perspective that was converting a warehouse to a retail, to a bowling alley. in that case, it was an intensification of the use, it was a change from warehouse to essentially retail. so in that case, you had to pay the difference between what warehouse was paid and what retail would have paid. it was a margin. several dollars multiplied over a series of square feet. in that case we found out, guess what, that the tenant had actually remodeled the place to the point where she was removing square footage. so when we calculated the loss of square footage plus the intensity of the change in use, it was a net zero fee. so i say all that just to say that at this point we don't have enough data to even know how many small businesses are being affected today. and my sense is absent the fee being used up for other things,

the discounts being used up for other things, there would be more than enough to cover small business. i think that the more important challenge for policymakers such as yourself and the board of supervisors ultimately is how many opportunities for different interest groups do you want to have give discounts to. that's the challenge. there is only so much that we can give out. commissioner dooley: i'm wondering about whether we might, our commission might want to suggest that we could have some sort of fixed percentage of this pool of money so that at least we would know what we're dealing with with our small businesses rather than be sort of free for all. we don't want to have them grabbing all the pot, you know, before we do because we don't really know, at least here, we don't know how that's going to work. >> i think a regulatory mud wrestling match. commissioner dooley: you don't want really want to do that.

thank you. >> commissioner yee riley. commissioner yee riley: thank you for the presentation. we are all interested on the 5,000 square foot waiver. my question is, is it limited to only commercial buildings and how do you come up with 5,000? what is the magic number? is it based on survey or some sort of study? >> it is. 5,000 was a number we came to pending, we hope, some survey. we do not have -- it literally is a number that we just arrived at through conversation. there is no magic data point. i can tell you that anecdote alley we wanted it large enough to accommodate a medium neighborhood sized grocer. we didn't want it so large that it would capture users that many would not consider small businesses or some might consider out of scale with neighborhood commercial districts.

but, frankly, i'm here to learn from you and from the staff what the right number may ultimately be. so we're not wedded to the 5,000. it was a convenient number that seemed to capture a range of businesses, but we're hoping that through research we can find out, again, who has been affected and what's the standard size that makes sense for san francisco. commissioner yee riley: thank you. >> commissioner clyde. commissioner clyde: thank you, mr. yarne. just the first, let me see, so i looked at this and 94% of this feel is going to be dedicated to basically improving muni. that's very much necessary for small business. i ride muni. i depend on it pretty much exclusively when i'm not taking taxis or using my bicycle. it would be -- it's a significant improvement that

needs to be made yesterday. how we fund it is going to be really interesting going forward. i want to ask about the nonresidential fees not in the eastern neighborhoods. currently if someone takes, reuses the space -- it used to be a grocery store and now they want to subdivide it into maybe some offices or an art gallery, an office and maybe put in a little restaurant, ok. so they want to reuse this and put in multiple places. are they currently assessed fees in the nonresidential side? >> so in a scenario that you're describing? commissioner clyde: right. >> in the scenario you're describing you have a lucky subdivider, developer, because grocery retail is the highest, has the highest fee rate

because it generates the highest number of trips. so in a scenario that you're describing where a grocery store is reconverted into some small office, some retail restaurants, there would be no fees charged. commissioner clyde: there would not? >> no, because you're going from a higher intensity to a lower intensity use. commissioner clyde: interesting. what about small manufacturing? we have talked about at this commission reusing some of these larger difficult to lease space into maybe light manufacturing, sewing with a retail space as part of that complex. >> even more so. commissioner clyde: even more? >> in other words those what we call in planning speak, production distribution repair, p.d.r. uses are even lower intensity, so there would be no fee paid. not to get too complicated, but under tidf, if a fee was recently paid on grocery and

then you for some reason the grocery store went bankrupt or something and a couple years later you converted to a lower intensity use under the low system, there was an opportunity to get back an amortized portion of the fee. commissioner clyde: do we charge this fee on financial institutions as well? >> yes, we do. commissioner clyde: and then you know that there is a big discussion right now about workforce housing, middle income housing. >> just came from that. commissioner clyde: i was there and had to come here. it's full of a lot of very interesting information, but what is striking me is how expensive it is and how difficult it is to develop workforce housing in san francisco. we seem to do a good job with low income and very low income housing, good pools of money for that. of course, market rate housing can take care of itself. it's market rate. but that middle ground and

that's where many of our small business people are workers in that middle income. they are not low income. they're in middle income. there is a real challenge for small employers, at least in mystery in restaurants and hospitality, hotel, keeping people in the city. it doesn't take much to earn in that middle income. so i am a little concerned about the residential impact fee when it comes to the creation of workforce housing. i have lost many of my very good workers to other areas of the country. a couple just moved over to the east bay because they can get affordable housing in the east bay. so can you -- >> well, i wouldn't want to bring that whole discussion in here, but basically it is an absolutely legitimate concern. this city has put a significant fee burden on housing, market rate housing.

