>> no. >> sorry, that wasn't my question. do these other stores that are not an os ska store but they have an online presence selling os ska progresses -- products are are the majority of their items os ska products. >> in the case of susan roberts and miss ota. all what was listed are pieces that she bought but there is no way to buy from that website unless you have it linked which is very complicated for us. our website is linked to our is to -- stock. with susan it's a pretty small shop and she has

20-30 lines. >> how many distributions centers. if somebody bought bout it online? >> if they bought from me, it would go out of the shop because it's linked our website, our stock. if someone finds it on the site, what will happen is someone will try something on in one store and not find it and find it there. it's directly linked to what's in the shop. >> so the website is linked to a shop. then all these websites are linked to actual shops? >> it's way way off. as of

today we have 9 online stores. 8 online stores. >> but you said you can't actually buy? >> you can from us. >> you can from online stores. >> but in miss oata's case, the web they have they bought it. >> my question is can you buy things from your online stores? >> yes. >> okay. >> you have said multiple times and i picture your painting of your client that she's hometown local woman, local type stores, neighborhood based and she's a

partner and has a business interest. what is the, what percentage interest? 24 percent in the entire company of os ska? so it's store base? >> you have stores throughout the west coast? >> in midwest? >> chicago. i should mention that online shops t online shops are linked to each individual store and each store is different. what i have in mill valley might be different than what i have in chicago. when we are selling something, it's packed and shipped from that shop. >> okay. thank you. thank you. mr. sanchez.

>> i don't have anything further to add, but i'm available for any questions. thanks. >> so there is a lot here regarding whether an internet store is a store, not a store. my belief is it's a store if it pays taxes and pays employees and has inventory. it's a store. for clarification is there anything in the code that it pertains to a brick and mortar location. >> the establishment. the nine stores that they have, it's the nine online stores are the 9 brick and mortar stores would be 18 stores. are we going to double count? the chicago store also offers online sales. so this is part of the problem

with the confusion to trying to consider an online presence. if you go to the location, does it say os ska in front. they said this is a store. you can go to one and walk right into the retail space. it says susan roberts. it's a retail that sells os ska products. tim buck too, they sale in sports basements and online retail stores. >> do they advertise from that website that this is their particular store? >> you go to tim buck too website and see the products. this is the nomenclature of os

ska to saying this is their online store but it's online presence for their individual brick and mortar store. that's my understanding. >> i know this is great but this is going to definitely going to come up again. >> yes. we've had this for nine or ten years now and the question comes up with what triggers retail use. if you sell your merchandise in a nordstroms maybe you have a section that sells honda, does that make it a formula retail store and people have argued do we count international stores. the code specifically says it has to be stores in the u.s..

do you count something that is a corn er of the store or independent stores that has signage and merchandise which is for that brand. they have got the signage and uniforms. those are the things listed in the criteria for formula retail use. >> do other cities have formula retail legislation? >> yes. first being caramel by the sea which adopted in the late 80s. it has expanded since then and there are some in southern california. from what i have seen from ordinances, it's very similar to ours. i don't know if we became a model or took it from someone else in 2004. but what i have seen it's been similar. that said, i have not done a full comparison, but it is something that i have

looked at. >> thank you. >> i have a question for the appellant. i have a question for you. on this question of the link from the websites to actual stores, we heard from the permit holder that they link up to an actual store. i recognize that stores like your own and susan roberts might not constitute the online store that you are referring to. i don't think you would count those. >> we counted originally and our counts this is in roberts store. >> what other stores would you count that are not linked to brick and mortar stores. >> at this time just roberts store. >> okay. >> 17 others?

>> no. they count themselves out. >> what exhibit is that? >> right here. >> how did you get 18? i'm trying to understand your way of counting. >> the way i determine 18 is because each of the online

stores has a separate web address from their brick and mortar stores. >> it's 9 plus 9. >> let me pull out my -- okay. so physically 9 os ska stores and euro internet stores are 9 with additional three pending online stores. >> thank you. okay. so similar to the situation that we often have with the mobile foot

trucks. i believe a criteria is a criteria until it's changed by ordinance and so now the number is 11. i believe that is the number that we should be looking at and i'm personally not persuaded by the internet argument. primarily because as mr. sanchez pointed out the original ordinance was done in 2004 in public testimony. the internet has been around longer than that and it has been amended several times and it should not be included from the count for 11. from my view we have 9 stores and i don't 52 -- view the internet sites as stores and i would be inclined

to denial the appeal. >> when we deal with issues whthey came up, precedent to mr. sanchez, they got 3 stores and the 4th one is coming. is that formula retail. i said to him, no. the question was how do you arrive at a threshold that accurately reflects the concern behind the regional and the subsequent legislation as it changed. the question in mine mind is that it's not hard fast and what was the intent of the legislation. there is no doubt that the line is one expansion mode. the question is whether san francisco is the 10th one or it could have been depending on whether there was legislation elsewhere the 14th or 15th one.

