but working for the city and county of san francisco give us employees the unities to contribute their ideas and energy and commitment to shape the city's future but for considering a career with the >> good afternoon everyone. this meet willing come to order. welcome to the january 14, 2019 regular meeting of the land use and transportation committee. my name is supervisor ahsha safai chair of the committee. to my right is supervisor aaron

peskin and matt haney. today is our clerk. our clerk is erica major. i like to thank from sfgov tv. madam any announcements? >> clerk: please silence all cell phones and electronic devices. items acted upon today will appear on the january 29 board of supervisors agenda. >> supervisor safai: please call item number one athleticism three today. >> clerk: revise map one to include 1650s1660, 1670 and 1680 mission street in the c3g area and making promote -- appropriate finding. item two is revise map one of

the octavia area plan to change designation of 1650, 1670 and 80 mission street from np3 and c3g area plan. item number three is ordinance amending planning code to resume 1650, 1660, and 1670 mission street from their current designation and c3g and affirming appropriate funding. >> supervisor safai: unless there's initial comments, call up mr. aaron starr from the plan planning department to speak on item one and two. >> good afternoon. manager of legislative affairs for the planning department. there are three items before you today. the first two change the general plan and the second one changes the zoning map. this is a package of ordinances

intended to rezone the properties from 1650 to 1680 from their existing zoning which is nct3 and through cg3 which is downtown general. the general plan amendments are being done so that the zoning maps will be consistent with the general plan. they were spurred by the department of real estate ordinance which proposed to rezone the subject properties. the planning commission heard these three item on their october 25th hearing and voted unanimously to recommend approval. i'm here for any questions you may have them. >> supervisor safai: any questions from committee members? >> supervisor peskin: for real estate but not more planning. >> supervisor safai: item number three.

>> good afternoon chair safai i'm director of real estate. i'm here in connection with the planning department to ask for your consideration and approval of the rezoning of these parcels to the c3g designation. as hinted at by mr. starr this rezoning was part of the sale of two buildings. the 1660 and 1680 properties which were used to help fund the 49 south van ness project. >> supervisor peskin: welcome to new member haney. i want to thank you and your staff john gavin for meeting with me earlier and these are not questions about the rezoning

but questions around the purchase and sale agreement and the appraisal i wanted to determine for the record and hopefully with some evidence for the record that the highest best use in the appraisal was for c3g or office if you will and that was set forth in the purchase and sale agreement. >> thank you for meeting with us earlier supervisor. it was our pleasure to speak with you this morning and to your question, based upon your inquiry, we did go back and look at both the purchasing sale agreement and the appraisal. we believe there are evidence in both of those documents that support your assumption and your assertion. i would first going to the appraisal report, the report was done by -- they indicated they

used the comparable sale approach. if i may quote from that report. it says in quote, in the sales comparison approach, the value of the subject is estimated by comparison with recent sales of similar office buildings in the subject market area. most appropriate unit of comparison for office property is priced per square foot basis of building area. the appraisal went on to use nine comparable sales. all sale were office. most those sales had c3 zoning. the price had a range $600 per square foot which was reflective of an always use.

the appraisal was subject to review appraisal pigeon clifforn clifford who supported the use and the comp. we return to the purchasing and sale agreement. first the franchise price that was included in the purchase and sale agreement is reflective of the appraisal. secondly in section 5.8 of the purchase and sale agreement, subsection b i quote, the staff of the real estate division will cooperate in good faith with buyers. by this cooperation paragraph, it's clear that it was

contemplated bethe party that would be rezoning and because of timing, the city wanted to enclose this transaction use those proceeds for the 49 south van ness project with the rezoning to lag behind. >> supervisor peskin: thank you through the claire for those responses. obviously when a property is owned by the city zone p and so far as we know longer own them, which seems appropriate those of us were members of the board at the time of that sale was cognizant of the purchasing sale agreement. i appreciate there was an appraisal and office comps were use and independent review of that appraisal and have no further questions. i'm subject to public comment, happy to forward these items to the full board with recommendation as a committee report. >> supervisor safai: thank you supervisor. unless there's any other

questions any members. let's open it up for public comment. each speaker will have two minutes. please state your name for the record. >> sue hester. this is the first hearing on the new board. you have proposed to send out something to the board tomorrow without full understanding what you are doing. in the packet for the third piece of legislation, it's my letter to the planning commission when they did this. it details the issues. basically, we had a precedent that was set in 2002.

