we're taking full advantage of the fact that they exist and yet we're sort of turning a blind aye to the fact that they shouldn't exist under regulations, so in some way, we almost feel -- i feel sort of honor bound to ratify their existence rather than make them kind of operate under the constant threat of being kicked out. >> right, the thing is i don't want to -- when a lot of people go shopping, you know right now, i'm glad target is coming to the city because i have so many people that leave the city to go shopping at these places outside of san francisco. that's tax money leaving the city. >> absolutely. >> and that's one thing, small business and the big formula retails need to work, in my opinion, hand in hand because a lot of these formula retail places bring in the jobs like allen just managed about the ripple effect in that area. i do know there are smaller

businesses, especially along 9th street that do benefit from people going into that center. >> the mean the reality is in this place, the likely outcomes are that -- and the only real consolidation is here trader joe's and peer one are next to each other. if trader joe's said i want to take over peer one imports space and make it a 21,000 square foot space, would that even -- would that violate the rules currently? what is it? 75. >> it potentially could since -- oh, i'm sorry. am i still permitted? >> when you're engaged by somebody, you are. >> i'm sorry. it would potentially traininger the conditionle use permit simply because as existing, even if we were to say this is a lawfully nonconforming use, the combination of the two

sites would trigger a conditional use permit requirement. but certainly we can address both an overall size limitation of 75,000 square feet plus a combination of more than 10,000 square feet to address the roll-up or 5,000 square feet since we're all picking on chase bank tonight. >> we're not picking on chase bank. >> i'm just kidding, kidding. commissioner dooley: can i just ask, everything in there right now is nonconforming, i assume. >> correct. commissioner dooley: so from my understanding then are those businesses currently under threat to be removed? my impression from nonconforming in my area is that it's allowed until a new person comes in and then they have to apply for a c.u. because it's not a conforming space.

>> commissioner dooley, i think it's fair to say that it's unclear whether the existing use is permitted. especially the eastern districts and the combination of the formula retail ordinance, it's unclear whether that center can continue to exist and that was the purpose for the special use district legislation was just to ratify what exists there and to allow tenants to move in and out without an increase in the square footage. commissioner dooley: thanks. president adams: any other commissioner comments? >> steve, would that address your issue? as long as people can move -- i think by -- i mean to your point, by ratifying this use scenario that happened, however it happened, then you would provide for the free, the ability for someone to move out and someone else to move in without a bunch of undue

permitting and what not or maybe even being blocked out somehow. it seems like it would make it more expedient for the case that you have indicated, if someone is out, we don't want it vacant. if it gets tied up in unintentionally ill legality, that would prolong the process. >> correct, that's exactly what i was thinking. >> yeah, i kind of agree with that line of thinking as well. ok. president adams: any other comments? do we have a motion? >> i would move that we approve the modification -- the legislation so that this center can operate legally as it's presently laid out with the modification to prevent a roll-up of space as we have described earlier and i don't know how that would be drawn out particularly in the legislation, but if we can see

that happen, then i would move that we approve this legislation. president adams: director dick-endrizzi? >> so i just want to be clear because mr. lowe had said it's not currently in the current form of legislation, but willing to amend to make sure that any use size over 75,000 square foot would then trigger an additional use so to support that proposed amendment, if that is something in addition to the roll-up of what you just said. >> why don't i restate my motion. i move that we approve this legislation with the provision that there is a maximum size of 75,000 square feet and a cause to prevent the roll yupt of existing spaces into larger spaces. >> i second it. president adams: roll call. commissioner dooley: may i ask for one clarification. are you saying prevent the roll-up or it would trigger it? >> that's a good question out

of my general knowledge base here. >> i think trigger. >> you want to trigger a review. for example, i can imagine some cases where we wouldn't want 258 square feet to sit idle because no one wanted 258 square feet. if peer one said, well, i'll take that, maybe that's ok under a conditional use. so why don't i restate my proposal. >> vice president o'brien: you're doing a great job. >> third time is a charm. >> the rookie, commissioner dwight. do you want to restate it commissioner dwight: i will move that we approve this legislation with the 75,000 square foot cap and the provision that any situation that would cause the consolidation of any of these existing spaces would require conditional use.

vice president o'brien: second. >> and just to confirm, nothing permitted over 75,000 square foot, but then consolidation of spaces under that threshold would be conditional use, correct? i have that seconded -- commissioner dooley: may i ask for a clarification, just to be clear, because we had -- there was some discussion going on with the 75-foot threshold, anything over that would be conditional use. so i just -- but that's now how the motion is stated. so is that the intent of your motion? >> bigger than 75 but only under a c.u. i thought you did. commissioner dwight: actually i didn't state it that way. all of you in the world watching this, if anyone is out there watching this. >> they're watching. commissioner dwight: the fourth attempt by the rookie. so back to discussion briefly.

