>> that is an excellent question. miss morgan is the driving force in this process. she has not involved in any case like this before. she is not familiar with this and she contacted the planning department many times before eventually filing a formal complaint. >> thank you. >> with your expertise in land use law, the property owner starts work without a permit and then seeks a permit. is that property owner forever precluded from seeking a permit?

>> know. i don't think -- what the property owner could do is to try to correct any defect that had happened provided everything else was above board. >> what am struggling with is let's assume that all of this is true and the property owner here and the permit holder have started the work and now seeks a permanent while there might be signs and penalties. the property owner is not precluded from seeking a permit, right? i don't see how that is an invalid or fraudulent permit. that is where i have had trouble with this case. >> this is a very good question. why couldn't they just proceed

accordingly? that could be something they could do even if the permit was revoked. i think it should be revoked and two basis. one, they obtained a permit in bad faith on lawfully because they have already completed a lot of the construction and demolition. the second basis is the tax code section 26 which authorizes you to use your discretion our power to revoke the permit. on the one hand, they could presumably if you revoke the permit, go ahead and try to obtain a permit again and pay any outstanding fines if penalties that could be assessed, i was still request that the permit not be granted

based on the overall negative impact it would have on the community. >> think you. -- thank you. >> i am troubled by the suggestion been that the statements are impeachable because the permit holder contributed money to her campaign=!fqz"t>> i am simply pt as a relevant fact. i think it is relevant when someone has received a financial benefit and then they submitted declaration. , you can do with that what you will, tried to ruin credibility. this is not as if someone from the community who is not received a financial contribution.

>> do you think that affected the board of the tenderloin community benefit corporation? >> i am not arguing necessarily that it affected the decision one way or the other, i am disappointed in doubt because i think it is relevant in as much as just as they drug has suggested or tried to impeach the credibility of scott robinson. he does not live in the tenderloin, he is a for-profit business. in as much as that is relevant, i think that the financial association -- is relevant. >> did you look if mr. robinson had donated to anyone's campaign?

>> who is scott robinson? >> he owns housing court inc.. >> i don't know why you brought bay drugs into it. what was this bay and drug thing? >> there is the reason for you to investigate his financial connections because that would be the interest of bay drugs. >> if you are making a suggestion that someone else's testimony is tainted, you would make sure that your client, even though there once removed, did not also contribute. -- even though they are once

removed, did not contribute. >> i'm understand that and that is an excellent point, commissioners. i would point out that i have never actually met mr. robinson. i have dealt entirely with ms. morgan. i have no financial interest in this case. i'm doing this case simply because i believe in the strength of my client's position and have a lot of sympathy for that community. i used to live in the tenderloin. my mind and heart is with that community and that is why i am representing the appellants. >> to contribute to a campaign is someone's first amendment right. to decide that someone has done that, they are not credible.

i have a problem with that. >> i don't have a problem with it. i understand the relevance. i also understand that you would not as an advocate try to inform the board about someone else's political affiliations or financial connections. with due respect, vice president garcia, i think that that is relevant. >> with -- what would it be for the entire community benefit corporation? >> can we go through the rest of our presentations? corks are there any more questions?

-- >> are there any other questions? >> the appellate stated a lot of things that i did not address in the brief. i will focus on the impact of illegitimate pharmacy in the tenderloin. at prior hearings in this case, i have discussed the procedural mistakes this board has made as well as the due process issues. i believe the record is adequate to show the superior court that the board violated its own rules. i will not belabor the point tonight. i hope that will not be necessary at the end of this hearing because i will focus on presenting evidence that bay drugs will have a positive impact. the north of market benefit

corporation is a neighborhood organization that has been active in making the tenderloin safe and clean for the past six years. in my brief, there was a 2010 board meeting of the community benefit corporation. the appellate here was the one who asked for this meeting to oppose bay drugs. they asked for the meeting. there was 40-50 people at this meeting as well as my clients. we are where the problems in the tenderloin. the board declined the request to deny bay drugs.

the board consists of members of the tenderloin and businesses of the tenderloin. this is even a wide organization. this also is part of representation of larger groups in the tenderloin such as the tenderloin housing clinic, the tenderloin neighborhood development corp., the ymca, the hastings college of law, and the san francisco city impact. these other members who are on the board of directors. what is the san francisco city impact? here is what they say on their website. "our mission is to build healthy lives through service, relationships, education, and in power >> -- and empowerment."

they voted to support bay drugs. the tenderloin housing clinic says "founded in 1980, the tenderloin housing clinic is an all volunteer operation in a one-room office building. today, the tenderloin housing clinic operates the largest permanent housing program for a single homeless adults and is a leading provider of legal services to low income tenants. they voted to support bay drugs. next is the tenderloin development corporation. here is what they say "since 1981, tenderloin development neighborhood corporation has been committed to making the tenderloin and surrounding neighborhoods a better place to live.

