president olague: can you hear me? this is the regular meeting of the san francisco planning commission for may 26, 2011. before i take roll and remind you to turn off your cell phones, let me announce that sfgtv is currently broadcasting the budget commission, so the committee will come to us once that concludes. and again, turn off your cell phones, your pagers, any

electronic devices that may sound off during the proceedings. roll call. commissioner kathrin moore is here. commissioner sugaya is expected. commissioner rodney fong. >> here. >> commissioner mike antonini. >> here. >> commissioner ron miguel. >> here. >> thank you, commissioners. first category on calendar -- i think i've adjusted it too high. >> items proposed for continuance. item one, standards for safe buildings. proposed to continue to july 14, 2011. item two, case number 2011.0051 c, california street, being proposed for a continuance to july 28, 2011. item number three, case number 2010.0517 c for 3672 18th

street, please note that due to recent legislative changes, this item no longer requires a conditional use authorization and, therefore, is no longer before you for your consideration. commissioners, further on your calendar, item number 12, case number 2011.009 3-d for 2350 broadway. it's a request for discretionary review. please note that d.r. has been withdrawn and this item is no longer before you for your consideration. and item number 17, case number 2010.0987 c for 2055 lombard street. staff has informed me that this item should be continued to july 28 2011. with that, commissioners, i am not aware of any other item on this calendar being proposed for continuance. >> for your information, we will be hearing item 11 today,

but i believe that we will make our ultimate recommendations in august. so i'm not sure how -- i mean, just for -- >> after the hearing we'll continue the items till august 4. >> august 4, yeah. ok. >> ok, that's just for information, that's not for an action. >> exactly. >> thank you. >> is there any public comment on items proposed for continuance? seeing none, public comment is closed. commissioner antonini? >> i move to continue items one and two to the dates proposed and item number 17 to july 28, 2011. >> second. >> thank you. >> item 17, 2055 lombard street

to july 28. on that motion, commissioner antonini. [roll call] [chorus of a's.] >> thank you, commissioners, those items are continued as discussed. commissioners, on the consent calendar, items four, five and six, are considered to be routine and would be acted upon by a single roll call voted at commission. there would nobody separate discussion of these items unless a member of the commission, the public or staff so requested. in that event the matter or matters would be removed from the consent calendar and considered as a separate item at this or a future hearing. although i know that item number five is going to be pulled from consent, i will announce all three of them at this time. item number four is case number 2011.0009-c for 170 west portal

avenue, a request for conditional use authorization to allow full-service restaurant in the west portal avenue neighborhood commercial zoning district. item number five, case number 2011.0228 c for 55 page street, a request for conditional use authorization to modify the conditions of approval. that were placed on the existing building, to allow 17 below market rate housing units to be changed from rental to ownership. this is within an n.c. 2 to an n.c. 3, a commercial transit district. item number six, 1404, a request for conditional use authorization to establish a new small self-service restaurant in the existing ground commercial space. commissioners, as i have announced, i am aware that item number five has been pulled from the consent calendar by

commissioner moore and with that, items four and six are still before you for consideration. following any public comment, which would automatically remove these items from the consent calendar, these matters are in your hands. >> is there any public comment on the consent items? >> 55 page will be pulled, so we will hear it as a regular item. is there any additional public comment on consent calendar items? seeing none, public comment is closed. commissioner moore? commissioner moore: i wish to explain myself to the other commissioners. i had asked for this item to be pulled partially. we have an outstanding meeting with the city attorney to discuss affordable housing and renter and ownership issues. and since this falls right in

the middle of the discussion, i think we would be well advised to hear the position first. and for that reason i asked the item to be pulled. i do also believe that the public is anxiously standing by to see where all of this is going. the numbers we read in the papers are getting increasingly more alarming, that by now about 4% of working-class people have lost their retirement benefits due to the difficulties in the economy. all of that plays into hoey we define afford -- how we define affordability and that's in line with commissioner antonini's concerns about affordability in an ever-vibrant discussion which deals with the reality. so it is for that reason and many others that i believe we're not really doing page

