Protect light industrial businesses from Big Tech sprawl

|
(13)

[Editor’s Note: With the San Francisco Board of Supervisors Land Use Committee scheduled on Monday, July 7, to act on a proposal to allow the new owner of the San Francisco Design Center to evict existing tenants to accommodate tech company Pinterest, Jim Gallagher of Garden Court Antiques, one of those tenants, wrote the following guest editorial for the Guardian.]

The San Francisco Design Center has been a doing business at 2 Henry Adams street for the last 40 years.  During that time it has created thousands of good paying jobs in the city.  We are currently at risk of losing the majority of the building to tech office space.  The building is zoned for PDR-Design but a loophole in the law is being exploited by the new owners, a Chicago based investment firm.  This would lead to the loss of SF based small businesses and the jobs that they create.

 We have worked with countless interior design firms, architects and contractors as a resource for their projects.  In addition, we are an intrinsic part of a network of the PDR(Production, Distribution and Repair) businesses here in San Francisco.  These are the upholsterers, fabrication workrooms, cabinet makers, finishers, metal workers, installers and movers that make up our industry.  This industry offers above average paying jobs to a variety of people from different cultural and ethnic backgrounds that don’t necessarily have college degrees.  These jobs and those that work at them are being squeezed out of this city and when they are gone, we lose yet another piece of the soul of San Francisco.

There is no question that PDR space is being lost in San Francisco.  A recent study of PDR space in SF, showed that we currently have the lowest available PDR space of any major American city at less than 7 percent.  Mayor Lee along with Supervisors Cohen and Campos introduced legislation at the end of last year to expand the amount of PDR space and shore up the manufacturing and light industrial sector in the city.  Why then, would the Board of Supervisors even consider giving up a quarter of a million square feet of PDR space that is currently 90% occupied with viable PDR businesses?

The sad reality is that it is a simple matter of corporate greed.  The new owners of the Showplace Building at 2 Henry Adams bought the building as a PDR building, knowing the use limitations of designated PDR building and immediately began to find ways around the laws.  The loophole that they discovered was the Landmark designation.

The Landmark designation was an exception put into the PDR protections in order to help with the cost maintaining some of the historic architecture that is often found in these PDR buildings.  The idea being that PDR rents do not always bring in enough income to retrofit and maintain these old buildings.  The Landmark status would allow the owners of PDR buildings to rent out part of the building as higher paying office space in order to offset the retrofit and maintenance cost.  This sounds like a good idea until you bring in the greed factor.  This Landmark exception has become the favorite loophole for corporate investors and greedy landlords to move out PDR businesses all over the city.

In the case of the Showplace Building, it is currently 90 percent occupied by PDR-Design businesses.  According to the building owers, there are approximately 262,000 square feet of rentable space in the building.  The Common Area Maintenance or CAM fees that tenants of the building pay beyond their monthly rent is $1.25 per square foot per month.  This would mean that the owners of the Showplace building are currently bringing in nearly $3,500,000 just in Common Area Maintenance fees annually.  In what universe is this not enough money to maintain a building that was fully retrofitted 15 years ago and is only five stories high?

The idea that this building needs to granted Landmark status from the city in order to create enough revenue to maintain the building just does not pass the smell test!  This is a case of simple greed on the part of a Chicago based investment company.  They believe that they can skirt the laws that are in place to protect San Francisco based small businesses and San Francisco workers.  They do not have the best interest of our city or our workers in mind.  They simply want to exploit this Landmark loophole in the PDR protections to line their own pockets.

I would hope that the members of the Board of Supervisors and Mayor Ed Lee do not let this happen.  Please consider the consequences to our city.  Do not choose to allow a Chicago based investment company to skirt our laws and exploit this loophole.  Do not allow this greed to put several San Francisco small businesses out of business. 

This building is 90 percent full of viable PDR businesses.  We pay nearly $3.5 million dollars a year to maintain this building.  This is the perfect example of what a well-run PDR building should look like.  This building is this beautiful and well-maintained because of us.  Please don’t allow the exploitation of the Landmark status to kick us out.  We built our businesses here because we love this place and we want to continue to work and thrive here.

Comments

should be in a high-value location. When the Design Center was built, it was not at the epicenter of the global knowledge and sharing economies the way it is now.

