Last month, the Planning Department penalized a Castro-based car sales startup for operating an office without the proper permits.
On March 28, a Notice of Violation and Penalty Decision was issued against the company, which operates at 2336 Market Street between Castro and Noe streets.
"We are disappointed with the Zoning Administrator’s decision," Shift's spokesperson Jamie Radice told Hoodline.
According to the company's website, its goal is to simplify the private car market by offering individual buyers and sellers services like test drives, inspections, and financing.
Launched in 2014, Shift has two other office locations in the Castro at 584b Castro Street and 2500 Market Street. The company's inventory of used cars is kept in South San Francisco.
"Castro has been our home since Shift was launched in George's living room in the neighborhood," Radice said, referring to the company's CEO, George Arison.
The Planning Department originally received a complaint in August 2017.
Department staff visited the site in September 2017 and spoke with Shift's owners and legal counsel, issuing a notice of violation on September 26. After a temporary appeal, the item was scheduled for a Zoning Administrator hearing on January 10.
At the hearing, the company's legal counsel, Kala Sherman-Presser said, "this is the next phase of Shift."
While there are no cars on site, "this is the retail experience we envisioned," said Sherman-Presser. "People are coming in and they're meeting with our team, and they're walking through a car-buying experience."
According to Sherman-Presser, the company uses the space as "non-traditional retail," because it's home to a sales team that handles customers in person, in addition to offering online and telephone support.
Zoning Administrator Scott Sanchez said that because Shift occupies the ground floor and an upper floor, Conditional Use Authorization is required for a combined space larger than 2,999 square feet.
Previously occupied by Simply Brilliant Press, the property is zoned for retail use, but Sanchez determined that Shift's business model doesn't conform to the city's definition of retail sales and services.
"Because no retail goods or services are being provided, and substantial administrative office space is included, the use of the subject property is considered to be General Office for the online sales platform," Sanchez ruled.
Sanchez also determined even if Shift were offering retail sales and services under the city's definition, "that use would be considered a Retail Automobile Use, which is also prohibited within the Upper Market Street NCT District."
To recover the cost of correcting the alleged code violations, the Planning Department is also seeking $958.09 for time and materials.
"We appreciate the Planning Department’s need to ensure retail businesses are operating in retail-zoned areas," said Radice. "However, modern businesses— especially technology companies—don’t always look like traditional storefronts."
"We don’t believe that an empty storefront is better than a retail business like ours. Shift brings foot traffic and job growth to the area, which benefits everyone," Radice said, adding that the company found "it ironic that a campaign office is using a retail space up the street," a reference to candidate Mark Leno's headquarters.
"We hope that the Board of Appeals sees the value we add to the region and rules in our favor," said Radice.
Shift appealed the Notice of Violation and Penalty Decision to the Board of Appeals. A hearing is set for June 6 at City Hall.
