it does not go on until 10:00 at night. prior to his business being there, it was a gay bar that ran loud music and pot smoke. it is a sandwich shop. i fully support it. i would live above it. i would live next door to it. a police support this effort. >> i received a card from mr. shadhadi, and i am sorry but you cannot speak in public comment. if you wish to speak in the time of your attorney, speak to him. is there any other public comment? seeing none, we can move into a bottle. -- into rebuttal. >> thank you for listening to me today. i wanted to comment on ike's place as a coffee shop.

when it first opened as an espresso bar and the like sandwiches, unfortunately customers were not showing up for the coffee and the ice cream. they started only showing up for the sandwiches. that is how the space became a sandwich shop. i think the complaints that were made to planning were not legitimate complaints. they were just made with the intent of garnering a payoff from ike's place. how do i know that? the first was for $8,000 worth of damages to pay for having a sandwich shop underneath. after that, when complete started coming in, they tripled the number to over $3 million. that is how i can say the complaints were not legitimate. if you look at the history of what happened over the past year and a half, just half a block

away from where the old ike's was, a sandwich shop opened up. they applied for a permit with planning. they are called dinosaurs. at the planning caring, not a single person came up to oppose them. meaning the neighborhood was ok with the sandwich shop. furthermore, ike's -- we personally applied to open up a sandwich shop. we were able to garner the permit -- we would have been able to have it had begun the proper signatures from all the parties involved. it was just a bunch of "get them out of here because they are

terrorizing the neighborhood." if we were, we would not have been able to get the permit across the street. we had department of public health recognition of being able to serve some witches. we had that permit. we also applied for a permit for a full ventilation hood and did get that permit as well. we were able to put in those cooking instruments with city permits while planning is saying we did not have that. so we had a lot of support from the city and were working with the planning department to find a way to move. unfortunately, when they asked for us to stop, it would have either been the closing the business down. president goh: when did you put

the ovens index -- in? when you opened, you started as just a cafe and were going to make sandwiches on the side. >> we put in the hood once the landlord got involved.

commissioner fung: when you receive the initial notice in may and the more formal notice in july, you did not file an appeal, as stated in the documents from the planning department. >> we were dealing with a lot of issues, mainly with a landlord and our neighbors. when we were working with planning, last minute, the landlord decided to move a

letter -- decided to send a letter. we had a few days to be able to get a signature. we received the notice. i was not aware i needed to appeal anything. i was still trying to resolve the situation to get the proper permits. also, we were dealing with tons of court dates with the landlord. it was kind of lost in the shuffle. commissioner fung: when you receive the final notice in july, you saw a panel to there, yet you kept the operation going until september. >> when we got the final notice,

it said we could either closed down and lay off 47 employees, or stay in business. these controls are put in place to protect the city, to protect everyone. what was in the best interest of the city was to keep the 47 people employed and all that revenue coming in for the city. you can either shut down for business or not shut down for business. >> anything else, commissioners?

>> i want to state again the first time i met with ike and his attorneys was march 2010. from the initial meeting, we said he had to move. from that time, he was aware we felt he had outgrown the space. it was pretty apparent he had outgrown the space from the lines and the number of employees he had. it is very small. one of the presidential -- one of the president's brought suit and we paid at the tenants for nuisance. another residential tenant went to small claims court and got $7,500. the nuisance problems were real. we were trying to work with mr. shiheda so he could move in a

reasonable manner, but he did not want to move. we were forced to do the eviction action. he was a government led. we always told him he wanted -- he was never misled. we always told him we wanted him to move. >> mr. sanchez? >> thank you. in regards to what the appellant raised in terms of their development over the years, they initially represented themselves as a retail coffee establishment. it is clear that is how they initially operated. that is the approval they got from the planning department. where i have the problem is serial permitting. they are getting minor incremental permits -- a permit for a could hear and a sink their.

