eleven? was there some... i am just curious, how did they come to that number? >> i wish that i knew. the best that i could do was to follow the legislative trail so that i know that version one of the 2004 legislation referred to four or more retail outlets and the final version referred to eleven or more other. my suspicion is that four or more captured successful, relatively independent businesses in the city that some number of supervisors wanted to support. that is just a guess, i don't have the institutional knowledge to know the specifics but that is just what i am guessing. >> well, i would like to thank you, very much for this presentation and i am blad that the planning department is coming and letting us know, you know you are correct. there is a lot of new

legislation coming down the pike. and it is effecting every neighborhood has their own definition and it is not the same. and i do believe that we need some type of uniformty and that this needs to be brought up. and everybody has their own opinions and it has been in the paper a lot lately, in both and so i really appreciate your comments this evening and it is not an easy one and you are right. there is a lot of legislation coming up regarding this. so, an item number four to discussion and i would like to, and i see that we have some here, the commissioners and any thoughts and any ideas and any thoughts that you may have on this subject and i will start with commissioner ortiz. >> we should call for public comment first. unless there are other commissioner questions? >> we will go through questions

first and then we will have public comment. >> i am thinking about in the last meeting we had the haze valley and we saw some conditional use, and i think that the question that popped in my head is like internet giant retailers trying to open up the brick and mortar, the spirit of the legislation here is for corporate giant not to muscle the small businesses out in, and have we even explored that at all. >> it has come up, and so, i can answer to the current existing definition of formula retail and if amazon.com were to open a brick and mortar store it would not be considered a formula retail outlet unless had it 11 or more outlets and there is a number of instances where this has come up as a point of discussion and there are some stores that have a very large and active on-line presence that do not have many brick or

mortar stores. they have gone into the neighborhoods with just the process, and the planning commission, hearing and that is typically when the discussion arises again, and in order to i am thinking of the letter that went in on fillmore street and it was not considered formula retail and although it has a fairly robust on-line presence. we would need to change the definition in order to get on-line retailers brought in to the definition. >> commissioner dwight? >> have bands like in the haze valley and is that legally? can we ban, you know, i actually am quite comfortable with this motion of conditional use because i think that it is great because it stimulates full disclosure and public discussion and let's all of the merchants and the residents as well as the company itself weigh in on the decision and i am curious to know if an out right ban has been challenged legally? >> i think that there are two ways to look at it from the

department's perspective. and one, the legislation has been approved to form, when they were passed. so they were reviewed by the city attorneys and approved as to form. and to my knowledge, they have not been tested in court at this time. haze, and north beach, and i believe that there is one other area, where formula retail is banned, but they have not, the bans have not been revoked. >> commissioner dooley? >> i was wondering, are you thinking about, i think it might be helpful to have different levels of consideration for the formula retail, because obviously, 11 or more targets, would have a very big impact compared to eleven or more, you know, of something, smaller. even though they might have a light of them say a subway? >> in terms of its impact and how broad the impact is.

and it is kind of, but it is... you have got it look at a target and think that its impact is city wide. and then that we have kind of an intermediate group that i guess that i would call district-wide, district serving. and then, there is, you know, sometimes very small places, so are you guys thinking about levels? we are, we are looking at levels, and at three different ways, and the one is the definition of formula retail, it does not distinguish between 12 outlets and 12,000 outlets that is one level. and in addition, the definition does not distinguish between foot prints or big box store verses maybe a small up scale boutique and so a 20,000 square foot store verses a 2500 square foot presence and the criteria are the same, regardless of the

use type, and so a grocery store is considered the same way as a juice bar, for example. and or a target uses it, and we apply the same criteria to target that we would to a smaller maybe like a kate spade or a boutique type of store. >> in addition there are questions of geography and there are areas of the city that tend to serve retail needs, and regionally. like downtown, verses smaller neighborhood commercial districts and so we want to make sure that the controls make sense and the geography where they are applied. >> and grocery stores are exempt, correct? >> grocery stores are not exempt. >> oh, really? >> commissioner o'brien. >> i will make a comment after

public comment. >> one question that i had if there is an international business that did not have any physical presence say in the bay area or not even in the country, or wanted to set up a branch here, but and say in europe they were, you know, the branches throughout europe way more than 11, would they be automatically, bared under that 11 rule under this proposal to change it to include international? >> under the current definition, and international company, with fewer than eleven other retail outlets in san francisco, would not be considered formula retail, and there is pending legislation that would impact the goff area and that would, in that district, it would take into account whether the number of international stores in existence. and that has not yet... >> let me try to rephrase that. i think what i understand and i think that you meant to say, is, if an international company, now has more than 11

