With Plans Stalled for Neighborhood Grocery Store, Sup. Preston Calls for Hearing on Troubled Site at 555 Fulton Street

SAN FRANCISCO — Nearly 15 years ago, the city created special development rules to allow additional building capacity at 555 Fulton Street in exchange for allowing a neighborhood-serving grocery store. Now, with 139 condominiums fully built and operational, but with no movement on a city-approved plan to bring in a grocery store on the ground floor, District 5 Supervisor Dean Preston is demanding answers.

“For decades, neighbors in Hayes Valley and the Western Addition have asked for a neighborhood grocery store,” Preston said. “The city made special rules to make this happen at 555 Fulton, and I’m beyond frustrated that, despite full city approval nearly two years ago, there is no tangible progress from the developer to deliver.”

In 2015, developer Z&L Properties purchased the site at 555 Fulton and, after a series of delays, constructed 139 housing units, with a 16,686 square-foot ground floor retail space. There were a series of starts and stops in getting a neighborhood-serving grocer into the ground floor, which stretched all the way to July 2021, when the Planning Commission conditionally authorized Trader Joe’s to operate in the retail space.

At the time, public statements indicated that the Trader Joe’s would be opening in late 2022 or early 2023. As of today there is no open date in sight, and it appears that negotiations have stalled between the property owners and Trader Joe’s.

“We need answers,” Preston said. “If there are legitimate reasons for not moving forward, let’s hear them. But delaying without a public explanation is not acceptable. This space has been vacant for too long already, and we want to see it activated.”

Supervisor Preston expects to schedule the hearing in March.

Z&L Properties is partially owned by Li Zhang, a real estate tycoon who was arrested last year and is accused of bribing public officials as part of the Mohammad Nuru investigation. Given the pending prosecutions, Preston’s hearing this hearing is not focused on the criminal cases against the public officials and private actors. Instead, he is inviting both Z&L and Trader Joe’s, as well as Planning Department officials, to the public hearing to get information to the public on the status of the neighborhood-serving grocery store.

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