Businesses at the Japan Center mall have been trying to negotiate with property owners for rent relief. (Kevin N. Hume/S.F. Examiner)

Businesses at the Japan Center mall have been trying to negotiate with property owners for rent relief. (Kevin N. Hume/S.F. Examiner)

To save San Francisco small businesses, we need immediate action from Governor Newsom

By Dean Preston and Aaron Peskin

It can be hard to pinpoint all of the things that make San Francisco such a special place, but a good place to start are the neighborhood small businesses that we all love and are the lifeblood and anchors of our communities. They are truly shared spaces. But as we stretch into our seventh month of living under a global pandemic, these businesses are facing an impending tidal wave of commercial evictions, unless Governor Newsom acts now to extend emergency protections.

San Francisco rightly earned praise for our early and effective response to COVID-19. By following the lead of public health experts, we avoided the nightmare scenarios that occured in other major metropolitan areas. And the significant strides we have made to lower transmission rates has enabled the gradual reopening and limited operation of many small businesses in San Francisco.

The vast majority of San Francisco businesses have faced months of lost income as a direct result of complying with public health orders. A recent survey of restaurant owners predicts that some 50% may never reopen. Entire industries remain completely shut down for health reasons, and some are only recently able to start operating at 10% of their ordinary capacity. We have done the right thing to slow the spread, but it only makes our obligation stronger to do right by those businesses that followed the rules.

Both the State of California and the City of San Francisco have taken steps to protect residents and small businesses impacted by COVID-related income loss. Normally, state law precludes localities like San Francisco from regulating commercial rents, but on March 16, Governor Newsom issued an Executive Order that gave cities the green light to put in place emergency eviction protections, for residential and commercial tenants.

No longer stopped by state rules, our city quickly enacted temporary eviction protections. Businesses would not face eviction under the local order issued by Mayor Breed until the state of emergency is over.

The problem is, state protections are set to expire at the end of this month. Already, merchants across the city are seeing credible threats of displacement from landlords. In Japantown, one of two landlords of the Japan Center mall, Kinokuniya Bookstores of America, has refused to respond to any of its tenants’ attempts to renegotiate rent, even though their businesses have been completely shut down during the pandemic. Restaurants and other retail businesses throughout the City are clamoring for additional monetary relief while some property owners remain unrelenting in their ongoing demands for full rent. Fears abound that as soon as protections expire, dozens of businesses, some that have operated for decades will receive immediate eviction notices.

We are doing everything in our power locally to extend protections. Our offices have introduced an emergency law to extend commercial eviction protections for 60 days, the longest possible time period for an emergency ordinance under the law. We have also set forth a vision for longer-term relief that would allow small businesses until December 31, 2021 to make good on back rent, while allowing landlords — themselves hampered by mortgage and other loan repayments — to avail themselves of hardship protections.

At best, the 60-day Emergency Order buys us more time for the state to act. But there is no time to wait. On Tuesday, Sept. 22, the Board of Supervisors will vote on a resolution calling on Governor Newsom to extend eviction protections and expand financial support for small businesses and their employees beyond September 30, 2020.

This is a starting point in the fight for small business survival. We need to address the mounting back rent that businesses have incurred through no fault of their own. It is unreasonable to think that small businesses who had thin margins before the pandemic will come out of the pandemic suddenly able to pay back-rent on top of their usual rent. We must make sure that measures for stability not only address the impacts to date, but also ensure small businesses stay afloat in the immediate term.

The cost of inaction will no doubt be severe. Small merchants are the bedrock of our city’s neighborhood character. We can not let them be stamped out of existence for playing by the rules in a global pandemic.

Supervisor Dean Preston represents District 5, which includes Japantown, the Fillmore, Haight-Ashbury, Hayes Valley, Cole Valley and the Inner Sunset. Supervisor Aaron Peskin represents District 3, which includes Chinatown, North Beach, Polk Gulch, Fisherman’s Wharf and Union Square.

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