San Francisco's 2004 chain-store law banned El Farolito's 12th shop

Vol. I, No. 28 · San Francisco — Monday, August 24, 2026 · Price: the twelfth location, conditionally

BY CONSTANCE FEENEY, CITY HALL

El Farolito has served burritos in San Francisco since 1983, when Salvador “Don Chava” Lopez opened the first location at 24th and Mission Streets. By 2021 the taquería had grown to eleven locations across the Bay Area. Salvador Lopez had died that January, at 70. His children, Irene and Santiago Lopez, ran the business by the time Planning stepped in. A twelfth location, planned for 1230 Grant Avenue in North Beach, is what tripped a law the city had passed in 2005. San Francisco’s Planning Department told the family that September that opening it would make El Farolito a chain.

The law dates to 2004, when the Board of Supervisors added Section 703.3 to the Planning Code. It defined “formula retail,” the city’s term for a chain, as any business with eleven or more other locations that also shares two or more standardized features: signage, façade, décor, uniforms, or a trademark. The ordinance banned formula retail outright in one neighborhood commercial district and required a case-by-case hearing in two more.

North Beach joined the outright ban within the year. Chinatown’s Visitor Retail district did not follow until 2008, four years later, under a separate ordinance. A 2007 ballot measure, Proposition G, is reported to have extended the hearing requirement to every commercial corridor in the city, a claim this desk did not independently verify against the original ballot record tonight. Two decades on, that hearing has become close to automatic almost everywhere it applies. The outright ban has not. El Farolito’s twelfth location ran into the ban.

Board President Matt Gonzalez introduced the original ordinance in August 2003, co-sponsored by Chris Daly and Tom Ammiano; it passed the following April as Ordinance 62-04. Aaron Peskin, then North Beach’s supervisor, sponsored the North Beach ban a year later, and it passed in April 2005 as Ordinance 65-05. Peskin also sponsored Chinatown’s outright ban, which did not pass until November 2008 as Ordinance 269-08. Planning staff apply that definition case by case, reading a business’s location count against the file. No supervisor votes on an individual application.

The law requires a hearing instead of an outright ban in most other districts, a process Proposition G extended citywide in 2007. That hearing has become close to a formality. GrowSF, an advocacy group that favors loosening the rules and does not publish its own source data for the figure, has tallied a 97.6 percent approval rate for formula-retail hearings since 2014 and 100 percent since January 2020. This desk could not independently verify that count before deadline. The public record is simpler. San Francisco Planning’s own explainer page still describes the outright-ban list in language dated May 2011. That is fifteen years out of date, and it still names the same three districts the North Beach ordinance set in 2005.

El Farolito’s North Beach location never went through that hearing, because North Beach does not offer one. The law there does not ask permission; it says no. The taquería is on Grant Avenue today because the definition bent, not the ban. News accounts from the time report that El Farolito changed the signage at some of its other Bay Area restaurants, enough that fewer of its eleven other locations still shared the standardized features the 2004 law counts. On paper, El Farolito stopped qualifying as a chain. Peskin, the same supervisor who had written the North Beach ban seventeen years earlier, brokered the deal in April 2022. El Farolito opened at 1230 Grant Avenue that June, full yellow signage restored, one of twelve locations now.

Confidence is high on the law’s history and its outright-ban list, both drawn from the Board’s own legislative record and the Planning Department’s own page. Confidence is lower on how toothless the hearing process has actually become, since the only tally of it comes from an advocacy group with a stated position and no published method. The three-district ban is the part of the 2004 law nobody has repealed. It is also the only part that still says no on its own, without a hearing, a vote, or a compromise.

The city’s Supplier Contracts file, the record that feeds its public spending site, shows purchase orders exceeding the agreed price on 5,050 of its 49,070 line items, spanning 240 vendors. Nobody at the Controller’s Office could explain why before deadline.

BY HAZEL WONG, NUMBERS DESK

San Francisco agreed to pay Swinerton Builders $140.3 million to rebuild the Gene Friend Recreation Center, a single building in SoMa. The city’s own contract-tracking file says it has released $98.26 billion in purchase orders against that agreement: more than 700 times the amount anyone signed off on.

The same broken pattern shows up 5,050 times across the file. The Controller’s Office Supplier Contracts report, the public record that feeds the city’s spending-transparency site at openbook.sfgov.org, lists 49,070 contract line items. On 5,050 of them, the amount the file says the city has committed exceeds the amount anyone agreed to pay. Those broken lines span 240 different vendors, not one contractor’s paperwork. Added together, they claim $141.3 billion in commitments against $15.5 billion in agreed contracts. This is the file meant to let residents track construction spending, and tonight it cannot do the arithmetic on some of the city’s biggest capital projects.

The Controller’s Office defines the broken field, consumed_amt, as the balance of outstanding purchase orders released against a contract. In ordinary municipal purchasing a department is not supposed to issue purchase orders beyond what a contract authorizes without amending the contract first, so the number should not exceed what the city agreed to pay. On the recreation center contract it exceeds the agreement by a factor of 700. On a $278.6 million SFO cargo-terminal contract with Austin Webcor, a joint venture, it exceeds the agreement by a factor of 63. Both projects are real and both are large. Neither has cost anywhere near what the file claims.

A separate field in the same file, pmt_amt, is supposed to record what the city has actually paid out. On the recreation center contract that figure is $554.6 million, a striking sum for one building but a small fraction of $98.26 billion and not a physically impossible one. This desk could not reach the Controller’s Office before deadline to ask whether the consumed_amt field reflects a known bug, a duplicated batch of purchase-order records, or something else entirely.

