Photo courtesy of Back Streets Business Report.

Photo courtesy of Back Streets Business Report.

August 2008

Back Streets Businesses Want to Stay in Southeast San Francisco

By Kerry Fleisher

A seamstress at Advanced Technical Sewing (ATS) meticulously darns medical bags in a large, well-lit facility in Bayview, just a T-Third Muni ride away from her front door in Chinatown.  Around the corner at Bode Gravel and Concrete, cement trucks roll in and out, dispatching concrete to Mission Bay, Dogpatch, and South-of-Market building sites.  ATS and Bode are two of 10,000 Back Streets Businesses – small and medium-sized firms that provide industrial products or services – that are located within San Francisco, but rarely visit City Hall to vocalize their needs.

These behind-the-scenes industrial businesses, as integral to the local economy as the retail or service sectors, are slowly being pressured out of the City by residential and office development.  Bode, for example, has moved locations three times within San Francisco to comply with zoning regulations since they were founded in 1915; currently they have a 10-year lease on Port property, with no guarantees that they’ll be allowed to remain in the long-run.

Under the guidance of District 10 Supervisor Sophie Maxwell, the Back Streets Businesses Advisory Board issued Made In San Francisco late last year to highlight the importance of Back Streets Businesses to San Francisco’s economy. The advisory board, which consists of industrial business owners, academics, union leaders, South-of-Market activists, and non-voting representatives from five City agencies, hope the report will influence zoning policy emerging from the Eastern Neighborhood Draft Plans.  The Plans are currently undergoing Environmental Impact Review certification.

San Francisco residents are dependent on Back Street Businesses.  The enterprises generate $55 million in annual payroll taxes, responsible for more than one-fifth of the City’s payroll tax revenues.  Back Street Businesses employ more than 80,000 workers  –  approximately nine percent of San Francisco’s total employed workforce – which catalyzes at least twice that many indirect jobs.  Yet it’s biotech that’s the economic sector du jour, not light industry.  According to Mike Battini, co-president of Sheedy Drayage, an industrial contractor, “Skilled labor is looked down upon in San Francisco, even when those laborers make six figures a year.”

Made In San Francisco attempts to derail some of the stereotypes associated with the industrial sector.  The report divides Back Street Businesses into a dozen categories, such as specialty manufacturing, food production and catering, and warehouse and delivery.  The report demonstrates how dependent restaurants are, for example, on Back Street Businesses.  Dinner for two at Delfina Pizzeria, a trattoria in the Mission, relies on 25 Back Street Businesses located throughout the Bay Area.  A meal consisting of calamari, bean salad and buttermilk panna cotta, for instance, entails deliveries from five different San Francisco food suppliers alone.  The furnishings and table settings are provided by 14 different San Francisco businesses, such as Economy Restaurant Fixtures, American Linen, Murphy Printing, City Lights and Arrow Paper Company.

Mark Klaiman, Back Streets Businesses Advisory Vice Chair and owner of Pet Camp, an overnight facility for dogs and cats, hopes Made In San Francisco serves as a catalyst for changing the way politicians view the light industrial sector.  And zoning policy should accommodate the varying needs of different populations, according to Klaiman.  Rather than having residential areas collide with industrial space, for example, there should be a gradated buffer zone from industrial, to mixed-use, then retail and housing, according to Klaiman.  “There should be a stepping down of industrial space nearby,” he said.  

Various policies can be adopted to protect industrial uses.  A nuisance ordinance sponsored by Supervisor Maxwell, which legally protects compliant, pre-existing industrial use from potential squabbles with adjacent residential housing, was passed by the Board of Supervisors in 2006.  The ordinance states that landlords must disclose the potential for industrial interference, such as noise, odors, dust, and operation of machinery, before leasing adjacent residential property.

“We should all share this burden, and not just industrial owners.  Developers have certain obligations,” said Klaiman.  He pointed to South-of-Market, where the vibrant nightclub scene has conflicted with residential development in recent years.  The nuisance ordinance is a good first step, according to Klaiman, to encourage developers to proactively reduce the chance for zoning conflicts.  In addition, South-of-Market condominium developments should feature better insulation and double pane windows facing away from clubs, he said.

