neighborhood. regardless of what they say, what they're saying is there a half-dozen other brands that are located in the area, and there is no sherwin williams, and by bringing them in a basically dilutes the paek store sales at other stores and puts a foot . i would like you to consider turning down this project based on the formula retail in keeping locally-owned businesses active and alive in the city. thank you. president olague>> hello, i ow's hardware, a store that has been there since 1905, part of the merchants association. formula legislation was brought to us because we had a proliferation of video stores in

san francisco. that is why it came in. that is why we had it. some of the formula legislation has had problems. this particular case is exactly why it was brought in. sherman williams wants to dominate san francisco with paint stores. it seems clear to me that the legislation says look at the ncd and do a survey of it. polk street is 14 blocks along with various widths. having asserted that stops a half a block from where the store is going in is ridiculous to me. if you had 14 blocks, u.n. more paint stores, more hardware stores, and you had a lot more formal stores, at least 10 more in that area. if you add van ness, which is not in our district but only one block away, i cannot count the number of formula retail stores that are on van ness, one block away, and that is part of our

trading area. the report talks about how it is going to enhance hardware stores. 20% of my business is in paint and sundries. that is a lot of business to be worked on in my store. but what is worse, sherman williams is the fourth largest paint dealer in the world. they owned lots of sun drink companies. i buy those things. 238 of the items in my store are sherman william products. i will be competing against the person down to block where i am getting stuff from. makes no sense. gnr payne, a full line paint dealer, their main product is also a sherman williams product. sherman williams is trying to eat their young. they will go out to the independent dealers and compete against them. they are coming to independent hardware stores and going down with them.

they now have three stores. all these stores will be within 2.9 miles of each other. that is not very far, and they have plans for seven more stores the way we heard, all within san francisco. that is a small marketing area. thank you for your time. >> good afternoon, commissioners. how're you doing? i will make it short. what i want to say is -- president olague: can you state your name for the record? >> nick. sorry about that. this has been a store that has been empty for quite some time now, and if you look around the city, we have a lot of storefronts batter and deep. i live in the richmond district, and we have major halls on geary street and clemmons street. anytime somebody wants to come in, you need to look at it on a

case-by-case basis. i think this will bring more traffic to the area. that is one thing i here on geary when i talk to the merchants, there's not enough traffic, not enough people walking the streets. i think this will bring traffic to the other stores in the area. that is really all i have got. have a good one. president olague: thank you. it jennifer, followed by elizabeth. >> my name is jennifer ferris, president of the polk district merchants association. quick five blocks from the proposed site at the sherman williams star. i own a studio gallery that is two 0.5 blocks away. i can assure you that i use more pain in my store that carter has pills. we repaint every month. the association in my business are both very opposed to this project.

as other people have mentioned, there are loads of formula retell. for some reason the neighborhood was that it to a strange shape for purposes of the report. if you go just another two blocks away, there are far more formula retail stores. we have a lot of retail stores is still pained, including a paint store that sells only paint, a very large space, which opened directly across the street from me six months ago. so there is a lot of paint. there's a lot of the book patient -- a duplication. there's a lot of formula retell. the thing i also want to discuss today is the commercial vacancies. there have been a number of vacancies on that particular block. there have been four stores that have turned over within the bloc within the past year and a half of those spaces have generally rented within three months. the space that we're talking about here has been empty for quite a long time but there are many reasons for stores to be vacant. i actually have correspondence from colleen schmidt, who owns a

business in the neighborhood and has been working with the owners to try to lease the space since january of 2011. i think you just got this in the mail. i am sorry she was so late. i do not know how many of the people have been talking about renting the space, but it is something you need to think about in terms of preserving the quality of the neighborhood, the uniqueness of the neighborhood, and honoring, respecting, and value in the existing small businesses in the neighborhood. sherman williams has only been around a little bit longer than brownie's, and we have lots of the venerable businesses in that neighborhood. we ask for your help to try to preserve the neighborhood. thank you. >> commissioners, my name is elizabeth. i own the gallery on polk street, and i am the treasurer of the polk street merchants

