Troubled SF Safeway in Fillmore to close, replaced by housing

The Safeway on Webster Street in San Francisco’s Fillmore district informed employees Thursday that the store will be shut down in March and that the 3.68-acre property will be sold to a residential builder to be redeveloped as housing.

The company said it has entered into an agreement to sell the parcel, known as Webster Plaza, to Align Real Estate, which will build a mixed-use development with housing and commercial space.

“As part of the sale the Webster Safeway store is expected to close on or around early March,” the store stated in a letter to city officials. “All associates at the Webster Safeway will be re-assigned to another store in the San Francisco area.”

Safeway said it has “proudly served the Fillmore District for 40 years and that “decisions like these are never easy, nor are they made without a great deal of consideration.”

“San Francisco has struggled with housing shortages and Safeway sees this as an opportunity to positively impact the community and to be part of a solution to bring much needed housing to the city,” the company said.

The store, located in a historically Black neighborhood, has been the source of some controversy over the past year as it has blasted classical music to deter people from loitering in the parking lot, annoying some neighbors. Last year, the store also shut down its self-checkout kiosks to reduce theft.

For a city facing increased pressure by the state to generate new housing, however, the closure could present a huge opportunity to create more than a thousand units. The property is zoned for buildings that could stand 130 feet tall, and the new owners could build more than 50% additional units under state density bonus programs. 

“This is a real and rare opportunity to add a significant amount of new homes in this part of the city, and even a new grocery store, and it shows a real interest in investing in housing in San Francisco,” said Mayor London Breed, who grew up in the neighborhood.

Though, that gain comes with the loss of a grocery story in a part of the city without many of those options. 

“While in the short-term we are losing a grocery store in the community, there is also a new Trader Joe’s opening nearby and an opportunity for a new market on the site,” Breed said.

Supervisor Dean Preston, who represents the neighborhood, said he was informed of the impending closure Thursday morning. “This is the first we are learning of the sale and intent to close the store,” Preston said. “We are extremely concerned with the potential loss of this grocery store in the heart of the Fillmore, and especially the possibility of losing it as soon as March, which we view as unacceptable.”

Preston said he has reached out to Safeway and the developers to learn more about the plans, the timing and whether a grocery store could be part of the redevelopment.

In a statement to the Chronicle, Safeway said it did not plan on being part of the redevelopment. The closest Safeway store is in the Castro, about 1.1 miles away.

While the potential redevelopment will create a grocery shortage in the Fillmore, it could signal a new receptiveness on the part of Safeway to redevelopment projects. Over the past dozen years, San Francisco elected officials have lobbied the grocery chain to consider allowing housing on some of its larger sites, including the Potrero Center at 16th and Bryant streets and the Castro property on Upper Market Street. Those talks have not been fruitful.

The Rev. Amos Brown called the pending closure “a blow to the Black community.”

He said he had sat through dozens of meetings with Safeway executives in the years when the supermarket chain was lobbying for permission to anchor the retail center on the 1335 Webster St. property, which had gone through stints as two other grocery stores.

“We were allured and tricked into supporting Safeway becoming the anchor corporation in the development,” said Brown, pastor of San Francisco’s Third Baptist Church, located near the Safeway. “I was personally lobbied by city government to support a left turn off of Geary so that traffic could access the store from Cathedral Hill.”

Brown said the recent issues of loitering and theft could have been solved if Safeway had worked with the neighboring residents. He said a year ago there were rumors that the store would be closing, but that Safeway officials assured him that was not the case.

“They told Amos Brown, ‘Oh no, we would not do that. We are here to serve the community,’ ” Brown said.

Brown took issue with the idea that by selling to a developer, “they are going to be doing us a favor.”

“They are creating a food desert, so it’s painful,” he said. “Another instance where the Black community is being disinherited, disrespected and destroyed. … They never came to us and laid their cards on the table.”