it's made in some case arguably, it's raised the level, the threshold of which a developer will build housing. if you're paying $90,000 in fees per door per unit before you even buy land or pay for some concrete or wood, that's a pretty significant cost that generally gets passed on. and so it is a problem. it is real. the problem ultimately, though, comes down to priorities and deciding what of that fee burden is essential and what is unessential, or what of that fee burden can be shifted to other revenue sources. i would make a very strong argument that of all of the impact fees i have seen, i'm not known for being a fan of another new fee in a city that has a five fee burden, i will say this is one of the most appropriate and fair nexus studies i have ever seen in terms of studying real impacts

and providing real solutions. but inevitably, we have to take a look at the overall fee burden and a the mayor has indicated he wants to do that. commissioner clyde: the current transit impact development fee is applicable for any space over 3,000 square feet that has been vacant for five or more years. are there time limits on this new fee? >> so that's a great question. there is traditionally, the way vacancies have been treated, at a certain point, you lose your credit. so if you have had a retail space that sat vacant and it's treated as essentially a new use. i think we need to look into that and how that is done when we move to the new system. commissioner clyde: is the fact of that expiration, is that an incentive for a landlord to rent the property? >> hopefully. commissioner clyde: because that is a huge problem in san

francisco. we don't really have ways to force people to lease their space or use their space. >> i would say hopefully because as you probably know from firsthand experience, it's amazing sometimes the lack of rational self-interest to lease by certain retail landlords. we have a lot of people in our office that focus on commercial corridor revitalization. folks are absentee landlords or just not interested. you're correct, it creates a financial incentive to move the property, but the reality is most landlords don't have an idea that this financial penalty even exists. so their willingness to respond to it is probably minimal. commissioner clyde: thanks. >> director dick-endrizzy. >> as you noted, we had the discussion in our meeting that the controller did a report on the impact fee and through a

quick look at it, we saw that a few numbers of small businesses were charged that. so if that is absolutely the case and moving forward, instead of a fee waiver for the first 5,000, since it's such a nominal amount of money, do you think that this group might consider a full exemttion so that the small businesses that are working with that 5,000 square foot, if that's what the final decision is, should any larger developments end up utilizing that pool of $40 million or $10 million a year, that the small business can still be ail to have, work under the guidelines of what the intent of that 5,000, the fee waiver is for the $5,000 square foot? >> i think it's a really interesting idea and i think what would happen in that scenario, just to play it out,

is we would have to project 20 years out given historic tidf revenues what percentage of that stream is going to actually come from small businesses. if we were to do that, we would reduce the discount budget available to those other waivers. we would say based on past history, $2 million of the $40 million will be used by small businesses i would say. i think in that scenario, it's pocket to consider that. we would have to study it, but i think it's possible. we just have to predict accurately how much small business will utilize it so we don't bust our budget. >> we should open it up for public comment. >> at this time we are going to open it up for public comment. we have any members of the public that would like to comment on this matter? seeing none, thank you very much. >> well, i think perhaps maybe

what we could provide mr. yarne, the commission can provide is some direction in terms of the square footage and around the question about the amount that is allocated. i think it might be good to just have the commissioners make some directive comments for him to be able to take back and work on in regards to small business. president o'brien: i certainly put on my small business hat kind of like the idea of some kind of protection put in there for small business no matter what happens. i don't really -- five years is a long time and, you know, if all of a sudden this money is all gone and somebody trying to start a small business is going

to be faced with a substantial fee, commissioner dooley gave an estimate, one is $60,000. commissioner dooley: $66,000. president o'brien: that some going to kill anybody trying to start a small business, trying to come up with that $60,000. remember, when you're going for your small business administration loan or whatever, you're telling the bank, i'm getting absolutely out of it, at least from the business perspective, maybe indirectly from services provided on the part of the city. i just would like -- i would rather see small business always gets the roughened of the stick anyway. that's why we're here to protect them to not get subject to this some way or another at any time, whether the $40 million gets used up or not. that's certainly one thing i would like to see something put in in the sense of direction to try to make that a goal for the small business community.

commissioner dooley: i think it's completely justified. you have to look at the job creation and what it costs for job creation. i don't know if that can be quantified, but how much is another person working or an additional three jobs here, five, 10, 20. they at some point, we don't get many breaks and i think please you should work to find out how much you can reasonably expect the small business community to use and then exempt that figure off the top so it isn't in a pool that is up for grabs and a competitive way. president o'brien: michael al, precisely, i think if you could do some level of analysis on how you think that, the pool of waivers will get con suled. this might be moot. maybe you look back in history and decide, well, we have got plenty of allowance here for

the small business portion and then maybe either exempting it is easy to do because it's not a huge amount. i think for us to just blindly go into it and everything is going to be ok doesn't usually work out in san francisco. i don't know how difficult it is for you to go back and look at the data but that would be useful for us. >> thank you. >> thank you, michael. >> thank you. >> the recognition. >> yeah. chris is going to call it. >> commissioners, you are now on item number three, presentation of the small business commission certificate of honor to sergeant chuck limbert, san francisco police department as part of the san francisco small business

