The City rolls out lower permit fees, discounts for permanent parklet program

It’s a ‘step in the right direction’, some merchants say

New changes to Mayor London Breed’s proposed Shared Spaces legislation would make businesses with lower earnings eligible for a steep discount on parklet fees.

A business that generates under $2 million in annual revenue based on tax filings will be eligible to receive a fifty percent discount on permit fees to build a commercial parklet, in an attempt to make the outdoor business program more accessible to a wider variety of merchants across San Francisco.

Under the latest changes, the cost of parklets would also be reduced for every business, regardless of how much money it makes.

A fixed commercial parklet that can’t be moved from the site is still the most expensive, at $3,000 for the first parking spot; however this price represents a 50 percent decrease from the price named in the original draft of the legislation. A movable commercial parklet that can be deconstructed outside of business hours would cost $2,000 for the first parking spot, down from $3,000.

For either type of commercial parklet, fees for additional parking spots in the first year’s permit hold steady at $1,500 and $1,000 respectively.

Costs for public parklets, those that are accessible to any individual at any time, remain at $1,000.

Together, these modifications attempt to mitigate concerns from business owners that the program requires too steep an investment up front to construct a parklet, which on their own cost thousands of dollars, and, therefore, exclude merchants on historically under-resourced and lower income corridors.

“These adjustments to the fee schedule are one of the ways we can help achieve greater accessibility to, and equity within, the program,” said Robin Abad, the program manager.

While these steps are helpful in reducing the up-front cost burden on struggling small businesses, they don’t fully resolve the concerns around equity and inclusion, according to multiple community members who spoke to the Examiner.

Jaynry Mak, owner of Dim Sum Corner on Grant Avenue, said it’s a “step in the right direction,” but not yet enough to help her fellow merchants who are worried about keeping a parklet operational for the long haul.

“Chinatown small businesses with money and incentives can afford to keep a parklet funded over time, but with Chinatown being far from economic recovery, any parklet fee is an additional burden on already struggling businesses trying to survive at this time,” she said.

Mak’s restaurant would be eligible for the 50 percent fee waiver under the new rubric.

Most Latino-owned small businesses in the Mission would also qualify, but unresolved issues remain for neighborhood merchants, according to Peter Papadopoulos from the Mission Economic Development Agency.

Chief among those issues is the interplay between parklets and cultural events that occupy the streetscape on a semi-regular basis such as Carnaval San Francisco, which Papadopoulos described as central to the Mission’s culture.

Others pertain to accessibility for individuals with limited mobility and whether The City would subsidize business owners who have opted into the parklet program but have to tear them down in order to facilitate utility, transit and other infrastructure projects on the street, he said.

MEDA has asked The City to slow down the legislative process and instead extend the current temporary program until solutions can be crafted to address these questions.

“MEDA supports the Shared Spaces program overall, but we want to make sure we have worked through remaining concerns before taking this large, permanent step of essentially privatizing public spaces,” Papadopoulos said. “MEDA continues to stress the need to slow down this final decision to make sure The City and all involved get this right.”

More affordable fees also mean less funds going back to the city agencies charged with helping to run the Shared Spaces program, such as the San Francisco Municipal Transportation Agency, which is currently struggling financially and unable to sustain full transit service.

As the Examiner reported in April, the original projected net cost of Shared Spaces to the agency was $10.6 million, the result of foregone revenue from parking meters, the price of staff time and earnings through permit fee revenues.

This represents just about 0.89 percent of SFMTA’s $1.4 billion budget for next fiscal year, beginning July 1, 2021.

SFMTA leadership last week jumped to defend the hit to the agency’s operating budget, describing it as both an investment in the long term vitality of San Francisco and a downpayment on the revitalization of neighborhood commercial corridors that helps to spur transit use, employment and sales tax.

Original projections put SFMTA permit revenues at $1.7 million for the coming fiscal year to help offset the cost, according to a staff report presented to the board on May 4.

City officials could not provide a revised estimate for how lowered fees would impact those earnings and therefore overall net cost, citing uncertainty around future applicant eligibility.

Abad emphasized that Shared Spaces is a subsidized program, not a cost-neutral one, and that there are numerous examples of initiatives that don’t break even throughout The City including bike racks, curb colors and public transit.

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