San Francisco pumps $6M of improvements into several blocks near Union Square

San Francisco officials have allocated $6 million for the beautification of several blocks on Powell Street that lead into Union Square, and to encourage tenants to fill its large empty retail storefronts.

A city press release states that about $2 million will be used to support 10 new tenants for storefronts in Powell, either by subsidizing tenant improvements, or "directly subsidizing other aspects of the startup costs of a new business." The remaining $4 million will be used to replace the existing metal sidewalk extensions along the Powell Street Promenade, between Market and Geary Streets. This will widen the sidewalk and incorporate the cable cars as well as the architectural style.

The co-sponsors, Mayor London Breed, and Supervisor Aaron Peskin representing Union Square District 3 see the improvements as an important step towards revitalizing the stretch of road along the cable car start point. This is the first impression that many tourists get of downtown San Francisco when they exit the BART station.

The retail sector in the area is desperately lacking. Eight empty storefronts were visible on Powell Street between the cable car turn-around and O'Farrell Street, and 16 vacant ones between Market and Sutter. This does not include the restaurant at the Beacon Grand Hotel's ground floor that is still under wraps. The former H&M, Uniqlo and Gap flagships at the cable-car turnaround are vacant, as is the former Gap flagship on the corner of Post and Powell.

According to a leasing advertisement for the Flood Building on Market and Powell Streets, 10,000 pedestrians walk by this location every hour. A suitable retail tenant, or even for the spots nearby, has not been found.

The grant will only be made available to a specific storefront after a landlord has reached an agreement with a tenant on the terms of leasing. The grants are not clear if they have a limit, or if they can be used beyond Union Square, where the moribund stores are most noticeable. I will update this article if I receive any information.

The grant program is coordinated with a separate $700,000.00 effort by the city, administered by nonprofit SF New Deal, (formerly pandemic food delivery), that offers grants up to $8,000, permitting assistance, and $5,000 to property owners who are willing to host pop-ups in the Financial District or Jackson Square. According to the Downtown SF Partnership, there are currently 45 ground-floor retail, restaurant or pop-up spaces available.

Meanwhile, the city's legislative package reforming zoning in Union Square -- making above-ground-floor space more flexible and office-to-residential conversions less onerous -- was recently greenlit by the Planning Commission for review by the Board of Supervisors.

Breed's budget proposal will be presented to the Board of Supervisors June 1st. San Francisco Municipal Transit Authority will provide the remaining $2 million to support sidewalk improvements.

Jeffrey Tumlin is the director of Transportation for SFMTA. He said, "A vibrant Powell Street is critical to downtown San Francisco’s economic recovery." It's important to us that we support this project. Powell Street will become more welcoming for both tourists and locals.

Breed told a press event on Tuesday in Union Square at Geary and Powell that her proposal goes beyond just making improvements. It is also meant to send a message regarding the city's downtown approach. CNN aired a special hour on Sunday that focused on the fentanyl and homelessness in downtown San Francisco, asking if it could be a "failed" city.

Breed stated that "we need to change the way we do things here in order to support Union Square and our downtown." This stretch of Powell Street is a place for shopping, dining, and activity.

Breed and Union Square Alliance CEO Marisa Rodrguez have called attention to this stretch on Powell as a public-private revitalization priority, particularly for tenants like pop-ups - a sort of tide-over until longer-term renters come around.

The Friends Experience, for example, took over the former H&M shop at 150 Powell St., which had been vacant since the beginning of 2021, for a few short months. Samsung leased the nearly 30-square-foot Uniqlo shop for a pop-up promoting its products following Uniqlo’s closure in spring 2021.

Tenant improvement costs, especially for pop-ups, can be a major barrier to entry along the historically high-traffic retail storefronts with very high rents. Permits for Samsung's pop-up store in October last year, for example, showed that the space could have required nearly $200,000 worth of preparation work.