housing court has fought hard but they have no record of any other activities to decrease crime in the tenderloin. thisit is a for-profit corporat, not representative of the community. the housing forum has included them without including a hell of a drug has operated in seattle. the tenderloin community benefit corporation did consider held a drug operates, and did consider the effect on the neighborhood. they voted to support the drug. the other thing is about the impact of this parade of pharmacy in the tenderloin. if you deny their permit, there is going to be a vacant storefront. but in storefronts cause crime.

-- vacant storefronts cause crime. the mayor has said central market in the tenderloin have been burdened with high vacancies for decades. he also said activating vacant storefronts around central market street and the tenderloin is key to the overall improvement of these important neighborhoods. that was in another "san francisco chronicle." vacancies lead to more vacancies, which lead to more crime. other businesses do not want to locate on the street with the store fronts because customers will not want to go there. big drug was vacant for almost a year before the landlord could find a tenant. one of the impacts on the neighborhood is you do not want vacancies in the tenderloin. that is going to be the result to deny the permit.

i am going to address briefly -- the appellant thinks there are bases for deriving the permit. you cannot do that until you overcome a procedural hurdles. i stated that in my brief. i think that is it. there is one correction in my brief on page 8, where i misquoted a landlord. i stick the process will result in another opportunity for community activists to oppose a different business from working. that sentence should read community, not "community activists." vice president garcia: would you address the issue brought up by mr. wagoner having to do with

the discrepancy in the dollar figures, the $40,000 and the $106,000, and the mysterious $166,000? >> i do not know what happened. the contractor probably put in $40,000 and it means there was a change order. but i do not think that exhibited bad faith. i will address what mr. wagoner says about the bad faith. just because you have a contract on april 16, he assumes that as soon as the contractor signs the contract that he has to start work. he says, "how could he have done nothing until may 24?" it is very usual for people to enter into contracts and then wait six weeks until they get the permit to start work. that is not a discrepancy. there is nothing bad faith about that. it does not mean that as soon as

he signed a contract you have to start work. >> nor does it answer the $66,000 question. >> i do not have any idea how the contractor put $40,000.100 dozen dollars on the contract. i do not know the answer. >> maybe dbi will offer up something. commissioner peterson: you started your argument that this pharmacy will be good for the neighborhood. has there been a change in the business plan? other products other than prescription drugs being sold? >> to my knowledge, there has been no change in this plan. there is going to be prescription drugs. it will be a general pharmacy. i assume they will supply clinics and band-aids, and things of that nature.

i do not think they are going to supply more than that. i think the business plan is the same as in my previous brief that i submitted. commissioner peterson: i think one of the concerns with the pharmacy is that it is only dispensing drugs and is not serving the neighborhood with other products. i do not actually see evidence to the contrary of that. >> really, this pharmacy is serving drugs to seniors and disabled in the community, and things like band-aids and kleenex tissues, and things of that nature. but just because the pharmacy is providing drugs does not mean it is going to be used illegally. that is a big leap of logic here. like has been said in my brief, they have a program where they have this huge database of

doctors who generally prescribe illicit drugs. they know what they are doing. they have operated in seattle. the landlord has checked out their operation in seattle and knows that they have had a history of providing community services and hiv services. what they have done in seattle has not increased criminal activity. the have a history. the and not just coming in and saying -- there are safeguards. there is no guarantee, but that is what they do. commissioner peterson: thank you. >> thank you. >> mr. duffy? >> good evening, commissioners. the permit was filed according to the bi records on may 21,

2010. it got issued on may 24, 2010. it got a certificate of final completion on june 25, 2010. there were rough electrical inspections on may 28, rough plumbing inspections may 27, and a rough framing inspection on may 28, 2010, according to dbi records. the final inspections for electrical work june 9. final plumbing, june 24. the final building, june 25, 2010. we did receive two complaints on may 28, 2010, and june 8, 2010, after the permit was issued. those were both investigated. i will be available for any -- vice president garcia: what was

the result of that investigation? were you able to determine whether work took place prior to may 24? >> that is -- the permit was already issued. someone saying the work started prior to that -- when there is a permit in place when the inspector goes there, it is hard for us to go back. we have not been there prior to the permit being issued. >> and can you shed any light on the $40,000, $106,000 question? >> to be honest with you, we see a lot of undervalued permits in our department. a lot of times, i think what happens is that an architect comes in and does not know what the contract is. the look at the square footage and put down the price. our inspectors asked for that valuation to be increased and to pay an additional fee. that did not happen in this case.