stores, anywhere in the world, but in america, they are not subject to the control, because they are not eleven stores in america. >> that is correct. >> the proposal now is to include if they have more than 11 internationally. >> the proposal now, i think that you are referring to only applies in the haze goff district and that would include international. >> right. >> so, i guess my question is which was directed to the haze valley for now in case this becomes a bigger power and more spread out and the implication is that if you have no presence in the haze valley and even say that you did not scr a presence in the us and you decided that you wanted to establish a presence in the u.s. and by chance identified haze goff has the area where you wanted to put in the first branch in and

you did not have any of them anywhere in the u.s. and you have more than 11 in the world you would be barred from putting one in the valley under the this proposal. do i understand that correctly? >> that is correct. >> that is the proposal, and that proposal was triggered by the ruger gant store opening there where the company is a foreign company with more than 11 foreign outlets or no minimal outlets in the u.s. will have snuck around the restrictions. >> but everyone would still have the cu, except for the two districts? >> it would just say that you have to apply for a cu. >> they would not be banned except for the two districts that ban all formula retail. >> commissioner dwight. >> but all of this discussion, is of conditional use is sort of maybe got my shoe laces tied together, does any retailer who wants to open anywhere in the

city, do they have to apply with the planning commission. >> a new, change of use permit if you are were changing the use, that would not go before the planning commission, it could trigger the neighborhood notification and there are some that do not trigger the change of use notification. >> i don't recall doing it from my business and it was not the change of use from the building. so, you had me worried there for a second. >> director? >> thank you, mr. president. just want to make sure that the commissioner is clear, and so, right now, the planning commissioner is about to... there is no specific proposal on the table right now, from the planning commission. there are pieces of legislation that have been reduced and i think that actually pretty much all of them have been before the commission already that are still sort of out there sxh have not been completed.

and so, tonight, so, what you your action item is the planning commission is going to put forward an rfp on a study and so what this is and they have, the planning commission directed the department to get input about what should be in this scope. and so just think about what we have the commission has the opportunity to say that we like to understand the implications of what it will mean if we include these foreign, you know, subsitary and what would the financial implications be. and so you, the action item is to give some suggestions to the planning commission of things that you may want to see considered as part of this scope so the future proposals come forward and you have some of this either economic or data information from this scope to help advise and guide you, does that make sense? >> yes. >> commissioner dwight?

>> we are just directing specific questions, i think that after public comment we can have a little bit of discussion, and i don't, desire to draw it out tonight, because i just think that it is really important that we are starting the conversation. >> yeah. >> okay, great. >> commissioner white? >> yes, do you have any data in regards to formula retail in districts that impact small business. in regards to when they come into a neighborhood, and if, you know, if there is a closing down of small businesses because of their type of business that goes in the area, or could that be included in this rfp. >> i think that is what we are hoping to gather. how does the presence of a formula retail impact rents vacantcy rates and positively and negatively and how does it impact the small businesses and the other question that we are hoping to answer is to what

deeeoes the existence of the cu process serve as a barrier to entry itself? how much do people fear the cu process? >> i am sure that some formula retail activates corridors that are good. is there any data, currently in regards to that? >> in our very short time line we had to produce our report and we have found that there have been some studies produced that include san francisco, data, and those tend to be a little bit one sided and we are looking for a broader picture and we have very little hard data to use to analyze to develop, a policy and that is really why we sort of felt a lack in the information and so we needed to commission a study. >> okay, thanks. >> commissioner dooley? >> i know that i think that you guys are kind of using it as your starting point for 2007 retail formula retail study. >> are you going to kind of basically update what was in

that? >> we certainly have conducted the study and referenced it in our report, i think that we are hoping to include more quantitative information and in addition, if i remember correctly that report included colma, and daily city and south san francisco, and in the study area and that would be sort of dramatically skew the numbers for us at this point in time. >> okay. at this time, i would like to call the public comment on items number 3 and 4. but don't go away sophie because we are going to finish this up here. so do we have any members of the public who would like to make a comment on item threes and four? >> welcome mr. cornel. >> thank you, nice to be here, steven cornel of small business advocates i think that maybe looking at this broader, the purpose of the whole thing was to help and preserve the unique character of small businesses

