order of magnitude of the annual projected revenue. the revenue projection assumes full development bill about in any given years. in total, it shows the update would result in an increase annually. because it is the primary mechanism for impact from new development on the transit system, the rates have not kept pace with the cost of providing that service, the department recommends a series of modifications to the ordinance. introducing a policy credits program and extending for institutional uses, retaining the frame for inactive uses, providing collection and appeal authority in certain cases and clarifying the use of the application for the provision.

we are recommending introducing a program, and just as a reminder, there is a policy credit proposed. there is assisting ability fee revenue to fund the credit program. it is intended to encourage and help meet certain policy objectives of the city. it would allow certain projects to be waived or reduced fees under the program. the categories of program eligible for this credit includes non form of retail and vacant space. those less than the maximum amount of parking, the affordable housing projects and small residential projects

designed are those with 20 units or less. the credits would be allocated on a first-come, first-served basis. the board has generally supported the concept of a policy credits program. they did establish a cap, they felt it was important to recognize the development project has an impact on the transportation system as a whole under the sustainability ordinance. it may be something for the commitment -- committee to make a recommendation on today. as proposed, it does not include a policy credits program but is intended to be in alignment. it is not necessary for those uses. the commission may want to recommend instituting a policy credit program for small

credits. we also heard some from concerns -- that some concerns from the community about growth. by establishing the credit program, it will move to 5000 revs murphy. more projects would have reduced fees under the policy credits program. the commission may wish to consider the mta board's recommendation to establish a cap of 90%. the department is also recommending extending their grandfather. for -- the grandfathering period, but the objective was to allow the use is sufficient time to accommodate a new fee.

the october 2012 date included in the proposed ordinance had assumed a much earlier adoption. that we heard feedback from these types of uses suggesting that they needed a much longer field to adjust. we recommend extending to when it might come into effect if it is adopted. it does not yet spelled out a transition in terms of grandfathering uses, and this is something that staffas committed to working out a detailed proposal on with the legislature to ensure that a project would not be grandfathered and subject which was not the intention of either program. a third recommendation is to retain the existing language

that establishes a timeframe for active and inactive users to determine if a prior year's credit can be applied. the proposed ordinance changes this language. edifies a three year timeframe for nonconforming or traditional uses. they understand the intention was not to create that dichotomy. staff said the language and it is much more clear. we also heard feedback from the small business commission requesting retention of the five-year time frame and are proposing are recommending this modification. a fourth recommendation is to provide the san francisco municipal transit agency with authority to collect the fees in those cases where the certificate of occupancy has already been issued but the fee

has not yet been paid. there has been a time when they have had occasions to not have paid their feet. once the occupancy is issued, it has o'hare project with the sponsor -- contact with the project sponsor. under the current and proposed ordinance, the staff recommendation to give the authority to do collection in those cases. it recommends establishing a process where there is responsibility for assessing the impact fee. under article 4 of the planning code, this would establish a

perrault procedure where is the responsible agency. our final recommendation is to clarify the way in which the application is to find. the updates as accessory uses may not pay the fees if they are not exempt from the feet regardless to the use which their accessory is exempt. because it was not intended to apply for residential, it is our recommendation to clarify that it is also not subject to the feed with the caveat that it does apply to the non- residential portion and the accessories would be subject to the fee. in terms of anticipating the hearings of land use in september followed by full board

education in october, the limitation in november. the sustainability program is adopted, it would no longer be collected. we're expecting to see deliberation on that in winter of 2013. i am available for questions. >> you might also point out that in the audiences someone from the transportation authority and the mayor's office that worked on this project with you. >> would you like to speak? >> i want to spend a couple of minutes reinforcing the support of this project. where have been working collaborative the with the mayor's office. it has been three years coming,

it is one of the few sources the mta has to support capital related projects. as a development of the city, the tension in providing the services grows. the mta board supports the policy credits, the policy credit for using given the impact regardless of development tie. of all the policy credits, the parking restriction credit was the one that resonated with them the most due to the impact of the parking in the legislation system. i want to thank alicia for the amount of work she has done.

