today is really up to date, right? >> i see -- >> so, exactly, i was about to say amanda is on. she can speak to this. >> hi, supervisors. amanda from the treasurer's office. so the data that you see, diana was correct about that one year catchup, cleanup effort. the closure data you are seeing currently is not up to date. the reason for that, we get the bulk of closures in our system when we have businesses renew their business registration every year. typically that happens by may 31st. and so in our data, you'll historically see a big uptick of closures in may an june when we hound businesses and they say, no, we're closed. and because the city has deferred basically all of our

business taxes during the pandemic, we have not seen that uptick. the next deadline for businesses to renew is april 30th. so we do anticipate we'll see more closures as the notices have gone out this week. we know this is not an accurate representation of how many businesses are operating. we expect quite a few closures between now and the end of may. >> supervisor chan: that's super helpful to kind of get us sort of in the context of what we're looking at in terms of closure. that it may be actually a more dire situation given the fact that we're just in 2021 and maybe some of the businesses are teetering and trying to make the decision right at this minute, right at this juncture of what they've just been through in 2020.

that's super helpful. that means i may circle back early may or sometime in may to kind of hopefully get a better understanding -- sort of the same breakdown you're presenting now and see what that would look like. for me, definitely, i'm particularly interested in businesses that have been around for 15 years or more. you know, to see that data in may, what that means for those businesses. and my second question is -- i don't expect you to answer, because maybe the volume of it -- but just try to understand the breakdown again in slide 9 of that presentation. you know, when we look at the san francisco register of businesses by age, that's great looking in the breakdown. just trying to understand for that 28% -- or even 5-15% -- for

28% for the businesses that have been around for more than 15 years and those 5-10 years and the 37% category, do we know what type of business are they -- you know, i think it's just thinking about the budget analyst report talking about the industries that really are suffering right now. and without the support of the federal loan i'm trying to, again, understand -- does it sync in terms of closure with what the budget analyst is seeing? >> so i think what we have here, we can get it by industry, but we don't have that today. but we can definitely, i believe that can be broken out by industry in terms of the years

and associated. that's something we can come back to. >> correct. i will just add to look at slide 10 with a little more insight. if you look at the little grey bars at the bottom. the orange bars are businesses that are closing in any given -- any of the given years that have been around for more than 15 years. and they've been generally within a band of 11-13% of all closures. going back to 2015. currently, that stands at about 13.3%. and for the reason that amanda stated, these are super preliminary numbers, but it is kind of heartening that the trend remains the same in terms of the share of these businesses. so that kind of lets us know that perhaps it's capturing

something and we will definitely keep track of it. and then we'll be able to produce follow-up and show you, not only which businesses remain open that have been around for 15 or more years by industry, but we can also show you who closed by that measure. >> supervisor chan: i want to add two things in reference to the questions. >> yesterday, as we proposed the 20 million appropriation of property tax revenue, these businesses were prioritized. so businesses that are considered community anchors, 50 years or more, for our funding, they were prioritized in the grants. i wanted to make mention of that. also in terms of an update on the campaign. there is going to be -- we launched in november and it's

recovery. so the campaign is -- we will recover together and shop local. more to come on that. we'll be definitely more focused on redirecting everybody back to shop locally as we reopen. so thank you for that. >> thank you. supervisor chan, are you finished with your questions? >> i am, thank you, chair. >> supervisor preston: i have questions, but before i get to them, that last slide, can you put the last slide up that shows the closures. let me just say this and this is a comment not a question. to see this kind of graph and then hear from the treasurer's office around the reasons that the 2020 and 2021 figures are

likely off. i think it does a disservice -- and i'm not singling out oewd. if you listened to me talk to the police chief about how data is presented and other departments, i think you'll see a consistency. these kind of graphs tell a story. when you present a graph like this showing business closures plummeting in 2021, when we all know that is inaccurate and when you're actually telling us that is inaccurate, it is okay to say you don't know something. it is okay for that bar for 2020 and 2021 to say, we don't know. we are studying that. but i don't like anyone looking at this chart who would think that business closures have dropped to like a third of what they were before the pandemic. which is -- it's laughable to all of us, right?

