sites for selectively looking at uses is one thing. but to wholesale basically describe a large area which spans different planning areas, that is not the way i would suggest that we do this. as to mr. vettle's comment, i would be prepared to look at that as a site specific issue, although i am not prepared to do site specific rezoning. however, to and how current rules apply to the site, including previous entitlements becomes a separate project on its own. so i ask that if indeed we are considering for the central corridor, land use planning which includes hotels, i would be interested to hear that and

the context of that study [speaker not understood] unfolding. i do not believe that any step ahead of time are appropriate. and in the whole story of how it evolves with the site specific considerations, i would be interested in that. ~ steps unfolding what concerns me is hotels which exceed 78 feet other than a site which is controlled for height and bulk as the case mr. vettle is describing, large sites will go for very large hotels. those are all of the formula hotels which occupy sites which are really the ones we are looking for with a much higher degree of importance, particularly the housing sites. and i do not want to see then those sites start to compete with each other for higher and better use because we know tourist hotels most likely generate higher residual values than affordable housing will.

i'm just hanging that out to you more as a question than a definite answer, but there will be conflict when it comes to adding this in as broad stroke as what is in front of us today requires. so, i suggest that we ask for a more robust discussion, probably within the context of what's ahead of us here in terms of central corridor. and then give mr. vettle and staff to come up with a story of its own regarding the site across the ballpark. >> commissioner antonini. >> well, this is only an initiation, but i did have a question for staff before i began my comments. muo allows housing or does not? >> it does allow housing, okay. that's what i thought it was ~ because we've got a whole alphabet soup of different areas and sometimes it gets a little confusing to remember them all. well, first of all, the simplest part of the entire

discussion today -- and it's specific to the property on king street -- something that was passed before the zoning changed. you know, i think there should be consideration of grandfathering that in, even though oftentimes we have to conform to the law today. even so, i think that this is a special situation and it comes after the law was changed. so, whatever we may do on the entire area, i think we certainly -- that's an extremely good site in my opinion for a hotel because there isn't anything around there and it's very close to the ballpark and a lot of the activity that's going on. soon to perhaps be an arena not far from there. so, that's a separate issue. and as far as the initiation, i certainly am in favor of initiating it so we can have a robust discussion and find out whether or not this should be more site specific or whether it should be the entire muo area.

there is a hotel room shortage in san francisco. i think the latest figure showed 83 to 85% occupancy. and after the moscone expansion hopefully goes through and with the addition of an arena, i would hope in the future we're going to have even more demand for hotels. and one of the reasons we lose big conventions in san francisco is our center is too small to accommodate them, but also we have -- when we have the larger conventions, all of our hotels are filled and we don't have enough hotel space. so, i think that -- but i think this is a good subject to be talking about. you know, also the other part of my feelings are that our hotels are fairly restricted to two or three areas of the city now and wouldn't hurt to have

hotels in other parts of the city. whether they should be the entire muo can be debated, but i think parts of it probably do have to be opened up for larger hotels. so, i would favor initiating this so we can have a robust discussion over the whole issue. >> commissioner sugaya. >> yes. to staff, why was this initiated in the first place? is it a response to mr. vettle's predicament or is it something that is -- >> the answer is yes, and partially yes and partially because we literally could not find any rationale in the entire eastern neighborhoods process of why the 75-room hotel limit was placed there. if i might, just to remind, this is not about raising height limits or far limits. it's only the room count.

height limits stay the same. far limits stay the same. the bulk requirements stay the same. this is simply -- this is simply a change to the room count. >> okay, thank you. if it's in response to a specific property, i don't think this is the proper response. and i think that the eastern neighborhoods went through an entire process for many years and, you know, if there was a rationale against it, somebody should have thought of it back then. i'm also not in favor of it because of the implication that it might be in place when the central corridor comes through. and i think that any muo changes in that area should stand on their own. so, i'm going to make a motion not to initiate the amendment. >> second. >> commissioner wu. >> so, i was also going to ask about whether this distinction on hotels shows up anywhere else in the code. if you could describe.

