400 Castro Street Corner

Philz Coffee, Hamburger Mary’s and SoulCycle are all angling to land on Castro Street and the one hearing which could clear the way for all three to land on the street has been scheduled for December 4.

As proposed, SoulCycle will take over the iconic Bank of America building formerly occupied by Diesel at 400 Castro Street, Philz Coffee will take over David Chiu’s former campaign office space at 549 Castro Street, and Hamburger Mary’s will occupy the Patio Restaurant and Café space at 531 Castro Street which has been vacant for over a decade.

With eleven or more locations world-wide, each of the three businesses are considered “chains” and subject to the San Francisco’s Formula Retail restrictions.  And as such, San Francisco’s Planning Commission will need to deem each business “necessary or desirable” for the neighborhood in order to proceed as proposed.

83 thoughts on “Three Chains Angling For Castro Street Openings”
  1. It is ridiculous that any of these 3 would be considered “chains” – and I say that as someone who doesn’t even like Philz. (“I dislike their coffee, but will defend their right to sell it.”) Each of these 3 situations constitute prime evidence of the ridiculousness of the one-size-fits-all “chain” regulations.

    1. Second that. I’ll never go to any of these places (Philz is not that good, nor was H. Mary’s, and Soulcycle . . . da fuh?). But refusing to let them move into vacant storefronts, hire people, and operate businesses that, presumably, will have a customer base? Insanity.

      1. Exactly – both the old B of A building and the old Patio Cafe have been vacant for years – how is it better for the neighborhood to keep them vacant?

        Heck, I think Harvey Milk would’ve been ecstatic to learn that national chains wanted to move into and be associated with the Castro.

        1. The BofA building has not been vacant for years. It has been continually used since BofA left it as a box office for the Gay Men’s Chorus and various clothing stores, including one very long term tenant. As someone else noted, the business trying to move in there now is not a chain.

          Harvey Milk has been dead for 36 years. What he would want today as an 84 year old man is impossible to determine. What is known is that during his lifetime he wanted commercial rent control for the Castro, not chain stores.

          1. The Diesel in the BofA building closed in Jan. 2013 – that’s 22 months, which I think in most minds would qualify as “years”.

            As for Milk, I’m not sure how Milk’s 1970s views on rent control apply to today’s discussions about commercial chains. My point – one made speaking as a gay man of several decades’ span on this earth, and as someone who worked as a reporter at a gay community paper at the start of the 1990s – was that I think it’s a pretty easy assumption to say that *any* gay activist in the 1970s would be very excited to hear that national companies were actively seeking the LGBT market. I remember when Miller Beer first sponsored gay pride events and rodeos, I remember when the first car ads featuring gay couples aired. People were amazed and thrilled.

          2. That’s odd. I remember “gay activitsts” in the 70s complaining about corporate interests appearing a Pride, etc. I’m sure people were happy that Coors was dropping their anti-gay efforts (only to continue and redouble them privately among the Coors family owners), but they weren’t happy about them co-opting Pride. There’s a difference between openly marketing to us (yay) and using us (boo).

        1. Thanks for once using your views as the baseline for what everyone should want. Why must you always be polemic, why can’t you just say “I disagree, I like it, but to each his own”?

          For some of us, when we want a cup of coffee, we just want a cup of coffee. We don’t want an unwashed hipster giving us condescending looks because we can’t decide between the Ethopian Wildebeast Hearth Roast and the Columbia Fair Trade Empowerment Blend…. nor do we want to wait 5 minutes for said sneering hipster to brew said cup. If that’s what you like, then by all means go ahead, to each his own. That’s great, that’s economic diversity, and that’s why Dobbs and I both said that we support Philz’ application *despite* not liking their coffee. But not liking their coffee does not make me “wrong”.

          1. My sister the Coffee Snob riposted:

            That’s the problem in America. everybody wants everything instant and cheap. No sense in waiting a couple minutes for something good, when you can have cooked coffee readily available at starbucks.

        2. Philz coffee is okay – not terrible but nothing you can’t get a thousand other places. And it’s way overpriced and the service is awful. Glad you like it, anon. I hope it opens in this vacant spot and you spend a lot of money there.

          1. Harvey Milk was an important historical figure, but what he would want or not want for the neighborhood is completely irrelevant (just like it is irrelevant what any other dead person would want). What is relevant is what both the current residents of the neighborhood and the rest of the city would like to see there.

            As someone who lives relatively close by, I would just like to see a business that people want to patronize–and enough with all the trendy “farm to table” restaurants and other fadish spots–just because something is “locally owned” does not mean it cannot be pretentious and overpriced.