so i appreciate the transparency in the comments and recognizing the limits, but either let's get better data and projections or let's have a chart that shows we don't know the information. no need for comments, but i wanted to put that out there. i did have specific questions, though, regarding the presentation and what oewd is doing or is not doing. so, first of all, on the 400 referrals through partner organizations that you referenced, what is the data coming out of that with respect to rent reductions and waivers? how many of the 400 had their rent reduced or waived, how much rent was waived? what data do you have? >> we don't -- so those are just referrals, so that's what

grantee's report. they report referrals not the latter. >> supervisor preston: so these are referrals from community organizations to oewd or to other resources? >> to other resources such as the one providing the lease review. for example, we have 13 providers, a business comes to them for help and support. they document if it's like for lease review or lease support. so that's what you're seeing here. >> supervisor preston: okay. i'm just go to submit we need that data to analyze how effective the system is. so presumably each of those partner organizations is tracking some kind of data. i don't know. but we don't know if the referrals are working or not. we don't know if the 400 businesses that were sent to get

assistance elsewhere, none of them got their rent waived or reduced or all 400 did. so that's concerning in terms of evaluating the outcome of these programs. >> and it doesn't correlate necessarily -- i just want to clarify. it could be any number of things. it could be reviewing the existing lease. it could be negotiating a lease. so it doesn't correlate specifically to rent reduction. so i just want to be transparent about that, too. in reference to your question. >> supervisor preston: thank you. so the 400 referrals are not specifically to address back rent? >> no. >> supervisor preston: do we know how many businesses have been assisted through these programs? you mentioned 400 referrals. but how many have been specifically assisted through

referral to address back-rent issues? >> we don't have that. we can follow up with partners to get more specific information on that for you. >> supervisor preston: okay. and i mean i'll ask a few more questions. i want to be clear at my frustration level -- both my appreciation for all oewd's work in supporting businesses, but also the frustration that -- i literally have been raising the issue of back rent for eight months with oewd. so the fact that we don't even know -- this is one of the primary ways that supposedly we're assisting small businesses and we don't even know how many we're assisting with back rent issues or how much that is. that's a problem and needs to change going forward. a couple of other questions on this. one of the other ways that

referenced the ways we were assisting was that we were starting to do webinars on the eviction moratorium. so, when did oewd do its first webinar for small businesses around the eviction moratorium and their rights and obligations under this ordinance? >> so i don't know -- i don't know if anyone knows specifically that. i do know very early on -- so, again, it's what we do, but also what we do in collaboration with our partners and supporting those two. i do want to say really early on there was collaboration in terms of what is going to happen when i close and very early on, like, remember the first, maybe second month of the closures, we did do

some webinars with committee for civil relates and with the non-profits and meta and others. we have been doing them in collaboration, but i don't know if you know when we hosted one specifically. we did the bar and others. do you have any more specific? i know we've been doing them throughout? >> sure. thank you, chair preston. specific to only commercial eviction moratoriums, the first one that i hosted was just even yesterday, but our first webinars related to covid, we -- we provided webinars that were not just specific to commercial eviction, but also the help order because a lot of times businesses didn't have singular questions on the moratorium.

it was moratorium plus. can my business operate, or can i operate based on what the health order is saying. the first webinar -- the first one i did was march 19, 2020 and it was a combination of some moratorium questions and some health order questions. >> supervisor preston: thank you. i think the answer to my question is yesterday. that the first webinar done by oewd on -- specifically on the issue of either the eviction moratorium or to the extent implicated back rents, that was yesterday. there may have been other stuff folded into other presentations. and you know, i want to say that i appreciate that this was done yesterday. it's been a long time and this is the big -- you know, among

big issues facing small businesses, this is massive. so i'm not going to ask you on the spot to count up the number of hours that oewd has spent administering say $5,000 grant program, but if you put that on one side of the scale and put on the other, the number of hours in which there was any webinar or anything else on this issue of eviction and rent debt, the fact that yesterday was the first one, i think, again, i don't want to criticize when it's happening, because kudos to you for doing it yesterday, but we're pretty far along to be just starting that. you know, let me ask. what is oewd's position with respect to back rent? is there one? when you engage, for example, a commercial landlord, that

contacted oewd, you said you provide guidance, clarity around the terms. what is oewd's message for that commercial landlord if there is one? >> so, i think i'll let you answer a piece of it, but what i will say, again, in the office for us we work with the partners that help to negotiate, that have that level of expertise to help provide that. us directly, we refer out to those services and contract out those services, because we at oewd are not the experts. i'll let him answer in terms of the moratorium itself and what guidance he provides directly related to that. but what i will say, is that for us, we contract out those

services that have that expertise when it comes to guiding businesses in terms of what they should be negotiating and how they should negotiate. and those are the services we contract out and support with in collaboration with our partners. >> supervisor preston: i'm trying to get a sense more clearly of what oewd, if anything, communicates to commercial landlords? i'm not suggesting an answer. i'm trying to be clear. is the message from oewd to commercial landlords that reach out, we urge you to waive rent so that your businesses can survive. or is it we are agnostic on whether you raise rent, that's not our role, that's someone else's role on what you should do. i just want to some clarity. i understand there are advocates, someone might have an attorney. but i think it's important we get clear on who is taking what