>> yeah, ann marie rodgers, planning department staff. this restriction shows up at least in the sso district. and in talking with the planning department staff, the way that the muo district was created was copying and pasting the existing sso district and then working from there. and in talking with them, there was no specific consideration given to that particular requirement, especially in relation to this parcel which as mr. vettle said and is in the staff report that's before you, this parcel previously had no strict prohibition on the room count. in this case, if there were any hotels that went forward with 76 rooms or more, it would still come before the commission for conditional use hearing. >> okay. so, i think my comments are that if this does go forward, it's important to have a description of the muo. i know that not every zone has

the goal set to it. but what is the purpose of the muo? does changing this meet the purpose or not meet the purpose? if it's specifically about this hotel project, maybe there is a different solution that can be crafted and it's difficult. i don't think the submission is supportive of de facto spot zoning. is there something mr. vettle talked about that can be a smaller more specific area to address the hotel issue? >> commissioner antonini. yeah, thank you. it was brought up by staff and i think it's a good point. i'm not sure where the 75-room number came from. it seems somewhat arbitrary. mr. jim meeko, do you have an answer to my question? ~ about why it was 75 rooms? hotel use was not permitted in the sso until supervisor daly introduced a text

amendment to allow it also for one project. but in order that that not drastically affect the whole sso, this 75-limit was put in place. and we also carried that through into wmuo after a great deal of discussion. >> okay. so, it had its origin even before the muo designation? right, but it was in terms of the secondary office intentions of sso, which as ms. rodgers said, were carried over lock stock and barrel into the muo. it did not exist until supervisor daly introduced it. >> okay, thank you. now i know the history, but i still don't know, maybe it was felt that 75 was a number that, well, it's small enough that it would fit into the fabric of the area. however, it doesn't speak to height, doesn't speak to bulk. it's just a number of rooms if

you had -- you could have, you know, a larger number of smaller rooms and a smaller number of larger rooms. it could be a lot of different forms. it might encourage something we don't want. so, i don't know about that. then we still have the conditional use process which i think is a strong argument that anything that would be approved, any hotel would have to be found to be necessary or desirable. and, so, each one would be considered. it's not like -- all you're saying is we're going to open the door in a large area of the city to allow us to pick and choose whether or not any hotels would be appropriate. and i think that makes a lot of sense because this is an area and is going into change, and we're not quite sure what we're going to end up with. i think it makes a lot of sense to leave us with that option. however, i wouldn't be opposed to staff looking at whether it

should be a portion of the area and not the entire area, or certainly if it is the entire area, we just need a little more rationale why this particular area would be the area targeted for possible hotel -- larger hotels. i think the 75 is -- may not necessarily be the right number anyway. so, i'm against the motion. >> commissioner hillis. >> i would agree. i'm against the motion. i'm happy to -- i don't know where i would land necessarily on a 75 or above room hotel in this district, but i'm open to looking at it. it seems arbitrary that we put this 75 kind of room cap. there could be other places it could work, you know. i think it's a good time to look at this, this project obviously has come [speaker not understood]. we could adopt something limited to this project. there could be other areas in the muo that are appropriate. so, i don't think there's much harm in moving this out and having that debate and

discussion with the public on where it's appropriate. so, i would agree. i'd move this, although i think [speaker not understood]. >> commissioner moore. >> i think it would be very wise, not for this discussion, but for upcoming discussions to really talk about the trends in hotel development, and [speaker not understood] smaller rooms, tourists all across the world have basically turned their back on large hotels, but there is a real strong trend towards smaller boutique type hotels. that doesn't necessarily mean all upper end boutique, but there is a range of boutique size and happen to harbor in the 75-room quantity, and that is kind of for me an issue which i think staff should clearly look into in order to make the discussion which becomes an ingredient in the planning of the central corridor.