commission city employee recognition program. president o'brien: come on up, if i could have the police chief and the captain from mission station. i first would like to recognize san francisco police chief greg suhr and mission station captain bob moser for coming tonight. i really appreciate that. i just got a text from supervisor weiner who is also supposed to be with us this evening, but he is still in his land use committee meeting. before i read this, i was thinking about chuck and why are we doing this. a good example was a couple of weeks ago on the 10:00 news at 10:00, the lead story was pick

pockets and how bars and nightclubs are fighting back. and amber lee was in the castro and she was up in north beach and down near union square and with the bars and the nightclubs, they were posting signs have been careful. keep your cell phones in your front pocket, just warning people how to take care of yourself. as i'm watching this and as we're trying to get the story done, it's because of sergeant chuck limbert. he has come to meetings and warning people about this stuff. he is one of the few, first off, i got to thank captain suhr, police chief suhr, sorry, because you're the one who brought chuck to the mission to begin with when you were captain of mission station. it begins with the community

policing. if there is a bogus $20, $100 bill, the merchants know about it. they tell chuck. chuck let's everybody else know about it. you don't get that with a lot of police officers, so you're awesome, chuck. [applause] >> so with this certificate of honor, the small business commission of the city and county of san francisco recognizes sergeant chuck limbert of the san francisco police department on this monday, february 13, 2012, the small business commission is proud to acknowledge the contributions that sergeant chuck limbert of the san francisco police department has made to the san francisco small business community. as event coordinator admission station, sergeant limbert works closely with her chants in all of the mission, the mission, lower 24th street, castro, and

other neighborhoods served by the station. community members are united in commemorating limbert for going above the call of duty and coming in on his days off to make sure that high profile events go off without a hitch. as sergeant limbert of the captain's staff, he sets new standards on community policing by working with local merchants on issues such as checking credit card fraud, fake currencyy and other pertinent issues. the commission commends sergeant limbert for his work and thanks him for serving as an example of being a great city employee, not just for the police department, but for the entire city family as a whole. [applause] >> i want to thank the

commission for recognizing chuck. that was a great story you told saying that when chuck knows something is amiss, he lets everybody know about it. when chuck knows anything, he lets anybody know about it. so it was my pleasure to have him admission station. he is fabulous. he does the best job making everybody feel at home. i mean, we talk about stats and crime numbers and all that, people are really as safe as they feel. when you have police officers like chuck and captains like bob and commissioners like yourself, it makes it so much easier for all of us who live in san francisco to feel just as we should. thank you. [applause] >> i want to thank you all very much. i really appreciate this. i accept this on behalf of all of the police officers that do community policing. sometimes that's not recognized. we understand that small business is the backbone of san francisco and that's what we're here to support.

so going out and establishing relationships underneath the direction of the chief of police as well as captain moser here, that really instills me to go out and do what i want to do best. that is talk to people, get to know them, and help the people of san francisco. so on behalf of everyone, i appreciate this offer in extending it to me and thank you so much. [applause]

>> need to be able to tweet it. >> thank you so much. [applause]

>> commissioners, the next item, item number 4, approval of the january 9, 2012, meeting minutes, explanatory documents draft january 9, 2012 meeting minutes. >> i move to approve. >> second. >> all in favor. >> aye. >> we'll take that as yes, ok.

thank you. director which item do we want to go to next? >> move to item number six, the presentation or supervisor, would you like to do the presentation of your legislation or have the others do their presentation? >> that would be good. >> thank you, commissioners, item siic trojian of b lab on benefitprest corporations of the state of california. this item is a discussion item and will be followed by a potential action item.

>> if i can give a slide show up, that will be great. there we go. good evening, my name is eric

trojan, i am director of policy for blab. -- b-lab. our mission is to solve social and environmental problems. one of the things we do is go around and educate the public on issues. across the country, currently, seven states have enacted benefit corporation legislation. there are eight states currently moving it forward. in california, some of the business associations that were supportive of the legislation's and advocated for it, january 3 was the first effective date for a company to have the option to incorporate as a benefit corporation or any other current corporate form. the purpose of benefit corporation is to provide

protection for corporations to consider stakeholders. they have one duty, to maximize shareholder profit. the free-market approach was taken to alter that, where a company could choose to be a benefit corporation and it would voluntarily have the choice to consider other issues such as society and the environment in addition to the shareholders. this provided the company's market distinction for being amongst the traditional corporations out there and help investors by identifying these new types of corporations. they could easily identify mission-oriented companies said they could apply mission- oriented capital to those companies. previously, as they invested in to a company, they claimed to

have a particular mission. there is no recourse for the shareholder otherwise to sell his or her stock. the annual benefit report is produced not only for the shareholders, and i consider this a steak to work for doing these quantitative reports, the financial documents. a qualitative report is produced for the shareholders, as well as the public, and that is one of the unique things. again, a voluntary choice on the company's party disclosed activities to the public. the three elements of benefit corporation legislation is a purpose, accountability, and transparency. previously, the soleur