SF to explore registry program to assist longtime businesses with rising rents

In San Francisco, where evictions are up, rents have soared and longtime residents are moving out, compounding such forces of change is a rising rate in the closure of neighborhood businesses.

The number of businesses in The City that have closed or relocated after being at the same location for at least five years skyrocketed from 518 in 1992 to 3,657 in 2011.

This year, the number is expected to climb to 4,378, up from last year's 4,123, according to a budget and legislative analyst report. And if the current trend continues, it will climb to 5,910 come 2019.

“Displacement that we have seen on the housing front is happening on the commercial front,” said Supervisor David Campos, who requested the report and discussed the issue Monday afternoon at Caffe Trieste in North Beach.

According to the report, “The cost of non-residential real estate and the increase in business closures and location changes have been rising together instep.” But the report stops short of blaming city rents outright for the trend and notes that further analysis is required. The average price for commercial real estate has increased from $189.50 per square foot in 1999 to $675.10 in 2013, the report states.

To help local businesses manage the rent costs, Campos has introduced legislation with Supervisor Mark Farrell that would establish a legacy business registry. The registry would allow city businesses with roots of at least 30 years to receive financial incentives and technical assistance from The City.

Under the proposal, business owners could purchase their properties and not have to pay The City's tax on the sale of the property. Similarly, landlords who purchase the property could receive the same rebate if they grant legacy businesses a 10-year lease. Combined rebates in any one fiscal year couldn't exceed $400,000.

“Unless we do something … these neighborhoods are going to lose their character,” Campos said of his proposal to assist the local businesses.

Kevin Hunsanger, co-owner of Green Apple Books who has worked at the store since 1991, has valued the impact a legacy business can have.

“As I've grown up in San Francisco, it has grown up around me,” Hunsanger said of his business' culture. “How the community celebrates it, it's addictive.”

The business recently expanded to a location at 1231 Ninth Ave. after the landlord who also owns the building and the business, Le Video, gave Green Apple a discount. Without that consideration, the store never would have opened Green Apple Books on the Park, Hunsanger said.

Regina Dick-Endrizzi, executive director of the Office of Small Business, which would have oversight of the registry, is supportive of the proposal. Legacy businesses, she said, “help with the identity of the neighborhood and they operate as anchor businesses … for continued business attraction and foot traffic.”

Hunsanger said there is a “magic” feeling about being in a building that has history. If nothing is done about rental costs, he suggested in 30 years “the hills will remain the same but nothing else will be here.”

Referring to the legacy of the Seal Rock Inn at Ocean Beach, with its connection to the late writer Hunter S. Thompson and his novel “Fear and Loathing in Las Vegas” Hunsanger said, “That means something to me.”

“You can't replace that,” he said, adding that he takes friends and visitors there.

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