“We work for you,” Chamber Co-Director Paula Reynolds told the high-octane group at the outset of the event, which was graciously hosted by WrapManager, the financial services firm at 319 Miller, within its Assembly community gathering space. “We’ve heard your concerns about the downtown retail environment, and as you know, we’re committed to sharing valuable information as much as possible.”
As a foundation for the discussion, there are no City of Mill Valley regulations explicitly intended to prohibit chain businesses, loosely defined as stores/restaurants with multiple locations – more than 10 in many instances – and standardized signage and branding.
“The question is, should Mill Valley manage or restrict formula business, and if so, how?” Reynolds added. “What are the intended and unintended impacts of restricting formula businesses, and how do you effectively balance the desire to retain Mill Valley’s small town character with its need to remain economically viable?”
As promised, the event began with information, both from handouts and a panel of knowledgeable folks on the subject, including City of Sausalito Mayor Joe Burns and Sausalito Chamber of Commerce CEO Juli Vieira, who spoke about their city’s regulations on formula businesses. City of Mill Valley Planning and Building Director Patrick Kelly was on hand to discuss the City’s existing regulations and possible tweaks to those regulations. Jonathan Plotzker-Kelly, the owner of the Heliotrope skin care product store in San Francisco and a board member of the Valencia Corridor Merchants Association.
Burns noted that Sausalito passed an ordinance to regulate chain businesses in 2003, when Crazy Shirts sought to open there. “Local business owners said, ‘we have to stop this,’” he said. “We can't have companies so large that they can pay the rent that a local mom and pop can’t.”
Burns said it was important for towns like Sausalito and Mill Valley to understand their brand and act accordingly when regulating commercial applications.
“The big downside for us was that if a Crazy Shirts were to open, it wouldn’t be in sync with a small community like ours full of small businesses,” he said, noting that they’ve worked with businesses like Equator Coffees, which recently took over the former Cibo space on Bridgeway, to alter its branding a bit in keeping with Sausalito.
“I hear a lot from our small businesses that they are afraid that we are going to become another Pier 39 or Fisherman’s Wharf,” Vieira said.
Burns added that Mill Valley already had a deep, much-envied brand as an arts destination with venues like the Sweetwater Music Hall, Marin Theatre Company, Mill Valley Film Festival, Fall Arts Festival, Throckmorton Theatre and much more.
"The future is experiential," Burns said. "The arts culture is still very much alive here in Mill Valley. We need more of that in Sausalito."
The Community Vitality section of the City's MV2040 General Plan echoes Burns' sentiment, noting that the arts sector "draws thousands of local residents and visitors into town each year to patronize Mill Valley stores and restaurants."
Burns noted that the City of Sausalito is in the midst of its General Plan update, which could include amendments to the formula retail regulation.
Plotzker-Kelly presented a unique, compelling recent history of regulating chains on Valencia Street. His association has never won a legislative victory in opposing a chain store, and yet a chain store has never opened on Valencia in the year the association has been active.
That’s because San Francisco’s regulations simply call for a public hearing for applicants with 11 or more locations, and the association has been able to generate enough opposition – in letters and in public hearing turnout – to attendance at the hearing that companies like American Apparel and Jack Spade all end up saying, ‘we don’t want to go where we’re not wanted.’”
Plotzker-Kelly cited some broader reasons for regulating chain business beyond wanting to prevent rents from skyrocketing, particularly the uniqueness of district like Valencia Street and downtown Mill Valley.
“Why do people want to come to our unique destination?” he asked. “It's often to find something unique that you can’t find anywhere else, and that real connection you develop with the business and the owner. I also want to keep my dollars local to pay for things that impact us directly. I don’t want my money to go to Seattle.”
Regulating by District
A consistent theme throughout the discussion was that one set of regulations shouldn't be applicable across each of Mill Valley's commercial districts. “There won’t be one solution that fits all,” said Teresa Rea, a member of the Chamber board and a 30-year land use planner.
Vieira suggested that one way to treat disparate commercial areas differently is to simply apply different rules for, say, downtown Mill Valley vs. Miller Avenue or the Alto Plaza center. That’s what happened in Hollister, the major city within the scope of the San Benito Chamber, which Vieira previously ran, where they created a historic business district that barred chain businesses but allowed them outside of that district.
Plotzker-Kelly noted that while Valencia Street remains free of chain stores, Mission Street “is lined with chains literally one block away.”
And Mill Valley is no stranger to treating downtown differently than other districts.
At the time, some businesses owners saw inconsistencies with the rejection of Subway coming in the aftermath of the approval of the then-43 store Pet Food Express in Alto Plaza. City officials leaned on the distinction between downtown, "the primary commercial and civic center for the community," which has a "number of small businesses operated by independent proprietors who are actively involved in the community," and the areas outside of downtown.
The City also leaned heavily on its Core Values, which call for the "preservation of a vibrant community that respects Mill Valley’s small town character," as well as "economic vitality with an emphasis on small and local serving businesses."
