June 21, 2013

The Chips Don’t Fall In Chipotle’s Favor: Request Denied

2100%20Market%20Street%20Rendering%20X.jpg

Following the Planning Department’s reasoning and recommendation, San Francisco’s Planning Commission has denied Chipotle’s application to renovate and occupy the empty one-story building at 2100 Market Street, formerly home to "Home" which vacated the building in 2011.

2100%20Market%20Street%20Site.jpg

Keep in mind that the Commission’s rejection of Chipotle’s request was based on Chipotle being a formula retailer, not based on there being a better use for the Upper Market site which is zoned for development up to 65-feet in height.

First Published: June 21, 2013 12:00 PM

Comments from "Plugged In" Readers

Horrible mis-use of power by the Planning Commission. So another dilapidated, empty retail space will remain vacant once again.

Posted by: Futurist at June 21, 2013 12:17 PM

Nothing wrong with this site a bulldozer and 8 stories of condos would not fix. The current building is a gross under utilization of the site.

Posted by: SFRick at June 21, 2013 12:52 PM

This is so bad. What is wrong with a well-run, chain restaurant going into that busy street corner? The food is excellent there and the renderings of what they might have done would have enhanced the building and been a welcomed change for the currently abandoned space. Rents are so high in SF - what mom and pop outfit can make a go of that? Not many. Guess we'll just have to walk past another boarded up restaurant space waiting for who knows what, who knows when. Great job, SF Planning Commission!

Posted by: mikie415 at June 21, 2013 12:55 PM

The commercial landlords in the Castro deserve some blame here. The incentives are broken if the owners can afford to sit on empty spaces for years while they play chicken with the planning department and the neighborhood suffers. Maybe we need higher taxes on vacant buildings.

Posted by: heynonnynonny at June 21, 2013 1:00 PM

I'd say it would be a perfect place for a CVS pharmacy or a Walgreen's. [/end sarcasm]

Posted by: lol at June 21, 2013 1:08 PM

That area doesn't need any more damn burrito joints. It's not the chain concept that bothers me; it's the fact that we can't get more creative with what type of food service goes in there. Ultimately, I agree with many of the posters, though -- that single-story eyesore of a building is a terrible under-utilization of that property.

Posted by: OP at June 21, 2013 1:16 PM

All together now. Comrade Brahma, you can lead us:

Stand up, damned of the Earth
Stand up, prisoners of starvation
Reason thunders in its volcano
This is the eruption of the end.
Of the past let us make a clean slate
Enslaved masses, stand up, stand up.
The world is about to change its foundation
We are nothing, let us be all.
|: This is the final struggle
Let us group together, and tomorrow
The Internationale
Will be the human race. :|

Posted by: formidable doer of the nasty at June 21, 2013 1:16 PM

Bravo! We already experienced the 'flavor of the moment', Boston Market, die in that location.

Posted by: Marten at June 21, 2013 1:20 PM

Go higher here. Use the 65'.

Posted by: DanRH at June 21, 2013 1:26 PM

build, baby, build!

Posted by: david m at June 21, 2013 1:29 PM

Wasn't there word a few months back that the building the funeral home is in next door is for sale or lease? I thought I saw something about that, but either way, for those who are calling for building in that space, if the developer were to get both lots a huge complex could be built.

Posted by: DS at June 21, 2013 1:49 PM

Marten,

Chipotle's application should be rejected because Boston Market died? LOL. I guess a non-chain restaurant should also be rejected, given that Home closed shop.

Posted by: NJ at June 21, 2013 1:49 PM

Why do these stories never include the name of the landlord?

Who owns this property? Have the property taxes been paid? What else does this person (or entity) own?

How can the owner afford to keep that place vacant for two years? If the rent was lowereed, a locally owned business could go in there.

If the ocmmunity want the buidling torn down and replaces with six stories of housing, the owner should be the target for those comments, not the Planning Commission.

Posted by: bgelldawg at June 21, 2013 1:51 PM

I'm in favor of building higher, but I'm not at all in favor of insisting that everyone must build higher now. If you can find a valuable use for a low-rise structure now, more power to you-- and if it ends up getting built up 20 years from now, maybe in 20 years we'll have a better understanding of what is good to build, and the result will be better.

Posted by: Alai at June 21, 2013 1:52 PM

I wonder if planning's decision was somewhat forced by their recent previous decision to turn down Starbuck's request just up the road. They would not want to appear to be making capricious decisions.

Posted by: The Milkshake of Despair at June 21, 2013 1:55 PM

The Commission's decision was entirely appropriate. There is a Formula Retail Concentration Index policy, ink barely dry as it was adopted only a couple of months ago, which (summarizing) says there's already enough chain stores around that location and that, absent some kind of very extraordinary circumstance (which isn't the case here) no formula retail will be approved for this location.

This is the gateway to the Castro, and the last thing the neighborhood needs is a big fast food chain there, further creating the impression that the neighborhood has nothing to offer but the same cookie-cutter stores and restaurants that grace every strip mall in America.

