the business has a loyal customer base for its reasonable prices, and extraordinary quality of service. cows automotive center adds to the culture and community in the mission district restoration of classic and vintage cars, participation in parades and motorcades, and many ways in which it gives back to local schools, its neighbors and those in need. the business is currently at risk of displacement as they received a notice of termination from [inaudible]. note, cows automotive center is located in the [inaudible] special use district it is included in the legacy business registry and subsequently displaced conditional use authorization from the planning department would be required for any new nonresidential use.

all five businesses received a positive recommendation from the historic preservation commission. after reviewing these applications and the recommendations from the historic preservation commission, staff finds the businesses about the three criteria to qualify for listing on the legacy business administration. there's five [inaudible] for the small business commission one for each of the regular street business applicants note motion should be in favor of the resolution. in the resolutions please, play close attention the four traditions that define the business. once approved by the small business commission businesses must maintain these physical traditions in order to remain on a legacy business registry. for elbowroom, and san francisco eagle bar, there bar feature is the feature that the panther businesses. longbow jewelry, it is retail jewelry

sales. for perry's san francisco it's restaurant-bar. for cows automotive services it is automotive repair and maintenance services. this concludes my presentation and i'm happy to answer any questions you may have i believe there are business represent us in attendance would like to speak on behalf of their applications. >> great. do we have any commissioners would like to make any comments before we hear public comment? okay. let's open up to public comments. go ahead. >> all call speakers in this order, please [calling public comment cards.]. i'm sorry. wait. nevermind. there aren't--[calling public comment cards.] apologies, again.

>> good afternoon. my name is margie butler. on perry butler's daughter. he's not able to attend the hearing today but i'm very happy to be here on his behalf. we greatly appreciate the work of supervisor mark farrell and his staff for the work and the support of perry's application as a legacy business. we thank each of you on the small business commission for your work in the process. perry's open its doors in 1944 union st. on august 20 perry's open its doors in 1944 union st. on august 20, 1969 at 5 pm in the afternoon. i got was young 26-year-old then full of energy and optimism. union street was a nice quiet neighborhood accommodation of residential and commercial with hardware stores, laundromats antique stores and just a few restaurants. perry's open quietly that august day. enough folks to came in to eat and drink to provide a good start. the business grew steadily from there. in october in october 1969 the san francisco

chronicle publish a two-page story about perry's and that changed everything. perry always says, it blew the doors off the place. all of a sudden it was so crazy busy that my dad and the staff did not know what to do. over time, they figured it out and as i've been told by countless people it was a wild and crazy ride. if someone had told perry then that i would be standing before you today 47 years later perry's having enjoyed the success it has he would not have known what to think. as i stand here in his stead, i'm incredibly grateful and very proud that perry's on union street as to the test of time and become an integral part of the neighborhood in the city's restaurant world. to be nominated as a legacy business is a very important honor. when asked how perry's estate in business a long in such a volatile competitive industry perry's answer is simple. it's the people. perry's has been blessed to have so many wonderful men and women work at perry's over the years. that's what makes it happen and they deserve the credit. it's a hard work and dedication of any san

franciscans that makes perry's the place it is today and just two years shy from celebrating its 50th anniversary thank you very much for considering perry's nomination. >> thank you. next speaker, please. >> [calling public comment cards.] >> hello. my name is john downey. i'm a san francisco real estate broker and just want to make a quick comment regarding the relocation of the elbow room. i've been working with the owner mark shapiro for about the last year and a half. when the building was announced it was going to be redeveloped into a condominium project we definitely want to save the elbowroom get something out diligently trying to find a suitable spot thankfully, we have found one that we have a letter of intent right now and the key reason why our bid got selected over some of the groups was because of its potential legacy business status. the owner really appreciated that. he wants to

go ahead and rent to a legacy business. hopefully we can pull that off. thank you very much. >> great. thank you. >> hello. unmatched marrow co-owner of the elbowroom. pretty much rich said everything there is to be said we have been in business for 27 years. i been there since 2003. i've been a booker as well of bands, dj for the benefit shows we have upstairs. we spend generally first and deathly trying to relocate and continue overdoing for the neighborhood and for the city. so hopefully we can get legacy business. thank you very much. >> thank you. any other speakers? >> good afternoon commission. my name is [inaudible]. we are

the present owners of the san francisco eagle. it has been a very wonderful go after 40 years of opening and the bar has been in existence for over 35 years. we have a huge history of benefiting the community and we continue to do that and pledged to continue making it a community bar and a space for people to gather and socialize, and make good things happen. we really appreciate your consideration for the legacy business status. iq. >> thank you. any other comments? okay, seeing none, public comment is closed. commissioners any other comments before we take a motion? go ahead. commissioner zouzounis >> thank you everybody for coming. i love hearing the stories and my family owned businesses in south of market neighborhood and a lot of the history that i think we have to

document comes from the ego and self is important. stuff i always hear from my dad and wish we could put that -immortalize that some happy to have you guys here and i love hearing the family business stories in the 2nd-3rd generation so thanks for all your work. >> okay. well i just want to say-i want to give a shout out to the three of the businesses. first off, elbowroom. when you move, keep your atmosphere. part of the best part about playing in the elbowroom is you have elbowroom and that's about it. then, perry's on union street, my first time living in san francisco, lived in--and when i moved out of--when i parents came to town twice a year we had to go to perry's for brunch, and for dinner. like twice in one day. you're an institution. with all you are 49ers and giant stuff on the wall in the history of san

francisco on the walls in there, it really is an institution. so, thank you for that. then, last but not least, in close to my heart is the eagle bar. i mean, mike what you guys have done resurrecting that because when i close down i mean it was dead. you guys came in their and every night now it's busy. friday nights is busy. i've been to pound puppies on saturday nights. it's crazy, but the thing that you should be most proud of is the sunday your best. these guys raise more money on a sunday beer bust for hiv aids human rights, i mean you name it. these guys are there and they are there for the community, and that is something that didn't have to go away and you guys kept it alive and if it wasn't for you, you are the community you put

the leather flag up there and i think you actually turned around that area south of market like kind of brought back to life again. so, thank you for what you've done there. anybody else? do we have a motion to approve all five businesses as legacy business? >> so moved. >> second. >> okay. >> motion to approve the resolution adding these businesses to legacy business registry, by commissioner dooley and second by commissioner adams aye dooley aye, dwight is absent ortiz-cartagena aye tour-sarkissian aye yee-riley aye zouzounis tremont. that motion is approved 6-0 with one absent.

>> great. graduations. [applause] next item, please >> item number four, board of supervisors-board of supervisors file number 170209 police code bicycle chop shops. ordinance amending the police go to brevet the assembly disassembly, sale, offer of sale distribution or offer of distribution on public property or public rights-of-way bicycles and bicycle parts under certain conditions and with certain exceptions. authorize the police department as a pd, to seize bicycles and bicycle parts following violations of this prohibition and require as a pd to return seized items to the rightful owners without charging any fees except that sf pd may charge an inbound fee if the rightful owner consented to or participated in the act that led to the seizure. discussion and possible action item. the

bill barnes legislative aide from the office of supervisor jeff sheehy. >> good afternoon members. bill barnes chief of staff for supervisor jeff sheehy. you may have heard about this legislation. essentially this is to solve a basic problem on our sidewalk switches you have people engaged in illegal business activity in short. for people not familiar with what a bicycle chop shop might be, it is a series of stations often where parts are disassembled, reassembled and resold. so regardless of the origin of how people got to buy parts we won't speculate on that, what occurs is only one part of your bicycle has an identifying feature that's the frame which has a serial number which you can use to reclaim it if it's found. people should register the bikes with sf-safe and if the police find it they'll give it back to. the other part of the bite don't have any sort of identifying feet. once you disassemble bicycle and you take off the seat for the wheels with a handlebars or what have you, you then have all these parts kind of out

