The sign is still there, but the scent of roasted coffee that drew in regulars and tourists to North Beach’s Caffe Roma for two decades is gone. Since the cafe closed in early 2018, the space has remained boarded up, with paper pasted on the big glass windows that once let passersby glimpse the soccer games that played on the TVs.

The cafe site is far from the only empty space in the neighborhood. The number of vacant retail properties in North Beach has jumped, alarming residents, business owners and City Hall. Spaces stay empty even after they find tenants. Mattia Cosmi and his wife, Alice Romagnoli, the owners of the nearby Italian Homemade Co., are eager to reopen the former cafe as a restaurant, but have been stymied by bureaucracy, they say.

About the series Shuttered Stores looks at the problem of vacant retail storefronts and identifies causes and solutions. Beginning with a close look at North Beach, where vacancies have soared, and continuing with other San Francisco neighborhoods, we will analyze why some commercial districts struggle and what residents, business owners and civic leaders can do.

“There’s a real community here, but I don’t think empty storefronts foster a good feeling,” said Arthur Rose, a former Caffe Roma regular who has lived in nearby Nob Hill for almost 40 years and had a morning ritual of buying coffee at the now-closed shop. North Beach, he said, “has lost some of its charm.”

It’s a microcosm of what’s happening around the city, and the world. Headlines about the “retail apocalypse” abound, and bankruptcies in the sector are on the rise. Alarmists fret that the brick-and-mortar store is on its way to the graveyard, while Silicon Valley’s most utopian thinkers envision augmented reality and other new technology transforming shopping beyond recognition.

Yet Amazon.com has been around for a quarter century, and while e-commerce has been on the rise, Census Bureau data show that physical retail revenue is still growing, albeit slowly. Something deeper seems at play in North Beach, where the vacancy rate grew from 13% in 2017 to 21% in 2018, the sharpest increase in any San Francisco retail district. North Beach now ranks fourth among the city’s 24 recognized neighborhood commercial districts by vacancy rate; the citywide average is 12%.

Among the reasons: A long city permit process and high construction costs, as well as the need for seismic retrofits, which account for a quarter of the neighborhood’s current vacancies. San Francisco’s high rents and labor costs have also hurt. There’s been bad luck, too: Two fires have gutted historic buildings that housed a half-dozen businesses.

The problem builds on itself. Vacant storefronts threaten the stability of nearby enterprises, which support each other by circulating customers from coffee shop to art gallery, hair salon to vintage-clothing boutique.

“There’s so many empty storefronts, it’s not like people are lingering and enjoying their walk,” said Tracy Andreassen, owner of a women’s clothing boutique called Rendezvous that opened at 1817 Powell St. last year in a space that had been empty for years.

North Beach, whose booming nightlife once drew jazz musicians, strip club patrons and beat poets, now stands in stark contrast to the towering glass skyscrapers springing up South of Market and just as quickly filling with workers. Vacancies rose from 28 out of 221 storefronts in 2017 to 45 out of 219 at the end of 2018, according to a city survey. Sales tax collections for the North Beach neighborhood commercial district — a close barometer of the health of retailers — were $1.4 million in 2018, a drop of nearly 5% from 2017.

For store owners in San Francisco, signing a lease is only the first step toward opening a business. The city’s Department of Building Inspection must approve changes to store exteriors as well as interior construction, and additional approvals may be required from the planning, public health, fire and public works departments.

When stores are changed into restaurants or other new uses, neighbors within 150 feet of the property must be notified, and anyone can file for a discretionary review, which requires a hearing at the Planning Commission, adding months of delays. City agencies can be backlogged by weeks or months.

According to a city report, San Francisco granted 7,891 commercial permits over the counter for applications submitted in 2017. That’s 9 out of 10 permits that didn’t require additional reviews. But when city law mandates reviews, delays are lengthy.

From January 2015 to March 2018, 308 applications for restaurants, stores and offices in San Francisco commercial districts required additional city reviews that took eight months on average to complete, the city’s Budget & Legislative Analyst office found in a study.

For North Beach over a similar time period, the average was slightly higher at 8½ months, according to a more recent analysis by the Planning Department.

Real estate professionals in other big cities say San Francisco’s approval process stands out, and not for good reasons.

