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enture capitalist Neil Mehta has purchased seven storefronts in San Francisco's Pacific Heights district as part of a move to support local businesses. This acquisition has sparked controversy as some businesses are being pushed out by their new landlord. In response to this issue, Supervisor Aaron Peskin plans to introduce temporary zoning controls next month on the Upper Fillmore Neighborhood Commercial Historic District across four blocks between Jackson and Pine streets. The legislation aims to boost the bargaining power of businesses to stay in their current locations by requiring landlords to get additional approvals for replacement tenants. This protection would apply specifically to companies in the city’s Legacy Business Program.
The proposed ordinance comes in response to complaints from longtime restaurants Ten-Ichi and La Mediterranee, which accused Mehta of shoving them to the curb. The sushi restaurant will close on Sept. 30, while the Middle Eastern eatery's lease ends in May. Supervisor Catherine Stefani is also considering legislation aimed at protecting the corridor’s mom-and-pop businesses from displacement.
Early this year, affiliates of Mehta, managing partner of locally based GreenOaks Capital, went on a buying binge along Fillmore, first scooping up the defunct Clay Theater and a building next door for $11 million. They then spent tens of millions buying up six more commercial buildings across a three-block stretch between Pine and Clay streets.
Cody Allen, a spokesman for Mehta, stated that the building purchases were made on behalf of a nonprofit foundation funded by the Pacific Heights native "with the objective of bringing in more small businesses, rather than introducing chain or formula retail tenants." The aim is to bring in a wider variety of food and beverage operators, revitalize the iconic Clay Theater, and restore Fillmore storefronts in need of investment.
Allen, managing director of Aegis Reserve, added that Mehta never proposed raising rents on any commercial tenant nor encouraged any sellers to evict tenants or raise rents. Supervisor Aaron Peskin, president of the Board of Supervisors, tied what was happening on Fillmore to a larger initiative to upzone a large swath of the city to allow taller buildings meant to help meet San Francisco’s housing requirements. He compared Mehta's efforts to California Forever, a once-secret initiative funded by Silicon Valley billionaires to create a utopian city in east Solano County. In the face of mass community opposition, a planned ballot measure to allow the city was scuttled this year.
"Fundamentally, it is irresponsible to signal upzoning plans to real estate interests without first creating the protections for our beloved neighborhoods-serving businesses," Peskin told reporters during a press conference. "They aren’t even getting a bus ticket."
