In what has become an all-too-common tale in San Francisco, one of The City’s last independent theaters was threatened last year with a sharp rent increase.
The Roxie Theater, the more than century-old theater in the heart of the Mission District, was paying $9,792 per month in rent, which the landlord tried to increase to $21,200 per month. The theater ultimately negotiated a three-year lease and now pays $10,963 in monthly rent.
But not all businesses are so lucky.
That’s why The City last year established the Legacy Business Program, which aims to help negotiate such shocks by assisting mom-and-pop shops and nonprofits in business for more than 30 years with grants and encouraging 10-year leases. Supervisor David Campos introduced the legislation as Proposition J, which nearly 57 percent of voters approved in November.
Since the Board of Supervisors’ unanimous approval last March and the application process opened last September, the Legacy Business Program has received nearly 80 nominations, which only the Board of Supervisors and Mayor Ed Lee submit. The number of completed applications has lagged behind with just 26 applications from businesses.
After a slow start implementing the registry, the first round of businesses are queued to receive their new status Monday by the Small Business Commission, marking the final stamp of approval businesses need to become eligible for legacy business grants.
In the past month, The Historic Preservation Commission unanimously granted legacy status to 19 businesses.
For some applicants, months passed before they heard back from the program or saw the process move forward — although the process is expected to take around two months in the future, according to Office of Small Business Director Regina Dick-Endrizzi.
The Roxie Theater waited four-and-a-half months for commission hearings after Supervisor Scott Wiener nominated the nonprofit theater in April. The theater then submitted its application two weeks later and received a receipt six weeks after.
Nearly two more months passed before the Planning Department informed the theater about its Historic Preservation Commission hearing, which was held last Wednesday. The theater’s final hearing at the Small Business Commission is scheduled for Aug. 22.
Up to 300 businesses and nonprofits each year can receive one annual grant ($500 per employee, up to 100 employees), while property owners who negotiate a long-term lease (10 years or longer) for their legacy business tenants can then apply for a yearly grant of $4.50 per square foot (up to 5,000 feet).
If and when the theater gains legacy status, the Roxie will be eligible to receive $6,000 per year based on its 12 full-time employees. The property owners of 3117 16th St. can apply for $18,500 per year based on the building’s square footage.
“While the per-employee grant will be very much appreciated, the grants available to our landlord in exchange for the negotiation of a long-term lease are likely to be more valuable to us,” said Dave Cowen, the theater’s executive director for the past year and a half.
Property owners are only eligible for grants if they’ve signed long-term leases with their legacy tenants, and the program can connect businesses to Legal Services for Entrepreneurs, Dick-Endrizzi said.
Guidelines are still being developed for how businesses and property owners can use the grant money, which will be “very specific,” said president of the Small Business Commission Mark Dwight in a hearing July 11.
“This is not a debt-relief program. This is an investment program,” Dwight said.
Just a month ago, new Legacy Business Program Manager Richard Kurylo got the ball rolling as the only staff member exclusively dedicated to legacy businesses.
Although program money comes from The City’s general fund, Kurylo suggested the funding should come from a variety of sources in the future.
Kurylo worked in neighborhood revitalization with San Francisco programs like Invest in Neighborhoods for more than two decades and noticed an urban shift. The challenge used to be how to attract businesses to neighborhoods.
“The big problem now is keeping the businesses here,” Kurylo said.
More businesses closed or had to relocate last year than ever before. California has no rent control for commercial spaces, which rose by 256 percent in some areas of San Francisco over the last 15 years, according to S.F. Heritage. In 1992, 500 businesses shut their doors for good.
That number rose to 4,000 in 2014 alone.
Kurylo’s long-term vision is “to encourage and enable businesses to buy properties.”
“The best way to prevent gentrification is to actually have the business owners own the spaces,” he said.
When landlords sell their buildings, the “for sale” sign can feel like a death sentence for the businesses operating there, which are subject to the whims of new owners hoping to maximize their profits or attract new tenants.
Home to the Lone Star Saloon, the two-story building at Harrison and Dore streets that dates back to 1907 is up for sale. The modified building is not considered a protected historic resource by the Planning Department, so the land may be redeveloped.
The Lone Star is 27 years old, and businesses 20 years or older may apply if in danger of displacement — a special exception within the program. The bar cleared its first hurdle as a legacy business at Wednesday’s Historic Preservation Commission meeting.
Since opening in 1989, the saloon has helped to define and celebrate gay bear culture, shaping and sheltering its community of muscular, motorcycling men, according to its application.
Cultural contributors like the Lone Star are exactly what the Historic Preservation Commission, tasked with determining whether applicants contribute to their community identity and neighborhood’s history, wants to see. Legacy status will require physical parts of the bar’s identity to remain unchanged, like the back patio, wooden bar and ephemera collection of street signs.
Other pieces of the legacy program include an online registry, which has not yet been implemented. Another idea from the July 20 Historic Preservation Commission hearing is a legacy window sticker, similar to what Yelp and Zagat provide.
Businesses will also get help with branding and marketing, though specifics are still in the works, according to Kurylo.