street any disfavor by holding it over for a couple of weeks and then making a more informed decision. so i'm support of that. obviously i suggested it to explain it to the commission. president olague: are you moving to continue it? commissioner moore: yes, i do. supervisor alioto-pier: is there a second? -- president olague: commissioners -- >> wait a minute much the motion for continuance of that item should come when we call that item. we need to take care of the consent items first. president olague: i'm sorry. commissioner moore: i'm only explaining myself. president olague: it could have waited until we were discussing the item. sorry about that. commissioner antonini? commissioner antonini: move to approve items -- four and six we have called for public comment. ok, items four and six. >> second. president olague: commissioners, the motion on the floor is for approval of items four and six as they have been drafted. on that motion, commissioner ants nene? >> aye.

>> commissioner borden? >> aye. >> commissioner fong? >> aye. >> commissioner moore? >> aye. >> commissioner miguel? >> aye. >> commissioner olague. >> aye. thank you, commissioners. madam president, are you going to take item five now or at the beginning of the regular calendar? >> we're going to hear it now. >> item number five. case number 2011.0228-c for 55 page streefment -- street. just a minute, let me turn on your mic. hold on just a moment. >> good afternoon, president olague and department staff. this is a request for conditional use for 14975, to allow 17 rental b.m.r. units to be converted to for sale b.m.r.

units. property ject is within the nct-3 and 85-x districts. the b.m.r. units in this project were offered voluntarily. since that time the city has revised the affordable housing program and no longer accept rental b.m.r. units but requires for sale units or in lieu fees. this is consistent with current law on the subject. the existing b.m.r. units have never been rent and the projects will not displace any tenants in the building. the mayor's office on housing recommends approval of the proposed conversion and the department recommends that the commission approve the project, as the project will not displace any tenants, complies with the city's affordable housing program and meets all applicable requirements of the planning code. i'm available for any questions. thank you very much. >> thank you. project sponsor? >> good afternoon.

thank you for hearing us. i'm here on behalf of the b.m.r. rn owner. we have worked with the mayor's office and the planning department as mr. crawford mentioned, over the last year plus. the b.m.r. units have been an often-discussed topic at the building homeowners meetings. the homeowners association -- the president is actually here with us as well. they have also supported this change. they feel that the -- a consistent ownership throughout the building rather than having owners and renters would benefit the building. they look forward to active

participation on the board of governors, the various architectural security landscape and technology committees. it is often hard to fill those roles and they feel that 17 additional owners would help protect their investment and provide for a better living environment for the building. the homeowners association is also a little worried about the current economic climate. many of the current owners are in adjustable mortgages and right now are looking at refinancing options. many of the finance and mortgage companies will not refinance with the excessive rental component in

multi-family buildings. typically that line has been drawn around 30%. it varies amongst other financing companies. but with 17 rentals dedicated to b.m.r.'s, it can very easily jump above that 30% threshold and limit some of the financing opportunities for the current owners. >> thank you. any general public comment on this item?

>> i was surprised to see this item on the agendas and particularly to see it originally as a consent item before it was removed from that. and this is very sobering, just two days after the city has now approved the mass demolitions at parkmerced, which promises that all the rental units which will be provided to the existing tenants are fully enforceable and those promises won't go away. and here what we have is in the year 2000, this project sponsor, according to this executive summary from the planning department, voluntarily dedicated 17 of the units to be below market rentals. so i haven't heard anything as to why that needs to be changed, except for a preference, apparently now, to have a fully ownership-occupied building as opposed to a rental building. certainly the matter needs to be continued for a full hearing on what the basis for that is. obviously we're concerned that a project that was approved based on the provision of affordable rental housing is

now having those promises -- there's a threat to have those promises go away. to the eggs tents there's a legal issue, i think it's incumbent on the city attorney to explain how these promises differ from other promises of affordability. but i think there's also a conflict. to the extent this is a palmer issue, then -- but there's a claim here in the executive summary that these were voluntarily provided. so it's unclear whether palmer applies here. i mean, this is the same issue we've raised. this area admittedly is unclear. we certainly need a more complete hearing as to what is the law on this, whether the project sponsor can be compelled to live up to their original agreement or whether there are compelling circumstances that might warrant revisiting those conditions. and i hope there will be a full opportunity to address that important issue. thank you. president olague: thank you. any additional public comment on this item? seeing none, public comment is closed.

