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San Francisco seeks to get a handle on its inventory of vacant storefronts

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The 6×6 mall development on Market Street has sat vacant since its completion in 2016. (Kevin N. Hume/S.F. Examiner)

To the detriment of commercial corridors, San Francisco doesn’t actually know how many vacant storefronts it has.

But legislation from Supervisor Sandra Lee Fewer would close a loophole in The City’s existing vacant storefront registry law and make it easier for city officials to get a handle on the number of storefronts which are empty. Under the existing building code, a commercial storefront is not considered vacant if is up for sale or lease, leaving hundreds, if not thousands of buildings out of the count.

“This provision has really diminished the purpose of the registry which is to identify vacant storefronts. It has resulted in long term vacancies, sometimes 10 or 15 years, not being registered, solely because there is a for lease sign placed in the window,” Fewer’s legislative aide Ian Fregosi told the commission Wednesday. He added, “If we don’t know the scale of the problem, then how are we ever going to address it?”

The propoosal to close the loophole received key support Wednesday by the Building Inspection Commission.

The City first required registration of vacant or abandoned buildings with the Department of Building Inspection in 2009 and in 2014 required registration of commercial storefronts that have been vacant for over 30 days. But while there are thousands of vacant storefronts only a handful actually register.

The problem was highlighted in a 2018 budget analsyt audit. Fewer herself led a campaign to tally in the Richmond District she represents the number of vacant storefronts. The residents tallied 156. The number of vacancies registered with DBI was zero.

Fewer’s legislation requires that property owners register vacant storefronts within 30 days of vacancy, even if it is up for lease or sale.

By having a complete list, Fewer hopes The City can better connect property owners city services to help lease the space.

“Having an accurate count and an accurate list of these storefronts, as opposed to 40 citywide when we know there are thousands — that’s going to allow us to actually connect them to these resources,” Fregosi said.

Regina Dick-Endrizzi, executive director of the Small Business Commission, agreed an accurate list would enhance the city’s response. “With the new planning changes for allowing temporary popups or flexible-use spaces ,we could work with the property owners to help bring different entities together to perhaps fill the space,” Dick-Endrizzi said.

James Warshell, Building Inspection Commissioner, questioned the registry’s effectiveness, noting that vacancies “are doing real harm to their commercial corridor.”

“What I keep hearing from small business is, I was forced out because my rent was tripled. Then it sat there for five years because [the property owner] was completely inflexible,” Warshell said.

Debra Walker, Building Inspection Commissioner, said the data can lead to policy changes to make it easer to secure permits since “retail is feeling some pain” in today’s ecomomy.

The commission unanimously supported the proposal but suggested that those who proactively report have more time to pay the fee and receive a larger fee discount if they end up leasing the space.

One way The City can measure commercial vacancies is through United States Postal Service data showing what storefronts have not been receiving mail for more than 90 days.

In the third quarter of last year, there were 3,632 vacant storefronts based on that data. The highest vacancy was in District 6, the Tenderloin and South of Market Area, where there was a vacancy rate of 8.52 percent with 1,157 vacancies, followed by District 3, which includes North Beach, Chinatown and the Polk Street area, where the vacancy rate was 7.87 percent with 1,399 vacant storefronts.

The legislation also would make other changes. The existing code allows property owners to pay the $711 annual fee to register after 270 days, but Fewer is requiring the payment at the time of registration. If a space is leased within the year, up to half the fee would be reimbursed.

Property owners will also have a third-party licensed inspector verify their vacant storefronts are not in disrepair and causing blight in the neighborhood.

Department of Building Inspection spokesperson Bill Strawn said the department doesn’t have the resources to conduct the inspections, which would be in addition to the 160,000 total inspections its staff performs annually. He also said that the added cost may prod property owners to lease the space.

“By putting that burden on the owner’s self, then there is an additional cost involved and we help incentive to not keep the building vacant,” Strawn said.

If property owners fail to register they will receive a written notice. If they still don’t register they will receive a notice of violation and have to pay a penalty of four times the registration fee.

The Small Business Commission supported the legislation on Monday. A Board of Supervisors committee is expected to vote on the proposal within weeks.

jsabatini@sfexaminer.com

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