“When out-of-town retailers come to New York City for the first time, they’re usually pleasantly shocked by the speed,” said Jeffrey Roseman, a New York retail broker with Newmark Knight Frank. San Francisco’s eight-month delay for planning reviews is “horrible,” he said.

Some entrepreneurs look at North Beach and throw up their hands. Chain stores, known as “formula retail,” are forbidden in North Beach; it’s one of three San Francisco neighborhoods, along with Hayes Valley and Chinatown, with a complete ban. At other times, restaurants and coffee shops have faced limits.

Interactive A neighborhood in flux In San Francisco’s 24 commercial corridors, North Beach recorded the highest jump in retail vacancies from 2017 to 2018. A number of factors lead to empty storefronts: business failures, seismic retrofits, fires, rent increases and permit delays.

In most San Francisco retail districts, standard retail spaces cannot become restaurants, unless more approvals are secured. Food businesses permitted as “limited” restaurants, such as cafes and coffee shops, cannot convert to a full-service restaurant with a kitchen without additional permits. North Beach has additional restrictions.

Kevin Bohlin, owner of Saint Frank Coffee, said he considered the neighborhood for two years when he first set out to open his business.

“I love the character of North Beach and its history. I certainly felt there was plenty of room to have a different expression of coffee,” Bohlin said. “North Beach’s restrictions were not worth it.”

He chose Russian Hill for his first shop instead.

Shop owners’ struggles mirror the lengthy hurdles faced by housing and office projects. But in those markets, vacancy rates are in the single digits, whereas retail spaces are struggling.

The city has taken steps to shorten approvals. The Community Business Priority Processing Program, which started in 2015, seeks to speed up small business conditional-use reviews. Case managers help food entrepreneurs through the Open in SF program, which worked with 192 businesses from 2016 to May 2018.

In December, Mayor London Breed said she planned to shorten the wait for permits and allow more flexibility in retail spaces, such as allowing smaller shops to share one space and making it easier to hold events.

“Anecdotally, we’re hearing that more people are coming in to get over-the-counter permits, saving them and us time,” said Joaquin Torres, director of the San Francisco Office of Economic and Workforce Development.

But some say they’ve seen little evidence of improvements.

“There just doesn’t seem to be anyone in a hurry to speed up the process,” said Pamela Mendelsohn, a partner at brokerage Maven Commercial, which is marketing properties in North Beach. “I haven’t seen anything be put into action yet.”

Supervisor Aaron Peskin, who represents North Beach, blames landlords who have “unrealistic expectations of value” and “greedy brokers” who inflate those expectations.

“There’s only so many loaves of bread and cartons of milk you can sell to make rent,” Peskin said.

Real estate professionals don’t think rent is the biggest hurdle for retailers.

Asking rents for retail spaces in North Beach are around $36 to $48 per square foot a year, comparable to neighborhoods like the Castro and the Mission, Mendelsohn said. Those neighborhoods’ vacancy rates are close to the city average.

Peskin contends that some North Beach landlords are intentionally leaving storefronts empty. He is seeking to put a vacancy tax on the ballot that would fine property owners up to $250 a day if they intentionally keep storefronts and apartments empty.

There are no financial advantages for a landlord to intentionally leave a storefront vacant, said Said Kordestani, a partner and tax expert at law firm Farella Braun & Martel. Property owners can declare a loss on a property if their operational expenses exceed their revenue, but there’s no loss that can be declared for rent that isn’t being collected, he said.

“Leaving a property vacant is mind-boggling to me,” he said. “There’s no tax benefit.”

A woman walks past empty storefronts along Grant Avenue in the North Beach neighborhood of San Francisco, Calif. Friday, May 31, 2019. A woman walks past empty storefronts along Grant Avenue in the North Beach neighborhood of San Francisco, Calif. Friday, May 31, 2019. Photo: Jessica Christian, The Chronicle Photo: Jessica Christian, The Chronicle Image 1 of / 5 Caption Close San Francisco’s North Beach is littered with empty storefronts. Here’s why 1 / 5 Back to Gallery

A landlord keen to sell, though, might take the loss while waiting for a higher-paying tenant, which would increase its sale value. Or one might keep a location empty so a developer who purchases it doesn’t have to buy out the tenant business.

Peskin said he doesn’t think North Beach has a severe retail vacancy problem. Some parts of the neighborhood are worse than others, he said.

