Empty Spaces - New Report Sheds Light On North Beach Vacancies

SF City Officials, Landlords Face Scrutiny Following Report On Vacancy Crisis

By Joe Bonadio

July in North Beach is always a little bit of a conundrum. This is when San Francisco’s legendarily ambivalent weather kicks in with full force, so that we’re never entirely sure whether to expect sweltering, socked-in or both in the same day. Wealthier folks tend to leave town in search of more common summer climes, and the pace of things in the neighborhood slows to a saunter.

This year, we’ve got several factors complicating the mix, however. Top of the list is the vacancy crisis, and this month we received some new data on the problem. According to the new report conducted by the SFNBBA in cooperation with Telegraph Hill Dwellers and North Beach Neighbors, the numbers are jarring: over the past three years, the number of vacant ground-floor commercial spaces in the neighborhood has doubled.

North Beach’s commercial vacancy rate now stands at 10.25 percent, an unacceptable number in one of the most desirable districts in the city. There are several factors contributing to this, including ongoing retrofit work in many spaces and the St. Patrick’s Day fire, which took out an entire block of businesses at 659 Union Street. 

But a closer look at the numbers is revealing. Seismic retrofits actually account for merely twenty percent of the current vacancies in North Beach. Over a third of the 38 vacancies are leased, including eight that are undergoing improvements of one kind or another.

But landlords seem to be at the heart of the problem: fully 25 percent of the vacant storefronts have sat unoccupied for over three years, and forty percent of them are simply not for lease. What could account for this? One explanation is simple greed. Landlords’ unrealistic expectations has them holding out for rents that are too high for today’s market conditions. 

The rise of online shopping has wrought a sea change in the business environment, and for brick-and-mortar retailers, there seems to be no looking back. This is happening throughout the city and across the country, and landlords admittedly have a challenge on their hands. But they also have a responsibility to their communities to offer reasonable market rates for their commercial spaces. Empty storefronts are good for no one, as we are seeing, and they do nothing but deter business and drag down property values.

The city needs to apply the proper pressure to these errant landlords, both enforcing current laws more carefully and exploring penalties for those owners that neglect their communities in this way. There is one statistic that fairly jumps off the page in the study: over twenty percent of the vacancies in North Beach are properties either owned or managed by just two people: realtors Helen Tam and Sophie Lau. It would seem the city has a good place to start.

Ongoing construction work, and its attendant dust, congestion and parking misery, is another major factor impacting the neighborhood. The severe disruption caused by the Central Subway work at the old Pagoda Theater space was a headache that many neighborhood businesses clearly couldn’t handle, and many threw in the towel. City officials need to understand how destructive this unceasing construction is to merchants, and the community at large. They must coordinate with North Beach to reduce the overall number of street projects. 

The SFNBBA has worked for years to encourage businesses to open locations in our neighborhood. Cole Hardware, a family business in San Francisco since the 1920s, has been our most obvious success: We worked with Cole for over a decade to find a suitable space for their store. And they’ve delivered on their end, demonstrating that if you provide a great customer experience, people will come and shop.

As the picturesque center of our great city, the North Beach commercial district should be a thriving shopping resource for both locals and visitors. Although we face real challenges, the neighborhood is resilient. At the SFNBBA, we see North Beach as the vital, prosperous dining and shopping destination that it historically has been, and that it should be. And with our continued work, along with the help of city officials, our landlords and our citizens, we envision a bright future.