WaMu and Levi Strauss Among New Businesses
Setting up Shop in Castro
Still significant amount of vacancies – no tenant yet for Tower Records space

By Jaime San Felippo

Levi Strauss & Co. was approved on June 12 for a conditional use permit by the San Francisco Planning Commission to open a new retail location at 525 Castro St., the former home of Castro Video.

Levi’s is currently waiting for their building permit to be approved, which should take three to six weeks, at which time they will begin construction immediately. According to EJ Bernacki, communications director for Levi Strauss, the new location should open sometime in September.

The clothing retailer is a welcome addition to the neighborhood, which has been struggling to keep storefront vacancies at a minimum while searching out retailers that complement the neighborhood and give back as well. Levi Strauss fits the bill, having financially supported the San Francisco AIDS Foundation, the Horizons Foundation, as well as the Frameline Film Festival, among other charitable groups.

“I think we’ll do good in the neighborhood,” said Bernacki. “We have been in San Francisco for 150 years and active in the LGBT community as well as the Castro for decades.”

Washington Mutual (WaMu) will also be joining the neighborhood, opening a branch at the former ICI Paints location on the corner of Sanchez and Market streets. The bank originally wanted to open a second branch at the former Ritz Camera location on the corner of 18th and Castro streets, but was thwarted by neighborhood organizations that said one branch was enough.

The bank had already obtained the lease to the former Ritz Camera location and has decided to donate the space to the LGBT Historical Society for one year, which will open a retrospective museum in November.

Vacancies Still Present
Storefront vacancies have peppered the neighborhood in the past couple of years and have become something residents and neighborhood shoppers have gotten used to seeing.

The most notable of these vacancies is the former two-story home of Tower Records, housed in the Market & Noe Center, that closed in December 2006. Since the closing of the music chain, foot traffic on the upper Market block has decreased tremendously and some small businesses have felt the consequences of such a big draw having its doors closed.

Brad Villers, owner of Kard Zone for the past five years, said since Tower Records closed business has been down sixty percent. Kard Zone shares the same building as the massive empty space and Villers is frustrated that the space has not been rented out yet, saying his small card shop depended on the traffic Tower Records brought to his doorstep. Villers is hoping that the legalization of gay marriage will bring increased tourism to the neighborhood, and that Kard Zone and other struggling businesses will reap the benefits.

“Some people are doing really well and some of us are really hurting,” said Villers. “I’m praying that I’ll make it to Christmas. Soon it will be two years of living on charge cards, trying to run my business.”

“I wish we had some good news that we had somebody,” said Kent Jeffrey, general partner of the Market & Noe Center that formerly housed Tower Records. “Tower was such a wonderful anchor tenant. We’re certainly hoping to get a new wonderful anchor tenant.”

Jeffrey’s family has owned the land where the Market & Noe Center is located since 1928 and even lived in the building as an infant. His family operated the Finnish Baths bathhouse on the property from the 1930s till 1986 when it was torn down.

“We were thinking Staples would come in,” said Jeffrey, “but they left us at the altar. We negotiated with them for five months and then they pulled out without giving us a reason.”

Citing confidentiality agreements with prospective tenants interested in the space, Jeffrey would not say more about who might move in.

Plant’It Earth sits across Market Street from Kard Zone and the Market & Noe Center. According to Erin Worthing, site manager, the botanical shop will be moving to a new location on Divisadero Street because they have outgrown their current location. He added that they have always had steady business.

“We did consider moving in there,” said Worthing, referring to the empty Tower Records location. “But the place is so big we’d go into debt just to fill the space. It does sadden us to see the vacant windows.”

Steve Adams, President of Merchants of Upper Market and Castro (MUMC) says that despite the presence of empty storefronts and the slow economy business is “pretty good as of today.”

He points out that the Castro depends a lot on tourism. The neighborhood saw booming business in the 1990s but took a plunge after 9/11.

Adams is hopeful for this year with the influx of visitors due to the new gay marriage laws. But after the initial excitement wears off, he said there are a year-round challenges to keeping the Castro commercially viable.

One challenge is getting people that live in the neighborhood to eat, drink and shop in the where they live.

“The other pressing need is parking for shoppers,” said Adams. “The LGBT community doesn’t live in the Castro anymore. It is still our historical home, but many in the community have moved out into more affordable neighborhoods.”

Adams is not as worried about the storefront vacancies as some business owners are. He said there is a lot of interest in many spots.

In response to the growing number of vacancies, MUMC partnered up with the Castro Benefits District (CBD) and Ken Stram, Director of Economic Development Programs at the LGBT Center, to form the Business Attraction Program, which began giving “broker tours” at the beginning of this year.

According to Stram, the program was birthed out of growing concerns that the vacancies were hurting the economic vitality of the neighborhood. He said the main goal of the tours, which take place about once a month, is to get more attention from brokers from across the city that seem to overlook the Castro District.

“We are working really hard to educate brokers in the Bay Area about the Castro,” said Stram. “Brokers assume it’s full and overlook us, so we are trying to reach out and build relationships with them.”

Stram noted that a few spaces have already been rented out.

Joe Costa, co-owner of De La Sole on Castro Street, said he is excited about the small changes happening in the Castro. He said business at his shoe store has been good and he is excited that Levi’s will be opening down the block from his business.

He is surprised that some locations have sat empty for as long as they have. Costa said he wants to see all the vacant storefronts filled, but only with businesses that are “a good fit for the neighborhood.

“I am not opposed, in principal, to big chains,” said Costa. “But I don’t want the Castro turning into Union Street.”

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