Hopefully the property owners (a bunch of siblings from a Bay Area family) will get serious about talking to multiple local restauranteurs who have expressed interest. As a bonus, a local (non-Formula Retail) use would not need to go through an extensive Planning process and approval and could begin work toward opening something there very quickly.

The message for commercial property owners in Upper Market is that if the FR concentration index methodology shows that putting a FR chain in your property would exceed the threshold, don't bother wasting your time and and money on a big chain, it ain't going to be approved. Get serious about talking to local businesses, you'll fill your space a lot sooner and everyone will be happy, except those who don't think that some unique neighborhood character is important.

Posted by: Dubocian at June 21, 2013 2:11 PM

Who owns this property? Have the property taxes been paid? . . . How can the owner afford to keep that place vacant for two years?

Presumably the property taxes are next to nothing, thanks to Prop 13. Yet another reason that enormous subsidy is terrible, policy-wise.

Posted by: shza at June 21, 2013 2:17 PM

Who owns this property?…What else does this person (or entity) own?…How can the owner afford to keep that place vacant for two years? If the rent was lowered, a locally owned business could go in there.
All good questions. The answer, of course, is that Prop. 13 is "distorting" the normal incentives that would be at work in this matter.

I'm not a tax attorney, but I'm guessing that the owner probably can also take losses on this vacant place and reduce their taxable income on a dollar-for-dollar basis against profits made on their other properties while they hold the neighborhood hostage.

The solution to commercial landlords holding properties vacant so they can get over market rents from non-local tenants is aggressive anti-blight enforcement. But while I'd hope "naming and shaming" landlords that deliberately hold properties vacant while they hold out for "wishing" rents would be at least socially useful, a lot of these people are absentee and just don't care.

Posted by: Brahma (incensed renter) at June 21, 2013 2:20 PM

Dubocian, that was succinct and very well said. Hopefully that sentiment will make it from your keyboard to the landlord's ears.

Posted by: Brahma (incensed renter) at June 21, 2013 2:24 PM

"I'm not a tax attorney, but I'm guessing that the owner probably can also take losses on this vacant place...".
Chipotle was almost certainly paying rent during this entire application phase. The owner has to provide a letter saying that they approve of the store/use, and they wouldn't do that without money!

Posted by: Jeremy at June 21, 2013 2:26 PM

Yea, thanks Dubocian for telling us all that The Castro has a "gateway". Who knew? So is there a gateway also coming from the other 3 points of the compass?

And thanks for telling us what the neighborhood needs or doesn't need.

More socialist propaganda, and meanwhile another great location will remain vacant and boarded up.

Posted by: Futurist at June 21, 2013 2:31 PM

"Chipotle was almost certainly paying rent during this entire application phase"

Actually that's unlikely. I was a real estate agent for a few years and did a number of commercial leases. In the leases I saw the tenant never paid rent during the permit application process. The lease was always signed with an out if the permit was rejected. There may have been a refundable deposit, but even that was usually held by the agent until the permit was approved. In fact, in most retail leases the tenant would get a few months of free rent after permits to allow them to build out the space.

Posted by: lyqwyd at June 21, 2013 2:57 PM

Why does everyone get so excited about another 4 to 8 story box? SF builds the blandest of condos. A nice little one story restaurant would go nicely here. A patio. Some trees. Should every corner look like 16th and Market? I hope not.

Posted by: Mike at June 21, 2013 3:12 PM

^1 story buildings along our main street kill just a little bit of me every time I have to walk past them. I lose about a week of my life each time that I pass the Safeway.

Posted by: anon at June 21, 2013 3:23 PM

Safeway is a different story. That's a misuse of space.
Maybe you should try Manhattan?

Posted by: Mike at June 21, 2013 3:34 PM

Mike - You every right to feel that way. Just don't go bitching about the high price of renting/buying residential real estate while you sit at a 1 floor restaurant along a major transportation corridor.

Posted by: Fishchum at June 21, 2013 3:56 PM

@Mike - Manhattan would be fine if the weather didn't suck. I'd just like for us to have a little slice on the west coast.

Posted by: anon at June 21, 2013 4:06 PM

I'm not bitching. If I'm going to pay that much for a place to live, the city had better have some texture, not just a canyon of uninspired condo boxes.

I would rather see very tall buildings. Not squat little 6 story boxes everywhere.

Posted by: Mike at June 21, 2013 4:10 PM

Everyone who is talking about building up there should be banned from this site. That is a tiny space for a pbase of an 8 story building. Get real and or shut up in order to read what your knowledge superiors teach you.

Posted by: Anowned at June 21, 2013 4:36 PM

^Because clearly there are no places with a base this small of buildings of 8 stories or taller. None whatsoever.

Posted by: anon at June 21, 2013 4:44 PM

The building that is being completed at Noe & Market has a rough footprint of 70x90 (guesstimate)

The footprint of the property (including the current parking spaces) is almost double that.

Posted by: lol at June 21, 2013 5:00 PM

Cheering for the Planning Commission denying a store then accusing the owner of being a tax-evading blight monger for holding it vacant is:

a) post ironic
b) delusional
c) typical SF self-righteousness
d) all of the above

Posted by: aghast at June 21, 2013 8:22 PM

Chipotle is not a good fit with the urine soaked streets that surround the building.

