Chain stores would face increased restrictions in SF under proposed ordinance 

click to enlarge Legislation proposed by Supervisor Eric Mar would expand rules on where chain stores can open. - MIKE KOOZMIN/S.F. EXAMINER FILE PHOTO
  • Mike Koozmin/S.F. Examiner file photo
  • Legislation proposed by Supervisor Eric Mar would expand rules on where chain stores can open.

A proposal to increase restrictions on chain stores in San Francisco was introduced Tuesday by Supervisor Eric Mar, the latest effort amid a simmering debate on how best to preserve neighborhood character without impeding economic activity.

The debate resurfaced last year as some cases cropped up where loopholes were exploited in existing regulations on so-called formula retail businesses, such as with a high-end clothing store in Hayes Valley.

Just how challenging the issue can get was recently illustrated by the city controller's recently issued economic impact report that suggested increased controls would hamper the local economy. Critics said the study was flawed, in part for not assessing the impact chain stores would have by degrading the uniqueness of a neighborhood character.

Mar is moving forward with a proposal he said would "create a reasonable new formula retail ordinance that is clear, comprehensive and that will protect neighborhood character, protect small businesses and also allow for economic growth and diversity in our city."

It would make several changes, including broadening the definition of formula retail, which under current law applies to those stores that have 11 or more U.S. locations. The amended law would apply to businesses with 11 or more outlets worldwide. It would also cover those businesses that are at least 50 percent owned by a chain store company. Additionally, regulations would apply to new business types, including adult entertainment, massage establishments, hotels, tobacco paraphernalia stores and auto repair.

In 2004, Hayes Valley became the first neighborhood to outright ban chain stores. Since then, bans have been enacted for North Beach and a portion of Chinatown. In 2007, voters approved a ballot measure requiring chain stores looking to open in San Francisco's other neighborhood commercial corridors to file for special permits that increase public notification and are appealable to the Board of Supervisors.

Mar's proposal would also require an applicant of larger-sized businesses to pay for an economic impact study to assess its effects on nearby businesses.

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