[speaker not understood] smaller indeed are much more germain to fit with other more neighborhood scale oriented [speaker not understood]. i think that would be very worthwhile doing. in addition to that, i think it would be very wise next time or perhaps even now to give a map to the commissioners that they know where the sites which would be affected by the zoning, that we all can be well prepared for, continue the discussion as we move forward. there is nobody who sits here who says no for the sake of saying no. but i think land use decisions are far reaching and consequential and it is for that reason that i think we need to consider that this might come a little bit too quickly and not as well prepared as it needs to. >> let me follow-up on that. i'm not going to vote before the motion as currently proposed and support the initiation. but i agree with you that it requires an in-depth study, but not just for the -- from the --

of the hotel industry, but of the city, city-wide. and what things are happening in san francisco, whether it's arts, music, sports, driving more hotel stays. we talked about growth in 30 years and anticipated 30% growth. from that will be tourism. ~ and visitors. so, i'm supportive of more hotels whether they're big, small or medium size. and i put out a word of caution if we don't make that inviting, welcoming, we will lose that to south san francisco and port areas or outer lying areas when we have conventions city-wide and sf impacts people don't mind will take a bus into san francisco and stay in other cities. those are some large tax revenue dollars, hotel tax that goes to the general fund, goes to arts. and, so, i think it's important to support hotels in san francisco. commissioner sugaya. >> note that the denver nuggets stayed at the four seasons and not in oakland. so, i don't think we're in

trouble yet. in any case -- >> [speaker not understood] have large beds. [laughter] >> [speaker not understood] san francisco child abuse luncheon. anyway, the number, any number is arbitrary. we could have endless debates whether it should be 75 or 50 or 350. i mean, there is somewhat of an arbitrary number on what we define as formula retail. i mean, who came up with 10 or 11 or what it is? why isn't it 20 or 5? there's no rationale behind that number that i can figure out. it is always a surprise to me to say, hey, how come, you know, the san francisco soup company, i guess, might be an example. they've grown to more than 11 now or 10. so, all of a sudden they're formula retail and, you know, we go, oh, well, now you have to come in for a cu. so, the numbers game means nothing to me.

75 is fine. it came up long time ago through some kind of other rationale that had to do with size and restrictions, and the ability of, you know, the areas that muo as it was transformed from the older zoning would be able to maintain some amount of character. as far as the argument that is still going to be cu, i keep coming back to the same argument i've always made in that the commission never denies a conditional use permit hardly ever. so, it is no real control over these kinds of uses. and every time you throw a cu in there, it's going to get approved 99% of the time. so, i don't see the cu process as being one that controls the kinds of uses that people think it's going to. as far as mr. vettle's project, i'm quite happy if there could be a solution worked out on that specific site. maybe it has to encompass the

block. the block seems to be something that being close to the ballpark, being close to a potential arena. and given the already developed nature of that block, that might be something to consider. and i'd be willing to do that. but i'm not willing to consider at this time a blanket initiation for this type of zoning change. >> commissioner antonini. >> i'm not sure what the exact numbers are on the number of cus we have and how many are approved or aren't. there are some that aren't. and also they're often appealed to the board of supervisors even if they're passed by us and then they're overruled by vote of the supervisors. or they're appealed under c-e-q-a and they fall apart. so, a lot of cus that we have passed over my tenure have ended up never being built for a variety of reasons. so, there are already checks and balances in the process, the cu process. it's sort of ironic that the

fairmont renovation project, which has not gone forward and it was also -- many of the arguments were made that they had to sort of make it more of a boutique hotel, make it the old hotel, make it smaller -- i wouldn't call it boutique, but certainly smaller with the elimination of the tower. and there were a lot of reasons, but it was pointed out that most of the convention traffic was moving to the newer hotels down around the convention center. so, it speaks to the need for future hotels in that vicinity, especially the larger hotels which will have these larger conventions where conventioners probably want to be within walking distance of the convention center. and president fong makes a good point about the competition because we already have a number of conventions and various things that are held at airport locations. so, people or even business meetings where they fly in, they never have to leave the airport and fly back out again.

