this legislation, we are going to make sure that you go through more process, the cu process, and have it be more expensive, and that very language in there. >> i do not think it is about the process but about having a higher standard or threshold for approval, versus just added processes, but we can take those comments and look at that. vice president garcia: thank you. director goldstein: any other additional comments? is there any public comment on this item? ok, well, to move on to item number five, and thank you very much, mr.star. item five, appeal number 11-094. winfield design international

inc., appealing notion of violation and penalty dated august 19, 2011, addressed to thomas shuen and m.j. gaines at winfield design international, regarding noncompliance with the conditions of approval of planning commission motion 16 546. we will begin with the appellant. you have seven minutes. >> good evening, members of the board. i represent winfield design international, inc. the property in question on 23rd street, number 3000, and we are a small corporation that is owned by two owners, thomas shuen and milton gaines.

for the appellant. the property had been previously used as an industrial site, operated by winfield design international inc. winfield applied for a permit to develop an apartment project. the city and county of san francisco required as a condition for obtaining a building permit an inclusionary housing requirement of bmr units, under planning code section 315. also, winfield had to record a

notice of special restriction on the property, which included the fact that these bmr units were a part of the property. the important part here is back winfield design did not receive any concessions from the city in order to obtain a permit, and we contend that winfield is therefore not required to provide these bmr units, and being required to have a conditional use permit requiring the bmr units, that this violated costa-hawkins.

at the time, my clients were not aware of that. recently, the polymer case came down, which is cited in both the braves, and a polymer case pointed out that under costa- hawkins, the owner of the residential property may establish the initial rent and all subsequent rents if they qualified under the costa- hawkins act, and my client so qualifies. in discovering that my client qualifies under that act, and after enduring what we considered to be well in-

intentioned -- well-intentioned but overreaching enforcement by the mayor's office of housing, my client has decided to appeal the penalty that is imposed against it for allegedly violating the conditional use permit. we contend that my client, requiring to have these bmr units, as denied equal protection, that the costa- hawkins act is being violated, and there is an amendment to the united states constitution, and

the california constitution. the essence is the statute of limitations bars my client from pursuing the appeal. that is under government could -- code 65009, which has a strict 90-day limitation, which we agree does not apply in the case where there is a constitutional violation, or the original use is illegal. that is set forth in a case, a 1987 case, and we have since

reviewed that case. also, and is not a bar. the leading case with the statute of limitations dealing with santa cruz, cited in both breeds, and in the travis case, they did allow an exception under 65009, where the homeowner it did file within 90 days after the decision had been made, the final decision had been made. it is our position here that the final decision for which my client is appealing, the

decision under the penalty. which was issued by the zoning administrator. we have complied with that 90- day requirement, and we suggest that the endeavor to see a case tried on its merit, and in this case, we saw a request that the matter be considered on its merits. vice president garcia: sir? >> yes. vice president garcia: how many units -- first of all, there are 52 units? 52. and how many are owned out right, and how many are rentals? >> it is not a condominium.

they are all owned by winfield design international inc. vice president garcia: i am sorry. i must have misread that. everyone of them? >> yes. vice president garcia: thank you. >> surely. commissioner fung: several questions. the principles that you introduce, where they the principles of the firm at the time they got their entitlement? >> yes, sir. commissioner fung: a slightly different question, commissioner garcia, but since it was constructed that the units were rental units, are they now going to be marketed for sale? >> that is not envisioned at this time, sir. commissioner fung: i did not see much in your brief related to the findings by the mayor's

office on housing in terms of non conformance to the conditions. do you concur that the bmr units were not in place? >> there was some compliance but not full compliance. what might breed has alluded to with the -- what my brief has alluded to was the california state law. we were prevented from being allowed to use the unlawful detainer statute, not prevented, but there was an interference, and the penalty has alleged that my client wrongfully evicted a tenant, when, in fact, we went to superior court, got a stipulated judgment. the tenant was represented by counsel at the time, and that

judgment was stipulated, approved by a judge pro tem, and, yes, in the penalty decision, my client is charged with wrongfully the action. we contend that that is a violation of the judicial powers act. it goes into law that is pre- empted by the state of california, said that is part of the improper and over -- enforcement of which we complain. vice president garcia: it would seem, and i do not want to make an argument that the planning department could make, and probably because i do not understand to begin with, but i thought their argument was that you cannot evict a person because that person was not actually paying a bmr rate. do you contend that the person was paying a below market rates, and whose formula was used for

the below market? >> yes, the unit was paying the bmr rate, and the stipulation gave her until november. it was a loss to my client of approximately 30 $200, over $2,000 in damages, , which they a bad toupee, above and beyond normal wear and tear. this is an imposition on my client. -- of $2,000 in damages, which they had to bear. vice president garcia: is that agreed upon by the m.a.s. department on housing or by a formula that would be agreed to by both parties -- by the mayor's department on housing?

