stores opened. and in terms as if the conditional use authorization was required, and it is noted that there are five criteria that the planning commission would review and it it is noted that the existing concentration of the uses within the district is one and the availability of the similar retail uses in the district is number two. and the compatibility of the proposed formula retail use with the existing architect you aral and character of the district is number three. and the retail rates in the district for four and the mix of city wide serving retail use and neighborhood serving retail uses in the district. the formula retail use controls the first added to the planning code in 2004, and in nine years it has been amended nine times. and it was created i would argue that internet based retailing was pretty prominent and the early 2000s it has been amended and no addition of the requirement that we count the internet based retailers and in fact i don't know exactly how i would count that, is it based upon how many warehouse

distribution centers there are? and how many people have the website opened at one time and the idea behind the formula use controls is that it is the aesthetic impact and for example the starbucks because they had a hearing on that last week and denied the conditional use of authorization for market street and those are based upon the concentration of the uses within the neighborhood. and so if you have an internet based use, how does that contribute to the formula uses in the neighborhood and it is about the physical impact and about you see the starbucks and maybe i should not be using them as an example. you see the same signage everywhere that you go and you see the similar cookie cutter uses throughout the u.s. and that is something that the formula retail use controls try to limit or try to address. it is about those visual impacts. s and so, we reviewed the materials and do not find that this meets the threshold for triggering a conditional use authorization requirement, certainly if they reopened a

store, ore and that is the 12th store and then that would trigger the conditional use authorization. but, given for what we have seen in the materials now, they do not have eleven stores opened in the u.s., this will not be the 12th store that is operating, therefore, i would not trigger, the planning code requirements for the formula retail use and we have been applying this consistently since 2004 and so almost a decade of applying these requirements and when someone is seeking whether or not they are formula use and this is the standard that we tell them is how many stores are opened and that is consistent on the application. and so, that information that i wanted to present to the board and i am available for any questions. >> go ahead. >> are you saying that small business concerns are concerns of unfair competition do not enter into this planning code section? >> there was a business protection act and there was a requirement for authorization that was passed in 2007.

we have not been challenged in the courts as far as i am aware on our formula use controls based upon past cased thatvy seen, i think that the courts have upheld the courts controls based upon the aesthetics issue and i kind of to say that these controls are based upon small business protection and changing for the market place and in that regard. and so, i think as they were originally crafted. they are very much related to the aesthetics of formula retail uses. >> okay, thanks. >> may i... >> sure. >> so, if a store is the eleventh store of a national group, what happens after that, is really then immaterial, right? i mean if the 12th, 13th and 14th opens, the deed is done and the stores hope here and that is that.

>> and we will retreat these and if someone is opening a 12th store at this location? we treat that as the same as someone opening the 1000th store. [stand by change of captioner]

something specifically that says you counter internet source. >> the language that we have and the amount of experience we have for these online uses, i would imagine had it been the intent to count online uses that would have been referenced but what the code says is that you look at former retail use is a use with 11 or more establishments. for me it's not talking about an online presence. even someone who has one store can have a website. is that then form of a retail if you have a website? >> if you look at amazon and small book stores, you don't see anymore book stores anymore. i know there is a bike shop they have one store. but they sell things online too so you can go their website. i

think the intent of the formula control is about the aesthetics. you are going to see 500 stores by the time get to san jose. that's why it's called the formula retail use control. >> when you say establishment, if you have an online business, you still have an establishment, correct? >> correct. but it says that establishment has to have same signage, same logo, same color, talk about uniform and talks about retail where you have to have a retail presence and you have to have the same shopping experience. it says, let's see. former retail use in -- it says

defined as a retail establishment which has 11 or more retail sales establishments located in the u.s.. you can argue that it's web base is still retail. for example amazon wanted to put an online in san francisco, that's a non-retail from our point of view because you can't walk in the front door and look at a showroom. we would consider that to be kind of back office use. >> if amazon opened a shop on 7th street they would not be considered a formula store? would they be considered a formula store? >> if they do not have 11 or other retail establishments of that type in the u.s. they would not be consided

retail because it's about aesthetics. >> okay. thank you. >> miss sanchez, the appellant disagree on the number of facilities. did your staff review that and verify exactly how many there are? >> our staff did concern the pop up store was closed but we have not been to hillsberg or ever ston. we -- if we are trying to prove it doesn't exist, we should prove that it does exist. we should get a photo of it. >> how many did your staff find? >> 9. >> on a technical basis how does your department look at a

