A contentious proposal for a new tax on vacant grocery stores in San Francisco has been abruptly canceled due to pushback from City Hall and local businesses.
Supervisor Bilal Mahmood announced on Sunday that he will withdraw the tax suggestion and instead pursue a city ordinance that aims to enhance grocery store access through funding, incentives, and zoning changes.
This decision follows Mahmood’s recent introduction of the Affordable Food Act, which initially included two measures slated for a November vote.
An anticipated city fund might have been created to assist corner and convenience stores in expanding their selection of fresh goods while also supporting the establishment of new grocery stores.
Another element of the original plan was to impose new taxes on major chains that left grocery store spaces vacant.
However, the tax idea quickly met resistance from Mayor Daniel Lurie, business stakeholders, and even some of Mahmood’s fellow supervisors.
Mahmood has shifted his focus toward advocating for the grocery fund through an ordinance, rather than waiting for voter approval on the original ballot.
The modified approach will channel funding into helping convenience stores stock fresh food and incentivize the opening of new supermarkets through zoning reforms.
“It’s evident that there isn’t a consensus at City Hall on corporate accountability or a straightforward solution at this moment,” Mahmood stated on social media.
“Nevertheless, we need to emphasize results and work toward solutions that can unite us now.”
This legislative reversal comes as San Francisco is grappling with significant supermarket closures, which have diminished grocery and fresh food access in various neighborhoods.
Mahmood had mentioned that his proposal drew some inspiration from New York City Mayor Zoran Mamdani’s initiative to combat food costs with city-managed grocery stores.
However, San Francisco’s proposal stops short of having the city itself take on the role of running a supermarket.
Instead, the potential fund could rely on private donations and revenue from a vacancy tax to bolster grocery stores while encouraging large chains to keep their locations operational.
Lurie voiced his opposition to the tax strategy, as confirmed by his spokesperson. He mentioned he’s focused on bringing more grocery stores to the city but believes a vacancy tax isn’t the solution.
The suggestion also faced criticism from the Chamber of Commerce and Align Real Estate, a developer aiming to transform the closed Fillmore Safeway into a housing complex.
Mahmood noted that Amazon, which owns the vacant Whole Foods location in Midmarket, is “actively lobbying” against the proposed tax.
Earlier this month, another challenge surfaced when Supervisor Connie Chan, who chairs the board’s budget committee, did not prioritize the tax plan on the committee’s agenda.
Board of Supervisors Chair Rafael Mandelman raised concerns that the tax on vacant grocery stores might lead to “unintended consequences” as the city tries to attract businesses post-pandemic.
“I worry this approach may send a negative message, one that seems more antagonistic and suggests that San Francisco believes it can regulate and tax its way to recovery,” Mandelman commented.
The proposed grocery store fund ordinance is scheduled for consideration by the Board of Supervisors Rules Committee on Monday morning.
Mahmood expressed his gratitude to the committee’s chairman, Supervisor Sherman Walton, for advancing the proposal, emphasizing that waiving the tax doesn’t signify a retreat from wider community efforts.
“This is not the conclusion of our discussions,” Mahmood asserted. “Rather, it’s the beginning of a broader effort to tackle the affordability crisis, and I’ll continue to advocate until every community has access to affordable, nutritious food.”
