Balance Don’t Ban Formula Retail

How to best balance formula retail with non-formula retail, including small locally owned business, is a pressing question facing San Francisco. We are a city that values small business and we want to protect the independent character of our neighborhoods. We are also a city of innovation, where locally owned start-ups should be encouraged to grow and expand, and where large headquarter companies should be able to pilot new concepts. These ideals are not mutually exclusive.

Resistance to formula retail is nothing new in San Francisco. For years the city has banned “chain stores” from Hayes Valley, required conditional use authorization in neighborhood commercial districts and mandated notification in many neighborhoods when new formula retail is proposed. City lawmakers have made a total of 16 incremental changes to broaden the definition of formula retail and further restrict it in our city.

Now, there are nine new legislative proposals to restrict formula retail making their way through City Hall. Supervisor London Breed is seeking to expand the city’s definition of formula retail and restrict it in new commercial retail districts along Divisadero and Fillmore Streets and in the new Hayes-Gough Neighborhood Transit Corridor. Supervisor Jane Kim has proposed interim controls on formula retail in the Mid-Market area, a key neighborhood the city is aggressively working to revitalize. Legislation to further regulate formula retail has also been proposed by Supervisors Malia Cohen, Mark Farrell and Scott Wiener for sections of Third, Fillmore and Upper Market Streets.

While some level of policy is necessary to support small business and protect the character of neighborhoods, the recent proliferation of restrictive new proposals is concerning. Thankfully, the Chamber is not the only one that has taken notice. Last week, the city’s Planning Department announced that it will undertake an economic study to evaluate current formula retail rules and their economic implications in San Francisco. The Chamber, which represents hundreds of small businesses as well as a number of national retailers, has also convened a coalition of small business advocates and formula retailers to dialogue with city officials about this issue in the months ahead.

Now is not the time for hasty action. The Chamber encourages lawmakers to take pause on pending legislation until the Planning Department can complete its study, and stakeholders can engage in productive dialogue to find common ground. Small businesses and formula retail both have a place in our city. Both are important to our neighborhoods and both are important to the economic vitality of San Francisco. Finding the right balance is achievable if we use real data to create appropriate policies that serve our city’s residents, visitors, local merchants and business owners.

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