position here? what is -- again, what is the message from oewd to the commercial landlord when this issue comes up on back rent? is it telling them, you should waive it? or is it telling them we're not taking position on that. >> sure. i think i can answer a couple of those. you know, i've engaged with only a handful of landlords. but a lot of it is advocating for working with the business to either give them more time to repay rent, or you know, there might be conversations, depending on the business's specific issue, we'll work with the business to do a rent reduction, or really appreciate they're not going to get the same revenue that is coming in prior to the pandemic. if you're a business that such as like a hair salon, that was

unable to operate in the castro for months, they're not going to get the level of revenue that is going to cover the entire rent that they were previously owed. so it wouldn't make sense for the landlord to expect that. i think our goal really and in line with what the ordinance is, is that you really want to work with the business. the business is what is giving you that revenue. and you can't just say, well, i expect 100% tomorrow or 100% further down the road. it's going to take time for that business to get even close enough to the revenue they're generating -- they were generating before. but it's case-by-case depending on what the situation is that business faces. we want to -- our message is work together. this is such a hard time for the business. and if that means rent

reduction, if that means providing additional time. and a lot of it was prior -- allow for a repayment period. the previous moratorium didn't have that. so, yeah. >> supervisor preston: i don't want to belabor this point, but i think in any discussion or negotiation, it's really important that everyone is clear what their roles are. and, frankly, i'm guessing at your answer. i don't want to put words in your mouth. but i don't understand if oewd comes into a discussion between the commercial landlord and tenant as an advocate for the small business, or as effectively a mediator? what you're describing to me sounds more like a mediator role and mediator is indifferent to the result, but is there to have the parties work together. so i'm just trying to get clarity. again, i'm not even suggesting

what it should be, but we need to know what the role of everyone is. so is oewd's role as a disinterested mediator or as an advocate for the small businesses to get rent reduced or waived? or is there another option i'm missing? >> so our role serves as a mediator -- so this is where i see an area of opportunity. i see an area of opportunity in terms of what he was mentioning between the rents are -- you're not going to be able to sustain the rents that were pre-covid. the landscape is changing, so what information, what data can we be providing as a city to help inform those discussions? and that negotiation between landlord and small business.

something that is more plausible, realistic. our goal is to maintain our small businesses. and our -- in our corridors to continue serving our neighborhoods. it's either advocating for a business and intervene for them, with them. which is what we do with our partners. provide information about the data and information we can make available so that hopefully it pushes towards a better outcome for both. and so, that is where we are. we mediate, we do provide clarity on what the policies are, the legal issues are as it relates to the city. or where we can't, we provide the advocacy with our resources, with our partners, we do that for the business.

where we can't step in between two private parties, right? but we do have a role in providing education. that's an area of opportunity we need to be moving into more and be able to advise on that to, again, get us -- at the end of the day again, we want to make sure our businesses stay in our corridors. they're a key part of the economic recovery and how do we do that? these are the different ways. provide them a direct resource. provide access to that and figure out what that is. increase. intervene directly as mediator. and, again, that educational portion is key. but i do see an area of opportunity there we need to expand upon. i think that is part of your point, supervisor. i don't want to put words in your mouth, but definitely.

>> supervisor preston: thank you. there is a disconnect on the people who go to oewd and the actual role. folks go to oewd thinking they'll find in oewd an advocate for their position and, instead, get at best more of a mediator role. i know we're going to hear from people who are more the advocates in subsequent presentations. but i think it's important to be clear organizationally, you look at an organization -- or a department or agency like the rent board. they're clear. they're not an advocate for tenants. they're not an advocate for landlords. they can answer the question in two words if you ask them. you know. i just feel like some reflection -- what i'm hearing is that you take a similar position, but i think clarifying that is important in terms of how you

fit in here. let me just try to wrap up with another question here. or two. the fund, you referenced -- i think you said $24 million in grants and loans overseen by oewd. did i hear you right, for those, there is no restriction on those being used for rent? i think you were connecting them to the rent discussion saying those funds could be used for rent, is that correct? >> yes, that's accurate. >> supervisor preston: okay. and -- i just want to surface a concern here. which is that we're devoting, as we should, significant resources as a city.

