in the interim. the thinked option would be -- the third option would be if they think they're going to pay the fee and fill out a declaration of intent to pay the fee and through either the passage of a lot amount of time or dialogue with the community and an idea for an improvement comes up and they would have to start at the beginning of the process i just outlined but with just tim proouchlts and then -- but with just the improvements and come before you for approval of that piece. so there's three different kind of venues where projects would be presented before you. i think that's it. i wanted to spend more time talking about the process and i presented before this the to the cacs and often worked with the working group which was designated and from the market octavia and dan murphy and fernando ortiz and two of them are here for public comment and

i am hear for any questions if you guys would like. thank you. president miguel: thank you. i only have one card on public comment. >> good afternoon. i am on the land use committee and i earlier committed a request for continue continuance on this item and was told i could not do it at the time. this letter is from cfsn and this is mainly because we're thinking that a citywide-type of policy and since it seems to address or mention cac's a number of times and there are many areas and most areas don't have a cac, so we're concerned

that the neighborhood input has not been asked for. so this letter goes on to state, dear president miguel and commissioners, the coalition of responsible neighborhoods requests the planning commission for a continuance on this matter because of inadequate kovj and the coalition of neighborhoods and organization have over 40 neighborhood associations and was not contacted for their input. the policies and procedures may be satisfactory but the planning department must make outreach a priority when the board and city wide policy and procedures are considered. we have participated in every important citywide policy and procedure matters including most recently the 2004, 2009 housing elements and market octavia ---ing pshg nshg and eastern neighborhood p pn and cfsn believes outreach and notification are critical in a good government process.

your truly, judy berkowitz, president, cfsn. thank you. president miguel: thank you. is there additional public comment on this item? >> gafrp, commissioner. -- good afternoon, commissioners. peter cohen and i chaired the committee and the working group level along with levitt and dan murphy who had to leave and fernando ortiz from the eastern neighborhood. we spent a lot of detailed time on this and overall it is a good policy and will be an experiment to see how it works and we went through self-iterations and you could only quibble over words

and how well it will work and these are any own personal positions on the whole topic of in kind improvements and i was talking with dan murphy earlier and how that was baked into the eastern neighborhoods and market octavia and we were never talking about privately delivered in-kind improvement and the delivery system wasn't talked about much at all and the whole notion that private development should be contributing to public amenities that really complement the impact of new growth. and so it was a lot of debate about what the sensitivity was and the role of the advisory committee and talking about how it happened and a presumption that it would be happening through the public sector. this is a very new conversation

and with the private sector and i have to chair with you that i am tentative of the policies that encourage that and i don't think that should be encouraged and should be a little bit more the exception than the rule. and we have a fairly elaborate process through our cac's of identifying priorities and of working with five-year capital plan and with the large geography and not in the self-interest of a private developer as dan admitted and it doesn't make sense to do it if it's not really in proximity to the project. it changes the calculus for when and where and how the public

benefits to make sure these debates happen and that was critical to be a transparent dialogue at all levels and are making decisions and want to come back with the hearings. president miguel: is there additional public comment on this item? if not, public comment is closed. commissioner antonini. commissioner antonini: thanks. i have a few comment and then a few questions. i think your comment about balance is important and to make sure the in-kind improvements are balanced and there are efficiencies and quality that you will avail yourself of by having some of this done by in-kind rather than going through the city and just

sometimes we're backlogged and you can get things done by people who are experts in doing these things at a better cost. my one concern is that this is raised by the coalition of neighborhoods and you replied to my phone call and the planning commission has the authority and the cac's are advisory to us on that and you made that clear, but that these things should be vetted citywide and that the coalition of san francisco neighborhoods made a good point and this is a citywide policy and i would be supportive of a continuance because it's important to get the input, too, because these are being applied to specific areas that would be applied citywide as new areas come up.

>> by definition the in lieu concept can only apply where there are impact fees because they are replacing an impact fee. and impact fees are only in play in certain areas that have plans themselves. and impact areas have to go through a whole process and be applied to the board to have impact fee. >> some of these are somewhat overlapping and eastern neighborhood is a large area that may have neighborhood organizations that are part of that area. and the same could be true perhaps to a lesser degree of market octavia and that is one concern and the other thing is as we look at these in-kind arrangements, when we look at the use of in leiu fees or improvements within a neighborhood, we all have mistaken that and that is good that it comes before the planning commission and even though the cac may be

neighborhood and happen citywide and people moving into an area perhaps might have certain thing they are interested in and certainly becomes a more attractive area if the in-kind aproouchlts address the whole population of congressman, not just the population that lives in an area and it is important this be vetted as broadly as possible so that would be my feeling on it and we'll see what the other commissioners would say. i wouldn't mind a continuance for overs to have an -- to weigh in on it. >> i think the public park is a good example of the public opinion and to propose to do a public park and what we're talking about now is whether it pays for through the fees and the city built it or whether the

