After a year of fine-tuning, the Board of Supervisors may finally enact new regulations on office cafeterias. Ostensibly protecting restaurants and other small businesses adjacent to tech companies, the legislation has troubling aspects, including further expansion of Conditional Use.
The intent seemed simple and salient enough: the City gave tech businesses tax breaks to settle in the Mid-Market corridor, and that was expected to lift all boats. Big employers would attract small businesses, like restaurants, to serve their employees.
But for many stakeholders, it hasn't turned out that way. The influx of technology businesses onto the corridor hasn’t stopped business failures, especially of restaurants and cafés. Contrary to expectations, “Ground-Floor Activation” has yet to materialize in many areas of the district. The cafeterias run by tech companies for their employees make easy scapegoats.
"When you have a business practice that works in an isolated office environment, and when you bring that business practice to our City, I think it's okay to debate whether that's the right way to go,” said Supervisor Ahsha Safaí, the legislation's author, at the most recent Planning Commission hearing last March.
But while the alienation narrative has populist cachet, does it really explain continued business failures in Mid-Market, despite the highest level of investment in decades?
Tech has indeed has been responsible for the growth of business models which threaten restaurants; that phenomenon is hardly restricted to Market Street. Some contend the real issue is continued blight, plus delays in projects like Better Market Street and the Transbay Center.
One developer on the corridor argues the real solution for ground-floor activation would be to subsidize retail space for commercial tenants likely to "generate foot traffic and enliven the sidewalk in a positive manner."
Finally, new restaurants have always been a hallmark of gentrification, something which the Board of Supervisors has taken great pains to push back. Yet it seems now that a tax incentive policy is under fire for…not engendering gentrification.
It's no surprise, then, that the original bill, calling for an outright ban, was met with significant pushback, and not just from the usual suspects.
The Planning Commission rejected the legislation twice - most recently in March when they considered the new version which forgoes a ban in favor of a mandatory Conditional Use process.
The only supportive business group has been, predictably, the Golden Gate Restaurant Association. GGRA Policy Manager Chhavi Sani spoke in favor of the revised bill, stating "we believe private enterprise should be able to make the best decisions for their businesses, but we also believe that when they decide to locate in the city, they have a responsibility to that community."
But is preserving market conditions that keep wages down part of that "responsibility”? It's an open secret that the cafeterias provide food service workers with considerably better pay than restaurant wages.
Dante Ballard, from UAW local 2501, representing cafeteria workers at Airbnb, put that issue in stark relief at the same hearing: "I'm fortunate enough to have a well paying job, with excellent working conditions, including health care coverage and a 401(k)... having a Conditional Use requirement only creates hurdles to providing more of these good jobs…We don't really take away from the bottom line of the restaurants."
After the Planning Commission’s second rejection, Safaí has continued to amend the bill and now claims to have appeased almost all previous opponents.
“We began this conversation with a hard ban in response to concerns from neighboring businesses. Since then we've been listening to all the stakeholders involved, businesses, workers, suppliers – and made concessions,” says Supervisor Safaí. “This is a similar level of review as other neighborhood businesses. If they put their best foot forward in the process, they'll do okay.”
At last week's Land Use Committee meeting, Chamber spokesperson Dee Dee Workman spoke in continued opposition. She noted that a mandatory Conditional Use process in many cases “will effectively ban” new cafeterias. She reiterated that these office cafeterias “provide well-paid and benefited jobs to Bay Area residents who desperately need them” and that "many small business vendors who supply these cafeterias will be hurt by this legislation."
According to Safai, the San Francisco Chamber of Commerce “didn’t get the memo.”
Apparently sf.citi, the City’s leading tech lobby group, missed that memo too. Executive Director Jennifer Stojkovic gave us this statement:
“We’ve seen Supervisor Safai's legislation improve from being an outright ban on cafeterias to requiring a conditional use permit that adds to bureaucratic city processes. While sf.citi remains unsupportive of this legislation, we look forward to a final version that does not jeopardize the livelihood of our local workforce currently employed by corporate cafeterias, which provide competitive pay, benefits, and a reliable work schedule."
That the legislation now consigns office cafeterias to the ever-growing domain of Conditional Use Zoning, with its corrosive effect on affordability, is ironic. Tech workers may not be able to afford their own apartments, but at least they get free lunch - or, at least, they used to.