it was changed by an appeal of a zoning administrator's determination by the board of appeals to 1.3 million square feet of preexisting office space. what that meant was a gift that they developer dent have to pay for the conversion of the merchandise marked, two offices, housing fees, and child care fees. you're going to do the same thing today if you do this without thinking. i ask for the staff from the planning department to pull it up. my letter stated august 29, 2018. i was involved in both this case when it was originally approved at the planning department.

i was involved in the merchandise mark. we had a big battle in the city to institute housing fees, transit fees and child care fees. didn't come out of the -- >> supervisor safai: can you give the speaker an additional minute please? >> i have a press release that i used in merchandise mark. when the merchandise mark didn't do this drill. it allowed the buildings to be called preexisting office space. they lost $25 million to

litigation fees. there is no records for these buildings in the record. everyone will go to the building department and say, same to same, preexisting office to office. they don't know if the building department, city offices are not preexisting offices. in the permit it says office. i think it's reasonable to slow down on number three, push the general plan amendment through. let's stop the zoning until you have the facts what are the legal uses of the buildings. i can't figure out what it is because planning department -- the files are obliterated. they basically -- [indiscernible] i can't pull up

the history. you should pull it up for all of the buildings. it went to city offices. 1660 was built city offices. 1680 was legal industrial. it was an m zoning. it was not legal office. you're cheating the city out of funds. child care, housing and muny. thank you. >> supervisor safai: don't go away if you would be willing to stand for another moment. the chair will indulge me. >> supervisor peskin: i apologize for my ignorance. are you saying pursuant to the

voter approved initiative of 1986 proposition m that because these were government offices -- explain the argument. >> before there was proposition m, voters huged the board of supervisors and didn't allow the downtown plan to be adopted until the board of supervisors adopted housing fee, the transit fee and a child care fee. this happened in '85 before the downtown plan was passed. it was hijacked by the people in the city. the board adopted fees that preceded prop m. prop m is different. but the fees is further from that. the fee have been the bas basisr

the city since. it was blood on the floor for couple of years. slow down number three, which is zoning. get the information. >> supervisor peskin: i heard that. i'm happy for more information. if these were built prior to 1985 when those fees were adopted, we can look up and see when they were constructed, they would have been exempt from said fees at that time. >> no, they were not office. because they were not preexisting office. they have been converted to office use. that is a way we get conversions

of industrial to office in districts six and district nine. not district three. >> supervisor peskin: weren't these office uses by the government? >> the whole thing around merchandise mark is city offices are not offices. they are public use. just because the city get a office anywhere it wants to, doesn't convert the space to legal office. legal office is separate. that has been a zoning administrator's determination. so the city offices do not make an office -- do not make a space an office. so the city can take over hundred thousand square feet and

not have to pay fees >> supervisor peskin: this is interesting. i would like to -- ms. hester, we entered into a good faith contractual commitment with a purchaser of that property which i earlier referenced. i would like to give the planning department -- i would like to hear what the planning department response is. >> supervisor safai: we're still on public comment. we can come back to that. my other members wish to comment? seeing none, public comment is closed. mr. starr, supervisor peskin has some questions for you on this. >> supervisor peskin: you heard

the question. >> thank you for noting i'm not the zoning administrator. there are two issues. i think -- we discussed this at the planning commission hearing. ms. hester was there. only disagreement we had was the city -- the zoning administrator determined that these are considered office per prop m. for them to change it to general office, they need to do a change of use application. whatever fees are subject to that change of use will be triggered at that time. >> supervisor peskin: they are still subject to the various fees that ms. hester brought to our attention?

>> correct. >> supervisor peskin: ms. hester disagrees with that >> that's point of disagreement. i was just texting the zoning administrator. he confirmed that the old and new zoning, they confirmed that yes, they are subject to change of use fees from going from public facility to general office use. >> supervisor peskin: in item three amendment to the planning code sane the zoning map, does not in and you have itself change the use. they would have to file a building permit which would trigger the change of use and trigger the fees? >> you're correct. >> supervisor peskin: ms. hester would you like to respond to that? >> this determination by the zoning administrator is not in your packet. it never came back and the planning commission. i have no idea what this is. i don't have a lot of confidence in the building department or

that level. the planning department when projects are not rooted them. if a developer looks at a place and puts a tenant in and converts it to office and doesn't -- building department is not going to look at anything other than, oh, there used to be city offices here. the building department is not going really grounded preexisting offices as offices. prop m does not apply to the city. the city can do anything it wants without a prop m application. that's the way it was written. preexisting office is a big deal on 1650 which i know --

>> supervisor peskin: that was helpful. thank you ms. hester. i certainly will be the first to admit that it is entirely possible somebody could come to that change of use, relative to this property to the department of building inspection, they might not properly route it to the planning department. it could issue and any fees that are due and payable, might not be paid. i understand that concern. there may be, i'm now looking through the clair chair deputy y attorney, to deal with the subject ordinance to make it clear any and all fees are due and payable when a change of use is filed. should that issue and without the fees being paid, there will be an ordinance that clearly shows that the fees are due and payable. what do you think about that? i have alternatives.

