West Portal Worries

The neighborhood has avoided a plague of vacancies, but stability brings its own threats

By Shwanika Narayan and Roland Li | Sept. 27, 2019

On most days, West Portal Avenue teems with shoppers. Parents with little children scuttle from Ambassador Toys to the public library. When thousands of daily commuters exit the century-old Muni station, they’re steps away from bars and restaurants — some of which have been there for decades, like the Philosopher’s Club.

The stores here, and their owners, are resilient. Papenhausen Hardware survived a fire, filled a temporary space, and returned this month to its renovated, restored original space. Though the CinéArts at the Empire had to split its one screen into three, it’s the rare neighborhood cinema that still thrives in San Francisco.

For West Portal resident Tara Hardesty, who brought her kids to meet Clifford the Big Red Dog at a September book festival, the consistent roster of events foster a strong sense of community. It’s one of the reasons she purchased a home there.

“West Portal has always been a place for families,” she said, as her kids played lawn games and filled up coloring books. “There’s a real sense of community here and you still get the perks of the city while being in a quieter environment.”

West Portal merchants try to encourage neighborhood residents and visitors to patronize independent retailers. | Jessica Christian / The Chronicle

Stories like Hardesty’s tell you some, but not all, of the reasons West Portal seems largely immune to the plague of empty storefronts proliferating in many San Francisco neighborhoods. It doesn’t have the cachet of Union Square or the tourist magnetism of North Beach and Chinatown, but West Portal’s compact four-block size boosts foot traffic, merchants say. West Portal has the lowest retail vacancy rate among the city’s neighborhood shopping districts, suggesting it has weathered the tsunami of e-commerce better than other places.

Chronicle investigation in North Beach, the hardest-hit neighborhood in recent years, uncovered many reasons that stores fail and landlords struggle to find businesses to replace them. Understanding a success story like West Portal is harder — as is seeing the challenges that may lurk beneath a veneer of prosperity.

One factor that is hard to reproduce is wealth: According to 2010 census data, West Portal’s 8,052 residents have a median household income of $140,737, compared with the city median of about $96,000.

But how they spend that wealth has shifted dramatically. West Portal’s sales tax revenue — a measure of retail performance — rose steadily for years until it dipped 2% from 2017 to 2018, according to city data. That masks big shifts in the tax base: Tax collections from restaurants grew almost 50% from 2013 to 2018, matching a nationwide trend of increased spending on food away from home, while retail declined by 16% over the five-year period.

Business advocates say that while West Portal has historical economic advantages, it can’t be complacent. Small businesses grapple with all the challenges of retail, including the rising cost of business operations, the shift to online shopping, and changing consumer tastes.

Those challenges make events and other promotions crucial. “Foot traffic is down all across the city,” said Vas Kiniris, executive administrator of the San Francisco Council of District Merchants Associations. “People really do not need to get out of their homes to buy a product or to even get food. So we need to create these experiences for people to come to these corridors.” Kiniris said the rise in restaurant sales tax revenue reflects a preference for experiences, rather than material goods.

Merchants are doing what they can to provide those experiences, organizing street fairs, parades and guest talks. The nearby Stern Grove Festival draws 100,000 music fans during the summer. In some neighborhoods, Airbnb has a bad reputation for driving up rents or bringing noisy tourists to quiet residential streets, but here, business owners credit hosts for sending out-of-town customers their way. But events are costly, too, with street permits, bus rerouting fees and security costs to be paid, Kiniris said.

In West Portal, there are not only stores, but also services like dentists, doctors, real estate brokers and financial planners, making it a self-sustaining business area, he said.

“People are very loyal to this community. They grow up here, they raise their families, then the children come back,” he said.

The owner of Ambassador Toys says many shoppers come to the store, take pictures and then search for the items online. | Jessica Christian / The Chronicle

But do they open up their wallets? For Linda Kapnick of Ambassador Toys, that’s the challenge.

“We have a very nice following in the neighborhood, but I don’t see growth,” said, Kapnick, president of the 22-year-old store. “We’re seeing our sales drop.”

Customers come in with kids, pick out toys and then buy them for less from Amazon, she said. It’s impossible to compete on price with the e-commerce giant, she said.

“They literally take pictures and then say, ‘Oh, well, I can find it cheaper on Amazon.’” she said.

Maryo Mogannan, vice president of the West Portal Merchants Association, sees another negative effect from Amazon. He owns the Postal Chase, a shipping store, and says younger customers will walk in and be shocked that it costs money to mail things.

“These under-30s go, ‘What do you mean I have to pay $10 to mail this? Amazon gets me this two days for free,’” he said. He sees a broader problem with online convenience. Young customers expect everything to be brought to them. And that hurts local retailers, he said.

