From the Central Freeway’s Ashes, a Booming Hayes Valley Economy

While the rest of San Francisco struggles to manage commercial vacancies and blight, small businesses thrive.

There are pockets of blight all over the city, where commercial storefronts have stood vacant for months or years. Trash collected behind a metal gate covering the entrance to an old pizzeria on Golden Gate Avenue. The Harding Theater on Divisadero sat empty for more than a decade, rotting into the earth. The shell of an old cinema at 2555 Mission St. has been covered time and time again with graffiti. In a city as dense and expensive as ours is, with complicated zoning and construction laws, it’s not surprising this blight exists.

But it’s not everywhere. One neighborhood has seen such economic success that storefronts are snatched up as soon as the last tenant moves out. One might argue that Hayes Street between Laguna and Gough is the healthiest commercial corridor in the whole city.

This didn’t happen overnight. Before the Central Freeway was pulled down in the late 1990s, Hayes Valley was a rough area. Those storefronts tucked beneath the underpass struggled: Police avoided the area, taxis wouldn’t pick up customers, and crime was rampant. But with the removal of the dark cement shadow overhead, the neighborhood began to boom. Housing was rapidly constructed on empty parcels of land left vacant by the freeway’s supports. Businesses were attracted by the cheap rents. Owners and residents began hosting block parties to draw people in.

The efforts paid off, and gradually, the economy improved. Today, a number of stores have sat on the street for decades. Hayes Street Grill opened in 1979 and continues to draw a (mostly older) crowd looking for a place to eat before seeing a performance at the Symphony. Suppenküche opened on the corner of Laguna and Hayes streets in 1993, and still sees an hour-plus wait on weekends. Fiddlesticks, a children’s clothing store, opened in 2002, and the oh-so-pink gift shop Lavish a year later.

Businesses that do close down are speedily replaced. When longtime furniture store Propeller shuttered — the owner retired and moved to Mexico — new athleisure company Outdoor Voices snapped up the large storefront at 555 Hayes St. And in 2015, when neighborhood mover and shaker Russell Pritchard decided to retire and shut down Zonal at 568 Hayes St., Will Leather Goods signed a lease before he’d even cleared it out. The owners of burger joint Flippers passed on their lease to the owners of their next-door neighbor, Brass Tacks — formerly Marlena’s — before hanging their closed sign on the door. Less than a year later, it reopened as cocktail bar Anina.

What’s most remarkable about the rampant economic success of the neighborhood is the fact that it holds almost entirely small businesses. A strict formula-retail ban has blocked a number of large companies — any with more than 13 locations — from opening up, in an attempt to preserve the character of the neighborhood. And with a couple exceptions (here’s looking at you, GANT and Kit and Ace) the Hayes Valley Neighborhood Association has been successful in keeping out the big guys.

Success aside, there are two noticeable vacant storefronts in Hayes Valley — more pronounced perhaps because of their neighbors’ relative success. The former site of Place Pigalle at 520 Hayes St. has been vacant for three years, which is due more to the landlord’s ineptitude in getting it up to code and rented than to any inherent flaw in its appeal.

More worrying is the 4,000-square-foot commercial space on the ground floor of Avalon, a luxury apartment building on the corner of Octavia Boulevard and Oak Street, which has sat empty since the building was completed in late 2014. A restaurant and microbrewery by restaurateur Jeff Handy (of Oola) was meant to open in September 2016 — but construction has yet to begin.

And the enormous street-facing space may be indicative of future economic challenges for the neighborhood, as a slew of other residential towers are planned for Octavia and beyond. If those developers are OK keeping their ground-floor spaces vacant, or they can’t find non-formula-retail tenants interested in building a business from scratch, Hayes Valley’s bustling neighborhood vibe will be diluted by vast, cold glass windows plastered with “For Lease” signs.

The answer, the Hayes Valley Neighborhood Association believes, could lie in smaller storefronts. Recently completed 450 Hayes St. split its ground-floor space in two, housing Italian restaurant A Mano and juice joint Urban Remedy. And the nearly done residential space at Hayes and Laguna is home to both the tech store b8ta and the popular ice cream joint Salt and Straw.

In a neighborhood where economic success is almost a given, new developers only need to glance around to see what works: In the valley, small spaces filled with compelling small businesses will draw crowds, for decades to come.

Nuala Sawyer is SF Weekly’s news editor. |  @TheBestNuala


For more Hayes Valley coverage check out these stories:

The Hayes Valley Issue: A Neighborhood That Has Changed More Than Any Other
We love it so.

From the Central Freeway’s Ashes, a Booming Hayes Valley Economy
While the rest of San Francisco struggles to manage commercial vacancies and blight, small businesses thrive.From the Freeway’s Ashes Comes a Booming Economy

These Hayes Valley Vacant Lots Are Small But Mighty
Two itty-bitty lots on Octavia Boulevard are optimistically being considered for 24 units of housing.

Hayes Valley’s Commemoration of Central Freeway Removal Underway
Community members who made the removal of the Central Freeway possible want to acknowledge a fight that led to the neighborhood’s transformation.

Where to Eat and Drink in Hayes Valley
Infinite appetite, finite budget: This compact neighborhood has become the new locus of San Francisco’s food scene, with exciting openings at all price points.

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