the federal government now as well -- to providing assistance to small businesses. yet we are effectively handcuffed by state law around directly intervening to lower rents and force rent waivers. so, effectively, we have a system where the things you're managing, the grants you're managing, the care you're devoting to getting those things out the door is essentially and indirectly just passing all of this money to commercial landlords. i don't know if we track -- maybe i should ask you. do we track how the funds are used? those $24 million? and what percentage of that is used by these businesses to probably pay one tiny piece of the rent debt that is hanging

over them? do we track the usage of the funds? >> we don't track the usage of the funds with the exception of reopening, which -- let me correct that. those funds are specifically for reimbursable expenses for reopening. but other than that, we do not track it. we want businesses to be able to use it in whatever way they see fit to help support their business at this time. so it can be rent, it's just we're not restricting the use at this time. so it could help them come to a resolution. even though it may not be a big chunk, it may mitigate that, but we do not track that. >> supervisor preston: thank you. i will just finally comment that -- we need the tools locally.

and i will speak for myself but i know it's probably true for others who have consulted with our city attorney, wracking our brain, how do we go in and lower that rent debt legislatively? mostly you come up against a state law. i don't know if our state partners is watching, but it is absurd, absurd that the state and federal governments have not in any way intervened to allow us the tools to even have that policy discussion, and instead, the solution is only policy solutions that give money to businesses who then have to pay it to a landlord. commercial landlord. and the only folks who remain whole through all this legally are commercial landlords. that is a crazy system. it is not the fault of oewd, so it is a bigger issue.

but i just wanted to comment on that, especially because of your comment around the grant, that the funds being used are for rent relief. and we understand why a business would choose to use those funds for rent relief, but we need to be real when we're making the grants that we're indirectly funding commercial landlords because of being blocked from the policies that i think we would like to implement locally so intervene and lower that rent debt. with that back to you supervisor mandelman. >> supervisor mandelman: thank you, chair. i share your frustration. and feeling that sacramento, they're not giving us the tools we need to do for san franciscans or doing the work for all californians. i don't believe -- i believe our delegation is trying to do some of these things. i think there is tremendous,

frankly, domination of our state legislature by property-owning interests and real estate interests that are not interested in having these -- in either allowing us to protect our small businesses or allowing the legislature to do what the legislature should be doing. with that, we will move on. the office of small business. and the small business commission. we have regina, our small business director. and our small business commission president and they're going to present on what the small business commission and office of small business are hearing from small businesses. how the legacy business program has helped businesses during the pandemic. and survey they've collected from businesses on their leases

and i will also note that oewd has left it to office of small business to let us know whether we are meeting the demand for technical assistance and legal resources for small businesses dealing with lease negotiations and rent renegotiations. should we have director and president? >> yes. thank you. i do have a presentation and... all right. well, good afternoon, now, chair preston and supervisor chan and

mandelman. thank you, supervisor mandel pan am games -- mandelman for calling the hearing. it is a good time for us to be -- we know this has been a looming issue and a looming debt. but this is a good time for us to be collectively looking at this. and what we can be doing working together moving forward. i'm going to report on -- first start off with the office of small business. when the shelter-in-place order was called, then former director torres and i met to figure out how we should deal with responding to our small businesses as they were told to shut down. my office, as you know, our primary function is to be working with businesses, advising them on their licensing

and permitting requirements, what they need to know about opening a business in san francisco. and then what other resources are there to help them start their business. and also retail out the programs that the city departments have for small businesses. so, i do want to say, i do think while nothing has been absolutely perfect in this process, because this is not anything that we would have been able to anticipate, with oewd, we did just our coordination was centered on oewd would be panging the information -- managing the information source, the website and would gather all the information that businesses need to know. so, as the reopening guidance information happened, not only directing businesses to the

d.p.h. page, but also providing information on oewd, the loan programs and any small business registration deferrals. that information was on the oewd page. and then also on the oewd page the contact for businesses to contact for assistance was the o.s.b. e-mail and hot line. so we worked to make our delivery of services as seamless as possible. and worked in support of each other. since the shutdown in march 2020 -- actually, i do want to say one other thing. because my staff is used to responding to businesses wherever they are and having a conversation with them is the reason why our office is the

front line responders to our small businesses. so since march of 2020 through february, we've serviced 6,475 businesses. and that's a 44% increase over what the previous time period is. in our tracking, we developed 10 covid tags used to track the business needs in terms of when they're calling, the conversations we have, the assistance and guidance they were looking for. so we do have one covid tag that we have labeled real estate guidance. and we serviced 361 requests for assistance with this. i do have to say i don't have the specific number that we're -- though i could go back and obtain this information for you if you need it, in term of

commercial eviction moratorium, but the assistance -- the real estate guidance assistance that we requested was the need for assistance in the negotiating reduced rent. exiting a lease. commercial eviction moratorium and negotiating renewals of a lease during this time. so, the majority of these we will end up -- and i would say the likelihood is 85% of the that 365 -- we will be doing referrals to legal services for entrepreneurs. that is the primary service provider. we do let businesses know about the lawyer referral service with the bar, if for any reason

