Dogpatch's balancing act

Light industrial businesses in this mixed-use neighborhood could feel the pressure of a push for more housing.

By Steven T. Jones

URBAN PLANNERS STRIVE for what they call a "jobs-housing balance," a concept that's simple enough to understand: Give people places to work and to live, preferably in close enough proximity to avoid commuting and with a salary that can comfortably cover rent.

It's the kind of discussion that makes for lofty language in thick city documents. But it hits the ground in neighborhoods, like Dogpatch, that have developed into important centers for both jobs and housing.

Dogpatch is located between the pricey homes of Potrero Hill and the emerging Third Street commercial district – right in the prime path of the development pressures that are threatening light industrial jobs. In fact, the city's most ambitious housing plans could wipe out 17,500 production, distribution, and repair (PDR) jobs in eastern neighborhoods alone, according to a recent San Francisco Planning Department study.

Dogpatch offers both a cautionary tale and a microcosm of what it takes to achieve balance. Sometimes you can even get, from a single business, insight into the clashes and complexities of saving PDR jobs from the housing juggernaut.

In this case, that business is SP Controls, an audio component maker that the Bay Guardian discovered when we decided to knock on all the business doors in the block bordered by Tennessee and Minnesota Avenues and 18th and 19th Streets, much of which is taken up by an old three-story, aqua-green building. It looks mostly residential, although one open garage door revealed stacked merchandise inside.

A worker inside said we could find his boss up in the second-floor office that houses about a dozen workers – the only multi-employee business in an otherwise residential building – where we met one of the two owners, Gary Acundi. He related a recent story of a clash between business and residential use on this very block. But in this clash, SP Controls – which only does distribution and office work on-site and so has little impact on neighbors – was on the side of the residents, who wanted more parking spaces.

A plan to create perpendicular parking spaces on Minnesota Street was opposed by the PDR business on the corner, General Graphics, which makes large exhibition booths and other displays that need to be trucked out. And since the company doesn't have an off-street loading bay, the trucks often use the street.

"They are using public property to run their business," Acundi complained.

Even after relating the story, Acundi said he didn't see how city housing policies would affect his business one way or another – unless the city decided to sell its long-closed police and fire stations in the area, buildings Acundi has been eyeing. He wouldn't even bite when prompted by the argument that allowing dense housing development invites real estate speculation that can drive up land prices, cause owners to consider converting PDR buildings for more lucrative residential uses, increase rents, and bring in more people who might complain about certain business activities.

That's when co-owner Paul Brown, who had been listening to the conversation from around the corner, stepped in. Brown said he is worried about all these factors. Having a supportive landlord, Brown is pretty confident in SP Controls' ability to survive, but he is concerned about the threat that housing policies can pose to businesses like his.

"If there is less space available for light industrial, it'll be a requirement for us to move out of the city," Brown said, noting how important it is for PDR businesses like Giannini's Auto Body, around the corner, to survive. "The light industrial may be a pain in the butt, but you'd notice it if they were gone."

Being renters makes businesses vulnerable to changing market forces, but with land prices already so high in San Francisco, Brown said most business owners are trapped. "It's very advantageous for businesses to own the building they're in, and that seems impossible here," he said.

The conflicts with neighbors are more pronounced for companies like General Graphics, which can be loud and run late, even though it's right across the street from a block-long brick building now filled with condos that creep up toward price tags of $1 million each.

"Some of our neighbors have found they don't like the sounds and smells of the industrial process," said Bill Nieser, owner of General Graphics, who noted that the company has recently had complaints from neighbors that prompted a meeting. "We just try to be careful and cognizant that people are sleeping on the other side of the wall."

Nieser also cited the recent parking changes Acundi talked about, saying that if fully implemented, they would have hurt his business (the city decided to just do one side of the street). Yet he also sounded the role of the concerned resident by noting that the neighborhood was up in arms over a plan by the University of California at San Francisco to take over a building across the street, bringing in more people but not more parking.

Nieser sees it as part of the biotech craze the city is trying to create in China Basin – in the process driving up land costs and rents – which he said "is going to make it difficult for businesses like us to survive." And he said other San Francisco businesses would be hurt if they were forced out of the city. "We are the only full-service exhibit company left in San Francisco."

Of course, there are advantages to doing business in a neighborhood like this, said Phillip Drysdale, who runs the imported soapstone business on the other side of the block. "I quite like it. There are people walking about all the time with their dogs and their families," he said. "When you have a purely industrial area, anybody walking around is no good."

Yet this mix comes at a premium. Drysdale's business just moved here from New York eight months ago, and he said the rent is steep, although he feels stable because of a 10-year lease, which he assumes will safeguard against market changes triggered by city housing decisions.

Similarly, Rich Greaney of Pacific Floor Supply, around the corner, feels stable and secure – but only because the business has had the same landlord for 35 years, someone he's confident won't be looking to sell out to housing developers. "We're pretty well set in our little niche," Greaney said.

But balance is still the watchword for most PDR business owners in Dogpatch and other parts of the city being targeted by housing developers and their allies at City Hall.

"I understand the city needs more housing. I've looked at the numbers," Nieser said. "But I'd hate to see the city lose any more longtime businesses."

E-mail Steven T. Jones at steve@sfbg.com.