there. the major issue that we see on the public right-of-way is these folks are running an illegal business. the doing so without the benefit of a license. they're engaging in activity that probably should be better regulated. what we propose here is that the police department be able to impound these items with administrative citation. so there be no criminal-criminalization, or fine of anything of that nature an individual believes that the rightful owner of the bike if they could prove it would go to the impound yard and either turn in a receipt like a bill of sale, hey this is my by submit it has the right number, description. they can also through a sworn affidavit basically i own these parts either picture them, here you go. you lost the receipt you don't need to produce it. we introduce this and plan to schedule it shortly in the land-use committee. but i'm here to ask for the small-business commissions support what we think is a commonsense ordinance to address a very significant problem and without i'm happy to take questions folks might

have. >> okay. commissioners? commissioner yee-riley's bs preventing the police from arresting this illegal activity >> there's no specific code to allow them to deal with these types of items on the sidewalk. if a bicycle is stolen and an officer has reasonable suspicion that it stolen and that sort of thing, they can intervene but here, that designates this. so a good example i guess in the public works code if you are put something on the sidewalk usually a small business needs to pull a permit. yup tables and chairs when other types of encroachments, you want to put your trashcan out to go to public works to get a permit. the police are often called to these location people say this is happening on my corner and they show up and there's no tool for them to have no process for them to go through to accommodate it. we do build in appeals and people feel like something has not gone right

there's an administrative hearing process that builds into the legislation. but this comes from the police department and the recommendation that we put this into the police code so they have a section they can cite. this is not allowed on the sidewalk. we cannot issue a citation. >> any other-commissioner tour-sarkissian >> just coming back to a comment you said the activity is illegal. as it stands today is that correct? >> the operation of the business without proper licensing is illegal. having a buy parts on the sidewalk is not a legal annex with this legislation. is trying to accommodate. so if you have a transaction and you don't have a business license you're not registered with the board of equalization and others to collect appropriate sales and use tax and that kind of thing, it's not allowed. when an officer arrives >> just to cut you off, it's in illegal activity in the police have no remedy to stop this illegal activity on the

sidewalk? >> that's been the police department position when it comes to the sidewalk there's no ability to write a citation for this offense and to remove it. >> is this can be an administrative violation not a criminal? you said it takes the -what is the improvement? how is the resident of san francisco going to be benefiting from this legislation? let me tell you what i'm worried about. first of all, if it's in illegal activity, on a sidewalk, why is it that the police cannot take action? are you tony you're relying on their statement that they cannot this one would be a simple citation operating on a sidewalk with stolen merchandise. is that going to decriminalize that activity? is going to bring it down. explain. >> so it's possible that that

the material is stone. it's also possible that the items are not stone but we don't necessarily have proof of that this legislation doesn't speak to that finding. it doesn't say they have to be stolen or are not stone? it's as if you have five or more parts if you have a frame with the gears cut, three or more bicycles or parts you are not allowed to have that on the sidewalk in a murder. an officer can arrive write you an administrative citation in the benefit to the public that material gets impounded and san franciscans can walk up and down the street i'm here. that's the improvement. the police comment that can seize these parts and impound them until the rightful owner shows up at the impound and claims them. >> so whether you have a bite business on a bike or any other business, if you are not licensed one of the remedies to your knowledge? working with this legislation, do you think the police does not have any remedy to stop that activity?

>> that has been their view. writing a police report on this sort of case relies on the dh' charts one and goes into a different level of-ab let me offer a different example if you've tables and chairs in front of your business but you don't have a public works code and [inaudible] they can come out an issue basically a violation. you are supposed to have this permit and you don't. here, there's no lane which in a code anywhere doing with these illegal bike chop shops. this would establish a new section that says you a chop shop on the sidewalk is defined in the way that we laid out. the police department can give you a citation impound the parts. it's been in comments upon you to go down to the impound impound yard and prove your ownership it used on allowed to have them back on the sidewalk again. the resident of san francisco gets the immediate benefit by calling the complaint by officers they show. the file is resolved and hopefully deters this activity in the future because if it's in the police

code in the police department starts and for some people and set up in the future is our hope. chop shops in our new neighbors. there also downtown around montgomery street on any given day you can walk by and see this activity having unimpeded. >> if, in fact-if my bike has been stolen, how am i going to find out about the fact that the pedal has been found on the sidewalk when if it is established that part was stolen, is that going to allowed the da to press charges, or this is can be a limited?'s bs that would contribute as i said earlier the part a bicycle easiest to identify if the serial number has not been scraped off the frame. that's the part that easiest to identify. there's a voluntary registration limited through sf-safe where we can register your bike number get if you call the police department and file police reports as my serial number is 123456, and it's impound the

police department would search on. it's going to be more difficult to be candid to root the plate reclaim a wheel or seat just because those things are not marked for independent -a paddle, those things are not marked for independent coverage but the frame is often the most expensive part so people get the frames back. they can take it to a reparable bike shop and get it repaired. >> it looks like it's an improvement, correct? >> that's article. >> commissioner dooley''s bs my no financial penalty? if somebody can [inaudible] get a find it seems like that would be an additional deterrent would be if they actually had to pay a fine. >> i appreciate the question of that's a recommendation to the small business commission we will consider. we do not include it. as many of you know we are not quality of life citations are not being successfully upheld in our local courts and their arguments from some groups that were criminalizing poor people

or folks who are homeless. we did not put that in because we think the major improvement is the seizing of the parts but if the commission recommends monetary penalty we can consider it before we go to the committee. there's a question of how you would enforce on that but we can look into. >> commissioner ortiz-cartagena >> so in essence this is a business measure operating on the sidewalk, not illegally or legally, just there is no legislation either/or? >> that is great. there's nothing in the police code that deals with bicycle topshop specifically >> the reason we are seen this particular legislation is because working to implement the law making it illegal to operate this cottage industry. by the way chop shop for me growing up is a whole different connotation. so it's not necessarily stolen parts but it just the actuality of conducting this type of business.

>> that is correct. auto shop shops which more people more familiar with theirs old state law provision about how that bicycle chop shops is new so that's why this being proposed. >> i know there's business leaders here in the audience i probably have more questions after i hear their comments. >> i have a question just to follow-up what commissioner dooley asked. are we treating illegal activities on the sidewalk differently? are we citing some activities without citation, without penalty for the others, other than impounding the merchandise? i have a concern about that. with treating different businesses differently, in different ways. don't you think? >> i think it's a fair point. public works code police code, the administrative go treat different types of activities differently. in some cases you can have a permitted activity if you get that permit and then

you can get a notice of violation it here, we're saying this is in the sort of thing that should happen on the sidewalk. without with a few exceptions. are exceptions if someone has a yard sale in front of their home or a nonprofit is running some sort of program but there's very few exceptions that we don't want this to be a permitted activity in the same way we want other things to be permitted while there on this. there's different enforcement schemes in different places and i guess the recommendation of the police department and what were carrying forward is going to be the most successful at addressing this issue. >> thank you. >> any other commissioner comments before we go to public speaking? commissioner zouzounis >> thank you for coming here today. the threshold number, no more then four, where does that come from? >> i assume you're referring to page number two. [inaudible] three or more bicycles with

three or missing parts. these are based on observation. the definition that we thought was a reasonable definition that distinguish between someone who has an individual bike that's fully put together on the street. that's not something we would want to site for and these were examples of and what was observed by the police department and by people called him. around the threshold where this kind of activity would be regulated. so we think it is fully-how do i say this-we think the four different criteria, which are, or any one of these things could be happening are broad enough to capture activity we want to limit without interfering with the ordinary operation of a yard sale or something being held as a first amendment constitutionally protected right under this option of what's covered their listed exemptions were trying to find a balance. >> thank you. >> yes commissioner tour-sarkissian >> meeting the legislation,

the person is operating a valid business license this would,, somebody can have a valid license and have a shop on the sidewalk? >> let me give you an example of someone who might have a valid license would have that situation it if your bicycle shop owner, and you then have merchandise that's outside of your business on the street, you would've a valid business license and you would also bikes -you might have five more bicycles outside. in those cases we have a permit and both of those things would apply that's what were trying to capture with a valid business license. we don't want to hurt the small business on some of the street frontage with permission. that's why that language was included. i don't know if that helps? >> it's vague. >> okay. >> if i were in the bike business i would consider-i could be filing an application get it doesn't say in proximity of a bike shop.

