45- foot super slide with an elevation change of nearly 30 feet. climbing ropes and walls, including one made of granite. 88 suspension bridge. recycling, traditional swing, plus a therapeutics win for children with disabilities, and even a sand garden with chines and drums. >> it is a visionary $3.5 million world class playground in the heart of san francisco. this is just really a big, community win and a celebration for us all. >> to learn more about the helen diller playground in dolores park, go to sfrecpark.org. >> good evening, ladies and gentlemen, and welcome to the august 12, 2013, meeting of the san francisco small business commission, and the meeting is called to order at 5:35.

thank you for the sfgov, tv. for their support. take this opportunity to silence your cell phones and devices, there is a sign in for anyone who would like to be added to the small business mailing list, there are speaker cards available at the front counter, all speaker cards allow us to prepare more accurate record for the comments. you can return the speaker cards to maoe. >> roll call attendance? >> adams? >> here. >> dooley? >> here. >> dwight. >> here. >> o'brien. >> here. >> ortiz-cartagena. >> here. >> riley is excused? >> white? >> here. >> next item. we move on to item number two, which is again public comment, it allows members of the public to comment generally on matters

in the commission's purview and suggests new items for the commission's future consideration, do we have any members of the public who would like to make the comments on any items that are not on today's agenda? >> great, seeing none, public comment is closed. next item, please? >> thank you, mr. president, we are moving on to items three and four which we will call together. >> item three is a presentation by the san francisco planning department on formula retail ordinance and policies in the city of san francisco, including but not limited to the background, list and current laws and proposals that will be supported by a presentation of the planning department staff and explainary document, and to the commission on formula retail controls for today and tomorrow for the staff. and that is a discussion and possible action item and we have also, item number four being called. and which is a discussion, and possible action, to make recommendations to the planning department, and planning

commission on the formula retail study scope and the document for that item is an economic analysis of formula retail, and request for proposal and scope document, and again, this is a discussion and possible action item. and before we start with the staff presentation, from sophia heyword, director drazy would like to make a brief comment. >> i am on. >> so, commissioners, just under item number four, i have just, there is a one page, kind of laundry list of items that the commission has brought up, and topics and i just put them in there to make sure that if you needed to have your memory jogged on things that have been brought up by the different commissioners on the formula retail that is in there, this is not meant to be a proposal but these are all at one point in time different commissioners have brought up these items in relationship to formula retail. so i just wanted to let you

know that is there in your binder. >> and could i ask one quick question? >> did we call, three and four together or just taking these separately? >> we called three and four together and just... yes. >> good afternoon, good evening commissioners, sophie, hayward thank you for having me here. early they are summer president fong requested that the planning staff make a presentation to the planning commission about the current state of formula retail controls in san francisco. that request was timely, given that at that point, i believe that there were seven proposals and now, it may be closer to ten or eleven proposals. that have been recently enacted or are bending at the board of supervisors related to formula retail, those changes and proposals that are floating around right now could be

characterized in two ways, one is the changes to the structure of the formula retail, definition, and implementation in the planning code and then the second category are changes to the geologify. and typically the formula retail controls have been applied in neighborhood commercial district and proposals to extend those controls to c3 and pdr districts as well in certain circumstances. because of the number of proposals in the projects currently under consideration, the planning department's primary goal is to have time to study the issue including current conditions on the ground in san francisco so that future decisions and policy can be informed by real data as well as public input. so the manning department is looking at the issue and i know that this commission is looking at the issue and the mayor's office is also looking at the issue. and this evening, my

presentation will provide a previous history of the formula controls in san francisco and i would also like to touch on the definition of formula retail because that is important to understand as we move forward and then, lastly, i will identify topics that we hope to study and outline ideas that may be considered in order to develop a policy that will be broadly applied and refined if necessary, based on data and specific neighbors. so first, i just want to highlight two points in the relatively brief history of form law retail controls in san francisco. the first controls were adopted in 2004, and those controls were introduced by supervisor gonzalez and they required notification in most districts and that means a mailed notice to owners and occupants in the 100 foot radius, and those first controls did require

conditional use authorization for formula retail but only on very specific lots in the neighborhood of karl and cole and stanon. and those first controls did however, invoke the first band on form law retail and that was in the neighborhood commercial district xh is now in nct. and at the outset, or when this first set of controls was proposed, the definition of formula retail was four or more establishments, that was in version one of the legislation by the time that the legislation was passed, that definition had changed to eleven or more other retail establishments which effectively means 12 or more establishments and between 2004 and 2007, a number of those controls were expanded through to leading to 2007 when the voters passed proposition g which was a charter amendment

