Frustrated Castro merchants threaten to withhold taxes unless SF tackles drugs, littering on streets

For years, business owners in San Francisco’s Castro District have complained to city officials that homeless people struggling with mental illness and drug addiction have wreaked havoc on the neighborhood. Now, merchants say the situation has gotten so bad that they’re threatening to possibly stop paying city taxes and fees.

The Castro Merchants Association sent a letter to city officials on Aug. 8, urging them to “take action” because the Castro community was “struggling.” In the letter, they said people living on the streets “regularly experience psychotic episodes” and have vandalized storefronts and harassed business owners, employees, residents and tourists.

“They need shelter and/or services and they need them immediately,” the merchants said. “Our community is struggling to recover from lost business revenue, from burglaries and never-ending vandalism/graffiti (often committed by unhoused persons) and we implore you to take action.”

The group asked the city to designate 35 of the city’s shelter beds for the neighborhood’s homeless population, create a comprehensive plan on how to offer services to individuals who repeatedly decline help, and provide monthly metrics on how many people in the community have been offered services duck shelter.

If their demands are not met, the association is threatening civil disobedience by potentially asking store owners to stop paying taxes and other city fees, said co-President Dave Karraker. He said the association hopes to form a coalition with other neighborhood groups by October to come up with a plan to demand stronger solutions from the city.

“If the city can’t provide the basic services for them to become a successful business, then what are we paying for?” Karraker told The Chronicle on Tuesday. “You can’t have a vibrant, successful business corridor when you have people passed out high on drugs, littering your sidewalk. These people need to get help.”

In a letter sent to the group Tuesday, officials from San Francisco’s Department of Public Health and Department of Homelessness and Supportive Housing acknowledged the association’s concerns and said they were working to address them. City officials said they originally sent the letter to the wrong Castro group on Aug. 19 and confirmed to The Chronicle that the letter was forwarded to the Castro Merchants Association on Tuesday.

Officials said teams “regularly” update Castro residents of the city’s efforts to tackle homelessness and public safety through meetings organized by Supervisor Rafael Mandelman, whose district includes the Castro.

They also said officials from both departments meet weekly to focus on providing assistance to individuals in the Castro.

According to city data available online, San Francisco currently operates about 2,100 shelter beds for adults and youth. While it is not city policy to dedicate beds to specific neighborhoods, the city said it was on track to expand capacity by 1,000 new or reopened shelter beds over the next three months that can provide shelter for unhoused people in the Castro and other neighborhoods.

“We greatly appreciate hearing from community members about what they are seeing on the streets and will continue to work with the Castro community to improve conditions for all in the Castro,” city officials wrote in the letter.

Homeless advocates have said the city does not have enough permanent supportive housing and treatment beds to help people on the street.

Gwendolyn Westbrook, CEO of the United Council of Human Services, a nonprofit that provides meals and services to homeless people in the Bayview-Hunters Point area, said Wednesday that unhoused individuals need more mental health services, such as therapy. She said she understands the Castro merchant’s frustrations and said it would be “a good thing” if the city provided shelter beds to specific neighborhoods.

“But that’s not the case,” she said. “(The city) gives shelter beds to whoever needs them, no matter what area you are from. I get both sides of it, but when you’re trying to help your neighborhood, you’re looking out for your neighborhood as you should be.”

Karraker said the group has been asking city leaders for help over the past four years. The group and Mandelman keep a running list of people who they said create chronic problems in the Castro — which fluctuates from 20-25 — and that the merchants asked for 35 beds to account for an influx of people who moved to the Castro after a recent crackdown in the Tenderloin.

Karraker, who is the co-owner of the gym MX3 Fitness on Market Street, said a person who appeared to be on drugs smashed the businesses’s glass door when the COVID-19 shelter-in-place order went into effect in 2020. He said there have been “multiple” instances where people displaying “bizarre behavior” have walked into the gym and attempted to steal items, such as weights and clothing.

Business owners across the city saw an uptick in burglaries and vandalism in 2020 compared with 2019. In the Castro, the merchants association recorded more than 90 incidents totaling over $170,000 in repair costs since 2020, according to data provided by the association, which began documenting incidents during the pandemic. In 2021, there were a total of 25 reported incidents, the data shows. In March of this year, three men were arrested for allegedly burglarizing the historic Castro Theatre.

In response to the reported vandalism and burglary, city officials created a program that offers financial assistance to small businesses that have been affected.

Mandelman told The Chronicle on Tuesday that he supports the association and agreed with their demands.

“I share their frustration,” said Mandelman. “I’ve been working with these merchants for the entire time I’ve been in office, and I think we are all very frustrated that we haven’t seen more in the way the city responds.”

Karraker said he appreciated the city’s response, but said it wasn’t enough.

“Until we see demonstrable change, everything is on the table, including civil disobedience,” said Karraker. “We cannot continue with more of the same.”

Jessica Flores (she/her) is a San Francisco Chronicle staff writer. Email: jessica.flores@sfchronicle.com Twitter: @jesssmflores

Leave a Comment