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Monday, June 24, 2013

Chain stores -- and why we don't need 'em

The Chron's coverage of Chipotle applying to move into the Castro sounds like a press release for the company:

It's been almost two years since the Castro's Home Restaurant declared bankruptcy and closed, leaving a vacant building at Church and Market streets that has since been marked by public urination, graffiti and homeless people sleeping outside the shuttered restaurant.

The owners of 2100 Market St. have found a willing partner in a Mexican restaurant that would have no trouble paying the bills and is offering to fund a public art mural on its walls.

So what's the problem with using burritos to fight blight?
It's not until you get to the 11th paragraph that we hear what the problem is:

Victor Juarez, the owner of Chilango, said Chipotle's lower prices would drive him out of business.

"I cannot compete with them - it's impossible," Juarez told the commission. "I will have to close my business."
There are plenty of good reasons to limit chain stores in San Francisco. They drive up rents. They cheapen local commercial districts. They displace creative local operations. They're really an admission of civic failure: If San Francisco can't create its own local businesses, and we have to look to national chains to fill our storefronts (even in this era of economic boom) then there's something really wrong.

Jay Barmann has a mediation on all of this at sfist, and even he comes down on the side of saying sometimes chains aren't so bad:

Sure, we all want idiosyncratic antique shops and cool local clothing makers in our shopping districts, but sometimes we want a few basic needs met within a few steps of our building, too. In areas that haven't known as much residential population in the past, like SoMa and parts of Mid- and Upper Market, going out to buy Vitamin Water and Tylenol can be a pain in the ass. Those who might reject the idea of any and all corporate stores have to consider that rents in the ground floor spaces of new buildings aren't going to be cheap, likely unaffordable to small operators, and you might rather have a 7-11 down there than nothing at all.
 Which gets to the heart of the issue -- and it's not that different from the heart of the housing issue in San Francisco. If commercial landlords see a way to jack up rents (over and over) to the point where only chains can afford to set up shop in San Francisco neighborhoods, then chains are all we're going to get.

The state Legislature has prevented cities from passing commercial rent control; that means a local business has to sign a longterm lease (scary; if your business fails, you're still on the hook) or accept a short-term deal, which means that after a year or two, the landlord can raise the rent and make it impossible for you to stay in business, in place.

In the case of the Chipotle site, we're talking $19,500 a month.

I don't know the finances of the owners, or how much the mortgage is on the property, but geez -- is it possible that a locally owned business might be able to move in if the rent were a little lower?

Should the city charge a special tax on vacant storefronts to encourage landlords to rent the places out at rates that local entrepreneurs could afford?

Because seriously: This is a food-crazy and restaurant-crazy city. There are plenty of people who would love to open something in the Castro. But at $19,500 a month?

Isn't that part of the problem?





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