Online Extra: Political Notes: Groups appeal permit
for AHF Castro space
by Matthew S. Bajko
A heated dispute has erupted over the permitting of AIDS Healthcare Foundation's new pharmacy and clinical space in the heart of San Francisco's gay Castro district.
While zoning fights are par for the course in the Castro, the controversy over the Los Angeles-based AIDS agency's plans is uniquely convoluted. Neighborhood groups have lined up to protest how AHF was allowed to skirt the city's strict formula retail rules.
And a number of prominent local AIDS agencies that have battled AHF over a swath of policy disagreements, from its executive director's opposition to an once-a-day HIV prevention pill to how federal AIDS funds are allocated, have lined up to also protest its permits.
Adding to the debate is the fact that one of the agencies opposing AHF, the San Francisco AIDS Foundation, is building its own expanded health center for gay and bisexual men up the street from where AHF wants to open its new location. Some have questioned if having the two agencies in direct competition will have negative impacts on their ability to deliver services.
At the heart of the matter is AHF's desire to combine its two San Francisco pharmacies into one location at 518 Castro Street. The agency operates a pharmacy and HIV testing site at 100 Church Street, adjacent to its Out of the Closet thrift store, which it wants to vacate due to its landlord, Maitri Hospice, seeking increased rent for the space. The matter landed in court last year after AHF stopped paying its rent amid the lease renewal dispute.
AHF also owns the pharmacy at 4071 18th Street, which was formerly known as a MOMS Pharmacy. AHF acquired the HIV/AIDS specialty pharmacy chain in 2012, which it re-branded last year, and now wants to also vacate that location.
"It doesn't make sense to have two pharmacies so close together," said Dale Gluth, AHF's Bay Area regional director. "The leases at both have expired, so we want to relocate them into one space with medical offices in the back."
Last fall AHF rented the vacant storefront on the 500 block of Castro Street, where the nonprofit shop Under One Roof had been, to house the campaign headquarters for its Proposition D ballot initiative on last November's election. The nonbinding measure, which passed with 80 percent of the vote, makes it city policy for officials to continue to directly negotiate with drug manufacturers for cheaper prescription drug prices, including those used to treat HIV and AIDS.
In December it approached the planning department about moving in its pharmacists and clinical staff. At first the agency was granted its permits over the counter and began work on the space.
Yet after construction had commenced, city planners revisited their decision on the permits. In January, Zoning Administrator Scott Sanchez ruled that AHF had to seek a conditional use permit from the planning commission in order to change the allowable use from retail to medical because it was moving into a space larger than 2,000 square feet.
He also determined that AHF needed to address if it fell under the city's formula retail rules, which require any business with 10 or more locations in the U.S. to seek a conditional use permit.
AHF appealed to the city's Board of Appeals, and in March, the oversight body ruled that it did not need to seek permits to turn the storefront into a medical use. It reassessed how the space's bathrooms were applied, so that neither the pharmacy component nor the medical offices exceeded the 2,000 square feet restriction for Castro Street businesses.
But the board did determine that AHF, because it operates 28 pharmacies, triggered the formula retail rules and was required to seek approval from the planning commission.
Subsequent to the vote, AHF informed the planning department it would operate the new space under the name "Castro Pharmacy." The decision prompted Sanchez in April to request the appeals board to reverse its decision and grant AHF its permits.
The zoning administrator's latest determination prompted the various community groups and AIDS agencies to appeal his decision. The main appellants are the Duboce Triangle Neighborhood Association, the Castro/Upper Market Community Benefit District, and Laura Thomas , a queer woman who is the Drug Policy Alliance's deputy state director for California.
In a letter sent May 2 to the appeals board, the three parties argued that AHF had "improperly skirted" the city's formula retail rules and should be required to go through the conditional use process. That would entail a hearing and public comment before the planning commission, whose decision would be appealable to the Board of Supervisors.
They also argued that AHF uses a "cookie-cutter approach" with its pharmacies and co-locates them with a "highly profitable mega health center." The tactic, they argue, "has shuttered local nonprofits serving the unique and diverse needs of communities" and "would be rejected for the Castro" if subjected to a public review process.
"I think one of the reasons that people in the community in the Castro are concerned about this is because they want to have a chance to weigh in on it," Thomas, a former Castro resident and former SFAF employee, said in a phone interview Friday. "Folks who live and work and come to the Castro have strong opinions about it. It is an important neighborhood to many of us and we want to have a say in what it looks like."
Leaders of the neighborhood groups and Thomas are concerned that allowing AHF to use a name change in order to get around the formula retail rules will set a precedent for multinational chain stores, such as McDonald's, to also use such a loophole.