the issue then of the impact of that is i believe more properly discussed under conditional use situation and not in a de novo situation that we have. therefore i would support the finding the os ska store as a formula retail. >> i don't know if i followed everything you say, commissioner fung but i'm with the view that the online sites are not stores. i don't find that those are what was contemplated under the ordinance, under the code either and i think that as articulated by vice-president lapis lazarus i agree with

that analysis. at the same time i understand the textual base argument that isn't necessarily foreclosed that interpretation couldn't be but the facts that we are presented here is that those don't link up to warehouses to distribution centers, they are linked up to the actual stores. i also saw more compelling concerns raised by the public commenters that supported the appellant and the appellant's position in the is toers -- stores that it does appear to the domestic empire

of os ska. it has happened internationally. with corporation as sophisticated and granted we recognize that however the business structure is here with respect to the permit holders's personal business and trust could potentially look at and i'm not here at no basis for that. i hear that given it's connected to a much larger corporate structure, i think we can't ignore that, that cannot be, not considered factored into this. i would go more with my view with the intent here as the code is to prevent this type of proliferation. i can't go to palo alto and the same store and union square the

mall. all is the same. we have one here. even if the way that you run your business is more neighborhood base, i applaud that, i think it's a wonderful thing and i think to make each store look differentcious -- it doesn't change the fact that it's driven by other corporate entity that we are going to have to see proliferated throughout our city. for this i'm inclined to grant the appeal. >> i also would go in that direction. to me clearly this is a chain. the code says 11 or more stores. to me that's an

arbitrary cutoff point. that is what the code says. to me the equitable considerations are the impact of small businesses in consideration. someone read directly from the legislation and i think one of the concerns to me just made common sense before that is that one of the purposes of the legislation is to protect small businesses as well. it's not just aesthetics. it's to protect the small businesses in the city. for this i think it should go through the cu process and we need to come up with better ways to determine how to fulfill the intent of the statute in a way that's workable for everybody. i guess i would add if this were the

second or third os ska store it would still have the same potential impact on the stores carrying the line. while i understand trying to protect those, the logic, i'm not sure works in terms of it being it count because you would never allow a store to carry a line carried by another store. "see what i'm saying"? in other words would we be having this conversation if it were the 4th store in the united states because the impact would be the same? >> i this i for me if we are talking about 3rd or 4th store that would be different. we are talking about a store at the ready. >> the store on fillmore street is going to impact. it would still have the same impact because it's taking away the

customers buying the line. >> the store itself and the way it might be the more early phases and i totally understand your point, i just think that we wouldn't be looking at it. it wouldn't have the same look and feel of the chain at that point with the concern on the small business. i get what you are saying would be the same impact for that particular person but not us as a broader community in san francisco. >> right, this expansion, while it certainly looks that way is hypothetical and they can decide tomorrow that they have all the stores they want and that's the end of it. discussing a possibility. anyway. >> yeah. evidently this hits a little closer to me than most people. i had a small business that was impacted by a chain

store. the chain store came, another chain store came and they kicked each other off and blasted everyone. i think that there is -- i'm not a betting guy but i feel that film more street is planned. the stores they chose happen to the on the block for the people that have been supporting them for so many years. that goes back to maybe it's not the individual owner, but it goes back to the corporate head. regarding the internet, i think that you cannot discount the internet. i believe there is nothing in the code that says it's brick and mortar. i believe that each internet and each business has their own staffing, their own accounting, their own booking. i think the internet has to be considered. i have friends that have businesses and online businesses and those online

businesses are run separately on different books and different spreadsheets than their store business. to me as a business person that indicates that it's a separate business. that's not the same business, that's a separate business otherwise it would be incorporated in the same spreadsheet. so i agree with my fellow commissioners in having it go to the board of supervisors for a cu and i will deny the permit, uphold the appeal. >> i would like to make a motion. >> i will make the motion that we grant the appeal on the basis that -- it's an interestinqu.

sugstion i have that you might allow us to write written findings that would be adopted at a later time. >> that makes sense. >> okay. sure. so, i would move to grant the appeal, over turn the permit and issue our findings at a later time. >> okay. >> the city attorney that stating a reason at this time is still required. >> okay. on the basis that the permit was not validly issued and that the determination of what is the retail use should

be reconsidered. formula retail use. >> also commissioner, hurtado, if you would like to give the holder and opportunity to apply for conditional use authorization we need to specify the the one year bar for reapplication would not apply. otherwise they would have to wait a year before they could apply. >> we will wave the one year bar for conditional use application. >> mr. sanchez? >> as i understand the commissioner's deliberation and appreciate the discussion that did occur. it seems the board made the decision perhaps because what constitutes formula retail is the lease. so where they have 9 establishments now there are two additional properties for which they have leases. one

lease in hillsberg and one which is a master lease in evan ston for use. that constitutes the birth of formula retail stores 10 and 11 and this would be the 12th location in the u.s.. to get back what i said earlier by having clear thresholds. that was my understanding from the board's deliberation. maybe it's consideration to the leases that have been signed. >> that was my concern as well. >> i think also the issue of internet stores. that was something that darryl. >> i was the sole guy. >> i don't know what your view is on that. >> let's leave it at leases. >> when the findings come up, the board will have to vote again on the exact language of the findings. >> okay. thank you for bringing that up. >> so we have a motion adto

grant this appeal and over the urn the permit with former findings at a later time however issuing a basis that the permit was not validly issued and the determines for formula retail use should be reconsidered and further finding the one year bar would not apply for the conditional use application if it were filed later on. that's it. on that motion to over turn the permit with those basis, commissioner fung? aye, hwang? >> aye. lazarus? no. the vote is 4-1 the permit is appealed.

staff will find a finding later on. >> we'll take a break and come back at 9. >>