SF’s Peskin Proposes Zoning Protection for Mom-and-Pops

Venture capitalist Neil Mehta paid $100 million for eight buildings with stores and restaurants in San Francisco’s Pacific Heights in a move meant to support local businesses, according to a spokesman.

But Supervisor Aaron Peskin plans to enact temporary zoning in a historic district along Fillmore Street to protect restaurants who say they’re being pushed out by their new landlord, the San Francisco Standard reported.

The mayoral candidate will introduce the temporary zoning controls next month on the Upper Fillmore Neighborhood Commercial Historic District across four blocks between Jackson and Pine streets.

The legislation would boost the bargaining power of businesses to stay in their current locations by requiring landlords to get additional approvals for replacement tenants. The protections would apply specifically to companies in the city’s Legacy Business Program.

The proposed ordinance comes in response to complaints from longtime restaurants Ten-Ichi and La Mediterranee, which accused Mehta of shoving them to the curb. The sushi restaurant will close on Sept. 30; the Middle Eastern eatery’s lease ends in May.

Supervisor Catherine Stefani, whose district includes the Upper Fillmore, is also considering legislation aimed to protect the corridor’s mom-and-pop businesses from displacement.

Early this year, affiliates of Mehta, managing partner of locally based GreenOaks Capital, went on a buying binge along Fillmore, first scooping up the defunct Clay Theater and a building next door for $11 million.

They then spent tens of millions buying up six more commercial buildings across a three-block stretch between Pine and Clay streets.

Cody Allen, a spokesman for Mehta, said the building purchases were made on behalf of a nonprofit foundation funded by the Pacific Heights native “with the objective of bringing in more small businesses, rather than introducing chain or formula retail tenants.”

“Our aim is to bring in an even wider variety of food and beverage operators; to revitalize the iconic Clay Theater; and to restore Fillmore storefronts in need of investment,” Allen said in a statement.

Allen, managing director of Aegis Reserve, added that Mehta never proposed raising rents on any commercial tenant, nor had he encouraged any sellers to evict tenants or raise rents.

Peskin, president of the Board of Supervisors, tied what was happening on Fillmore to a larger initiative to upzone a large swath of the city to allow taller buildings meant to help meet San Francisco’s housing requirements.

He compared Mehta’s efforts to California Forever, a once-secret initiative funded by Silicon Valley billionaires to create a utopian city in east Solano County. In the face of mass community opposition, a planned ballot measure to allow the city was scuttled this year.

“Fundamentally, it is irresponsible to signal upzoning plans to real estate interests without first creating the protections for our beloved neighborhoods-serving businesses,” Peskin told reporters during a press conference. “They aren’t even getting a bus ticket.”

— Dana Bartholomew