Business owners and residents in the path of San Francisco’s ambitious, new $4.2-billion transit-center redevelopment are voicing frustration that part of the neighborhood is being pressured to relocate. They include not only eight parking lots, but 26 other businesses and at least 24 live-work lofts.
The redevelopment of an emerging “transit center district” will bring billions of dollars of new housing, transportation and business to what planners call an under-used slice of South of Market.
Some small-business owners are conflicted. They say that while the project may be good for the city and for the region, it’s bad for their livelihoods. The nation’s struggling economic climate has taken a financial toll, they say, and it’s difficult to relocate when there’s no financing available. Moving will make it hard to sustain their current clientele.
The city can use eminent domain to demolish 21 buildings in a 145-acre chunk of downtown. It needs the space to create a complex where rail, bus lines and retail converge. The new center includes:
- A network of underground tunnels will reroute Caltrain from Fourth and King streets to First and Mission streets, and make room for high-speed rail.
- A new transit center that includes access to rail and bus transit, retail space and a “living roof” park, will replace the existing Transbay Terminal.
- Bus ramps leading into the new transit center will be erected.
Governments can invoke eminent domain to condemn any privately owned land as long as it is for the public use and the owner is paid a fair price. Thus far, eminent domain has been used to secure only one property, but the rigorous legal process is often what pressures property owners to agree to move.
Small-business owner John Gasser runs one of the 26 companies being forced to move. His father, Adolph Gasser, built a successful photography shop in the 1930s, and it’s been thriving at the Second and Howard location since 1975.
“I’ll lose this building because of eminent domain,” Gasser said. “It’s the worst decision the federal Supreme Court ever made. It means our castle is no longer our home. It belongs to the highest bidder.”
“I’m not opposed to the project, it’s progress,” said Rex Tabora, a co-owner of Zebulon restaurant on Natoma Street between First and Second streets. “But I feel the city is boxing us into closing by not paying us proper compensation. There’s no way we could get a loan right now in this economy.”
Gasser recalled the last figure the Redevelopment Agency offered him. “Something like $100,000,” he said.
“I’ve heard from Realtors that this building could get $250 or $300 per square foot. Now we’re sitting in 17,500 square feet. You do the math.” At the $250 rate, that’s $4.3 million.
“I couldn’t even install fixtures with that,” Gasser said. “They tell you you have to move, but they’re not going to give you enough money. There’s something wrong with that picture.”
Varnish Fine Art on Natoma Street echoed Gasser’s complaint. Relocation advisers offered Varnish $10,000 in 2007. Here is part of Varnish’s written response:
“There is no way in hell we could do all of the ‘actual reestablishment’ for $10,000. Based on several bids and renovation for our current location, we estimate this cost could range anywhere from $100,000 with no renovations needed, and up to $600,000 in order to get new location up to specifications and codes.
“Our fate lies in the hands of the TJPA – and that’s not a good thing. We feel that they will do everything possible to minimize allocating proper funds to all of the small businesses who are now in dire straights.”
The Transbay Joint Powers Authority — the city agency charged with constructing the transit center and the new transportation systems — is prepared to pay up to $3.4 million for all relocation payments, according to a 2007 relocation study.
Residents, too, are miffed by the order to move, because of the hassle. But there’s been little public opposition.
“I’m not going to start a protest,” said Bill Haskin, 37, who also rents a loft on Natoma Street and is scheduled to move in 2011.
Part of the $4.2 billion transit-oriented development is a new neighborhood, dubbed the Transit Center District. The proposal includes 2,600 new homes, 3 million square feet of new office space and 100,000 square feet of new retail. Sidewalks on Folsom Street will be widened, bike lanes will be added and new parks will replace parking lots.
City planners say the new neighborhood will boost jobs and create a transportation hub linking the region’s bus and train systems. They call it a model for an environmentally sound city.
San Francisco planners are hoping to use the new development to erase an unattractive and underused section of the downtown.
Housing activists say though the land may be put to a good public use, taking away housing, and especially rent-controlled properties, slowly chips away at tenants’ rights.
Tenants’ rights lawyer Dave Crow called it “unfair” to relocate tenants in the current rental market. “We never like to see tenants be displaced,” he said.
“And in my opinion, rent’s definitely not going down.”
The owners of several small businesses to be bulldozed have expressed their outrage in writing. The following are excerpts taken from letters written to relocation advisers:
“First off, we strongly object to the possible condemnation of the property is located at 83 Natoma Street. Zebulon has been in its current location for over seven years when no other business would dare venture out in what was then a ‘blighted area’ and since have watched the neighborhood develop into a true mixed-use area … The transit plans will negatively impact our restaurant business and our capital investment.”
“Varnish is our dream. We’ve put everything we had into it, all of our money, all our hearts and souls went into it. Varnish is alive … The brick, the steel, the wood and all the people who proudly contributed to its structure created this sanctuary, and we feel that means something … how do you put a price tag on that kind of loss?”
Mike Grisso, senior project manager for the San Francisco Redevelopment Agency, gave two reasons why the city considers that part of downtown blighted.
“One: The existence of the Transbay Terminal itself is outdated,” he said. “It’s unattractive and seismically unsafe. It has reduced investment and hurt development. And two: A lot of vacant parcels from the former Embarcadero Freeway have remained empty since they were torn down after the 1989 Loma Prieta earthquake.”
“This will be the epicenter of the entire city,” said Joshua Switzky, a project manager in the city’s Planning Department. “It’s old-school smart growth. Major density next to major transit.” At least one of the new buildings will stand at 1,000 feet — towering 150 feet over the Transamerica Pyramid — and several others will climb to nearly its height.
Though the project could relieve unemployment and foster economic development, some questions remain.
City planners say some buildings have to be taken down, though the transit center plan will preserve some historic sites, such as the Drexler Planters Hotel at 606 Folsom St. and the Philips Van Orden building at 234 First St.
Some buildings on the first block of Second Street couldn’t be salvaged, and were acquired either “under settlement or threat of eminent domain,” said Harry Quinn, real estate coordinator for Transbay Joint Powers Authority.
The 2000 census identifies 16,800 people living in SoMa — but the neighborhood is expected to absorb an influx of people, in part to accommodate the expected population increase in coming decades, city planners said.
“This can get very complicated, but generally speaking, this is a very good place to concentrate new housing,” said Jason Henderson, an assistant professor of geography at San Francisco State University who specializes in land use and transportation.
“If this works, and a lot of people start living down there, they’re going to need public services,” Henderson said. “Parks, schools, libraries. They need to make sure affordable housing is built on-site so the working class and lower-income people can live there.”
“The other is parking,” he said. “I’d hope to see new construction without parking, because the more parking there is, the more expensive the area becomes.”
Planners hope to complete the new transit center by 2014, and the downtown rail extension by 2019.
While acknowledging that the changes could create a more viable San Francisco, small-business owners say there are unforeseen costs. The current fabric of the neighborhood will have to be torn if a new neighborhood is to be woven in its place.
Both Tabora and Gasser are grappling with the idea closing shop. They said they’ll try to keep going in another location.
“We employ 20 people who depend on this job to support their families,” Tabora said. “We thought about closing, but it wouldn’t be fair to our employees.”