>> valencia cycle they put bikes on the street and he needs a separate permit >> that's what were trying to get out and i appreciate the question. >> i look at it for this week or per small business week we have to pull permits 12 are sidewalk sale. around the city. it's crazy. any other commissioner comments before we go to public comments? >> can i ask because has the police commission weighed in on this? >> the police commission has not weighed in on this. some may send the police commission regularly weighs in as a small business commission does on policy issue. this is a recommendation of the command staff at the police department when supervisor sheehy was first appointed. we talked to mission station where this is the primary neighborhood where this is a problem. on staff level recommendation that we proceeded. >> any other commissioner comments before we go to public comment? let's go to public

comments. any members of the public would like to make a comment on this item? >> commissioners, [inaudible].. it really bothers me. i understand we have to be compassion and care about these folks. here's this fellow he's got a generator.. check the subject he's got a frying pan and cooking away. so you've got this dangerous situation with a gas thing out there. smoking a cigarette sitting by there. any sane these people are. don't get me wrong, i understand but to run an enterprise on the sidewalk. commissioner adams, as you just said for a small business folks we have to pay for the space on the street. this is outrageous.

but you know it, we have to go and baby steps. we are people out there who think, look, these impairments have a right to be where they bloodied well feel like. that should not always be the case but on the other hand if we have a space [inaudible] put them under the freeways get them away for small business. our small business to get affected. i've one client over 60 between mission and self anas. he's got a massage establishment and any weight people come over and [inaudible] were even afraid to go by this area. you get the situation where people are afraid to go back to business. you've got kaplan on 16th st. with ace mailing people don't-they're afraid to go by because what's going on. look there out there. they're selling drugs. driving by i was just talking to the guys from [inaudible] you know this guy drives up in his white cadillac. every day he goes back and does his sales. we need to do

something but i think this is a good start. thank you. >> next speaker, please. >> good afternoon.. i am not a lawyer. i did do a little research. there's a lot of stuff in the public works code real specifically, the only people who can put something out on the sidewalk is the retail business in front of their own business. nobody else. if they're going to do some work,, construction work, it's the retail business giving permission to the person who's doing the work for them. that's under public works code 166.458. again, under section 724 of the public works code, the permits will only be granted to the owner of the were lisi, of the premises fronting there on of the business. nobody else can do

it. there is-there are fees for everything. i have pages of fees for the business owners who want to do. that's already in existence. today, there are some specific things which you can and can't do. all the transactions have to be done inside the retail store. so if you have your permit if you have your merchandise outside, you can negotiate you can do whatever you have to do the transaction within the building they can even do it on the street. minor point during all the stands have to be removed when the businesses close. then this whole thing about how you maintained the whole thing, there has to be liability insurance. and, they have to show a copy of the business

permit in san francisco. these laws already execute on forcing them doesn't seem like anybody ever enforces them and when they do enforce them they hit a business owner. if somebody else is out there i think the public works folks can take care of this right now. i think were looking at something that might be where there's no need. thank you. >> thank you. next speaker, please. >> good afternoon. scott howley cow insurance. i concur with what's been said. this seems like a commonsense solution from a small business perspective we are always been told we have to get permits, we have to conform with what the law is and in this case this will require them to conform also. it makes sense. i may question the fine. it seems like a high number but i'm not going to belabor that but it

does seem like a high number. the last comment is it does impact the pathway.. the impact as far as the business owner to have the pathway blocked or impacted as well as disabled and other people with strollers. it can have an impact, so i think it's a logical piece of legislation and support it. >> thank you. any other members of the public? seeing none, public comment is closed. commissioners,-commissioner ortiz-cartagena >> i agree with everybody here. it is kind of common sense. i grew up in the mission so some of these pieces of a bike it's more likely than not for speed but because only the

frain [inaudible] my overall concern is not the actuality of what's going on in this particular case but to make any business illegal outright i would rather prefer to like stephen cornell said enforce. if there's already laws because i'm a small business owner we've got to pay for breathing here in san francisco. if there's laws let's enforce them to the maximum let's penalize or not operating the permits. again, to target specifically a specific demographic of our population, because they cater to that business, which is operating legally, that's where my concern is. what's next? what is the slippery slope? how many vendors and the mission operate carts selling hotdogs and night. those are illegal under the same kind of logic we should shut those down immediately and criminalize them as well. so that's where my concern is, but i do agree with the blight this particular

cottage industry that spotted in the city is bringing to our merchants our core doors and just a visual eyesore brings to the city. that's my concern the actual legislation. not what is applying to political prior to in the future. >> any other commissioner comments? commissioner zouzounis >> yes. i agree. i think it's fair. this is in the first time i've seen an additional piece of legislation looking to be introduced that could be already covered by dpw regulations kind of overlooked businesses like a lot of the businesses i represent our small corner stores who have responsibility both in and outside of their business and pay fees to department of public works for cigarettes on the ground, or a tree that's unkempt outside. so i think we need to even the playing field in that sense and understand

the responsibility should be distributed. however, i think dpw has a lot of these nooks and crannies of regulations that i think need more enforcement rather than duplicate legislation. but, either way i think the police code president this sets is an important one as well since we learned that it does not exist in the--in the police code. thank you. >> commissioner dooley >> yes, i appreciate this is giving hopefully more teeth to the police. but on the other hand, i think it can be tightened up more in terms of them i think it's a little bit still permissive toward people who are maybe operating legally ,, besides operating on a

sidewalk. i would just suggest take a little closer look and make sure that nothing that we are doing here is kind of tacitly encouraging what we are not encouraging here. >> i have one comment about that. the exception. as i read it, it says this prohibition, that is not to assemble-disassemble, so, offer offer to distribute,.. so the exception to that assembling and disassembling is to have a business license. to my knowledge, how can you have a business license to assemble and disassemble on the sidewalk? and run a business offer to sell, distribute,-i find that

exceptional to make the same recommendation as commissioner dooley. to tighten that language a bit. your setting exceptions to grate a lot of confusion in my opinion.but, beyond that i can see the benefit of passing such legislation. >> would anybody like to make a motion to approve this ordinance with tightened regulations? >> if you, for the sake of being able to communicate,, if there are recommendations to tighten it, i think commissioner tour-sarkissian you provided an example but be as specific as possible to be able to provide the legislative sponsor and for us to be able to ensure we are articulating what we are intending with the tightening. >> go ahead. >> one more recommendation. this is focusing on the

criminality of the chop shop. wi-fi like summary mention, if you're a criminal part the car out front store the bikes bus one or two at a time if that's your guitar target i recommend maybe as for the police department with a think on that but again to further, i agree it's common sense but again, i have trouble making something legal. i'd rather enforce them you don't have a permit. why, when i don't have a permit they shut me down and give me 1000, $10,000 fines like that? i would rather see that than making any cottage industry on a potential business opportunity illegal. even though i know most of it is illegal operating, based on parts, it's just the possibility with the impact of being in the future to other cottage industries. >> i would strike that balance in our recommendation.

