The ActivSpace building at 3150 18th Street in the Mission District on May 23, 2019. (Kevin N. Hume/S.F. Examiner)

Mission entrepreneurs threatened with displacement may win a reprieve

Planning Commission approves 10-year exception to use restrictions for Activspace building tenants

The San Francisco Planning Commission on Thursday backed legislation that would grant amnesty to some 100 entrepreneurs facing displacement from a Mission District multi-use building over zoning violations.

Tenants of the building at 3150 18th St. include independent tattoo artists, counselors, massage therapists, aestheticians and other holistic service providers. That type of use is legally limited in the building, which is zoned for Production, Distribution and Repair uses.

Many of the tenants have said that they were not informed of the zoning regulations by the company that manages the building, Activspace, upon moving in. Retroactive enforcement by The City would cost them their below market rate rents and effectively put many of them out of business.

Reports of the potential mass displacement prompted Mission District Supervisor Hillary Ronen to introduce legislation aimed at keeping the businesses in place for 10 years, which was supported by the Commission on Thursday. The legislation will move before the Board of Supervisors’ Land Use committee next, and would then require approval from the full board.

“While this legislation is about saving the business currently there, we also want to be clear that we are actively working to protect arts and manufacturing spaces,” said Carolina Morales, Ronen’s legislative aide, on Thursday. “The Mission is one of the few neighborhoods where PDR zoning exists and we must protect it. We think resolution strikes the right balance between protecting small business in the short term while saving PDR in the long run.”

On Thursday, the Planning Commission agreed, backing the legislation with a unanimous vote and declining to take Planning Department staff’s recommendation to shorten the 10-year grace period down to three years for service uses. The Commission also voted to modify the proposed legislation to shorten the amnesty period for office space tenants to three years instead of ten years.

A department staffer said that the recommendation stemmed from concerns that giving the tenants a pass to circumvent the law would set a precedent for other developers, and that “most if not all [tenants] can pay higher rents than” what is charged for PDR spaces.

But several of the commissioners said that they felt the only one profiting from the current set up is ActivSpace.

“I think that nobody is making a killing here — but I think the landlord is,” said Commission President Myrna Melgar.

Melgar pointed out that the “going rate” for PDR spaces in the Mission district is “around $2.50 per square foot,” but most of the tenants are paying closer to $6 per square foot for their spaces.

“What it cost them to develop this building and what they are renting for is an issue for me,” said Melgar. “Somebody used the system we have, broke the rules, and is pocketing the differential.”

A representative for ActivSpace did not immediately return a request for seeking comment.

Current tenants of the building said that they provide crucial services to the community, and are only able to do so because of their relatively cheap rents at ActivSpace.

“I, along with all other alternative medicine practitioners [in this building], we are doing a great service for the community,” said Kimberley Tan, who runs Skin Salvation, a holistic adult acne clinic. “I have tried really hard to find other spaces, but it’s hard to find that independently.”

“I work at ActivSpace because it’s affordable. I take insurance including MediCal. I have looked at other places in San Francisco that are as accessible, have parking for my clients who come in wheelchairs. I have accessible bathrooms, wide hallways. It’s clean, it’s private,” said Maureen McKeown, a speech-language pathologist. “If you make [us leave] in three years it will put us out of business.”

Commissioner Milicent Johnson said that the entrepreneur’s dilemma “really highlights a larger need for micro office spaces and for a more nuanced definition of creative and artist spaces and uses that are actually contributing to the fabric of our city.”

“We have that type of definition around nonprofit displacement. There are funds and other types of support services,” said Johnson. “Yet when we think about other types of services [such as] therapy, speech pathology and body work, that are crucial services for folks, we don’t have the same sorts of supports for those types of businesses.”

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