Confidence is high that the numbers are wrong. A contract is not supposed to consume more in purchase orders than it was ever awarded. Confidence is low on why, since the file that would answer that question is the same file carrying the error. Anyone checking the city’s own spending-transparency tool tonight would see purchase-order totals no government has ever actually issued.

SOURCES & RECEIPTS

1. Reporting from Mission Local (“Salvador Lopez, founder of Taqueria El Farolito, dies at 70,” January 2021) and SFGate/SF Chronicle coverage of the North Beach case (2021–2022), confirmed live August 24, 2026: Salvador “Don Chava” Lopez opened the first El Farolito at 24th and Mission Streets in 1983 and died January 2021; the family had grown the business to 11 locations by the time San Francisco Planning issued a formula-retail determination against a 12th, at 1230 Grant Avenue, in September 2021. 2. Legistar Web API (webapi.legistar.com/v1/sfgov), Matter ID 7988, File 031501, queried August 24, 2026: introduced August 26, 2003 by Matt Gonzalez, co-sponsored by Chris Daly and Tom Ammiano; passed April 12, 2004 as Ordinance 62-04; added Planning Code Section 703.3, defining formula retail (11+ other locations plus 2 of 6 standardized features: merchandise, façade, décor/color scheme, apparel, signage, trademark/servicemark) and banning it outright in the Hayes-Gough NCD. Current definition confirmed against sfplanning.org/permit/chain-stores, fetched August 24, 2026. 3. Legistar Web API, Matter ID 9591, File 041071, queried August 24, 2026: introduced February 22, 2005 by Aaron Peskin; passed April 1, 2005 as Ordinance 65-05, prohibiting formula retail in the North Beach NCD. Companion files verified the same session: 041067 (Haight Street NCD, conditional use, passed January 8, 2005, Ord. 8-05) and 050254 (Divisadero St small-scale district, conditional use, passed July 29, 2005, Ord. 173-05). Chinatown’s Visitor Retail District outright ban is a separate matter, not part of the 2005 North Beach session: Legistar Web API, Matter ID 16827, File 081234, queried August 24, 2026, introduced September 16, 2008 by Aaron Peskin, passed November 25, 2008 as Ordinance 269-08, amending Planning Code Section 803.6. sfplanning.org/permit/chain-stores lists both districts together without dates, which reads as concurrent enactment and is not. 4. sfplanning.org/permit/chain-stores, fetched August 24, 2026: Proposition G (2007) made formula retail subject to conditional-use authorization in any neighborhood commercial district where not otherwise prohibited, now Planning Code Section 703.4; this desk did not independently pull the 2007 ballot record tonight and states this fact at medium confidence. 5. GrowSF.org, “The Formula Retail Ban Hurts San Francisco” (June 16, 2025), fetched August 24, 2026: 97.6% of formula-retail applicants approved since 2014, 100% since January 1, 2020; no methodology, data source, or query date is published on the page. 6. sfplanning.org/permit/chain-stores, fetched August 24, 2026, verbatim: “As of May 2011, formula retail was prohibited in the Hayes-Gough NCD, North Beach NCD, and Chinatown Visitor Retail district.” 7. Hoodline (“El Farolito gets their new North Beach location after compromise deal on formula retail rules,” April 2022; “The North Beach El Farolito is now officially open,” June 2022) and SFist (April 2022), fetched August 24, 2026: Supervisor Aaron Peskin brokered an April 2022 compromise under which El Farolito modified signage at other Bay Area locations to fall under the standardized-features threshold; the North Beach location opened in June 2022; the chain now operates 12 Bay Area locations. Full source list and query notes in receipts.json.

2. DataSF, Supplier Contracts (cqi5-hm2d), queried August 24, 2026: prime_contractor “Swinerton Builders,” contract_title “REC Gene Friend Rcrtn Ctr Rbd,” project_team_constituent “Prime Contractor”: agreed_amt $140,297,626.66; consumed_amt $98,264,188,981.665 (700.4x agreed); pmt_amt $554,554,186.94; remaining_amt −$98,678,445,541.95. 2. DataSF, Supplier Contracts (cqi5-hm2d), queried August 24, 2026: 49,070 total rows; $where=remaining_amt<0 returns 5,050 rows across 240 distinct prime contractors, sum(agreed_amt) $15,466,179,992.73, sum(consumed_amt) $141,277,149,334.71, sum(pmt_amt) $25,308,589,226.61. Dataset description: “presented on the Supplier Contracts report hosted at openbook.sfgov.org.” 3. DataSF column metadata for cqi5-hm2d, fetched August 24, 2026: consumed_amt = “The balance of outstanding purchase orders released against the contract”; pmt_amt = “The sum of payments from the City to the prime contractor, or from the prime contractor to a subcontractor”; remaining_amt = “The remaining award amount on the contract.” 4. DataSF, Supplier Contracts (cqi5-hm2d), queried August 24, 2026: prime_contractor “Austin Webcor JV,” contract_title “AIR-11917.66-DB WFG 675,” Prime Contractor row: agreed_amt $278,575,383.82; consumed_amt $17,642,414,001.33 (63.3x agreed); pmt_amt $840,800,929.47. Other examples pulled the same session: Skanska USA Building (SFO cargo building, 79.6x), Clark Construction Group – Calif LP (Ingleside Police Station, 25.6x, and PUC campus at 2000 Marin, 5.2x). 5. Same query as note 1; pmt_amt figure is the file’s own recorded-payments field for the same contract row. Full queries and raw responses in receipts.json.

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