>> are you saying we should not allow-anything should be illegal? >> when i used to be in parking i do not have one of10 million permits as a pd would come [inaudible] they would shut me down. i mean, okay with the enforcement you've got to do business like all of us but to say this type of business is illegal, that i have a problem with. >> the location of this >> and then enforce it it. >> rather than an industry is more the intent >> instead of making it five pieces, any bicycle part if you're selling it illegally, and i would make a recommendation of approving this because the police need something and i would make the recommendation. i would strike

down, instead of five pieces, any piece of a bike. because without saying it, i'm going to say it, it probably is a stolen bike. i actually listened my bike under sf safe and they found it. i like a back was a seat. that was it. so that bike is gone. but, i think to give this teeth i would make it any bike part. not just five pieces. on any sidewalk. >> so is it possible? >> we've heard i think a number of good ideas from individual commissioners will have a public hearing and take those under advisement. i would just say if i might just a couple things. we don't want to criminalize this activity and that's why it's not a misdemeanor. we sort of want to solve a city problem and then

the second question of reducing the number to a smaller number, this is what the advice we got from staff level where this is the threshold a thought is appropriate. i can certainly back was a question about monetary fines and the fairness of a small business receiving a monetary fine, but not having one here there's also question whether the threshold is right. i'll take that feedback back to the supervisor and also to the police department and if the commission at this point doesn't want to take a position i can always share revisions with staff before the committee hearing and the people would be more comfortable with that approach? >> i'm just clarifying for those listening, why are we taking the criminal aspect out of this equation as compared to other activities? if you have stolen merchandise but in this one [inaudible] you don't get what is the difference? explained that in the logic behind it >> there's two parts. nothing

here takes illegal activity and makes it less illegal. if you are in possession of stolen property that still a drunkard you can still be arrested. the da they decide to console charge. i think what people frustrated not seen immediate action it they call in a significant number of these parts on the sidewalk obstructing the right-of-way, impeding perhaps their small business and neighborhood and officers arrive and are not able to do anything. we think this is another tool. it doesn't take away from an example there might've been a theft and that would be independently executed that takes a while and the idea here was to provide a more immediate citation and removal approach. >> so the summary of that to clarify, if you don't have a license and are operating on the sidewalk, of course obviously if there's a business in front of that location, then you probably are operating without a license, but if you don't have a license the police department can

remove you from that location immediately without having to ascertain anything else. >> what we've been told is that for bikes this is necessary piece of legislation that will spot out in the code and if you have a license you be exempt. if you can produce onethat would not apply if your license with a bunch of parts the police can remove these parts immediately. >> if you don't have a license and you are above the threshold you are talking to, the four bike parts, then you are removed immediately? >> yes. >> the question we are asking, why are we setting these thresholds, did you answer the question? you as i will try again. i don't know if i answered it will. these are the thresholds people are more knowledgeable about this and the policemen have recommended. it's five fully put together bikes or five parts were three bikes with missing parts or with cable or gear cut. these are the examples of what people of expense in the field. we can say look at tightening it to people's point.

>> commissioner zouzounis >> those recreations you take back i would also note again what we heard in public comment in here on the commission about existing dpw code and that may not be enforced that also apply, and i am curious. is this something dpw looks like they need more support from the police code--from the police to be able to to go pick up? i see those guys in their trucks that come to my family store for lunch all the time. i know they got their work set out for them butis this something that that department has expressed they need more support in terms of there being able to collect- >> the department of public works is commissioners note routinely clears debris. you hear [inaudible] they routinely do it. in these cases the police would be that the public also may arrive at a location

without the ability to take action. i guess they could call public works. the police are really the folks who respond to these activities more frequently. i will check in with public works. see if that would be a different approach. >> just to summarize, as long as there's no threshold you have a permit if the permit doesn't exist let's create one. then it shouldn't be-if you don't have a permit you should not be operating. >> hears it a good example. you can go right there right now and check. you know what i'm talking about on 437 corbett picks up before the tunnels go in to twin peaks, they are doing construction there. so they moved the bus stop in front of pottery barn at market and castro. so we have these big tubes sitting there. across from the bus. there's a guy sitting there, if he was there three hours ago with about six bikes all torn apart spit out through that nice little plaza that members holocaust victims and there's

bike parts all spread out. i called the police just to see what would happen. the police came out but then they left and the guy still is sitting there. >> if i would go to that same corner and i put a bucket of bubblegum trust me, >> you will get nailed >> right. if you don't have a permit you should should not operate. one piece, to peace. >> [inaudible] >> we can approve legislation that denies the possibility of a permit. i know you can get the permit [inaudible] you can just say, know this will never exist it's illegal to operate this kind of business because that could have ramifications. if you're for small business owners. that's my concern. >> pardon me for interrupting but i think maybe sort of think of distinguishing about activity on the sidewalk versus being able to engage in that activity on private property.

in a brick-and-mortar,. we are not seen you can't dismantle or have a chop shop on private property. but when you engage in private property there's all these other sort of regulatory things. so it's a question. i don't thing may be the peddlers permit doesn't necessarily call out the specific kind of industry. so that is a police permit is the peddlers permit and so maybe bill, can you speak to why the police are not able to utilize the peddlers permit as a means for exercising removal of individuals? >> i don't speak on behalf of the police department but i would say that peddlers permit is for sale they would actually have to you have to witness a sale transaction. here, it's the presence of these parts in various states of assembly and disassembly. i think it's slightly broader but i'll ask the question of the police department as i think it's a good one >> great. >> the tool makers that are [inaudible] right there on the spot. if you do not have a

permityou should not be operating anything. >> there's a difference between dpw and what the police do. that's the other part >> also, anyone who's operating without a permit should be subject to the same fine as everyone else. there should be no exception to that. >> i think we for the feedback loud and i think i can offer is the ability to take that feedback back to the supervisor and to the police department and the city attorney. timing allowing i'm certainly happy to come back with revisions to work with staff to do that >> so do you have a scheduled date in land-use yet >> we thought about going today. we think will have to go to more than one hearing supply the benefit of having a hearing is to take the public input that will come for that we do not have a scheduled day. were trying to get this scheduled in may before the budget committee process starts in june. one of

the mondays in may is are likely scheduled day. >> all right. commissioners, would you like for a bill to take your feedback,, work to see if it can be implemented. we will try to provide a written response from articulating as much as we can in terms of the direction that you want,, and then you are saying, bill, you be willing to come back to see,-be back before the commission to take final action? >> happy to do that, yes. >> i propose that be the case. does everyone all agree? >> let me just clarify without final feedback was, all the items.>> right. i think commissioner, i think we have, and please, speak so i can make sure we can fully articulate, so the legislative sponsor has your full issues

or concerns and then that helps the legislative sponsor be able to- >> are we asked to summarize? >> yes. >> i think one is the threshold that was discussed. >> i have the threshold. also, >> commissioner ortiz-cartagena mention enforcement and with a licensing without a license. that issue. >> omission or zouzounis dpw >> existing dpw code that may not be enforced. >> so not exempting people from potential fines for not having permits. >> so can i just get a little bit of clarity for bill. when we are sane, dpw code not enforced, >> the item that [inaudible]

mentioned. >> section 24 of the public works. i got that. >> okay. then we want to tighten up the list that gives the five were more. we want to encourage-your requesting a direction that we reduce that number for you not giving a specific amount? >> i think it's just to reduce. i think five is too much >> any amount? >> yes. >> if i might commissioner ortiz-cartagena, has a good idea if i might be stated which is to basically see if there some way to permit this activity if in the absence of having a permit then there would not be a threshold and you would then be able to enforce. does that seem like the most-that was one of the many ideas i wrote downbut i was gonna go back to look and see whether the permit

peddlers permit covers it or whether we need a different permit. if you don't have a permit you can enforce it. >> that's good. >> okay. >> thank you for working with us. [laughing] >> all right. commissioners, if you want to continue this then we don't need to take action. so we will continue. >> thank you. thank you, bill. >> thank you >> okay. next item. item 5. >> item five legacy business historic preservation fund rules and regulations for rent stabilization grants and procedure for removing a legacy business from the registered action item. richard carrillo legacy business program manager office of small business. >> before you start we also have a city attorney matthew lee here for this item to answer any questions you may have as well. >> hello. commissioners. good

afternoon commission. richard carrillo legacy business program manager. i the powerpoint presentation. copies have been distributed to everybody and have copies on the table for members of the audience. today i'll be discussing three main items. removal of a legacy business from the lexi business registry. number two, proposed new rules for the rent stabilization grants in number three, insisting leases that are least 10 years regarding rent stabilization grants. removal of a legacy business from the ledges legacy business reggie is a work in progress but this is what we've developed as of this month. number one requester may be a member of the public, the board of supervisors, the mayor, the nominator, small business commission, historical

preservation commission-sorry, historic preservation commission with a legacy business program staff. number two, criteria for consideration of renewal from the registry. the business no longer has a presence in san francisco. the business longer contribute to the neighborhood's history and or identity of a particular neighborhood or community. number three, the business a longer is maintaining the physical features or traditions that define the business including craft culinary or art forms. procedures for requester. requester has a concern regarding a legitimacy of a legacy business being on the legacy business registry can file a request for removal with the office of small business. the requester is to cite the reason or reasons. the requester should include any documentation that supports the request for renewal. the office of small business will