so for you experts here, so basically what we need to do is approve this legislation and just make any changes to the site subject to conditional use. >> current stores, like nordstrom rack, someone moves out of nordstrom rack or someone moves out of bed bath and beyond, they can go right into those spaces, as long as they're not expanding the current footprint is how i -- >> again, is it ok if i can try to explain again. >> i have a question for you, too. >> if it exceeds 75,000 square feet that, would trigger a conditional use permit. >> correct. >> if there was a combination of where a tenant would go beyond, say, 10,000 square feet , that would also trigger a conditional use permit or -- >> i guess the question i have is, would it address your purposes if the legislation allowed the site to exist as it is legally, so ratified that it

is -- made it illegal -- a legal is setup presently and said that any change to that setup, meaning any consolidation or any expansion or contraction of space for that matter would require a conditional use. so any change to the status quo would require a conditional use. >> i was only trying to address some kind of materiality, like if wells fargo a.t.m. which is 75 square feet should vacate and be taken by urban tacoria, we don't want to force that tenant into a c.u. process. i'm trying to address some materiality to the anti-roll-up process. >> i'm not a real estate expert. does anyone -- >> from listening to the discussions, perhaps propose the approval of the legislation with the recommended amendments

that a conditional use is triggered when a size over 7,500 square feet or a roll-up of x amount, which is kind of what i was hearing from the conversation. >> 75,000 -- >> 75,000, squse me, square feet. >> what that would allow is for the -- 75,000 is bigger than the largest space there and is actually bigger than all of the other spaces combined. so that is not going to happen unless someone comes over and takes over the entire thing and makes it a macy's. >> wal-mart. >>ney man -- neiman marcus. >> we're getting into the realm of things that won't happen. the intent is to ratify it as it exists today and to try to sidestep any potential unintended consequences of approving it as it is today and

then not anticipating that something else might happen in the center. >> again -- >> please -- >> let me try to take a stab at it. let's say it's any use that exceeds 75,000 square feet by a single tenant would trigger a c.u., a conditional use permit and any combination of other existing space of more than 2,000 square feet, that's to address it if publico urban tacoria was to take over the space, not over 2,000 square feet, but a combination of other feet of over 2,000 square feet would trigger a conditional use permit. >> which spaces are contiguous here. if publico is across the way, then from pete's coffee, they could never consolidate whether it's right next to peer one,

they could. >> true. >> i don't have a -- >> do the math here as to what is next to each other, but i understand what you're trying to get at. it's probably it's either a 5,000 square foot limit or a 15,000 square foot limit. if you said trader joe's. >> i think did he say between trader joe's and pier one? >> i think so. >> those are the kinds of -- put a circle around pete's coffee. >> just not being intimate with the space, i don't want to propose something that was later ludicrous because i didn't understand the layout of the place. but what i do want to get at is i do believe we should approve

the legal use of the space as it is today. >> absolutely. >> even if we did something ludicrous, all we have done, the ludicrous part is they're subject to a c.u. haven't dispelled them to be able to do it. so i don't think it would be too much to be concerned about. >> plus we're just making a recommendation. a change in the legislation if someonives that -- identifies at it. >> can a take a fifth crack at it, round five? >> commissioner, so i can't move. >> how should i position it at this point? >> i think you got it. >> i think you got it. >> approving as is with no expansion greater 75 or consolidation greater than

2,000, both of which would require conditional use. >> you got it. did you get that, chris? >> yes. >> did you get that about four times ago. i'm anticipating i would get it. >> i had some extra space on the page fortunately. >> you are using pencil, right? >> that's for next time. >> ok. >> that's my motion and i'm sticking to it. >> a motion by commissioner dwight, i believe it's been awhile, but i think that was seconded by communicationer o'brien. roll call. commissioner adams. >> yes. >> commissioner dooley. commissioner dooley: no. >> commissioner dwight. >> yeah. >> commissioner o'brien. >> yes. >> commissioner ortiz-cartagena. >> yes. >> commissioner white. >> yes. >> commissioneree riley. >> yes. >> commissioners, is passes 6-1. president adams: thank you commissioners. president adams: thank you allen. >> thanks for persevering.

next item, mr. president. president adams: yes. >> commissioners, item 6, presentation on the central market economic strategy report by jordan klein, office of economic and workforce development and we'll have a powerpoint in just a moment. >> so commissioners, our new commissioners, while jordan is setting up, periodically we have our staff from departments come and report to the commission on projects that are underway with the city that affects small business so that you can be updated and kept apprised of the work that they're doing and be able to ask any questions about what's happening so that you're well informed.