lease where they have not opened up yet? >> that's an excellent question. the code says they maintain these other establishments and if they don't have it open, they may have a lease. they may not get a permit to open the use. what counts as what is going on at the time of the permit. >> i will ask one last thing. i will ask the permit there, if you look at the list have online sites, each site is different based upon it's location. i don't know whether they are all part of one distribution, one administration site or not. but do you know anything about that? i will ask them the same question? >> no, i'm not aware of how their online presence function is on their distribution, the

details of it. i have not seen that they have 11 or more other retail stores. >> it's just that it looks like every city they have a separate address. >> i think there was one store where it seemed like, when i looked it was another retailer, like where she sells the merchandise but she's not at the store. some of the stores where they have a presence are not stores but they have other merchandise. maybe the permit holder can address that more clearly. >> i have a question on the interpretation of the word open. if you have a bunch of stores that are developed and permitted across the country, they have not opened their doors, would that constitute an

existing store even though it's not open? >> the code says a formula retail use that is a retail establishment that has 11 or more. >> you keep using the word open. is that not in the code? >> no. that's how we interpret it. if a store is closed, if they are taking a holiday for a month. >> let's say they haven't had their grand opening. if we are taking their facts as true that they are ready, they are just waiting for to us end our hearing and make a ruling in favor of the permit holder and tomorrow grand opening is announced all over facebook. >> we have to draw a line to implement the code and we've drawn the line that it's open.

we are not omniscient and can't. >> but they are aware but they haven't opened. >> every permit that is for retail use that is in subject to the former retail control to submit an affidavit and we have to verify. we other >> use google to verify. >> so you wouldn't take into consideration the kind of evidence presented to us today about the appellant that they have taken the groundwork where the city has that research and can verify that. we have a standard and the standard is that they are open and we have

to apply that standard. >> right, open, so we are going back to that. if they haven't had their grand opening, then they don't exist? >> they don't count towards it. >> is that the hard line that you take. >> however if the board is inclined to do so, i would request that as crystal clear and explicit, something that we can actually implement successfully because the controls are of no use if we could not successfully repeatedly implement them. if the board is inclined to do that, that is something that we can implement. a clear threshold. is it a signing of a lease issuance of a permit, on the website. >> if the company itself is marketing it as having existing

stores is that is a marketing error with the wrong address. it's a little suspect. i don't know if that could be a possible way to looking at the company's own marketing material >> even with the marketing material and i went to the website as well and several times and other staff as well did not see information on the website or even wrong information that the trigger the use of the threshold. >> thank you. >> any public comment on this item? >> my name is penny. long time resident of san francisco. i'm also a retired attorney with over 30 years of experiencey as

land use attorney. and land use is an area of law that is not only a deep personal interest to me but it's something that it's a critical regulatory area for all public agencies. i want to address the question of whether or not the internet store should be counted in determining whether or not it's a formally retail use. there is nothing in the planning code to exclude internet businesses. now, i understand why the staff maybe a little reluctant to widen their net to look at internet businesses. it may have certain administrative difficulties, but the fact of the matter is, internet stores,

internet shopping is a commercial activity. it's not new. it's been in existence since the early 90s well before the retail ordinance was adopted. significantly there is nothing in the definition of a formula retail use or anywhere else in the planning code to exclude consideration of internet stores. now in this particular case what we are talking about is a process. if you sustain the appeal, it would be to require that this improvement and potential store on fillmore go through a planning commission cu process. so they will have their day in court. your sustaining of your appellant appeal does not

disclose that. it simply indicates to the appellant and to the permit holder, that yes this is a formula retail use that will need to go through an additional regulatory process namely the conditional use of proceedings that will be necessary before the planning commission. one last thing, i just want to point out that you don't need to decide what is an online shop because off ka has already done the work for you. if the overhead will come up i have a copy of material that i got from the internet. it's listed online shops and they list not only on the first page their international stores, but on the second page they list each of their online shops in

the united states. i didn't make that up. that's taken directly from the os ska website. they have themselves as not only having internet stores. please consider the internet stores. >> next speaker, please. >> good evening, my name is paul warmer and i have been living near fillmore street a long time. and i have seen the changes since the late 80s when it was originally a series of small local enter repreneurs that have been a retail of various sorts. particularly what we have observed is far and owned chains establishing a business presence in san francisco within first 11

stores. when you look at os ska on their website they have great plans on their website on how they are growing. this talks about it earlier when do you count it open. athletea was in their business plan. i would encourage you as part of the decision of this hearing to direct the zone administrator to develop policies to look at leases in the u.s.. grant it they can not research those. there is an affidavit submitted. the city was contingent upon it being drevenlth i think there

