Issue:  Vol. 48 / No. 8 / 22 February 2018

Political Notebook: Planning policy could restrict chain stores in the Castro


Planning Director John Rahaim
(Photo: Rick Gerharter)
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With a number of new retail spaces coming to the upper Market corridor running through the city's gay Castro district, planning officials are looking at how to prevent only chain stores from opening in the area.

Already the city's planning department has informed Starbucks, Chipotle, and Coffee Bean and Tea Leaf that it is not supportive of their applications to open in prime corner retail locations at three different intersections in the gayborhood.

"Personally, I don't think it is appropriate with those visible corner spots for a chain store to go in there," said Planning Director John Rahaim during the Castro/Eureka Valley Neighborhood Association's January 30 meeting.

He said the department is leaning toward recommending CVS's bid to open inside the former Tower Records space as the drugstore chain has wide community support and plans to completely alter the facade of the drab concrete building near the intersection of Noe and Market streets.

"We are talking to CVS about that site. We know people are supporting it because the space has been vacant for so long and the building is such a mess," said Rahaim, a gay man and former Seattle resident hired to the city's top planning job five years ago.

For months planning staffers have been working with gay District 8 Supervisor Scott Wiener and leaders of various Castro neighborhood groups on a new policy that would restrict the ability of formula retail to set up shop along Market Street. While the exact boundary is still under review, the area being targeted is Market Street between Octavia Boulevard south to Castro Street.

"We are working with the supervisor's office about how to put more stringent controls on that part of Market," said Rahaim, noting that up to 50,000 square feet of new ground floor retail is set to come online in the area in the next two years.

A Whole Foods has already been approved for a corner space at Market and Dolores streets, as has a new Bank of the West at 16th, Market and Noe streets. In recent years both a Chase bank and a Verizon phone outlet opened in corner spots at the intersection of Market, 15th and Sanchez streets where Starbucks wants to open.

The infusion of national retailers to the area has altered Rahaim's view on using planning codes to restrict their proliferation, as when he initially arrived in town he viewed the city's controls on formula retail with some skepticism.

Any retailer with 10 or more stores anywhere in the country needs to apply for a conditional use permit from the Planning Commission to open in the city. A few neighborhoods have gone further and adopted outright bans on chain stores.

Rahaim is now taking a harsher stance toward allowing chain stores in certain parts of town.

"I share the concern. I am getting a lot crankier about formula retail," said Rahaim, who lives in the Mission.

Wiener, who lives in Duboce Triangle, is on record in opposition to seeing a blanket restriction against chain stores in his district. Instead, he favors policies that would allow those companies with support from residents to open and require those with opposition to come under heightened review.

"I am not a fan of blanket prohibitions on chain stores," he told the Bay Area Reporter in a phone interview this week. "I think that is using a sledgehammer instead of a scalpel and can have pretty bad unintended consequences."

Under the policy being proposed for upper Market Street, whenever an application for formula retail comes into planning, staff would map a certain number of feet around the proposed site, likely a 300-foot radius, to determine the percentage of storefronts in that area that are also formula retail.

If the percentage is above a certain threshold, which has yet to be determined, then planning staff would automatically recommend against approval for the store. The applicant could still go before the Planning Commission to seek their permit, and it would allow for neighborhood interests to voice their support for certain applicants.

"That way if there is strong community support for a particular store there would still be that flexibility to approve it," said Wiener. "It is a good balance between monitoring formula retail and not having a ban."

Because the disallowance of a business' permit can be appealed to the Board of Supervisors, Wiener would not comment on if he agreed with the planning department's position on specific retailers.

What he would say is that he thinks "it is important to continually monitor the level of formula retail in the neighborhood to make sure that we don't end up having so much formula retail it undermines the uniqueness and character of the retail district."

C/EVNA President Alan Beach-Nelson , who has participated in the discussions on the new chain store restrictions, is supportive of the approach.

"I like the idea of a policy position and trying to figure out the percentage for chain stores versus mom-and-pops," he said.

The encroachment of chain stores in the Castro has been a topic of debate for decades. Ironically, one of the first chains to move in, Diesel, shuttered its Castro location in late January.

Another, Pottery Barn, said in 2010 it wanted to vacate its space kitty-corner to Diesel but remains open. Rumors that Apple was looking at the two storefronts appear baseless, according to several sources.

Other recent fights have centered on Levi's opening a retail space on Castro Street and Walgreens' continued expansion in the area. Opinions often are mixed depending on the type of store and the location.

"I am disappointed about the Diesel store closing," said Steve Adams, president of the city's Small Business Commission and past president of the Castro's merchant group. "In my opinion there needs to be a balance between the two – formula retail and non-formula retail."

But Gary Weiss, who owns Ixia flowers on Market Street, cautioned that the problem with chain stores is they drive up landlord's expectations on what they can charge for commercial rents, making it cost prohibitive for locally owned businesses. And when a chain closes, the rents remain inflated often leaving the space vacant for months or years.

"The majority of people would favor more mom-and-pop stores," said Weiss during last week's C/EVNA meeting. "But if a store remains vacant people get angry, so if a chain is going in they would rather have that instead of nothing."

It has been evident for months that the aforementioned trio of chains was facing obstacles to seeking city approval for their Market Street store plans. A clear signal was the fact none have yet been scheduled for a Planning Commission hearing.

In 2011 Starbucks announced it wanted to open a new store at 2201 Market Street on the corner of Sanchez where it could provide outdoor seating. The plans were immediately met with opposition from nearby residents and merchants, while fans of the Seattle-based coffee brewer voiced their backing.

Last summer Chipotle announced plans to move into 2100 Market Street, the former Home restaurant site, and open a branch of the Mexican burrito chain run by gay founder and co-CEO Steve Ells . But it, too, has faced fierce opposition from the neighborhood, and last week it launched an online survey and advertising campaign in the B.A.R. to try to drum up support.

So far 34 people have signed it, with several saying it would increase customer traffic to the area and be a benefit to nearby businesses.

"It is time to act with common sense. We have too many vacant storefronts in the Castro because there are a select group of very vocal people who are opposed to everything. Chipotle will bring jobs, sales tax revenue, and people to shop in the area," wrote Daniel Paulsen .

Coffee Bean and Tea Leaf wants to open at this vacant storefront at Noe and Market streets.(Photo: Rick Gerharter)

The latest retailer to run into trouble is Coffee Bean and Tea Leaf, whose local franchisee announced in October plans to open at 2301 Market Street. The spot on the ground floor of the Fitness SF building has been vacant for some time.

None of the three chains are likely to go before the Planning Commission until the new policy is adopted. Planning staff is expected to present the final rules for upper Market later this spring.

"It would allow us to test it out as it would be the first time in the city for us to do this sort of policy," said Rahaim.

In the meantime a number of Castro groups are conducting a retail leakage study to better gauge the kinds of stores needed in the neighborhood and how to attract them to open there.

"It will determine what businesses are missing, making people get in their cars and leave the neighborhood," explained Beach-Nelson.


Web Extra: For more queer political news, be sure to check Monday mornings at noon for Political Notes, the notebook's online companion. This week's column focused on a Stanford grad's push for a federal omnibus LGBT bill. Keep abreast of the latest LGBT political news by following the Political Notebook on Twitter @

Got a tip on LGBT politics? Call Matthew S. Bajko at (415) 861-5019 or e-mail mailto:.

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