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San Francisco

Neighborhood Formula Retail Appeal Against Kit And Ace Denied

An appeal filed against the zoning administrator by the Hayes Valley Neighborhood Association (HVNA) was denied yesterday by the Board of Appeals.

Kit and Ace, a Canadian retailer that has 29 open locations worldwide and 21 more on the way, has brought the issue of formula retail law to Hayes Valley in its attempt to open a shop at 371 Hayes St. In the past few weeks signs have been posted in windows across the neighborhood asking the community to oppose Kit and Ace, and to attend a City Hall hearing on the issue.

Photo: Madeline Behrens-Brigham

Last night that hearing took place, but the verdict didn't bode well for Kit and Ace's opposition. Commissioners ruled 3-1 in Kit and Ace's favor, based on the fact that at the time of the application the retailer did not qualify as formula retail. Under the law, businesses with more than 11 shops worldwide are considered "formula retail": although that number has now been surpassed, when Kit and Ace originally applied it only had eight shops. 

Darryl Kopke, the CEO of Kit and Ace, spoke at the hearing about why he felt the retailer would benefit the community. 

"A significant percentage of our fixtures are designed and created by local artisans, and we pay for those. We have our supper clubs catered by local chefs. Our shops have in-shop designers that can create a career for themselves. We have free wi-fi and sparkling water in our shops ... With due respect we understand the dynamics of this city's rules. We're not a chain store in the traditional sense, we've never considered ourselves formula retail. We are local and we're committed to the community." 

In addition to the presence of the CEO, 12 newly-hired Kit and Ace employees sat in the back row of the hearing room. 

Scott Sanchez of the Planning Department acknowledged the difficulty of the laws surrounding formula retail. "We don't debate now that the company is formula retail, but they weren't when the permit was approved," he said. "Question of intent is always important, but it's very hard to regulate. It's a very broad spectrum. Like La Boulange, which started out as a small bakery, and then became formula retail and owned by Starbucks." 

Commissioner Darryl Honda sided with the Hayes Valley Neighborhood Association on the issue. "This issue of small business is very passionate to me," he stated. "I was a small business owner for 16 years until Blockbuster rented a big space, causing all the rents to go up. The question here really is the letter and spirit of the law. By both letter and spirit I believe that they are a formula retail. When formula retail moves in, rents go up, then you see small businesses leave. We've seen too many local residents leave because of the economy, and small businesses."

In the end, however, the decision was reached that found Kit and Ace exempt from formula retail restriction.

"We disagree with the the decision," Gail Bough, Vice President of HVNA, told us. However, she said that "Kit and Ace has reached out to the organization to meet with HVNA's president and Vice President. Kit and Ace seems to have a clearer understanding of what Hayes Valley represents than when it decided to open here." 

Larry Cronander, President of HVNA, stated that, "HVNA will continue to be vigilant in defending the formula retail ban in Hayes Valley and will work closely with the Planning Department and the Zoning Administrator to that end."

A HVNA public meeting tonight will cover yesterday's ruling, and the issue of formula retail in the neighborhood. The meeting will take place at 7pm, at the Hayes Valley Playground (Buchanan and Hayes streets).

We'll let you know if any further legal action is taken, and if not, when Kit and Ace will open its doors. 

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