Issue:  Vol. 48 / No. 11 / 15 March 2018

Online Extra: Political Notes: Starbucks, bank encounter hurdles for Castro stores


Starbucks is eyeing this location at 2201 Market Street for its third cafe in the Castro. (Photo: Jane Philomen Cleland)
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As Castro residents debate the need for stronger controls against chain stores opening in their neighborhood, two national brands are encountering hurdles for opening locations in the city's LGBT district.

Coffee store chain Starbucks has delayed seeking city approval for a third location in the Castro as it tries to drum up support among residents and business owners. Having shopped its proposal to various neighborhood groups over the last six months, the company intends to wait until later this summer or early fall to go before the city's Planning Commission.

It has plans to open a new outlet at the corner of Market and Sanchez streets that would include outdoor seating. As a December article in the Bay Area Reporter detailed, Starbucks' decision to seek city approval to open at 2201 Market Street has been met with mixed reactions.

Fans of the Seattle-based coffee store welcome seeing an additional place to buy their macchiatos and frappucinos. But nearby cafe owners fear having to compete with the national chain, and some residents simply do not approve of seeing corner commercial spaces be taken over by formula retail.

Starbucks had been expected to seek backing for the new store from Castro merchants at their meeting June 7, as it was listed on the agenda as up for a vote. But at the monthly get-together the company announced it had requested a postponement to August.

Andrew Zall, a store development manager for Starbucks based in San Francisco, instead detailed how the company had increased its financial support to various Castro causes.

"One of the things you made clear was we had a lot of opportunity to be deeper engaged in the neighborhood," said Zall. "We have committed to do a number of things in the near term to demonstrate that commitment."

Among the items Starbucks has ponied up money for are hanging flower baskets in the Castro commercial corridor, sprucing up the Castro Community Meeting Room in the Bank of America building at the corner of Castro and 18th streets, and sponsoring the GLBT History Museum on 18th Street at the $1,500 donor level.

This fall the company will also be donating school supplies to the neighborhood's two elementary schools: Sanchez and the Harvey Milk Civil Rights Academy. It also plans to sponsor portable toilets at street fairs in the Castro and the annual Christmas tree display for a second year in a row.

"We've heard you want us to be engaged today in the community," said Zall, who acknowledged that Starbucks is aware of the neighborhood's concerns about formula retail. "We want to demonstrate we are not a behemoth but are engaged locally."

The concern over chain stores in the Castro is being fanned by the construction of new mixed-use developments along upper Market Street. The buildings will have housing over ground floor retail spaces.

As last week's Political Notes column reported, it is expected that, due to the size of the commercial spaces, the rents will be out of reach of locally owned shops. Neighborhood groups have begun to debate what restrictions, if any, are needed to prevent seeing only formula retail move in.

The issue has reared up in recent weeks due to Bank of the West seeking approval for a branch in the new development at the corner of 16th, Noe and Market streets. The bank, a division of Bank BNP Paribas, and developer Angus McCarthy want to build out a third of the ground floor space to fit the needs of the financial firm.

The remaining space would be set aside as a smaller storefront in response to objections from neighborhood groups that opposed the initial plans to hand over the entire space to Bank of the West. Although the compromise won the support of the Merchants of Upper Market and Castro, it did not mollify critics at two Castro homeowner associations.

Both the Duboce Triangle Neighborhood Association and the Castro/Eureka Valley Neighborhood Association sent in letters of opposition to the Planning Department.

The two groups expressed concerns about seeing a bank move in to such a prominent retail space. They also objected to Bank of the West being granted more space than zoning laws allowed and asked that the branch be capped at 2,500 square feet.

Planning staff agree and have recommended that the commission not grant the bank a waiver to open in a 3,314 square foot space. In his staff report, planner Michael Smith wrote, "the department finds that the larger use is neither necessary nor desirable for the neighborhood."

Smith recommended that the bank revise its project so that it complies with the 2,999 square footage limitation for the upper Market corridor.

"The project would provide a large commercial space that could be difficult to rent to future tenants," wrote Smith. "Furthermore, the rents for larger tenant spaces tend to price smaller, locally owned businesses out of the neighborhood and reduce the diversity of retail establishments within a neighborhood."

District 8 Supervisor Scott Wiener has sought to broker a compromise by inviting bank officials and Castro leaders to meet at his office in City Hall.

The bank's permit request was on the agenda for last Thursday's Planning Commission meeting. But the oversight panel postponed the matter to its July 12 meeting so that the neighborhood and project sponsor could have time to resolve the issues surrounding the retail spaces.

"The commission continued the matter, at my request, to July 12, to give me an opportunity to get the parties together. But it hasn't been scheduled yet," Wiener told the B.A.R. last week.


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


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