-- for a hood here and a sink there. that led them to a process where they could not get a permit. when faced with the choice of what to do with the penalties coming into effect, the appellant made business choice. it is clear. they made a calculated business choice that the penalties were easier to pay rather than doing business. it was ultimately a business choice they made and there is a penalty for that. this is the cost of violating the planning code. we respectfully request that you withhold the notice of violation and penalty. thank you.

commissioner peterson: i do hate to penalize a successful business, yet this party does not seem completely ignorant of the risks he took. i would say a penalty of $150 a day is a middle ground. but i realize the implications of layoffs for the city. having a successful business, it is hard to stomach a severe penalty for them. commissioner hwang: i would echo those comments as well. i applaud them for doing so well.

i have had one of the sandwiches. i stood in line and it was awesome. i appreciate comments from on the property owner giving more context to the story. i would be inclined to give a reduced penalty. commissioner fung: i do not think there is anybody here who does not support small business in the city. the issue is not the complaints.

the issue is not the elements of conditional use that he potentially had to go through. the issue here is having the appropriate notice and not acting upon it. if he had acted upon the original notice, and appeal that, he would have probably been able to stretch it out until september. given notice of potential penalties, he chose to maintain a very successful operation. i think the penalty is well served.

president goh: i would kind of go in the other direction. i think a lot of cafes make sandwiches and only have that retail coffee store permit, and nobody cares and the city does not care, and nobody really knows. so maybe it was true that when he started the business he started the business with the intent of making sandwiches and doing more small restaurant work than fits within the retail coffee store, but nobody would have noticed if he had not made such a good sandwich and people have not been lining up for it. the person from the public who spoke said it was because he succeeded so well and had growing pains. i buy that. i think that probably is really

what happened. maybe that also explains the way the serial permitting happened, which i do have an issue with generally. i would just take to penalize a successful business, as was said by some of the other commissioners. i would be inclined, also because the landlord does not object, to decrease the penalty to the minimum we can to get down to, $100 a day. commissioner peterson: can make a motion to make it $150 a day? >> you can make that motion. commissioner hwang: if you don't mind, i was thinking of another, to make. -- another comment to make.

i think it is clear that ike's has already learned its lesson. this business has grown and is developing and doing a great job. obviously, it is paying out at some of the pains of this learning process, and has done so with these tenant actions and nuisance actions, whatever they are called. i think that is persuasive to me that this is not going to be a problem that is ongoing. we will see -- we will not see ike's hear over and over again. thank you for allowing me to say that. commissioner peterson: how many votes are needed? >> it will require four votes. president goh: if $150 is as low as you would go, i would support

it. commissioner peterson: how about $125? president goh: if commissioner fung votes against us, we would have to continue it to allow vice-president garcia to vote. commissioner fung: i will move them that we continue it. >> do you want to suggest a date? commissioner fung: whatever is convenient for the parties. president goh: doesn't make sense for us to go ahead and vote and have a three-one, or does it not make any difference? >> if it is your practice to allow a continuance for the full board to hear it, it probably does not make a difference either way. it would probably make sense just to continue it. president goh: thank you.

>> the next meeting is april 20. we have very full calendars for the next several meetings. if you want to have it soon, you will have a full calendar. commissioner peterson: you could put it at the end of april 20. we would still need -- yes we will. president goh: this does not affect their ability to open a new shop and will not affect the city's finances, would it? commissioner fung: i move continuing to may 25. >> are the parties available on may 25? ok. president goh: you need to approach the microphone if you are going to speak.