commissioner antonini. commissioner antonini: well, thank you. this particular case even pre-dates my presence on the planning commission. it was in 2000. as pointed out, this was before there was a requirement, before below-market rates. but as part of it, the developer at that time had agreed to voluntarily provide a certain number of rental -- a certain number of below- market-rate units. apparently these were to be rental units, some of them, and they have not been rented. we never have made a specification that, you know, units have to be ownership or rental in an entire project. i mean, we leave that up to the project sponsor because we know how market conditions change and how it's quite possible that something that begins as a rental unit -- i'm talking about the entire project, will

convert into ownership. or we've seen instances where ownership buildings plan to be ownership have been rented for a period of time. so flexibility in the marketplace i think is important. and, of course, palmer -- i'm not sure if palmer applies in this instance. but as we know, we're no longer allowed to have below -market-rate rentals. the one option is to provide on-site ownership, which is what is being done here, probably sometimes preventtively, because there could be future litigation if someone challenges this under palmer. i don't know for sure. number two, you could have an off-site affordable ownership unit, or number three, you could contribute to an in lieu. so it seems like this is just good preventative procedure, and our biggest need is for, in my opinion, middle income ownership housing in san francisco, which we're producing almost none of. and because of the -- it's

afford afblet it would have to be affordable under our b.m.r. rules, which would dictate the income levels for which one would qualify for the ownership here. and also, unlike parkmerced and other instances, these are not rent-controlled units. their establishment was after 1978, i believe, which is, i believe, the line of rent control. so it's totally appropriate, and it might help this building. and as was mentioned, there's no reason the owners can't subrent the unit. if a number of owners -- large number of owners become owner-renters, then getting new loans f remaining owner occupiers or others might be more difficult, because they'll interpret it as a rental building rather than an ownership building.

so it makes a lot of sense to me, and i agree with commissioner moore, this is a sensitive issue, but this is an individual case that is crafted very carefully. and i can see why it was on consent. but it's good we had an explanation. >> commissioner borden? commissioner borden: i would love for the city attorney to weigh in. because as i also understand it, palmer applies to rental housing. so actually, we have more security if it's for-sale housing, because we can actually enforce that under the incontributionary rules, whereas we cannot really enforce rental. but i want the city attorney to clarify if that indeed is correct. and because this is a previous approval, has that decision been retroactive? maybe the city attorney can talk about that. >> deputy city attorney susan cleveland. these legal issues, i think as previously mentioned, will be the subject of a closed session that was scheduled, i think, for today, but was moved to a

date in july. and there are multiple legal issues at play both in this case and in quite a number of instances that will be coming before you of projects that were approved prior to the palmer decision and also prior to our current revised inclusionary housing ordinance. so i do think that most of those issues are best addressed in closed session but the palmer case would most likely apply to this decision in front of you today. as opposed to the parkmerced example that was raised by one of the public commenters, there is no agreement or contract here. this was an entitlement decision made by the commission with its regulatory powers. there is not a development agreement or other contract --

commissioner moore: would you speak a little louder? your voice trails. >> you want me to repeat what i just said? commissioner moore: no, just the last couple of sentences, you were trailing off. >> so does that answer your question, commissioner borden? commissioner borden: i think so. basically at this time we don't want to say on the record for certain, but it sounds like the palmer decision would affect this case. so theoretically if we didn't approve this conditional use, the project sponsor still wouldn't necessarily have to? i meant change in condition. it is still possible that the project sponsor could still go forward and not do it under the law? is that the case? >> susan cleveland knowles again, deputy city attorney. there is a risk of that. i think also what commissioner antonini mentioned earlier is the inclusionary housing ordinance has never dictated whether a unit is rental or ownership. the only question is at the

