Issue:  Vol. 48 / No. 7 / 15 February 2018

Supes hear small business owners' concerns


Lone Star owner Tony Huerta. Photo: Courtesy Facebook
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San Francisco officials aren't doing nearly enough to assist local historic businesses that have helped make the city what it is, dozens of merchants recently told a Board of Supervisors committee.

The board's government audit and oversight committee held a hearing last week on implementation of the city's Legacy Business Registry and Historic Preservation Grant, which is the result of Proposition J that gay District 9 Supervisor David Campos spearheaded and voters approved last November. The resource is meant to provide financial assistance to keep the city's "legacy" businesses open.

Supervisor Aaron Peskin, the audit committee's chair, has complained that supervisors have nominated dozens of businesses for legacy status, but the city's Office of Small Business hasn't processed any merchants' applications.

Prop J defined a legacy business as those that have operated for more than 20 years and that the Small Business Commission has found have significantly contributed to the history or identity of a particular neighborhood or community and would face a significant risk of displacement.

The Thursday, May 19 hearing came as Mayor Ed Lee announced he was proposing that more than $2 million in additional funds be provided to support legacy businesses.

At the hearing, Tony Huerta, 42, who owns the gay Lone Star bar, at 1354 Harrison Street, said he'd been "so happy" when Prop J passed, and he'd submitted his application for the bar, which has operated for 30 years, to become a legacy business. Months later, though, nothing's happened.

"The end is near for my business," said Huerta, who's owned the bar for six year. "I'm going to lose my life's work."

He told the supervisors, "The people have spoken. Don't delay. Help preserve the fabric of San Francisco."

In an interview after the hearing, Huerta said that his landlord, who he has "a really good relationship" with, plans to put the building on the market within the next couple weeks.

"He's looking to cash out," Huerta said. "He's looking to retire, and the market is strong right now."

The small business office was "helpful" at first, he said, "but then, very quickly," his application "stalled."

Huerta said if the landlord had had access to city funds, "maybe I could have negotiated a new lease," but with the delays, "I'm not going to have that opportunity. ... It's a shame."

Based on his bar's square footage, he doesn't know if the money from the legacy business fund would have been enough to sway his landlord to extend the lease, but "I don't know that the money was really the important thing for me. Really, it's the status of being a legacy business, and having the support of the city ... that's most helpful."

What will happen with the Lone Star isn't clear.

"I have the right of first refusal," Huerta said. "I'm trying to put together a group of investors to buy the building," but "honestly, it looks like a long shot for me."

He said, "The best case scenario for us is the building sells to somebody who is sympathetic to the legacy business status."

If the building does get new owners, "they would have to honor the remainder of our lease, which is three years," Huerta said. He declined to disclose his rent.

The planning department identified the building's owner as the Kevin P. Owen Trust.

The Lone Star's landlord couldn't be reached for comment.

Huerta said that despite changes in the bar industry – people used to go to bars "to get laid, and you don't do that in a bar anymore" – the Lone Star is "not a business in distress. We can pay our bills. We pay our rent."

However, he said, that would be different if the rent were to double or triple.

Many at Thursday's hearing talked about how their businesses have helped San Francisco maintain its reputation for having unique, close-knit neighborhoods.

Huerta said his bar attracts a group of regulars who come every day and even have Thanksgiving together.

"We raise money for all sorts of causes and open our doors to anybody and everybody," he said. "... We're trying to maintain a part of San Francisco that's vanishing all around us."

Despite the troubles he's faced, Huerta said, the Lone Star deserves "a chance to live on. I'm going to keep doing everything I can."


'A flashing red light'

At the hearing, Peskin said the historic businesses are "more than just places to shop and eat." They make the city "such a wonderful place to live."

He expressed great frustration with small business officials, and pointed to a lack of small business commission meeting minutes online.

"It's a flashing red light on the dashboard that something is wrong in this office," Peskin said, and there's "either malfeasance or incompetence" at the agency.

He said voters had signaled they're "tired of seeing all these legacy businesses being squeezed out."

Business owners aren't just looking for a check, they want "honor and respect," Peskin added, and for the city to acknowledge the work they've put in to keep their businesses going for decades.

"I think it's fundamentally dispiriting," he said of the delays. "It makes them feel that we don't care as they're struggling."

Campos, who was also at the hearing, said, "I am very frustrated, very disappointed that we find ourselves where we are today."

Referring to tax breaks given to companies like Twitter, he said the city has "rolled out the red carpet for corporate giants" and later added, "To me, this is a perfect illustration of why we need more oversight and transparency when it comes to these city agencies."

Supervisor Jane Kim, said, "We have been incredibly frustrated with the response from the Small Business Commission, or rather the lack of response."

Todd Rufo, from the Mayor's Office of Economic and Workforce Development, which oversees the small business office and commission, said, "There's no question we can do better, and we will."

Rufo said among other efforts, officials would work to clear their backlog and point business owners to other programs that may be able to help them.

In an interview Monday, Regina Dick-Endrizzi, the Office of Small Business's executive director, said, "I certainly understand their frustration. The office being short staffed has delayed our ability to be able to process [the applications] in a more timely manner, and also to be able to communicate the status to those who have submitted applications."

She said supervisors recently approved a position that will be dedicated to the legacy business registry.

"That has just been posted, and this week we are going to be reaching out to each of the applicants to inform them as to where they are in the application process," Dick-Endrizzi said. She added, "The fact that we're getting close to hiring for this position has freed up the ability for me to now start really getting the applications processed and reviewed."

Dick-Endrizzi said that she reviewed the Lone Star's application Monday morning but hadn't been able to contact Huerta "to let him know where things are."

However, she said, "I hope we will be able to get him before the Historic Preservation Commission soon."

That's the next step in the process. The application would then go to the Small Business Commission for final approval.


Mayor proposes funding

Last Thursday, Lee announced that he's proposing over $2.5 million in new funding in the fiscal years that begin in 2016 and 2017 "to create, develop, and implement the San Francisco Legacy Business Program."

In the announcement, Lee said, "Our longtime businesses are a vital part of what makes our neighborhoods unique and vibrant. I am proud to invest over $2.5 million in new funding through my budget to help San Francisco legacy businesses succeed."

Campos stated, "These businesses are the heart of our neighborhoods and commercial corridors. By overwhelmingly approving Prop J, the voters of San Francisco sent a clear message that preservation of the bars, restaurants, arts venues, non-profits and corner stores where we spend so much of our time is a priority. I am thrilled we were able to work with the mayor to fully implement the will of the voters."

Peskin also cheered the announcement.

"I'm optimistic that our board committee hearing, combined with the mayor's renewed commitment to the Legacy Business Preservation Fund, will ensure that we not only start administering relief immediately but that the program sustains itself for the long haul."

Small Business Commission President Mark Dwight also voiced his support.

"We support the mayor's initiative to assist some of San Francisco's most iconic small businesses which are challenged by the unprecedented recent increases in operating expenses," Dwight stated.

The audit committee, which besides Peskin also includes board President London Breed and Supervisor Norman Yee, continued the hearing to its Thursday, June 2 meeting. Breed had been excused from attending last week's meeting.

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