working with legal services doesn't work out. so -- and if there are businesses that are in an urgent situation, we do have a relationship with legal services where we are able to do a direct referral, pick up the phone, send an e-mail and let them know that there is a particular business that we want to bring to their attention. 63% of the inquiries were in the first five months. again, concerns about not being able to pay rent and/or wanting to get information if they needed to exit their lease. and then i did want to make a note that in february, 2021, we

began to see a slight increase in inquiries around the commercial eviction moratorium due to the pending expiration date. this is before governor newsome extended out the commercial eviction moratorium to june 30, 2021. and i thought i would provide for you -- we track as best we can, obtain the information, our inquiries by supervisor district, so i do have a graph here that you can see that the calls and e-mails that came in requesting real estate guidance by supervisoral district and then we also track by language service.

for the business legacy program, one of the key programs is the rent stabilization grant. we see this as a priority grant for this -- the legacy business program. it is an incentive for landlords to provide long-term leases to legacy businesses up to 10 years. they have to have a 10-year -- they have to -- lease terms have to be up to 10 years to be eligible for the grant. i want to stipulate that the rent stabilization grant we cannot mandate and we do not mandate that the landlord offset the rent. that is something that does get negotiated between the property owner and the landlord. the landlords are the ones that apply for the grants. and they need to reapply each

year. the grant pays 450 per square foot up to 5,000 square feet maximum. the highest grant amount awarded is 5,000 at 22, $500. this grant began in february of 2017. we do account for c.p.i. adjustment. currently out of the 227 legacy businesses, we have 42 rent stabilization grants for 36 businesses. there are some businesses that have more than one store front. so this has secured 121 months of leases, average 10 years per

lease. we did see a decrease in the number of applications during the pandemic year. we usually average about 12, but during the pandemic year we had four applications. to give you an idea as to the financial -- what we're paying out as a city for the grants. with the 42 leases, the first-year amount -- and this is total for first year -- $640,000. so that's the full obligations. and then an additional, we paid out an additional $1,138,000 for second and third and fourth year payment. [bell ringing] >> that's the end of the clock,

director. >> i have just a few more slides and then i can go fast. >> how much longer do you think you need? >> three minutes. >> okay. >> roughly, i do want to just note that half of the legacy businesses have reported. those that were not receiving the grant as an offset to their rent, those business -- the landlords have used that grant to offset lost or nonpaid rent. the small business -- in terms of the small business commission, i'm just going to rush through this. there were recommendations they've made to the mayor for more federal relief. and the economic recovery task force. clearly there was support for expanding the commercial moratorium and to relieve small

businesses of the outstanding lease obligations and san francisco, thank you, supervisor preston, for your cosponsorship in working with supervisor peskin on at least we have one option that allows a business to be able to terminate their lease early. one item i do want to highlight. supervisor ronen's point, we do need to take a look at our small property owners and small businesses that own property in relationship to their ability to pay a mortgage and what this might mean in relationship to either -- more likely for-sale of the property. so the commission conducted a survey in february. these are preliminary findings. we had 582 survey responses. to highlight some of the top points, 77% of these respondents

lease their space. in terms of lease, we asked the question about lease being renegotiated. the highest number of respondents said no, no rent negotiation was offered. but then the next number is, yes, rent was decreased in the lease renewal. have you missed any payments was another question asked. and this number -- in terms of the number of businesses that responded that said no, we don't know -- don't i don't know from the survey data -- this was done with another department, whether this is related to full month or partial months, but the highest respondent said they have not missed lease payments.

that number somewhat correlates, if i go back to the next slide, the number of businesses very close to that number of businesses that were not able to receive lease negotiations. and then when does your lease expire? the highest number of businesses are in -- coming up are in the 1-3 years. and -- which is for me an interesting overlay when we're looking ahead at the commercial eviction moratorium. so i think as we've had much discussion in relationship to -- we have yet had a really good opportunity to kind of really quantify the commission's interest in conducting the survey was to get a snapshot of looking at lease and rent obligation as one of the issues to be looking at to get a sense

of what information we can glean from that and provide in terms of taking a look at next steps. we do need -- one thing i think -- as deanna has talked about, we are seeing an increasing need of the need for legal support which is, you know, again, they're bringing on the bar association as an official partner with the city. so, if the commercial eviction moratorium is not lifted, come july, you know, the first set of businesses will need to meet their obligations. so, we should be anticipating, you know, that -- we should be look at whether the commercial eviction moratorium, or anticipating that it may not be extended if things continue to

