>> welcome to the small business commission. please turn of self funds are put them on silent. please sign in a different table. speaker crystal are available at the front table as well. we would like to think city hall media service for their continued support of our meetings. the meeting is called to order

at 5:35 p.m. vice president adams: present. commissioner clyde: here. commissioner kasselman: here. president o'brien: here. commissioner o'conner: here. commissioner riley: here. >> quorum is established. please note that items four and five will be after item 9. item one, -- item 2 below presentation of the small business commission certificate of honor recognizing a local small-business as part of the small business recognition program. >> it really is my honor this month to introduce a couple of people from the fillmore neighborhood. i would like to be joined by

meghan, and from the fillmore cbd, [unintelligible] from me -- from the sheba piano lounge. every once in awhile, a person just needs a good piano lounge. we will talk about why she is deserving of this honor. >> i am really happy. i feel she deserves this award. she is a real community member. she does a lot for the district. she is very generous. she is wonderful all around. when you walk into the piano lounge, she is very nurturing and very smart about how she does marketing.

if you walk in, you will see her paging through a recipe book. she is always finding new recipes for people. i am so sorry. net is one of my favorite people in the fillmore district. she is one of my favorite people. she always gives me a hug when i walk through the door. if you are a waiter or server in the fillmore district, you are going to she broke -- to sheba piano lounge at the end of the evening. we are an entertainment area. she brings music every night. she brings a positive attitude. she participates in all the community events. she is wonderful, and she works hard. she works so hard and she deserves this. i am very happy to say that

about her, and i hope i made sense. i just want to ask charles to come up and say a few words. charles also is part of the fillmore cbd. he is a board member. >> my name is charles spencer. i am past president of the fillmore merchant association, currently community -- community benefit treasurer. one of the things i have found during my time on fell more is that there are a number of good people. people have good hearts. they are smart. they treat people well. net is one of those people. to find that she is being recognized a think is a good thing and i want to congratulate her for that. >> commissioners, i just want to have netsanet alemayehu join me here. march is women's history month.

as i learned listening to the board of supervisors last month, every month is african- american history month. i think as a woman working in a great neighborhood, a historic african-american neighborhood, and i am especially proud to honor her today. i would like to read the certificate of honor. on this monday, march 14, the small business commission is proud to acknowledge the contributions that commissioner o'conner: -- contributions that netsanet alemayehu and sheba piano lounge of may to san francisco. it instantly makes customers to a comfortable and at home when walking into the restaurant. it is a crucial part of the fillmore entertainment district. by providing live music every night of the week, the restaurant inject energy into the neighborhood and supports local performers.

netsanet alemayehu often donates food for events in the film more area and participants in cross promotion activities. she embodies what a restaurant and its proprietor can do to help keep the community strong. she provides a very affordable entertainment option. i think this is very important in our city. >> i am honored to get all this attention, but there are some many talented musicians in san francisco come it is unfortunate there is not enough places for them to display their talents. i am so glad and we are so glad she but is one of the menus to do that.

thank you very much. [applause] >> commissioners, item three, presentation of the small business commission certificate of honor recognizing natasha

safo for her work with the enterprise zone program. commissioner yee riley will present. commissioner yee riley: on this monday, the small business commission is proud to acknowledge the contribution that natosha safo has made to the san francisco small business community. to work remotely and administering the enterprise zone program. she began her tenure in 2008. the number of businesses

approved for the enterprise zone program in san francisco has more than doubled, from 439 in 2008 to 938 -- 933 in 2010. her ability to distill details to end users, explain how the program works, along with her professionalism, have helped accomplish this feat. she has provided great service to the office of small business and the sbc, making herself available for workshops, working closely with the office of small business staffed. throughout our high level of customer service to the business community, she is a role model to all of the city employees. congratulations. [applause] >> thank you for all your help. we know how hard you work.

>> thank you to everyone on the commission for giving me the opportunity to get out into the community, get away from the phone and the computer, and to speak to business owners. i want to thank the others in the small business assistance center. my favorite part of the job is getting out in the community. i am very honored by this award. commissioner yee riley: picture? >> thank you.