        3. I love Philz too. But there is absolutely nothing moral about one’s choice in coffee. Fast and cheap or slow and served by a hipster or even tea or, gasp, a Slurpee from 7-11, if your ego is based upon what you drink, you are pretty much a hipster douche bag by definition.

      1. The Philz on 18th is a tiny location compared to any of their other sites. 24th and Douglass is probably the second smallest. In San Mateo they occupy a large building that sits on its own pad in a shopping center (which I believe to be one of their newest locations). It’s likely that a bigger location would work better for them.

    2. Hyperbolic. It’s not “one-size-fits-all” when there’s a mechanism to gain a variance. Let each obtain approval upon the basis of their individual merit.

  2. Just FYI, Soulcycle is not yet considered a chain, but it requires a hearing anyway for exceeding the use size. Once the new FR legislation goes into affect, “personal service” establishments will be evaluated as chains.

  3. This whole chain store ban baffles me. I can understand having some limits, but look what happened to with Jack Spade. Part of the pushback was that they wouldn’t “serve the community” because of how expensive the clothes were. How can a new independent business pay those rents and still sell cheap goods to “seve the community?” Seems like an untenable situation.

    1. Yeah, the whole “serve the community” idea is ridiculous considering the astronomical price of housing in and around the Castro. If you can afford an 800K condo then you can probably afford to shop at Jack Spade.

      1. It’s more, if you can afford a 1M condo and buy an 800K condo, you can afford Jack Spade. I know some people who can afford nothing but their condo.

    1. That really shows how restrictive and silly the restriction is…. could there be a more appropriate restaurant for the space? It’s an affordable sit-down restaurant, appropriate for the neighborhood and a similar use to the prior. Just because it has 12 locations (per the website), it gets caught up in extra red tape.

    2. Sorry, Paul, but Hamburger Marys died 15 years ago, when the original restaurant by that name closed in San Francisco. What is proposed now is quasi-nostalgia but will be nothing like the real thing. Hamburger Marys was a South of Market (not Castro) independent edgy diner, most popular as a place to sober up or continue socializing after the bars closed, although it also served lunch. It became so popular that it sold franchises so other people could use the name and copy the funky style of mismatched dishes, etc.
      What is proposed now shares nothing with what once was, other than the name. For example, it will have a full bar. The Hamburger Marys that people remember (or have heard about) did not sell liquor.

      This is a chain. And when the Castro looks like every other neighborhood in the USA, people will have little reason to visit it.

      I would like to think that we did not go through ten years of Les Natali keeping that space empty so we could have the same restaurant that you can go to in Kansas City, Milwaukee, Jacksonville, or Denver – all places that have this chain, along with nine other cities.

      1. +1, B. Hamburger Mary’s is possibly the worst choice that could be made. I understand that Les Natali can do whatever the f he wants, but really. The Patio was truly iconic in its day, what’s wrong with something local and unique? I would vote to block it.

        1. If the choice is between Hamburger Mary’s and something local and unique, I would understand this position. But the choice is between Hamburger Mary’s and a large, empty space.

          1. What other options are you aware of that are on the table? I don’t mean dreaming and speculating, but viable and available options?

          2. +1. and yes, the choice does appear to be one between HM and vacant space, given that the old Patio space has been empty for years (and years).

          3. The only choice is between a chain and nothing? Seeing as “nothing” produces zero profit, I don’t quite get why the building owner needs or wants to squeeze every dime he can out of a new tenant (thus essentially limiting tenants to those who benefit from the economics of a chain).

          4. It’s his building. Unless you want the City to take it through eminent domain, he can decide how to lease and manage it.

          5. Of course he can (within the rules about upkeep, etc.), but I can still think he’s a d!ck and say so.

          1. They are about equivalent to me, frankly. Not liking one franchise doesn’t mean I like another franchise. I would wince at either one, really. Neither has anything original or interesting to offer the neighborhood.

      2. Is there a Hamburger Mary’s in every other neighborhood in the USA? NO. (Not that I am trying to promote it as the end all be all, but it is hardly something as common as a Walgreens or a McDonald’s).

        Have you even left the Castro in a while? Apparently not. Kansas City, Milwaukee, Denver, and even Jacksonville all have their own interesting and very attractive neighborhoods, and like most cities they have numerous locally-owned businesses that you cannot find any place else, even though all those cities also have chains, too.

        There is nothing inherently wrong with chains, or inherently wrong with having some chains in the Castro. And, having some chain stores does not detract from what the Castro is about (hint, if you think the Castro is just another neighborhood commercial strip, you need to brush up on your LGBT history), nor do a few chainstores make the Castro look or feel like just any other neighborhood in the U.S.