progress in lifting of restrictions. we get more information as to the impact of the vaccine. and there is increasing trajectory of businesses opening. and what that may mean in relationship to businesses meeting their debt obligation, this needs to be assessed and we need to strengthen our ability to get a good idea from how much of this federal relief funding is coming into the city and has assisted businesses in meeting that debt obligation. and then, and then at the same time, in terms of our need for legal assistance and support, just as we are probably going to be escalating that need in relationship to businesses and

dealing with the end of the commercial eviction moratorium, business -- whether the funding and relief that they have received from the federal government is enough to assist them dealing with their back rent and other debt obligations. so that legal support and businesses being able to negotiate and have conversations with their property owners, we will also be seeing at the same time, an increase in new businesses wanting to open. so in the previous years -- i mean pre-pandemic, our legal referrals were often for businesses that needed assistance with lease negotiations, especially those that are non-native english speakers. so, with that, i will turn it over to the president. thank you.

>> hello. thank you very much for convening this important meeting and your leadership on this issue. i've worked with many of you and your staff on this issue. i appreciate the opportunity to have this important conversation. i did want it say before my brief remarks, i share your deep concern about the recent attacks on asian americans and express that i and the small business community stand in solidarity with all of you. the issue of commercial rent during the pandemic has been a top concern for me as chair of the small business commission, and a small business owner myself. i rent passenger vans to touring musicians and i have about a dozen leases at tiny locations across the country to service the live music industry, which has been completely wiped out by the pandemic. the small business commission survey of local small business

owners almost precisely matches my own personal experience. there has been, mostly, no negotiation with my landlords and little contact and in one case, when the lease expired the landlord actually increased the rent. i know i don't have to tell you this, but our small businesses are drowning in debt. i am no exception. i wake up every day wondering if i would be better off declaring the business bankrupt. the barrier is that many of the leases and debts have personal guarantees, which means i'd have to declare personal bankruptcy. this would mean the sale of my home, the college fund when college is right around the corner. for now i'm trying to fight it out. it will take me years to claw my way out. my experience is not unique. i hear the same fears and

concerns across the city. the moratorium has been helpful, but it's also fair to say it just kicked the can down the road. the debt remains. this is the portion of the iceberg under the water which we cannot see. to the point earlier we don't know how many businesses have closed, we know even less about who the walking dead are. the commercial lease problem is this a musical chair between banks, real estate owners and small business. the music stopped and small business is the one left without a chair to sit in. i'll note that to date while i've personally been wiped out, none of my lenders or landlords have incurred any losses. to chair preston's point, i'll note the obstacle here is the taking clause of the 5th amendment, so i doubt that the state and the feds have the ability to control the rent and

lease amounts. and i expect we'll need to be creative in coming up with solutions. some of you may be aware that state senator scott wiener tried to address the issue in april of 2020 with ab939 aiming to let business owners exit from leases without triggering personal guarantees. small businesses were outmatched by larger businesses and the bill died. paying all of the unpaid rent for the small businesses would cost a quarter to a half billion dollars. given the challenges in the wake of the pandemic, there does not seem to be enough money to make everyone whole. so the question is, does the city help a small number of businesses or spread the resources evenly among the small business community. trying to figure out our best

path, i convened stakeholders. together we were able to get spur to sponsor it. we attracted top leaders from banking, real estate to brainstorm how we might resolve the problem. there was one intriguing proposal that came out of this which involved amortizing property taxes over a period of decades in exchange for landlords waiving or amortizing the back rent due. there might be a similar option available to the city. i support without reservation making sure that the office of small businesses rent stabilization grant is fully funded which ensures our legacy businesses with proven records of operating businesses are able to survive the pandemic. i also support close examination of the recommendations of the budget and legislative analyst, focusing on those businesses ineligible for other aid and

placing a high priority on those servicing the most vulnerable population. i'm excited by a payroll grant program to jump start employment while helping our restaurants stay afloat. having said that, i'm going to suggest that this committee consider looking at the problem through the other end of the lens. while it might be a challenge for the city to make up the difference in our collective missing rent and expenses, that is not the only lever that the city has available to it. we can make our businesses more valuable relative to the rent owed by by making the shared rent spaces program easy to use. we can rebuild the economy by making san francisco an attractive place to visit. finally, i appreciated supervisor ronen's comments about needing a shop-local campaign. i couldn't agree more. and in fact, i've been working on a very exciting project which

