One recent evening, in a dimly lit empty storefront in the Castro, several dozen locals gathered to hear a panel of neighborhood leaders discuss strategies to preserve and expand queer spaces in the LGBTQ neighborhood.
Held November 3 next door to the Academy, an LGBTQ social club at 2166 Market Street, the meeting was organized by gay attorney John Hendricks of Hendricks Law PC. The 90-minute discussion touched on the wider problems affecting the neighborhood, including the stubbornly high rate of empty storefronts, street crimes, tent encampments, exorbitant real estate prices, regulatory snags in opening a business, and sparse entertainment options for women and people of color.
"In more than a decade representing local queer business," Hendricks said in an interview before the meeting, "I've observed significant barriers for business owners, including obtaining clear and consistent regulatory guidance and managing the cost of compliance."
Commercial vacancy rates in the Castro are at nearly 22%, he said, compared to the citywide retail vacancy rate of about 5.5%, according to a fact sheet Hendricks prepared and distributed to attendees. Yet, in recent months, a number of new businesses have opened in the neighborhood on its two main commercial corridors of Castro and Market streets, while three new eateries set to open on upper Market Street are working through the permit process.
In addition, while there are more than 170 Black-owned businesses in San Francisco, there are a couple in the Castro, including florist Guy Clark, according to gay District 8 Supervisor Rafael Mandelman's office.
While it is still unclear how many neighborhood businesses will successfully bounce back from the damage they suffered during the COVID pandemic, several attendees sounded optimistic.
For example, the empty storefront where the meeting was held was recently leased by the Academy to become an event space for rent to local groups. One of the Academy owners, Nate Bourg, said that "business has been good" and "we felt confident" that they have a good chance to make a go of it.
And panelist Dave Karraker, who owns MX3 Fitness, which has locations in the Castro, Lower Haight, and the Mission, said his center at 2336 Market Street "was very busy," more so than the others. Karraker, who is co-president of the Castro Merchants Association, also pointed out that workers were busy renovating Cafe Flore, the iconic cafe at Market and Noe streets that has been shuttered for several years. A seafood-focused eatery is expected to take over the high-profile corner space.
"Nightlife is fundamental to the neighborhood," noted Hendricks. For decades, bars were the most popular place to socialize but, in the eyes of many, those businesses often haven't been welcoming to people of color, women, and trans people."
Discrimination complaints led investigators to look at the Badlands bar more than a decade ago. A 2004 report by the San Francisco Human Rights Commission found that Badlands was discriminating against African Americans, but the findings were never official because the HRC executive director at the time, Virginia Harmon, did not sign off on the staff report. Owner Les Natali and the complainants eventually reached a confidential settlement, and Natali denied the allegations. Badlands permanently shuttered in 2020 during the pandemic.
Karraker conceded that other neighborhoods, including 24th Street in Noe Valley, and the shopping corridor on Chestnut Street in the Marina, are "more vibrant" than the Castro. Karraker thinks that locals who opposed the opening of a Trader Joe's in the Castro several years ago, citing traffic issues, "made a big mistake."
"It worked in New York City," said Karraker, pointing out that such a move would've brought a tremendous amount of foot traffic to the area. "Much of the nightlife has shifted to Oakland," he added.
Mandelman, who recently easily won reelection to a second term on the Board of Supervisors in the November 8 election, said that when he moved to the city in the mid-1980s, the Castro was a "vibrant, popping place" with few vacant storefronts.
"For me," he said, "it was a dynamic and exciting" place.
The Castro isn't the only neighborhood suffering vacancies, he said, "it's a citywide problem."
If landlords reduced rents and the city eased many of the requirements for building permits, business owners would be more likely to set up shop, Mandelman noted. As it is, owners have to "get through 17 departments that have to say yes" before they can open, he added.
Challenges
In an email to the Bay Area Reporter after the meeting, Mandelman wrote that he recently introduced a pair of policies allowing new queer bars and bathhouses to open. He said there are barriers to get these businesses going, including complex approval processes and also addressing the city's mental health care.
"A huge challenge is street conditions and what's happening with addicted and mentally ill folks," Mandelman said. "They go into stores and make life hard for business owners and their employees. Folks in the Castro are rightly frustrated with the city's response."
The Board of Supervisors voted in April on a zoning change to allow gay bathhouses to operate in the Castro and other areas of the city, as the B.A.R. previously reported. So far, however, no one has indicated an interest in opening one.
