23-Jul-2019 (Tue) Wherein a big glass box is moving in.

Last week at DNA Lounge I witnessed the most amazing thing! A guy was chewing gum. And he took it out of his mouth, with his hand. And he put it in a trash can. I'm not sure I've ever seen that happen before.

Truly, a gentleman and a scholar.

Be like him.

So, what's new. Well, Live Nation / TicketMaster are up to their usual shit: "Live Nation admits putting tickets straight on the resale market". "Resale market" means that TicketMaster pretended that a bunch of tickets had already been "sold" by moving them directly to their in-house scalping service, making it even less likely that you could get your ticket at face value. And local boys Metallica were fully complicit in this.

Oh yeah, and also: "Ticketmaster fined $4.5 million for deceptive ticketing practices: Canada's Competition Bureau found Ticketmaster inflated their prices by almost 65% using mandatory fees". $4.5 million is nothing to them, of course. Remember, a fine is a price. Business practices like this don't change until a rich white guy goes to prison.

Live Nation, you may recall, sell 80% of all tickets in the US, own 117 venues and exclusively books 33 others, including The Fillmore, The Masonic, Cobb's, Punch Line, and most recently, August Hall (formerly Ruby Skye).

But back down here on Eleventh Street:

You may have noticed that the Crepes a Go-Go truck across the street is gone. Their eviction had been pending "any day now" for about six years, but I guess it finally happened. Back in 2013 the purple warehouse building next door burned down, and the replacement project appears to be getting under way. Here's a rendering of the ridiculous flashbulb that they're planning to build there:

It's going to be office space, not overpriced condos, which is good news. If there's one thing Eleventh Street does not need it's another batch of glass-fronted apartments staring directly at a row of nightclubs and bars across the street.

The development appears to be "ground floor commercial", which almost certainly means that we can expect that storefront space to remain empty in perpetuity, as they do in all such new developments. Just look at all the empty storefronts on Folsom, Mission, King...

You'd think that if you had empty property, the thing to do would be to lower your asking price until someone said yes, thus finding what the market would bear. But the landlords think they'll make more money by playing a long game, and leaving the place empty for years until they find one deep-pockets client -- which is almost always a soulless, characterless franchise of a national chain, not a local business.

Peskin is pushing for a punitive vacancy tax to change this dynamic, and make it be cheaper to have tenants than not, and that sounds like a reasonable idea to me. The penalty would have to be pretty high to be effective, though.

Let's just hope that whatever company moves in there doesn't build their own cafeteria: another hermetically sealed burbclave that doesn't require their employees to ever engage with or patronize their neighborhood.

I recently had lunch with a friend at their office, elsewhere in SOMA, and we ate in the company cafeteria. The whole time all I could think of was that we were in a neighborhood with maybe 30 restaurants within 3 blocks, and this massive cafeteria was single-handedly cutting all of those other businesses' profits in half. There's another proposed ordinance trying to fix that, but it will accomplish nothing: "Watered-Down Version Of SF's Tech Cafeteria Ban Returns To Supes' Agenda".

What kills me is when the workers try to frame these cafeterias as "saving them money", as if they had never heard the phrase "there's no such thing as a free lunch". It's not even a metaphor in this case. You know that "perk" is coming out of your salary, right? It sure isn't coming out of the CEO's, I promise you that. It's like when people get a tax refund and get excited because they think the government just gave them free money. That is not how this works!

18 Responses:

  1. Jay says:

    I work for a startup between you and the Safeway. Very close to Street Eats.

    I've checked out the local restaurants, uniformly the meals are too large and too expensive.

    I understand, rents are so high you have to sell $12+ lunches.

    Regardless, I need both a cheaper option and a smaller portion option.

    So sorry, I can get that with the company buffet.

    • MattyJ says:

      Again, your 'cheaper' option at work is subsidized by _you_. Being a startup, my guess is that you're paid partially in fake money (equity) and your take-home suffers. Kids these days. Your 'savings' is already docked by your lower-than-it-should-be salary. Likely for mediocre food. Don't get this old man started on how perks such as company cafeterias serve the greater purpose of keeping workers at work longer and on break shorter. Ask yourselves how often you find yourself enjoying that retro arcade at work ... at 8pm. But I digress.

      I'll refrain from 'googling that for you', but seriously? You're in/near SOMA and you can't figure out where to eat? You can get 10 different types of taco within spitting distance of DNA Lounge. Did you bother walking more than a block from WidgetCo HQ?

    • Bill Muhr says:

      You prove nothing, drone.

      Franco established the Menu del dia to deal with problems like this. It must be brought to San Francisco!