>> i'll respond one at a time. i think either way, -- i think that your suggestion is doable. tomorrow rather than than today. it would be a statement that effectively -- any change of use, the property owner and project sponsor will be required to pay the feeings required by the code. sound like you're suggesting maybe those fees are not paid that the zoning changes made in this ordinance would be rescinded. i don't think that's something we can do. >> supervisor peskin: i was not suggesting that. i was suggesting a written instrument that would make it clear that in the event change of use issued and the fees weren't paid that the intent of

the city was to collect them and that sue hester or somebody can bring to our attention that her fears were realized and that the property owner still owes the city. >> yes. >> supervisor peskin: we don't like crafting words on the fly. colleagues, i think we have couple of choices. one is to continue item three for a week in this committee. the other is to send it out as a committee report and have language that we would introduce as an amendment tomorrow. i think either one of those is fine. mr. starr, if we can get a letter or electronic centr elecm

the zoning administrator. if you can draft language like this for introduction tomorrow, i will be comfortable in sending all three items out as committee reports today. >> i think that makes the most sense. >> supervisor peskin: for the record, ms. hester has a storied history making sure that the city is properly paid in many planning instances and we owe her debt of gratitude for millions of dollars that we have collected. want to thank her for bringing this to our attention and hope that language should be enough surety to make sure that is indeed what we all intend and will happen and with that, i will make a motion to send all three items, items one and two with recommendation. item three as committee report without recommendation subject to the amendment that he will

prepare by tomorrow. >> supervisor safai: can we do that without objection? >> clerk: item four is ordinance to change zoning code for nonretail sale and service uses in the c3r zoning district. >> supervisor safai: supervisor peskin. i will hand it over to you since this is your legislation. >> supervisor peskin: thank you chair safai. this has been heard in committee for a number of times and i know that you are familiar with it. for our new members edification, i will talk little bit about the fact that this is the product of a couple of years of informational presentations and collaboration between the planning department, my office and the always of economic and workforce development. really entered around trying to preserve our destination retail

zone in san francisco and union scare, commonly referred to as the c3r zoning district. which has been under pressure from the amazon effect and particularly as it relates to the push to convert upper floors historically have been retailed to office. last monday this committee adopted an amendment that seeks to actually achieve a compromise for applications to convert office space on the third floor buildings which was the source of concern, contention from property owners in the c3r zoning district. the complie compromise is a poly choice that really prioritizes retail and permitted uses while allowing limited conversions when the physical characteristics of the site are not conducive to retail.

just by way of background, we do duplicated the file. this one has a $4 conversion fee that's supported by a study that's referenced in the legislation. we had a duplicate file that has a $6 conversion fee which requires rereferral to plan napping is not before yo -- to . by unanimous vote we imposed interim zoning controls pending the approval of this legislation and what's before us, lift internal codes at the board put in place by.a year. i want to thank all the parties involved for reaching this compromise and hope that subject to public comment and any statements that mr. starr has made repeatedly is welcome to make again that we can move this to the full board with a positive recommendation.

>> supervisor safai: supervisor peskin, can you remind us why you chose the third floor? >> supervisor peskin: a lot of this actually -- mr. starr, you might want to jump in -- lot of this really came -- there were slew proposals to convert upper stories in the union square c3r zoning district to office ranging from properties macy's own and macy's men@ç store, properties on 200 block sutter street. at that time, the department really expressed concern about doing that and we looked at the building topologies. the first incarnation of this actually said no conversions of the third floor. we made them impossible. my office really listened to the union square business improvement district and others

as well as retail brokers and really sought to have some flexibility in the limited physical circumstances that were the subject of last week's amendment. i will defer to mr. starr if you want to add anything to this long-running conversation. >> you covered well. the staff report was initially to prohibit floors. the commission felt that we needed more flexibility on the third floor given the nature of retail and the dealty of leeing spacespace -- leasing spaces ou. >> i understand they felt what was the difference between third and fourth or fifth floor. why did they not like it being capped at the third floor. >> my understanding, retail --

people generally don't want to go up elevators or escalators to go shopping. third floor is difficult to rent to retail operators because of disconnection from the street. we're very concerned about preserving union square as a destination shopping centre. we don't want it to be degraded either. we don't want the buildings to be vacant. >> supervisor peskin: they did survey and found a relatively healthy occupancy rate. i think that kind of went into the staff's original recommendation for a strict r prohibition at the third floor.