association. i just want to say that i completely agree with my colleagues. this is not the type of business that we feel would add anything to the neighborhood, and we hope that you will reject their request. thank you very much. president olague: thank you. is there any additional public comment on this item? >> good afternoon. my name is david tutor, a commercial real estate broker. i have been involved with commercial real estate in san francisco for approximately 35 years. i wanted to submit to the commissioners a list of currently published rental rates in the polk street area. starting at two dollars a square foot, which is what the current owner is asking for his party, running up to $3.33 a square foot. larger retail stores, in my experience, and the formula of retail stores do not tend to

drive prices up a matter of fact, they usually draw the hardest bargains, mainly due to their credit balances, their availability of funding, and they're strong financial positions. sometimes this is not available with smaller tenants. we do not feel that the price has been set high, and it should cause no problem with the additional properties in the neighborhood. thank you very much. president olague: thank you. don trenor. >> good afternoon. good to see you all, hope you had a great thanksgiving. i am the chair person of the middle polk never had association. we have a very neat neighborhood, and it is unique because of polk street and the independent and unique merchants. it is our lifeblood. polk street is the lifeblood and

the greatest asset of our neighborhood and one that needs to be protected. the neighbors have been given two terrible choices to pick from here. that is keeping this predictably high priced space vacant. one that when it was being built was billed as a very large space. they knew that the taxes would be very high. they knew that this would be a very expensive place. the other choice is allowing a formula retailed there. formula retail always being a threat to our great independent nature on polk street. not only for miller retail, but a paint store. we have an abundance of paint stores in the area. i know it has been set, but it is thought that this subsection of polk street strip that was steady dose of 2 sacramento st., not even a full block north of where this proposed site is.

as i said, this space was known to be expensive, known to only be able to be filled with some business with deep pockets. the neighbor is given two terrible choices and to choose from in voted 60-40 to fill this space, and that is because of this year that we will see a dark space with vagrants in front of it every day, as we have for the past few years, and we do not want to see that go on indefinitely. but we really feel that the neighborhood should have a better choice to pick from here. thank you. president olague: thank you. is there any additional public comments on this item? >> good afternoon, commissioners. my name is andrew smith. my wife and i are owners of the subject property. i want to put on the record some discussion of the economics of

trying to lease this vacant space. it is a small commercial unit. the square footage is within the >> no. >> -- within the ncd regulations, so it is not a large space. i have a chart that shows some of the economics of the building itself, the mixed use building in which the subject unit is sitting. this unit is 5% of the square footage of the larger building. the building was built by myself between 2003 and 2008. this space has been on the market for rent since 2006. this part of the building was completed in 2006. the building was built in accordance with the city policy for buildings in an ncd, but commercial retail use is on the ground floor and with residences above.

the office thinks this building is worth $19 million, so that was about $1 million worth into this commercial unit. the party taxes on this or 41 cents a square foot per month. we have been paying those on a vacant unit since 2006 despite unresolved appeals to the assessor's office. the current evaluation is assuming a commercial rent of $ 2 a square foot, a very conservative estimate of the rinse available in this neighborhood. the capitalization rate is difficult with this type of mixed use property. the offer rents for comparable space is in the neighborhood are well above this, at around $2.50 and up boards. and this chart, these are actual compare insists the but comparisons based on leases signed by an independent appraiser. the show offered rents in the

neighborhood, $2.50 up to $4. the cost of these buildings are expensive to build. we basically do not make money on this building at the moment. the cost structures penalize new buildings in neighborhood commercial districts because of property taxes through prop. 13, through affordable housing. [bell rings] i wish to submit some other letters from neighborhood merchants who are in favor of it. thank you very much. president olague: thank you. is there additional public comment on this item? seeing none, public comment is closed. commissioner miguel? vice president miguel yes, i am is somewhat familiar with the area, but there are three firms in the immediate vicinity that my family frequents quite often.

