all the factors that make it more expensive to do business in san francisco. a later discussion. we are recommending that the percentage be between somewhere between 2% and 6% to be defined as the preference to be applied as the preference, regardless of whether or not you are an lbe. commissioner yee riley: the 2% or 6%? commissioner dwight: i do not think this was ever a proposal where you would get 10% plus 8%. it became an 8% vs. 12%. president o'brien: so is that a

motion? clerk: would you like me to read this the way it is written? i have provided benefit corporation discount of not less than 2%, not more than 6%, and remove the differential between the local benefit corporation to the non local benefit corporation. a certified lbe sba and the benefit corp. discounts may be combined. we would request that the controller after three years do an about tuition on those percentages. commissioner dwight: that sounds excellent. president of ryan: -- o'brien: i second. director: do you understand how the legislation was drafted with the lbe preference?

>> i think so. so let's say the benefit is 5% for a benefit corporation, then it would be 15% if you are an lbe and it benefit corporation. if you are a benefit corporation where the war and you are not an lbe, you are at 5%. president o'brien: and that does not distort things for you? you can work with that? >> maybe they should look into that. commissioner dwight: we are giving you the leeway to make it as low as 2% and as high as 6%. not to get out of control. this is -- i do not honestly think this is going to cause any company to move its headquarters to san francisco. i do think it will encourage local companies, lbe's, to adopt the b standard and to move

towards it. i think it will encourage others outside of the area that they will be acknowledged for their goodness, but it is not like providing tax credits and things like that, which have an immediate financial benefit to a company, so i regard as more ads encouraging the movement and rewarding those, not to cause any change in where people are located. i think we have established that by simplifying the proposal as stated. clerked -- clerk: and we have a second. president of brian -- o'brien: roll call. clerk: [reading roll]

commissioners, and that passes 6 to 0. commissioners, you are now on item number five, general public comment. this would allow members of the public to, and generally on matters within the commission's purview and suggest new agenda items for the commission's future consideration. >> do we have anyone here who would like to comment on some item not on the agenda this evening? seeing none, public comment is closed. >> commissioners, before we move on to item number eight, supervisor common -- carmen chu has brought something, so i would like to distribute that to you. commissioner: you did the minutes provedcl -- you did the

minutes? clerk: would you like me to read item number eight? item number 8, a discussion and possible action to make recommendations to the board of supervisors, which obligations. commissioners, inside your packets is an ada fact sheet that is provided by the sponsor. the planning department memo which was provided to you previously that summarizes the planning department's decision on their limited scope, along with a full copy of the legislation, and as the director mentioned, there is the letter from supervisor carmen chu. >> good afternoon again. i am from supervisor david chiu's office.

this is to a property owners. the supervisor has been working for years on this issue, ever since this service on the small business commission. this is in his district and throughout the whole city. we did some research through the office on small business on the number of ada lawsuits that have been happening, and since 2005, there have been about 5000 lawsuits in california, and about 300 businesses have been sued, some of them several times, and some of them have had to close their doors because of the lawsuits. instead of spending money on lawsuits, that businesses and property owners should be spending this money on improvements to make their facilities more accessible to the public. so i will briefly summarize the legislative proposal, and the first is the city would be

required to give priority to building permit applications for worked for small business tenants been brought into compliance with access laws. this is something i think the planning department has a policy to do, but this codifies for the city that practice. the second part is beginning in october of 2012, before a commercial landlord signed a lease or minus an existing lease to a small business, they would be required to bring the ground for entrances and exits into compliance with pre-existing accessibility laws. what this does, it does not require anything new of property owners. it is something they should be doing anyway, and it recognizes that they should do this before entering into a lease where they know that the small business will be open to the public, and the reason we did this is

because improvements to the threshold, to the door, they will last from business to business. the tenants change, but the doorway will not, and the property owner might have more of an ability to make these improvements than the small business. the third thing it does is commercial landlords would be required to inform tenants that they may have ada requirements and also include in any new or amended leases a provision addressing their perspective ada requirements, so it is a lot about disclosure, letting small businesses know that this is an issue, because often small businesses do not realize their potential obligations until it is too late. the fourth thing is small, self- service restaurants and retail coffee stores would be allowed

to exclude the square footage for disabled access in the allowable square footage, so it basically is not penalizing establishments for building ramps and other things to make the business more accessible. so since we introduced this legislation in i think it was september, we have continued to have conversations with many stakeholders, the mayor's office of disability. one person was here earlier, but they had to leave. they have been great. we have been working with the regina a lot, and we have also had conversations, actually last week, with commercial landlords and realtors, and so we are getting a lot of feedback, some ideas that people have for potential changes, so we are very open, and we are looking at some of those and would like to hear your feedback. thanks. clerk: commissioners?

