News & Research Archive

Retail Zoning Changes Need to Occur Now

Mar 28, 2013

 

In 2011, San Francisco passed a retail ordinance requiring any chain retailer with more than eleven stores to undergo a special review process in Neighborhood Commercial Zoning Districts to determine whether or not the retailer is a good fit for the neighborhood. The purpose of the ordinance is to foster the growth of local markets and retailers while preventing large chain retailers from edging out smaller businesses and creating uniformity in unique neighborhoods. In addition to this new ordinance, neighborhoods have long created restrictions to reduce the amount of restaurants, financial services and other retailers deemed capable of creating a negative impact on a particular San Francisco neighborhood. Both of these restrictions have seriously impacted neighborhoods while creating a negative impact on commerce tied to new store growth. As a real estate broker I have seen first hand how out of touch these ordinances really are – not necessarily in terms of what they are trying to accomplish but in the long delays that retailers must face when going through the application process.

When a chain retailer decides to enter a neighborhood within an NC Zoning District, it is easily a six month to one year or more process simply to find out if their business will be deemed acceptable or not. This means that the space will remain vacant during that entire time period – causing any landlord to lose rental income. The same situation occurs with any change of use: For instance, if I want to put a food use into a retail space that previously did not serve food, I have apply through a notice process to the neighborhood that could take ninety days or more just to find out if I can secure the location or not.

I am not proposing a change to either the 11-store rule or the requirement to seek neighborhood input for change of use. I am however, proposing streamlining the timeline to something that is more realistic. It shouldn't take two weeks or more to post a 30-day notice and then another 30 days wait for approval and a retailer shouldn't have to wait six months to a year for approval. The consequences of these long waits and loss of income affect many people. When I arrange a lease for someone, I get paid when a lease commences. A contractor and architect are paid upon completion of work. The landlord is paid rent and a retailer can begin hiring when the shop doors are ready to be opened. Finally, the government can start collecting taxes when work commences. This issue effects a wide range of service providers and vendors who won't benefit from leases until approval requirements are met and doors are ready to open.

Mayor Lee and the Board of Supervisors need to take note of just how lengthy the NC Zoning District approval process is and work to streamline the process. If this priority is seen to, jobs will be created sooner and neighborhood vacancies will be kept lower – benefiting retailers as well as the neighborhood.

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Written by: Hans Hansson

E-mail: hans@starboardnet.com


Hans Hansson is President of Starboard TCN Worldwide Real Estate Services as well as a member of the Board of Directors for TCN Worldwide Real Estate. Hans has been an active broker for over 28 years in the San Francisco Bay Area and specializes in office leasing and investments. If you have any questions or comments please email hans@starboardnet.com or call him at (415) 765-6897. You may also check out his website, http://www.commercialspacefinder.com/.

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