San Francisco Supervisor Resigns Amid Questions Over Business Practices

San Francisco, CA – In a stunning political development, Beya Alcaraz, San Francisco’s newly appointed District 4 supervisor, resigned Thursday night just a week after taking office, following revelations about her conduct as a small business owner. The resignation has sent shockwaves through City Hall, raising questions about the mayor’s vetting process and oversight of new appointees.

At 29, Alcaraz’s brief tenure was abruptly ended after scrutiny emerged over her management of a pet-supply store in the Sunset District, which she previously owned and operated. Julia Baran, who purchased the store earlier this year, provided ABC7 News with videos showing the business in poor condition, citing “hundreds of dead mice, piles of trash, and cages covered in urine and feces.” When questioned by ABC7, Alcaraz did not dispute the claims, noting the challenges of operating a small business in San Francisco.

Further scrutiny centered on the financial practices of Alcaraz’s former enterprise, the Animal Connection. Profit and loss statements obtained by ABC7 show consistent losses between 2020 and 2023, despite Alcaraz telling Baran that the business could be profitable. Text messages verified by ABC7 reveal that Alcaraz admitted to using personal expenses as business deductions, effectively turning the struggling business into a personal source of cash.

Alcaraz outlined her approach in messages, stating, “I also live off a big portion of the non-cash revenue. I spend expense a bit of money on my personal life so I can use it as a tax deduction. E.g., I pay for my dinner and drinks with my friends or 'clients' as a business expense and they may or may not pay me back in cash.” In 2023, she reportedly spent $15,659.92 on such “meals and entertainment” while claiming a net loss of $20,748 on her tax return.

The revelations extended to payroll practices. Alcaraz admitted in interviews to paying summer employees in cash without reporting it to the IRS. When asked whether this constituted tax evasion, Alcaraz deflected, insisting her actions were common among small businesses and intended to ensure seasonal workers were compensated. “They needed a little extra cash. I paid them extra cash because I think they should get paid,” she said.

Legal experts indicate that these practices, if verified, could carry serious consequences. CPA and financial planner Larry Pon noted, “You cannot use your business account to pay for personal expenses and deduct them on your tax return. You also have to report all your income and put employees on payroll. Generally, first, you face civil penalties. If it’s serious, criminal penalties could apply.”

Mayor Daniel Lurie, who appointed Alcaraz, confirmed he spoke with her Thursday night regarding her resignation. In a statement, he acknowledged that the new information about her business conduct would be a significant distraction from her role as supervisor. “This is not the first time that I have gotten something wrong. It won’t be the last. But I commit to the people of San Francisco that I’m going to learn from this and grow,” Lurie said in a press conference Friday.

The mayor declined to provide details on Alcaraz’s vetting process but promised a review to prevent similar incidents in the future. Lurie also did not indicate when a replacement for District 4 would be appointed, a decision that carries political weight amid ongoing debates over neighborhood upzoning and the contentious Great Highway proposals.

Alcaraz’s resignation highlights the complex challenges faced by small business owners navigating San Francisco’s regulatory environment, but it also underscores the heightened scrutiny public officials face regarding personal and financial conduct. For the city, the episode is a cautionary tale about the importance of thorough vetting and the potential political fallout from missteps in leadership appointments.