A proposal to use financial incentives to help preserve longtime San Francisco businesses passed on Tuesday.
Proposition J will create the Legacy Business Historic Preservation Fund. Under the proposition, legacy businesses will be granted $500 per full-time employee. Building owners who lease to legacy businesses for at least 10 years could also receive an annual grant of $4.50 per square foot of leased space.
Prop. J expands the definition of a legacy business to include businesses and nonprofits that have been in the city for over 20 years, have contributed to the history or identity of a neighborhood, or face risk of displacement because of rent increases or lease termination.
Momentum for Prop J picked up last year, after the “city’s budget and legislative analyst issued a report saying thousands of businesses would close, driven in part by commercial real estate prices,” according to KQED News. “It predicted that if current trends continue, more than 5,000 businesses would close or change locations by 2019.” Read more.
According to the San Francisco Business Times, city Controller Ben Rosenfield estimated “the measure ultimately could cost about $30 million in 25 years — just for the business grants — and another $21 million to $63 million annually for the landlord portion of the program. About 7,500 businesses could qualify as legacy businesses, and some 300 a year could receive grants.”
Opponents of Prop J “argued that the fund translated to a political handout, especially since legacy businesses would be nominated by supervisors and the mayor,” the newspaper reported. “Proponents, however, said the fund could save small businesses that otherwise may shut down or flee to new, cheaper locations amid the city’s real estate boom, particularly in the city’s unique neighborhood commercial corridors such as Chinatown, North Beach and the Richmond district.”
For his part, Harold Hoogasian, president of Hoogasian Flowers in San Francisco, said he opposed the effort. “The last thing we need in is more government intrusion into business,” said Hoogasian, whose father, Harold B. Hoogasian, emigrated to San Francisco in 1928 and soon started working in the floral industry. (Hoogasian owns his properties, but he says he could “probably apply for a subsidy, as the business does not own the property, but rather a family LLP.”)
“In my opinion it would represent the ‘nose of the camel under the tent’ of rent control, which currently only applies to residential tenancies in buildings built before 1978,” said Hoogasian on Tuesday, before the proposition passed. “Sorry if I sound cynical, but I have lived in San Francisco all of my life and seen even more radical changes occur in the name of some greater good in the past.”
