Bar wars

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For the owners of the Hole in the Wall Saloon, the plan was simple: move their popular South of Market gay bar out of its dingy and dilapidated quarters to a much better spot around the corner. With numerous bars and nightclubs already along the stretch once known as the gay miracle mile, they assumed their place would fit right in.

But SoMa is changing — and the bar’s new neighbors in the increasingly residential district are using every regulatory trick in the book to block the move. Another bar, they say, is one too many.

The Hole in the Wall’s current location on Eighth Street frequently lives up to the place’s modest-sounding name. The plumbing stops up. The patched floor sags in places. And the bar tilts at an unnatural angle. Co-owners Joe Banks and John Gardiner, who are life as well as business partners, spent years seeking a new space for their eclectic, art-filled taproom. Last year they thought they had found an ideal spot a block and a half away on Folsom, between Dore and 10th streets.

At today’s prices, the building was a bargain — only $1.2 million. After making sure that the space, a former dance studio, was zoned to allow for a bar, Banks and Gardiner hired a local design-build firm to renovate the building. They hoped to open the new location by April 15, the bar’s 13th anniversary.

Now they just hope to open.

In early December project manager Jeff Matt was working on the build-out of the new space when a man named Jim Meko stopped by and asked him to give a letter to the owners. The letter, obtained by the Guardian, is on letterhead for the Western SoMa Citizens Planning Task Force. The task force, which Meko chairs, is advising the Planning Department on a new zoning plan for South of Market.

The letter was a copy of a five-month-old missive Meko had addressed to the real estate agent representing the building’s sellers. It warns that if the property were sold to someone who wanted to open a bar, the buyers could face "obstacles" such as protests to the state Department of Alcoholic Beverage Control and petitions to the Planning Commission.

Silvana Messing, the agent to whom the letter is addressed, told us she never received it. The agent representing Gardiner and Banks as buyers, who asked not to be identified by name, claims he didn’t see the letter either. But if he had gotten it before the sale, he said, "I probably would have advised [Gardiner and Banks] not to buy the place."

Meko, who lives around the corner from the Hole in the Wall’s new location, told us Banks and Gardiner "tend to live right on the edge of the law" as bar owners. He charged that the place used DJs without the proper entertainment permits and that there have been reports of drug dealing and nudity on the bar’s premises.

Gardiner admitted that he and Banks have employed DJs in the past but says they did not know that a DJ requires a special permit: "We thought an entertainment license was for places with live bands…. When we found out, we stopped it." Banks and Gardiner denied that drug dealing takes place at the bar. As for nudity, several Hole in the Wall regulars recalled a time in the mid-’90s when patrons occasionally drank in the buff, but they told us such behavior died down long ago.

Officer Rose Meyer, the San Francisco Police Department’s permit officer at Southern Station, gave the bar and its owners glowing reviews. Referring to Gardiner in particular, Meyer told us, "Southern Station would have no objection to him operating [at the new location]. I don’t foresee there being any problems."

"He has always been responsible" in the past, she said.

Meko claims the letter wasn’t meant to stir up opposition to the bar’s move. Instead, he said, he was simply trying to warn Gardiner and Banks about the simmering antinightlife attitude among SoMa residents. "It’s real precarious," Meko said. "Neighbors just rise up. They become real irrational…. They can go crazy."

When 10th Street resident Damien Ochoa received notice from the Planning Department about the new bar in early January, he didn’t rise up — at least at first. But given that his bedroom window is less than 50 feet from the bar’s back smoking area, he was concerned. As a result, he said by phone, he "started to do a little bit of research about the owners." In the course of his research, he got in touch with Meko.

Ochoa said Meko informed him that "they’re potentially not good neighbors." After a neighborhood meeting, Ochoa, Meko, and several other residents pitched in money to file a petition in Ochoa’s name asking the Planning Commission to look at the project under its power of discretionary review. Other neighbors lodged protests with the Department of Alcoholic Beverage Control. Within weeks all of Meko’s warnings to the real estate agent had come true.

As a result, work on the new bar is at a standstill. It cannot begin again until the protests work their way through hearings and appeals. It could be many months until the outcome is decided. Banks and Gardiner say they have staked their financial future on the new bar, with tens of thousands of dollars in construction loans set to come due before the end of the year. Without any income from the new location, they might not be able to stay afloat.

Banks told us the opposition to the bar’s move came as a complete surprise. The Hole in the Wall, he said, is "a place where everybody’s welcome. It’s a gay bar, but everybody’s welcome." To try to resolve the dispute, Banks and Gardiner hired Jeremy Paul, an experienced permit expediter, to shepherd the project through the regulatory process and to negotiate with Meko and the neighbors. The two sides are currently in talks about enclosing the back smoking area, a change that could cost more than $100,000. Paul expressed guarded optimism that the project will eventually go forward, but he told us the rancor over the new saloon is an example of "the identity crisis" San Francisco is going through.

"The Hole in the Wall relocation is a case study in how dysfunctional this system is," Paul said. Zoning in the area allows for a bar, he said, "and if these people don’t want to live in a bar district, they should check the zoning where they’re buying a house or renting an apartment" before moving there.

Paul added that if the residents are dead set against any new bars on their block, they should work to change the zoning.

The task force Meko chairs is at work on a new zoning plan for the area, which it will eventually present to the Planning Department. Some nightlife supporters worry that the goal may be a more residential neighborhood with no room for more bars.

Meko and Ochoa strongly deny that Meko is behind the residents’ actions. "I’m a neighbor," Meko told us, claiming that he is simply working with other neighbors to prevent the noise, smoke, and litter that could accompany the bar. As for the task force’s work, Meko said he is actually trying to bring more nightlife into SoMa, but only in appropriate areas with adequate "buffers" for the residents.

"I’ve spent the last 10 years of my life trying to broker peace between" bar owners and neighbors, he asserted. He noted that the Entertainment Commission, on which he also sits, is working to clarify permit rules for clubs and bars.

John Wood, a member of the San Francisco Late Night Coalition, said the neighbors "have reasonable concerns" about the new bar but those concerns "are being overblown." Wood noted that the bar is only rated for 49 patrons at a time and that by agreeing to soundproof the building and possibly enclose the back patio, the owners have been very accommodating. "Even nightclubs don’t go through those kinds of measures," he said.

Banks told us he and Gardiner desperately want to resolve the situation. "We’re willing to do anything within our financial means," he said. "We want to save it. The Hole in the Wall is our baby." *