has already attracted amazing partners. i can't reveal the details, as i don't want to spoil the surprise, but i'll be connecting with all of you soon as we move the project along shortly. with that, i yield my time and thank you very much for having me. >> thank you. >> supervisor mandelman: we have a number of folks who want to speak. nearly double the number of businesses that have gotten rent relief and although there are

some protections going forward from the commercial eviction moratorium legislation, i'm -- as i know everyone here is -- very concerned about what this means for the future of our small businesses as we move out of the pandemic. so that was my takeaway. i appreciated the slides showing the castro street and i appreciate the director and the president for all their work. >> chair, if i may, just briefly. the commission survey is through a partnership with the university of san francisco. we'd of course like to thank them, but also want to note we intend to make the survey a regular part of the commission's work and that may be of use to you and your colleague in understanding and tracking the changes that result from any policy proposals that you may

make now and in the future. >> thank you, president. so our final -- >> just one second. i want to comment on one thing. agreed with what president legagne laid out. i want to take issue with one point, though, just dispelling the notion that there is some kind of constitutional barrier to government intervening on the rents. and this is, unfortunately, a longstanding -- frankly talking point of the real estate industry that has seeped its way into our collective -- they've been very successful in saying, no, you can't touch rents because of the constitution. the reality is we've seen the same thing on the residential side. i'm very familiar with that. i've litigated many cases on this for a long time. the court refused to accept that argument. and actually on the residential

side said no under the police powers, the city in certain circumstances, crisis of unaffordability for example, have the right to have rent control. in fear that the same thing would happen to protect commercial landlords, the real estate industry led by the california association of realtors, passed a state law to preempt cities from regulating rents in any way. that is our barrier. i want to be clear. this is a time when we're putting big ideas, all of us, forward on how we save businesses and how we rethink. i mean we rethought our streets. we rethought a lot of things in in pandemic. one of them that we need to recognize is that state law preemptings of a city power to intervene to regulate rent in an emergency situation like this is a huge barrier.

not the state constitution. for the public and again for those working in sacramento, now is the time to look at freeing cities up. frankly, the commercial moratorium is the result of the governor freeing cities up from what otherwise is prohibited under state law. >> chair preston, i take your point. i'm only repeating what i heard from both federal and state policymakers when i have advocated for the very changes that you and i agree would be most helpful. >> thank you. well, let's not let them off the hook. our very able city attorney will defend our local efforts with the same enthusiasm and zeal they have defended successfully our local law. >> i want to concur with chair

preston's point. i think many of us are concerned about what the trump supreme court will give us and what we'll need to unravel over the course of our lifetime as we take back our supreme court. but i believe that the state of the law is still as chair preston described and they haven't fully eviscerated all of regulations, at least the matter of the constitution, although i know that is some folk's goal. all right. so our last speaker before we hear from the truly important people -- well everybody here is important, but before we hear from the small business owners themselves is the attorney with three years of experience advising small business tenants about commercial leases and representing them in lease negotiations. and he's here on behalf of lawyers committee to talk about

what they're seeing in their work with small business clients. >> thank you, supervisor mandelman. just appreciate everyone giving me a minute while i figure out how to share my screen and put up my slides.

>> we can see your presentation. it is very small, however. >> yes, i'm going into presenting mode. thank you, mr. carroll. >> of course. there we have it. >> great, thank you so much. good morning, supervisors and thank you for the invitation to speak today. i'm here to speak on behalf of the lawyers committee for civil rights of the san francisco bay area. and before i start, i would like to express solidarity with the asian-american community in light of the recent terrible events and uptick in hate crimes against asian-americans. i'd like to share thoughts with you about the importance of

providing legal representation to small business tenants during the covid-19 pandemic. these are based on my experience working as staff attorney for three years which included the pandemic pandemic in march 2020. i'd like to say a little bit about the issues that small business tenants face in san francisco. which were exacerbated when the pandemic hit. the legal ease in commercial leases as many of you know is confusing if not down right cryptic. for this reason, many small business tenants i advise did not know their legal rights and obligations under the lease and needed a lawyer to help them figure out. many are unable to pay their rent. obviously. despite their best efforts to continue their businesses during

the pandemic, many of them received repeated requests for back rent from landlords who ignore their invitations to renegotiate leases. i've even talked to tenants who locked them out of the store front illegally. when i told one tenant this is illegal and she could sue, she responded she might as well give up and leave because she didn't have money to hire a litigation attorney, which organizations who are legal services providers, typically cannot provide as a free service. i also talked with another tenants whose landlord threw the lease at him when he said he couldn't pay the rent. as the pandemic wore on, i heard from more tenants whose landlords filed lawsuits requesting back rent as money damages without requesting that the tenant be evicted. i tried to help the tenants find

