Ordinance amending the Planning Code to define Legacy Business and to require conditional use authorization prior to replacing a Legacy Business with a new non-residential use in certain Neighborhood Commercial, Named Neighborhood Commercial, and Neighborhood Commercial Transit Districts, and in the Chinatown Mixed Use Districts; amending the Administrative Code to allow a business that has been operating for 15 years to qualify as a Legacy Business; affirming the Planning Department’s determination under the California Environmental Quality Act; making findings of consistency with the General Plan and the eight priority policies of Planning Code, Section 101.1; and adopting findings of public necessity, convenience, and welfare under Planning Code, Section 302.

This ordinance (File No. 250808), sponsored by Supervisor Chan, requires a Conditional Use Authorization (CUA) for new non-residential uses replacing a Legacy Business in most Neighborhood Commercial and Chinatown Mixed Use Districts. It also expands Legacy Business eligibility to those operating for 15 years (previously 20) if at risk of displacement. Exemptions to the CUA include spaces vacant for 3+ years, businesses removed from the registry, or new uses qualifying as a Small Business Enterprise (gross receipts under $5 million). This ordinance, which replaces interim controls (Ordinance No. 532-24) expiring May 1, 2026, was recommended for disapproval by both the Planning and Small Business Commissions due to concerns about CUAs as an ineffective and burdensome tool, though the Board's amended ordinance asserts consistency with city plans.

This ordinance aims to protect long-standing local businesses by making it harder for them to be replaced by certain new non-residential uses, potentially preserving neighborhood character and unique cultural assets, but may also increase regulatory hurdles and costs for new small businesses, potentially leading to longer storefront vacancies.

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