        Your parochial views of the world is rather stifling. Get out there and see a little bit of the rest of the world.

  4. Local merchants oppose chains because chains have deep pockets, and local businesses fear rent increases that only chains can afford.

    1. In truth, local merchants fear chains because they provide competition. Local merchants would rather face less competition so that they can charge higher prices and provide poorer service.

      1. I think the truth is a mix of the two. A lot of local stores provide great, specialized service, and it’s true that big chains get economies of scale that result in (arguably) unfair competition. Chains also bleed profits out of the community, either to a particular family (if they’re privately held) or a diffuse group of stockholders. I saw this first-hand in my hometown, when the local grocer (who funded band uniforms, sponsored local food drives, etc.) was replaced by a national grocer who did none of that.

        BUT, that said, national chains and their marketing can drive foot traffic that in turn can support a neighborhood as a whole. Look at Chestnut Street; I’m guessing that there are a lot of locally owned businesses that are perfectly happy to see all the Yuppies coming in for their Starbucks and their Lululemon. My guess is that Chestnut would look at lot more like the Castro if it weren’t for the chains. And even if there weren’t a multiplier or add-on effect, it simply cannot be the case that keeping a storefront vacant for *years* in the vain hope that a local business will start up, is better than allowing a chain to start paying rent, hiring employees, and buying ad space.

        If the concern is simply economic competition, then the better way to address this are sliding fees, not outright bans. Make the permits more expensive for national chains; give local businesses tax breaks; whatever – but don’t throw down a one-size-fits-all ban.

        1. “it simply cannot be the case that keeping a storefront vacant for *years* in the vain hope that a local business will start up, is better than allowing a chain to start paying rent, hiring employees, and buying ad space.”

          What makes you say that Les Natali has been keeping the former Patio space empty for more than ten years because he was hoping a local business would start up? That is not what happened here. Natali expanded the space, evicting two small local independent retail shops in the process, and did whatever he wanted without concern for city permits, code or zoning requirements, or community needs.
          He then sought a tenant to pay for the restaurant space while Natali would run the bar and keep all the bar proceeds. Does this sound reasonable to you? Not surprisingly, he could not find anyone to enter into such a business agreement, so the place sat empty.

          Now Natali is trying to use his ineptitude and apathy as a bargaining chip – make an exception to the rule for me or I will continue to blight the neighborhood with this large empty space. His bad behavior should not be rewarded. The Castro deserves better. If Natali can’t run the building, he should sell it to someone who can.

          1. So now the City is going to decide which property owners “properly” run their businesses? Or will there perhaps be a committee of neighbors, a Castro Hills Neighborhood Association, for example, which oversees all of the commercial activity in the neighborhood and can, using lengthy and complex and expensive procedural methods, “punish” property owners who do not perform appropriately?

            How will that work, exactly? Life is sometimes not “fair”. There are sometimes shitty property owners. If the property were truly a blight, then use code enforcement to clean it up. Is it your role as a neighb to decide that this landlord is not acting appropriately and to use arcane rules that are found nowhere else (that I am aware of) in the United States to discriminate in this particular way?

      2. Both Dan and you can be correct at the same time.

        I’m not sure what the answer is. The restrictions seem onerous and ever more ridiculous, but Dan is correct that dominance by national and regional chains does impact rents…and neighborhood character.

        I think you are also being somewhat contrarian in the idea that chains are automatically somehow better. Starbucks versus Sightglass? Please. If that is your definition of better service and product, than as a coffee snob I am not sure if I would rely on your Yelp! review. 🙂

  5. It’s just protectionism and commercial rent control for existing businesses. Small business advocates like Rick Karp and Stephen Cornell admit as much in their frequent disingenuous testimony at the planning commission.

  6. and within a pink thong’s throw of all three are multiple Bank of America, Wells Fargo, Chase, Walgreens, CVS, Starbucks, Peet’s, etc., etc.
    The inconsistency is baffling.

      1. They weren’t grandfathered in. They were allowed under a “oh, what harm can letting in one chain store do?” theory. Followed by a “oh, what harm can letting in another chain store do?” theory. Etc., etc.

        1. What revisionist history are you trying to push? Bank of America has been in the Castro since 1922! Probably before your grandparents were even born. Walgreens opened in the neighborhood in 1980. There was never any theory of “oh, what harm can letting in one chain store do?” These were simply everyday stores that regular residents of the neighborhood patronized.