review the documentation provide a written determination and hold a hearing at the small business commission for final determination. at this time, staff recommendation is to continue the item we need to provide greater details for procedures for requester and procedures for evaluation and determination. we would like to get additional input by the city attorney's office. any questions or comments? >> yes. i do. i mean, going back to your first slide, it says the requester may be a member of the public, board of supervisors, mayor and nominator . i mean the nominator is either the board of supervisors or the mayor, correct? >> that is correct >> now i continue to small business commission historical preservation commission legacy business staff. they member of the public does not have

standing to nominate a legacy business, correct as a legacy business? >> do nominee, no only the board of supervisors can nominate >> but why would a member of the public have not that i don't want to come i'm just asking, if they cannot nominate what would they have the right to request to remove? >> they might have an issue with the business. something that the rest of the people that we identify here my not know about. or, just a problem in general. >> so although the public do not have the right to appoint, or to nominate but would have the right to [inaudible] >> may i provide an example. let's say business cells, changes ownership. we may not be aware of it and they substantially change their business model. a member of the public can bring that to our

attention that some of the key elements, let's say a restaurant sells. they were a seafood restaurant and they become a burger restaurant. the seafood element was part of their defining features and they become a burger joint. so it may be-we may not be fully aware of it could a member of the public may be aware of it. then, matthew, we've had some discussion about under the criteria, under number two, things that happen in the past. i think with our nonprofits, again, they engage in community services.. so that-having that sort of connection to the community may not be something that we are fully aware of the limits of the community may be aware of and so they may change their business model, their service model to the degree that it may

-what put them on the legacy business may need to be reevaluated >> sure. >> i don't think you have the right to remove. they can be a requester. >> my concern about that is, which we need to kind of work out, first of all when summary makes a request and is a member of the public there should be aforum, or procedure, to put forth that request. that request has to be considered. publicly, privately, that can affect or otherwise hurt the business if it is qualified, not qualified. i would be interested in finding out how the request is going to be entertained and by whom. what is going to be the procedure, with its can be public or otherwise were getting into very important aspects of things.. your legacy

business, somebody says you should not be and then somebody has to consider that. is that going to be the commission, or another body these are issues that we need to kind of work out in the process. >> just to echo that point, i think one reason not to take any action on this item today so we can take some more time to pin down for what specifically-what specific kind of processes triggered when a member of the public, or anyone, flags this kind of issue. one version of what it means for a member of the public to kick off this process for whatever that process might be is the -this away for the office of small business and the commission to gather information from all available,

forces but once that information is come to the small business or to the commission there's no obligation to go any further. your staff can see this information, but you have no obligation to do anything else. a different version, and i'd another thing you need to do-[inaudible] to illustrate what kinds of different things we could mean for my different version would be something like standing to lodge a complaint where we could conceivably be talking about a member of the public coming in and demanding a hearing to consider whether -whether a legacy business should stay on the registry now looks like a very different thing. i just want to echo the idea that i thinkprobably the best use of your time will be to continue this take a little more time to flush out further details about what the process looks like and then we can come

back to you at that point. >> important to consider, all these options and you are right. especially, legacy business. we may [inaudible] chill the desire to be a legacy business because it takes one person to really affect your reputation if pablo you can attack a legacy business that we need to balance the interest of the public with the interest of the legacy business that is going to take time to clarify. yes. >> alright so i think i hear from you commissioner tour-sarkissian for us to get a little closer consideration around just the process of the requester. if it is a member of the public, i think we were being sensitive to the fact that

in so many things that the city has the public is able to initiate something,, but am i hearing-and again we have to believe that everything, but if it's a member of the public they more go through a more traditional route to the nominator or the commission.. >> i think the comments of our attorney was very clear. that the city attorney's office has to consider the subtleties and come up with rules and segregate the different tracks of approach. i think i'm of the opinion that we should table this issue and wait until the bees articulate i didn't necessarily want to single out the members of the public but of course i gave that as an example that can be a lethal

problem for legacy business. i mean kind of a benign request could in fact and by so doing to fetal purpose of the legacy business program. i want to be very careful about the prospect so there's a balancing approach between the interest of the public versus the interest of the business.. >> are we allowed to legislate that public request like in a form in which that's presented? if we can ask for a letter to our commission which we've done before. versus,-ccan't stop someone from making public comments, obviously, but if they're claiming to be going through this procedure, is

there a way we can define with a procedure looks like? >> yes. i think one version of this would be to set up a way for office of small business staff, and by extension the commission, to receive information from the public. that could be in addition to public comment at meetings, which is of course always there, you could just set up a process and make sure that members of the public know that process is there. that if they want to bring information to the office of small business in the form of a letter or in the form of something else, i think it would probably be within your power to define with the process would look like. you as a commission could then still retain ultimate authority over what to do with it. it could be that the office of small

business reads the letter and it's clear there's nothing here that this is not a good use of your time. it could be that-it could be that you as a commission empower the office to make that call. it could be that you as a commission will sort of want to review complaints as they come in and decide whether there might be something here. so maybe you direct the office to investigate. maybe you make this an agenda item at a future meeting, but on these kinds of things, i think you'll probably turn out to have pretty broad latitude to figure out what process works best for you and is more useful to you. what that process looks like. >> we could set up standards for the office to consider in if these standards or developments are met to either recommend removal,, or not instead of burdening the commission with decisions. in

fact,these requests have to be tested. we set the elements for that testing. >> yes. something in a similar vein which i think will probably help there is a way in which how this process plays out, there's a way in which that process is informed by the substance of what criteria we think might trigger removal from the registry if there's only a small number of things that could possibly result in removal, then, for example probably be pretty easy for the office of small business to read a complaint letter and say well this doesn't fall under one of those things. so there's no point in going any further. whereas, if it does allege one of those things might possibly trigger removal is triggered,

then maybe it makes more sense to conduct an investigation to gather evidence about whether those allegations are true. >> yes. >> should we hear-we have three different items. [inaudible] or we take this all is one? >> its agenda list on one item to hear the separate rules and regulations so we can hear public comments on both. staff is saying we are requesting you don't take action on the rules and regulations for removal but possibly take action on the rules and regulations around the rent stabilization grant >> okay. continue. >> moving onto the rent stabilization grant, the grant, as i mentioned previously, is

incentive to landlords who enter into a long-term lease agreement with legacy businesses. the lease agreement must be a new lease for term of at least 10 years or extension of an existing lease to at least 10 years. the grant equals up to $4.50 per square foot, 5000 ft.2 maximum .. annually for each year of the term or each year of the extended term. an extension instructions in the application on the small business website. text from the legislation that will be discussing today reads as follows. the office of small business shall award an annual grant to a landlord that on or after january 1, 2016 enters into an agreement with the legacy business.. peer. for 10 years or extend the term of the legacy businesses existing lease to at least 10 years. for each year of the leaseextended

into or after january 1, 2016, or each year added to an existing lease on or after jen refers to thousand 16. for example, an existing five year lease extended to 20 years and generally first 2016, would entitle the landlord to 15 years. i'm going to present a number of different scenarios as a lead up to the two rules were proposing today. lease scenario one is a new lease more than 10 years. in this case, the leases more than 10 years. in this case, the leases from january 2017-december 2026. the landlord is eligible for 10 years of rent stabilization grants and the lease years and grant years are coinciding. so the lease year, 2017 [inaudible] lease year 2018 is paid in fiscal year 17-19 18-and so on. that's the

most straightforward example. lease scenario number two is a new lease totaling five years. because the new lease is not 10 years or more the landlord does not eligible for rent stabilization grants. lease scenario number three is a new lease totaling 15 years from january lease scenario number three is a new lease totaling 15 years from lease scenario number three is a new lease totaling 15 years from january 2017-december 2031. the landlord is eligible for 15 years of rent stabilization grants and again the lease years and the grant years coincide. lease year 2017 is paid in grant year 2016-17 lease year 2018 is paid in grant year 17-18 and so on. any questions at this point? okay. these are pretty standard but i want to make sure were all followed could little complicated so i'm taking it slowly. it gets more complicated as we go. lease