we provide safe affordable housing and support services and order to lay the foundation for a better quality of life for low income people in san francisco." they voted to support bay drug. housing court has fought hard but they have no record of any other activities to decrease crime in the tenderloin. thisit is a for-profit corporat, not representative of the community. the housing forum has included them without including a hell of a drug has operated in seattle. the tenderloin community benefit corporation did consider held a drug operates, and did consider the effect on the neighborhood. they voted to support the drug.

the other thing is about the impact of this parade of pharmacy in the tenderloin. if you deny their permit, there is going to be a vacant storefront. but in storefronts cause crime. -- vacant storefronts cause crime. the mayor has said central market in the tenderloin have been burdened with high vacancies for decades. he also said activating vacant storefronts around central market street and the tenderloin is key to the overall improvement of these important neighborhoods. that was in another "san francisco chronicle." vacancies lead to more vacancies, which lead to more crime. other businesses do not want to locate on the street with the store fronts because customers will not want to go there. big drug was vacant for almost a

year before the landlord could find a tenant. one of the impacts on the neighborhood is you do not want vacancies in the tenderloin. that is going to be the result to deny the permit. i am going to address briefly -- the appellant thinks there are bases for deriving the permit. you cannot do that until you overcome a procedural hurdles. i stated that in my brief. i think that is it. there is one correction in my brief on page 8, where i misquoted a landlord. i stick the process will result in another opportunity for community activists to oppose a different business from working. that sentence should read

community, not "community activists." vice president garcia: would you address the issue brought up by mr. wagoner having to do with the discrepancy in the dollar figures, the $40,000 and the $106,000, and the mysterious $166,000? >> i do not know what happened. the contractor probably put in $40,000 and it means there was a change order. but i do not think that exhibited bad faith. i will address what mr. wagoner says about the bad faith. just because you have a contract on april 16, he assumes that as soon as the contractor signs the contract that he has to start work. he says, "how could he have done nothing until may 24?"

it is very usual for people to enter into contracts and then wait six weeks until they get the permit to start work. that is not a discrepancy. there is nothing bad faith about that. it does not mean that as soon as he signed a contract you have to start work. >> nor does it answer the $66,000 question. >> i do not have any idea how the contractor put $40,000.100 dozen dollars on the contract. i do not know the answer. >> maybe dbi will offer up something. commissioner peterson: you started your argument that this pharmacy will be good for the neighborhood. has there been a change in the business plan? other products other than prescription drugs being sold? >> to my knowledge, there has

been no change in this plan. there is going to be prescription drugs. it will be a general pharmacy. i assume they will supply clinics and band-aids, and things of that nature. i do not think they are going to supply more than that. i think the business plan is the same as in my previous brief that i submitted. commissioner peterson: i think one of the concerns with the pharmacy is that it is only dispensing drugs and is not serving the neighborhood with other products. i do not actually see evidence to the contrary of that. >> really, this pharmacy is serving drugs to seniors and disabled in the community, and things like band-aids and kleenex tissues, and things of that nature. but just because the pharmacy

is providing drugs does not mean it is going to be used illegally. that is a big leap of logic here. like has been said in my brief, they have a program where they have this huge database of doctors who generally prescribe illicit drugs. they know what they are doing. they have operated in seattle. the landlord has checked out their operation in seattle and knows that they have had a history of providing community services and hiv services. what they have done in seattle has not increased criminal activity. the have a history. the and not just coming in and saying -- there are safeguards. there is no guarantee, but that is what they do. commissioner peterson: thank you. >> thank you.

>> mr. duffy? >> good evening, commissioners. the permit was filed according to the bi records on may 21, 2010. it got issued on may 24, 2010. it got a certificate of final completion on june 25, 2010. there were rough electrical inspections on may 28, rough plumbing inspections may 27, and a rough framing inspection on may 28, 2010, according to dbi records. the final inspections for electrical work june 9. final plumbing, june 24. the final building, june 25, 2010. we did receive two complaints

on may 28, 2010, and june 8, 2010, after the permit was issued. those were both investigated. i will be available for any -- vice president garcia: what was the result of that investigation? were you able to determine whether work took place prior to may 24? >> that is -- the permit was already issued. someone saying the work started prior to that -- when there is a permit in place when the inspector goes there, it is hard for us to go back. we have not been there prior to the permit being issued. >> and can you shed any light on the $40,000, $106,000 question? >> to be honest with you, we see a lot of undervalued permits in our department. a lot of times, i think what happens is that an architect

comes in and does not know what the contract is. the look at the square footage and put down the price. our inspectors asked for that valuation to be increased and to pay an additional fee. that did not happen in this case. i do not know the reason why. i cannot speak to the contractor either. it could be equipment in the space. freestanding equipment would not be part of the valuation of our permit. that is possible. i was thinking about it after you asked the council earlier. we see if a lot. sometimes it is a hard one to figure out. it really is. we do expect people to put the honest price of the contract on the permit application. we use a swift evaluation in the building code. it is based on square footage. but then you pull in finishes. that is variable as well.

