By: Claire Cain Miller
New York Times
May 28, 2010

When Ron Mallia bought a dilapidated former auto repair shop on Valencia Street, in the trendy, artsy heart of the Mission District, he was very particular about the types of shops that could rent the space.

It took him seven months to find tenants during the depths of the financial crisis, but he turned down several chains, including Urban Outfitters. He ended up subsidizing the rent for Gypsy Honeymoon, an antique store, and for Heart, an art gallery and wine bar, and Arizmendi Bakery.

“I didn’t want formula retail because I didn’t feel that’s what’s going on on Valencia Street,” Mr. Mallia said. “I wanted a small entrepreneurial-type business that offers something unique.”

Mr. Mallia is part of the “shop local” movement in the Bay Area, where “locavores” no longer just want to buy food grown locally, but also apparel, jewelry and furniture based on where it is made and sold.

However, many storefronts on Valencia are empty. Some residents and shopkeepers wonder whether this hyper-local form of protectionism is good for residents and merchants — and who should have a say over how and where people shop.

The idea, of course, is a close relation to the local-food movement whose influence is omnipresent in the region. These days, it is rare for a Bay Area restaurant not to list the farm that grew the kale or made the goat cheese on its menu. But now, particularly in neighborhoods like the Mission, it is just as common to read that a dress was sewn in San Francisco.

David Campos, who represents the Mission on the Board of Supervisors, said that there was a real interest in maintaining the character of the community, particularly in the Mission. “You have to balance that against a need for economic development, but in my view the two are not mutually exclusive,” he said. “There are a lot of local shops that are still doing well, and I think government has a responsibility to promote that.”

Cassie McGettigan, a co-founder of Gravel & Gold, a Mission shop that sells goods from local artists, said: “Retail stores are just catching up to the food world and the whole know-your-farmer, local eating movement. It’s about making sure you know where your stuff comes from, and that every place you spend your money has an impact.”

San Francisco’s labyrinthine planning code helps the local shopping movement’s cause. Neighborhoods, including Hayes Valley and North Beach, have banned chain stores, and any formula retailer, defined as a store with more than 10 locations nationwide, must be approved by the planning commission before it can open in the city.

“The feeling is that potentially, if you allow a number of formula retail stores, you lose neighborhood character and locally owned businesses,” said John Rahaim, director of the San Francisco Planning Department. The commission weighs that against the number of empty storefronts and businesses that sell similar products, Mr. Rahaim said.

The ideology is not confined to San Francisco. In Sausalito, the City Council recently prevented a Peet’s coffee shop from opening, and shopkeepers and residents in Berkeley and Oakland have also battled over chain stores.

On Valencia, the fight is just heating up. The street is in the midst of a renaissance, sprouting trendy boutiques, antique stores and restaurants to cater to the young hipsters and artists who have moved to the neighborhood.

But not everyone is welcome. Last year, tenants and residents in the Mission successfully fought the opening of American Apparel, even though the company boasts about manufacturing clothes in California and paying workers fair wages.

Many merchants and residents worried that if American Apparel took a spot on the street, it would be followed by a flood of chains that could pay higher rents and push out independent shops.

“I definitely didn’t want them,” said Gabrielle Ekedal, owner of Gypsy Honeymoon. “They seem to be a conscious company, but on the other hand, I think it would have started a trend pretty quickly because they’re so mainstream.”

Of course, the new independent shops are also displacing other local stores, often owned by Latino immigrants who still run most of the shops on Mission Street, one block from Valencia.

“I am not against all the people coming to the neighborhood, as long as it’s not at the expense of the immigrant community being pushed out because they cannot afford the rent,” said Dairo Romero, community development manager at the Mission Economic Development Agency, which advocates for low-income immigrant entrepreneurs.

The drive to maintain the individuality of the neighborhoods is a big reason that San Franciscans support locally owned businesses, said Hut Landon, executive director of the San Francisco Locally Owned Merchants Alliance. But the most important reasons, he said, are economic.

“Economically, locally owned businesses give back more than three times as much as chains,” Mr. Landon said, “and even more than online retailers that don’t collect tax.”

Civic Economics, a consulting firm for local businesses, was hired by Mr. Landon’s organization to study economic activity in San Francisco, Colma, Daly City and South San Francisco. It found that if people diverted 10 percent of their total retail spending to local stores instead of chains, it would add 1,295 jobs and $15.3 million in retail sales to those areas. “The local business that comes in is going to hire the local lawyers, accountants and advertising,” said Matt Cunningham, a co-founder of Civic Economics, “versus the Borders and Wal-Marts of the world, who are going to do that in their headquarters’ cities.”

But some economists disagree. Russell Roberts, an economics professor at George Mason University, said that when shoppers hunt down specialized products for the lowest prices — no matter where the products are made — they have more money left over to spend in their communities.

“For most of human history, people bought local because trade was limited to things that could be put on boats or camels, and we were poor,” Mr. Roberts said. “There’s nothing wrong with buying local if it gives you pleasure to buy from people you know, but it is not true that by doing this, you’ll benefit the local community in a way that’s different from buying outside the community.”

But some shopkeepers worry that banning chain stores can also result in less foot traffic for the local businesses, fewer jobs and more vacant buildings.

On a recent Wednesday afternoon, most of the stores on Valencia were empty except for a lone salesperson, and several of the storefronts were boarded up.

Sunhee Moon, a clothing designer who has had a store in the Mission for eight years and manufactures her crisp cotton blouses and skirts nearby, is one of the few local business owners who is fine with chain stores opening nearby.

“Business is good for business,” she said, pointing out that two newer stores on her block have brought more foot traffic. “If my customers have another two or three places to shop, then fabulous.”

Some Mission residents feel the same way. In response to a post about the American Apparel blockade on the Mission Mission blog, a commenter using the name T1 wrote, “Now the extra $ I would’ve spent on the Valencia corridor will instead go to the neighbors of the new Union Square store.”

But for now, many neighborhood shoppers are willing to pay a premium for locally made goods.

Heather Pugh, 25, just got a promotion at the bike store where she works and went shopping at Artist-Xchange, a gallery selling local artists’ work, for a necklace to match a new dress. Ms. Pugh said she was willing to pay more for locally made items, especially in this economy, to ensure that the people making things get paid enough.

Just as important is the feeling of wearing something that no one else has, she said. “Who doesn’t want to be unique these days.”

Read more at the New York Times: http://www.nytimes.com/2010/05/28/us/28sfmission.html?pagewanted=1&_r=1