Expand protections for small businesses

Jake Spade controversy shows need for more reforms

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EDITORIAL Corporations and chain stores are crafty, and they can always find creative ways to get around whatever barriers that cities and counties erect to protect their local small businesses. And such barriers are important because most large corporations enjoy economies of scale, the ability to absorb sustained losses while gaining market share, and other unfair competitive advantages.

San Francisco voters and legislators have approved and expanded so-called formula retail legislative protections over the last decade, requiring stores with 11 or more locations that want to open in neighborhood commercial districts to obtain a conditional use permit, allowing the public to weigh in and city officials to reject disfavored projects.

But as we observed in last month's saga involving chain store men's clothier Jack Spade's planned move into the old Adobe Bookstore space on 16th Street near Valencia, it's still too easy for deep-pocketed corporations to make stealthy inroads into some of San Francisco's most beloved and sensitive commercial districts.

First, Jack Spade disguised its corporate connections in pulling a building permit, then it won over the zoning administrator by claiming only 10 stores (despite the fact that it's a national chain owned by Fifth & Pacific, aka Liz Claiborne, which also has a string of Kate Spade women's clothing stores), and then, even when activists and small businesses won the argument and a 3-2 vote by the Board of Appeals on Aug. 21, that wasn't the supermajority needed to overturn the flawed decision.

As they say in the neighborhood: That shit ain't right.

Clearly, something needs to change because Jack Spade isn't the first, and it won't be the last, corporate-owned chain store that wants to move into the Mission and other gentrifying commercial districts in the city, including Western SoMa (where development forces have been unleashed by the city's approval of its local area plan earlier this year), Hayes Valley, Polk Gulch, and the Divisidero corridor.

And when one deep-pocketed chain store moves in — a corporation that is willing to invest early in an up-and-coming neighborhood — it creates a strong upward pressure on commercial rents that forces out small businesses, nonprofits, and community-based organizations. And then residential rents follow suit.

Only governmental and political will can break this pattern, and it's a pattern that must be broken if San Francisco is going to retain its economic vitality. Study after study shows that small businesses circulate their revenues within the community instead of siphoning them off to Wall Street and the corporate headquarters, and that helps the overall local economy.

Flawed ideas about consumer choice and the supposed wisdom of the supposedly free market shouldn't distract San Francisco and other cities from focusing their economic development efforts on local small businesses, a sympathetic symbol that gets disingenuously trotted out in the rhetoric of Mayor Ed Lee and his allies even as he stacks the Small Business Commission with bankers and right-wing ideologues.

Now, with the Board of Supervisors back from its summer recess, is the time to redouble our efforts to resist corporate dominance. That should include support for Sup. Eric Mar's legislation to change the metrics for what's considered "formula retail," support for Sup. London Breed's efforts to expand protections in Hayes Valley and Sup. Jane Kim's similar efforts along Market Street, and consideration of changing the vote threshold for the Board of Appeals and giving neighborhoods more tools to resist stores like Jack Spade.