The Empire Theater Block Skips the Hearings. What Happens to the Shops Around It?

Mozzarella di Bufala sits between two buildings that are scheduled to come down. On one side is the Empire Theater at 85 West Portal Avenue, which has been dark since 2021. On the other is 61 West Portal Avenue, which held a Goodwill and a Supercuts in the Chronicle's August account. Owner Pedro Galletti chose not to sell, so the new building will go up around his restaurant. "I'm going to be surrounded by it. Literally," he told The San Francisco Standard.

Neighbors can no longer slow the project down. What happens to the independent shops around it depends on a city relief fund that can't pay out until two city offices write its rules, and the ordinance gives them until about January 2027 to do that.

A project that more than doubled

The project first appeared as 64 homes in nine stories. On August 31, the San Francisco Chronicle reported that DM Development and Empire West Portal LLC had raised it to 172 homes, with 26 of them affordable. The paper said the larger version was made possible by Mayor Daniel Lurie's "Family Zoning" changes and the purchase of the building next door. The Chronicle described 12 stories. The Richmond Review/Sunset Beacon described 13 in October. For comparison, the tallest building on the avenue today has five floors, a few have four, and the rest have two or three.

Here is what the Beacon's October report lists:

The Chronicle says the 7,000 square feet of retail will be split between two storefronts. The facade will use metal and bronze panels, terra cotta, and precast concrete, and the design includes a marquee meant to recall the Empire.

Why the conversation moved from the hearing room to the storefront

The Chronicle reported that the developer is using two state laws that streamline approval. Once the city deems the application complete, the project goes ahead with no public hearings or votes. A state density bonus doubles the building's height. The Beacon named the laws as SB 330 and AB 2011 and described AB 2011 as a 90-day, over-the-counter approval. San Francisco Planning's AB 2011 page says the law requires ministerial approval for eligible housing on qualifying retail, office, or parking sites.

District 7 Supervisor Myrna Melgar supported the rezoning. She told the Chronicle, "What I am not in a position to do is to ask them to make it smaller." She told the Standard that hours-long listening sessions are no longer required, so she could not make the developers sit down with neighbors.

Merchants told the Standard they had largely stopped arguing about the building's size and started planning how to survive it. Galletti and West Portal Daily Market owner Issas Haddad both suggested the developer could pay for relief grants. Melgar pointed them to a city program instead.

The shops in the construction zone

These are the businesses named in fall reporting on the project, all within sight of the site:

Merchants don't agree on what comes next. Vivacqua told the Standard, "The construction will be a pain, but customers will come anyway. And then the new housing will bring many more people." Bullard put it this way: "We put our heart and souls into our stores, and we don't have deep pockets to weather a huge disruption." Melgar herself expects "a couple of years of construction and noise."

What the relief fund says it will do

The program Melgar pointed to is the Small Business Rezoning Construction Relief Fund. It was created by Ordinance 236-25, Board of Supervisors file 250782. The Board gave it final approval on December 2, 2025, and the mayor signed it December 5, 2025. The ordinance text defines its purpose this way:

"providing grants and other assistance to San Francisco's Small Businesses impacted by increased construction as a result of the City's Rezoning."

The Office of Small Business and the Office of Economic and Workforce Development run it together. The ordinance lists what the program can pay for:

• Grants to small businesses displaced by rezoning construction
• Financial help, business assistance, relocation assistance, and leasing support for businesses whose operations are interrupted
• Loans through nonprofit community lenders, if the administrators choose to set them up
• Marketing, promotions, branding, and technical assistance

A "small business" here has no more than 100 full-time employees and no more than $5 million in gross revenue in 2025. Restaurants and bars get a wider test: no more than 100 full-time employees or no more than $7 million in revenue. Both limits rise with inflation starting in 2026.

The ordinance applies to construction tied to the city's 2025–26 residential rezoning. The Chronicle credits Family Zoning for the larger Empire plan, and Melgar told the Standard the money "is there to apply for" once construction starts cutting into foot traffic.

Why the rules matter more than the money

The ordinance requires OSB and OEWD to write rules within 12 months of the law taking effect, and before any money goes out. Those rules must set who qualifies and how awards are decided. They must also give priority to impacted businesses with only one location, and they must let a business apply if it was displaced or impacted within the two years before it applies.

Here is the order of events in the ordinance:

1. Effective date. The law took effect 30 days after the December 5, 2025 signing, around January 4, 2026.
2. Rules deadline. The rules are due 12 months after that, around early January 2027.
3. First payouts. Money can go out only after the rules are published.
4. First public accounting. The first annual report on what was paid out and for what is due by December 1, 2027.

The funding also works differently from a normal city budget line. The fund can accept grants, gifts, and money the Board appropriates. It also gets money from businesses that choose to send up to 4% of their gross receipts tax to it on their original return. Those designations count for tax years starting January 1, 2025, and are capped at $8 million a year in total. Anything above the cap goes to the General Fund. How much money is in the fund depends partly on how many businesses check that box.

A candy shop ordering for Easter in October

Zogaric's problem shows why the timing matters. She told the Beacon that merchants expect business to fall about 20% during construction, but they don't know how long that will last. "We don't know how long the construction is going to take, when it's going to start," she said.

Seasonal orders are where that uncertainty hits first. "We're ordering our spring products for Easter. Do I order the same amount as last year? Do I expect a 20% decline in revenue, in foot traffic at that point?" she told the Beacon. She added that a start date would tell Shaws whether to shift toward online sales or deliveries. Shaws was already placing spring orders in October. Under the ordinance, the program's eligibility rules are due by about January 2027.

On the corridor's own calendar, West Portal Gallery celebrates its first anniversary on Friday, November 13, from 6 to 9 p.m. at 320 West Portal Avenue. For more on how storefronts change hands along these blocks, see our earlier look at how West Portal Avenue fills its empty storefronts and our West Portal neighborhood page.

This post is general information about a city ordinance, not legal, tax, or financial advice. Business owners should check their eligibility directly with the Office of Small Business or a qualified professional.

If you own a home a few blocks from the Empire site and want to know how a multi-year construction project nearby fits into your own timeline, Level Up Group follows these projects block by block. Schedule a consultation and we'll go through the reported plans with you.