“The 500 block of Columbus is an absolute, abject disaster,” he said. “I can’t pretend that’s not the case.”

David Blatteis of Blatteis Realty, which represents Helen Tam, the owner of several vacant properties on that block, said it’s a “lie” to say that brokers are pushing landlords in North Beach to seek higher rents.

Read more: Business owners tell their stories

Tam, in an email, said she is spending $2 million to renovate the vacant properties to meet the city’s seismic-safety requirements, and that she and Blatteis hope to reopen them by September. She said she “never tries to keep stores vacant” and would rather charge less rent than let a store go empty.

“The city government is causing the vacancy,” Blatteis said. “They’re looking to punish landlords. … That’s so counterproductive.”

Behind Caffe Roma’s darkened doors, the problem is in full view. Cosmi and Romagnoli, who moved from Italy to San Francisco in 2013 — yes, Italians are still coming to North Beach — want to use the space for their business.

The couple spent $2.9 million in October to buy the building at 526 Columbus Ave. With recipes for fresh pasta from their native Rimini, Italy, Italian Homemade, now operating out of three locations in San Francisco and one in Berkeley, seems like a perfect fit for the neighborhood long known as the city’s Little Italy. Their original North Beach location down the street, along with the others, is thriving, having gone from selling just pasta and sauces to serving full meals and catering events.

Before he and Romagnoli bought the building, Cosmi said, he’d asked the city four times if he could cook in the Caffe Roma space, which is zoned as a “limited restaurant.” But he didn’t hear back for months. He couldn’t delay the purchase — if he had, he might have lost the space.

The city finally said no in March: His business needed new approvals to operate a full-service restaurant. Gina Simi, a Planning Department spokeswoman, said the city received a formal restaurant application in January and the department responded two months later, well within the normal response time. She said there may have been informal correspondence between Cosmi and the city. The result: Opening the new restaurant will take up to a year. Until then, the space will stay vacant.

Both residents and city officials have ideas to help fill the neighborhood’s vacancies, but it could take months or years to implement them.

North Beach’s vacancy problem 45 of 219 storefronts were vacant in 2018

The vacancy rate rose from 13% in 2017 to 21% in 2018

The citywide average is 12%

Sales tax receipts declined 5% from 2017 to 2018 to $1.4 million

Danny Sauter, president of North Beach Neighbors, a local advocacy group, suggests more events, like the farmers’ markets his organization helped start or movie nights at Washington Square Park. More flexibility in zoning — like letting a bookstore serve coffee or putting a bakery in a coin laundry, for example — would help, he said.

“I think this is such a multifaceted issue that you can’t come to the table and say that you have one approach to solve this or one silver bullet,” Sauter said.

Breed is trying to push for change on several fronts.

“It’s really hard to do business in San Francisco,” the mayor told The Chronicle in December.

In February, she and Supervisor Vallie Brown announced a strategy for combatting vacant storefronts, with an emphasis on overhauling permits and zoning. Breed promised $1 million toward assessing the causes of vacancies, building relationships with property owners and generating a pipeline of tenants to fill storefronts.

What causes retail vacancies? There are many theories about what causes retail vacancies. Here’s how they have played out in North Beach. E-commerce Maybe. Sales tax receipts have dropped in the neighborhood. High rents No. Rents in North Beach are similar to the Castro and Mission districts, brokers say. Tax avoidance No. Though critics claim landlords are seeking tax breaks by keeping a property vacant, financial experts say that’s not possible. Seismic retrofits Yes. A quarter of all vacancies in North Beach are caused by earthquake-proofing upgrades, suggesting the city-mandated safety program is a major factor. Bureaucracy Yes. Landlords, business owners and city officials agree that San Francisco’s permitting and zoning requirements are keeping storefronts vacant.

But for Cosmi of Italian Homemade, the delay in opening a second location in North Beach remains frustrating. His business was born here, he said, and he wants to grow here.

“So, I can’t open a restaurant. What am I supposed to do, cook with my breath?” said Cosmi. “They are saying, ‘You can open a restaurant here but without a kitchen.’ What am I, a magician?”

Shwanika Narayan and Roland Li are San Francisco Chronicle staff writers. Email: shwanika.narayan@sfchronicle.com, roland.li@sfchronicle.com Twitter: @Shwanika, @rolandlisf