>> well, while this is leading, i say good evening, commissioners, thanks for the opportunity to speak. maybe you have heard about central market in the news recently, so to director dick-endrizzi's point, i'm here to kind of fill you in on the work that we're doing in central market. >> jordan, would you prefer the other mic? >> yeah. let's do that. ok, here we go. rear ready. so you should have the central market economic strategy in front of you. i'm going to try to keep this to just 10 minutes or less and my presentation roughly follows the document in front of you. i will start way little bit of background information and discuss the methodology behind the creation of this document.

i'm going to share a selection of the research and findings and then review briefly, briefly review the action plan for central market and then talk a bit about implementation and evaluation and take your questions. so in january, 2010, then meyer newsom directed our office, the office of economic and workforce development to redouble our efforts to revitalize the central market district which has for decades suffered from blight and disinvestment. and so -- and we launched what we call the central market partnership and we call it a partnership in acknowledgement of the fact that no one agency nor even the city by itself could effect change in central market. it's going to require a real general partnership of the city including all of the various city agencies, the private sector, nonprofit organizations and individuals, individual

residents and merchants. and so after doing the work for about a year, there was so much happening we came to realize, so many people and organizations working to revitalize the district and what we lacked was a unifying framework for this work. as a result, there was some duplication of evidence and missed opportunities to leverage all of the difficult investments that people were making in the neighborhood. so we set out to create the economic strategy and so there was a 10-month community planning process that went into the creation of this document. the goal was to create a framework for community and economic development activities that really -- that enabled community members to prioritize the strategies and objectives that are most important to them and most effective to achieve change in the neighborhood. the process which i'm about to go over including research, case stutsdz, et cetera, and it was really a broad partnership of folks that made it happen. when i say central market, have i this map up on the screen.

black outlined area is what we call the strategy focused area. that's the area where our interventions are really focused on creating change. the purple area is the business study area, so we stretch that down to the mission street corridor because we wanted to look at the businesses on that street as well. and it's kind of hard to make out on that screen, but there is a green area that includes more of the northwest soma and the tenderloin districts because that's an acknowledgement of the fact that we recognize that the health and economic success of central market is closely related to that of the adjacent neighborhoods and vice versa. and so some of the -- a few of the strategies in the action plan relate to those neighborhoods as well and the demographic research and other research that we conducted reflects that larger study area. and i should just point out when we say central market, we're talking about market street between 5th and 11th roughly. there was a diverse group of

partners that went into creating this. u.c. berkeley research institution, community-based organizations, a planning consulting firm. i should also mention there was a steering committee of city staff and community residents, community organizations that on a regular basis reviewed our work and provided feedback to both the process and the content. so the methodology, we did quite a bit of research. we reviewed every report on central market and the surrounding neighborhoods that we could find from the last decade at least plus we reviewed demographic data, economic data, social service data. i have a great wealth of research, if anyone is interested in learning about central market and the tenderloin, i can give you just about anything you can ask for. we also do quite a bit of community engagement over the course of 10 months included actually -- i'm sorry, that number is wrong. at least seven community meetings at this point.

there were -- there was a resident survey, a merchant survey and an intercept survey. there were focus groups with artists, with nonprofit organizations, with her chants and other affinity groups that we interviewed neighborhood stakeholders and the action plan which we'll review in the end went through three rounds of public iteration. so as a result of that research and that community engagement, that document in front of you is pretty rich with findings about the neighborhood in these categories, but rather than go through my 40 slides of findings, i think i chose five or six that i thought you would find most relevant. demographics, the central market and adjacent area has a high concentration of single-room occupancy hotels and there are fewer family households and there are more single households, 61% of the

population is male, so it's skewed male. also, it's skewed very heavily towards very low income households. nearly a third of the households earn less than $15,000 a year. that's over triple the rate of citywide and also fewer residents in the area are part of the labor force. we conducted a merchant survey as a mentioned. the merchants were very concerned about vacancies. they were more concerned about vacancies than they were about the adult entertainment uses. they felt like, well, adult entertainment, yeah, it's seedy and it's bad, but at least it's not vacant. the vacancies are really what attract crime and negative behavior. so that was a top concern. 19-20 felt that arts expansion which the city has been working on a lot of artists have been moving to the neighborhood, they felt like arts expansion would be helpful for their business because it would attract for people and more

