Prop. D retail vacancy tax campaign kicks off in North Beach

Prop. D retail vacancy tax campaign kicks off in North Beach
North Beach merchants and citizens join Supervisors and other city officials at Live Worms Gallery in support of a vacancy tax. | Photo: Lee Hepner
By Romalyn Schmaltz - Published on January 13, 2020.

Over 100 small business owners and neighborhood activists joined 10 members of San Francisco’s Board of Supervisors at Live Worms art gallery in North Beach Sunday afternoon to kick off the Proposition D campaign.

Slated to be on the March 3, 2020 ballot, Prop. D would impose a tax on commercial properties that remain vacant for more than 182 days in any given tax year.

The tax would ramp up from $250 to $1,000 per linear foot of store frontage over the first three years, and includes exceptions for nonprofits, businesses affected by disaster, and some other cases. Prop. D will require a two-thirds majority to become law.

North Beach’s District 3 Supervisor Aaron Peskin lauded the rare unanimous support Prop. D has from the SF Board of Supervisors.

“Every single member of the Board of Supervisors, our state legislature delegation State Senator Scott Weiner, my predecessor State Assembly member David Chiu, and the wind at our back — the San Francisco Democratic Party — all support the proposition," he said.

"But most importantly, it is the merchants and the merchant organizations, starting with the North Beach Business Association (NBBA),” that have mobilized getting the legislation on the ballot, Peskin said.

Several speakers noted the importance of thriving small businesses to neighborhoods like North Beach. They said vacant storefronts not only contribute to a depressed community and economy, they also invite crime and unsanitary conditions as foot traffic is decreased and vacant entryways are used for illegal or unsafe purposes.

“There are far too many vacant storefronts in my district. This is an issue of public safety," said District 6 Supervisor Matt Haney, who represents the Tenderloin, SoMa and part of the Lower Polk corridor.

"When you have vacant storefronts, when you have commercial corridors that are dying, often other types of negative behavior come about," he said. "There aren’t eyes on the street, there aren’t people walking around enjoying the area, and I’ve seen that happen across my district."

Fady Zoubi, NBBA’s past president and current board member, said he feels this is an opportunity for a better balance of businesses in the neighborhood.

“It would turn the relationship between landlords and small business owners into a partnership. Importantly, it would keep the ambiance of North Beach retail as unique as it’s always been, where if you go into a business, there’s a 90% chance you’ll meet the owner.”

Because of the neighborhood’s formula retail ban, nearly all businesses are locally owned and, by definition, lack the corporate foundation that can absorb exorbitant rents.

According to Daniel Macchiarini, owner of North Beach’s Macchiarini Creative Design and president of NBBA, the idea for the proposition began last year in North Beach, when NBBA, Telegraph Hill Dwellers and North Beach Neighbors conducted a survey of businesses in North Beach’s Neighborhood Commercial District (NCD).

The survey recorded 40 vacant storefronts. Because of subsequent outreach connecting landlords to potential small business owners, 19 new small businesses have secured leases in the NCD, with even more businesses hoping to open this year along Columbus Boulevard and Grant Avenue.

Small Business Commissioner Kathleen Dooley addressed the crowd, saying, “We have tried every trick in the book to get [landlords with longstanding retail vacancies] to lease their properties to really no avail."

"Many owners of business buildings are not renting and are wanting astronomical rents that no one can afford, and they’re blighting our neighborhood," she said. "So this is how we want to thank them so much for their lack of cooperation.” 

Some North Beach commercial property owners see other reasons for the rampant vacancies, however.

Giovanni Toracca, whose properties include storefronts on the 1300 block of Grant Avenue, shared that while all his properties are currently leased, "I have one guy who just wants to open a barbershop," but has been hamstrung by city permit processes for about a year, unable to open his business.

"The vacant stores are mostly retail, not food or services," he said. "I told Aaron Peskin, if you want to go after somebody, don't go after the landlords — go after Amazon. But you can't, because you know they'll win."