Photo: Gabrielle Lurie / The Chronicle 2018
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One of the key reasons San Francisco is suffering from a glut of empty storefronts appears to be the city itself and a permitting process that can take an incoming business anywhere from six months to a year to complete, a new report by the city’s Budget and Legislative Analyst Office concludes.
The report took a close look at building and planning permits issued between 2015 and 2017 for new businesses moving into the Upper Market and Castro commercial corridors.
The report found that building permit applications for commercial property alterations, additions and repairs submitted in 2017 to the Department of Building Inspection took an average of 172 days — that’s nearly six months — to be approved.
It took another 88 days, on average, for the permitted construction and renovation work to be completed and get a final sign-off, for a total of 260 days or more than 8½ months.
If the new business needed a conditional use authorization change from the Planning Department — they’re required for more businesses in the Upper Market-Castro than in some other neighborhoods — it took an average of 332 days, or nearly one year, to be approved.
When combined with the time it takes to get a building permit and the final approval, the entire process can take a year and a half for projects requiring both Planning and Department of Building Inspection approvals, the report said.
Meanwhile, the storefronts remain vacant and the businesses are stuck paying rent.
“And it’s not cheap. But all you can do is sit and wait,” said Daniel Bergerac, Castro Merchants president and co-owner of Mudpuppy’s Tub & Scrub dog wash.
Bergerac estimated commercial rents in the Castro run anywhere between $4 and $7 a square foot per month. A 2,500-square-foot restaurant space, paying $5 a square foot, is looking at $12,500 a month in rent — whether it’s open or empty.
“It’s like going into a casino,” Bergerac said. “You don’t know if you are going to win or lose.”
Vacant storefronts are a growing blight in a number of neighborhoods and have been blamed on everything from internet shopping to the loss of parking and landlords looking for higher rents.
In North Beach for example, a 2018 study by the North Beach Business Association, Telegraph Hill Dwellers and North Beach Neighbors pegged the storefront vacancy rate at 10 percent, double the rate recorded by the same group in 2015.
The Budget and Legislative Analyst’s survey of the Upper Market and Castro found that as of March 2018, about one out of 10 stores were vacant.
Of the 31 vacant Upper Market and Castro storefronts surveyed by the analyst, 13 were undergoing renovation or awaiting approval from the city to proceed with renovations.
The length of time it takes to go through the process appears to vary with the location.
For example, it took almost two months longer (56 days ) for projects in the Upper Market-Castro district to go through the conditional use authorization process than it did in Hayes Valley and along Valencia Street.
The city has programs to speed things up for small and mid-size businesses. In the last three years, 32 businesses sought help in accelerating their approvals and shaved 118 days off their wait, but it still took an average of 173 days — about six months — to get the final OK.
“For many applicants that means 18 months, two years or more of paying high rent on a storefront that hasn’t even opened yet,” said Supervisor Rafael Mandelman, whose district includes the Castro and who called for the study.
“The city ought to be doing everything we can to attract businesses and help them to open as quickly as possible, not making it more difficult, time-intensive and expensive,” Mandelman said.
“If it takes 88 days to build something out, but twice that time to get the permits, then something is wrong with the process,” said Supervisor Aaron Peskin, whose district includes North Beach.
“My feeling is that the big projects are getting approval first, while the little ones that make the world go round wind up at the bottom of the pile,” Peskin said.
Mayor London Breed has called for streamlining the process to enable small businesses to get their permits over the counter, rather than waiting months for their applications to move through the city departments.
“The city needs to be working with our business owners and providing support, not making them jump through dozens of hoops just to get a permit,” Jeff Cretan, Breed’s spokesman, said.
Meanwhile, business owners are still faced with backups.
Bergerac said store owners are joining the ranks of people who hire professional “expediters” to get their permits approved faster — it’s a longtime, winked-at practice.
“What does that tell you about the system?” Bergerac said. “It’s criminal.”
San Francisco Chronicle columnist Phillip Matier appears Sundays and Wednesdays. Matier can be seen on the KPIX-TV morning and evening news. He can also be heard on KCBS radio Monday through Friday at 7:50 a.m. and 5:50 p.m. Got a tip? Call 415-777-8815, or email email@example.com. Twitter: @philmatier
This post was originally posted at https://www.sfgate.com/bayarea/philmatier/article/SF-takes-its-time-OKing-retail-makeovers-look-13736702.php.