>> by the city and county of san francisco. vice president garcia: ok, thanks. director goldstein: no other questions? ok, thank you, sir. we will hear from the zoning administrator. >> thank you, scott sanchez, planning department. i am joined by the deputy city attorney, a representative from the mayor's department on housing, and someone from the planning department, who actually processed this many years ago. this is a notice and penalty for failure for conditions of approval relating to an approval that was more than eight years ago now, and the project has subsequently been built, and what is unique in this case is we have an appellate self -- not disputing this accept the conditions. the appropriate time to make those arguments would have been eight years ago when those conditions were imposed because

of the novel legal issues, we called upon the city attorney to help us prepare our brief, which you may know it was submitted to you, and she will give the bulk of the presentation. i just wanted to provide some background and the timeline. in august 2001, the conditional use authorization request for the property was filed for the demolition of the existing industrial building and the new construction of residential building containing 54 units, and it needed to conditional use authorization on multiple grounds, but two which are important is that it needed conditional use for the construction of residential uses in the existing zoning district, and also with the time because of policies that were in place requiring 25% bmr, below-market rate units. they set to lower that. in 2002, this was the time of the reasoning after its. there were multiple hearings on the item before the planning commission ultimately approved

in march 2003. it was subsequently appealed to the board of supervisors, on by five members of the board of supervisors. the board of supervisors overturned the commission decision approving the project but re-approved it with additional conditions. those conditions were then in full of fat. there was no challenge by the public at that point in time. they subsequently in november 2003 filed a building permit application for the project. in december, they filed a notice of special restrictions. those are the conditions that they recorded on the dean of the property themselves. they then build the project, received there's a to begin a final completion in 2007, but they failed after that time to comply with the mayor's office on housing requirements for those below market rate units. they were to diligently to get compliance from the project sponsor and we have 50 pages of emails between the project sponsor and the appellant that are available for review that demonstrate the extent where the demand for compliance, and to be

clear, there is no penalty that has yet been accruing at the property. the notice of violation, the penalties are on hold while the matter is before this board of appeals, so those were some of the points that i wanted to highlight before turning this over to the deputy city attorney. thank you. >> hi, good evening, president goh, and members of the board. i and the deputy city attorney. i am appearing this evening on behalf of the zoning administrator due to some of the legal arguments raised in the appellants a brief. as the zoning administrator has already alluded to, the bmr's and others refer to the planning code, including the affordable housing program and its regulations.

and the procedures manual. in this case, we do not have a case where the appellant is arguing they are complying. they have argued that certain provisions of law mean that they do not have to comply with the city's laws. as the zoning administrator alluded to, these legal challenges should have been brought under state law within 90 days of the final decision, which in this case was the board of supervisors' decision on the conditional use authorization in 2003. it is not deserting administrators attempt -- it is not the zoning administrator's attempt. there are many things we cited in our brief which requires the

court to look to the complaint, and here is the objection to the bmr objections. the government could requires anyone who seeks to challenge the legality of a conditional approval to serve and file the challenge within 90 days of the decision, and the purpose here is i think very important. there are short statutes of decisions. this is to provide certainty for the property owner, that their permit is a valid permit, but it is also to provide certainty for the california legislature for the jurisdiction in the city that the conditions are valid conditions and will be complied with. the property owner gets certainty, and importantly, the city gets certainty.

complaining of being costa- hawkins act, the law was enacted and is an exact the same format as it is today as it was in 2003. the attorney for the appellant claims tonight claims denied that they were not aware of -- claims denied that there were not aware of -- claims tonight that they were not aware of costa-hawkins. i want to talk of the embassy kids, which they raise. embassy is not applicable here. it is not a case that has to do with a conditional use. and it was a challenge under our contract and of the notice of intent to withdraw under the ellis act. so that case does not apply

here. another case which she mentioned for the first time tonight is also -- i did not read this case for this particular matter, but that case would not apply here, as well. there are many cases that state it, whatever your claim, constitutional violation, pre- emption, 650, shorter statute of limitation, and moore's kazakhstan to a limitation applies, said thank you, and if you have questions related to the legal issues, i am happy to respond, and we a staff from the mayor's office on housing and planning. vice president garcia: is it the palmer case? >> yes, sir. vice president garcia: it would seem that going forward that the planning department would absolutely have a problem causing someone who has a project such as this one in the future to have to comply with