and we'd rather, you know, encourage them to have the activities within the city, although i believe we still -- this is always a discussion we have about whether the airport is part of the city and county of san francisco or not, but we might -- we might get some of the revenue there, but that's a discussion for another day. >> commissioner wu. >> so, i think what was put in front of us today was not necessarily to talk broadly about hotels. i would be interested in that discussion where hotels are appropriate for the city, is there a need for more. i think hotels provide some of the working class jobs in the city. but i think what was put in front of us, as i understand, was sort of a solution to the 144 king problem. so, i'm going to support the motion because i think there is a different solution to the 144 king issue and happy to have a different conversation about hotels at any other time. >> commissioner sugaya. sorry, were you finished? okay. >> there is a motion and a

second to not initiate the proposal. commissioner antonini? >> no. >> commissioner hillis. >> no. >> commissioner moore? >> aye. >> commissioner sugaya? >> aye. >> commissioner wu? >> aye. >> commissioner fong? >> no. >> that motion fails 3 to 3 with commissioners antonini, hillis and fong voting against. >> commissioner antonini. >> i want to clarify with staff one more time. would seem to me that although there was the instance that was bort up by mr. vettle about the property on king street, which is perhaps -- began the discussion, isn't it true that, you know, this is much broader and this motion has to do with the very large area. [speaker not understood]. it seems to me this is just allowing us to open the dialogue about the possibility of allowing a larger room count. >> that is correct.

our understanding is that -- and the process of copying and pasting the sfo tables into the newly created muo zoning district ~ sso there was not specific consideration given to the -- the hard limit on hotel rooms of 75. therefore, there doesn't seem to be a land use rationale to keep that hard limit at 75. there does, however, exist -- strongly induced rationale to closer review each proposal through the conditional use authorization process. >> that seems consistent with which mr. meeko said earlier, that this whole process of 75 began from something former supervisor daly had done in regards to a broader area that was then morphed and carried over into the muo. so, i mean, i think we're talking about -- it's the new vote to talk about that

particular number in this particular zoning district because that seems like just a carry over. it was just as good to carry into their -- >> another way i can maybe clarify it is that the 75 room limit came from the sso table. this site that we're talking about or this area was not formerly an sso zoned area. this was formerly the m2 district. >> you're talking about muo, not the king street site, but entire area was formerly an m2. that's true. it was a previously industrial area and i think this needs to be looked at. certainly if we initiate it today, i'm going to move to initiate. we can have a discussion. public is going to be able to comment. it may be approved, it may not be approved, it may be modified. to not initiate sends a wrong message to people who are in the hotel business saying san francisco doesn't want hotels because they're not even willing to talk about expanding the areas in which we would

have larger hotels larger than 75. and that's the bad message to send. so, my motion is to initiate. >> commissioner antonini, if i may, the preliminary recommendation on the calendar indicates to adopt a resolution authorizing an adoption hearing on or after june 6, 2013. staff would like to modify that to may 23rd, 2013. >> the motion would be -- a discussion begins after may 23rd, rather than june 6th. is that what -- >> yes. >> it doesn't make any difference. the motion is fine. if that is the motion, my motion would be consistent with that. >> thank you, commissioner. >> commissioner hillis. >> just a question for staff. are all these -- the muo zoning district, how much of this district is in kind of consideration in the central corridor plan? >> the corridor covers generally the area between second and sixth. the specific areas to be rezoned are still being considered.