And while the neighborhood has abundant transit, parking is limited. Many shoppers want to drive to the street and park, particularly if they have kids in tow, said Kapnick.

Perpetual construction on the century-old West Portal Muni Metro Station has led to rerouted traffic and street closures.

Parking tickets cost $90 or more, which can also turn off shoppers from returning.

“At some point, you just lose interest in going to an area,” said Papenhausen Hardware co-owner Karl Aguilar.

Some West Portal businesses have ended long runs. In August, 82-year-old Portals Tavern closed because its new landlord didn’t extend the bar’s lease. Others like Manor Coffee Shop, a diner that opened in 1967, was shuttered in 2016 when the owners retired.

Papenhausen Hardware, which has been open in West Portal for more than 80 years, survived a 2018 fire, thanks to a generous insurance policy that covered workers’ salaries and to $7,500 in aid from the city. After a year, it relocated to a temporary space. This month, Papenhausen returned to its building, which has a gleaming new interior.

Beyond selling hammers and doorknobs and locks, the nine-person business offers expertise that’s hard to reproduce online. Employees are able to answer specific questions like how to hang a flat-screen television on old lath and plaster walls, or repair sinking steps.

“So as long as those problems exist … we’re going to be fine,” said Matt Rogers, the longtime co-owner of the store.

Events are another draw that e-commerce lacks. One of the businesses filling up the neighborhood calendar is Bookshop West Portal, which opened in 2006, a time when big chains were going out of business because of Amazon. (A Waldenbooks in the neighborhood closed the same year Bookshop opened.)

Bookshop averages six events a month, said co-owner Anna Bullard. In early September, the inaugural West Portal Book Festival drew hundreds. The week included author talks, a neighborhood book swap, and a day for children. The bookstore teamed with the local movie theater and Rain Tree Cafe for some events.

Clifford the Big Red Dog greets kids attending the West Portal Book Festival. Events are crucial for drawing foot traffic, merchants say. | Jessica Christian / The Chronicle

“We’ve been competing with Amazon for a really long time,” Bullard said. “I think local governments need to be more aware of all the tax breaks they give to these big businesses.”

Some tech companies are trying to pitch themselves as helpful to local stores. Airbnb, as part of an effort to build bridges with neighborhoods where its hosts rent out beds, held its first merchant walk in West Portal in June 2016.

“We’ve heard that the walks are helpful in driving daytime foot traffic,” said Adam Thongsavat, deputy director for public policy at Airbnb. “That’s what really helps commercial corridors thrive.”

Phil Li, an Airbnb host who works from home for a Seattle tech company, said guests invariably ask for recommendations when they stay at his place.

Getting customers in the door is one thing. Keeping the doors open is another, as rising rents throughout the city pose a challenge.

“All neighborhoods want more retail, and retail is going through a sea change — even reasonable rents are really high,” said Deidre Von Rock, former president of the West Portal Merchant Association.

She said a number of reasons were behind the handful of vacancies in West Portal, including landlords who don’t need to rent or are picky about tenants.

The vacant spaces in the neighborhood tend to be larger, commanding higher rents than a local, independent business might want to pay. RadioShack vacated 123 West Portal in 2014 after almost 50 years. Verizon was negotiating a lease in 2017 and went as far as submitting paperwork to the city, but pulled out at the last minute, said Ken Brownell of real estate firm TRI Commercial, who represents the space.

The owner of 123 West Portal, Rodney Malouf, 82, said he wants a business in the site that’s “immune from the internet.” Malouf, who inherited the property from his mother in the late 1960s, said he doesn’t want to sign up businesses that are “trendy right now, but may not exist in the future.” In an ideal world, he said, RadioShack — which went bankrupt twice in the past four years, a case study in failing to adapt to the times — would still be a tenant.

Brownell said there’s interest in the location from workout studios, which Malouf is averse to, he said, and restaurants, which would require conditional use permits, a lengthy and costly process.

The city has placed restrictions on the property’s use, he said, “and the owner has added more restrictions.” Rent for the location is $8,000 a month, $500 less than what RadioShack used to pay, Brownell said.

Malouf’s property is still the exception. Most of West Portal’s shops are filled, but that stability comes with risks.

A man checks the progress of Papenhausen Hardware’s preparations as it returns to its original location after a fire had forced it to relocate temporarily. | Jessica Christian / The Chronicle

“If you have a lot of businesses that have been around forever and haven’t adapted or changed, then the street’s going to slowly die,” said Aguilar, the Papenhausen co-owner. “The market changes. People change.”

View the original article on San Francisco Chronicle here.

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