  2. Eeyore says:

    Pittsburgh is having the same problem with the empty storefronts on the ground floor. Block after block of condos, apartments, and offices with (if you can believe it) very few coffee shops, seedy bars, or convenience stores to serve their residents. Because the same developers built the parking garages, there's no place on the street to put a food truck to at least sell coffee in the morning unless the developer invites you to park in their one surface lot. What's wrong with the world today? I thought we used to have a machine or something that installed another drug store, coffee place, pizza joint, and cupcake bakery overnight before moving on to the next block.

    • bmj says:

      Worse, if any of these developments do have ground floor businesses, they are national chains rather than local establishments.

      As for that machine you talk about, it's been re-purposed to remove those businesses overnight, because progress.

    • Jonny says:

      Consider yourself lucky. At least your city allows food trucks. My city decided to essentially ban them. They were competing with the expensive restaurants. I have basically zero options for anything cheap or limited in portion near where I live.

  3. MattyJ says:

    I think I've railed against the cafeteria ban in the past, even though I support the idea. The reason being that in some places (mid-Market) they haven't also enacted the penalty for vacancies in ground-floor retail.

    Until about a year ago there was a proliferation of giant, 2,000 square foot chef-backed 'projects' that utterly failed because tech workers don't want to necessarily pay $30 for a sandwich every day. I mean, that $30 sandwich was awesome and I had one every month or so, but around here you sometimes have to venture out to (egad!) the Tenderloin to get something reasonable. And I do that, but I can't see the average Twitter employee venturing out of that building to eat that sandwich.

    I think it might be getting better as those projects fail. Hopefully we do get more small places. Sam's, Little Griddle, Market on Market, Italian Homemade, whatever those two places in the Uber building are, the taco place on 9th ... all those little places are crowded as hell at lunch but there are not enough of them.

    Anyway, if this city was smart (holding my breath in 3... 2... 1...) they'd enact the vacancy penalty first/immediately, get some businesses open and maybe a year later ban the cafeterias.

    Who am I kidding. Once the payroll tax incentives are taken away, all the tech companies will move out and mid-Market will be a barren wasteland once again.

  4. marijane says:

    When Airbnb opened their Portland office in the same building as my previous employer, I was mildly appalled to see them get catered lunches every day of the week. We were mere blocks from some of the most amazing collections of food carts on the planet!

  5. Nick Lamb says:

    Isn't it important to put the gum back inside its wrapper before the bin, so that it doesn't stick to something/ everything and make an awful mess?

    It's been a few years since I last chewed gum but I feel like that's how it was.

  6. ryantgtg says:

    I think there’s a tax incentive for leaving those storefronts high-priced and empty (big surprise). If you jack up the rent - say $20k/mo - and no one rents it, then each month you’re taking a loss of $20k. It’s good for the books!

  7. Cat Mara says:

    Shoo-in candidate for the "Eyesore of the Month" page there.

  8. Dealing with landlords and zoning in my own small downtown, I found that it wasn't the property owners keeping the ground floors empty storefronts; it was the local government. They decreed that all ground floor units should be retail and did not allow them to be office spaces. So they would lay empty for years while the landlord lobbied for waivers to be allowed to turn them into office space, which eventually happened.

  9. AntaBaka says:

    The Live Nation story is amazing.

    A consultant for Metallica decided to bring high value tickets directly to the secondary market to get a better margin. Live Nation obliged.

    So, basically Metallica scalped their own fans.

  10. Thomas Lord says:

    Ground floor retail requirements are increasingly treated by lenders and investors as government meddling because retail margins are very low. Leasing at too low a price would technically lower the price of the land. They financially model the buildings to work just on the basis of the upper floors. And they lobby for zoning changes to someday use the ground floor as residential or private office. One seemingly popular passive aggressive trick in Berkeley is to spend a decade not even finishing the ground floor (e.g., not putting in a proper floor, not finishing the HVAC and plumbing, etc.). (This all has the effect, by the way, of a massive public/private transfer to Amazon!)

    Why is this apparently lost income acceptable to investors? Because quite often they don't need more cash. In fact, they are only getting into real property because they have too much cash and look for assets that will retain value in the long run.

  11. funjon says:

    I recently bought tickets to Elton John's farewell tour for my mom for her birthday; it was significantly cheaper to drive 3 hours to Vancouver and spend a night in a hotel instead of seeing it ~20 miles away in Tacoma, because TicketMaster apparently can't charge the inappropriate-touching-level fees in Canada? Between saving $700+ on TicketBastard fees and the exchange rate, I actually got a better package for cheaper.

  12. nonolook says:

    Great project across the street, by one of the most distinguished SF architects. How amazing. I'm sure it'd help with the thriving of 12th st.

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