commissioner dooley: this is great. thank you very much. i have been working on ada compliance issues since before i was on the commission. i just have some questions. is there going to be some kind of codified piece of information that will be required that the landlords give which will not necessarily be written by the landlord? >> part of the conversations we have been having in the last week with the commercial landlord community, and that the city would draft some sort of disclosure statement that would be put in the les or made very visible and translated into different languages and something that the city gets to decide what the wording is and require that that be in all. commissioner dooley: that would

mean that when someone is a prospective tenant, the landlord would not be able to say, "this is what is needed to be done to bring it up to code, but you will have to pay for it all." how does that work? >> right. i think there are often leased positions -- least -- lease provisions. we originally looked at legislation that would short of sit -- shifted back to the landlord, but we were told by our city attorney's that that was not possible because of commercial rent control issues. so that is sort of why we did the notification portion and then did the approach to require improvements to be made before signing the lease. commissionerdooley: -- commissioner dooley: let's say

there is something that is not complying, the landlord did not bring it up to date. will they be required -- well every commercial unit be required once this passes to bring it up -- technically, they are all supposed to bring it up to date, but will this make it more pressing for them, or how will that work? >> the way it is written now, when that leases renewed is when the work should be done. we are open to -- we heard feedback that may be more appropriate that as opposed to add the lease signing having the work done, having a plan for having the work done, so that is an interesting idea that has recently come up, so as not to disrupt an existing small business tenants, said it will not have to close.

commissioner: i think it is really great. clerk: commissioner o'brien? president o'brien: they do not necessarily have to do an upgrade except under the current standard of readily achievable, right? so opposed this legislation, we never situation where that category would not exist anymore. they would just be under an obligation to do it when they renew the lease? >> the exact same readily achievable and technical standards that are part of the federal ada law exists.

it is more of timing. president o'brien: to say that it has to be done right now because they are renewing the lease. so that is different. ok. ok, so be readily achievable will still apply, meaning if it was prohibitive at the time that they are renewing the lease, then that would still -- so i am trying to figure out what will the difference be then? if they still have the readily achievable problem, so what does it do? what exactly what the legislation do then? >> they would then have done what they needed to do. they could sign the lease. there is no agency keeping track of who did what. president o'brien: bear with me

for a moment. let's say that i cannot do this in a readily achievable way, say i am with a foundation, and it is what it is, and i get a lawsuit. after the legislation passes but says, ok, i am now renewing the lease, and i still do not do it for readily achievable means, has anything been achieved? director: may i answer that? based on what we have seen, inspectors have found a readily achievable solution for most entrances and exits with the small businesses, so i think they're readily achievable or the technically feasible, it is there is subbasement, but it could be, depending on what is

readily achievable for the property owner, if you have the three steps, which means if you are going to level and out, it is going to require a serious amount of work in terms of also buttressing the whole foundation and structure of the property, and mixed use above, so some of the readily achievable solutions are a doorbell with a sign that says "please ring for service," and oftentimes, there may be a portable ramp that is involved. a simple scenario, that would be under this legislation the landlord's responsibility to make sure that it is readily achievable based upon what the property owner is able to do is done and in place for the

business. president o'brien: ok, to try to make sure i understand what i am hearing, this is to say, look, we see situations out there through the access inspectors where it is readily achievable, but they are just not doing it, so the intent is where it is readily achievable to say they have got to do it with this legislation. what i'd be right in saying that? >> -- what i'd be right in saying that? >> the concept of what is readily achievable is that you are finding a solution for disability access that is readily achievable, and readily achievable could be that you make the entryway to new building code standards. that could be readily achievable, or it could be that it is the buzzer at the entrance way that says "please ring for

service," or if it is a food establishment, they will bring more food to you outside then. by access specialists, with expertise, there is pretty much always a readily achievable solution. so it is just saying that the property owner is required to do what ever is readily achievable, no less than readily achievable, based upon what they are able to afford to do it. president o'brien: but that is not what the legislation is doing. it is affecting timing. it is changing it on a timely basis, so you may not have done something before that was readily achievable, and now we

are going to make sure of that you are doing whatever is considered to abate readily achievable when you renew your lease. he may have decided it is not readily achievable before, but now he is going to be charged with being forced to do what is concerned -- considered readily achievable. i just wanted to make sure i understand the impact of it, because i would say there are a lot of businesses that would be concerned about that, and i have worked on both sides, by the way. i have worked where they actually put a bill in and did other things, to make its statewide, some stuff that they could do, but i have also seen situations we're is just not possible, and the timing is not going to make the difference. i have a concern about that part of it at least. but that was one of the four dimensions, right?