in san francisco. and keep it vital in a place to do things. and san francisco is only 49 square miles, and so i think, it is just keeping it for the neighborhood is looking at things too small of an area. and you come into san francisco, from the south, the first thing that you see, is on one freeway, it is home depot and the other freeway is lowes and ha is what you see is the first big things coming into the city, the big boxes, you are starting to see some of that on coming in from the golden gate bridge, the walgreens and the gas station and ihop and not very much over there but it is sort of sets the stage on what we are. and if we are going to be or if this legislation was put in to make us a unique city to it preserve the small business, i think that we have look at things like the target store downtown being put in. or the one on masonic and look at it as a broad city, the impact on how it does in the

whole city. one thing to think about. and the other thing that i don't think was addressed was, they had two different formula use and things that came up in the last year or two, and one was sherm an williams store that came in on polk street and another one was orchard supply that wanted to come in on howard street or one of those streets and i forgot which one. and in both cases, the way that the planning department came up with how many other formula stores were around it or how many other similar stores, there was not a set kie criteria in the orchard supply case, the city builders was a block and a half or two blocks away and they were never counted as part of it, it didn't make sense, in the case of the sherm an williams store they left out a bunch of stores by jerry man did jerry man

dering the area. i think that has to be fixed a uniform thing that makes it reasonable. some things to think about. thank you. >> i need to remind that the public comment is at three minutes. >> any other member of the public who would like to weigh in on items three and four? >> seeing none, public comment is closed. and i would like to open this up for discussion. >> steven thank you for coming out tonight, and i think that we need to send the message out broadly that this is going to be an open discussion at a policy level now and frankly i have been frustrated with the fact that we are kind of dealing with this on a skirm ish basis and we need to address it at a policy level and so i am really hopeful that

this is now, happening. and i think, you know, the world changes over time and so we are seeing some new anomalies that we could have no way of anticipating, when this policy was originally adopted and i think just in our discussions of vetting, some of these scirm ishes i know that myself, i have vacilated between what the chamber of commerce has to say and what the merchants have to say and even what the press has to say and then walking these areas, myself to see what actually is it like to be in those neighborhoods and i know that being in dog patch as a business and being in south of market as a resident, you really don't know these neighborhoods unless you live there and work there and so it is really hard for whether it is the sfmta trying to do something street scape wise or the planning commission trying to do something from a planning perspective to kind of go, here is a new neighborhood that i

got to assess that out and figure that out and it is difficult and so i think that, you know, minimally the conditional use process is got for the locals to dialogue and the legislator for the nuances of the neighborhoods so i am hopeful that we can deal with some of these issues at a policy level. i know that there will continue to be nuanced challenges on a case by case basis and maybe this will give us a better opportunity and i know that we are committed in participating in the dialogue and i want to put out the call out to the merchants and the small businesses to participate in that dialogue as well. because if you don't show up, you really should not be complaining when you are seeing the results. >> that is the democracy. >> thank you. >> commissioner dooley? >> yeah, a lot of merchants have conducted me about this. and you know, all sorts of opinions, but, kind of what i

take from it is that all formula retail is not the same. that i think that it is time to, you know, make some differentiations on looking at the geographic impact and we need to see some small coffee shop or sandwich shop impact is going to be. and say, this big around. and then, you go, to somebody that has a parking lot, and they are serving a district, and then, maybe, i think that that examination of the impact potential impact has to be this big and then when we get to the really large formula retail like a target, then, you have got to take in consideration, it on a city-wide impact and i

think that is a real problem in the years past that one size fits all in terms of realistickly how big the potential impact is going to be just based on what type of business it is, and i don't know whether it is best to deal with it in terms of square footage. you know, which i am thinking at least it is easier to define. i don't know. i am not sure what would be the best criteria to put the potential formula retail applications into. >> i just had the comment that i do have usize regulations by district which often forces the discussion of the big box store. and that is usually where it comes up, so a location like the masonic location for the new target, for example, that trigger conditional use authorization for a number of reasons, including formula retail and also you size, and

so that for example, would have come for a conditional use authorization, regardless of whether or not it were a formula retail location. >> so what i am sesing more is in terms of when you are assessing the geographic impact, i think that we need to, you know, refine that more, so that not everyone is being, you know, examined in the same manner, because there are, you know, very big differences. and i think that if time to kind of reflect that. and you know, levels in some way. you know? i am not completely sure how to do that yet. but, i think that would be important. and also, in terms of, you know, we don't want to say eleven or more targets, would be okay. you know? that kind of thing, so i think that those levels have to correspond also in terms of, in terms of their impact you know,