The nuisance ordinance, along with redevelopment community meetings, has helped Bayview’s economy, according to Bob Legallet, a Back Streets Businesses board member and Bayview property owner.  “I’m happy there’s been a sense of vitality recently brought to Bayview industrial property,” he said.  Legallet occupies a nostalgic niche in San Francisco history.  In his office headquarters near Islais Creek, mementos from his family’s now defunct leather tannery business from the 1920’s abound: kangaroo, buffalo, and calf skins drape over the wooden walls; black and white photos of his French grandfather proudly displaying cow hides line the conference room.

Back then Third and Evans streets were called “Butchertown,” and the Legallet family tannery business abutted a dairy farm.  The business eventually moved to Revere Avenue and Griffith Street, where “everything was filled with garbage,” Legallet recalled.  Now the surrounding area is cleaner, and the buildings are separated from the coastline by a large patch of landfill.

In 1979, the tannery closed its doors, and the Legallets sold the equipment to South American companies.  The land stayed with the family, and Legallet stayed with the land, rejoining the family business after college.  Legallet now owns a 400,000 square foot property along Islais Creek, along with other industrial property in South San Francisco.  “We don’t call ourselves investors, we call ourselves managers,”  he explained.  And Legallet focuses his energies on his long-term neighborhood; he doesn’t concern himself “with anything north of Cesar Chavez,” he said, with a pinch of pride.  

Legallet acts as a liaison for small business owners and tenants who don’t participate in community meetings, due to language barriers or lack of time. “My best interest is to be their benefactor,” he said, lamenting how downtown interests can slow progress towards protecting Back Street Businesses.  Light industrial owners are not “smoke-spewing health degenerating producers,” as the public might suspect, according to Legallet.      

A mantra of the Back Streets Businesses Advisory Board is that Back Street Businesses are the primary source of income for those without four year college degrees.  And these workers aren’t just scraping buy.  The average Back Street Business worker with some college experience makes roughly $3,000 more annually than their counterparts in other economic sectors; those with only high school education earn roughly $4,000 more a year than high school graduates in other sectors.

Klaiman views higher wages as a hard-to-ignore upside of the Back Streets Businesses sector.  “Industrial jobs traditionally pay more than jobs in the service sector, which increases the middle class,” he said.  “Not everyone wants to work behind a desk downtown.” Legallet shares this opinion, noting that there’s more room for advancement among blue-collar workers, since nuanced industrial skills are on the decline.

Despite the intricate web of Back Streets Business transactions that take place in San Francisco every day, residents may be surprised to learn that many products sold in the City are made in San Francisco.  Legallet proselytizes this overlooked concept whenever possible, bringing Anchor Steam Beer, Underwood Sausage, and Triple C cookies – all made in San Francisco – to City Hall when he visits.  Right alongside the Vixen Creation dildos made in Dogpatch.  “That always gets some laughs,” he admitted, mischievously.

Made In San Francisco highlights a number of planning policies from other traditionally vibrant industrial cities, and suggests how San Francisco can emulate these successful programs.  The term Back Streets Businesses was coined by the City of Boston’s Redevelopment Agency, which provides industrial planning services and a team of business managers who serve as ombudsmen to Back Streets Businesses.  Cleveland has an industrial outreach program, which helps businesses relocate as needed.  Oakland provides financing options for industrial businesses having difficulty obtaining loans.

These policies and public programs stand in contrast to San Francisco, where the City’s Chamber of Commerce doesn’t adequately represent the true needs of the light industrial sector, according to Made In San Francisco.  As a property manager with a diverse mix of industrial tenants, Legallet tries to do his bit to lighten the stress of running a small business, with or without the government propping them up.  He installs showers for industrial tenants as needed, for example, and personally warns neighborhood kids about the dangers of skateboarding on truck ramps. “I’m kind of a socially conscious guy,” he shrugged modestly.

 

 

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