Advertising adorns windows of a new condominium development at 555 Fulton St. in Hayes Valley as it nears completion on Wednesday, July 31, 2019. (Kevin N. Hume/S.F. Examiner)

Despite a chain store ban, Hayes Valley may soon get a new chain grocery store.

Supervisor Vallie Brown, who represents the neighborhood, has revived a plan to lift the chain store ban at one address in the neighborhood, a development of 139 condos at 555 Fulton St., to allow for a chain store grocery to open on the ground floor.

This was attempted by Brown’s predecessor and current mayor London Breed, but the proposal never advanced to the Board of Supervisors for a vote as the prospective grocery store tenant at that time, New Seasons, based in Portland, Ore., withdrew from the deal amid construction delays.

But now negotiations are underway between 555 Fulton St. owner Z&L Properties and another grocery store chain.

Brown declined to name the store, citing ongoing negotiations. But she indicated a deal was in reach.

“I am introducing this legislation today because there is finally light at the end of this tunnel,” Brown said.

The legislation would lift the chain store ban only for that site and for a grocery store. A prospective grocer would need to apply for a conditional use permit, which the Planning Commission must approve. The permit could be appealed to the Board of Supervisors.

The legislation includes “an affordable requirement to make sure that the Western Addition and the Hayes Valley neighborhood can have access to fresh and affordable healthy food.”

“Moving forward, the interested tenants will work with the community and my office to make sure the grocery store dream is a reality,” Brown said.

The condo development was approved with the promise of a 25,000-square-foot grocery store to serve the nearby residents living in affordable U.S. Department of Housing and Urban Development housing.

“A non-formula retail grocery store may be less affordable, and this one-time lift of the ban on formula retail is intended to support an affordable grocery store that is committed to serving and hiring from the neighborhood,” the legislation said. “According to the U.S. Census Bureau’s 2017 American Community Survey, the median household income in the surrounding neighborhood is $24,041, and over one-third of residents in the neighborhood live below the poverty line.”

Under the legislation, the grocer is required to “prepare a projection of food affordability at the proposed location and submit it for review by the Planning Commission.”

The Hayes Valley Neighborhood Association, which was involved in the previous New Seasons proposal, said they are awaiting further details from the developer before commenting.

Brown said if everything goes as planned, the new grocery store could open early 2021.

Since the board is currently on summer legislative recess, the earliest it could consider the legislation is in September.

jsabatini@sfexaminer.com

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