busupervisor mar: thank you everyone for your patience. could you call the next item? >> a hearing on formula stores in this city and county of san francisco and impact on small businesses, neighborhoods, workers and the economy. supervisor mar: i have been working with a coalition of leaders and small business organizations and many community-based groups as well to figure out ways we could help enhance our diverse and vibrant

small-business sectors and merchant corridors. this hearing is called in that interest. in 2007, san francisco approved proposition g which required any formula retail use trying to move into any of our neighborhood commercial districts to obtain a conditional use authorizations. since that time, we have seen a huge number of applications for formula retail businesses to move into san francisco and there has not been a serious attempt to analyze the impact these companies are having on our local economies and neighborhoods. i'm well aware of how difficult it is for our small businesses to survive in these hard economic times and i have heard from the small business commission and many merchants in my neighborhood throughout the city -- and throughout the city on how hard it is as they feel threatened by the growing presence of formula retail

competitors. many provide substandard wages and benefits to their workers and bring them buildings and facades not in keeping with the character of our neighborhoods. it is imperative that we have a clear understanding of how our city is being changed by their presence. the purpose of this hearing is to get a better understanding of the scale of formula retail in san francisco, how it is impacting the city, and our efforts to regulate these businesses are working and how we can help our small business sector survive and flourish. i want to thank the people who have been extremely helpful pulling this hearing together, not only my key legislative staffer, but jennifer from the office of economic and work force development and regina from our office of small business and her staff as well.

we have a number of speakers lined up and i just want to first say i think [unintelligible] will be joining us. first is the planning department. perhaps we could wait for her to arrive and i will ask if regina could present briefly. i know we have had a number of conversations. supervisor wiener: i want to thank everyone for coming today. when we talk about formula retail, in addition to all the points the chairman made about dealing with having a mix of businesses in our neighborhood, one issue i hope people will address today which i think goes hand in hand is how to improve our cu process.

we believe in having strong neighborhood and put when we talk about the cartel activity, commercial corridors and whether formula retail stores come in. but one of the reasons we see pushed back for expanding the formula retail controls is that the conditional use process is exceptionally log cumbersome, painful and expensive. i hope in having the formal retail discussion, we can talk about ways to make it a better process for everyone. >> thank you. >> good afternoon. i'm from the office of small business. my comments today are going to be around discussions, and

formal recommendations the commission has had in its committee meetings. to be clear, the commission has not had a formal hearing a around this particular issue, so to provide any definitive direction or recommendations from the office or commission, that's not what my comments are about, but to provide you with information about the discussions we have had as we move forward -- we will be using these as guidelines for us. in 2009 and 2010, the small business commission did make to formal recommendations to the planning commission not to approve a pet store formula retail. the commission did make these recommendations because the businesses came to the commission and so the commission responded to their request.

in general, the commission does not take positions on a formula retail as a matter of course. in both instances, the small business commission's fault the guidelines in the planning code to make their recommendation and their recommendation was in the surrounding neighborhood was well served by the number of pet stores and there are plenty of similar retail uses within the eight block radius of the proposed site. in addition, in 2009, in a letter to the planning commission, are commission noted the city was actively recruiting this particular formula retail business into a couple of neighborhood marketplace initiative areas due to the lack of a pet supply store. this particular formula retail entity declined the city's efforts to recruit as its choice

was to be in higher income neighborhoods. this caused the commission to look at some of the criteria and are there other ways we could incentivize formula retail entities going into other areas? in addition, the commission did make some notes with those recommendations that one significantly more money said nerf -- circulates when purchases are made at locally owned stores rather than outside area at or nationally owned businesses? a bit from the san francisco locally owned merchants -- merchants association. he will speak to dead details,

but we used that study to provide some of our comments. most of our job has been distributed to that work force. what kind businesses are an integral part of our city's character and it -- homogenization impacts the character of our neighborhood. locally owned businesses are invested in our community and make strong commitments to the neighborhoods, schools, and nonprofits in the area. competition and diversity leads to more choices. for each formula retail pet store -- and this was specific to that letter to the commission -- for each formula retell the story that opens, several small independent retailers are pressured often to the point of closing and that reduces competition. reduced environmental impact,

locally owned businesses purchased products from local distributors and a large formula retailers may at distribution centers from outside the area. in july of this year, the commission made a recommendation to support supervisor mar's legislation to prohibit the stores from the ncd controls. while it is not be commission opposition to ban formula retail, the commission does believe there are times when formula retail is appropriate, but in this matter, the commission tends to defer to the supervisor when they are producing legislation that comes from their constituency. as a result of the 2009 and 2010 discussions the commission has had, we have these items.