scenario number four is a lease extension now we are talking lease extension versus new lease. extending existing five year lease, to 10 years. existing leases , to 10 years. existing leases from january 2011-december 2016. five years total. the landlord extends the existing lease to december 2021 which is five additional years and eligible for five years of rent stabilization grants. again, the lease years and the grant years coincide. let's stop there and talk about what is the definition of an existing [inaudible] this came up last meeting. if a legacy business has a five-year lease that began in 2014 and ends in 2019, so today there are two years left on a lease, is this an existing five year lease which is a full lease term, or an existing two-year lease which is the remaining lease

term? the answer is, this is a existing five year lease according to city attorney's office. the landlord would have to add five years to this lease to extend it to 10 years in order to be eligible for the rent stabilization grants. question? >> clarification. if you have an existing lease of at least five years that is not expired ,, not expired, of course, then you can tag that to the five years to meet the threshold. that's it. >> yes. i only use december here because i wanted to make it simpler. so i used calendar year >> no. it doesn't matter. if you have a five-year lease that's not expired, regardless of whether you have burned five years, you can add that initial term to your extension to meet that 10 years. in this case, your example, it's an

unexpired lease. let's say december 4 before it expires you get [inaudible] then you benefit from the prior five that you initially had granted bringing it to 10. i confused you now. [laughing] that's exactly what you said but in a simpler way. >> yes. you're taking a five-year lease year extended to 10 years therefore your eligible for that extension period it spews that you met the requirements of 10, so you get eligible for five years >> you're getting the number of grants for the number of years you add to the existing. >> that's right >> so but six year lease and you added four years the landlord would be eligible for four years.. >> threw the president, i actually had not really thought about having you just maybe think of something commissioner tour-sarkissian. do we need to have a minimum amount of time

left in the lease for it to be-what if there's six months left in the lease? that they go to do the extension? i'm just sort of proposing it would almost be like you're almost at the point of really beginning in two lease negotiations where if you have two years out you are not getting into the lease negotiation. >> our attorney, my understanding had interpreted the law and had concluded that regardless-and i would like to have an answer, regardless of how much time left in the initial lease term that you would meet the threshold. talk about the threshold of 10 years. by adding at least five years to the initial term. regardless of where you are in that initial five years. >> yes. that's certainly how

i've been thinking about it, commissioner. i think where that comes from for me is the language in c-one about a qualifying landlord being a landlord that-among other things, that extends the term of the legacy businesses existing lease to at least 10 years. then is eligible for a grant for each of those years. so it seems like what the ordinance is really focusing on is not how much time has already passed on the least but as you put it, as long as the lease still exists extending it to at least 10 years that seems like a qualifying lease. >> yes. that would be the threshold. actually i'll be in favor of the lexi business that we want to save that were not making it that hard, of requirinng the remaining, remaining, term to meet the 10

years. that is, if that were the interpretation of the city attorney's office you another eight your extension to meet the 10 year which would make it more difficult. so we use the initial term, regardless of where we are but we still have to be in that initial term,, not out of it, and then tag on whatever we need to meet that 10. >> that is correct >> the way it's written now, the only differences whether or not the existing lease is still good. not expired? >> yes. >> expired or not expired? >> yes. i think that's a good way to think of it, yes. >> i'm sorry but then may i ask, then what's going to prevent any property owner who with a legacy business is very close to lease expiring in a business wants to renegotiate

a 10 year lease. i'm just trying to get to where is the line of the intent of the legislation with the 10 year, i mean the ordinance for the proposition with the 10 years, when were getting close to the time lease negotiation? because conceivably a property owner could just do five years, get close to the five year, do another five years, do another five years. or, were going to see more leases there just doing five-year extensions cannot be negotiation we negotiating at a 10 year. mi-both ways can be look at with the intent and so what intent direction of intent, are we encouraging by a decision be made? that's my question. >> i think regardless we still meets our purpose of saving the legacy business to be on the

premises. whether they do 10 years or five, five, five they still have to the incentive to keep the 10 tenant in there. >> as opposed to a new tenant with a five-year lease with a don't get any tenants. >> right. i'm just posing the question to make sure we think it through. >> all let the attorney respond, but one thing is by using this interpretation it seems logical. or helping the legacy business because were not making it difficult and burdensome on the landlord to accept. therefore, we are saying, if you are within that initial term you can qualify. the question is to keep the business, in place. i think that's- >> right. that seems right to me. the other thing that i would flag from the ordinance that might inform the

commission's discussion here is because it's an annual grant there is potentially some built-in incentives.. there is a way in which the system of grants incentivizes longer extensions as opposed to shorter extensions. if you extend the lease for more years that's more years during which the landlord will be eligible for a grant. here, once you extend the lease, to at least 10 years in the first place so that your qualifying for the grant at all then each year,, each year of extension beyond that is one more year when you, the landlord can get a grant. so to the extent you as a landlord are incentivized by being able to apply for that grants, then having each additional year of grant eligibility maybe pushes you towards a longer as opposed to

a shorter extension. >> okay. >> continuing, were all in agreement of [inaudible]. okay. the next two scenarios we will describe the need for for the proposed rules. lease scenario five is a new 10 year lease that begins in 2020. or 27 in the new leases from january 2020-december 2029. the landlord is eligible for 10 years of rent stabilization grants. we want to encourage long-term leases for legacy businesses as far and is advance as possible so we propose a qualified landlord may not wait for the qualifying lease to take effect before applying for and receiving a grant. that means, the lease year and grant year are offset. lease year 2020 is paid in grant year 2016-17 lease year 2021 is bleeding grandeur 17-18

and so on.. >> i think what you're saying, that you are saying the new lease will begin at sometime in the future and you want to bridge that gap between the expiration of the granting of the new lease and the expiration of the existing lease and benefit the landlord. is that it? >> we want to benefit the legacy business and benefit the landlord, yes, that's correct. they could wait and-they could wait a couple years to do that new lease and they would write the grant then but it makes it more if a legacy business of a don't have to wait right before the lease is up for renewal. we want to avoid that. we like to say well just grant them the 10 year new lease now and we'll start paying you for that grant now. will keep track of the

lease years. >> now that is before the expiration of the existing lease. there's no actual gap. there's kind of a-the new lease will kick in at the expiration of the existing lease but you want to give them that incentive to commit earlier by giving them access to this fun. >> that's correct >> the incentive kicks in. >> that is correct >> continue, please. >> this is the same thing with an existing example. so here is a similar scenario with lease extension instead of a new lease. lease scenario six is an existing five-year lease that's extended to 10 years which is done two years prior to the leases expiration. the lease during the existing leases from january 2014-december 2019 this year 2017 it extends the existing lease to december 2024

which is five additional years and eligible for five years of rent stabilization grants. again the landlord may not wait for the qualifying v-6 engine to take effect before applying for and receiving the grant. again, the lease year and grant year are offset and again this encourages a landlord to extend the lease for legacy business in advance of the lease expiration date. so the need for the propose role. this is where the need comes in. a problem could arise if the landlord has received a grant before the lease or lease extension has taken effect and for some reason the qualifying lease or lease extension does not take effect. for example, if the business [inaudible] in that timeframe. the solution is the landlord must as a condition of receiving a grant agreed to return the entire amount of the grant in the event that for any reason the qualifying lease or lease extension does not take effect.

