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Supervisors call for financial aid fund for merchants harmed by construction

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Merchants across The City have been affected by Muni construction projects. Masaye Waugh, co-owner of Bootleg, closed the restaurant in November due to lack of business from the ongoing the Van Ness Improvement Project. (Kevin N. Hume/S.F. Examiner)

From Chinatown to Van Ness Avenue, long-running, much-delayed Muni construction projects have threatened businesses and even caused some to shut down.

Now San Francisco leaders may have a solution: cold hard cash.

The Board of Supervisors, acting in their capacity as the San Francisco County Transportation Authority, pitched the idea for a “city construction impact mitigation fund” Tuesday morning.

The Examiner first reported Chinatown businesses closing due to Central Subway construction delays in 2017. Just last year, Bootleg Bar and Kitchen closed on Van Ness Avenue, and attributed its woes to Van Ness BRT construction, which is also a Public Works and SF Public Utilities Commission project.

Supervisor Aaron Peskin said the San Francisco Municipal Transportation Agency, which runs Muni, has failed to help businesses stay afloat when construction blocks signage, impedes pedestrian access or takes away parking.

The City offered free advertising and business “support” through the Office of Economic and Workforce Development to Chinatown businesses impacted by the Central Subway construction project and to Van Ness merchants impacted by the Van Ness Bus Rapid Transit project. But Peskin said shuttered businesses in those neighborhoods show that effort has failed.

Instead, he called for the SFMTA to start building cash subsidies into its project funding proposals. If SFMTA disagrees, he said supervisors would stop funding transit projects.

“I’ve lived through it on the Central Subway and it has been a nightmare,” Peskin said. “We’ve got to get a handle on it or we’re going to have to stop appropriating money.”

Later in the day, SFMTA Director of Transportation Ed Reiskin told the San Francisco Examiner the proposal could potentially throw a wrench into future transit projects.

Right now, “we’re doing record levels of public construction, the likes we have not seen,” he said. But if project costs go too high “depending on how you set the parameters, it limits the amount of work we could do.”

On Tuesday, however, nine out of the eleven supervisors either signaled future support for a construction mitigation fund openly during Tuesday’s transportation authority meeting or told the San Francisco Examiner that they support it.

Of the two holdouts, Supervisor Sandra Fewer said “I don’t know” when asked if she supports the idea, and Supervisor Rafael Mandelman said “we should certainly be looking for ways to try to help those businesses survive,” but did not commit to the cash idea.

Board of Supervisors President Norman Yee said SFMTA’s response to suffering businesses is so ineffective that it is like “Hey, we’re going to promote your corridor now, it’s too bad half your businesses are gone.” Supervisor Vallie Brown said her neighborhoods are “under siege” and that businesses say loans offered by The City are ineffective. Supervisor Hillary Ronen said “it’s insane what happens to these businesses. These projects take so long.”

Supervisor Shamann Walton told the Examiner, “we have to compensate businesses for their loss of revenue.” Supervisor Matt Haney said merchants in South of Market suffered under Central Subway construction and there is “urgent need” for a construction impact mitigation fund. Supervisor Catherine Stefani said “we have to protect our small businesses.” And Supervisor Ahsha Safai said that in moving forward on city projects, it should be considered “that we build into the price a mitigation fund.”

Merchants and community groups speaking to the Examiner were split on the idea.

Albert Chow, the owner of Great Wall Hardware on Taraval, who spoke frequently on the impacts of L-Taraval train track construction, said cash should be a last resort. He said marketing and other merchant support from The City has worked on the West Side.

“I know that sounds funny coming from a merchant, but here’s the thing,” he said, “what if you gave someone $5,000 and they blow it, and still go out of business, and they turn around and blame you?”

Neil Ballard, a member of SFMTA’s Citizen Advisory Council, said “absolutely” there should be cash subsidies for businesses, as historically San Francisco has turned a blind eye to suffering merchants.

“When they tore down the Embarcadero freeway, businesses went away completely,” he said.

Vas Kirinis, executive director of merchant associations in both West Portal and The Fillmore, said sometimes having a paid neighborhood leader like himself instead of a volunteer organization can make the difference for a corridor.

When the Twin Peaks Tunnel construction impacted West Portal, he said, his group helped keep customers patronizing shops.

“We made activities to bring people to the corridor,” he said. “We did wine walks, Airbnb superhost walks, concierge walks.”

But in Chinatown, where the Central Subway construction took longer than Twin Peaks Tunnel construction, Malcolm Yeung, deputy director of the Chinatown Community Development Center, said cash could help.

He said he understood why West Side merchants may not need the help, but the particular fragility of immigrant merchants in Chinatown and the severity of construction may change the score.

“In some instances, marketing programs do work and are extremely effective,” Yeung said, ”but in some neighborhoods with a very sensitive economic environment, subsidy programs are going to be necessary.”


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