"I think that if all it takes to get out of being called formula retail is changing your name that maybe is a problem for how we are defining formula retail in this city and that is a conversation we need to have," said Thomas. "If you can come in and say we are two completely separate functions in one space knowing if you put those two together it would be over the square foot limit and need to go through the conditional use permit process ... I think that is a problem."
District 8 Supervisor Scott Wiener , a gay man who lives in the Castro, shares those concerns.
"I have questions about the appearance that the planning rules are potentially being gamed in terms of the formula retail rules and rules around square footage," said Wiener, who declined to weigh in on how the appeals board should rule because its decision could come before the supervisors. "I am glad the board of appeals will be sorting that out."
SF AIDS Foundation spokesman James Loduca , reached by phone last week while participating on the agency's annual bike ride fundraiser, said SFAF's main reason for supporting the appeal of AHF's permits is a matter of fairness. It had to follow a public process in order to receive city approvals to open its new health clinic on the 400 block of Castro Street and believes AHF should do the same.
"The foundation's position is that AHF should play by the rules and go through the same process as everybody else had to," said Loduca, adding when asked about perceptions its support of the appeal is due to competition concerns, "that is plain wrong; it is inaccurate."
Yet in its letter to the board of appeals, signed by SFAF CEO Neil Giuliano, the agency states that how AHF determines to locate its pharmacies "is not based on need but to purposefully establish a head to head, competitive, hostile environment in which AHF assumes it will win out because of its deep pockets and the ability to lose money in a location for an extended period of time to outlast the competition."
What is without question is AHF's policy stances are clearly a part of why a number of AIDS agencies are protesting its permits. In addition to the AIDS foundation, the AIDS Emergency Fund, Positive Resource Center, the Asian and Pacific Islander Wellness Center, and Project Inform have all sent in letters in opposition to AHF's permits.
The agencies' letters pointed out AHF's opposition to Truvada, a pill people can take to thwart contracting HIV, and blamed its advocacy work in Congress for resulting in San Francisco losing $3.31 million in federal HIV/AIDS funding.
"Leaders of this politically charged, highly-profitable global operation have a long, established track record of supporting positions and activities that directly oppose the hard work of the San Francisco community to further its business aspirations," wrote the executive directors of the local AIDS agencies in their letter. "They have advocated repeatedly to cut funding that goes directly to serving people living with HIV/AIDS in San Francisco."
AHF has countered the attacks against it by marshaling support from a number of local agencies, including the LGBT Community Center, the UCSF Alliance Health Project, and Bay Area Young Positives. (UCSF and the young positives group receive financial assistance from AHF.)
Executives from the agencies signed on to letters of support that state since AHF first started offering services in San Francisco in 2001, and the Castro since 2009, it "has been a valued collaborator and has made significant contributions toward addressing the HIV epidemic in San Francisco."
(After this story was posted to the Bay Area Reporter's website June 9, LGBT center Executive Director Rebecca Rolfe contacted the paper Tuesday, June 10 to say the agency had retracted its letter of support, which had been signed by Claire Farley, the center's associate director of economic development.)
Tom Myers, AHF's attorney, stressed in a letter to the appeals board this month that all the agency is asking to do is to relocate an existing pharmacy "literally around the block" and to continue to provide the services its clients have been receiving at two locations in one space.
By doing so, he wrote, "AHF will be able to provide better services, and cost savings will help offset the net loss AHF incurs in providing free and reduced fee medical, prevention, and testing services to San Franciscans."
His letter includes a footnote in which he states that while AHF does not consider itself to be in competition with other agencies, "it appears that many organizations that have written in opposition do see themselves as competitors, and may be using this process to gain what they see as a competitive advantage."
The agency is concerned about having the permit process drag out as it could lose its leases at either of its pharmacies at any time and be unable to provide medications to its 1,000 clients.
"We have expired leases, patients to serve and the construction is half done," said Gluth. "We are not afraid of going through the approval process. But we are concerned that by doing so we are risking services to our patients."
AHF argues that its application has not materially changed from when it first approached city planners with its consolidation plans. And its rebranding, said Gluth, was discussed "multiple times" with planning staff.
"We haven't changed our plans at all," he said. "The same plans we submitted to planning we are executing today."
Because no one appealed the board of appeals' earlier decision regarding the square footage issue, that matter is now settled and not subject to additional review by the oversight body.
It will meet this Wednesday, June 11, to determine the questions surrounding whether AHF's pharmacy falls under the city's formula retail rules, and thus, needs to seek conditional approval on that basis.
The meeting begins at 5 p.m. in Room 416 at City Hall.
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