foot traffic. when we asked them about their desired improvements, a lot of merchants brought up homelessness. i should say every survey we conducted, homelessness was cited as a central problem. we believe actually that there is a little asterisk there. we believe when people say homelessness, they were actually using homelessness as a proxy for street activity in the central market district. if you walk around central market, there are a lot of people on the street at all times of day and evening, a lot of whom are engaged in negative behavior, aggressive pan handling, public intoxication, public urination and defecation. a lot of people attribute those activities and people to homelessness, but, in fact, we know that a lot of those people are housed in hotels in the neighborhood and even out -- people live outside of the neighborhood and travel to central market. and so an asterisk, again, people complain about homelessness, we think that is

not always what they mean. also merchants expressed a real desire to address vacancies and crime and some of the our structural issues in the neighborhood. there are a number of pipeline development projects that are really going to transform central market over the next few years. you may have seen the cranes at 10th and market, the crescent height development is bringing 750 new housing units and i think about 50,000 square feet of retail to that corner. the company is currently engaged in a huge retrofit of the s.f. mart building on market street between 9th and 10th where twitter will be moving in this summer and actually another lease was just signed by 1 kings road i think they're called, a large online retailer. on that map, which is also in the document, there is a number of projects in the works that are going to add thousands of new housing units and bring

hundreds of thousands of new square feet of new retail commercial space to the neighborhood. and while some of these projects are in limbo right now like city place, we do think that ultimately this is going to have a huge impact on the neighborhood. that's great news because it's going to bring much needed foot traffic to the neighborhood. that said, the picture is pretty bleak right now. the vacancy rates on central market are the highest in the city by a significant margin. now, these numbers are at this point nearly a years old and the market, the real estate market in central market has been doing a lot better. we have had a lot of small victories, new businesses, new small businesses signing leases on market street, larger employers signing leases for office space so we think these numbers are lower now and we're actually in the process of updating these figures. but still, there is a lot of work to be done. there is a lot of good news, a lot of work needs to be done

still. many of the buildings on market street are not leaseable right now. they're old historic resources, beautiful buildings and many of them need -- require significant seismic upgrades, electric upgrades, plumbing, and begin the low leasing rates in central market compared to the adjacent neighborhoods, in many cases, it's just a math problem and the property owners are not even able to get a bank loan to finance those upgrades because the projected returns on the rents are not high enough. that is why intervention is required in order to address the rampant vacancies and blight in the neighborhood. there are plenty of arts and cultural assets not neighborhood including, i don't know if you heard the news, but a.c.t. just purchased this theater across u.n. plaza. it's another asset coming to the neighborhood. artists are constantly coming

to the neighborhood, they are reaching out to our office looking for space. this is a fascinating slide to me. this is the m.t.a., transportation by mode down market street. those two red circles are pedestrian figures. you see between 4th and 5th street, there are 6,000 pedestrians an hour during the peak hour period. between 6th and 7th, it's less than 1/4 of that volume. you can see, the pedestrian traffic just falls off a cliff there. people just aren't walking past 5th street. so that represents a problem, a challenge, but also a great opportunity. there is really a great opportunity to attract more people and lengthen that corridor at powell. lengthen it from powell down to civic center and really kind of expand the vie britain lebron si of our thoroughfare there. this is one of the reasons people aren't walking past 5th street. you can see the concentration of crime in the study area.

this is central market compared to union square area so you can see how much denser crime there is. so there is a ton more data if you're interested. i'm moving ahead to the action plan. before i get to the plan itself, i want to mention some guiding principals behind this revitalization work. the mayor really, really emphasizes these points. a lot of people fear displacement in central market, but what is happening in central market is not about displacement at all. it's about creating a functional low-income community that creates more economic opportunities for everyone. it creates more jobs for everyone and that allows existing residents, existing merchants, existing communities to stay where they are if they want to. and we really want the city to focus on interventions that wouldn't happen without public intervention. if there are things that the private sector has taken care of, then we're not going to go there. we're going to worry about what would happen without our work.

so the action plan at the back of this document, this is a sample page. there is a five-page action plan there, there are six objectives, under each objective, there are a number of specific strategies and action items. there is a second column that designates the city agency or nonprofit or private sector partner that is primarily responsible for these action items. so this is a framework for action and it's also an accountability tool. it really helps us stay on track of who is doing what. the six objectives, number one, stabilize the existing community. that is about serving the people that live there now, making sure there is a robust and effective workforce development system, retain existing affordable housing, et cetera. secondly, enhance and activate the public realm. that's about, for example, making sure that cleaning and graffiti removal programs are expanded on central market and also public spaces like u.n. plaza are activated with positive uses. that's the best way top