Breaking the chains - Page 2

Rival measures updating SF's formula retail controls stir controversy and debate

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Philz Coffee is a homegrown chain that would be exempted from proposed formula retail controls.
PHOTO BY KENNEJIMA/FLICKER (CC)

Senior Policy Advisor AnMarie Rodgers and Project Manager Kanishka Burns sat down with the Guardian to go through details of the proposal and a May study it was based on, "San Francisco Formula Retail Economic Analysis," by Strategic Economics, as well as an earlier study by the Controller's Office.

"Our department is super committed to encouraging the diversity of neighborhood commercial districts," Rodgers told us, acknowledging that small businesses often need protection from deep-pocketed corporations that can pay higher rents and enjoy other competitive advantages over mom-and-pop stores.

Rodgers cited studies showing that local small businesses circulate more of their revenues in the city than big chains, boosting the local economy. That's one reason why the Planning Department proposal expands formula retail controls to include the categories business and professional services (including Kinko's and H&R Block), limited financial services (including street front ATMs and small banking outlets), and fringe financial (such as check-cashing and payday loan outlets).

The new controls would also count a company's outlets in other countries and locations that have been leased but not yet opened, it would expand some of the neighborhoods subject to formula retail controls, and it would require formula retail businesses to minimize their signage on the street, improve their pedestrian access, and fund more detailed analysis on their impacts on the local economy. Big box stores, in particular, would be required to submit to even more detailed economic impact studies.

Many of these same provisions are included in the Mar legislation, which also goes further in including gyms, gas stations, smoke shops, strip clubs, massage establishments, and various automotive businesses under the formula retail controls. Like the Planning Department measure, Mar's also requires more data for formula retail applicants.

"We want to make chains fund economic impact statements before they go into the neighborhoods," Mar said, noting how those studies will allow city officials to make better decisions about whether to approve formula retail applications.

Stacy Mitchell is the senior researcher for the Institute for Local Self-Reliance, an organization that has been working with San Francisco on its formula retail controls since their inception. She applauds the city's current efforts to create more comprehensive guidelines and to require more economic analysis.

"San Francisco doesn't have a good mechanism for fully evaluating the economic impact of these proposals," Mitchell told us, calling the Planning Department and Mar efforts "a really good place to start the conversation."

But Mitchell said that she doesn't want to weigh in on what specific number of outlets may be right, saying city officials just need to decide, "What is the right balance and mix and how do we want to handle it?"

Rodgers told us the Planning Department legislation will expand the number of businesses that fall under formula retail controls, even as the threshold is raised to 20 outlets, although she couldn't quantify exactly how much.

But critics are focusing on aspects of the proposal that loosen current restrictions, noting how that cuts against the trend in recent years of supervisors seeking to tighten restrictions in their districts, creating a hodgepodge of legislation that the Planning Department was trying to overcome with comprehensive new legislation.

 

WHAT'S A CHAIN?

The Planning Department's new threshold and the arguments being made to support it rely heavily on making the case that three specific homegrown companies should be excluded from formula retail protections: Philz Coffee (with 14 stores), Lee's Deli (13 outlets), and San Francisco Soup Company (16 locations).