Why Walgreen's Continued Expansion is not good for the Neighborhood

In 2007, Walgreen Co. had net income of $2.04 Billion. With 6,271 Walgreen's stores nationwide, the average after-tax profit is $325,306 per store. That's their “take-home-pay.” Per Walgreen's own spokesperson, Todd Horton, with 54 stores in San Francisco, Walgreen's only donated $100,000 to local charitable causes in 2007 (about $1,850 per store), a mere 0.57% of their approximate San Francisco net-profit of $17.5 Million. Industry standard for corporate giving is 2.0% to 5.0%. The recent $5,000 contribution to Harvey Milk is nice, but far from being a good neighborhood business and community partner.

If Walgreen's were to expand the specialty pharmacy into the space at 4127 18th Street, the total Walgreen's footprint in the Castro Neighborhood Commercial District (NCD) would reach 14,000 square feet (slightly larger than 1/4 the size of the giant Safeway on Market).
For over 4 years, Supervisor Bevan Dufty has been pleading with Walgreen's to improve the look of the front of their Castro store. They haven't. The loiterers and dated window displays remain. The paint has not been refreshed in a generation.

The memberships of several of our neighborhood groups have gone on record opposing the expansion. Our goal for Castro Village is to keep it vital and diverse. A conversion of yet another neighborhood- serving business into a generic corporate giant will accomplish neither of these goals.

The space into which Walgreen's hopes to expand had been a thriving laundromat for several decades. Per the SF Tax Collector, the laundromat ceased operations in November 2006. The landromat operator declined to give reasons for the closure. In only three months (over the holiday season), Walgreen's developed a corporate plan for the space and in February 2007 signed a 20 year lease. Spokesperson Todd Horton would not reveal how the rent Walgreen's is paying compares to that of the laundromat, saying it was proprietary.

For the past 15 months the former laundromat space has remained unoccupied as Walgreen's pays the rent. A primary argument for allowing Walgreen's and other unattractive chains into Castro Village is that empty storefronts are bad for business. This is undisputed. But if Walgreen's had any sense of community, it would have offered the space for use as a gallery or by a non-profit while waiting for permits. At least it would not have been left vacant. Walgreen's supporters fail to mention that certain property owners and leaseholders in the Castro apparently don't need nor care to lease or
occupy their properties. The owner of the largest restaurant space in the neighborhood, who also owns a bar on 18th Street, seems content to leave them vacant in perpetuity. Others are asking obscene rents.

What many of us have been working hard to achieve is a neighborhood commercial district that attracts local residents, but also encourages people to come and shop because we offer something that other neighborhoods do not. We have several other Walgreen's within walking distance (one just three blocks away at Market & Sanchez). Having yet another will not bring us more business or vitality. There is only one Cliff's Hardware, only one Buffalo Foods, only one De La Sole shoes. These are businesses that add to the fabric of our village. Please don't sell us out.

(alan beach also contributed to this story)

One thought on “Why Walgreen's Continued Expansion is not good for the Neighborhood”

  1. I’m really upset that like many spaces in the Castro, that store front is vacant – and BECAUSE Walgreen’s is paying the rent and keeping it so!

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