1. 28 San Francisco | November 2015
THE TALK TK
Staying
AliveWith rents heading to
infinity and beyond,
how do San Francisco’s
venerable shops keep
paying them month
after month?
By Adam L. Brinklow
When brunch hot spot Boogaloos
announced in September that it was
leaving its digs on Valencia and 22nd
Streets, manager Peter Hood pointed
the finger at a “whacked-out” rent
hike: The space subsequently went
on the rental market for a Dear
God!–inducing $17,500 a month.
That’s a 317 percent hike from the
prior rent of $4,200. But that’s legal:
Commercial rental space is excluded
by state law from any form of rent
control—yet the vast majority of city
businesses rent their space.
“In 2014, 4,000 San Francisco
businesses closed,” says political
consultant Nate Allbee. “Back in
1992, we had only about 500 closures
a year.” Allbee is managing the cam-
paign for Proposition J, a November
ballot measure that would issue
grants to landlords who back off on
rent hikes on historic businesses.
No doubt the city’s old school
entrepreneurs are pining for Prop. J.
But even if it fails, many of them will
manage to hold on. How do they do
it? Here are a few tricks of the trade.
MOVE UPSTAIRS
Patrick Batt, owner of Auto Erotica
(4077 18TH ST.), has a trick—looking
upward. He sells vintage gay porn, a
specialty that can be sourced in only
a few cities in the world. “I can’t just
move to Dallas,” says Batt. “There isn’t
a supply of this material in Dallas.” But
retail space around 18th and Castro
Streets is going for as much as $7.50 a
square foot, or $4,500 for a 600-square-
foot store. But Batts has snagged a
lofty solution: a rare second-story
commercial space. How much less
does he pay than down on terra firma?
“Half.” A savvy deal if you can get it.
ALTERNATIVE FUNDRAISING
When Borderlands Books (866 VALENCIA ST.)
last February announced its impending closure,
hundreds of loyal customers bought $100
annual sponsorships—enough to chip away
at the bookseller’s projected $30,000 payroll
shortfall.
Owner Alan Beatts would have to amass
far more in donations, however, to fulfill his
ultimate, stay-in-business wish: “We need to
buy a building. If you’re thinking in terms of the
next 30 years, renting exposes you too much.”
PRAY FOR J
The owners of Lone Star Saloon (1354 HARRISON
STREET), which is in danger of losing its lease,
have begun promoting Prop. J. “We have a good
relationship with our landlord, says co-owner
Tony Huerta. “But there’s a lot of money hanging
like a carrot in front of him.” To be eligible for
Prop. J protection, businesses must be 30 years
old. Lone Star is 26. Hang in there, guys.
MAKE IT IMPOSSIBLE TO
GET KICKED OUT
Bruce Lyall, who has been slinging vinyl
at Recycled Records (1377 HAIGHT STREET)
for almost 40 years, is one of the few San
Francisco entrepreneurs who owns the walls.
(Nearby Amoeba and Rasputin Music own
too—perhaps it’s a Haight thing). “I rented for
a long time from a really good guy, but he was
very sick. He had AIDS. He arranged for all his
tenants to buy the properties they were in.
It was a probate situation. I made an offer—
nobody topped it.” He could never pay the kind
of rent his neighbors are paying, he says, even
at the “sleepy dead-end” of Haight. “Business is
good, but not as good as it was 20 years ago.”
BE UNIQUE
In 2002, when Dan Zelinsky
took over the Musée Mécanique
(PIER 45) from his father, Ed
Zelinsky, the job came with a
complimentary bucket of cold
water. “I said, ‘OK, Mr. Accountant,
how are we doing?’ And he
said, ‘Not too well.’” Dan hadn’t
known that the elder Zelinsky
had been operating at a loss for
years, paying the difference out
of his other ventures. Dan cut
costs: “I eliminated all operations
except for opening the door in the
morning and turning on the power.”
It worked—but how the hell did
he pull it off? For one, his lease
ties his rent to a percentage of
his sales, insulating him from the
ebb and flow of the market. Heavy
foot traffic from his Fisherman’s
Wharf location doesn’t hurt, nor
does being basically the only
arcade collection in Northern
California that’s open to the public.
Zelinsky’s trick is the hardest one,
but also the simplest: Give people
what they want, and maybe, just
maybe, they’ll keep you going.
Even in San Francisco.
HIT THE LANDLORD
LOTTERY
Following a wave of
closures, commercial
landlords have been
getting a lot of bad press.
Many of them deserve it.
But take Darts Central, a
darts store on a block of
Oceanview (5 PLYMOUTH
AVE.) that nobody ever
traverses. “In fact, if I did
get a lot of foot traffic,”
says business owner
Don Campos, “I probably
wouldn’t like it.” How does
he keep the lights on? The
building is owned by the
church next door, which
(mercifully) charges him a
fraction of market rate, he
says. (He thinks a similar
500-square-foot space in
the same neighborhood
could run $2,500 a
month.)
Susan and Hal Tauber
have owned Glen Park
Hardware (685 CHENERY
ST.) for almost 40 years.
“We had one landlord, and
then he died. His wife took
over, and then she died.
There was a fight between
heirs, and we ended up
with one of them. We
pay below-market rent.
A place like this you’d
imagine would go for
$5,000—we pay $2,500.”
Like the mom-and-pop
hardware store, the
stand-up landlord is rare.
But extant.
GET CREATIVE WITH
YOUR SPACE
For years,Video Wave of Noe
Valley survived the depredations
of first Blockbuster and then
Netflix, only to get bounced
from its Castro Street digs by its
landlord. A block away, Buttons
Candy Bar (4027 24TH ST.) was
having trouble making its $5,000
monthly rent. (“Candy,” says owner
Dona Taylor, “is cheap.”) So the
stores did what many beleaguered
San Francisco renters do: They
became roomies, splitting the
24th Street store, and its rent,
down the middle. Taylor also owns
a vintage furniture store next door,
When Modern Was (4037 24TH
STREET), which, she frankly admits,
is doomed. “In a few years the
lease is up, and the landlord thinks
he can get $12,000” (roughly
double the current rate). On the
other hand, her Gallery of Jewels
(4089 24TH ST.) might live on simply
because it occupies only 250
square feet. “Even if they charged
me $20 a square foot,” Taylor says,
“I could still afford to stay there.”
Her prescription for anyone crazy-
brave enough to start a business
in San Francisco: The smaller, the
better.
ILLUSTRATION BY NOAH MACMILLAN