Erick Arguello sat surrounded by members of the Calle 24 Latino Cultural District Council just hours after San Francisco’s Board of Supervisors overwhelmingly voted in support of the Calle 24-backed ordinance to temporarily halt the merging of storefronts, and he rejoiced—quietly.
“For me personally, it was bittersweet,” Arguello said, recalling the hundreds who have flooded city hall over the last few months pleading with supervisors for help, fighting back one neighborhood crisis after another. Many times those pleas for help seemingly went unheard. “There’s so much more that this neighborhood needs to survive.”
To combat skyrocketing commercial rents that have threatened the existence of small, mom-and-pop businesses within the city’s Latino corridor, the Board of Supervisors voted 10-1 July 28 to approve an emergency ordinance that would prohibit the merging of business storefronts for 45 days.
Supporters of the ordinance—sponsored by District 9 Supervisor David Campos and supported by Mayor Ed Lee’s office, the Planning Department and the Land Use and Transportation Committee—championed the legislation based on the current trend of landlords wanting to make more money by combining storefronts with the ambition of renting out spaces to high-end restaurants.
Arguello noted that a few spaces within the corridor have been targets for such mergers. One is the vacant restaurant space next to the Rose Food Mart at 22nd and Potrero streets, for which the landlord is asking $4,000 a month He is also asking for $150,000 up front before signing over the lease. The owner of the Rose Food Mart told Arguello that the landlord is considering combining his leased space (the Food Mart) with the next-door vacancy for one large restaurant.
Another is the now vacant space that once housed the El Salvadoran Usulutan Restaurant at 24th and Harrison, which stands next to another vacancy that housed a church. Arguello and Miguel Bustos, also a member of the Calle 24 Council, say landlord Alan McCarthy illegally combined the two spaces without acquiring the proper permits and is now asking for $12,500 per month for the space. Arguello also mentioned that a woman from El Salvador approached McCarthy about renting the space for a restaurant.
“He told the lady that he won’t rent to Salvadorans,” Arguello said. “Because the last [tenant] was Salvadoran.”
Arguello said that merged commercial spaces that rent for higher prices drive up the average rent costs within the corridor, which makes it difficult for small businesses, especially when their leases have to be renewed.
According to a report by the Mayor’s “Invest in Neighborhoods” Initiative, there are 164 storefronts on 24th street between Mission Street and Potrero Avenue; 26 percent (or 42) of which are restaurants and bars.
The ordinance is part of Calle 24’s larger ambition to create a Special Use District, which Campos’ office is currently drawing up legislation for January of 2016. When the board reconvenes in 45 days, Campos and the Mayor’s office will seek an extension of the prohibition of mergers for another 6 to 8 months.
The ordinance made it out of the Land Use and Transportation Committee on July 13 by a 2-1 vote; the lone dissenter was District 8 Supervisor Scott Wiener, who was also the lone dissenting vote on July 28.
“Although I am in complete agreement that having over-the-counter permits to merge commercial spaces on 24th street is not an acceptable state of affairs, I think that a ban goes too far, and I would prefer to see a conditional use requirement here,” Wiener said on July 28, calling for a more flexible solution. “This prohibition would not allow for any exceptions, no matter what the circumstance is.”
The main opponent of the ordinance, a group called Open 24th that was formed about two months ago, has expressed that its mission is addressing 24th street’s many vacant storefronts, which it numbers at 19. But according to the Invest in Neighborhoods report, the actual number of vacancies available for lease is 6, or about four percent.
At the Land Use and Transportation committee meeting, members of Open 24th spoke of the vacancies, even citing how Jack’s Club on 24th and Utah streets has been vacant for years. Jack’s, however, is located past Potrero, technically beyond the Latino corridor boundaries.
“They don’t know what’s happening,” Arguello said of Open 24th. “So they count that as a vacancy.”