developer built it and pay the feeses and there is a difference process about the department does and there are pub hick hearings by d.p.w. or m.t.a. and that engagement processes the local neighborhood groups and the city wide neighborhood groups and that still happens. this is about who builds and pays for it. >> and i think i understood your graph, but there could be a situation where the cac heard and advised about in-kind agreement and perhaps was not in faif, but there is an avenue it could come to the planning commission anyway. that answers a lot of my concerns because that allows for

that. >> as long as there is an in-kind fit and i think you have explained this and it fits within a public process and public prioritiy and as peter cohen was saying, some developers will want to do something that benefits the project in a more direct way. within the department and parks and rec and d.p.w. and implements the priorities that are out there, i think we can give it a shot. president miguel: commissioner olague. vice president olague: i agree with the comments from peter cohen and not going to reiterate them and when we were looking at the neighborhood plans, i don't

think the intent was to ever sort of go the route of in-kind and wasn't something that we have discuss ed in-depth or encouraged that and i didn't support that and members of both places were participating and trying to create a policy for in-kind agreements instead of an automatic green light on them. i feel comfortable with what is before us and especially a couple of years. >> there is the commitment of the department to come back and report on that faster review.

>> it seems there is a public process attached to this and so i am comfortable with moving ahead with it today given that there's been a lot of public input and the opportunity for that when we have the in-kind come before us and will be back to us in a couple of yearses and allow for the public scrutiny and open to whatever. >> i am also open to go ahead on it today and a couple of comments on new parks and open space and a minimum of three

year maintenance and the problem in the past with maintenance agreements on public parks is that rec and park doesn't have money to maintain them afterwards. and so i would personally scrutinize it very, very careful carefully. three years is nothing in the life of a park and i would have serious concerns about that. and at least the minimum is in here. and in-kind agreements are standard and this is a different one in that it is in lieu of a payment of fees. and i have participated in a number of nonprofits that have gifted the city with in effect in-kind projects and in numerous

cases a great deal for park and rec and number one, can be onerous and expensive and there were instances where it was possible for the nonprofit in effect to deliver three times the amount of merchandise at the same price and still do it in conformity with all city regulatio regulations. the concept does work and it is very, very standard. many nonprofits utilize that process. and i don't want the public to think this is anything we're inventing here. this is very, very standard and developers can in effect take

care of certain city needs without going through the city doing it on their own time. commissioner sugaya? commissioner sugaya: it will be interesting to see what happens given the current development climate since all of this is kind of dependent on development happening and we might not have a very long report in two years anyway. president miguel: mr. graham? >> i wanted to thank the cac and the work for this and this is something the commissioner asked for a few weeks ago when that project came up. i think the advantage of having this policy is, in fact, and just having the policy in place will address the concern about overuse because it actually makes it very clear when we can and cannot or should or should not use the in lieu program and some types of improvements lend

themselves to this more than others. and with the larger products or economy of scale and this will probably be the only one built within five years. other types of improvements are clearly less inclined for in-kind. the policy of the case by case basis. president miguel: thank you. >> is there a motion? >> move to approve. >> second. >> commissioner antonini? >> aye. >> aye. >> commissioner miguel? >> aye. >> thank you, commissionerses. you are now on item 11,

2010.0464 contraction for 445 valencia street. >> good afternoon, commissioners. erica jackson, planning department staff. before you is a request for conditional use authorization under planning code to allow a new massage establishment within the valencia street commercial district at 445 va leps ya street and -- 445 valencia street. it meets the planning code criteria. and the business has three xiing locationses within san francisco and all three locations are in good standing with the department of public health and have received all the required city approval. there are no open vying violation cases with the building department and with the planning department for the three locations. the applicant has filed a new massage permit with the department of public health for the new location.

and condition approval with insures that the applicant maintains in good standing with the department of health and failure to do so can be resevened by the planning commission. given the findings discussed, staff recommends the approval of the conditional use authorization with conditions. thank you. i'm available for questions. >> thank you. any public comment on this item? excuse me. project sponsor. the project sponsor is here and wishes to speak. if not, is there any public comment on this item? none appearing, public comment is closed. vice president olague: i might have of looked it, but i couldn't find the hours of operation here. maybe it's on this one.

>> i believe it's under condition 13. page 11. from 7:00 a.m. to 10:00 p.m. president miguel: 7:00 a.m. to 10:00 p.m. the health code. vice president olague: right. those are standard. for people that live above obviously. just wanted to make sure that the tenants are not that it' going to be disturbing. >> it is an s.r.o. hotel that's above. vice president olague: yeah. and i'm going to move to approve. i don't see anything here. >> second. >> commissioners the motion on the floor is for approval. >> commissioner antonini. >> aye. >> commissioner sugaya. >> aye. >> commissioner olague. >> aye. >> commissioner miguel. you are on item 12, 2010.0072c. 627 vallejo street.

