South City courting small business 

Offering itself up as the reasonable, down-to-earth alternative to San Francisco’s high business costs, South City is forming a task force to attract small businesses from its pricey northerly neighbor.

Cities such as South San Francisco, Brisbane and others on the Peninsula, with their proximity to the airport and lower prices, are seeking to benefit from recent increases in the cost of doing business in The City. The task force, the brainchild of South San Francisco Mayor Rich Garbarino, would reach out to smaller businesses being priced out due to costs of mandated business fee to support a San Francisco-run health care program as well as paid sick law passed by voters last November.

Business experts have described the trend of the smaller businesses, whether manufacturing, light industrial or other types, leaving The City as an "exodus," as they relocate to cheaper regions of the Bay Area.

Garbarino said he formed the collaboration "with the goal of seeing if we can get [small businesses] to relocate in South San Francisco where frankly the business climate might be a little bit more friendly than San Francisco."

A fourth-quarter 2006 market report from NAIBT Commercial, a commercial real estate firm, showed South San Francisco’s vacancy rate for office space dipping from 12.2 percent during the fourth quarter 2005 to 8.9 percent. The average asking rate for office space was $2.47 per square foot compared with The City’s $34.26 during the same time.

The task force, which includes the South San Francisco Chamber of Commerce and Economic and Community Development department, meets for the first time today as collaborators, Garbarino said.

The task force will likely focus primarily on business outreach, highlighting South City’s unclogged streets, parking, proximity to San Francisco International Airport and rail stops, the mayor said. It would also target retail, service and small manufacturing companies to occupy space spread out over the city, Garbarino added.

Positive business growth in South San Francisco can be seen by the arrival of Starbucks and Peet’s Coffee downtown, South City Chamber of Commerce CEO Maria Martinucci said, because those companies occupy spaces in and around growing areas.

Industry analysts say space in South San Francisco is tight but more development, such as the new Mandalay Terrace buildings with their combined square footage of 639,000, slated to begin construction in May, could help ease increased costs due to demand.

Gregg Domanico, a managing partner specializing in life science space with NAIBT Commercial, said the market was "really tight" for Class A office space in South San Francisco but called it a "healthy market."

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