For the past three years, an experiment to fill empty downtown storefronts by offering free rent to small-business pop-ups has led to more than a dozen shops and restaurants securing long-term leases.

Although that has not restored downtown to its previous vitality, it’s a start. And now, a nonprofit formed by Mayor Daniel Lurie’s wealthy allies aims to expand on the Vacant to Vibrant initiative by helping businesses skip the pop-up phase altogether.

Launched Thursday by the San Francisco Downtown Development Corp., the $25 million Downtown Business Fund (opens in new tab) offers move-in grants of up to $500,000, sub-market-rate loans of up to $1 million, and other design and technical support to help businesses build out and open in vacant spaces around Union Square and the Moscone Center.

“Downtown is seeing real momentum, driven by the local businesses that make San Francisco special, and that momentum matters for our entire city’s recovery,” Lurie said. “Today, we are taking a major step forward with the Downtown Business Fund, bringing together public, private, and philanthropic partners to help more businesses open, grow, and stay in downtown San Francisco.”

Shola Olatoye, CEO of the DDC, said the three-pronged approach is intended to help businesses make capital upgrades and reconfigure the available spaces, many of which were “built for retail of a different era.” The program could renovate empty department stores and large chain outlets into indie shops with smaller footprints.

“We are in the midst of a really important recovery, and we see the Downtown Business Fund as filling a critical gap,” Olatoye said. “We want to make sure that businesses that want to have a longer-term commitment can also come to San Francisco, and we make it easy for them to do so.”

Simon Bertrang, executive director of SF New Deal, which manages Vacant to Vibrant and will assist the DDC in operating the new fund, said the investment is “head and shoulders above what anyone else has offered.”

While Vacant to Vibrant helps pop-ups move into turnkey spaces — like Al Pastor Papi (opens in new tab), which opened in a former Chipotle on O’Farrell Street — by providing three months of free rent, the Downtown Business Fund will give prospective tenants the capital for more complex renovations. 

“If you want a cafe in a space that wasn’t a former cafe, this opens up more possibilities,” Bertrang said. “It’s really a next step, a level of support that’s going to allow us to fill the more complicated spaces, the spaces that require more investment upfront.” 

Initial backers of the fund include Citizens Financial Group, Google, and JPMorganChase. The architecture firm Gensler will provide free or low-cost design assistance, while Cleary Gottlieb is offering pro bono legal counsel.

“Small businesses are essential to a strong downtown, and supporting their growth is core to our work at Citizens,” said Mark Valentino, the company’s head of business banking. “This fund reflects our long‑term commitment to San Francisco — helping local businesses access the capital they need to invest, grow, and play a meaningful role in the city’s continued recovery.”

Like Vacant to Vibrant, the Downtown Business Fund will provide expedited permitting, Olatoye said. The program will initially focus on filling storefronts on Powell Street between Union Square and Market Street — where Gap, Uniqlo, and H&M used to be — and in the Moscone Center corridor along Stockton and Fourth streets.

Enthusiasm for the program is high, she said. Ahead of Thursday’s official launch, more than 80 businesses and landlords had expressed interest.

“We’re talking to a number of businesses in San Francisco and the greater Bay who want to be in downtown San Francisco,” she said. “I’m feeling pretty positive.”

To qualify for the program (opens in new tab), applicants need to be licensed to do business in the city and the state and have all other requisite permits for their type of business. Though the fund is geared toward established businesses willing to sign three- to seven-year leases, the DDC and SF New Deal are also ready to help first-time business owners.

“‘No wrong door’ is our mantra here, so if you are a home entrepreneur who hasn’t filed taxes and is just starting out, you should still visit the website (opens in new tab),” Olatoye said. “There is a place and space for everyone in downtown.”