[applause] >> you are now on item six, general public comment. this allows members of the public to comment on matters within the commission's purview and suggest new items for the commission's future consideration. >> testing. president o'brien: seeing none. ok. seeing none, we just move on. >> commissioners, you are now on

item seven. before we call the item, the director has a comment. >> commissioners, at the last legislation and policy committee, and due to an error on my part, the items on the agenda did not get agenda is as recommendations -- did not get agendized as recommendations. normally those comments are for did to you by e-mail. will we have provided in your packet at the beginning is that at the end of the summary of items staff has provided for you is a list of comments, questions that came from the discussion at the committee, for your reference. >> item 7, and discussion and

possible action to make recommendations to the board of supervisors on the business tax and regulations code payroll expense tax exclusion in central market and tenderloin area. ordinance amending article 12- day of the business and tax regulations code to establish a payroll expense tax exclusion for businesses located in the central market street and tenderloin area. this is a discussion and possible action item. supervisor kim: do you have copies of the legislation? >> i need to disclose for the record after speaking to the city attorney -- the privately owned company i work for, the owner owns a building in the mid market area, which is in this

enterprise zone. i have no opinion one way or the other. i am just disclosing that. supervisor kim: do you have copies of the legislation? thank you for having me here to present. as a co-author of the legislation, i wanted to speak to the commission. thank you for your work in san francisco. you are the jobs of san francisco and we appreciate what you do. this legislation had come to our office to help as a potential pathway to revitalize mid market, the corridor that is currently used for commercial usage. but we've seen the highest level of vacancy in the city, up to 31%. the zone also includes it uptown to underline, as mentioned in the title -- also includes

uptown tenderloin. it is a tax exemption on net new jobs throughout the city and county of san francisco, if you're willing to relocate or bring a new business to this corridor. if you are currently paying payroll tax you will continue to pay a base peril texture are paying currently. these are growing companies that want to move into commercial break and realistic. we have close to 3 million square feet of commercial real- estate on at mid market alone. this legislation is not for everybody. this is definitely an incentive to bring new jobs into the city and to revitalize corridors we have not seen revitalization in in over 50 years.

the borders of the district go from approximately middle of fifth street on market all the way to 10, and then go up to bea -- to geahry. we are in discussions with twitter, which currently houses 1500 employees but is expected to grow to potentially 3000 employees. they are looking for larger office space. that are looking at a central market building. we are also talking to black rock foundation, which runs burning man. we hoped this will encourage a grocer's door to come to the -- a grocery store to come to the tenderloin.

the tax exemption is only for six years. we are asking businesses to invest in mid market and to bring new jobs into the city. hopefully, this will help revitalize the corridor over time. more than happy to answer any questions for commissioners. i forgot to add one more important element. any business that pays over a million dollars in payroll tax will have to negotiate a binding community benefits agreement with the city of san francisco to qualify for the tax exemption. we are negotiating a community benefits agreement with twitter. we do not want businesses to come and take a vintage of the tax exemption. we also want them to connect with the neighborhood. twitter could partner with some of the local schools in the area and do internships or tutoring. the could potentially promote

local arts shows and other ground floor. the plan is to convert the ground floor of sf mart to be a media showcase. the also the ideas we are throwing out. is there any questions? vice president adams: i want to thank you for co-sponsoring this legislation, and the great work you have done on the board of supervisors. you have answered a lot of my questions already. it is a way to create jobs in an area that has not had job creation in over 50 years. i really like it that you have included it into the tenderloin. i think that part need some tender loving care. and think it is awesome that you guys are doing this. commissioner dooley: i also want

to thank you for giving a new try, a difficult area. we have received some push back from other areas, saying, "i am small-business in the bay view. why can you do something for us?" reticence seeing it as either/or, i just want to put that fourth to the supervisors in general that there is a need out there for many other corridors and to use the innovative thinking you have on this. keep moving forward to all the other areas that seem to be suffering quite a bit of economic problems. supervisor kim: one of the reasons we are focused on mid market is we do not have to build infrastructure. the commercial area is there.

it is thickened. in terms of infrastructure, we have 18 bus lines running through market street. in many ways, we want to encourage businesses to come to transit rich areas. we are not pushing large businesses out. of course, the legislation does target very large companies. we do think it will be a benefit to small businesses in the area as we increase foot traffic, that will start to grow the area. commissioner dooley: we may be losing enterprise zones, so i think it is a good idea to take what you are working on here and think about extending it throughout the city.