toanat anit's important to do so to avoid this a symmetry that exist where there is a permit issued here as opposed to when the store is opened to determine whether or not it's 12 or 11 stores. the second point i would like to make is i was curious and started looking. i'm surprised to see that someone who is as savvy in the commercial world as these people appear to be open the pop up store, yet at no point was there a business license find for in san francisco, at no point was there an fbn filed for in san francisco. this means of course the store is operating for a period of time for christmas great revenue period, no record in the city rolls, therefore pay roll taxes. so again, it's wonderful

you can slide under the radar by the way you publicize and file forms or don't file forms. i just wanted to highlight that in terms of the process that companies follow. thank you. commissioners, i really commend you on the kind of questions you are asking tonight because it seems to me you are getting at the reality of what's going on in our neighborhood, not just the theory of it all. what's going on here and are we pretending that something is not happening that really is happening. i think there is two questions from this hearing. one is os ska a chain store and is it appropriate for fillmore street and especially given the

retailers and given the retail uses on the street. the formula retail usage itself, it's really about aesthetics and signage. that's clearly not true if you look at the language of the ordinance. it makes clear that the increase of formula retail businesses in the city of commercial areas if not monitored will hamper the goals and will eliminate businesses establishment opportunities for small or medium size businesses which tend to be non-traditional or unique. seems to me the questions you are asking tonight get to some of the reality of what this ordinance was passed to do. it was intended to stop the proliferation of chain stores in our neighborhoods. the way it's being applied, if there is

any possible way that we can pretend this is not a chain store, then that's the result that we reach. it's turning the ordinance on its head to what it was intended to accomplish. under the ordinance and common sense, os ska is a chain. it has currently 18 stores in the united states and six pending if you would include the online stores. even if you don't include the online stores, it's got nine now operating, three additional spaces leased and a pop up that may exist. that is not to mention the 50 stores outside of the united states. what the ordinance does say is 11 or more retail establishments. that's not stores. that's not whether they are open or not. it's not brick and mortar. it doesn't say that. it doesn't disqualify online stores. it's not whether they are operating. so it's

clear that os ska is exactly what this ordinance was intend today present. just quickly, on this ordinance, the formula retail on fillmore street is one of the factors to be considered near 50 percent of the 20 new stores on fillmore street on the last couple of years none were according to the planning department formula retail when they open and almost all of them are now. no one in the neighborhood has spoken out in favor of this. there has been no outreach for the neighborhood. i encourage you to reject this permit and begin writing the application of this ordinance. >> thank you. do you care to state your name for the record? >> thomas reynolds. president of the association. >> thank you, any other comment? >> good evening president hwang

and commissioners. i would request that you approve online shopping. it's a form of electronic commerce which allows a consumer to directly buy goods and services from the seller over the internet using a web browser. this is a type of retail activity under section 73.3. it is a commercial use which provided goods and services under section 79014. again i urge the commission to accept it as online shopping. i'm a previous employee of state and county and spent 30 years handling complaints. we talked about amazon, the complaints i have

handled are neman marcus and others. online shopping. i think that's the key to the whole thing. >> is there any additional public comment? seeing none, public comment is closed. >> we'll start with rebuttal. >> with regards to miss ramos previous statement, in no way does the company try and offer me special treatment.ey -- i learned of their attempt to lease a space from me in july. i then called the sales rep and asked if this was true and he denied it and said of course

os ska did not do that. it's not in our plan. then they signed the lease in december when i still had os ska products in my store. that was part of the $26,000 that they considered not enough. more than that, i passed on the line what you see in the documents that they have submitted because i did not proof that they were actively seeking these spaces. i decided to pass on the line because i didn't want to be in competition with the store that was going to cannibalize my business. so, i real think if you are open your mind to thinking what chain stores are an their intentions, they are there really for the

corporate profit that are more substantial than any small business can ever make. thank you very much. >> thank you commissioners. i want to start by saying i absolutely recognize the concern with formula retailers growing in the city. it's somewhat of a shame that monique is getting caught up in this. i think that is a pretty clear situation. we have gap, they started a new brand. by the technical requirements of the code, they got through. i think that is a very different situation that we have now. we have miss ramos, a part owner of the business and running the business on the west coast and would it be a so shame to roll her into these businesses because it's a different business. there is no chain

store that would ever have gone through the effort that miss monique did, she did not have a business for the specific reason that she had this line for a long time. she tried to work with her to build line at her store. it's not monique's control as to how much she business -- buys. monique has been in a difficult position because she's a san francisco native. she wants to be here and grow her business in this city. i really stress this is a very different situation than the athletic or other stores of the world. since we've had so much focus on leasing activity i want to mentioned that we have subways fo