project sponsor's option. here they're actually not changing their option under the incontributionary ordinance. it's still an on -- the inclusionary ordinance. it's still an on-site. but the condition on this that the commission placed was quite unusual in that it specifically required rental housing. >> i mean, i just would say generally -- i mean, this development, for whatever reason, this was agreed to and before the law existed. so i hate to penalize the developer for doing that. we never specified -- we generally don't specify inclusionary versus rental versus home ownership. i guess at some later date we should have a conversation with the mayor's office of housing about what, if any implication of what population you're going to serve. i don't know if that changes the range that you have to have or, you know, for people to

occupy the space. but it would be at some point advantageous to have a conversation with the mayor's office of housing to understand what generally are the b.m.r. ranges with housing versus b.m.r. ranges versus for sale. but also, we have the reality of the palmer decision that at this point doesn't give us a lot of discretion in the rental space anyway. we have more discretion in the for sale space. so it was useful to have this conversation, but it is kind of hard because there are -- there's still things that we don't quite understand, but it does seem clear to me that our control over rental affordable b.m.r.'s that are rental is a lot less than we had in the past. and generally i would say that given the fact that they're not coming back to us to try to remove the b.m.r.'s off site, which is where we see the changes that we're looking for, i would be in favor of supporting this request, but

not at the expense of further having a conversation about these issues, because i think they're important. president olague: commissioner miguel. vice-president miguel: yes, i agree that this is an anomaly. certainly during the time i've been on the commission and for the 20 years before that when i interacted with the commission and sat through many a hearing, i had never heard of this particular condition being placed on anything. and it also, as the city attorney and commissioner borden mentioned, absolutely no relationship to parkmerced whatsoever. this is a problem that occurs in mixed-use buildings, rental and ownership. it concerns problems regarding condo fees. it concerns problems regarding general maintenance. it concerns problems regarding

financing. it is something that most property owners do their best to avoid because of these types of problems. there are actually some people who look for condos who would not buy in a building that was this type of mixed use. my reading of the law on it -- and i am not an attorney -- is that it's unenforceable anyway. and i think that is in this instance. and i think that goes to the entire picture. i would be in support of it. i think it's an odd anomaly. i think it should go ahead. it's something that perhaps the commission at that time passed. and i'm second-guessing them, which is something i probably should not do, but, you know, someone makes an offer and it sounds generous and you say, hey, great, let's go with it.

and that's exactly what this sounds like in my mind. i would be fully supportive of improving this. president olague: commissioner moore. commissioner moore: i still believe that proper instructions, which help all of us from second-guessing, and i'm not necessarily i am applying that you are all guessing, but there are areas, since none of us are lawyers, where i think a clear instruction by the city attorney is indeed of what we're asking for here. and i think it would make it a lot easier, even if we agree or disagree on the outcome. waste unusual to me -- what is unusual to me and this is a side bar to ultimately i will do on this, which i don't know at the moment because i don't have the instructions, is the fact that the c.a.c. who spent literally a lifetime helping the project at large to comment on this issue.

as to whether or not their comments would matter or might not, that is another issue. buff i've gotten several phone calls about the grave disappointment that the department had not informed them. and with the idea of that this is still in c.a.c., that is -- not that it affects what i do. the other thing i'd like to ask, and perhaps mr. crawford could shed some light on it. the original intent of this developer to voluntarily, as it was at that time, add 17 units, is commendable. waste unusual is there are 12 years later and no income has been derived from renting these units. even if they were affordable rental units, there's still a huge amount of capital from 17 empty units, which has not been brought back to this development. the additional questions -- and i don't have the keys in front of me -- was