>> good afternoon, president miguel and commissioners. i'm rick crawford of department staff. this is a request to legalize the current arrangement uses at 627 vallejo street by permitting the owner to discontinue the grocery store use and legalize the establishment of a stand-alone liquor store and include the floor area for wine sales and maintain the existing accessories small fast food restaurant as a stand-alone use. the project is located at southwest corner of vallejo and columbus avenue within the north beach neighborhood commercial district and the north beach special use district. on august 30 of 2007, the planning commission authorized a conditional use to allow the establishment as a small service restaurant of 950 square feet inside the retail grocery store and to allow wine sales as an accessory to the grocery store. the area of the restaurant was limited to 950 square feet with no physical separation between

food service and the store permitted and required if the grocery store were to change to another use, a new c.u. authorization would be required for the stand-alone restaurant it. the area of wine sales is limited to 745 square feet and planning code allows wine sales as accessory provided they do not occupy more than 15% of the store floor area. the approved wine sale area is 14.9% of the 4,971 square foot area of the store excludeing the restaurant area. the sponsor has been operating the business for over a year and has never been in compliance with the terms of the 2007 c.u. authorization and conditions of approval. the department has an active enforcement case against the property for exceeding floor area limits for the wine sales and also for the failure to restore the store front to the historic character. and i have here for you a report

an that of mr. dario jones of department staff. planning code section 218.2 allows the elimination of a grocery store if it can demonstrated that it is not economically viable. the section requires the applicant to provide 24 month of financial data indicating that the use is not generating a profit. the sponsor submitted financial data for 12 months because they have not been open for 24 months when they made the application. in addition, the business has not operated as a grocery store during that period but more of a wine store with specially grocery items similar to the present request. the applicant states he cannot make a profit as a grocery store but can do as a wine shop although it appears he has never attempted to operate as a grocery store and is unprofitable as a wine shop and specialty food store. the department has received seven letters of support for the project including one for the north beach neighborhood association and the north beach

chamber of commerce. we received two letters in opposition including one from telegraph hill association and the vice president of the north beach merchants association. the department recommends disapproval because they believe this project is not desirable under section 303 of the planning code for the following reasons. the stand-alone self-service restaurant is not permitted to occupy a commercial space by a sales or service such as a grocery store and for planning code section 780.3b. and the project would eliminate a neighborhood serves grocery store. and the proposed project does not meet the applicable requirements of the planning code and is not consistent with the objectives and policies of the general plan. the commission's action to disapprove the request is necessary for enforcement to resume and compliance with the planning code and provisions of the 2007 motion to be achieved. i'll be happy to answer any

questions that you may have. thank you very much. president miguel: thank you. project sponsor? >> good afternoon, commissioners. our location has been open for about a year and a half under the conditional use permit of grocery and a self-service restaurant and a wine retail store with specialties. in 2009 which was our first year of operation we have lost $751,0 $751,000. money that came from refinancing

our personal property. the accusations are that we never tried to have a grocery store. we have 6,000 square feet which is a kitchen, storage, bathrooms, grocery, self-service restaurant, a wine retail store and a location that has never worked in the past 10 years for anything. documentation is being given to mr. rick crawford which support what all of our losses. financial statements were admitted to him, sales tax returns were submitted to him. and the letter from a certified public accountant was submitted

to him. as we learned in our business, we find ourselves running out of money. and maybe at a point in time we should have some good sense and just close it down. the same way other operators have closed that location down in the past 10 years. prauf but sometimes common sense is not so common, so we kept on going. and we started changing our operation. what we should have done is come. you and ask you for a change of use, but we didn't. maybe we should have went to the planning department and asked them for change of use, whatever the normal process is. we did not do that. am i guilty of that?

very much so, yes, i am. but as we losing all this money, we come to a desperate situation and how do we stay in business? we took about 80% of the groceries out, we did. it was not done because of greed because if you do thing for greed it's because you want to make more money. we never made any money. greed had nothing to do with that. wasn't done to spite anybody. it wasn't. we were the ones working there every day and losing must be. we never laid off anyone of our employees. all the losses were accrued because of groceries? absolutely not. we have is t same amount of employees we had when we open regardless of the losses. couple of things happen in 2010.

due to the changes that we made, we have minimized the losses. which is able enough to stay in business. also triggered another thing, they complain two different departments from the planning department because we are in breach of a use permit, rightfully so. that's why we're here today. we're asking you for an adjustment in the use permit for a change in the use permit so allow us to operate. if you do grant us that permit, we may have a chance. if you don't, and we will thank you very much for your time. i will be here until the next case comes up. if you have