commissioner hwang: just for my edification, if you put in a permit and estimate the worst to be $40,000, then determine the fee in connection with the permit -- is that correct? how does that work? if you have a $40,000 estimate on a permit, what would be the fee, if you know? the ballpark. >> there is a schedule in the building code. it goes from zero to $5,000. it is based on the -- if it has to disciplining as well, i think they also increase their fees if it is a higher valuation. but there probably would be -- i would say you're talking hundreds of dollars more, not thousands, for the extra fees and the difference. >> so for a contractor or whoever submits the permit and estimates the work at 40,000, but the work ends up being over

twice as much, the differential on the permit fee would be a couple of hundred dollars? >> probably in this case -- if i took a rough estimate, you are probably talking between $500 thousand dollars. that is my experience doing work in the permit bureau. but looking at these and what permits cost, i would estimate between $500.1000 extra dollars. >> -- $500 and $100,000 extra. commissioner hwang: that would affect -- $500 and $1,000 extra. commissioner hwang: that would affect property tax, correct? it uses the amount you stated on the permit application. >> the city assessor's office would use the valuation on the permit.

that is right. >> notwithstanding the significant differential. >> yes. that is right. but for the equipment -- i am not sure. we would have to see an itemized thing for the contract to see if there are things that will not be included as part of the construction costs, because not everything is. commissioner hwang: thank you. president goh: i am looking at the april 16 contract that itemizes the various things that were meant to be done. under the concrete framing, for example, there is "remove concrete slab at restaurant. install ada ramping, steel. install railings, 3/8 inch." all of that sort of sounds like forming the foundation of the

restroom. my question for you is how long would all of what i just said typically take? >> i am not so sure i could answer that question. that would depend how many people you had working in the space and how many hours a day. it is too difficult for me. president goh: i have another follow-up question. i am talking about removing concrete. there are a lot of people who would take a certain amount of time. with that kind of thing typically happen before one redid plumbing, if one were interested in reviewing plumbing? so you would expect that kind of foundational stuff i just talked about what happened before the plumbing? >> it sounds like if you are breaking out a concrete slab in a restaurant, that would mean you were going to do some underground plumbing work. president goh: with that require

a permit? >> yes. president goh: under the plumbing of the same contract, relocating the sink and fawcett, relocating the ruffed in plumbing -- i imagine that is what you were talking about. installing the new toilet, etc.. installing a 2 gallon under- counter water heater and what not. ne estimates about how long that would take? probably the same answer. >> again, it is hard for me to tell. some of this work -- if you have one person working there, it would be a couple of weeks. if you have five or 10 people -- a lot of times in commercial jobs, we do find there is a bit of that. there is usually a rush on that more than residential jobs. on downtown projects, they are moving. they want to get their cover it

up. the want to get their finishes done. there is usually an opening date. there is a faster pace to them than maybe a job in some type of a residential occupancy. it is a hard question for me. i think it is better directed to the contractor, if he was around, or someone representing him. every job is different. i think we spoke in the previous hearings about the demolition, that some of the demolition prep would not have required a permit. i think we talked about the flooring. but that would not include wrecking the concrete slab. that was part of the permit, i would have said. >> on your slow estimate, you said a couple of weeks. what about your fastest estimate, 10 people working? is 3 days reasonable? >> i have seen people did jobs

in that time. some of these jobs -- i am sure you are familiar with some of the stores downtown. they can turn work around in a weekend. they can close and reopen again on a monday morning. you'd be amazed what they can do. president goh: thank you. commissioner peterson: i would like to follow up on a question i asked mr. waggoner. after you received the complaint and did see evidence of work being done before you granted the permit, what would you as a department do? >> if work starts without -- if we get there it had taken place, we would issue a stop work order until they obtained a permit and there would be a nine times penalty on the fee. that is the penalty for doing work without a permit as the san francisco building code allows. >> and then they could reapply

for the permit. >> you would definitely have to apply for the permit within a time-mandated -- depending on the seriousness, it is usually 30 days to apply for a permit. if they are doing an excavation or something hazardous, but there was something going to fall, it would vary. but in general is usually a 30 day -- obtain a building permit within 30 days and contact the building department for inspections, and countermanding work until you get the permit. it is a stop work order. commissioner peterson: thank you. commissioner hwang: i believe the date you said you received a complaint -- the 28. all this that complaint?