Preserving Small Businesses in San Francisco
As famous for its rich history as it is for its iconic landmarks, San Francisco is made up of dozens of neighborhoods and cultural districts marked by distinct personalities that have been influenced by both residents and businesses. Unfortunately, the city can also be an expensive place to live and work because of housing shortages, gentrification, and other economic factors.
Nonprofit civic organization San Francisco Heritage released its “Sustaining San Francisco’s Living History: Strategies for Conserving Cultural Heritage Assets” report in 2014, highlighting the pride and engagement long-standing businesses bring to communities. However, the city realized the businesses that helped establish their neighborhoods’ identities were struggling in an economic climate that led to displacement, rent increases, and lease terminations.
To help protect those establishments, the San Francisco Small Business Commission established the Legacy Business Program in 2015, offering financial assistance and other resources for landlords and tenants. Regina Dick-Endrizzi, Executive Director of the Office of Small Business, tells us more about how the program works.
The San Francisco Legacy Business Registry
A business is eligible for Legacy status if it meets three criteria:
- Continuous operation in San Francisco for at least 30 years. Allowances are made for businesses where operations were interrupted for no more than two years and for businesses that have only operated for between 20 and 30 years but have significant merit based on criterion two.
- Contribution to the community or neighborhood, including having a significant impact on the history of the community or neighborhood, or influencing the area’s cultural identity.
- Commitment to preserving architecture or traditions. Legacy businesses are expected to maintain the historic appearance of their locations, as well as the customs and practices for which the businesses have become known.
In addition to acting as cultural and historical icons, they are important because of their tangible effects on their neighborhoods and the residents of each.
“Legacy Businesses hire locally, serve as community gathering places, engage with residents and visitors, and adapt to meet the needs of the neighborhood,” says Dick-Endrizzi.
Businesses can submit applications and then be nominated by a member of the Board of Supervisors or the mayor, or can be nominated and then invited to submit the application. After an application has been submitted, it takes about 10 weeks for the business to be approved. Throughout the process, the application must be approved by the Planning Department and the Historic Preservation Commission, then the Small Business Commission. No more than 300 businesses may be nominated each year.
There are currently around 120 businesses on the registry, though some have multiple locations that bring the official number to nearly 150. The registry includes foodservice operations like Boudin Bakery, a sourdough bread company operating since 1849; Casa Sanchez, which once offered free meals to customers tattooed with its logo; and Sam Wo, a Chinatown restaurant that, despite leaving its original location in 2012, has been in operation for more than a century. It also includes three businesses that have closed since being added.
“Among the top issues faced by San Francisco small businesses include navigating the dynamic business climate, accessing affordable financing, and complying with complex business regulations,” says Dick-Endrizzi. “Currently, the No. 1 issue remains the rising cost of rent and risk of displacement. Shorter lease terms in recent years have exacerbated the issue, leaving businesses to deal with lease negotiations or displacement every three to five years.”
At least one of the closed Legacy Businesses, vintage clothing shop Retro Fit, blames its closure on a substantial rent increase. To alleviate the issue from both sides, the Legacy program offers assistance to businesses and their landlords.
“A viable strategy for securing the future stability of San Francisco’s long-operating businesses is to provide incentives for them to stay in the community, and incentives for their landlords to enter into long-term leases with such businesses,” says Dick-Endrizzi. “Landlords of Legacy Businesses are eligible for grants if they agree to offer lease terms of at least 10 years or extend the term of the existing lease to at least 10 years.”
The Legacy Program offers a business assistance grant, a rent stabilization grant, and other resources, including assistance with licenses, permits, zoning laws, and other legal requirements through the Office of Small Business and free legal services from the Lawyers’ Committee for Civil Rights Under Law.
Through the business assistance grant, for which the majority of Legacy Businesses apply, an operation may be awarded $500 per full-time employee. There is a maximum grant sum of $50,000, and the business must specify how these funds will be used in its grant application. According to Dick-Endrizzi, the funds are commonly used for important expenses that many small businesses may not otherwise be able to afford, such as equipment, facade improvements, and marketing.
The rent stabilization grant, introduced in February 2017, is available to landlords who lease spaces to Legacy Businesses for 10 years and awards $4.50 per square foot, up to a maximum of 5,000 square feet. Landlords may use these funds to provide businesses with a lowered rent, but are not obligated to do so. Since it was introduced, 15 landlords have submitted applications for the grant.
Dick-Endrizzi says the program’s mission is receiving support from business owners and members of the community who often “have personal relationships and decades of memories” with Legacy Businesses and those who run them.
“Many residents have expressed their gratitude for the Legacy Business Program due to the shared goal of protecting Legacy Businesses,” says Dick-Endrizzi. “Legacy Businesses define the character of San Francisco neighborhoods and bring energy and life to the city. They are the heart of San Francisco and make the city so unique.”
City officials, community organizers, and local business owners interested in beginning or proposing similar programs in their municipalities are encouraged to reach out to the program’s representatives at firstname.lastname@example.org.