i believe she wants to make a couple of comments. >> i am the director of transportation policy, have to reiterate, these ordnances were introduced by the mayor and co- sponsored with supervisors wiener and olague. we appreciate this opportunity to better align these houses. >> will live like to echo of my colleague's comments. it is a needed update in terms of findings to support the

effort to implement the transportation system and ability project. >> is there any public comment on this item. >> hello, commissioners. he and the development consultant and i have a class that has been working on a project that involves wholesale and household storage as well as incubator space. it was submitted last year and we have been working closely. a have been implementing the project with the incubator. the changes to the program comes as the with the wholesale

storage exemption. we certainly appreciate a reduction of a fee for other uses, but a fee on the storage component is a substantial hit to the project and one that will probably make the project in feasible. what we are requesting is a consideration of grandfather in, similar to the non-profit institution exemption under the effective date of the legislation. we have an application in for the department and we hope to be able to process that quickly and get the project under way by the time it goes into effect. the changes have caught us by

surprise. we appreciate the automotive repair and storage components to be allowed an exemption to continue. got good afternoon, commissioners. i am speaking on behalf of the director. in june 11, 2012, they voted 7-0 to recommend approval with modifications. the commission proposed alternatives. they recommended the threshold remain in effect until it is implemented. second, the implication was that it was not accepted by the board and adopted a secretive program as proposed.

the commission reviewed the planning department was a recommendation and determined there was a recommendation. the policy decision regarding the credits that will be allowed, and they requested it be made available to small businesses that meet the non formative criteria. this is consistent with the intent of the credit. it seems substantial but still leaves the possibility of $6,500 and fees to open the business. it can be applied for other impact fees such as eastern neighborhoods and non planning related fees. this is only available for existing commercial spaces and new developments related to

small business will be subject to the tidf. it is the goal of multiple city departments and to the office of economic and work-force development, injected with the neighborhood program. it is a shared priority in the non-formula retail to move the scope forward. including those with low and moderate income and expressing the impact fees. inevitably, clients skier clearer for those that might be applied to them. they become hesitant to fill the spaces and to contribute to the challenges of filling a long- term vacancies. i thank you for the consideration of the recommendations. >> public comment is closed.

commissioner moore: i would like to state my support for many of the critical points. i think sitting together with president fong and former commissioner miguel, i am painfully aware about the difficulties of the small business. i am fortunate to see that formula retailers in the middle of abrogating formerly single stores in twto -- a small antiqe dealer is replaced -- 7-eleven is taken next door. between two of them, small

businesses have disappeared. i think that the subtle difficulties should make us very aware of the ever-increasing uphill battle the small business is facing. i would like to ask to retain a very hot critical question if i may. in the discussion which i appreciate, on page 7, there is a comment about the grandfather provisions. the use of larger institutions, being able to avoid paying any of the impact fees because they

are taking care of themselves. how could you please explain that using shovels are causing more transportation problems at the moment then there are solving and must be exempt from paying these fees? >> redirect in that? -- >> either of the two, -- commissioner, were you directing that question -- commissioner moore: to either of the two. >> the fee applies to land use, was someone provides shuttle service or not is not relevant to the payment of a fee. >> the one institution -- it does not a non-profit.

>> the specific application is a project that are exempt. there are not subject to property tax. it is a for-profit institution. that is the distinguishing characteristic. commissioner moore: the greatest minds are working together and i have great admiration for everyone that participated. i am a strong supporter of public transportation, so i would say, let's just move this forward. there are many things i would like to ask a question about. this would have been the meeting

where we got into a little bit more detail. how do we address the question the gentleman asked about a wholesale storage? all of these things upholding challenges are constrained in the current market at this particular time and raise questions of why we are doing this right now and why we are doing it so quickly. i would like to for the recommendation to anyone that can also be implementing it. given this is a very complex thing, i feel a little bit overwhelmed. commissioner antonini: i have a few questions, just on the feet in general. we're talking about these numbers, the $12.60 going to 1264. -- $12.06 going to $12.64.