so i would just say i have a concern about that one. clerk: commissioner clyde? commissioner clyde: the way i understand it, upon renewing the lease, they have to bring it up to code as much as possible, as readily achievable, or notify the commercial tenant coming in of their potential liabilities under the ada. >> i would correct that in that they have to do both. commissioner clyde: they have to do both? if they are renewing the lease, and month-to-month leases are common, so as long as the tenant does not change, it does not, but as soon as the tenant changes, then they have to bring it up to as high a compliance

standard as possible. >> the way the legislation is now. they would have to adjust the entrance. we did not even bring a bathrooms and things. one of the things that we can hearing from small businesses was that these kind of drive by lawsuits often got triggered by noticing the entrance. that is the reason. commissioner clyde: a kick, but going back to commissioner o'brien"s -- ok, going back to commissioner o'brien's, statement, they have obligations. >> exactly. if they are not doing improvements to trigger a dbi inspection, and they think they are in the clear. commissioner clyde: a kick, i

would just weigh in and say that as a commercial landlord, this is reasonable. this is part of doing business. our laws have changed. we are required to do this. there are tax credits and programs to help find these improvements. unlike that there is an expedited permit process around this. i think that is really important. again, it is triggered by a change in tenants, so the landlord has the opportunity to plan for it. and it is also in the landlord's benefit because they are being sued as well as the tenants. landlords are subject to these. reading carmen chu's letter, i am concerned that this is targeting small businesses. obviously larger businesses have more resources, probably legal

departments that are going to protect them from, you know, potential lawsuits, but, again, as written, they are currently excluded. that might be an amendment that you could consider. you know, leases are private, so the arrangement between a landlord and a tenant, a tenant improvements are generally part of leases, particularly long- term leases. i do not see any thing with the disclosure. making sure it is in all. making sure this ada requirement really should be in every lease. i do not understand why it is not, so i would say that i support this, and i am really glad that the commission has identified the square footage issue. identifying ada improvements and

wanting to exempt them. clerk: director? director: i think i ended up making my comments. clerk: commissioner riley? commissioner yee riley: there are times when you on a building, and they rented out to a commercial business. the timing is an issue. anytime you renew a lease, you have to make all of the necessary corrections so the billing will be in compliance, so what if the landlord does not have the money to make all of the necessary work to bring the building up to compliance? how does this law compared to the federal law? >> this refers to what the

federal law is, so it does not add. those buildings should be complied if they are renting to a small business that is open to the public. director: under the federal law, the property owner has an ongoing obligation to make sure that their property is ada accessible, so, again, just like the small business, the landlord has the choice of doing something or not doing something and still being subject to a lawsuit, and what we have seen in the lawsuits, that the property owners are also being sued, and having to do the same sort of payment outlays to the plaintiff and the lawyer, but because of how the lease is designed, then the physical structure, during the fiscal

so again, under consultation and calls that we have received in our office that we have talked to many small property owners that said how come -- no, it was how come you didn't inform me of my obligation? again, looking to the city government and the local government of like informing them of what their obligation is. so i think again kind of going back to the concept of what is readily achievable, i think ultimately there is an ongoing obligation. so the longer you have your property that you don't do something can also incur your potential liggins outlay -- litigation outlay. looking at what men of the inspectors are recommending is not extraordinarily expensive. >> i was told that the federal government, if the landlord

cannot afford to make the correction right away, they have up to five years to do the work. is that true? >> that is not what i have heard. i mean that could be -- we r.f.p. to take a -- we will have to take a look at that. understand that in many of these lawsuits, the suits are being done in federal court, they are still applying state law applying playoff damages. >> i read supervisor charamen chu's letter, and she raised some legitimate concerns. if the property owner decided to pass the cost on to a tenant, that would be a lot of money for a small business to

come up with. >> what would happen if they renew the lease? they are going to have to do the work, and the work is going to seriously disrupt not just the tenant in that space, but disrupt all the tenants inside the building? are they just going to have to figure out a way to get this done? >> that would be one answer to it, yes, because that is what the law would say. the other is the concept of at the lease renewal or the new lease signing, having a plan in place for doing the work on the entrance. that sort of came up in the last few days, and that is something we are looking at, that maybe the plan in place could address the needs of the small business. but i don't know. if the work has to be done, it has to be done. >> you see, i could support

where it is today. when you exceed a certain threshold, you have to do handicap work. it is like 20% or 30% of the value of the work that you are doing has to be exclusively budgeted for handicapped issues , and they can be reasonable. i have a guy who has an elevator. nobody is going to ask him to replace that elevator unless they are going to do a whole new construction. a guy sitting there, he is doing business, and he is hanging in there. he is a small business guy even if he is a landlord owner. in a lot of cases he could be a small business. it could be a mixed use building. they live upstairs, a space down stairs