i do not know the reason why. i cannot speak to the contractor either. it could be equipment in the space. freestanding equipment would not be part of the valuation of our permit. that is possible. i was thinking about it after you asked the council earlier. we see if a lot. sometimes it is a hard one to figure out. it really is. we do expect people to put the honest price of the contract on the permit application. we use a swift evaluation in the building code. it is based on square footage. but then you pull in finishes. that is variable as well. commissioner hwang: just for my edification, if you put in a permit and estimate the worst to be $40,000, then determine the fee in connection with the permit -- is that correct? how does that work? if you have a $40,000 estimate

on a permit, what would be the fee, if you know? the ballpark. >> there is a schedule in the building code. it goes from zero to $5,000. it is based on the -- if it has to disciplining as well, i think they also increase their fees if it is a higher valuation. but there probably would be -- i would say you're talking hundreds of dollars more, not thousands, for the extra fees and the difference. >> so for a contractor or whoever submits the permit and estimates the work at 40,000, but the work ends up being over twice as much, the differential on the permit fee would be a couple of hundred dollars? >> probably in this case -- if i took a rough estimate, you are probably talking between $500 thousand dollars.

that is my experience doing work in the permit bureau. but looking at these and what permits cost, i would estimate between $500.1000 extra dollars. >> -- $500 and $100,000 extra. commissioner hwang: that would affect -- $500 and $1,000 extra. commissioner hwang: that would affect property tax, correct? it uses the amount you stated on the permit application. >> the city assessor's office would use the valuation on the permit. that is right. >> notwithstanding the significant differential. >> yes. that is right. but for the equipment -- i am not sure. we would have to see an itemized thing for the contract to see if

there are things that will not be included as part of the construction costs, because not everything is. commissioner hwang: thank you. president goh: i am looking at the april 16 contract that itemizes the various things that were meant to be done. under the concrete framing, for example, there is "remove concrete slab at restaurant. install ada ramping, steel. install railings, 3/8 inch." all of that sort of sounds like forming the foundation of the restroom. my question for you is how long would all of what i just said typically take? >> i am not so sure i could answer that question. that would depend how many people you had working in the

space and how many hours a day. it is too difficult for me. president goh: i have another follow-up question. i am talking about removing concrete. there are a lot of people who would take a certain amount of time. with that kind of thing typically happen before one redid plumbing, if one were interested in reviewing plumbing? so you would expect that kind of foundational stuff i just talked about what happened before the plumbing? >> it sounds like if you are breaking out a concrete slab in a restaurant, that would mean you were going to do some underground plumbing work. president goh: with that require a permit? >> yes. president goh: under the plumbing of the same contract, relocating the sink and fawcett, relocating the ruffed in plumbing -- i imagine that is what you were talking about.

installing the new toilet, etc.. installing a 2 gallon under- counter water heater and what not. ne estimates about how long that would take? probably the same answer. >> again, it is hard for me to tell. some of this work -- if you have one person working there, it would be a couple of weeks. if you have five or 10 people -- a lot of times in commercial jobs, we do find there is a bit of that. there is usually a rush on that more than residential jobs. on downtown projects, they are moving. they want to get their cover it up. the want to get their finishes done. there is usually an opening date. there is a faster pace to them than maybe a job in some type of a residential occupancy. it is a hard question for me.

i think it is better directed to the contractor, if he was around, or someone representing him. every job is different. i think we spoke in the previous hearings about the demolition, that some of the demolition prep would not have required a permit. i think we talked about the flooring. but that would not include wrecking the concrete slab. that was part of the permit, i would have said. >> on your slow estimate, you said a couple of weeks. what about your fastest estimate, 10 people working? is 3 days reasonable? >> i have seen people did jobs in that time. some of these jobs -- i am sure you are familiar with some of the stores downtown. they can turn work around in a weekend. they can close and reopen again on a monday morning. you'd be amazed what they can do. president goh: thank you.

commissioner peterson: i would like to follow up on a question i asked mr. waggoner. after you received the complaint and did see evidence of work being done before you granted the permit, what would you as a department do? >> if work starts without -- if we get there it had taken place, we would issue a stop work order until they obtained a permit and there would be a nine times penalty on the fee. that is the penalty for doing work without a permit as the san francisco building code allows. >> and then they could reapply for the permit. >> you would definitely have to apply for the permit within a time-mandated -- depending on the seriousness, it is usually 30 days to apply for a permit.

if they are doing an excavation or something hazardous, but there was something going to fall, it would vary. but in general is usually a 30 day -- obtain a building permit within 30 days and contact the building department for inspections, and countermanding work until you get the permit. it is a stop work order. commissioner peterson: thank you. commissioner hwang: i believe the date you said you received a complaint -- the 28. all this that complaint? that work had commenced prior to issuance of the permit? >> that complaint is a real- estate company which manages the building has confirmed the above

address are putting a pharmacy, and i think it is work started prior to issuance of permits. but i do not have the details with me. >> is it over on your table? >> it is not. the first lines on it -- i do have a limited print up from the records. i did not get the original complaint. those are filed away on microphone. there was another one on june 8 saying they started construction before a permit was issued, large amount of construction going on. construction should be in commercial unit only. commissioner hwang: you have the report of the investigator? or the inspection person? >> it seems the inspector noticed there was a permit issued. he was there on the same day for

an inspection anyway. the permit would have been -- it was filed on may 28. he was there for an inspection on may 20 -- on may 28. if he saw the complaint after that date, he would know he had been there for inspection, so he might not have had to go back. commissioner hwang: i guess i just wanted to find out the specifics of the complaint. the complaint described the work that was commenced. do could get a sense of how long something could have taken. could it have taken four days to construct whatever was being complained about? that is where my question was going. but it sounds like you do not have the specifics here. >> the permit was issued on may