          It is true that CVS is new, but it is simply occupying a long vacant space that was previously occupied for several years by another major chain store, Tower Records.

          This phony notion that chain stores are new to the Castro or somehow not part of its makeup is quite laughable. It is funny that the neighborhood can get slick and pretentious restaurants like Hecho attracting yuppie patrons and further gentrification, and this causes no problem with anyone (aside from the original racist name), but somehow a chain store threatens the “soul” of the neighborhood? Give me a break! I would take another CVS over another high falutin “locally sourced” restaurant any day.

      2. I think the “extra hurdles for chain retail” ordinance was enacted in 2007. All these places were there long before that – except the new CVS on Market St. that jumped over the hurdles.

    1. I think it’s because they’re classified as “community-serving utility businesses”. But yea… enough with banks and drug stores.

  7. Except for the two Peet’s Coffee locations (Halstead and Broadway) , all of the retail, restaurants, bars and clubs in Chicago’s “Boystown” are not chains and are thriving. How do they do it? While visiting there I noticed they had a lot of the type of stores the Castro used to have, all independently owned, most with very creative merchandise or food, and all created by locals in the neighborhood..
    I don’t think Chicago’s Lakeview neighborhood has nearly as many restrictions as the Castro has, so what happened here and why is it working there?

  8. The chain policy in this city is self-serving and stupid. Almost every neighborhood has chains from national chains like La Boulange (Starbucks), Starbucks itself to infinity, Walgreens, Safeway, every imaginable bank, not to mention the local chains. I couldn’t care less if you support chains or independents but do the math when it comes to basic economics and rent. Certainly beats having empty storefronts.

  9. You have answered your own question regarding north Halsted street in Chicago. The business owners purchased their property back in the early 1980s when the neighborhood was very sketchy. The owners of Roscoe’s and SideTrack (to name two I’m very familiar with) started out with one storefront and expanded as the business grew.

    Les Natali did the same purchasing his Castro properties such as The Patio. The neighborhood has played the waiting game and lost. Natali can sit on empty storefronts because his acquisition costs were low, and wait for surrounding rents to rise even further.

    Even a “evil” chain restaurant would be better than nothing.

  10. Sigh… sounds like Castro is headed in the direction of Fisherman’s wharf…

    The problem with chain stores is that they can afford to operate locations as loss leaders. That may be the best argument, and the only argument in opposition of chain stores, but it’s sufficient nonetheless.

    An empty storefront is not evidence of a lack of interest by a local businessman wanting to open a store there. It could just as easily be an example of a holdout landlord.

    1. And we can all agree that this is not a good thing, but does not that mean giving the power of the State….or some neighborhood “committee” the right to force this issue?

    2. Hamburger Mary’s isn’t Burger King. I highly doubt they can operate any of their 12 stores at a loss just for marketing or to be competitive like the huge national chains can.

    3. One empty storefront in the span of a few blocks *might* equal an opportunistic landlord, holding out for higher rent. However in this instance, with multiple empty storefronts in a 2-block stretch of a supposedly vibrant neighborhood in this City (and this City being one of the wealthiest places on the planet), I think one is hard-pressed to put it down to “a holdout landlord”.

      1. Ok, but what is it, then? Surely demand is not so low that landlords can’t find anyone to occupy the space at any price.

  11. SoulCycle? LOL. I guess you can call it gay progress, equality, or whatever you want, when the Castro is now as boring and mainstream as the Marina.

    1. I would hardly call SoulCycle “mainstream”, a “cult” maybe, but not yet mainstream. We do not pick and choose the businesses that come to the Castro. SoulCycle expressed interest for the old Bank of Italy/America building. Very few businesses like that building. It is an awkward building. I am glad that SoulCycle is willing to take a chance. I wish them success there. With the Muni station, it should help them reach lots of people from various neighborhood, and overhaul help businesses around. That is probably why local neighborhood associations welcomed SoulCycle there.

  12. Philz coffe is a solid B-. One step above Starbucks, but 10 other coffees in SF are better. Try red bird espresso. Awesome

  13. A decade ago, if we were talking about chains in the Castro, the conversation certainly wouldn’t be on a real estate blog. Let’s face it, the Castro is a lot less fun than it used to be.

  14. Good point, frog. That’s why, as a long time merchant in the Castro, (since 1987) I am actively opposing Philz’ expansion plans in the Castro. They now have 17 stores and Phil’s son is quoted in a 2013 article as expressing the plan to, one day, having 1,000 stores. All the while they’ve been on 18th Street they have not once supported ANY local non profits or funded the holiday tree or port o potties for Halloween or Pink Saturday! Yet they are asking the City and the Castro to give them, ” the little guy”, a break on their plans to expand into a larger space so they can garner more and greater profits. Soon the Castro will be home to nothing but bars, banks and baristas….

