Small and smartly furnished, these newcomers fit the profile of the Cute Neighborhood Eatery. Wrap Works is a casual, counter-service establishment that sells gourmet burritos and smoothies. Five doors up the street, Fuzio serves what it describes as "universal pasta" and salads in a more sedate, sit-down atmosphere.
The two restaurants have different looks and offer different menus, but they have common roots. Wrap Works and Fuzio are both owned by the people who brought you "Fresh Mex," Chevy's Inc. -- which is owned by J.W. Childs Equity Partners, a Boston-based investment group with a $430 million portfolio.
San Francisco has been good to Chevy's, which currently has nine restaurants in the city. Another Wrap Works, at Ninth Avenue and Irving, is expected to open soon. And business looks so promising that the company has plans for another four restaurants in the near future, including a 7,000-square-foot Chevy's at Van Ness and Golden Gate early next year.
All this in the city that supposedly hates chain stores.
In any city, at any time, there exists an overarching ethos, a philosophical orientation that colors the way residents think and feel about the place they call home. Even in San Francisco, this most allegedly unconventional of cities, a conventional wisdom prevails.
In the broadest possible strokes, this mind-set can be described as "progressive," a term suggestive of everything from a near-automatic mistrust of things corp-orate to an almost Pavlovian defense of The Oppressed.
When it comes to defending the integrity of the city's cherished neighborhoods, this common mind-set becomes particularly rigid and particularly harsh. A newcomer to San Francisco quickly learns the drill: Chains are bad, independent businesses are good.
A closer look at the business reality of the city, however, reveals that the belief that San Francisco hates chain stores -- hates them enough to make the city inhospitable to them -- is a myth. San Franciscans may talk about loathing evil corporate chain retailers, but the fact is that chains are flocking to the city, and they are thriving here. Locals may lament the demise of neighborhood character, yet they shop for groceries at the mega-Safeway at Potrero Center, where more than a dozen chain stores occupy what had been a new-car lot.
San Franciscans seem to genuinely want their city to remain distinctive -- S.F.'s daily newspapers produce a steady torrent of stories to that effect -- but at the same time the city's populace seems to crave the convenience and ease of chain-store America. So, many residents live a paradox, clinging to the unsubstantiated belief that some magical barrier will protect neighborhoods from chain invasion, even as the chains keep coming, and even as the San Franciscans who say they hate chains keep drinking Starbucks and eating Fuzio.
This clash between myth and reality might be seen as just another charming facet of San Francisco's quirky nature, if the ramifications of this factual disconnect were not serious. But serious they are. By adhering to the myth that it is a chain-hating bastion of neighborhood activism and small, local businesses, San Francisco has failed to make the hard decisions about development -- the very decisions that must be made if the city is to avoid becoming the accidental agglomeration of upscale marketing plans that it claims to abhor. By believing in a myth, San Francisco is allowing its worst fear to become reality.
In a Keynesian-clear example of demand-driven supply, San Francisco has seen a marked increase in retail and restaurant chains over the last 10 years. It is an influx that seems to follow class lines and an astounding shift in the city's demographics.
Fifteen years ago, the Marina District was a quiet family neighborhood. Today, the area is dominated by young, single professionals. Along the three blocks west of Fillmore, Chestnut now boasts 38 chain stores and restaurants -- and about a dozen independently owned businesses. Commercial space -- $1.75 per square foot before the 1989 Loma Prieta earthquake -- now leases at $3 to $4 per square foot, per month.
Even the Haight-Ashbury, supposedly the city's least commercially driven quarter, has seen the arrival of the Gap, Z-Gallerie, and Spinelli coffee. Yuppies have replaced hippies; hippies, in many cases, have become yuppies.
Anyone selling anything, both nationally and internationally, drools at the very mention of the San Francisco market. After Washington, D.C., San Francisco has the highest disposable income and the best-educated population of any city in America.
With the Silicon Valley boom, San Francisco's middle class has swollen by the tens of thousands in recent years. San Franciscans don't make house payments, they rent; they work at well-paying jobs; they eat out. They don't have kids. They spend money. Economists have found that American consumers have become bored with traditional shopping centers. Instead, they prefer to shop in neighborhood locations, a trend that makes San Francisco and its celebrated neighborhoods a prime destination for businesses.
"San Francisco is a retailer's dream," says Lynn Sedway, an economist with the Sedway Group, a San Francisco consulting firm. "Retailers have discovered that neighborhoods, with their density and high volume of foot traffic, are ideal."
The chains are focusing on the city's most economically appealing neighborhoods -- the Marina, the Haight (Upper, not Lower), Union Street, the Inner Sunset, and Noe Valley. And that focus has real economic motivation behind it: High-earning newcomers and rising rents have pushed what once were considered modest but "nice" neighborhoods far, far upscale. And as the neighborhoods "move up" from middle class to the upper middle and above, they increasingly reflect upper-middle-class tastes and spending habits.
