San Francisco is a city of diverse and distinct neighborhoods identified in large part by the character of their commercial areas.
San Francisco needs to protect its vibrant small business sector and create a supportive environment for new small business innovations. One of the eight Priority Policies of the City’s General Plan resolves that “existing neighborhood-serving retail uses be preserved and enhanced and future opportunities for resident employment in and ownership of such businesses enhanced.”
Retail uses are the land uses most critical to the success of the City’s commercial districts.
Formula retail businesses are increasing in number in San Francisco, as they are in cities and towns across the country.
Money earned by independent businesses is more likely to circulate within the local neighborhood and City economy than the money earned by formula retail businesses which often have corporate offices and vendors located outside of San Francisco.
Formula retail businesses can have a competitive advantage over independent operators because they are typically better capitalized and can absorb larger startup costs, pay more for lease space, and commit to longer lease contracts. This can put pressure on existing businesses and potentially price out new startup independent businesses.
San Francisco is one of a very few major urban centers in the state in which housing, shops, work places, schools, parks and civic facilities intimately co-exist to create strong identifiable neighborhoods. The neighborhood streets invite walking and bicycling and the City’s mix of architecture contributes to a strong sense of neighborhood community within the larger City community.
Notwithstanding the marketability of a retailer’s goods or services or the visual attractiveness of the storefront, the standardized architecture, color schemes, decor and signage of many formula retail businesses can detract from the distinctive character of certain neighborhood commercial and mixed use districts.
The increase of formula retail businesses in the City’s neighborhood commercial and mixed use areas, if not monitored and regulated, will hamper the City’s goal of a diverse retail base with distinct neighborhood retailing personalities comprised of a mix of businesses. Specifically, the unregulated and unmonitored establishment of additional formula retail uses may unduly limit or eliminate business establishment opportunities for smaller or medium-sized businesses, many of which tend to be non-traditional or unique, and unduly skew the mix of businesses towards national retailers in lieu of local or regional retailers, thereby decreasing the diversity of merchandise available to residents and visitors and the diversity of purveyors of merchandise.
Formula Retail Uses.
Formula Retail Uses Permitted as a Conditional Use. Formula retail uses are permitted in the MUG District, UMU District, Western SoMA Special Use District, the Chinatown Community Business District and the Chinatown Residential Neighborhood Commercial District only as a conditional use. When considering an application for a conditional use permit under this Section, the Planning Commission shall consider the criteria defined in Section 303(i) of this Code.
Formula Retail Uses Prohibited. The establishment of new formula retail uses in the Chinatown Visitor Retail District is prohibited. The establishment of new Restaurant or Limited-Restaurant uses that are also defined as formula retail in any Chinatown Mixed Use Districts is prohibited.
Formula Retail Use Defined. Formula retail use is hereby defined as a type of retail sales activity or retail sales establishment which, along with eleven or more other retail sales establishments located in the United States, maintains two or more of the following features: a standardized array of merchandise, a standardized façade, a standardized décor and color scheme, a uniform apparel, standardized signage, a trademark or a servicemark.
Standardized array of merchandise shall be defined as 50% or more of in-stock merchandise from a single distributor bearing uniform markings.
Trademark shall be defined as a word, phrase, symbol or design, or a combination of words, phrases, symbols or designs that identifies and distinguishes the source of the goods from one party from those of others.
Servicemark shall be defined as word, phrase, symbol or design, or a combination of words, phrases, symbols or designs that identifies and distinguishes the source of a service from one party from those of others.
Decor shall be defined as the style of interior finishings, which may include but is not limited to, style of furniture, wallcoverings or permanent fixtures.
Color Scheme shall be defined as selection of colors used throughout, such as on the furnishings, permanent fixtures, and wallcoverings, or as used on the facade.
Facade shall be defined as the face or front of a building, including awnings, looking onto a street or an open space.
Uniform Apparel shall be defined as standardized items of clothing including but not limited to standardized aprons, pants, shirts, smocks or dresses, hat, and pins (other than name tags) as well as standardized colors of clothing.
Signage shall be defined as business sign pursuant to Section 602.3 of the Planning Code.
“Retail Sales Activity or Retail Sales Establishment” shall include the uses defined in Section 303(i)(2).
Determination of Formula Retail Use. If the City determines that a building permit application or building permit subject to this section of the Code is for a “formula retail use,” the building permit applicant or holder bears the burden of proving to the City that the proposed or existing use is not a “formula retail use.”
Permit Application Processing. After the effective date of this ordinance, any building permit application determined by the City to be for a “formula retail use” that does not identify the use as a “formula retail use” is incomplete and cannot be processed until the omission is corrected.
(Added by Ord. 204-06, File No. 060482, App. 7/25/2006; amended by Ord. 269-08, File No. 081234, App. 11/25/2008; Ord. 298-08, File No. 081153, App. 12/19/2008; Ord. 140-11, File No. 110482, App. 7/5/2011, Eff. 8/4/2011; Ord. 75-12 , File No. 120084, App. 4/23/2012, Eff. 5/23/2012; Ord. 106-12 , File No. 120047, App. 6/22/2012, Eff. 7/22/2012; Ord. 42-13 , File No. 130002, App. 3/28/2013, Eff. 4/27/2013; Ord. 56-13 , File No. 130062, App. 3/28/2013, Eff. 4/27/2013)
Section header and division (b) amended; Ord. 140-11, Eff. 8/4/2011. Divisions (b)(2) and (c)(9) amended; Ord. 75-12 , Eff. 5/23/2012. Division (c)(9) amended; Ord. 106-12 , Eff. 7/22/2012. Section header and division (b)(1) amended; Ord. 42-13 , Eff. 4/27/2013. Section header and division (b)(1) amended; Ord. 56-13 , Eff. 4/27/2013.