San Francisco Chinatown merchants say they're struggling to survive Portsmouth Square's 2-year renovation

SAN FRANCISCO — Portsmouth Square has long been known as the "living room" of San Francisco's Chinatown, a gathering place for seniors to play cards, listen to music and socialize. Now, two months into a $73 million renovation, that living room is torn up, and nearby business owners say they're already struggling to survive.

The project, which is expected to take two years, has brought construction noise, dust and the loss of nearby parking spaces, all of which merchants say have driven customers away.

"A lot of merchants around here have been complaining, and they've been talking to the contractor," said Edward Siu, the head of Chinatown Merchants Association. Siu said some stores have reported a 60% drop in business since construction began, citing the lack of parking, noise and dust as key factors keeping shoppers away.

At Charming Sun Market, the owner says the problems go beyond lost foot traffic. He says vibrations from the construction have caused rock and sand to fall from the basement ceiling — He estimates about 30 pounds of material so far — and knocked out electricity in part of the space.

"She practically has to like clean it every day because like it keeps dropping every day," said a staff member of the market.

Siu said the market owner is not alone.

"And also another one, a restaurant down on the Kearny, they have the water leaking on the basement," Siu added. He's referring to Garden Restaurant, which also has a sub-sidewalk basement and is vulnerable to leaks if pipes or concrete gives way.

Tan Chow from the Chinatown Community Development Center sent CBS News Bay Area photos of the Garden Restaurant incident.

"These are pics of a sewage backup since the bridge demo started 10 days ago," said Chow.

The city says those damage claims are under investigation.

"After a thorough investigation is completed, and it's found that this construction did cause some damages, then the city will make good on keeping people whole for what's been done," said Rachel Gordon of San Francisco Public Works.

Siu also said parking near the square was removed without enough notice to businesses. "They took the parking spaces. Why can they do that, you know, without talking to us?" he said.

Gordon acknowledged that construction of this scale inevitably affects the surrounding area. "That is just standard with a construction project of this magnitude," she said, adding that the city is working to limit the impact by adding parking, improving transit access and opening public restrooms nearby.

"We are going to be working as a city on a more robust, open-for-business campaign," Gordon said. "We are hoping that people come down and continue to shop and eat in Chinatown businesses."

The San Francisco Recreation and Park Department, which oversees the renovation itself, also responded to the concerns. In a statement, spokesperson Daniel Montes said the $73 million project represents one of the largest investments ever made in the park and will eventually create "a brighter, more welcoming, and more spacious public gathering place that will serve Chinatown for generations to come."

Montes said the department is working closely with Public Works, community organizations and merchants to minimize impacts, and that staff continues to meet directly with business owners to address concerns as they come up. He pointed to vibration monitors placed around the project area and new signage encouraging visitors to keep supporting Chinatown businesses during construction. He also cited the bridge demolition -- one of the project's biggest construction elements -- as an example of efficient work, noting the bulk of it was completed in just two weeks.

For Chinatown residents like Wilma Pang, the wait still feels long. "It's just a long time," she said, recalling when the square buzzed with music and gathered seniors. "We used to play music there and entertain the seniors, and now we really miss that, you know?"

Pang says she's hopeful about the renovated square -- but just as hopeful the businesses around it can hold on until it opens.