Mike Koozmin/S.F. Examiner file photoMore types of businesses were added to the list The City considers formula retail.

SF amends anti-chain store restrictions to protect neighborhood businesses

San Francisco strengthened its anti-chain store law Tuesday as The City's booming economy has increasingly attracted more interest from well-established brand-name companies from throughout the world.

What was shaping out as a battle and a major overhaul of San Francisco's chain store regulations has in the end come to a harmonious conclusion, with the approval of nine key changes meant to preserve neighborhoods' unique character and level the playing field for independent businesses.

“Our formula-retail controls are working in San Francisco and we did not need a radical overhaul but rather some thoughtful tinkering in order to update and strengthen our existing formula-retail controls,” Supervisor Eric Mar said, adding that The City has about 1,250 formula-retail stores.

Among the most significant changes to the law is the definition of formula retail. Existing law defined formula-retail stores as having 11 or more locations in the United States, but the legislation was amended to include businesses with 11 or more locations worldwide.

The types of businesses captured by the restrictions has also expanded to include check cashing, massage parlors, tobacco sales and fitness gyms. Another significant change is that applicants who propose a business of 20,000 square feet or more must hire a consultant to perform an economic analysis of how the business would impact neighboring businesses.

San Francisco's first restrictions on chain stores were enacted in 2004 with an outright ban for Hayes Valley. North Beach followed suit. In 2006, voters approved a ballot measure requiring any chain store to have to obtain a special permit to open in neighborhood commercial corridors through the Planning Commission, which is appealable to the board. The process can take six to nine months.

Supervisor Scott Wiener called the amended law approved Tuesday a “sensible piece of legislation,” which is “improving our approach to formula retail.”

The legislation also adds the restrictions to the mid-Market Street area between Sixth and 11th streets.

“As mid-Market continues to grow, which is a wonderful thing and commercial vacancy goes down, what we are now seeing is that with rising rents there is more pressure on our small businesses on mid-Market,” said Supervisor Jane Kim, whose district includes that area. She added that workers and new residents in the area are in favor of having more unique independent stores.

Some in the real estate industry had complained that the restrictions will lead to less foot traffic and commercial vacancies.

The debate over the issue will continue, as Mar plans to form a working group to figure out the best way to streamline the approval process for more local chain stores like Philz Coffee or the San Francisco Soup Kitchen and discuss how best to restrict subsidiary businesses of chains.

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