but the study area is between second and sixth. so, it includes -- it includes everything left of second on this map. that's part of the study area. >> it's not east of second? >> that's right. >> again, i think the plan is -- i'm happy, you know, i may support later on we do come up with a solution strictly for this block, but there's other blocks that may be appropriate. i just don't want to be back here in a year or two saying, why didn't we do a 100 room hotel between fourth and third by the ballpark? so, i mean, i just like to give staff and the public time to look at this and weigh in. i don't think there is a big problem initiating. again, i'm happy to carve out the areas that are being studied under the central corridor plan. any of those are possible when this comes back to us, i think. >> i was going to say we're happy to look at alternatives if you want to consider initiating. we can brick back alternatives to you. ~ bring i'm not we had today that date.

any date is appropriate. ~ wedded to that date >> is there anything else? okay, commissioner sugaya. >> following up commissioner hillis, it seems premature to be considering blocks that are part of the central corridor in this zoning since we have no land use studies except the central corridor on which we can base any kind of rezoning decision. so, it seems more applicable to me -- or appropriate to eliminate everything west of 2nd street if that's the boundary and have any kind of consideration for initiation limited to those blocks that are east of 2nd street. that may eliminate mr. vettle, but i think that can be taken

into consideration if there's any desire to limit the area in which the initiation would apply to. also, it's interesting to hear some arguments being made that people may stay in south san francisco or elsewhere and take buses into the city for nvention if meetings were held in the city itself. and then we hear comments that in nob hill they're losing hotel occupancy because conventioneers don't want to walk down the hill to the convention center. so, somehow those two things seem contradictory to me, that right in the city we're saying or we're being given the argument that nob hill is no longer appropriate and people don't stay there. on the other hand, we're being asked --

>> experiencing technical difficulties; please stand by >> so, i'm going to oppose the motion. i think that unless it's amended, i might be amenable to moving forward. but it seems to me that a wholesale consideration is not in the cards for me. >> commissioner antonini. >> well, the answer to commissioner sugaya's question is that unfortunately many conventioneers and tourists aren't -- don't like walking long distances. riding a bus is different. they walk out of their hotel, ride the bus, bus takes them there, they take three steps, they're inside. so, it is consistent they would not want to have to deal with going up and down nob hill, but, you know, so that it can be consistent that they'd stay at the airport taking a bus. >> commissioner moore.

>> i really want to avoid this commission sends the wrong message to long-established old business in san francisco. the fairmont, the markoff, et cetera. i think it is a very kind of inappropriate comment to say that we are sending messages to hotel developers discouraging them from coming to san francisco because we are having a land use discussion and a project discussion about where a hotel should be, and under what process they should be discussed. i think that in itself sets an argument which i really feel offended by and i want to be clear about that. i think this commission, from everything i hear even if we don't agree about what we're doing today, ~ is interested in seeing hotel discussion expanded, the size discussion researched, the locations more particularly honed down, except for the issue regarding mr. vettle and his client, which is apparently the reason why this is in front of us today anyway.

why don't we take step 1 before we take step 2 and get mr. vettle's issue addressed and staff can determine how appropriate that is, but not draft it up in this very contentious discussion. that would be my comment. and the motion as it stands, i will not be able to support it. >> can i ask a little clarification? if we initiate today, you can come back with a new matrix, new hybrid that maybe is the radius, much smaller, much grander than this, correct? so, initiating would allow staff to come back to speak to the commissioners, speak with project sponsors and narrow or enlarge the scope? >> that's correct. initiating would allow the adoption hearing to proceed. >> okay, i just want to make that clear we're not putting this in cement. commissioner sugaya. thank you.

>> yes, i think the amendment call for tourism business for a while. i think that most large conventions run their own buses. so, they can very well run buses from nob hill to the convention center. there's the cable car. you know, if the hotels wanted to, they could supply the buses themselves. as far as -- and the other argument about having to provide for increased number of hotels, i suppose that's, you know, that's a no-brainer. but i'd like to see it in the larger context in terms of a land use study and a specific study of the shortages of hotels and that kind of thing before we leap into rezoning everything. as we've heard previously, the impetus behind this particular proposal came from mr. vettle and the desire to address a particular site in which they got caught in the eastern neighborhoods plan