Mid-Market: The shape it’s in. Who owns it. What’s next.


Despite assessed values in excess of $375 million on these three blocks, the CityPlace parcels reflect the area’s persistent bleakness. Photo by Lenny Limjoco.

This story was originally published in Central City Extra, a monthly newspaper in San Francisco 

We call it the plywood parade — the relentless march up Market Street from Fifth Street to Eighth Street of boarded-up or erratically open storefronts, emptying offices in the upper stories and crumbling facades.

The three mid-Market blocks mostly look like hell.

Mayor Gavin Newsom knew that when he announced his Jan. 14 launch of a Central Market Partnership “to renew and coordinate efforts” to fix up the area. His project extends from Fifth Street to Van Ness Avenue. Our look is tighter because from Fifth to Eighth streets is the locus of the deteriorating retail scene. Owners have renovated a few of the 57 buildings along the three blocks, only to find the ground floors unrentable.

Of the 88 storefronts in these buildings, 27 — 31 percent — are vacant.

Among the empty storefronts  are ones that make a big impression: Civic Center Pharmacy, the Grant Building ground floor, Merrill’s Drugstore, Hollywood Billiards and the planned CityPlace complex.

Early last year, the owner of the Wilson Building next door to Pearl Paint was planning to convert the upper floors to residential condos, but work stopped in the midst of façade renovation. The building has had six liens against it in the last 18 months and is considered “troubled” by Fidelity National Title, which is involved in trying to move the property.

The recession may have pushed mid- Market over the edge to today’s grim visage, but its decay was sealed at least 20 years ago.

Market Street was jumpin’ in the 1970s. There were plenty of people on the street, lots of things to do. The St. Francis, Embassy and Strand theaters were operating, Merrill’s was bustling, Hibernia Bank was opening new accounts. People came and went with great regularity — to an amusement arcade, the Market Street Cinema and, just off Market and Seventh streets, the Main Post Office and the busy Greyhound Bus Station.

Foot traffic slowed when the Greyhound Station closed in the mid-1980s, about the same time that the Civic Center was becoming a magnet for increasing numbers of homeless people. But it was the 1989 earthquake that drove nails in mid-Market’s retail coffin. When the seismically unstable Main Post Office closed, a major reason for people to come into the area evaporated. The dot-com  boom of the 1990s gave mid-Market property owners a financial goose. Some renovated their aging buildings, investing in fancy build-outs to draw the exploding cyber industry.

A sales base review of real estate parcels between 1992 and 1999 shows changes in about half of the 57 properties on the three blocks. The sales base registers deed changes — new construction, ownership or use. The property may have actually changed hands, or a new investor, partner or family member may have joined the deed.

A public records search doesn’t explain why so many sales base changes happened in the 1990s, but in addition to the flush economy, interest rates had dropped, opening opportunities for purchase or refinance that were unavailable when loan rates were in double-digits.

The popping of the dot-com bubble in 2000 deflated mid-Market retail once again. The 2008 recession made matters much worse.

Thirty-three buildings — more than half the three-block total — are at least a century old, including the Odd Fellows Building, the Grant Building, the Renoir Hotel, Hollywood Billiards, the St. Francis Theater and two other properties that will be demolished for CityPlace. The oldest building, at 929 Market St., went up in 1904. It’s Shiekh Shoes’ flagship store.

Today’s paper value of all buildings on these three blocks and the land they’re on, according to assessor’s data, is $375 million. That, of course, is vastly understated, at least in light of the near future, when this stretch turns around.

And it will turn around, probably before this century’s Twenties come roaring into town.

Marching down Market

The face of Market Street changes from its commercial source at Castro Street, where it thrives with small businesses, on its way to the bay. Vacant storefronts begin to pepper the blocks after Van Ness Avenue. At Polk Street, the venerable, incomparable, stand-in-line sandwich shop Quincy’s, a neighborhood fixture for decades, is shuttered. Directly across Market on 10th Street , there’s a huge hole where several buildings were razed in 2007 to make way for 720 luxury condos that were never built, victims of the recession. The ground floor of the block-long, wholesale furnishings bazaar San Francisco Mart is vacant except for Walgreens at Ninth Street.