we rhet struck a compromise lan. >> supervisor haney: how floors defined? some of the places have a very open atrium. the second floor might not be up until 40 feet. i'm curious how the floors were defined in instances. >> t >> there are definitions for floors. based on that definition, there's a mezzanine definition. i think in some cases that counts as a second floor. it depends on certain characters of the building. >> supervisor haney: union square boundaries, i understand you have them laid out here. physically where does the union square downtown zone end? does it end at market street?

does it capture the west field mall across the street. is not capturing the mall? >> i believe it does extend to west field and the old bloomingdale. it's not just union square but the neighborhood we know has union square. >> supervisor haney: what would happen to the upper floors potentially? >> they could convert to office on some of them. >> supervisor peskin: on the third floor, with this compromise along, that's before you. >> supervisor safai: men's clothing tend to be on the up

floors. bloomingdale, nordstrom, they all tend to be on the upper floors. >> i think that's changing there. they got rid of the macy's men. >> supervisor haney: can we write in the amendment to protect men's clothing? >> supervisor peskin: about the boundingries of the c3r, we can pull up the map. >> supervisor haney: let's do that. >> supervisor peskin: you can go to planning.org and tab on the like has the zoning map to pull that up.

>> it has a movie theater and the office.

>> supervisor peskin: there it is. well done aaron. i don't mean this aaron. there you go. i want to show that cursor around union square. >> it's this area here.

this lighter pink. it does include the properties across market as well. >> supervisor peskin: those are the two parcels. if you get sfgov tv. through go. there's the answer to your question mr. chairman. >> supervisor haney: thank you. >> supervisor safai: thank you mr. starr. we'll open up for public comment. please come forward if you wish to comment. state your name for the record. you have two minutes. >> my name is william levine. i'm a fifth generation san franciscan. i was not aware of your compromise. i think the compromise is

excellent. anything above the third floor will be disastrous. we used to have a store building union square that question did e did rent. it's very hard. trends and fashion changed in the last 20 years. i remember when i first started working, everybody wore suits. now hardly anybody wear suits anymore. >> supervisor safai: just us. >> i think only in department stores, do you want to go anything above the third floor. i think the third floor is a good compromise and you're allowing that situation to occur where you can have offices on the third floor standard type buildings. not department stores. i commend you for that. any other cleaning in that let m--change in that let me know.

>> supervisor safai: next speaker. >> good afternoon supervisors. i'm karen flood executive director of the union square bid i want to say thank you to supervisor peskin for working with us. i know it's been a long road up. did hear us on the third floor. it makes a difference. we care about union square. we wanted it to be as much retail as possible. it creates vibrant downtown especially on the lower levels. this has been really important to us and we appreciate the introduction of the fee for conversion from four to settlement. tha-- fourto six. so thank you. >> supervisor safai: thank you. >> supervisor peskin: i thank my staff who did all the hard work.

>> sue hester. basically i'm a broken record. please use every opportunity you have to require the landlord to install lighting on the exexterior aexsteer-- exterior . the landlord, the building owner, should have to install exterior lighting. assumption that everyone had that the zoning of the first floor was retail. it's not safe now. if you're not firm especially if

you're older, dark sidewalks are really impediment to feel comfortable in the public realm. the persons that have to do the improvements are the landlords. not the tenants. they should have to install led lights or whatever to light the sidewalks and not relay on interior lighting anymore from retail. you have an opportunity, use it. if building owner is going to take advantage of having more lucrative space, put the burden on them to light the sidewalk for the public. thank you. >> supervisor safai: any other members wish to comment? public comment closed. supervisor peskin. >> supervisor peskin: i want to say that, this will raise

million dollars for improvements in the c3r. i want to >> president turman: thato put . i want to acknowledge my staff and parties planning. representatives of the property owners in the c3r and would like to make a motion to send this to the full board with a positive recommendation. >> supervisor safai: great. can we do that without objection? it is so moved. any other items before us today? >> clerk: there's no further business. >> supervisor safai: we are adjourned. thank you. [adjourned]

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coffeehouses in month neighborhoods that are on their own- that's >> can i get public comment before going into closed session , i don't see public comment. we will now enter into closed session. do i need a motion to do that? >> we need a motion to go into closed session. >> i i moved.