San Francisco Officials Want to Help Save the City's 'Legacy Businesses'

San Francisco city officials plan to put a measure on the November ballot asking voters to back a preservation fund supporting longtime small businesses and nonprofits facing rising commercial rents and gentrification.

"They have a very important part in the character of these neighborhoods, and unless the city makes an investment in helping them, they're going to fail," says Supervisor David Campos, who is sponsoring the legislation along with supervisors John Avalos, Jane Kim and Eric Mar.

Last year, the city's budget and legislative analyst issued a report saying thousands of businesses would close, driven in part by commercial real estate prices. It predicted that if current trends continue, more than 5,000 businesses would close or change locations by 2019.

Campos says the proposed measure, the first of its kind in the nation, was crafted in consultation with a broad array of stakeholders, including the small business community, preservation activists like SF Heritage, nonprofits, the Chamber of Commerce and realtors.

"We have worked with folks that are not necessarily on the same page and said, 'How can we as San Francisco prioritize these legacy businesses?'"

The proposed Legacy Business Historic Preservation Fund would make businesses that are 30 years or older eligible for annual grants of up to $50,000, or $500 per employee, and an annual $4.50-per- square foot grant would be available to property owners up to $22,500. No more than 300 businesses could qualify each year. Campos says businesses will have to show to the Small Business Commission that they've contributed to the community and that they've benefited or provided character to the neighborhood.

He says it's especially important to give property owners incentives to provide 10-year leases, instead of short-term leases that are sometimes month to month.

"That instability is very dangerous and actually has lead to businesses closing because the rents can go up so quickly," he says, pointing out that the state does not allow rent control on commercial properties.

Campos' office says there are 7,000 businesses in the city that are 30 years or older, and around 3,000 may be eligible for the program. The money for the fund, estimated annually at $3 million, would come out of the city's general fund.

The measure is expected to be put on the ballot by the Board of Supervisors, and early polling indicates voters would support it.

In recent years the city has seen a number of famous and beloved restaurants and bars close, including The Lexington Club, Joe's Cable Car, Empress of China, and Esta Noche.

"This is not going to answer every problem, and it's not going to address every situation," says Campos. "But it's some assistance and I think it will have an impact and make a difference."