Posted by: MikeNSF at June 21, 2013 9:03 PM

A board member from Castro CBD has said that this location has only had one other restaurant group express interest in the last two years, and the BAR reports that the landlord is only seeking the same rent as s/he got from Home.

No greedy landlords, no mom and pops expressing interest.

Posted by: wc1 at June 22, 2013 8:01 AM

I am chalking this mostly up to a tactical error by the applicants. Next time, they should try this:

[IMG]http://i39.tinypic.com/4u6rt0.jpg[/IMG]


Posted by: soccermom at June 22, 2013 10:37 AM

Link to backup your statements, wc1? Didn't see that info on the BAR articles I've read.

Posted by: Dan at June 22, 2013 11:06 AM

"the BAR reports that the landlord is only seeking the same rent as s/he got from Home."

Apparently Home was overpaying. So what? If you only get one bid in two years, the market is telling you to adjust your ask.

Posted by: heynonnynonny at June 22, 2013 2:45 PM

How is the owner responsible for the building being empty? They were trying to rent it but the planning commission and the comrades did not let him or her rent to Chipotle.

So what if the owners had gotten 100 offers in two years, each one of them would have had to been reviewed and denied by the City.

The planning commission and the "People" are to blame for this building staying empty, along with many others. Own your politics SF and stop blaming prop 13 and landlords for empty buildings.

Posted by: grumpy at June 22, 2013 10:44 PM

Grumpy: for someone who slings around "comrades" as an insult, you show a pretty weak grasp of how price discovery works in a functioning market.

Posted by: heynonnynonny at June 23, 2013 11:09 AM

Functioning market?!? That's a laugh.

Comrades is the right term to use here. This is as close to a communist plan economy as you'll ever get in this country. "The market doesn't need a Chipotle, the market needs what we say it needs." Never mind that the market hasn't produced any alternative proposals for the use of the property.

Posted by: gentrified is a dirty word for clean at June 23, 2013 11:33 AM

In a communist state, there would be no landlord except the state. This is called zoning. Now that the landlord knows his property is not zoned for a fast food chain, he will adjust his rent expectations accordingly. Given that his property taxes are low due to Prop 13, he should still do well.

Posted by: Dan at June 23, 2013 12:02 PM

Or he will sell his property to a developer for a handsome property.

Posted by: Dan at June 23, 2013 12:05 PM

^He "knows" no such thing. He now knows that for a fast food chain to work, he needs to conduct more "community outreach" (AKA bribes of money and/or other goodies to Planning) before submitting the proposal. He'll likely touch base with CVS, as they obviously know who to pay off.

Posted by: anon at June 23, 2013 12:09 PM

Agree with anon - if the property is not zoned for a fast food chain, it should um, be not zoned for a fast food chain. In other words, the zoning should be written to disallow fast food chains. As it is, it's entirely discretionary and random, thus subject to all sorts of abuses and corruption.

(And in this case I agree that the corruption leads to the what I like seeing happen, but that's no excuse - if we don't want a fast food chain here it should be prohibited, not decided on a case-by-case basis)

Posted by: anonymouse at June 23, 2013 12:39 PM

the word market cannot apply in this City, that's how much you know about the "free market" you are trying to throw into the equation. In a free market you wouldn't have a planning commission dictate how private resources would be utilized, you would not have an opinion poll where all opinions are welcome to plan what next building goes up and where, and you wouldn't have a City trying to redistribute wealth in order to equalize societies injustices.

Stick to your socialist studies, you don't know what market means. Hey nanny nanny, get it anyway you can.

Posted by: grumpy at June 23, 2013 2:14 PM

Please point out which zoning restrictions this proposal violated.

Oh hell, I'll give you the answer: None!

Of course city government is entitled to engage in city planning. But it needs to be a deliberate and transparent process, not through arbitrary opinion-based decisions that invite corruption. This is shameful.

Posted by: formidable doer of the nasty at June 24, 2013 9:35 AM

^ the formula retail zoning restriction.

Posted by: lyqwyd at June 24, 2013 11:21 AM

^There is no formula retail zoning restriction. There's a clause that initiates a hearing for any neighborhood that has adopted formula retail restrictions, but then the decision to go/no-go is entirely in the hands of planning - and as we've seen, completely arbitrary.

If there were an actual restriction, I'd be totally fine with it.

Posted by: anon at June 24, 2013 12:44 PM

restriction:

"Something that restricts; a regulation or limitation."

restriction is different from a ban, and I believe entirely the appropriate word in this case.

Posted by: lyqwyd at June 24, 2013 12:59 PM

Some folks asked about property taxes on this parcel, here is what the Assessor says it is worth:

Assessed Values:
Land: $348,617.00
Improvements: $1,514,814.00

So that will run the landlord about $20k a year in taxes to let it sit vacant.

Posted by: chacho at June 24, 2013 1:47 PM

Every San Francisco neighborhood needs its Pagoda Theater.

This will the the Castro's

Posted by: Toady at June 24, 2013 5:16 PM

Posted by: SocketSite at April 16, 2014 8:57 AM

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