Bay Area Reporter - April 10, 2008
Matthew S. Bajko, m.bajko@ebar.com

The San Francisco AIDS Foundation confirmed this month that it has entered into formal talks to move into the two-level storefront near the intersection of Noe Street that has sat empty since December 2006. A multitude of chain stores from Trader Joe's and Cost Plus World Market to Staples and Office Depot expressed interest in the site but never made any serious offers as their plans met with neighborhood opposition.

The foundation's desire to move into the site has generated little controversy thus far. While exact details of how it would utilize the space remain under wraps, the plan calls for relocating and expanding the agency's gay men's health center, Magnet, into the space, as well as the offices of the Stonewall Project, which helps men who use speed.

"Yes, we are in negotiations with the owner of the space," said Steve Gibson, Magnet's director, during the area's merchants' group meeting April 3. "We submitted an offer for both floors."

The announcement comes as both Levi's and Walgreens are shopping around their own plans for outlets in the Castro to community groups. Both retailers expect to go before the Planning Commission to request permits for their projects in coming months.

Walgreens wants to expand its specialty pharmacy on 18th Street into the vacant Laundromat space next door. Levi's has signed a lease at 525 Castro Street, which Castro Video recently vacated. The San Francisco-based jeans company wants to open a boutique store that would mainly carry men's clothing but also stock some women's items.

Both retailers face opposition from residents and some merchants who oppose seeing formula retail open along Castro Street, and in Walgreens' case, complaints that the company already has a large footprint with its corner store at 18th and Castro streets.

The companies' moves come as construction has begun on a new French bistro where Welcome Home restaurant formerly was on Castro Street and on a Washington Mutual bank branch at the corner of Market Street and Sanchez, the site that formally housed a Dulux paint store. Under One Roof, the shop that benefits numerous AIDS nonprofits, also relocated to a bigger storefront on Castro Street and opened its doors in a matter of weeks.

In its old space will be De La Sole, the gay-owned shoe store on 18th Street. Also opening its doors is the new Church Street bakery Thorough Bread and Pastry. [For more information on both see this week's Business Briefs column, page 5.]

Several other stores and eateries have also recently opened their doors, including Brandy Ho's on 18th Street and a second outlet for locally-owned retailer Sui Generis, which moved into a Market Street space. The flurry of activity has Castro business boosters hopeful that a revival of the area's retail scene is in sight.

"It's not great and it's not bad, but good," said Steve Adams, president of the Merchants of Upper Market and Castro. "I am cautiously optimistic about things. It seems we are getting more people in the neighborhood. Merchants are saying sales are up this year as opposed to last year."

Sore spot

One sore point continues to be the former Patio Cafe space, which has sat boarded up in the middle of the 500 block of Castro Street for nearly a decade. The owner of the property, Les Natali, has seen his plans for the space delayed by fights over his permits and disputes with his contractor.

More recently, nearby storeowners have complained about the boards covering the entrances to both the Patio storefront and the building next door, where Natali ripped out rainbow-colored stairs to build street level entrances and combined two stores into one retail space.

Natali did not respond to a request for comment this week. Adams said he toured both spaces in March and they looked nearly complete.

"I just want Les to open those places, to open that bar and get those boards down," he said.

During the tour of empty spaces with commercial brokers he and other Castro leaders held last month, Adams said the emphasis was on seeing local merchants move into the storefronts. He conceded that there is a concern about limiting the amount of formula retail in the area.

"We told them that on Castro Street we would like mom and pop stores. If you want to bring in a chain that is what Market Street is for," said Adams. "Everyone wants to see a nice mix of businesses in the neighborhood that are LGBT-owned and are friendly to our community, like Levi's. I am really happy about Levi's."

Levi's had been looking to find a suitable location in the Castro for months. The old video store space it secured is 1,900 square feet. The company plans to file for its conditional use permit this month and begin seeking support from neighborhood groups. The company would like to be open in time for Folsom Street Fair weekend.

"It is a nice intimate space and will make a fantastic Levi's boutique," said E.J. Bernacki, director of corporate communications for Levi Strauss and Co. "We will need to do some work on the space but it won't be months after we get permitted. We would like to be up and running as quickly as possible."

The company has indicated it is willing to help oversee the Castro's annual holiday tree and decorations, and at the invitation of Supervisor Bevan Dufty, participated in the recent transgender job fair at the LGBT Community Center.

"We are fully committed to being involved" in the Castro community, said Bernacki.

Dufty convened a meeting between company executives and merchants from other Castro clothing retailers several weeks ago to see if the jeans purveyor would be in direct competition with other stores. Only a few carry Levi's products, and the company plans to sell different items in its store.

Despite it being a national brand, Dufty noted that the company filed an amicus brief on behalf of the city's same-sex marriage lawsuit and offers benefits to its gay and transgender employees.

"There is some sensitivity about it being formula retail that to me is outweighed by the vitality this store will bring," said Dufty.

Patrick Batt, a former MUMC president who rejoined the board this year, has been an outspoken critic of chain stores opening shops in the Castro without making commitments to give back to the community. But in the case of Levi's, he said other merchants would benefit from it being in the Castro.

"I absolutely believe that a store will bring people who might otherwise go to their Union Square store into the Castro," said Batt.

Levi's is likely to seek MUMC's support at the group's May meeting. As for Walgreens, the merchant group voted to support the company's application for a conditional use permit at its meeting last week.

Its plans call for constructing three private consultation areas so pharmacists can meet with customers one-on-one; hire a full-time dietician; and build a large community education room that would have its own street entrance. The new store would be about 3,000 square feet.

"We are doing this to improve our overall health care services we provide to our customers," said Todd Horton, the company's district manager for northern California. "We realize we are a chain but we want to be an integral part of the community."

While the majority of merchants at the meeting voted to support the project, Batt was among the handful who did not. But after company executives agreed this week to consider upping their annual donation toward MUMC's holiday promotion from $250 to $1,000, as well as potentially pay to recarpet the Castro's community meeting room, Batt said he is more inclined to support the company's plans.

"I think it will go a long way to help them with the approval process," said Batt.

The company faces a harder sell before two residential groups, the Eureka Valley Promotion Association and the Duboce Triangle Neighborhood Association. Members of EVPA are already on record as against formula retail in the Castro, and the proposal received a chilly reception at the DTNA's land use committee meeting this week.

"The scope of what they are trying to do is very admirable. I am a customer of that location. I am even a stockholder. The whole issue really comes down to one's philosophy of wanting formula retail or not," said DTNA President Dennis Richards. "I think it is an admirable thing they are trying to do. I am concerned about the size of Walgreens in the neighborhood."

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