New Castro retail rule
meant to aid local merchants
by Matthew S. Bajko
Speaking before Castro merchants during their August meeting, District 8 Supervisor Scott Wiener was asked about the new ground-floor retail spaces being constructed in a dozen mixed-use housing developments along Market Street.
Wiener, a gay man who lives in the city's LGBT district, said it is incumbent upon the gayborhood's residents and current business owners to encourage local retailers to move into the storefronts that will be available between Octavia Boulevard and Castro Street in coming years.
"We need to be very proactive and make sure local retailers are aware of this," said Wiener. "If we are passive about this, landlords are going to take the path of least resistance and that is to bring in banks and real estate companies. We need a mix."
The issue of what types of retailers call the Castro home has been contentious for decades. Recent debates over proposed Starbucks, Trader Joe's, and Chipotle Mexican Grill along Market Street have roiled the gayborhood, with the national chains failing to win acceptance for their plans.
This year saw the city's planning commission adopt stricter rules for formula retail along upper Market Street aimed at curbing the chains' ability to open along the busy thoroughfare. The zoning change is seen as giving an assist to local merchants seeking stores in the Castro.
But even locally based businesses can find frosty receptions to their proposals. A new bar planned for a storefront on the 2300 block of Market Street and a gay gentleman's club eyed for the building that housed Diesel at Harvey Milk Plaza were both dropped due to negative reactions from the neighborhood.
Or they encounter resistance from landlords, unwilling to take a chance on non-formula retailers. Take for example gay San Francisco resident David Wilson, 43, who owns the pop-up shop Hero.
The underwear and swimwear store temporarily opened May 26 at 2286 Market Street in a vacant store space at the Market Noe Center. Wilson needs to be out of the storefront by September 3 as pharmacy chain CVS will begin remodeling the building prior to its planned store opening in 2014.
"Literally, I was looking for eight months until it just so happened Kent Jeffery, whose family owns the building, was kind enough to let us use the space until CVS moved in," said Wilson. "He gave it to us as a favor. It is really wonderful he gave us the opportunity to prove the concept."
He and his sister, Jennifer Wilson , an out lesbian, have owned Prerogatives since 1989, a wholesaler that started selling Pride-themed items and now sells 6,000 products, mostly adult sex toys and videos.
His new store is a separate business he currently solely owns and carries brands Prerogatives doesn't. Earlier this year Wilson had approached the new ICON development at the corner of 16th, Market and Noe streets about leasing one of three small retail spaces fronting Noe.
In order to win approval for having Bank of the West as his main commercial tenant, developer Angus McCarthy struck a deal to carve out several smaller storefronts to be leased to local merchants.
Yet Wilson was told that the bank preferred to have a similar business as its neighbor, such as a title company or some other financial service firm.
"I basically had given up when this pop-up popped up. It was so frustrating with basically no call backs from anybody," said Wilson, who also had no luck contacting the owners of vacant retail spaces along Castro Street. "The few conversations I had initially were we are looking for financial services companies or things like that."
Hearing about Wilson's difficulty landing a lease in the gayborhood, Wiener this summer proposed making it tougher for real estate offices, insurance firms, and title companies to open along upper Market Street. In July the Board of Supervisors adopted interim rules requiring such businesses to seek conditional use permits from the city's planning commission in order to open in a storefront on Market between Castro and Octavia.
The new rule sunsets in 18 months, but in the interim, planning staff has been instructed to study the issue and propose a more permanent zoning solution for the business corridor.
"The last thing we need is to have all this new retail space come on line and have it all filled up by title companies and office uses. We want active ground floor retail," Wiener told the Bay Area Reporter. "I was concerned we would see a trend toward title companies, real estate companies and financial services and not see landlords take a risk on local retailers and restaurants."
Wiener said a number of small retailers looking to open clothing stores or restaurants in the Castro have told him they couldn't get a call back from landlords.
"It is very challenging for them to find spaces. Sometimes landlords won't even speak with them," he said.
With the new rule in place, Wilson and his commercial leasing agent did speak with the leasing agent for ICON but determined the asking price for the spaces, almost $10 a square foot, was out of his reach.
He is hopeful he will be able to reach a deal for the vacant storefront at 432 Castro Street where clothing store Injeanious had been. The space has been vacant since last summer and plans to turn it into a French bakery fell through.
"Nothing is for sure," said Wilson. "If Injeanious fell through I am not very optimistic I will find a space."
He has talked to practically every store in the Castro to inquire if they plan to close anytime soon in hopes of taking over their lease.
"So I have a list of every possible space, and even some people don't know are going to open up," said Wilson. "It is slim pickings."
Magnet extends lease as project stalls
San Francisco AIDS Foundation officials have obtained a one-year lease extension for Magnet as plans to relocate the gay men's health center in the Castro district to a larger space have stalled due to permitting delays.
Last fall, SFAF officials announced they had signed a 10-year lease for 474 Castro Street and would combine Magnet, the Stonewall Project, and the Stop AIDS Project into the location after overhauling the building. With Magnet's current lease set to expire in September of this year, the AIDS agency had planned to have its new health and wellness center open either next month or October at the latest.
But the $10 million project has yet to be scheduled for a hearing before the city's planning commission, which is now on summer recess until Thursday, September 12. As of this week, SFAF was still waiting to learn when the oversight panel would vote on its project.
It has had to rework its designs for the new space due to feedback from both city planners and nearby residents. City leaders also had to enact a zoning change along Castro Street in order for the nonprofit to be allowed usage of the entire building.
The latest iteration of the design shows fake, oversized wooden doors lining the entranceway, a second-floor balcony over wine bar Blush, which is remaining as a tenant, and a new third floor recessed rooftop addition.
"The process is going well, and our pre-application discussions with the city have been very helpful in insuring we submit the best possible package for review by the commission," stated SFAF spokesman James Loduca in an emailed response to questions last week about the status of the project. "We've been planning for a September review, and seem to still be within our target range."
As for Magnet's lease at its current location at 4122 18th Street, it has been extended until September 30, 2014 with an early termination provision, Loduca told the B.A.R.
"On a parallel track, we negotiated a lease extension to ensure there's no service disruption for people who rely on our free sexual health services at Magnet," wrote Loduca. "Once a date has been confirmed with planning, we can provide an update on timelines for opening of the new health and wellness center."
Web Extra: For more queer political news, be sure to check http://www.ebar.com Monday mornings at noon for Political Notes, the notebook's online companion. This week's column reported on the hiring of two out CA leaders to run statewide health nonprofits.
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Got a tip on LGBT politics? Call Matthew S. Bajko at (415) 861-5019 or e-mail email@example.com.