Levi Maxwell, a transgender advocate who is chair of the Economic and Workforce Development Committee of the Castro LGBTQ Cultural District, said the ongoing problem of tent encampments won't be solved until the number and quality of shelters improves. When given the opportunity to move to a shelter, "many people won't go" because the shelters are unsafe, they said.
In terms of nightlife, "people are going across town to Jolene's," a queer-owned establishment, said Maxwell. Currently, there are no dedicated spaces for lesbians in the Castro, they said.
An audience member, who identified himself as Frank, said he came to San Francisco after living in Paris where the gay scene is "over." When he moved to San Francisco, he was disappointed to see how much the Castro had changed. "It's gotten very expensive here," he said. "I can't afford it."
Another audience member, Kent Mirkhani, a gay real estate developer, said, "I'm part of the problem. I'm trying to build 140 units on this block" but he's hit numerous roadblocks that have stalled the project. "I'm about to give up," he said, noting that the building he has proposed would have 22 affordable units, more than the minimum requirements of the city.
Mirkhami, who lives nearby, has been trying to develop two sites on the 2100 block of Market Street for years, one of which is the vacant Open Bible Church at 2135 Market Street. His earlier proposals were met with objections from nearby residents due to the height of the buildings and the configuration of the housing units.
Just this month Mirkhami and his architects released new renderings for a project at 2140 Market Street with 91 units of housing. It would replace the Lucky 13 dive bar, a surface parking lot to its left, and a three-unit apartment building to the right of business.
Terry Beswick, a gay man and longtime local activist who recently started a consultant practice to help connect small businesses and nonprofits to government and corporate funding, said the meeting was a "constructive" method of bringing the community together.
In an email to the B.A.R., Beswick wrote that there is "a cool campaign rolling out soon" that aims to market empty storefronts in the Castro to prospective tenants co-sponsored by the merchants group and the Castro/Upper Market Community Business District. "The campaign tagline is 'I'm available,' and it involves catchy posters in vacant storefronts with a cute avatar and QR codes that will link to a website and a database of brokers," he stated.
"I'm hopeful the project will bring a lot of visibility to the opportunities for small businesses and entrepreneurs in the neighborhood, but I think its success will be dependent on participation from landlords and commercial brokers," Beswick wrote.
Beswick said many factors contributing to the high vacancy rate "are outside our control as the economy continues through a cycle of disruptions. But we can help our commercial corridors adapt through targeted funding and technical assistance, as well as changes to burdensome regulations and costly fees."
Beswick recently secured a $100,000 grant from the city so that the merchants group, where he serves as treasurer, could "activate" vacant storefronts in the Castro. "It is not a lot of money to tackle this enormous problem. We're working now to identify landlords in the neighborhood who we hope would be willing to lease to us at very low cost so that we can activate and market their spaces," he stated.
"My hope is that we will secure a good sized space that we can brand as a Castro Visitor's Center," he added, similar to what is being done in the Haight with "Welcome Haight & Ashbury." The space would be used to direct tourists to businesses and attractions and showcase Castro-themed merchandise from multiple vendors.
"We have lots of great LGBTQ and allied vendors who participate in our monthly Art Marts on Noe, or in the Castro Street Fair, who just don't have the financing to rent an expensive storefront on their own, and we'd love to help them generate revenue in a more long-lasting pop-up arrangement," Beswick stated.
Attorney Hendricks conceded that many of the ideas discussed at the meeting have been debated for years, noting that a 2015 retail strategy report for the Castro outlined some of the same recommendations.
That report "is a valuable document, and while some of its recommendations have been implemented, it is apparent that many have not, or at least not fully," he wrote. While the 2015 strategy "appears slightly outdated," he recommended "dusting it off and putting its recommendations back to work for our neighborhood."
While the 2015 strategy expressly calls for developing and monitoring annual benchmark indicators of district improvements, Hendricks said he was unaware of any updated statistics.
"You can't improve what you don't measure," he wrote.
Andrea Aiello, a lesbian who's the executive director of the Castro CBD, did not attend the meeting. In an email she wrote, "What you must understand is that there was funding for the study, not funding to implement the recommendations from this study. We did get another grant to hire a consultant to help new merchants get into spaces; but the funding became available right when the pandemic hit. We decided to redirect the funding to our new retail leasing campaign, which will launch soon."
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