415. why am i wrong? >> the inclusionary housing ordinance as it stands today requires all project sponsors to pay a fee. that is amply supported by a nexus study and by fighting since section 415. if you want to provide on-site or off-site units, you need to meet certain requirements. vice president garcia: so you are saying that it is like an impact be? >> yes, it is an impact fee. vice president garcia: i thought they determined in part that it could not be an impact fee? they had agreed to do and in lieu of the instead of doing an on-site. >> yes, it was a fee in lieu of the on-site requirement. the planning code requires just a feed -- the fee.

that is the primary requirement. vice president garcia: you are confusing me, or maybe i am asking my question poorly or and exhibiting a lack of understanding as to what the issue is, but it had been raised by whatever jurisdiction that was -- was that los angeles? >> los angeles. vice president garcia: and it is an impact fee, so we can cause the developer, in this case, palmer, to pay it, and i thought the court had decided that it was not an impact fee. >> the court in palmer found the fee objectionable on the basis that it was a fee in lieu of an on-site requirement on a rental project. the fees in san francisco are no longer in new -- lieu. they are the primary requirement, and they are fully justified by the required nexus

study and findings in the ordinance. vice president garcia: so we do not have to give a density bonus or something else in order to be exempt from consideration for costa-hawkins? >> that is correct. if you want to provide your unit on side, and if you are a rental project, the current requirement is that you enter into an agreement with the city. vice president garcia: ok, i am still confused as to why that is not a violation of costa- hawkins. because of the fee? >> it is justified. vice president garcia: there is no more inclusionary housing? >> fifi goes to the mayor's office on housing to build affordable housing -- the fee goes to the mayor's office.

vice president garcia: he just has to pay some fee that goes to the mayor office on housing, and they can construct below market rate houses? >> yes. and there are certain options. if you meet certain conditions, you can provide the units on side, but you need to meet other conditions. this is primarily the fate. -- fee. vice president garcia: thank you. commissioner fung: i would be interested in hearing a little more detail as to how the bmr conditions were not met, as possible, either in terms of rental rates or other conditions that were part of the cu. >> certainly, i can give a brief overview, and then i think the representative from the mayor's department of housing can give more.

basically, under the planning code and the procedures manual, all owners or renters are required to qualify the household as a low-income or moderate-income households and then to provide information to the mayor's office on house and that they are selling or renting back below market rate prize. here, no such ban was given, and the mayor's office found that the units were occupied, that they had not qualified to households that were occupying the units, and they did not know what the rental rates were. so that is when the mayors of us on house and started to investigate and request information from a property owner about who was occupying the units, what their income levels were, and what rents in the recharging, and they received the information back

that was insufficient. in fact, they receive information back that some of the rates were above the below market rates. vice president garcia: before she comes up, patrick and whether or not the person and was evicted was paying what the city would agree were below market rates, with the mayor's office on housing or the city's attorney agree with that statement? >> i am not specifically aware of that or if the city that information at the time. the idea was that we did not have the information about the rates being charged at that time, and that is why the mayors of us on housing was seeking, to determine if the intent -- the mayor's office on housing was

seeking comment to determine if the intent was below market. vice president garcia: if they could demonstrate that they had paid, that they had been charging below market rate? >> yes, the mayors of us on housing had no other objection. does not have any objection to a legitimate eviction if the rules of the below market rate program are being complied with. vice president garcia: >> thank you. >> i am with the mayor's office of housing. i will describe the sequence of events from my perspective. which it came to our attention that the building was out of compliance with the program somewhere around 2008-2009.

we received a letter from an attorney stating that there would like to come into compliance has. i think my manager has that letter. i spoke with the planning department at the end of 2008 when we were doing the annual housing inventory and he said that these units were completed this year. i did not see it on my list, so we knew there was a problem. it was not until october of 2009 that we were able to issue the letter. this is the second largest building that we had to tackle. in october, we issued a letter from our director saying, your units are not complying with the program. we would like to bring you into compliance. we talk about it and our director thought it was the best to use the income available for low-income households instead of going through the available process. it worked beautifully. all units came into compliance.

we have a fully functional bmr program at the other voting. i gave him 30 days to respond. i sent them all of the copies of everything they needed. a letter to them and a cover letter to every tenant, the application, a phone number to call, everything customized, copied. i thought, let's just make this easy and it will be fast. i had the impression that they might be close to compliance. i did not hear back from them until july of the following year. it was october that i sent the letter and july that i finally got something back. after looking into it, it was incomplete. there was no income documentation. i needed to know who lived in the units and what rent was charged and what leases, to show the rent. i needed to know who was living