San Francisco’s investment in Fillmore has yet to bear fruit 

Even if you build it, they may not come. Timing is everything. And sometimes, it really is the economy. Platitudes tell the story of the Fillmore district today and its ailing marquee tenants, even as property owners and San Francisco’s Office of Economic and Workforce Development continue to pump money into it.

Formed in 2006, the Fillmore Community Benefit District — a funding mechanism for neighborhood improvements financed by property owners — was just gaining traction when the recession hit it head-on. Yoshi’s luxurious Fillmore outpost was similarly unprepared, having opened in the still-gritty neighborhood late in 2007 alongside soul-food restaurant 1300 on Fillmore and a larger development housing both of them, the $72 million San Francisco Jazz Heritage Center. All received substantial support from the San Francisco Redevelopment Agency.

But jazz doesn’t sell like it used to, especially during an economic downturn. Business was slow from the beginning, and both Yoshi’s, 1300 on Fillmore, and their new neighbors Sheba Lounge and Rassela’s Jazz Club and Restaurant sought millions of dollars in additional loans from the Redevelopment Agency to cover construction costs and keep their doors open. Years later, the picture has improved only slightly.

“I’m not saying that I’m giving up,” said Yoshi’s owner Kaz Kajimura. “I’m determined to make this work, but with the size we have in this Fillmore area, it is a pretty tough business to be in.”

Monetta White, owner of 1300 on Fillmore, said she’s way off her revenue targets. “Our doors are still open. I wish things were better, but as they say in the restaurant business, after four years you’re making it.”

Money is short, but in order to continue supporting the district through what’s still viewed as a temporary trial — and in the absence of any additional funds from the Redevelopment Agency, which pulled out of the district in 2010 — both The City and Fillmore-area property owners appear prepared to continue investing in the neighborhood.

The Fillmore Community Benefit District, which originated with a five-year term, is up for renewal on Sept 13. According to board member Todd Clayter, property owners representing 67 percent of the district’s parcels voted in favor of continuing the district in a preliminary petition, while 7 percent voted against it and 26 percent did not vote.

He says business owners are happy with the progress made to date by the benefit district. Its approximately $350,000 annual budget funds street cleaning, marketing efforts and safety improvements with the goal of eliminating the Fillmore’s high-crime stigma and converting it into a citywide dining and entertainment destination.

The City is on board to spend more money in the Fillmore, too. Neighborhood Business Development director Amy Cohen said the Office of Economic and Workforce Development loaned $5.5 million for restaurant improvements at Yoshi’s and 1300 on Fillmore and plans to send another $900,000 in grants to the seven-block district for marketing, events, business development and streetscape improvements.

Supervisor Ross Mirkarimi, who helped establish the Fillmore Community Benefit District and has been one of its biggest boosters, says he’d like to see even more money coming in from The City, perhaps in the form of microloans to encourage small businesses to open in the area.

“Some CBDs do warrant a certain level of attention that frankly I don’t think it’s getting enough of,” Mirkarimi said. “It requires some constant hand-holding by The City.”

Yet despite the millions spent so far, the Fillmore’s new nightlife destinations have seen only minor improvements, and the district remains all but dead during the daytime. Above and beyond the national economic downturn, it’s possible that the essence of the latest Fillmore redevelopment plan — shoehorning an upscale jazz district founded upon a 60-year-old legacy into the middle of a low-income residential neighborhood — is itself fundamentally flawed.

The Community Benefit District has already retreated from the jazz label in a bid to broaden its appeal, voting to drop the word “jazz” from its official name at a board meeting last month. And in order to expand its reach beyond nighttime entertainment, the assessment district promises to shift its focus to daytime activities should its renewal be approved, Clayter said.

Then again, not everything in the Fillmore is struggling. As many as 30,000 people visited the neighborhood for its annual Jazz Festival over the Fourth of July weekend, and its Juneteenth festival attracted 18,000.

The Fillmore Center, a 1,114-unit housing complex built by the Redevelopment Agency in 1992 and located one block from Yoshi’s, is at 95 percent capacity — 98 percent if you account for pre-leased units. “If we go any higher, we’ll be ecstatic,” said general manager Cyril DeFazio, who also serves as the Fillmore Community Benefit District’s public safety chairman. Although 20 percent of the building is leased at below-market values, the market rate for a one-bedroom unit has climbed to $1,900 in recent months.

Elsewhere in the district, vacant storefronts suggest commerce is lagging far behind. “People think it happens overnight, but it just doesn’t,” said 1300 on Fillmore’s White. “But we’re hoping it doesn’t take 20 years to get people down there and get it thriving again.”

Yoshi’s changes up food, programming to survive

Nearly four years since opening in late 2007, and after millions of dollars in investment from the San Francisco Redevelopment Agency and The City itself, Yoshi’s is still hurting.

“It’s never really been easier at all,” said owner Kaz Kajimura. “We thought it would be better with the economy turning around, but it’s still a pretty serious struggle just to keep the doors open.”

Kajimura chalks up his challenges to a combination of factors: the Fillmore district’s ongoing, but not-quite-there-yet renewal; food and ticket prices that may be too high for the neighborhood; and, of course, the tepid national economy.

Then, there’s the jazz thing. The entire district was fashioned around it, but hardly anyone seems to want to hear it. So, with mixed results, Kajimura is experimenting.

Earlier this year, Yoshi’s swung decisively in the other direction by booking a series of old-school hip-hop acts: Naughty by Nature, Bone Thugs ‘N’ Harmony, Public Enemy, Doug E. Fresh and De La Soul. Flava Flav played the same stage christened on opening night by jazz iconoclasts Roy Haynes, Gary Burton and Ravi Coltrane. An entirely new crowd discovered the club, but a backlash followed closely behind. Six months later, Kajimura isn’t consistently making money at the door.

“We used to call ourselves a jazz club, but as you can see from our calendar, sometimes we wonder if we’re still a jazz club,” he said. “That seems to be the only way that we can survive in this market.”

Next month’s schedule features DJ Grandmaster Flash, George Clinton and Parliament Funkadelic, a two-day salsa festival and a Dave Matthews Band cover group.

In a separate effort to bolster its budget, Yoshi’s is looking hard at private events. Its 13-member management team features both a private events manager and a director of private events, and under them a host of new interns charged with supporting event sales and production.

After four years, Yoshi’s high-profile restaurant remains a work in progress. Not even sushi is sacred, although it’s the food on which the entire franchise was founded. Yoshi’s club menu now features burgers and fries, a stark contrast to head chef Sho Kamio’s typical exotic fare — but that still hasn’t saved his kitchen.

“We’re still here, but every day is a challenge,” Kajimura daid. “We have to put all of our energies into getting this place going.”

The City’s ongoing investments in the Fillmore district

San Francisco officials have invested almost $6.5 million in upgrades to the Fillmore district. Here is where it went:

$5.5 million: Loan to owner of Fillmore Heritage Center for tenant improvements at Yoshi’s and 1300 on Fillmore
$800,000: Grants for advertising, business attraction, events, facade improvements and streetscape improvements
$95,000: Grants for marketing, promotions and CBD renewal process

Source: Office of Economic and Workforce Development

The Fillmore district’s ongoing investments in itself

In addition to city funding, the Fillmore Community Benefit District also taxes property owners to pay for the following services:

Street services: $221,370
Executive director: $93,600
Admin: $31,600
District identity/marketing: $23,288
Total: $369,858

Source: Fillmore Community Benefit District 2011-12 budget

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