Possibly 1,000 businesses along the eastern edge of The City are operating illegally after their landlords failed to complete an amnesty program in areas where The City has adopted restrictions to protect light industry such as print shops, film production, auto repair and furniture wholesalers.
Back during the turn-of-the-century dot-com boom, high-rolling tech firms began pricing light industry out of The City, and blue-collar jobs began to vanish. Community advocates joined forces to battle such commercial gentrification.
In an effort to protect companies in the so-called PDR industries — production, distribution and repair — city officials began their decadelong effort crafting what is known as the Eastern Neighborhood Plan. That document used land-use controls in an effort to strike a balance among conflicting demands from the housing, industry, office and technology industries.
The plan designated about 7,000 parcels in the Mission, South of Market and Potrero Hill neighborhoods where buildings could only house such PDR uses. As part of those restrictions, the December 2008 plan created a three-year amnesty program, which expired Jan. 19, in which buildings that were made illegal by the new controls — mostly ones that had converted into office space — could become legal by paying an impact fee of about $10.50 per square foot.
But only 30 businesses applied.
Representatives of impacted businesses are now calling for an extension and also a reduction in the fees. And there is fear that if the program is not extended or the fees lowered, potentially hundreds of 5- to 10-year-old businesses will have to leave.
"Any small business without proper permits is subject to code enforcement and termination of use," according to a Planning Department report.
Land-use attorney Brett Gladstone is leading a campaign to extend the program and lower or eliminate the conversion fees. The fees were set before the economic recession.
"Some progressive activists have long wanted office users to leave the industrial districts, to move downtown, to move to Oakland, South City, wherever it is, but leave this space for heavy industry, even though there is no need right now," Gladstone told the Small Business Commission on Dec. 12. "The progressive activists have long been looking forward to Jan. 19 because that's the time they can start making complaints to the Planning Department."
Victor Vitlin, a co-owner of Lion Enterprises, a 150,000-square-foot building at 2525 16th St. in the Mission, said he has to pay $1.25 million to fix their legal status. His building is home to six businesses, including a catering company.
"Since the building is not full and the rents average about 75 cents per square foot, I cannot get that money from my tenants, who are struggling themselves," he said.
Vitlin also objected to the fees and asked for the process to be re-examined. "To us, what is good for small business is good for The City," he said.
The amnesty program could be extended for six months under legislation introduced by Supervisor Malia Cohen, which is going before the Board of Supervisors Land Use and Economic Development Committee today.
Cohen said while she is OK with an extension of the amnesty program, she is not willing to reopen other aspects of the politically charged Eastern Neighborhood Plan.
jsabatini@sfexaminer.com
Eastern Neighborhood Plan facts