Annual median household incomes in the Bay Area have increased from $28,000 to $47,000 since 1985. San Francisco's upper-end neighborhoods reflect similar jumps, with median incomes now around $40,000 in areas like the Inner Sunset and Noe Valley.
In these neighborhoods, the tastes of the yuppie class have spoken. Chain stores that cater to upper-middle-income habits are warmly received, while other, less tony enterprises get the cold shoulder. McDonald's is bad, Pasta Pomodoro good. "No" to Burger King, but "yes" to Wrap Works.
(Meanwhile, residents in economically depressed Bayview-Hunters Point, for example, have to beg for a simple supermarket. In this neighborhood, the very opening of a McDonald's is cause for celebration.)
Chain businesses that fit these unwritten, upscale class-and-image criteria report that setting up shop in San Francisco is, in fact, easy. Starbucks, the scourge of the independent coffee shops, reports it has done so well that the chain recently opened its 25th San Francisco store (that's roughly one for every two square miles of the city) at the foot of Mission Street.
"We've had a really good reception in San Francisco," says spokeswoman Elise Wolford. "We've had great success here."
If changing demographics have driven the increase in chain outlets, other factors have helped the trend along.
Under the unabashedly pro-business, pro-development leadership of Mayor Willie Brown, city government has given Starbucks and other chain retailers a warm welcome. Where once San Francisco seemed to hinder at least some attempts by national chains to open branches here, since Brown's election, developers say they have noticed a new can-do climate in city government.
"This administration wants to see things happen," says realtor Carol Gilbert, who specializes in retail and restaurant leasing throughout the Bay Area. "In the past, the permits process was unnecessarily cumbersome. Since Brown became mayor, there's a feeling you can get things done -- today."
To "get things done," businesses have frequently looked to key lobbyists who are close to city government. Home Depot paid political consultant and party boy Jack Davis (friend and campaign manager for Willie Brown) $90,000 to help bring the hardware chain to San Francisco. Last year, Starbucks paid lobbyist (and another mayoral friend) William "Billy" G. Rutland $7,000 to help the bean chain open more stores.
Growth controls in San Francisco's downtown area remain among the tightest in the country. But in the city's commercially promising neighborhoods, despite a common misconception to the contrary, commercial development regulations do not stand out from planning and zoning restrictions in most other major American urban centers.
Legally, Starbucks and other chain retailers and restaurants encounter few barriers in San Francisco. New projects must abide by the zoning and size regulations that are specific to each of the city's 20 "neighborhood commercial districts." But these projects are not subject to public hearings unless they seek to go beyond the city's zoning and size guidelines.
The city's Master Plan asserts a vaguely worded commitment to preserving the character of San Francisco's neighborhoods. After 1986, when voters passed the slow-growth initiative Proposition M, all development proposals approved by the Planning Department were to be consistent with eight "priority policies." The policies include requirements that projects preserve and enhance existing neighborhood businesses and character.
But history has shown that these policies are given little consideration, if any at all, in the Planning Department's decision-making processes.
One longtime neighborhood activist describes a pervasive and long-standing pro-growth ethos in the Planning Department, which all but ignores the city's Master Plan:
"They bend over backwards to make sure projects get through," he says. "The Planning Department sees itself as primarily there to encourage business -- and to get out of the way of development."
If the city government is compliant and zoning regulations are not particularly onerous, don't national firms looking to set up shop in San Francisco still face daunting opposition from the city's vaunted neighborhood activist groups? Isn't the common culture of San Francisco a real deterrent to franchise development?
Not really.
With the right team of realtors, lawyers, and consultants, opening chain business locations in San Francisco is actually pretty simple. Here's how it's done:
A national business that wants to open a location in San Francisco scopes out a desirable neighborhood with the right demographics -- that is, a neighborhood where age and income levels suggest a high probability of success for the product, whether it be khakis, home furnishings, or wood-fired pizzas.
The chain then hires a consultant to help navigate the city permits process and act as a liaison with neighborhood groups.
Chevy's Wrap Works, for example, hired lobbyist Jane Winslow to negotiate with neighbors around planned stores in Noe Valley, the Castro, and on Fillmore Street, after its Union Street shop encountered opposition from the neighborhood.
"Problems happen because businesses don't do their groundwork beforehand," says Winslow, also a longtime neighborhood activist. "Talking with the neighbors is something businesses have learned they need to do."
It's a lesson that many chain businesses have taken to heart.
Charles Schwab wanted an office on West Portal Avenue, but zoning laws prohibited any new financial institutions without special permission from the city. So the company paid Solem and Associates nearly $40,000 to help secure a conditional-use permit, and to make sure neighbors were happy.
It is true that chain stores often must spend thousands of dollars to set up shop in San Francisco. But that money has become an accepted part of the cost of doing business in S.F.
Large companies like Boston Market have their own real estate departments to research and identify potential new sites. The chain has four stores in San Francisco.
"Real estate is very limited, but otherwise, opening locations in San Francisco has been no more difficult than anywhere else," says spokeswoman Margaret Bradley. "The whole Bay Area has embraced Boston Market."