  15. What chains do to the neighborhood can be seen on Filmore street. It used to be filled with local merchants selling products the neighbors would need daily. Groceries, dry cleaning, coffee, books, copy mat, jet mail, etc. Now it is one clothing store after another with $300 designer blue jeans. Very sad.

    1. How exactly did the chains do this?
      The unfortunate reality is that in “basics” chains often do serve their markets in a brighter, cleaner, and possibly cheaper way. What you rather shop at a nice Whole Foods or an old corner market that sorta…smells? Answers may vary depending on yoru prferences, but the marketplace as a whole seems to be saying something you may not like.

      You also cannot forget the internet and delivery. heck, half the web 2.0 or 3.0 or whatever is devoted to encouraging delivery and internet-based shopping.

      As for the specifics:

      Groceries….are you saying Russian Hill no longer has supermarkets nearby? Or are the supermarkets evil, too, and we can only shop in tiny, expensive shoopes like quaint French villages?
      Bookstores…ervyone buys books on line. It’s sad but it is reality. Plus, if I recall, there are still a bookstore or two. Marcus Books was not necessarily doomed by a evil chain but by rent appreciation.
      Dry Cleaning-have all the dry cleaners really disappeared? How are the chains responsible for this?
      Copy Mat…many people now own computers with printers. Is a Copy Mat that necessary on every street?
      Coffee…there are coffee shops everywhere on Fillmore Street. Local, chain, artisan, basic.

      The sadness you speak of at least partially represents the reality that Russian Hill is a VERY wealthy neighborhood popular among tourists. I am not sure chain stores in an of themselves are responsible for the transition

    1. Venture Capitalists have swooped in! They are EVIL EVIL EVIL!

      Of course!

      (Now, the gentleman from the Castro brings out some legitimate points that Philz has not really shown itself to be a very good neighborhood ciitzen. I am queasy about these kinds of chain restricting laws, but since these are supposed to be factored into the decision in the process currently required….)

  16. Philz is already in the neighbohood and a great addition to castro that will add vibrancy in the middle of block of their new store. soul cycle is a great use for the corner and will bring in customers from many the castro but also other neighborhoods. they are very lgbt supportive and have many lgbt instructors. regarding formula retail – having small businesses being protected thru restricted competition and protectionism of certain companies has the unintended consequences of letting those same businesses raise their prices and /or continue to offer the same merchandise that has been unsuccessful. put another way, why reward businesses that are not evolving with trends and the time? SF already has less than 1/3rd chain stores of other cities. We have way less in the NCD neighborhood districts than any other metropolitan city. local businesses benefit by an addition of levi’s or other chains that drive foot traffic. lastly, increase in rents is not a direct result of chains. oftentimes, chains pay LESS rent. yes LESS rent ( i work in the industry) because they have strict underwriting of lease economics based on sales. large companies cannot keep underperforming unprofitable stores open, they simply close them. local businesses will often have LL’s perform work and or provide additional cash for work which drives up the rent for them. It is a much more complicated issue and much more fluid than what most think and the BOS and land use, including wiener, marr etc. have no clue of this and pander to neighborhood groups who know even less about the economics and deal structures of retail real estate. lets consumers have a choice. if you don’t like it, dont shop at it, but dont be arrogant enough to assume that your view of what constitutes a right retailer should be enforced on other consumers

  17. All three businesses received support from the local neighborhood associations, despite the fact that all three businesses are formula retail. All 3 have been deemed “necessary or desirable”.
    Hamburger Mary’s was the most controversial project, and was decided by a local vote.
    Note that for Philz, this is not an addition, it is just a relocation from 2 blocks away (from 18th & Noe to 18th & Castro).

    1. The location change for Philz may be what Mr. Batt is concerned about. He failed to disclose that he is part owner of a coffee shop on Castro.

    2. Yes, see my comment above that most anti-chain screaming comes from competitors who don’t want the competition.

  18. Wow, that certainly puts a different light on Mr. Batt’s comment above. It reminds of those of a certain bakery owner on Market Street who opposed a new Starbucks in the neighborhood for similar reasons.

    1. If the baker was providing a product with any quality at all…one would think he or she could survive. Many of the new pastries at Starbucks are awful.

  19. Any other neighborhood would have an amazing restaurant moving in – if not three. Instead, we get hamburgers and coffee… OMG, we also get a new hot dog place coming in! World class neighborhood!

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