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Fed up with homelessness, Castro District merchants threaten to withhold city taxes

Fed up with homelessness, Castro District merchants threaten to withhold city taxes
Fed up with homelessness, Castro District merchants threaten to withhold city taxes 02:24

SAN FRANCISCO (KPIX) -- Members of the Castro Merchants Association in San Francisco said they may be willing to stop paying local taxes and license fees if city agencies do not improve their response to people in need  which, they say, has allowed an increase crime over the past four years.

"It's gotten to a point now where it's gotten really tough for any small business owner to successfully run a business in the Castro and this is our call out to the city to do something," said Dave Karraker, co-president of Castro Merchants Association and co-owner of MX3 Fitness. "Every year we pay the city taxes and we pay the city licensing fees to operate a business in this city and, if they're unable to fulfill their obligations for that money we're paying, then we're going to take action."

The association sent a letter to city leaders Aug. 8 asking them to address the behavioral health and drug abuse crisis in the Castro District. The group asked for 35 beds designated to help people in their neighborhood, a plan for when people repeatedly decline services and monthly metrics on who has been offered shelter and how many have been placed in one.

"I think we became a second Tenderloin. We are at that point," said Ken Khoury, who owns Castro Coffee Company. "As merchants, we are struggling to basically have things taken care of."

He has been in business for more than 30 years and feels as if the situation has only got worse in recent years. It is pushing him to think about how much longer he can keep running his store. He supports the move by the association and believes withholding city funds may be needed to stop the property crime and assaults reported in the area.

"That crossed my mind a few times already because I'm getting older," he said, speaking about abandoning his business. "We need to see something, we need to see the city take concrete steps in that direction."

The city's Department of Public Health and the Department of Homelessness and Supportive Housing responded to the merchants' letter on Thursday. In a joint statement to the business owners, the agencies explained that they are working on a multi-pronged approach to address the health and safety of people on the street. Signed by both agency directors, they explained that beds cannot be allocated to one neighborhood but more than 250 beds just opened in the city out of 400 anticipated by SFDPH. 

"For individuals who consistently decline assistance, City agencies are collaborating to use every tool we possess to support the individual's well-being and welfare and to protect community safety, including involuntary care when individuals are eligible," the city response said. "Clinical teams are trained in assessing individuals for involuntary holds. However, California state law sets a very high threshold for these holds and, often, that threshold is not met, even when it looks to the public like an individual 'needs help.' To address the rising concerns in the Castro, we have established a weekly case conference specifically focused on individuals identified as needing assistance by the Castro community."

The Castro Merchants Association has tracked incidents since Jan. 1, 2020 involving burglaries and vandalism and counted 95 incidents which required more than $170,000 in repairs to their members.

"I want to almost compare this district to the Tenderloin, it's getting bad," said Alex Avila, an employee at Marcello's Pizza. He says he has been assaulted twice in the past six years. "We've instated a new rule that no one is allowed to leave unless they're with someone else."

The merchants group does not have a timeline before it takes any further action but says it hopes in the next few months the city can provide a plan to make the situation better and they can track that progress.

"We're not giving up on the city and we would love for City Hall to really take us seriously because this is our livelihoods,"  Khoury said.

Some of the response around San Francisco recently has just pushed people from one community to another part of the city, according to business owners.

"We're waiting for the city to give us a response that we think has tangible results that are measurable," Karraker said. "The Castro has a very long history of civil disobedience and it's not beyond question that we might take those kind of steps."

While they give the city time to meet their expectations, they are also working with other community groups around San Francisco to build a unified voice in their frustration to the current problem on the streets.

"People are fed up, residents are fed up, businesses are fed up. This is not normal, this is not how the richest city in the world should be conducting business and we're looking for answers," Karraker said. "Harvey Milk famously said 'You got to give them hope' and, right now, the merchants of the Castro and the residents of the Castro feel completely hopeless."

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