they are directly in that area. yesterday -- and i may have missed something, but i went from o'farrell to pacific. i found in those 11 blocks eight vacancies that were apparent to me. there may have been more or less. that is including the subject space. one is a commercial condo that has been vacant for some time, and it is a different situation. but i also found, and they were all mentioned today, a number of firms that deal fairly specifically in these types of products, as well as others, were the products are more of an accessory situation. and there is also, as was

mentioned, the fact that the sherman william products are actually available at other stores along the street and the immediate area. i did not check the side streets. i do not have time to start doing all of that. i think that the conditional use it requirement necessary and desirable as to formula retail, considering what is available, considering the uniqueness of polk street, is something that we have to take into very heavy consideration. and i would be leaning to the small merchants, at the local merchants. the argument that the money is kept locally when you deal with

local merchants has great ability -- great validity. everything i have ever read, nationally and in california, has supported that. i see no financial information, a county information, that gives anything other than the fact that there is nearly a 10-1 differential, the reports i have seen. and that is one of the reasons, of course, i think san francisco enacted this formula retelling the first place, for such neighborhood districts. i will not make any motion at what i have. president olague: commissioner antonini? commissioner antonini: i disagree in some regards. ironically yesterday i was in hayes valley not far from here

having a bite to eat, and the discussion came up about formula retell being entirely banned, and what would -- one would expect that the prices and rents are low. actually, that is not true. everything is expensive, and it is a wonderful neighborhood. if you -- the idea that if you eliminate formula retail, it will be less expensive does not seem to make sense. the best situation is when there is a blood between some formula retail and some independents, because sometimes, and so one of these people, we would much rather shot with the independent because we know them and then have the product. but if you have a bigger job, you have to sometimes go -- with a big paint job, you probably would buy from a larger provider, particularly in a professional. i think it can be synergistic. i have seen that in many neighborhoods. not just with paint stores but a

lot of other things did you go there for one product, paint, which you only get paid from the effort -- sherman williams stores. the other hardware needs, you cannot get there, and you would have to go to one of the other hardware stores in the area to buy those things, unless you feel like taking a trip out of town, which many people do if there is nothing nearby. having done painting on my own and working with contractors who did painting in my office and my house, i know it is important with color matches and other things, sometimes the time lost from the job by having to run the long way to pick up paint is important. if you are doing a job, it is important that you have them there. but the whole issue about -- in fact, sherman williams paid is there in the company store, and they have some of their stores in independents, too, is the

same thing with levis. many independent stores sell levis, and you can choose where you want to buy. there is the levis store and you can buy from a lot of other stores. i do not know that is necessarily a contradiction. the fact that there are so many vacancies in that this store has been vacant since construction was completed in 2006, it is kind of a strange thing that has been pointed up a part of it runs on california street and part of it on polk because it was the neighborhood theater. unfortunately, it is not a theater anymore. this is been a particularly hard place to rent, and looks like the least is $2 a square foot, which is less than almost

anybody else in the neighborhood. it is not like they're looking for is our but it lehigh rents. they're looking for some rent, other than vacancies. we're usually supported of -- supportive of business in america. competition is part of what we believe in. if we have a vacancy in somebody's paying property taxes, i think we will -- we should let somebody in there who will fulfill the rent. and if their local, i doubt they're going to take their money and go somewhere else to spend that money. they're probably going to spend it locally. i think occupancy always terms vacancy in my mind, so i would be supportive of this. i will see what the other commissioners have to say. commissioner moore: i have to disagree with the notion that occupancy trump's vacancy, especially in this case. i would like to share a brief

anecdote. it was just three weeks ago that my husband and i repainted with our own hands a 1200-square-foot apartment. all of these supplies were bought on polk street specific and in the corridor which we're discussing. 1200-square feet from a painting walls, ceilings, doris, a taking of hardware, replacing a bunch of things, and it requires a large number of supplies. unfortunately they're very expensive at this moment. together with a large number of sundries, from all the right tarps, tapes, brushes, and more. and i was able to not only find them within walking distance to my home, but i found them in a number of stores which are all incredibly mutually-supported. that was one of the greatest

experiences. one person only had three sets the window hardware. i did not have to ask where i should go, they were immediately telling me, without being prompted, that down the street there was this and that, and they included the brownie's store and another -- and a number of others. this was a positive experience, because most people say that i can order it for you and have it in two or three days. but this was a perfect network of interactive and coordinated never hit merchants where nobody was really trying to take the total amount of the territory, but they were supporting each other. i am very, very strongly in support of local merchants but i am interested in not only what they are doing to their business model works for the area in which they are serving. that is the right amount of choices, the right amount of supplies, the right amount of variety, including the ability

