has so far refrained from pursuing Trader Joe's. The grocery chain has its backers for a Castro location but would also likely encounter fierce opposition from small grocers in the area as well as residents who fear the traffic impacts would be nightmarish.

With the potential for 11 parcels along Market Street to be redeveloped with ground floor retail spaces, Dufty predicted the number of vacant spaces would only increase in the next few years if nothing were done to address the situation. He said he sees no need for a Castro-specific ban on formula retail since the board passed citywide legislation requiring chain stores to receive conditional use permits before they could open.

"My goal is to market the existing sites," said Dufty, who supports seeing the Chinese restaurant chain P.F. Chang's take over the Tower Records space. "The goal is not to have 50 new nail salons."

One real estate agent who works with clients looking to move into the Castro said he felt Dufty's marketing proposal was unneeded. Lee Julien with Vanguard Properties said what would help reduce the number of vacancies is overturning the ban on new bars and restaurants along Castro Street.

Doing so, he argued, will pull in more people to the area and increase business for other stores. He also said he sees no harm on banning formula retail along Castro Street.

"It isn't a question of marketing them. Anyone can walk by the Castro and see the empty spaces are there," said Julien. "I don't get many requests for stores other than bars and restaurants. If the Castro were more of a restaurant and bar destination, that would help bring more mom and pop retail into the area. Maybe lifting the ban on bars and restaurants might be helpful."

Others argue there already are far too many bars in the heart of the Castro. Quesnel said any solution is hampered by the fact that the neighborhood means different things to different people.

"The problem is it is hard to separate out what the needs of the residents of the village are from what the needs of tourists and the people who view it as a gay capital are," he said.