24. you had four days in between. i am not sure what progress they made. i am sorry i do not have the full details of that. it was updated by the building inspector. >> mr. sanchez? >> good evening, members of the board. i would like to add a few items. the city inspector give you a detailed outline of some of the permit processing. this is located within a residential-commercial high- density zoning district. within this district, retail uses are principally permitted. when the building permit was filed on may 21, the planning

department reviewed over the counter. there is no notification required. it goes through over the counter. the board of appeals received a district -- a jurisdiction request on may 14. on june 30, the planning department said there were two permits related to work on the ground floor. the pharmacy is a principally permitted use. the second was a permit for work to convert a dwelling unit on the ground floor to a lottery and storage area. we did have records related to

the ground floor, related to the activity in the front in the commercial area. in regards to the approval process for this, it is principally permitted. however, there is still discretion. all building permits are discretionary other than certain sign permits. so the planning commission, had a dr been filed, been -- would have been able to exercise their discretionary authorities. this board had first discretionary authority. it was an interpretation from 1954 that explained they also have the right. it is with the same authority that the planning commission can approve, deny, or recommend with modification. there was no notification required. this is not a conditional use.

there is no necessary or desirable requirement here. it is simply principally permitted. those of the issues i wanted to raise. i am available for any questions. thank you. >> i have borrowed mr. sanchez's ipad because i found the -- president goh: are you addressing the question the commissioner asked? >> yes, on the wording of the complaint. the real-estate company which manages the company has confirmed they are trying to get around neighborhood protections including the police department, district inspector

need to verify construction is according to approve plans on the permit application. which actually was in place. president goh: thank you. >> we can take public comment now. if people who are interested please line up on the side of the podium. please step forward. president goh: can i see a show of hands, how many people intend to speak in public comment on this? >> we have speaker cards. if you have not filled one out before you speak, we would ask you to fill one out afterward and handed in. i do have some speaker cards already. three minutes. >> i am the executive director of the north of market tenderloin community benefit district. since 2005, we have provided neighborhood improvement efforts

in the tenderloin. we are a community-based organization that represents a broad cross-section of the neighborhood, with residents, property owners, and agencies like the housing clinic serving on our board of directors. we held a public meeting where over 50 community members have a dialogue with the owner of the pharmacy. the owners then attended a meeting of our board of directors, where they presented their project and engaged in a thorough discussion regarding community concern. our board felt the addressed all safety concerns and voted to be supportive of their business. because we are a body that represents the tenderloin, we carefully consider the context and ramifications that a business or policy might have on our neighborhood before taking a supported or opposed position. in the past, we have opposed the opposition -- the operation of the problematic liquor store and

a nightclub. we have surveyed over 500 residents and used their input to develop a neighborhood safety plan. we take pride in knowing that the positions we take are truly representative of the community. it has been our experience that problematic businesses rarely engage with the community. the owners of the pharmacy have engaged with the community and made impressive efforts to address every concern that has been raised. we feel this is indicative of their future in directions. as a 12-year resident of the tenderloin, there has long been a dynamic of commuting criminals in the tenderloin, meaning that those engaging in illegal activities do not originate from the tenderloin. in this month's issue of "the central city," it says 80% of people arrested in the tenderloin lived outside of the district. this tells me that the drug sold

on tenderloin street do not originate from the neighborhood , but a broad group of commuting criminals. the police captain can probably speak to that. there is no denying challenges regarding open and blatant drug sales, but this pharmacy nor any other firms see in the neighborhood can be blamed. for this reason, we kindly ask that you allow this community business to open its doors. vice president garcia: you mentioned the police captain is here. when you had your meeting and gave approval to this project, did you have police input? did someone from the police department speak to the drug issue, whether or not it would exacerbate the problem? >> the police captain attended the community meeting. he talked about that he had engaged with the pharmacy owner and had taken a tour of the facility. he was not taking a position

either way, but made some recommendations to the owners about addressing concerns -- addressing security concerns. >> thank you. i do not see people lining up. please line up to submitting time. please lineup if you're speaking. please step forward now. >> do i have the overhead? >> speaking to the microphone, please. >> i am also a founding member of the tenderloin community

benefit district. i was the interim director. it was not formed to be a planning organization. we have the north of market coalition, a planning organization for the neighborhood. the cbd was formed for business property owners. property owners pay into the cbd. they are the entities that are served. that is the business plan for when we formed it. it has nothing to do with planning. it was not part of the jurisdiction to take over the planning for the neighborhood. we have other entities that do that. to come up here and have a meeting and all that