Two years ago, when Nordstrom shuttered its once-gleaming flagship store in Westfield San Francisco Centre, the city convulsed with anxiety over the demise of local shopping and overall business vitality.
Given that continued state of existential angst, you’d think news of Nordstrom proposing a new store in San Francisco would be warmly greeted. But you’d be wrong — at least in the case of a group of residents loudly opposing the company’s desire to move into their neighborhood.
The kerfuffle is playing out at the San Francisco Planning Commission, where the Seattle retailer is requesting approval to put a concept store called Nordstrom Local into a long-vacant storefront on Fillmore Street. The commission on June 5 plans to consider Nordstrom’s request for “conditional-use” authorization. That Nordstrom needs permission at all to fill a retail space that’s been empty since before the pandemic is a perfect illustration of the city’s outdated and restrictive approach to “formula retail,” or what normal people call chain stores.
Frustratingly, it’s yet another example of how San Francisco’s kvetchocracy all too often reigns over a commonsense approach to governing and doing business.
For years, the city has made it increasingly difficult for brands owned by big corporations to set up shop in town, invoking the vaunted “San Francisco values” of promoting and protecting local merchants. But given the current reality on our streets and neighborhoods, with too many boarded-up storefronts and empty sidewalks, it’s time to walk back that tired approach. After all, it isn’t exactly consistent with San Francisco values to encourage locals to shop in the suburbs because the stores in their neighborhoods are shuttered.
In the case of Nordstrom, approval of the new store should be a no-brainer. The 1,648-square-foot location would be a showroom, tailoring service, and pickup-and-return center for Nordstrom.com, rather than a full-blown shopping emporium. It’s a clever approach for Nordstrom, which knows that many consumers prefer shopping online, but like having a physical location for returns and alterations. It would be only the seventh Nordstrom Local location, the others being in Southern California and New York. In other words, the shop should be a feather in San Francisco’s retailing cap.
But that’s not how some in the neighborhood see it. Residents have come out in force to suggest that Nordstrom Local isn’t the right fit for Fillmore Street. “This street has historically been home to local retailers such as Mio, Mudpie, Sue Fisher King, and Cielo, and many more beloved shops that serve and reflect the Upper Fillmore community,” wrote Ditka Reiner, a Clay Street resident, in a letter filed with the Planning Commission in opposition to Nordstrom’s application.
Paul Wermer of California Street offered a helpful note: “We have suggested that Laurel Village is a much better location,” given its parking lot. Wermer and others fear that Nordstrom Local customers will double-park on busy Fillmore Street.
You’d think the neighbors would be less concerned about double-parking — though I hate it too and wish the cops would write more tickets — than the vibrancy of their local shopping strip. It’s also rich that some think they know better than Nordstrom, which obviously has its reasons for choosing Fillmore, about where its store should go.
Nordstrom can’t receive a routine permit to operate in this location because of the city’s long hostility toward formula retail. A 2006 ballot initiative enthusiastically promoted by then-Supervisor Aaron Peskin — a champion of keeping San Francisco as it is for eternity — required that any brand with at least 11 locations nationwide get conditional-use permission to open in multiple commercial districts. A later ordinance by another supervisor, Eric Mar, plunged the knife further by changing the definition to any operator with 11 stores worldwide.
The result is a commercial environment that is the opposite of what Mayor Daniel “Open for Business” Lurie has said he wants — and what San Franciscans clearly voted for in November. A new study by real estate brokerage Maven Commercial found that while the majority of big brands that apply for conditional-use authorization eventually get it, the wait time for approval is more than seven months, and applicants pay at least $25,000 in expediting and legal fees.
This is great news for land-use attorneys, but its terrible news for landlords, who lose out on rent; city coffers, which go without much-needed tax revenue; and unemployed San Franciscans who have to wait months to land jobs. Instead of bogging down the process, wondered Maven partner Pamela Mendelsohn, “why isn’t the city … speeding things up?”
Some in City Hall are asking the same question. Newbie Supervisor Stephen Sherrill recently passed legislation, which Mayor Lurie signed, to remove conditional-use requirements for businesses on a stretch of long-suffering Van Ness Avenue. The reason he was able to do so relatively easily is that the affected section of Van Ness is what’s known as a “residential-commercial” zone and therefore not covered by the 2006 ballot initiative. Huge swaths of the city, by contrast, have been designated “Neighborhood Commercial Districts,” where easing approval for big brands would require asking voters to undo what they did two decades ago.
Supervisor Myrna Melgar, a former president of the Planning Commission, is mulling another swipe at the formula-retail blockade. She told me last week she is drafting legislation that would make it easier for big-name brands to slot into a space vacated by another chain store. “It would be ‘same for same,’” she said, noting that in the last five years, a stretch of Ocean Avenue in her district has seen a Target, a CVS, and two Walgreens close down.
She said the chain-store restrictions are “hurting the people we precisely want to help” by making it difficult for merchants to move in. Big brands, which often occupy spaces mom-and-pop stores can’t, act as anchors for the neighborhood. “You go to pick up a prescription, and you stay to buy apples,” Melgar said.
The mayor’s office hasn’t commented on the Nordstrom Local proposal specifically or formula retail generally. But it’s reasonable to assume Lurie’s economic development team plans to focus on loosening the rules. Melgar is meeting this week with Sarah Dennis Phillips, executive director of the city’s Office of Economic and Workforce Development, to discuss what could go into a ballot initiative next year.
Knocking down formula-retail restrictions would be consistent with the effort Lurie announced in February to revamp permitting processes citywide. The mayor gave the people running the PermitSF initiative a year to “develop and recommend amendments to [the] City Charter” for how permitting works. Such tinkering easily could include addressing restrictions on formula retail.
The outcome of such efforts will help determine how rapidly San Francisco can get the wind back into its sails. Those are the values — not quibbles about double-parking — we should be concerned about right now.