>> you do not need more testimony, do you? >> it is possible a commissioner will have questions, but the hearing disclosed. >> we are not available those days. commissioner fung: the motion is to continue to allow for a vote. commissioner peterson: but if the vice president has questions for the parties, the parties will not be available. commissioner fung: i am ok with that. >> the motion is to continue to may 25. on that motion -- president goh: aye. commissioner peterson: aye. commissioner hwang: aye. >> the vice president is absent. the motion carries. thank you and thank you,

deputies -- deputy city attorney allen is. -- city attorney owens. as we are changing deputy city attorney's -- attornies, i will call the next item, item 5a. this is two rehearing requests for 1468 fulton street. we received a letter from cbs outdoor and from the community housing, requesting a rehearing of the appeal decided on february 9, 2011. at the time, the board voted 3-2 to uphold the permit on the basis it complies with the code and the city did not err in

issuing such permit. it is the removal of an advertising will sign pursuant to a notice of violation, and permit number 2010/10/13/2815. a public hearing was held on march 16, 2011 and was continued to allow sub middle of additional briefing and evidence -- sub middle -- submittal of additional briefing and evidence. president goh: i did watch the video that evening. we had continued in order to get the lease agreement. i had suggested that we not have further oral argument. but if the commissioners have arguments -- have questions, the can obviously ask them. commissioner hwang: i have a

couple of questions for mr. espinosa. >> good evening. commissioner hwang: thank you. in reviewing the file for today, i reread your declaration here that you submitted on february 22. the last bullet says, "i am financially dependent on the income from the billboard to meet my financial obligation to the bank. without it, i cannot continue making payments to keep my property." that was a true statement, right?

i heard at the last hearing that you only received one check in the course of three years from cbs out door. is that correct? >> i believe they were making payments not in a monthly -- lump-sum is ever so often. commissioner hwang: i thought you said you had not been paid anything for 2.5 years. >> i had statements from my management company. commissioner hwang: what kind of statements? >> statements regarding the operations. commissioner hwang: how much money were you depending on receiving from cbs? >> $500. commissioner hwang: and you received one check to 0.5 years ago? >> i am not really sure at this

time. commissioner hwang: thank you. president goh: any other questions, or should we jump into deliberation? commissioner peterson: i have a question for counsel for cbs outdoor. in the lease agreement submitted with your brief, i notice the lessee has full discretion.

at the time, i understand it was viacom assigned to your client. i am searching desperately for that >> when you say discretion, what exactly do you mean? commissioner peterson: paragraph 8, in the sole opinion, the continued maintenance of the structure is impractical or an economical -- well, let me just start at the beginning. that whole paragraph basically allows the lessee to determine

in its own opinion whether or not to maintain the fine. >> well, not exactly. i do not think it is an illusory provision. oftentimes, especially in the city, they will complete the make it uneconomic, so sometimes neighborhoods will change -- they will complete the make it uneconomical. whether it is uneconomical or whether it is blocked, there are certain criteria, if that is what you're asking. commissioner hwang: you are saying that this does not provide your client with a soul ability to make this determination?

>> any determination has to be made in good faith. because it is a contract, i do not think a determination could be made in bad faith. >> turning to paragraph 3 of your lease, that allows the leslie the right to make any necessary applications, permits, etc., but for the construction and maintenance of the full discretion of lessee. all such permits shall always remain the property of the lessee, so can you explain that authority to operate the sign, get permits, bill and signs, remove signs. i think that is how it sounds. however, the issue here is not really authority. the issue here is agency and whether or not we were acting on behalf of mr. espinosa, and i think that is where the issues

diverge. commissioner hwang: ok, thank you. commissioner fung: would you like to respond? i think i had heard from the previous hearing that he had not been paid for quite awhile. would you like to provide a little history of that? >> i have not examined the payment history, to be honest with you, but what i do know is that there is a property manager, a property management company that has been involved on this property for some time, and the payments may have gone to the property manager. mr. espinoza may not have known if the payments were made. i am also aware that there was a lag time between the purchase of the property by mr. espinosa edd notification of cbs, paying the prior property owner went for some time. i do not know exactly how long that was.

those are all the facts that i know. president goh: let me ask you, because i saw it when i watched it on the video, but the owner was invited to speak, and he declined to speak and allow you to speak for him. can you talk about that? >> well, what i can say to that is prior to the hearing, i was in contact with the property management company. president goh: ok, thank you. president goh: ok, thank you.