so i have a full text of the rule. i don't know if you want me to read it >> just a question. if it doesn't take effect due to what? due to whose fault? >> it could be any reason. one example that i gave is the business could buy their own building and move or they could decide to move on their own. not stay in that location spews how are you going to give the incentive? i'm just discussing, how do you give an incentive to a landlord to sign on and commit early on? and create this doubt that the tenant himself could for reasons that would be convenient economically for the tenant to move out. how are you going to convince the landlord that he or shewould not have to-i mean, that they would have to come up with a lump sum of money that may be quite important,

especially if they commit five years in advance. want them to commit ahead of time. yet you're telling him if your tenant for some odd reason beyond your control decides to move on, you're going to cough up all the money you have received. is that doing the- >> that is correct that something the landlord will have to take into consideration. >> obviously, these are different but what happens on the other and if for some reason the property owner sells the property, and then for some reason the lease is not of the business is not honored with the new property owner? so,, there may be varying reasons. >> that's can accrete quite a bit of-we have to kind of think about this happening in a sale

of the reading because the successor in interest is going to inherit an obligation that is going to be based upon the future event that's not controllable at the time of the sale. so if the new buyer buys the property subject to such an obligation, then you are going to create a whole holdback in transactions that can hinder the sale. i mean we will have to consider these options that may happen subsequent to granting the lease. >> right. i think we have to remember this is taxpayer money. we want to incentivize the property owner to do a lease extension, but is taxpayer dollars. so if the property owner, let's just say in this situation of intent and might be sort of thinking of selling the property but doesn't ivan we don't know that, and then they are getting these funds early on, there is

a responsibility that this body has towards taxpayer dollars of the property owner actually receiving the money before the lease extension actually took place. it was based on not lease extension.so if you think that there needs to be more specific scenarios of which that request of the property owner to pay back is done, then we can provide us with some direction on that. >> i personally believe these regulations are geared towards helping legacy businesses. by so doing, giving incentive julian owners to grant these extensions ahead of time. so that there is predictabilitythat it increases the business and stabilizes legacy business. however, in order to do that, the landlord has to kind of way the risk,

the financial risk that can present. if we say that there is divestment for reasons beyond the landlord's control, that is they have a valid and enforceable extension that the landlord is committed to any successor interest is committed, that matter that they would have to reimburse these funds for reasons that are beyond the control, or act or omission, i think we need to think about that. if were going to provide that. >> just to offer tools to the commission to implement that policy, choice or other policy choices, one way-one possible tweak to the existing text of this regulation that would i think implement that policy choice would be to do something like in the last proposed rule six, instead of

of saying the landlord agrees to return the grant, if for any reason, the qualifying lease or lease extension doesn't take effect he could say, instead, something like the landlordagrees to return the entire amount of the grant in the event the qualifying lease or lease extension does not take effect, unless the landlord shows that it was not responsible for that fact. something like that. >> yes. i think the issue is not so much as to-we are not trying to-we want to give the incentive to the landlord to grant these ahead of time. so if we don't set those caveats then no landlord is going to do it because that is a carrying obligation that can kind of burden the property in interest.

>> were looking for the amount. >> yes. what we are doing we are hurting the legacy business by creating an unnecessary burden to the landlord. so i grant you, it is the taxpayers money, but the purpose of this fund is to provide that stability to the legacy business. i think there ought to be some sentence qualifying the last one, saying, unless they can. i mean, you are carefully putting the burden on the landlord saying it's not my fault. so that is in the best interest of the taxpayers. the landlord has the burden of proof that it's not he or she that's causing the extensions to come into effect >> that's a good catch. that was going to be my next question. would be, if the commission would want-o you

have a range of policy choices here and i think the policy rather than legacy like legal question i want to stress you as a body can, i think, do what you think is best and i want to make sure you have the tools to make that decision. so option one would be the regulation as existed, which is a blanket rule that if for any reason this lease doesn't happen the landlord has to give them the money back. there's big disadvantages to that from a policy perspective in terms of the incentives we are setting up for landlords in the legacy businesses we rent two. one advantage from a policy perspective is that it's relatively easy bright line rule. a second option would be to say that the landlord doesn't have to give the money back if it wasn't the

landlord's fault that this lease didn't happen and then sub option a-b within that do you put the burden on the landlord to show that? do you put the burden on someone else? there's all sorts of choices you can make there. i just want to keep those tito is up for you as a commission >> i think we should identify who is causing the lease not to happen. it's a legacy business. because they don't want to do it anymore? then i don't think the landlord should pay the money back. but if the landlord were to sell the property or do anything to cause this lease not to open than they should pay it back. >> i think the sale of a building does not cause a lease to end. usually,-that is not a reason for the lease to terminate. if there's a commitment, that reality is burdened by that possessory

right. >> right. i just want to make it clear that if it's the landlord's fault and they then they pay back. if it's not then they should not have to. >> i agree. >> okay. >> so on not read the text but it is here. if anyone in the public wants to see i can take a look at that. i would just make sure it shows up on the screen again. sfgov tv, there we go. thank you. that's the full text so anyone can take a look at that if they like. okay get adoption of rule number six. hold on one moment. >> so are we to take specific action on rule number six, and need to, if we do are we going to do it all at once? we will

definitely need to have the proposed amendment that commissioner tour-sarkissian identified good commissioneryee-riley. would we not have to have that as an amendment? >> yes. was going to treat that as a amendment. we conclude that a moment in the motion at the end. it seemed to sort of make the most sense to say that process for the end and all defer to the commission on that. >> in other words we could today make a decision on this with a caveat that exception is going to be included that would be compliant to the comments that were made, that if it is not the landlord's fault, that then, the question that you asked and i don't know if you heard it from the commission, certainly, i would like to [inaudible] as to who would have the burden without be the landlord's burden to prove he or she did not cause

that lease not to come, that renewal for that extension not to come into effect, or some else you said? should we not decide that too, with you before we can make our recommendation as to the amendment? >> yes. think we could.. one option isis the commission could continue this item give us a chance to write that out more cleanly in the commission could take further action on it later. i do think you would be allowed, although the commission is required to post proposed regulations with 10 days notice, i'm not aware of any requirement that prevents you from revising the text of those regulations. you have to post the proposed draft but it's here in this public meeting in the be open with a public watching us. i think it

would be fine for you as a commission to change the text of the regulation before adopting it. so i think we could make this change today, if that's with the commission wanted to do. but we do that through emotion or something >> right. i think that's- >> maybe our attorney could propose kind of a ending for that paragraph so we can all listen to it and approve it. it would be cleaner this way >> sure. >> instead of-i'm sorry to put you on the spot >> no., no word of course. my pleasure. >> are getting short on time. >> all skip to the contingency provision. there's a contingency provision in the legislation that a minister of code section 2.8 provides a lease between lease and legacy business making a lease or any portion thereof contingent upon

a landlord receiving a rent stabilization grant from the city equal to 450 per square foot or maximum 5000 ft.2 per location. the problem is that the landlord does not receive a rent stabilization grant and wishes to exercise the contingency provision, how does the office of small business ensure the landlord waits until the appropriate lease year to exercise the provision? for example landlord generally receives a grant in fiscal year 17-18 that would paid for lease year 2021 how do we make sure the lan [inaudible] 2022 exercise contingency provision? the solution isadoption of rule number seven.i have the text here. will number seven in the interest of saving time i'm not going to read it. maybe i should in this case.spears read the second part of >> i'll read the second paragraph. we just put it in there. any lease that contains

such a contingency provision must however was provided applicant must wait for the lease year versus the grant year to exercise the contingency provision that in the case were applicant applies for and received a grant when the lease or lease extension was executed which is the grant year, even though the lease or lease extension did not take effect until a later fiscal year. which is the lease year. if the proposed new rule is adopted the lords would have to wait for the property or to exercise the contingency provision and this goes hand-in-hand with rule number six. if the proposed rule is not adopted landlords may not wait for the appropriate year to exercise the provision. so any questions on rule number seven? okay. so one more thing i want to cover not tried to move quickly. i know are

running out of temporal existing leases already at least 10 years. question if the term of the lexi business existing leases already at least 10 years with a landlord get an annual grants for every year the lease is extended.. the answer is, yes. from a legal perspective of the ordinance tells us the landlord is eligible for a grant for each year that was added to an existing lease on or after january 1, 2016 for an example existing five year lease extended 20 years the landlord will be eligible for 15 years of grants. so one more scenario here. lease scenario number sevenis an existing lease of 17 years. is extended to 25 years. the landlord is eligible for eight years of rent stabilization grants. so one

last question. for cases in which existing lease 10 years or more, can we require a minimum 10 year extension? the answer from a policy perspective, the suggestion to require a minimum 10 year lease extension make sense but from a legal perspective the ordinance tells us a landlord is eligible for grant for each year that was added to an existing lease on or after january on or after january 2006 so the solution is just to make sure lenders understand and are being informed that long-term lease extensions are desired. >> great. let's open this up real quickly to public comment. i knew way of someone sitting here for public comment on this. public comment on item number five? thank you for waiting all day. >> no problem. it was exciting last year to be part of the legacy business process. speaking and hearing all of the other groups and so it's nice to revisit that today. with the businesses. so, thank you for the opportunity to