requiring conditional use authorization for formula retail establishments and neighborhood commercial districts, this is important to note, because this is the section of our controls that we cannot change. we can certainly change the definition, and we can change the criteria that are used to evaluate formula retail establishments but the fact that formula retail establishments require, conditional use authorization and a planning commission hearing in nc districts cannot be changed unless we go back to the ballot to the voters. i have distributinged to you and i have left copies out for the public, one page sheet and on one side there is a chart that summarizes the specific controls applicable by voweding district and including some zoning districts that have a some what new nuanced application of application controls such as geary street where the formula retail requires a cu, but for example, pet food supply stores are

banned. >> on the other side of that sheet is the definition of formula retail, from the planning code as well as the criteria used to evaluate conditional use authorization proposals for formula retail, and so, well, i will not go through all of those rye tera necessarily in the report, or in this presentation, for you, and i am certainly happy to answer any questions, but the basic definition of formula retail in the planning code is a type of retail sales activity or retail sales establishment xh along with 11 or more other retail sales establishments located in the u.s. maintains two are more of the following features, a standardized array of merchandise, decor or color scheme, uniform apparel and standardized signage and most areas where there are form law retail controls, those controls are conditional use

authorization. and the cu criteria are the same regardless of the use, size, or number of retail outlets. and moving forward, are the long term goal the planning department is to develop a consistent city wide structure for the controls that can be refined, if necessary, based on the needs of specific areas. our hope is that we will have a fairly consistent definition of formula retail from district to district. and in the short term we are commissioning a study to provide real data to inform the changes to the definition and future policy changes. and questions, or topics that we grable with when we consider the controls and definition, are whether the definition captures appropriate uses, and so, currently the definition applies only to u.s.-based businesses for example, international businesses that do not have eleven or more retail outlets in the united states. and i am thinking of pharmacies

or david's tea and they are not considered formula retail by the planning department. there are also readily identifiable chains that are not considered formula retaylor subject to the formula retail controls such as gyms, 24 hour fitness or gas stations, or whatnot and those are not useful that fall into this category. >> and we are looking for the criteria for evaluation and 11 or more establishments a hard and fast masic number. should a business with 12 outlets be evaluated using the same criteria as the larger chain such as subway. >> should it reflect whether it has outlets in the area, such as lee's deli. or thousands of outlets, and are there uses, grocery stores or pharmacies come to mind but

there could be others, providing retail that is not typically provided by operators or not readily accessible in some neighborhoods >> the commission adopted a policy that considers the concentration of existing formula retail in a geographic area and considering new applications in the upper market zoning district and we want to evaluate how those controls are working. and we also would like to consider visual impacts. and by definition, formula retail establishments do have some level of standardized brand presence that could be signage or color scheme and at that level of standardization contributes to a sense of playing that can respond to the unique character of san francisco neighborhoods. and we certainly want to look at economic impacts, and issues that we are considering include vacantcy rates and retail rents, and the availability of goods and services to meet the daily needs and the provision

of quality jobs for residents and we also would like to reconsider the geographic boundaries. two proposals will extend the formula retail controls beyond the nc district and two pending proposals but i realized that there is one set of in terms controls that may have already been effective and that is in the mid market area from fifth to van ness, i believe. and it would extend them beyond the nc district and into more industrial pdr districts and the city's downtown c3 district and we are hopeful that it will provide data to extend the districts where formula retail controls apply. >> and on july 25th, the planning commission passed resolution, 18931, recommending to the board of supervisors that the issue of formula retail be studied further and to that end, the planning department is partnering with the office of economic workforce development to over

sue a prepared study to provide data and analysis specific to san francisco and the planning commission, the planning staff and the board of supervisors and this commission can use to inform policy, as you know our time line is short, and we are hoping to select a consultant and to begin the contract soon, so that we can return to the planning commission for a planning study this fall and complete it late in the fall and the rush is because we are doing this as new controls are coming fast from the board of supervisors for example and we want to help inform decisions to be extend possible. >> and that concludes my prepared presentation, and i certainly have lots of information, and i am happy to answer questions that might be an easier format to get the information that you are specifically looking for you thank you. >> do we have any commissioner questions? >> how did they decide on

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 degree does 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 .