BAR: “Plan aims to end Castro retail vacancy battles”

BAR: Castro Retail Strategy project consultant Elizabeth Libby Seifel gives a thank you hug to Danny Yadegar, who administered the survey that forms the basis for the report, during a June 4 open house where preliminary recommendations were presented to community members. Behind them are members of the technical advisory group, made up of members from the Castro/Upper Market Community Benefit District, which helped with the survey. Photo: Rick Gerharter

The latest article from the Bay Area Reporter.
By Matthew S. Bajko
Link HERE.

A tiny, bathroom-less storefront on upper Market Street illustrates the ongoing conversation about how to fill vacant retail locations in the city’s gay Castro district and with what sort of businesses.

Last October Drysdale Properties, a local affiliate of Berkshire Hathaway HomeServices, had planned to move into the roughly 300 square foot space at 2324 Market Street. But before it could open its doors, it was the target of neighborhood complaints for not seeking the required permits imposed on real estate offices wanting to open in ground floor retail spaces along upper Market Street.

The zoning controls, recently made permanent by City Hall, aim to limit the number of real estate offices, as well as financial services and other non-retail uses, moving into ground floor storefronts on Market Street between Octavia Boulevard and Castro Street.

Seeking neighborhood support ahead of a hearing before the city’s planning commission this fall, Drysdale owner Gretchen Pearson and real estate agent John Oldfield made their case to Castro Merchants members last week during an information-only presentation. The business association will be asked to vote on backing the real estate firm’s permit request at a later date.

Drysdale intends to use the storefront as a satellite location for its main office on Polk Street. Oldfield addressed concerns that it would do little to activate the street, noting that he and other agents would utilize it when showing off properties in the Castro and surrounding neighborhoods.

“This office will be open on weekends. It will not be a dead space,” said Oldfield, adding that its window display of homes for sale would also attract foot traffic at various hours. “That’s part of our business model. The window space, in the way we use it, is a draw.”

Noting the lack of plumbing in the space – there is access to a bathroom elsewhere in the building – Oldfield implied it is a challenging space to lease for more traditional retailers.

“It’s been vacant for over four years,” he said.

Yet D&H Sustainable Jewelers, which is located directly across the street at 2323 Market Street, had been interested in leasing the space in order to open a watch store.

“The landlord didn’t want to talk to us because he had a more important client,” said co-owner Lindsay Daunell. “It would be perfect for us since we are across the street.”

The question of what is the most appropriate use of the 2324 Market Street retail space is not unique when it comes to vacancies in the Castro’s commercial corridors. How to fill the gayborhood’s empty storefronts, said to currently number 33, is a long simmering debate.

Arguments have broken out over everything from the recent influx of coffee shops and banks to formula retailers seeking prominent corner storefronts and the rezoning of spaces for non-retail uses.

The backers of the under development Castro Retail Strategy hope it will provide some resolution to the retail wrangling in the neighborhood.

“The trend we have been seeing is businesses coming to the district and ending up in prolonged battles over entitlements and then the planning process ends in denials,” said Danny Yadegar, the project coordinator for the retail strategy. “We want to get ahead of the businesses and begin marketing to brokers, landlords, and property owners what the community wants to see.”

The Castro/Upper Market Community Benefit District last summer launched the effort to create the strategy and has been working with the Duboce Triangle Neighborhood Association, the Castro/Eureka Valley Neighborhood Association, and the Castro Merchants group to develop it.

Last fall 1,200 patron surveys were gathered, both online and at various street locations in the Castro and along upper Market Street, to provide a better insight into who is shopping in the district and what stores people felt were missing.

As the Bay Area Reporter noted in a story last month, the surveys found that the most requested businesses included a bakery, butcher shop, and additional clothing stores, particularly for women. The number one retailer many survey takers said they wished would open in the neighborhood is Trader Joe’s, which twice abandoned sites along upper Market Street due to neighborhood concerns about parking and traffic.

Other businesses denoted by a green light, meaning they would likely draw wide public support in locating to the Castro, include art gallery space, ice cream, jewelry, men’s clothiers, gyms, veterinarians, specialty bookstores, and more restaurants with late night hours or outdoor spaces.

The stores marked with a red light, meaning they will likely generate opposition should they seek to open in the Castro, included coffee houses, pharmacies, fast food, nail salons, and financial services.

Businesses given a yellow light, meaning they would likely face divided support, included art supply stores, bars, technology stores, office supply stores, and women’s clothing shops, mainly due to questions about their viability in a historically gay neighborhood.

‘Dildo dilemma’

Due to past controversies over plans by Starbucks and Chipotle to open in corner storefronts at major intersections on Market Street, which not only led to permit denials for both chains but also more stringent rules for where formula retailers are allowed to open along upper Market, the Castro has a reputation among commercial brokers of not being inviting to new businesses, said Elizabeth Libby Seifel, the owner of Seifel Consulting hired to assist with the development of the retail strategy.

“Brokers say this neighborhood is being overlooked because there has been so much neighborhood opposition to certain uses. That has echoed out that you guys aren’t interested in new retail,” Seifel told Castro business leaders at a June 4 meeting to provide them with an update on the strategy.

Another issue is the perennial debate over the more adult-themed window displays along Castro Street, what Yadegar defined as “the dildo dilemma.”

At least one broker, added Seifel, has pointed to the more risque products on view as being “another challenge for family-oriented businesses” interested in opening in the Castro.

Andrea Aiello, executive director of the CBD, countered that it was a view expressed by a broker “who represents formula retail” and doubted the window displays were negatively impacting efforts to attract new businesses.

“I wouldn’t put it out there that brokers don’t want to come here,” she said.

What is often mentioned by brokers, said Seifel, is that “the windows of the Castro aren’t really that interesting, inviting, or dynamic.”

One of the recommendations expected to be in the retail strategy calls on the Castro business community to develop a brand that it can market, or select several marketing messages aimed at different groups of patrons. Ideas already cited include it being a pet-friendly neighborhood and a late-night destination.

With a number of new mixed-use housing developments to be built near the Church and Market streets intersection, the consultants have suggested focusing first on attracting businesses to empty storefronts in that vicinity as a way to test out the retail strategy.

“We want this study to be actionable and for you guys to do something with it,” said Seifel, who suggested one benchmark of its success could be looking to see how many vacancies remain after one year.

Key to seeing it be implemented is having buy-in from property owners, argued jeweler Daunell, who continues to look for nearby space to rent to open a watch store.

“I hope there is some accountability on the part of landlords and they understand this project,” she said. “If they don’t, it all goes moot.”

The final Castro Retail Strategy report is set to be unveiled in mid-June and will be posted to the websitehttp://www.castroretail.com/.

About the Author: Danny Yadegar

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