speakto the proposed rule changes for the legacy business. i'm ken rowe, the main owner of arrows small business of the leg is on the legacy business registered on the cut my statement and have it so i hope it makes sense but because of the grants to arrows we were able to continue to support local newspapers for our marketing been able to extend our lease a bit early allowed us to not waste time looking for new locations and to find backup plans if our lease was not extended. you all have spoken eloquently about that already today. this process has allowed us to make long-term decisions with our landlord as to the amenities we offer. we have a well known steam room with a 20-year-old boiler that just happened to die two months ago. it's kind of public knowledge that are

attendance drop dramatically because of that. if we do not have the lease extension early we may have had to reconsider investing in a new boiler. as it was, our landlord was able to help us with about half of the cost since he knew that he long-term renter with the same type of business in the same location. in the end we were then able to contract with another local small business before that for that new boiler. the landlords grant possibilities had to be delayed until the end of our previous lease he may not have helped us with a boiler cost and the next tenant in the building may not have needed such an amenity. so thank you for considering all of this and i've learned a great deal about these proposed changes, too. thanks. thanks. >> great. thank you very much. any other public comment? seeing none, public comment is closed thank you.

>> so for purposes of any commissioner who wants to make a motion, although of course commissioners are free to make whatever motion they want, i could tee up to possibilities. for both possibilities, these are both in proposed rule number six, both possibilities would in the very last sentence, the last full line, second to last line of proposed rule six, delete for any reason, and then-so that sentence would, if, however the qualified landlord applies for a grant before the lease or lease extension has taken effect the landlord must, as a condition of receiving a grant, agreed to return the entire amount of the grant in the event that-deleted-the qualifying lease or lease extension does not take effect,,, and then-so option one would be,,, unless the

office of small business determines that the qualified landlord was not responsible for the fact that the qualifying lease lease extension did not take effect. this is neutral as to burden. it just leaves the office of small business to make that call without there being any default options. option number two would put the burden on the landlord and would be similar but it would say, unless the qualified landlord shows that the qualified landlord was not responsible for the fact that the qualifying lease or lease extension, did not take effect. >> as to the second option, that proof is made to what body? >> i think we could still spell this out. shows to the satisfaction of the office of small business, for example.

>> yes. >> then there's an existing regulation about appeals of adverse action by the office of small business. that being appealable to the commission then to the extent you think you need akamai think that existing regulation would cover it. >> if the president allows me to just quickly, give my comment about-i think putting the burden on the small business commission is in my opinion is an unnecessary burden to i think the recipient should be able to prove that he or she was not the cause of that extension, not to come into effect.. so i would be personally in favor of that. also in the interest of the taxpayer instead of forcing the taxpayer to prove and or prove that it was not the

landlords fault. i would see from a public policy point of view, the recipient proving, having having the burden of proof. so as far as i'm concerned, is one of the commissioners, i would go for the second option. >> put the burden on the landlord? >> i would put the landlord with a caveat to prove to the satisfaction of the small business. >> i'm okay with that >> me, too. >> just read that one more time, to be clear for the record, proposed rule six would be unchanged except that in the final sentence,, the potential motion would be, first, delete the phrase, for any reason, would insert eight, at the very end of the proposed rule

instead of a period where it says take effect period that period would take make a, and unless the qualified landlord shows to the satisfaction of the office of small business that the qualified landlord is not responsible for the fact that the qualifying lease or lease extension does not take effect. >> then you're going to leave the last sentence. is that going to be awkward? the qualifying lease extension does not take effect. i mean, are you deleting the last comment--after, for any reason is that can be your sentence or are you going to continue, the qualifying lease or lease extension does not take effect? >> so my thought here was to delete for any reason. say the qualifying lease or lease extension does not take effect and then insert a comma with

this new language >> so you'd and the paragraph with the additional sentence? >> right. >> okay. do we have a motion on this? >> i'll make a motion that is amended-motion >> we have to do things were talking about here. >> so i think the motion would be to accept-to approve rules six, as amended, or we first have to take a vote on the amendment to rule six, right? >> right. i think first i would to amend rule six along the lines described by deputy city attorney and i can read that [inaudible / off mic] >> which we will continue >> the removal but this one there's two rules that were

adding so we first have to vote on making the amendment to rule six. as proposed by the city attorney. >> okay. >> i move we adopt the amendment as set forth by the city attorney. that's it. >> for rule six. >> four rule six. and adding the moment as read and proposed by city attorney. >> let the attorneys figure this out. >> i will read that the full last sentence just to be clear, >> as to be read by the city attorney as follows >> sure. the final sentence proposed rule six would read, if, however, the qualified landlord applies for a grant before the lease or lease extension has taken effect, the landlord must, as a condition of receiving a grant, agreed to

return the entire amount of the grant in the event that the qualifying lease or lease extension does not take effect ,, unless the qualified landlord shows to the satisfaction of the office of small business that the qualified landlord is not responsible for the fact that the qualifying lease or lease extension does not take effect. >> yes. >> okay. do we have a second >> second. >> we should do a roll call >> yes. let's do speak all vote >> are we voting on the- >> on the moment >> let's just vote on whether to make the amendment first and then the commission could vote on both proposed rule six and seven at the same time i think. >> adams aye, dooley aye dwight is absent ortiz-cartagena aye

tour-sarkissian aye yee-riley aye zouzounis aye. that motion is approved 6-01 absent. >> now you can make a motion to adopt both rules six as amended and seven. >> so moved. >> second. >> all right. once again adams aye, dooley aye, dwight is absent ortiz-cartagena aye, tour-sarkissian aye yee-riley aye, zouzounis tran. that motion passes, 6-0, one absent. >> okay. thank you. next

item, please. >> item six directors report to update and report in the office of small business and small business assistance center department programs policy and legislative matters, announcements from the mayor and announcements regarding small business activities. discussion item. >> commissioners, all be very brief. i'll let you know were engage in the updating our sales force which is how we track our client services. in a joint partnership with oewd to actually improve our capacity especially in reporting and sharing client information. also, rick and i for the legacy business program have initiated the logo branding project. so i will send you the schedule of which we are proposing to have the deliverables come before you. so that we have our logo. we can have the plaque. we can have certificates. we have marketing brochures and working on a new website. so those are the two things we will be

sending out new legislation that's been introduced to you tomorrow, and that concludes my report. >> great. think it any public ccomments on item number six? seeing none, public comment is closed. next item, please. >> item seven commissioners reports allows president vice president and commissioner's report on recent small business activities and make announcements that are of interest to the small business community. discussion item. >> okay. the auditing i've report i did attend the office council district merchants dinner last thursday. and that we are getting--i am hoping with the neighborhoods during small business week trying to engage small businesses. in the sidewalk sale which will be on the 28th. that's what i have to report it commissioner

ortiz-cartagena >> i just want to highlight the passing of robert putsch and ellie from california parking.. yes, his family is one of the pioneers of parking in the city and her blessings to his family and all the contributions he did to the parking industry in san francisco. >> thank you. any? >> i also attended the gala you attended on thursday. good party. >> anybody else? public comments. anybody like to make comment on the commissioner's report? seeing none, public comment is closed. next item, please >> item eight new business allows commissioners to introduce new agenda items for future consideration by the commission. discussion item. >> commissioners zouzounis >> yes. this past tuesday supervisor cohen's office introduce a probation all flavored tobacco. i want to -

excuse me - make sure that comes before commission at one point and also for those listening, if anyone is interested in a timeline, were opportunities for public comment, contact our office. at this point it should be heard within a committee in the next month and so the commission will update on that. this also comes with a proposed, but pending, ban on all filtered cigarettes, which president of the board supervisor london breed's office is looking to introduce. an aide from supervisor 10 reads breed's office came to me about that piece of legislation which i also want to come before the commission once that is induced the board of supervisors. yes. >> okay. any other