As such, it makes sense that the site is relevant to the new status of that area, and that non-core uses be relocated in a more economically optimal location.

Given that that area is also not well served by transit also appears to suggest that a location in Bayview or West Oakland might be more suitable for the existing tenants.

Posted by Guest on Jul. 02, 2014 @ 12:52 pm

Your pro-gentrification argument ignores the need to diversify the city's economy, as even City Economist Ted Egan has called for, not mention to the city's workforce. There is value in diversity, both in natural systems and human-created one.  

Posted by steven on Jul. 02, 2014 @ 1:35 pm

does it matter whether every city in that conurbation is diverisifed?

The real problem here is that we have balkanized ourselves politically. Take that away and SF can be all knowledge economy and Oakland is all industrial and overall everything is in balance

Think bigger, Steven.

Posted by Guest on Jul. 02, 2014 @ 1:51 pm

"Low-value tenants"? Wow, aren't you condescending! The "epicenter of the global knowledge and sharing economies". Wow, aren't you condescending!
Concentrating these "sharing" companies makes bad economic sense and has already proven that it has big ramifications for affordability and contributes to huge income discrepancies. Locating "sharing" companies throughout the country makes more sense to spread the wealth--or is that too socialist for you? Rapid video/software communications makes it possible for those companies to collaborate anyplace in the world so they don't have to concentrate. How about diversity of industries in the City or does that somehow threaten your way of life?

Posted by Guest on Jul. 02, 2014 @ 1:46 pm

actors may generate more value and prosperity than others?

Or that historically emerging economic paradigms have often been forged in homogeneous environments?

Really?

Posted by Guest on Jul. 02, 2014 @ 2:00 pm

Depends on you how you define "value" and "prosperity." And is rapid upheaval of overall benefit?

Posted by Guest on Jul. 02, 2014 @ 2:52 pm

You're entitled to think you are worth more money than you earn but that ultimately is not your decision, but rather for someone else to determine.

Posted by Guest on Jul. 02, 2014 @ 3:06 pm

want them to work.

What's up with the control freakdom and micro-management?

Posted by Guest on Jul. 02, 2014 @ 2:07 pm

Manhattan, the City of London or Victoria Island in Hong Kong.

If PDR wasn't there, we'd never move it there now. so why keep it there?

Posted by Guest on Jul. 02, 2014 @ 12:53 pm

As a local and out-of-work resident I have wandered the halls of SFDC pretty often. First off, the building is awesome and it looks like you used the wrong picture. Second, the showrooms in here sell some pretty amazing stuff. But from my wanderings, its all showrooms, very little production or repair going on from what I have seen.

Question for the author: as a purveyor of European antiques from the 17-19th century, how many full time San Francisco based employees do you have?

The PDR zoning in SF and the diversity of jobs could definitely use some protection, (this is part of the reason why I drive to the East Bay for auto repair rather than pay the $150/hr for SF based mechanics), but I have never seen a 'Now Hiring' sign in SFDC. I can commiserate that the author may be losing his space but the arguement that its about protecting diverse jobs and PDR does not fly.

It's also hard to feel bad for the author on paying a $1.25 in CAM or whatever when the cheapest table on their website is $2,500!

Posted by Marcus on Jul. 02, 2014 @ 4:08 pm

This paper has always gone to bat for the provincial, effete interests of the 1% - just look at their constant support of the no wall on the waterfront: an entire philosophy funded by one couple who couldn't stand to have their views interrupted.

Pardon me while I feel sorry for the poor European antiques shop selling vastly overpriced objects of negligible value to anyone who isn't a millionaire. Surely there isnt any space elsewhere for this business in SF, like any of our high end neighborhood commercial districts which fetishize unaffordable mom and pop enterprises

Posted by Becky Backside on Jul. 02, 2014 @ 7:31 pm

The left panders to the industrial, only to discover that it's a mirage.

Posted by Guest on Jul. 02, 2014 @ 7:44 pm

It looks like Jim Gallagher wants to protect high paid interior decorators from having to drive to a less desirable neighborhood in order to by high-end furniture for Ann and Gordon Getty...put these over-priced merchants in Emeryville next to IKEA where the rest of us have to shop.

Posted by Guest on Jul. 02, 2014 @ 8:55 pm

Post new comment

The content of this field is kept private and will not be shown publicly.