Historic SF Movie Theater Could Turn Into Retail Center

The San Francisco Planning Department staff are set to recommend approval of a new design, which maintains and restores many of the single-screen movie theater’s landmark details, and its change of use, according to Planning Department Chief of Staff Dan Sider.

The 111-year-old Clay Theater on Fillmore Street may soon take one step closer to transforming into a retail space.

“We’re supportive of the proposal owing to its consistency with applicable Planning Code criteria and the recently-adopted landmark designation,” Sider said via email.

Renderings showing a restored marquee and ticket window with an “Artist’s Co-op” gallery space inside have been filed with the city’s Planning Department in advance of hearings before the Planning Commission and Historic Preservation Commission next month.

“As much as possible the exterior of the building will just look fresh and not different,” according to David Marlatt of DNM Architecture, which created the plans.

Inside, there will be more changes, although a walled separation between the current lobby and screening room will be retained. A removable level floor will go in over the existing sloped theater floor and some 1960s-era renovations that cover original architectural features will be removed, as well as the screen.

The initiation of the landmarking process in 2021 “somewhat delayed” the department’s review of the applications, Sider said, “to ensure that the character-defining features of this historic building were — to the extent possible — preserved.” Marlatt said that planning staff suggestions were more along the lines of “tweaking this and tweaking that” rather than a major overhaul.

The approval hearings were originally supposed to take place next week but were pushed out a month at the request of Supervisor Catherine Stefani’s office because neighborhood groups wanted more time to prepare, Marlatt said. Sider said so far only a few comments have been filed on the project, two for and two against.

“There will always be people in San Francisco who don’t understand that single-screen movie theaters are not viable in a post-COVID world,” Marlatt said, adding that the owner had subsidized the rent for Landmark Cinemas and it still shut down in January 2020, before the pandemic led to a slew of further movie theater closures.

The San Francisco Neighborhood Theater Foundation has said that the nonprofit made a $3.5 million offer to buy the theater after Landmark pulled out, but it was rejected. Balgobind Jaiswal bought the property in 2008 for $4.8 million, according to public record, and Maven Commercial, which has been working with Jaiswal to lease the space, said it did not make financial sense to sell at that price, especially after years of carrying the property at a loss.

The landlord reduced rent by 50 percent and paid operating expenses traditionally borne by tenants for seven years while Landmark was in place, said Maven’s Pam Mendelsohn. Since the closure, Maven has not received any written offers from theaters, she said via email, but “the landlord would welcome any kind of film or entertainment use.”

While no movie theaters have stepped up, the street has been otherwise active since the pandemic. Maven has signed more than 15 new leases on the corridor in the last few years, with several others currently pending, she said.

The Lower Pacific Heights neighborhood is “one of the most desirable and active retail nodes” in the city with less than 3 percent vacancy, said JLL’s Laura Tinetti. Retailers who had been “struggling” are now being replaced and there are active requirements from both online brands looking for brick-and-mortar locations and boutiques from Los Angeles and New York seeking a San Francisco location, she said via email.

“The theater business has evolved over the last few years and we’re not surprised that retail is a highest and best use in this popular Fillmore corridor,” she said.

If the commissioners approve the plans in July — and preservation and neighborhood groups do not appeal the decision to the Board of Supervisors — construction could begin by the fourth quarter this year and a new store could open by this time next year, according to Marlatt. But, in San Francisco, that’s a big if.

“Anything in San Francisco can be appealed,” he said. “That’s always there as a possibility.”