>> that is per square foot. commissioner antonini: it is assessed when they began operation? >> net new development. if your total is 10,000, but you grow by 1000, it is just on the 1000. the impact fees come due at issuance of the document. most projects are choosing to participate to allow projects got to pay their fees until issuance of the first significant -- certificate of occupancy. commissioner antonini: the other thing i have questions about hiis how this tidf compares with other jurisdictions or other cities that have these types of

fees to offset transportation impact? >> i think a lot of other cities have transportation fees as part of the -- and many jurisdictions will take advantage of these. especially in our city where we rely so heavily on transit. however, in terms of keeping them out today, other cities have failed to do that. one of the things we have been doing is being able to update this appropriately. commissioner antonini: i will speak a little bit more to some of the updates, concerns about coming to the threshold of being around 3000 square feet and

dropping it down to 800 does capture a lot of small businesses that might be a situation where there may choose not to develop, the fee might be significant enough that we might have a dampening effect on enlarging their facility or opening a new facility. i assume it would apply to both situations, particularly professional offices that can fall into there. a case can be made where you spread the fee evenly. everyone pays a rather than just the larger ones. i am a little concerned, i rather agree with small business that we have to look very carefully at the effect on a business that is open with only

1000 or 1500 square feet and if you do the math, you figure out how much that is going to be, the impact is probably more significant for that business than one that is larger and presumably only has factored in a lot of fees and costs into this operation, it easier for them to do it. i see both sides of its. in terms of casting a wider net, and have to include non profits. not saying that these are beneficial uses. the impact is probably just as great. we grandfather them for a while, it is probably appropriate and something that is new. that wasn't there before, but it is an expansion or a new use. there is some warning, but i think we're talking about

january 2014 as a grandfather date that gives people plenty of time to get used to it. pdr and museum rates low word, is there reason why those uses have lower fee levels? maybe you addressed it -- >> it is based on the nexus analysis and the desire not to establish a fee rate that exceeds 68%, the museum's actually had a fairly significant difference on their trip generation than did other of those uses. they were able to parse that out to figure out what their rate should be. with pdr, the impact the rates

in the fact, and hence the reduction. commissioner antonini: certain businesses would have a lower rate and i think it cuts both ways. we are addressing transportation needs of both in terms of paving streets, doing things the au areto-typ -- athat are auto-type cost. if more people are riding public transportation as a result of this, there is more cost on that end of it. it seems that in one sense, it cancels the other one out.

>> with the proposal to include the credit for building reduced parking, it is not so much establishing a direct relationship has it is encouraging fulfillment of one of the policy priorities. or policy objectives. commissioner antonini: it is not really annexes situation because of the taxes could be more strain on the public transit system that often times is not adequate now to accommodate the people that are riding out. -- riding now. generally, it seems to be pretty well thought out. commissioner borden: yeah, i definitely want to support the concern around small business. i did not see the actual study, but i am interested to understand how many people or

trips are attributed to the 800 -- i did not think the impact would be that great. >> it is my understanding that 800 per square feet is one net new impact. i'm not sure how it applies in transportation, but i can find that out and come back to you. when we're figuring out the calculators for each of the various types of services, this is where we see the new impact. >> it seems like a small threshold and it is somewhat surprising. the 3000 or less square footage, i imagine that it would be something that we want to look at. the pdr space, we spent a lot of time focusing on making sure we are protecting and supporting

pdr's. we are able to keep the fee lower, that makes sense. if we are talking about attempting to be small businesses, and generally single owner who operated. to the extent that those businesses would also be impacted, her something of a policy question as we discussed space in general. the other question was related to charitable causes. you said that if the organization is exempt from property taxes, it does not matter if that our educational. or our educational institutions treated differently?