to refer you to somebody else. what i am concerned about in this application is that the applicant and self-described to us what he was trying to do, trying to service the wholesaler, the professional painter. and i do not believe that this particular location is good for that. i think it is too small, and it does not have a staging area which need on the street or in a parking lot to load your truck or small vehicle with the type of things you do. when you want to go in the polk street corridor to buy a larger number of supplies, the drugstore on pacific at polk provides you with the type of parking, and you can do those kinds of things. i have to basically say that i am in support of the concerns

with the local merchants, that this is not the right location for this application. i would like to make a motion to disapprove. >> second. commissioner borden: i think this is a difficult case, because on the one hand, i sympathize with the vacancy issue of that particular space. i used to live in this neighborhood and i remember when the old theater was a vacant, vacant for a long time. finally it was torn down. it was sad, and the new building -- the marquee does look nice, but i have noticed the space has been vacant for a long time. so that has been a very unfortunate outcome. obviously we would like to see that space activated. on the other hand, i used to shop all the time at brownie's and knew all the different merchants there. for me, the most compelling thing is when he said 20% of his

business were for painting in painting sundries, which is pretty surprising. i did not expected to be so high. that is a pretty good amount of business to be potentially threatens in these local merchants, and that really concerns me about that. because it is not a situation where, you know, one of the reasons we all love to live in san francisco is that every neighborhood has its own individual and unique character. it is not anywhere, usa. you do not drive down the big el camino real and find this store in that store. we do not want it to be that way. i am not selling sherman williams is part of that network, so to speak, because it is not. i have never bought paint, not to say that other people do not need to buy paint, but i actually think that is the kind of overwhelming to think about

buying paint because of all the choices these days -- and away, that is just a side bar. the other thought around a store that would fill this space is, ideally it would be something that would have more of a broad appeal to people in the neighborhood, because i just do not know how often people need to paint their buildings. i imagine it once every so often. but it sounds like we have enough stores in that area to accommodate it. yes are not against sherman williams. i grew up with sherman williams. i think it is a great store. i think the idea of supporting the contractors -- and there are a bunch of different businesses of that type in the area but i am not suggesting that i know anything is vacant or that the neighborhood is supportive, but another is an echo system of contractors that service the home industry, and that seems like it might be a place to look if you have not already as a potential spot. but i do have to agree that on

polk street, if that is one of your main audiences you're seeking to reach out to, it does not seem like as ideal of the location, and it is right near the bus stop. it would be problematic if there are a lot of trucks pulling up their right by the bus stop. on this one, even though i typically would be supportive because i think the vacancy needs to be filled, i think in this case it seems that there's a lot of evidence that this is not necessary and, for many, not desirable. commissioner fong: i am going to take a different position and maybe in an unpopular one. i think this actually serves a different need then maybe the small hardware stores, someone painting their own apartment. we have the van ness corridor right behind it. we have many apartment buildings in the area or maybe a building owner wants to do a significant size job that is more than two gallons of paint.

to commissioner moore's question, it is a curious if this is a place where people can come in and look at swatches and plays a larger order for delivery to the actual job site or pick it up -- it is not a warehouse, correct? >> correct. commissioner fong: for all the larger buildings in the area, then as corridor -- and we want property owners to make improvements to their building's overall. so i think this will benefit a different niche. i am in honor of a small business and fearful of someone else coming in, and that might threaten the portion of my business as well, but i would be surprised if you probably sell more than four gallons at a time of paid at one time, and i think this might serve a different niche. i will see where this goes. i will support the filling of many vacancies in san francisco.

commissioner antonini: i think, as commissioner fong was pointing out, there are some options that the sherman williams people pointed out about quick drive and some other products they're having, and i do not know whether that will solve these products to stores that will sell them independently or it will only be sold ed sherman williams, but having a lot of experiences with the fog in san francisco, a quick drying paint is important to have. also, this is an extremely dense area. 50,000 residents per square mile in this area. obviously if they feel they need to locate here, i think there is the belief that there is a lot of business here. so i think that it is, you know, an important thing to have