Neil Mehta, the venture capitalist behind the acquisition of a string of properties on San Francisco’s posh Fillmore Street, made waves earlier this week for allegedly trashing long-established restaurants to attract more upscale retailers. For example, the San Francisco Chronicle spoke with the owner of Ten-Ichi, a neighborhood sushi restaurant that has been around for nearly 50 years and is now forced to vacate its premises next month. “This is the opposite of what San Francisco does with long-standing, traditional commercial tenants,” the restaurant owner told the paper. “This guy (Mehta) is pushing us out.”

Sources close to the ousted Mehta, however, paint a very different picture. They say Mehta’s main focus is on bringing a variety of restaurants to the area and he is even planning a sort of “Y Combinator for restaurants,” according to one source.

According to this person, Mehta has a pretty grand vision. He wants to transform the four-plus blocks he quietly acquired last year into an oasis where ambitious restaurant owners can afford to set up shop, San Francisco residents can find a wealth of restaurants and shops, and a 111-year-old movie theater down the street will be restored to its original glory and “not turned into an Equinox Theater.”

When asked for comment earlier this week, Mehta declined to comment officially. The man is said to have purchased a 117-year-old, 836-square-foot home worth $17.6 million in 2022, just blocks from his newly acquired commercial properties. He said he was speaking to reporters only on behalf of his portfolio companies.

Up and right

Some of Mehta’s plans were first reported earlier this year in an article by The Information, which focused primarily on how Mehta, who is far less famous than many venture capitalists, can raise so much money to invest.

It’s been a rapid but steady rise for the 40-year-old. A graduate of the London School of Economics, Mehta was reportedly a star investor for an offshoot of quantitative hedge fund DE Shaw before leveraging his reputation and network to co-found his own venture capital firm, Greenoaks Capital, in 2010.

The San Francisco-based firm, which raised its first institutional capital in 2015, has since invested in some of the hottest private companies in the technology industry, including Stripe, Databricks, Rippling and Canva – all of which are now valued at billions of dollars by their backers.

Greenoaks is also one of the early investors in Wiz, a until recently lesser-known cybersecurity startup that reportedly turned down a $23 billion acquisition offer from Google. (Wiz, by the way, was founded just four years ago.)

Now Mehta is putting some of those profits into Pacific Heights, the San Francisco neighborhood where he grew up for much of his life, by creating a $100 million nonprofit to fund his spending spree. The plan is apparently not only to transform the Fillmore into a popular restaurant, but in the process to cut through some of the red tape that many aspiring restaurant owners face, and offer them lower rent—and in some cases even charge a percentage of sales instead of rent—so that these businesses can more easily thrive.

Mehta doesn’t see his growing real estate empire as another financial gamble, according to friends. They insist his main interest is ensuring his San Francisco neighborhood fully recovers from the pandemic, while about half of the shops on Fillmore Street have permanently closed, according to commercial real estate services firm CBRE. He is a “big believer in cities,” one source says.

These measures are likely to consolidate his wealth in any case.

For one thing, Mehta is avoiding so-called “formula retailers,” companies with 11 or more stores around the world. Some are already in the process of obtaining conditional building permits, but these take up to 12 months, which is why many of the stores on the tree-lined street currently appear empty. (In other San Francisco neighborhoods, chain stores are banned entirely.)

Mehta is also likely to benefit from the 100 changes to San Francisco’s building code passed in December that simplify the permitting process for independent companies.

Thanks to his financial strength, Mehta can afford to be selective about the companies he wants to help survive, whereas the previous owners of the buildings could not afford to be as selective about the amount of rent they charged.

Mehta doesn’t buy his buildings cheaply. For example, he acquired the theater down the street and an adjacent commercial building for $11 million, compared to the $4.8 million the previous owner paid in 2008. For a separate 7,300-square-foot building, he paid $9.7 million, or $1,329 per square foot. Still, it’s easy to see how all the pieces – buying the buildings, renting them at below-market rates to minimize turnover – could create a more vibrant scene that increases the value of Mehta’s real estate over time.

Alex Sagues, senior vice president and head of CBRE’s Urban Retail team in San Francisco, says many shopping districts are successful when they are carefully planned. “You don’t want to have two cafes next to each other,” Sagues says. “But if you take a bakery and put a cafe next to it, it can attract business.” Likewise, he says, “every winery in Sonoma makes the town more attractive.”

As for the high-quality food that could soon be available throughout Fillmore Street, Sagues says there is less danger of cannibalization than one might think. “People come for a specific experience. They don’t come and then decide between Mixt (a salad restaurant) or (three-Michelin-starred restaurant) Atelier Crenn.” The more densely populated a neighborhood is, the more people come, he adds.

Mehta’s measures could already be having an impact on the market.

Although Pacific Heights has long been one of the most expensive and desirable neighborhoods in San Francisco, real estate prices plummeted during the pandemic. According to Redfin, the average home price in Pacific Heights is now rising rapidly again, reaching $2.25 million in July, a 28.6% increase from a year ago.