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What We Talk About When We Talk About Formula Retail

| Written by ILSR Admin | No Comments | Updated on Jun 19, 2013 The content that follows was originally published on the Institute for Local Self-Reliance website at https://ilsr.org/talk-talk-formula-retail/

SFist News, June 19, 2013

Formula retail. You know: chains. They’re a hot topic in S.F. right now, especially in The Mission where a beloved used bookstore is becoming a Jack Spade, and in the Castro where Planning has already tried to head off moves by Starbucks and Chipotle to expand in the neighborhood. The Planning Department and the Board of Supervisors are working to rewrite the very complicated rulebook around chains, which are totally forbidden in a couple of neighborhoods, but only vaguely frowned upon in others. And as the Legislative Affairs manager in Planning, AnMarie Rodgers, tells SFist, “There are currently 10 proposals on the table to revise the formula retail rules in different districts, only three of which are public.”

What exactly is the problem with chain stores and chain food, you ask? Well, plenty, if you ask neighborhood merchants and a certain anti-corporate segment of our city’s population. And given that our neighborhood restrictions on chains are part of what give S.F. its own distinct character, we should probably be glad that such restrictions are in place.

San Francisco defines formula retail as, “a retail sales establishment which, along with eleven or more other retail sales establishments located in the United States, maintains two or more of the following features: a standardized array of merchandise, a standardized facade, a standardized decor and color scheme, a uniform apparel, standardized signage, a trademark or a servicemark.” Basically, any chain that already has 11 locations. Rodgers tells us, though, that a new rule being proposed states that Planning must reject an application by a chain if they have 11 locations including any leases signed, requiring them to research whether the company has signed leases on eventual but but not-yet-opened locations across the country.

Some argue that the whole system is too confusing, even for planners, and there’s a need for a clearer citywide policy to streamline this. Also, some argue that this process leaves storefronts vacant for far too long in the hopes of finding mom-and-pop retailers who are not likely to be as financially viable in the long run, leading to further vacancies. The Castro location of Home restaurant, vacant for two years now as Chipotle has tried to move in, is a good example of a space that is too financially encumbered to work for a small business, but is highly desirable to a national chain.

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As the Institute for Local Self-Reliance notes:

The restrictions have helped San Francisco maintain a relatively vibrant independent retail sector. The city has twice as many independent bookstores per capita as New York. It is home to some 80 local hardware stores. It also boasts more than 900 independent retailers selling fresh food, including more than 50 locally owned grocery stores of at least 5,000 square feet.

The rules are getting revised as demand from developers increases to put formula retailers in their projects. That potential pressure, and the vagaries around the existing rules, prompted Wiener to pen some legislation earlier this year (approved a few months ago by the Planning Commission) that will restrict formula retail uses on the Upper Market corridor to a 20 percent concentration within a 300 foot radius. This effort, Rodgers explains, is a test case and the first one in the city in which the rules were made this specific. So far the rule has been used to reject Starbuck’s bid to move to Sanchez and Market, but to allow a CVS to move into the Market-Noe Center, prompting some confusion in the neighborhood given the number of other pharmacies around. “We’re going to wait and see how it goes,” Rodgers says, saying that other neighborhoods’ formula retail rules may get similarly rewritten.

Also, Supervisor London Breed has two proposals in to restrict formula retail on Divisadero and on Lower Fillmore; and Supervisor Malia Cohen is looking to rewrite the rules for Third Street as well.

The need for change is this: A voter-approved ballot measure in 2006 made it necessary for every formula retail use to go through a Conditional Use process and get approval from the Planning Commission unless it was already prohibited in a neighborhood; the new rule was written to avoid over-concentrations of formula retail in neighborhoods, however it did not define what that concentration should be.

Also, there’s currently no zoning regulations that specifically deal with fast food, however there are arcane rules surrounding cafes and quick-service operations, and confusing regulations for specific retail districts regarding the combination of chain fast food alongside other formula retail.

Rodgers says that the Planning Department is working on crafting some citywide rules on formula retail, defining what it is, for a start, and creating a more specific guideline about concentrations in neighborhood commercial districts. “The Commissioners themselves are confused and asking for this,” she says. The new rules may go up for a vote as soon as July.

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Read the full story here.

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