Whose San Francisco is this anyway?

“Small business is the backbone of the San Francisco economy and we need to do everything we can to help the small business.”

Rob Black, Chamber of Commerce

San Francisco has 24,965 small businesses employing 1 to 20 workers each. Companies with fewer than 50 employees employ 43% of all San Francisco workers. One out of every 4 jobs is created by small business. Small businesses represent 85% of the city’s businesses.

“So, why do politicians want to kill the goose that lays the golden egg with excessive restrictions, regulations, fees and fines,” asks Walter Franko who has operated Ricca’s Café on Mission Street for 38 years. Walter just shook his head in exasperation when reminded of the new regulations proposed by the Board of Supervisors and the Mayor.

Conditional Use Permit for Discount “Dollar Stores”

Joshua Sabatini of the San Francisco Examiner reported that Supervisor Gerardo Sandoval thinks that Discount “Dollar Stores” along Mission Street in the Excelsior neighborhood is “creating a blight.” He requested the City Attorney to draft regulations that would require conditional use approval before any dollar store can open in any of the City’s Neighborhood Commercial Districts.

What does a conditional use permit application mean?

Today, the operator of a Discount “Dollar Store” can go to the Planning Department, obtain a permit over the counter and open his store.

If a conditional use permit is required, the business operator has to appear at a hearing before the Planning Commission for approval. Planning Commission hearings are backlogged for months.

Under a conditional use application, the operator has to affirmatively show the Planning Commission the following: that the use of the property as a discount store is necessary and compatible with the neighborhood and other businesses in the area; that the use of the property is not detrimental to the health, safety, convenience or welfare of the public; there is adequate parking and loading for the intended use; the use must not be injurious to property; and that the proposed use must meet traffic, height and elevation requirements provided in the Planning Code.

A conditional use permit process is lengthy and costly – it may take anywhere from 3 to 6 months, or more. An operator may have to start paying rent of up $3,500 per month for a small retail space while going through the process.

The decision of the Planning Commission may be appealed to the Board of Supervisors adding more time and expenses – all of these hurdles including land use attorneys fees to sell $1.00 or $2.00 shirts?

Requiring that Discount “Dollar Stores” obtain conditional use permit effectively bans these businesses from the neighborhood commercial districts.

Calvin Louie, President of the Chinese-American Democratic Club (CADC) said, "Sandoval's policy seems to run counter-intuitive to the American way. Most of the people who establish the "dollar stores" do it in an effort to achieve the American Dream. Many of these stores are "mom-and-pop" operations where the parents are trying to help their families and put their kids through school ... Also for many low-income people, the "dollar stores" are the only businesses they can patronize.

Sandoval added that these “dollar stores” generally sell “cheap plastic wares” and do not offer “any quality shopping experience.”

Cristina Jaochico and Mary Gonzales, both from the Excelsior neighborhood, like shopping in these stores because they can afford the price. Gonzalez likes shopping at Ping’s Gift Shop because “they have a lot of stuff and they are cheap.”

“I don't know why Sandoval is proposing this restriction. Ultimately these stores do help the consumers. Instead of discount stores, would anyone prefer to dot the Mission with high end retails such as Gucci and other brand names?” asks Wilma Pang, former Mayor candidate.

Banning Formula Retail Stores

Judith Berkowitz, President of the Coalition for San Francisco Neighborhoods, is concerned with Supervisor Tom Ammiano’s proposed ordinance to ban Formula Retail in large sections of the Mission neighborhoods. She said: “There should be a study before such a draconian measure is proposed. Any changes should be tied to the Eastern Neighborhoods Area Plan -- Mission Area Plan -- not developed separate from it. This goes against the City's "transit corridor" policy.’’

Judith Berkowitz

A formula retail store is defined as an establishment that has 11 or more retail outlets located anywhere in the United States. It meets 2 or more of the following criteria: standardized array of merchandise, standardized façade, standardized design or color scheme, uniform apparel of employee, standardized signage, trademark or service mark.

Berkowitz’ concern is shared by the East Improvement Association, a neighborhood association in the Mission. “In Year 2006, San Francisco passed Prop G. The conditional use permit required of these chain stores is sufficient and no extra special restrictions should be invoked.”