one, there needs to be new and updated criteria from the planning department and that the planning commission can use for approval, that the current criteria that is there has lent itself to one type of formula retail which tends to be the type that goes into our neighborhood-serving businesses like a coffee shop for burger place, that type of thing. i will review what the criteria are -- what is the existing concentration of formula retail uses, the availability of other similar retail uses in the district and compatibility of the proposed formula retail use in the existing retail vacancy rates in the district and existing mix of citywide serving retail uses in the neighborhood

serving retail use within the district. you can see the criteria is very distraught-focused. -- district-focused. one position the commission worked with this this one operator was looking for retail space that specifically had parking. what this said to the commission is that the intention of this particular formula retail operator was not necessarily to drop from the customer base of our neighbor and commercial district, but it would be drawing from a large section of the city. -- not necessarily to drop from the customer base. we need to see if they are intentionally looking for space for parking and that is a particular need, then is it a larger section of the city they will be drawing a customer base

from or if it is a big box, potentially it is a full city- wide draw customers. recommendations we are moving forward with -- for larger from the retail, where we don't necessarily think it would be an absolute requirement for a formula retail that andncd impact, but for a larger -- for a larger format retell, the commission would make a recommendation that we might want to consider proposing having an economic impact report and may be creating some threshold that would trigger that prior to the cu hearing.

having regular updated economic impact reports that review current formula retail existing and its impact. this way, we are getting some economic measures and barometers of the decisions being made in terms of approving the formula retail. supervisor mar: thank you very much. we appreciate your testimony. >> i have a couple of other items. i can submit them in writing or would you prefer to hear them? supervisor mar: very briefly and we would like them submitted. >> there would be notifications but it -- but to the potential businesses not just in the district ensure radius that may be impacted by the business, a

citywide block book notification like our office and other stakeholders and taking a look at community benefits, i know we often talked about impact fees and perhaps this committee benefits could be used toward doing economic assistance and development with businesses in the neighborhood commercial corridor or funds going to such programs for neighborhood economic development organizations to assist businesses that may be impacted by the business coming in and to help them deal with the transition. supervisor mar: thank you for the work on the shop small and small business saturday. i was going to say that anne- marie rogers from the planning department is here and she's

going to present and she will be followed by the small business commission. we will be opening up for public comment and a few of our key experts that will be speaking are the owner of a hardware store and another sector impacted by large from the retail in many different areas of our city. then one of the leaders of a new coalition of small businesses and the owner of a pet supply store and followed by another outside expert at labor policy expert from uc-berkeley. thank you for being with us. >> good afternoon. i know it has been a long hearing so i will keep my items focused. there were four items i wanted to cover and feel free to interrupt me. very briefly, i will go over the history. i heard a little bit about the

controls so i will gloss over the high points of that and i will go over a summary of recent applications for formula retail we've reviewed at the planning department and commission and i will conclude with some of our current issues related to land use in formula retail. i just handed to the clerk report we gave to the planning commission earlier this summer and i put copies for members of the public here. most of the information is contained in that report. briefly, looking back at history, formula retail was first legislated in 2004 with an ordinance that established for retail and brad pitt in one district while making it conditional use in another. -- since 2004, the code has been amended numerous times with regards to formula retail.

in 2007, the voters passed proposition g which required any neighborhood commercial district to have a conditional use authorization formula for formula retail and further defined the formula retail use. that's a little bit about the legislative history. the definition for what is a formula retail is any type of retail or sales activity which has 11 are more along with that shop being applied for locations in the united states. in addition, they have to have to of the following features -- either a standardized path of merchandise, standard de corps or color scheme, standard facade, or trademark and service mark. that is the current definition of formula retail and it applies to a number of types of