Market starts to look really bad at Eighth Street. The north side is fine with the Orpheum, Academy of Art and the open space of U.N. Plaza. But the south side misses Trinity Plaza’s Moon Star restaurant at the corner. Toward Seventh Street are the shell of the Strand Theater, closed in 2003, and a hole where the Embassy Theater once entertained.

Seventh Street is anchored by the historic Grant Building, which was the only thing left standing on the block after the April 19, 1906 earthquake. Across the street is the Renoir Hotel, 158 rooms over four storefronts, of which only the doughnut-and-sandwich shop at Jones Street is a consistent business.

Ten of the 21 buildings up to Sixth Street are a century or more old; it’s the biggest block, the heart of mid-Market, home also to Market Street Cinema, a tribute to the demand for non-nuisance sex shows, and Kaplan’s Surplus & Sport Goods, a retail landmark in the neighborhood for decades.

The block from Sixth Street to Fifth Street, on which CityPlace is seen as a sort of Westfield’s western annex, is the most venerable — 18 of the 21 buildings are at least 100 years old. CityPlace will replace three centenarians.

The mogul of mid-Market

David Rhoades, development and operations director for Urban Realty Co., scoffs at timid developers who don’t see mid-Market’s potential — “an obvious great location.”

Urban Realty isn’t timid: It’s the mogul of mid-Market, owner of 14 percent of the buildings in these three blocks, and almost 30 percent of its assessed value. Urban Realty owns 949, 943 and 935 Market St. — the old St. Francis Theater, the Social Security Administration building and a little, nondescript structure in between — all scheduled for demolition to make way for CityPlace.

That 375,700-square-foot, five-story retail development spanning 275 feet on Market Street — about a third of the block from Sixth Street to Fifth Street — will be the jewel in Urban Realty’s mid-Market crown when it’s done in a couple of years. Now in the draft EIR stage, there’s little opposition to the project except to the 201- car underground parking garage with its entrance on Stevenson Street. CityPlace will have about the same square footage as Bloomingdale’s, which sits inside the 1.5 million-square-foot Westfield San Francisco Centre that opened in 2006.

CityPlace will be pitched, Rhoades says, to “value-based consumers” who shop at “value-based retailers, like Ross and Marshalls, the only retail segment of the economy that’s currently prospering.” Stores, their number not even estimated yet, will be offered “big, efficient floor plans” and low rents, he added.

The shoppers? They’re the ones “who now drive to Colma to shop,” Rhoades said.

Urban Realty’s crown is oversized, if not yet glittering. In addition to the three CityPlace parcels, Urban Realty’s portfolio includes 901 Market St. , the five-story building at the corner of Fifth Street that houses Marshalls; 925 Market St., a two- story structure that Rhoades says will be used as Cityplace’s construction offices; 974 Market St. a vacant one-story building on a lot that stretches back to Turk Street; the completely vacant 972 Market St., former home of Maxferd’s pawnshop with 29 rooms and 15 baths in the upper stories, which was probably an old rooming house; and the boarded-up 966 Market St. Also, down a block, at the corner of Fourth Street, is a ninth Urban Realty holding, 799 Market St., home of Ross and assessed at $42 million, an indication of how Market Street properties gain value on the way to the Ferry Building.

The money for the nine Urban Realty properties — which total about $150 million in assessments — comes from Commonfund, an investment company headquartered in Connecticut. Urban Realty calls it its “capital partner” in mid-Market, helping it “over two years … discreetly acquire nine properties in seven separate off-market transactions.” Commonfund, reported by S.F. Business Times in 2007 to be worth $35 billion, invests money for educational institutions, foundations, health care organizations and other large nonprofits.

“We work with these guys, because they’re good guys, socially responsible,” Rhoades said. Urban Realty looks for areas where the market is low and invests in developments that make things “better off than when we came to the block.”

CityPlace, one such development, Rhoades says, is located right in the middle of one of the city’s “pioneering” markets — perhaps a euphemism for risk coupled with opportunity.

Hollywood Billiards, Warfield

When mid-Market changes for the better, David Addington plans to be there.