commissioner o'conner: thank you for coming to present today. we have been following this issue both around city hall and in the press, and there are pros and cons to it. i have seen other city projects which i think are going to threaten the existing culture of san francisco by changing things too much. i think that is where some of the criticism of his proposed tax break comes from. however, the reality is we have to work and reach out to these companies, particularly when we are going to get that many jobs relocated to one district or one place, the place where you said the transit is already there, the square footage is there and vacant, and the street is dead.

i wish we could change the wind patterns, but i do not think we can do that. i think this is a good plan. i do not think it is displacing anybody. i do not think it is overly changing the neighborhood. we are here representing small businesses. to have that many jobs, if they do move there, if they do grow to that size -- to have that many jobs to an area that is empty is exactly what market street and mission need to become revitalized. if it is going to be small businesses that turn market street around, it is great to land a big fish like this, and maybe some bigger retail. but the reality is the small guys on market street need help.

it is debatable whether or not taking away all the parking in favor of bike lanes was the best path to take, but we took that path. it can be studied whether it is working are not. it is making it difficult for small businesses on market street. it is all the more reason why the city and district supervisor has to jump in and really addressed it. your predecessor did a lot of good work in a lot of areas of the district and did a lot to help this and franchised people, but i have been critical directly to him. there was not enough done on market street. i think it is great that you are jumping in and doing it. i think we can justify this tax break for this location and that this area deserves it. i would be in favor of approving it.

supervisor kim: we understand the criticisms of this legislation. we do have concerns around gentrification. we will be working with neighboring communities to see how we can address that. we are trying to make this a targeted -- high vacancy may not be in need of this exemption. we are looking and not as well. the comptroller's office is releasing analysis. they say there is a potential $4.20 million gain for the general fund, along with increases to property-tax, sales tax, and the multiplier effect of there being more business in the area. my predecessor is a small- business owner on market street. i just want to say that one of

the criticisms of this is that enterprise zone taxes do not work. the data has shown nationally it does not work to help with revitalization. but we think that twutter -- that twitter is a unique factor in hopefully making this a successful proposal. president o'brien: i would like to thank you for this presentation. i go along with the general consensus of the commissioners here. i think it is very hard not to see all of the real benefits in this and not a whole lot of downside. i am looking forward to mr. reagan's presentation. is it a general consensus from a tax revenue point of view that it will be a net positive?

>> this is a little debatable. it is definitely not a reduction in general fund is that if twitter stays -- in general funds if twitter stays. we think many businesses will not grow or come to mid market if we do not do this legislation. there is projected growth. there is predicted payroll tax growth, a small one, and gains in property-tax. i will let ted address this. there is a potential loss of payroll tax we would get if they decided to stay here. it is a question of whether you believe businesses would come in without this. does that make sense? that is a hard question to answer. again, it is a temporary tax exclusion and hopefully we will be able to see the fruition of this work. president o'brien: i also liked

the fact that it is not threatening anybody, regardless of its size. it is not going to knock somebody else trying to be in the same business out of there. that is something i should be -- i think should be noted for future possibilities. i actually think it should be considered elsewhere in the city. it was very interesting to see an article written by a small business owner that said, "while i do not see myself benefiting directly from this, i do see myself benefiting indirectly by raising the tide for everybody in the district. i am planning to support it as well. commissioner o'conner: mickey briefer direction. about five years ago, we had the first hearing on the potential conversion of folsom street into a two-way pedestrian boulevard. i would love to see that revisited.

>> that is a goal and our office. it connects south of market to the mission. there are some many small businesses coming to folsom st., which is wonderful to see. commissioner o'conner: that all grew out of nothing. it was not an easy street to get around, and they are all there. president o'brien: mr. regan's report was not approved yet, so it is not ready for presentation this evening. supervisor kim: thank you for your time. i hope this is not the last time i will be coming to you. we are more than happy to take feedback and comments in terms of what we can do to support the small business community here. thank you.

president o'brien: time for public comment. does anybody have any public comment on this matter? seeing none, this is an action item. >> that is correct. commissioner dooley: i would like to recommend approval to the board. commissioner o'conner: i second. president o'brien: do we need to take a vote on that? >> we have a motion by commissioner clyde to recommend approval, seconded by commissioner adams. would you like to do a roll call on that? vice president adams: yes. commissioner clyde: aye. commissioner dooley: aye. commissioner kasselman: aye. president o'brien: yes. commissioner o'conner: yes. commissioner yee riley: yes. >>