If it weren't for an informal alliance of media and neighborhood groups, the myth that San Franciscans hate chain stores would be long dead and buried. But the coalition has kept the belief on life support, artificially oxygenated well past its natural years.
Neighborhood groups perpetuate the myth by claiming victory on each and every occasion when a chain store abandons a project. Local newspapers report those "victories" as the rule, rather than the rare exceptions they are.
In the spring of 1995, for example, after months of protest by angry neighbors, Blockbuster Video deep-sixed plans to open a store at Ninth and Irving in the Inner Sunset. Neighborhood groups took the lion's share of the credit, and the daily papers agreed. A closer look at Blockbuster's permit application, however, reveals that the video chain abandoned its plans after city bureaucrats discovered the company had lied about the size of its proposed store on its application. Although the protests may have set a tone, it was the lie that enraged the city and made it clear to Blockbuster that its plans would never be approved.
Actually, whether the Blockbuster store was stopped by neighborhood activism or corporate stupidity is irrelevant. For every aborted Blockbuster, there are a dozen thriving Noah's Bagels, Peet's Coffees, and Ben & Jerry's in San Francisco. (Just one example: Noah's, which already has 11 locations in the city, has applied to open another 1,900-square-foot store with outdoor seating adjacent to the Safeway at Church and Duboce; World Wrapps hopes to open a third location next door.)
In fact, neighborhood groups have little influence over whether or not chain stores open in their neighborhoods. Two proposals before the Planning Commission earlier this year would have required all new businesses to notify neighborhood residents of the proposed plans. But the proposals were rejected after business groups complained.
Even longtime activists like Noe Valley land-use attorney Claire Pilcher admit that neighborhood groups have little power.
"It's a joke. Every time there's a conditional-use hearing for a new business, we go down there and fight it," says Pilcher, who founded the Friends of Noe Valley. "You just get tired of doing it. And nobody will come with you, and it's not good enough with two or three people. We don't have a prayer."
To admit that the anti-chain belief is myth is to face up to what the city, its neighborhoods, and its residents have become. San Franciscans tolerate high rents, bad traffic, and nonexistent parking because they believe that is the cost of living in a special, "different" place.
But the sad fact of the matter is that San Francisco is losing its unique character. The city that has always prided itself on being different is looking more and more like every other large city in America. Its residents are behaving more and more like people in every other large city in America.
And the myth of chain hatred is one of the reasons that fundamental shift in character has been able to occur with relatively little public debate. San Francisco has been "chained," almost sub rosa, at least in part because San Franciscans believe -- quite falsely -- that some law or regulation or bureaucrat or activist is out there preventing it from happening, or at least regulating its ultimate scope.
San Francisco is not just in transition; it is undergoing a massive transformation. South of Market, once an array of seedy warehouses, is teeming with construction, so-called live-work spaces, new restaurants, just-as-new multimedia businesses, and the multibillion-dollar mixed-use development known as Mission Bay. Union Square, one of the most desirable retail locations in the world, has become a veritable outdoor shopping mall, surrounded by virtually every big name-brand, from Eddie Bauer to Nike. And with monthly commercial rents as high as $30 per square foot around Union Square, businesses are staking claims on the next frontier, the city's cherished neighborhoods.
Yet San Franciscans insist on believing their city remains small and folksy, a cozy patchwork of unique neighborhoods with family-run businesses that date back several generations, where everybody knows your name. That city is gone.
Economics has spurred the transformation to a new San Francisco, where newcomers arrive by the thousands each year, drawn at least as much by well-paying jobs as by any appreciation for S.F. or the characteristics that make this city special. State demographers report that San Francisco is growing faster than any other Bay Area county: In 1996 alone, the city's population increased by 18,300 to 778,100.
Retaining or restoring livability in a city amid the throes of full economic boom -- which is exactly where San Francisco sits at present -- is a complicated task. The vast economic pressures focused on the Bay Area will not be lessened by ostrich behavior. Man-the-barricades, all-together-now rhetoric will not repeal the law of supply and demand or the sections of the U.S. Constitution that protect private property and interstate commerce.
Maintaining the myth of San Francisco's chain-store hatred disserves everyone in the city, from radical left anti-business activists to the board of directors of the San Francisco Partnership.
The myth allows residents of this city to continue deluding themselves. The myth allows San Franciscans -- pro- and slow- and anti-development alike -- to fail to adopt the governmental policies and the cultural attitudes that might manage this burgeoning transformation, maximizing its economic benefits and minimizing its soulless tendencies.
To deny that San Francisco is different than it was 10 years ago is unrealistic and unhealthy. The belief in mythical protections for the city's neighborhoods keeps San Franciscans from contemplating the future shape and feel of their city, and the realistic ways that shape and texture can be achieved.
Believing that national and international economic forces are being stopped at the borders of San Francisco by largely impotent forces of the progressive left has allowed San Franciscans to abdicate responsibility for the city they profess to love. And by the time anyone wakes up and smells the Starbucks, that myth of chain hatred may be all that is left of what once was San Francisco.