On a rainy day in January, he sat inside Showdogs — the upscale wurst shop at the corner of Market and Taylor streets that he co-owns with the owners of Foreign Cinema, a Mission District hot spot — and watched homeless and bedraggled people stumble through the downpour.

“I am going to make this a better place to live and work,” he said.

How? “We’re sitting in one” — Showdogs is the kind of commerce that will help turn the tide, he said.

Addington talked generally about the area’s condition and future, but shared little about plans for his own two big mid-Market properties: the Warfield, which he acquired in 2005, and the Hollywood Billiards building at 1028 Market St. that he bought the year before.

A prospective tenant for 1028, a major art store, pulled out of negotiations, he said. He is moving forward with plans to open a restaurant in the Warfield and convert the building’s upper floors to commercial condos.

In August, Addington filed preliminary conversion plans for 23 commercial condos. He’s since changed that, he said, to seven commercial condos, one per floor, “so a business owner can step out of the elevator into his own space.” Upstairs commercial tenants would help stabilize the street’s ground-floor commerce, he suggested.

Two disappointments have damped Addington’s optimism: last year’s defeat of Proposition D that would have allowed mid-Market commercial signage — “signage is crucial for retail,” he insists — and the evaporation in 2006 of the Mid-Market Redevelopment Plan, a 10-year effort to revitalize the area that died in the Board of Supervisors’ Land Use Committee. After he bought his properties, Addington spent two years as an active member of Redevelopment’s Project Area Committee.

“When I came here six years ago, the streets were dangerous and scary,” he said. “Now they’re not quite as bad. The mayor and police chief were here last week announcing their ideas for the area. Our efforts have reached the attention of people who can make a difference.”

He believes CityPlace and Angelo Sangiacomo’s Trinity Place at Eighth and Market streets will have an “enormous” effect. But, in almost the next breath, he tells what happened to his mother-in-law recently: On a rare, nice day, she was eating in Showdogs’ outside area when a woman approached and asked for money. When his mother-in-law said no, politely, the woman got angry, lifted her shirt and exposed her colostomy bag.

“Now,” he asked, “what do you think the other people eating their hot dogs are going to remember? How good the food was or the colostomy bag?”

The city is responsible for helping “scary people” like this woman and getting rid of the people who deal drugs openly, right in front of Showdogs, he says. Poverty and homelessness aren’t keeping mid-Market down. “We’re facing an issue of bad behavior, where a single, antisocial person can affect all the merchants around.”

The bright spot? “ ‘Fiddler on the Roof’ opened Jan. 27. That’s going to bring thousands of hungry people to mid-Market.”

Another one bites the dust

While Mayor Newsom was on Market at Taylor in mid-January announcing his incentives to revitalize the main drag, across the street 13 employees of Pearl’s were getting more somber news: The arts supply store, a highlight of mid-Market retail for 15 years, was going out of business.

General Manager Joni Marie Theodorsen, a Bay Area native with Pearl’s for four years, said business has been down for two years and then Christmas was awful. But, she said, the whole nation is in the tank. The 16-store Pearl Arts & Crafts chain is closing seven other stores.

“We’re not one of the top sellers,” she said, “but certainly not the worst.”

A week later, Theodorsen told The Extra the store would stay open into February. With a half-off sale,  many shelves were already bare.

She said she wasn’t surprised that the San Francisco store would be closed, “but I didn’t think it would be this soon.”

Pearl art supplies is getting ready to close its doors for good in February. Photo by Lenny Limjoco.
The new Federal Building looms behind the hole left by the demolition of the Embassy Theater, with the shell of the Strand and the National Hotel, to the right, and the Odd Fellows Hall at far left. Photo by Lenny Limjoco.
A strip of empty storefronts on the south side of the street between Sixth and Seventh include the two-story 1023 Market, the still unfinished Superb Art Museum of America and the blue facade 1035 Market, which was renovated in the last 10 years, but never found a retail tenant. Photo by Lenny Limjoco.
A colorful anti-graffiti mural hides the long-vacant Hollywood Billiards storefronts on the north side of the block. Showdogs is just out of sight at far right. All photos were shot using a fisheye lens. Photo by Lenny Limjoco.
Buildings on Market Street, Eighth to Fifth

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Mark Hedin contributed to this report.