Struggling businesses along the waterfront like restaurants, fish processing warehouses and ferry companies could soon have their rent forgiven under a proposal up for approval Tuesday by the Board of Supervisors.
Port of San Francisco officials said they expect to forgive about $13.5 million in rent for nearly 200 of their tenants to help them survive the financial impacts of the COVID-19 pandemic.
Restaurants, retailers and ferry services are among the businesses that would see the longest rent forgiveness under the proposal, from March 1 until the end of next April 30.
The 14-month period is expected to impact about 48 leases and total about $11.8 million in rent forgiveness.
Elaine Forbes, executive director of the Port, told the board’s Budget and Finance Committee last week that the program was advanced to “provide a real maximum opportunity for our tenants to weather the storm.”
She said the Port initially started with rent deferral but now has moved to forgiveness.
“We recognize that while we are encouraging a safe reopening and economics, the economics for our retail tenants and restaurants just are not there in the Covid pandemic and that we will be stronger if we can recover together,” Forbes said.
Port officials said they can absorb the loss in their budget, but will collect a certain percentage of revenues from the businesses’ sales.
Port officials estimate they could receive anywhere between $6.6 million to $13.3 million during the rent forgiveness period based on whether sales are 25 percent or 50 percent of those in 2019
A Port staff memo said that the proposal “aims to balance the need for relief for some tenant sectors with the Port’s need for a balanced budget and financial interests.”
“Like many commercial landlords throughout the country, the Port recognizes that keeping tenants in place rather than pursuing broad evictions makes financial sense during this downturn,” the memo said.
Crezia Tano-Lee, the Port’s manager of business strategy, said that many of the tenants “are very much hurting at this time.”
“We want to do our best to get that relief to them as soon as possible,” she said.
The memo said that between March 1 and July 15 tenants only paid the Port 56 percent, or $16.7 million, of what was owed.
The proposal at the Board of Supervisors will require the businesses to update their leases to recieve rent forgiveness, but will not require them to comply with some regulations that have been adopted since they last signed.
Those regulations could include requirements around all-gender bathrooms or plastic straw bans.
The board is expected to approve the proposal.
“I wish that all landlords were as generous and thoughtful as our San Francisco Port,” Supervisor Sandra Fewer said last week.