how many at the highest end, should be a maximum of the largest type of stores, or you know, maybe five 10,000 square foot store and one size does not fit all and eleven could be adjusted in some way, >> commissioner dwight? >> do the size restrictions vary by district? >> they do, yes. >> i have a couple of thoughts on this and one, i am going to the first comment that i am going to give credit to jim lazarus at the chamber of commerce because this has got me thinking and that is the companies like levis and gap, who have subsitaries who do not or who are subsidiaries are not formula retail. and you know, this is san francisco, and their home and this is where they employ a lot

of people. you know? why not let them give them a pass and let them try some of their experimental stores in some of our neighborhoods? you know, that i am all for, and if it is a local company, you know, another one, or another good example, i was thinking during this whole formula retail debate back in 2007, one company that comes to mind is san francisco soup company which started here. and now they are not even opening up stores in san francisco now because they are past eleven and now they are opening up in other places which i would love one of those in my neighborhood. that is not to mean that i am proformula retail though. and i do believe that there needs to be some balance because sometimes formula retail would be good for certain neighborhoods as anchor

stores. i do believe in the cu process, and i don't believe in out right bands, i think that they are bad. because once there is a band it never gets fixed. but the cu process, i have seen things shut down, and the neighborhoods did not want them and that will, and it is in the cu process and i have been through that myself. and you know, it forces these people to get more involved in the neighborhoods, whether it is in the merchant corridors or whether it is in the neighborhoods at large and there is a lot of benefits to that as well. and, i am a firm believer in that cu process. but, i am not a big fan of the out right bans and and if you are going to be making a policy decision, i would like to see something that will favor, you know, corporate san francisco and i know that is not going to be popular to say, but you know, somebody like levi they do have experimental stores and somebody like the gap, and they

do have instrumental stores, and i think that, you know, it would be cool if they started those stores like right here in san francisco. and so, it is just my two cents about that. but, i am a firm believer in the current cu process. a little mixed on the international ones. and i am not a big fan of the big boxes i will agree with mr. cornel and his comments, and i remember when the orchard supply came in i want to know where they came up because i looked at this and discount builders hardware was next door and it was not counted and i thought that was kind of odd. so that is my two cents and commissioner o'brien? >> yeah, it is a very complicated affair, i sat a couple of other commissioners here. for four or five hours, listening to the pet food

express application, and i personally, agreed with the recommendation of the planning department but i was very struck by the fact that it was truly turned down by almost a majority or a unanimous vote, not quite. but it was a powerful vote six to one against the application and it was interesting for a lot of different reasons, because there is a lot of unfortunate nature calling and malining good people, and the pet food express has definitely run by people who are neighborhood oriented, and they are good people. and that the programs that they run, which they, you know, evangalized in a big way as part of the application, they were sincere and they don't do

animal care and extracurricular activities for the pure hard business sense they do it because they do it because in their heart it is the right thing to do. but i think that it is going to be complicated to how you deal with the local neighborhood as well. it is going to be hard to try and to program it that it is not a contentious issue and there is predictbility but it is going to be hard to weigh in how you react to the neighborhoods, what they want to do and what they want to have in their community. i would also like to agree with commissioner dooley's comment that the size of the entity that wants to command is definitely something that should be brought into account. i think that the big store or a big powerful corporate entity,

bringing in a big box store, should be treated a little bit differently than, somebody who wants to open up a small little coffee is shop that might have some recognition because they have more than a couple of branches somewhere, i think that is the point that she was making which i think is a good one. i also think that on the big box ones, that do effect the city wide, the economic impact should be weighed in and not just in terms of the potential to cause businesses to fail, which i am not convinced they do myself, personally, i have always, when i speak to the business community, i always tend to go to where the business is even if it is in the same business just for the traffic. but also, the dollars that they bring into the city general fund. i mean when lowes went into bay shore, they are bringing in a lot of money that was going to another big box store and now

it is coming into the city coffers in san francisco and so i think that that should be a factor that is brought into account as you go forward with the analysis. i think that it is a real challenge, and i agree with the spirit behind formula retail controls and i agree with commissioner adams on not a blanket out right ban is probably, i never agree with a blanket out right ban on anything, whether it is marijuana or whatever it is, i don't believe that it could be categorized as black and white and i will be in the middle with conditional use and formula retail is no different and those are just the thoughts that i have. >> commissioner dwight? >> i am very concerned about sort of stoeking this anti-big, sentiment, and i think that we do have to remember that big companies do good things on a scale that small businesses cannot. and we have a good number of very large companies in this city that supp