New Plan Proposes Housing, Enlarged Smart & Final

By Carol Dimmick

San Francisco developer Sagamore Associates is finalizing a plan to build 120 units of housing, a two-story underground parking garage and new retail space along the crowded Clement Street commercial corridor between Sixth and Seventh avenues. The mega-project would also include rebuilding the Bank of the Orient on Sixth Avenue and a new Smart & Final supermarket on Seventh Avenue.

One of the few large infill sites left in the Richmond District, the majority of the property, with the exception of the corner lots on Sixth and Seventh avenues at Clement Street, is owned by several members of a French family in a trust that is administered by Bankers Trust of California.

The Sagamore Associates' plan, which would turn a large tract of commercial property along Clement Street between Sixth and Seventh avenues into housing and retail space, threatens to drive a number of small, family-owned stores out of business, but has won the support of several powerful neighborhood organizations.

After hearing presentations in March by Bob Mendelsohn, president of Sagamore Associates, the Planning Association for the Richmond and the Clement Street Merchants Association, two influential neighborhood watchdog groups, gave their tentative approval to the project. Mendelsohn declined to discuss the project for this article.

"The PAR board voted unanimously to support the development's concept," said Ron Miguel, president of PAR, the oldest neighborhood organization in San Francisco.

However, in a March 6 letter to Mendelsohn, Miguel outlined several concerns he said could lead PAR to withhold final approval.

According to the letter, PAR wants the housing component to be the first priority, while the preliminary plan Mendelsohn is proposing rebuilds the Smart & Final supermarket first and leaves the development of the housing component to an uncertain date in the future.

"Housing over retail on the Clement Street portion of the project should be included in an early phase. To leave it out or to an uncertain future time is a disservice to the site and to the need for housing in San Francisco," Miguel said.

Miguel also told Mendelsohn that the two-story underground garage, which is expected to run under the entire project, should be accessible from Sixth and Seventh avenues to facilitate the flow of traffic and ease a parking shortage in the neighborhood.

The project also got an enthusiastic endorsement from Irwin Phillips, president of Inner Clement Street Merchants Association.

"Any improvement that is going to bring more customers and parking to the street, we are going to approve," said Phillips, who owns an insurance business located at Deeds and Daily on Ninth Avenue.

While Phillips was enthusiastic about the project, he has concerns about the way the owners are treating small business proprietors along Clement Street during recent lease negotiations.

"We're dealing with foreign owners and a bank that is not from San Francisco. The bank's sole purpose is greed. It does not care about the neighborhood," he said.

While the project made a good first impression with local planning and merchants associations, a number of family-owned businesses who lease space along Clement Street are feeling the squeeze from recent rent increases.

Although development of the Clement Street retail parcels are not scheduled to begin until 2003, the owners are bringing rents up to market value as they expire, asking for shorter lease terms and leaving demolition clauses in contracts, according to sources familiar with negotiations.

Terry Lum, owner of Young's Hallmark store on Clement Street, is closing his doors after more than 20 years after his rent nearly doubled. Lum had harsh words for the way Cushman & Wakefield, the real estate agent hired by the family trust, handled the recent lease negotiations.

"I'm in the property management business myself and I have never seen treatment like this. I was told to take it or leave it, just like that," Lum said.

He said it was a difficult decision to close his business.

"We want to say thank you to our regular customers who have been loyal over the past 20 years," Lum said.

Another business that may be forced to close is Schubert's Bakery, a family-owned business that has been at the same location on Clement Street for more than 50 years.

Owner Lutz Wenzel is currently in lease negotiations and said the owner was asking for a big rent increase and wanted a shorter-term lease.

"We would like to stay. The business has been successful, but I don't know, we will have to see how it turns out," Wenzel said.

Several other owners in the middle of lease negotiations declined to comment, but the May Wah Market, another staple along Clement Street, was spared from the current round of rent increases because its current lease expires in three years.