A Diversity of Opinions
Bonnie Powers, co-owner of the Poet and the Bench that showcases the products of independent, including the work of co-owner and jewelry designer Jeffrey Levin, pointed to the opening of the J. McLaughlin clothing shop, which has 140 locations. The arrival of such a large chain has thrown many downtown merchants for a loop, she said.
Kelly noted that because the store is opening in the former Once Around space at 75 Throckmorton, there is no change of use – retail to restaurant, for instance. There was no requirement for a public hearing. “Absent any formula regulations, a use like that is permitted,” Kelly said. “Unless there is no facAde improvement or design change, it’s essentially like permitted use.”
Longtime Mill Valley resident Bill Green, the chief operating officer of the 15-store Margaret O’Leary apparel business and spouse of its namesake, said the underlying drivers of the issues around chain stores are fundamental economics.
“If I take private equity money and go public, the pressure is immediately on for me to open more stores and it doesn’t matter what I pay for rent because I need to open more stores,” he said. “Those stores would then be paying rents to landlords that are not sustainable. We’re then creating an ongoing institutional later of rent increase that will ultimately destroy the community. This is an economic situation that will hollow out Mill Valley.”
To avoid that fate, Green suggested that the City should develop a way to prioritize applications from locally-owned businesses and those that haven’t taken private equity funding. Such a move would be in keeping with the Community Vitality portion of the City’s MV2040 General Plan, which calls for the City work with the Chamber and others “to develop policies and programs that facilitate the successful development of locally based businesses.”
Green said he didn’t love the idea of requiring a public hearing for chain stores. “We want to talk to entities where we see clear lines of sight (and face possible delays).”
Former Mill Valley Mayor, Dennis Fisco, principal at real estate investment firm Seagate Properties, said he was part of a business task force in Mill Valley in 1989 “that debated this issue for a whole year, and I don’t think much has changed. It’s a matter of supply and demand and not greedy landlords. In Mill Valley, there are second, third and fourth generation property owners who just depend on the check. They don’t necessarily live here anymore, and they can afford to just sit and wait for that tenant that can pay top dollar.”
Fisco recommended the Chamber and the City begin the process of recruiting businesses that would complement the existing store landscape, and to treat downtown and Miller Ave. differently, similar to how Bridgeway and Caledonia in Sausalito are distinct to one another and complementary.
“I’m not in favor of any kind of chain restrictions, it’s already difficult enough when your tenant goes through the planning process,” he added. “Let’s identify the uses we want to attract rather than add restrictions.
“This will be a huge challenge for us,” Planning Commissioner Urban Carmel said. “The luxury of a strong economy is coloring our perspective a bit here. Back in 2009, it was really different. There were a lot of vacant shops here. There’s nothing that’s great about a small town with a bunch of boarded up shops. Stores that are able to remain open during the tougher times help the businesses around it."
"We have to be pragmatic," he continued. "Maybe having a few formula stores would make a difference and provide something we don’t have right now, like a hardware store, shoe store or a pharmacy."
Carmel added that the City could continue to lean on its strong regulations around signage and the overall look of a storefront to prevent approval of a business that doesn’t fit with Mill Valley’s character.
Ann Aversa, whose husband’s family has owned La Ginestra restaurant in downtown for 55 years and also own adjacent commercial buildings on Throckmorton Ave., said her work on business vitality in Mill Valley dates back many years.
“It’s a village made up of wonderful new independent stores and great old restaurants like ours,” she said. Peets and Equator and Whole Foods – those businesses bring in the foot traffic - that helps the small stores on either side of them that are independent. Our ecosystem has sharks and guppies and dolphins, and I would encourage us not to mess up that mix.”
“I’ve listened to the sharks and the guppies,” Levin said. “The conversation is between intimacy and mass. If you allow these big stores to come in, then shops like ours are going to disappear.”
Mike Walsh, whose family has owned property in Mill Valley for decades, said they’d “had quite a few chains contact us over the tears” from across North America. “What we’ve used is a balance and a discretion that Mill Valley can’t be full of chains,” he said. “But I don’t like the CUP because it’s so clumsy and we can’t wait months and months to get a little wine bar opened here. Our mom and pop tenants can’t afford to go through that process – we’d like to see that process streamlined.”
“We do have to be cognizant that there are a bunch of different needs here and we’re trying to meet them,” Councilmember Stephanie Moulton-Peters said. “It’s a balancing act. People that work here versus and those who are not going to want to eat at the 7-Eleven.”
Kelly said he’d recent attended a conference on the future of retail, and that “one of the takeaways for a planner is the need to be flexible with these ordinances. But I truly believe that we all need certainty, so if there’s a desire by the community to put some sideboards on formula-type businesses, we need to tell that story with certainty.”
In the near-term, the Chamber is committed to working on a policy statement that complements the current, relevant sections of the Community Vitality portion of the General Plan, as well as to soliciting its members for businesses that would be a good fit for Mill Valley and complement those that already exist here, and subsequently reaching out to commercial brokers on recruitment.
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