The East Improvement Association recalls “the negative impact to the Mission when Sears Department Stores and Hale’s Department Stores left. These historically strong chains anchored the Mission. When they left, there was no longer a magnet store to pull customers in to the area and the smaller stores suffered.”

"Without the prospect to attract these larger, more stable players, it has been problematic to find adaptive re-use for many key buildings that were previously utilized as movie theaters, furniture stores, factories and warehouses on important corridors of the Mission. Without the appropriate retail mix of larger and smaller retailers for shopping areas, they cannot remain vibrant.”

This ban punishes successful local businesses like the San Francisco Soup Company, which has several outlets all over the city.

Prohibition of New On and Off Sale Liquor Establishments

Recently, Gerardo Sandoval and Aaron Peskin jointly sponsored an ordinance amending the Planning Code creating a special Excelsior Alcohol Restricted Use District and the North Beach Alcohol Resticted Use District.

The proposed ordinance will prohibit new on and off sale liquor establishments barring new or expanding bars and restaurants from selling wine and liquor in the North Beach Area. This ban will also prohibit new grocery stores from selling wine and liquor in the Excelsior neighborhood.

Community Benefit Districts = Double Taxation of Small Businesses

While individual members of the Board of Supervisors are busy restricting the activities of small businesses, Mayor Gavin Newsom is pushing for the creation of a Community Benefit District in the Excelsior and Ingleside neighborhoods, which will create a new tax assessment district. In exchange for the extra tax, the Community Benefit District is supposed to provide extra services that will benefit the merchants.

Most merchants see these “Community Business Districts” as double taxation. Walter Franko complains about the “city government’s efforts to nickel and dime small businesses without giving anything in return.”

The community benefits district is similar to a business improvement district where the money is raised through property taxes. There are different methods to calculate the additional tax -- typically $970 a year for a standard 2,500-square-foot shop -- will be collected on the December property tax bill and disbursed in January.

Property owners and small businesses now pay for graffiti removal. If they fail to have the graffiti removed in a timely manner, they get ticketed and fined. “It’s punishing the victim”, says Franko.

Most recently, the city removed garbage cans from the streets without notifying the merchants. “The city is forcing the merchants to shoulder the costs of garbage removal services that the city should be responsible for,” complains Franko.

The city is sending out inspectors to cite property owners for cracked sidewalks.

The merchants are now responsible for cleaning their sidewalks and maintaining trees.

Under the Community Benefits District, the city will continue its street-cleaning services in these neighborhoods, a service most residents find dismally performed. In a 2005 city survey, only 43 percent of residents said they were pleased with the cleanliness of the streets, a drop of 5 percent from the previous year. Only 23 percent said they were happy with the condition of the city's pavement.

Another argument against the creation of Community Benefits Districts is that the city should be providing those services because they are already paid for.

All fees and permits payable by small businesses have been tripled or quadrupled in the last few years.

Nickel and Diming Working Families

Fines Ad Nauseam

Gerardo Sandoval plans to introduce regulations that would empower Planning Department inspectors to hand out or mail citations for violations of zoning regulations, specifically targeting property owners who pave their own front yards without the city’s permission.

If the ordinance passes, the Planning Department would be able to fine a property owner up to $500 in what is called a director’s hearing. Sandoval fears, “We are in danger of becoming a concrete city.” …The problem is most of the properties have been paved by previous property owners.

Increased Costs of Parking Meters/Parking Tickets

The newly super sized Metropolitan Transportation Authority (MTA), empowered by the recently passed Proposition A in the last election, is looking at yet another increase in parking meter rates. There is no doubt that the MTA will be looking at increasing the costs of parking tickets again. After all, Proposition A promised MTA $26 million in additional revenues.

Phil and Violeta Varelas of Chick N Coop have operated their business in the Excelsior for 30 years. The couple are well known and well liked not only in the Excelsior but also all over the Bay Area. “We are not rich. We manage financially. We start work at 4:30 am and work till night. We love our customers. We consider them family. We are happy when we see our customers enjoy our food. This restaurant allows us to help our family in Greece and here in San Francisco. Our family sustains us.”

If allowed to continue, the city’s regressive tax policies will nickel and dime folks like Phil and Violeta Varelas all the way to the poor house.