private paid attorneys, but without funds, they were unable to respond to the lawsuits. finally, many small business tenants contacting us do not speak english and have trouble communicating with the landlords in a dispute situation. i'd like to tell you about the value of legal representation. i was able to help many small business tenants understand their rights under their lease as well as look for lease provisions that might give them leverage during their negotiations. review of other documents can be essential as well. for example, one tenant came to me with a draft lease amendment that her landlord askedler to sign. the amendment lengthened the amount of time to pay the back

rent, but also agreed to give up her rights under future legislation benefitting tenants. she happened to speak spanish and connecting her with a spanish-speaking attorney was essential. in another case, i represented the tenant directly, i was also able to help the tenant clarify his goals, options and points of leverage before sending the landlord a letter inviting them to negotiate. the landlord had previously been unwilling to negotiate and once they got my letter, their attorney got involved and we were able to work out a settlement agreement that significantly reduced the amount of money he owed the landlord and allowed him to terminate the lease. landlords are using civil money lawsuits as a pressure tactic to

extract as much money from small businesses as they can. if you get sued, you have to respond within a set period of time that requires you to pay everything that the other side is asking for. small business tenants need trained litigation attorneys to help them avoid a default and negotiate down the amount of money the landlord is demanding. legal services organizations like ours have extremely limited funding to hire contract litigation attorneys and could use more dedicated funding for this as well as collaboration with other organizations who have business litigators in their networks. in closing, legal representation -- i'm talking about representation that fully meets the needs of the client -- can mean the difference between business closure and continuation. or between crushing debt and financial survival. for the low-income business owners that we've served who are

largely also people of color, it can be the difference between widening the racial wealth gap and keeping resources rooted in small businesses. thank you for listening. >> thank you, mr. >> one question i'm trying to get a handle on. seems we need more data. on the gap of what we're currently able to provide small businesses and what the -- we know the need is going to increase in coming months because we know we're headed toward a cliff. but are we currently meeting the demand? you mentioned situations where folks don't have someone to represent them in litigation. are we meeting demand for lease

renegotiations? are we meeting demand as it gets more complication and litigation intensive. do you have any notion of what the gap is? >> the gap is primarily when -- the gap occurs primarily when a tenant gets notice they're being sued for money damages. the need for help with lease review and negotiations is mostly being met. we have a network of pro bono attorneys that we can tap to meet that need. and we've built partnerships with two firms aaron fox and koe, to provide rapid response consultations to small business tenants who need the lease

reviewed and need advice about how to negotiate with their landlord. and those firms have also in some cases been able to take on the client for a longer term assistance to represent them directly in negotiations. so, there may be a gap -- a slight gap in people who are unable to get the longer term assistance from a pro bono attorney that they need. but i'm not aware of it. the main gap is where people need litigation assistance. and you know, organizations like ours that just provide tran actional assistance can't provide that for free. >> but even that is so important. i know from pre-pandemic time,

that i had spoken with tenants or folks who were going out of business, simply because the landlord had given them 100-page lease after many years, and they couldn't bring themselves to try to figure out how to deal with that and closed up. so i think meeting that need is incredibly important, but i think also -- and chair preston has done more -- knows more about this than i do, but there is real need to get representation to these small businesses. so thank you for your work. >> thank you for inviting me. >> supervisor mandelman, just to follow up on that. it makes a huge difference when providing legal assistance consistent with what he laid out, to have the potential of

litigation defense. as we know it's a huge deterrent. it's one of the reason we structured the right to counsel program it was full-scope representation, in contrast to new york city which did that for some people, but not all. and what they provided to a lot of tenants in new york was just the kind of advice and counseling, but not the ability -- and frankly, if the landlord, whether residential or commercial side, if the landlord knows if they sue you for the rent and you won't have a lawyer representing you, it takes away their incentive to come to the table. i appreciate elevating that important point. supervisor chan? >> supervisor chan: thank you, chair preston. my question will be for what you're seeing right now, especially during the pandemic.

what kinds of businesses are coming to us for this type of assistance? and maybe even just age of the business, just kind of help us understand what the type of business and the age of the business that are really now in need of this type of assistance? >> well, supervisor chan, i'm sorry, i didn't prepare any data for today. anecdotally from my own experience over the pandemic, i can say that age range has been all over the place. and the type of business coming to us i would say you know, obviously, the businesses were coming to us for lease assistance are all retail because they have some sort of store front.

i don't think we have any -- we had any manufacturing businesses or non-retail businesses coming to us. i would say the largest percentage is probably in the food industry. and then you know, there is other types of retail as well. you know, like clothing stores or convenience stores. businesses like that. >> supervisor chan: good to know. i think my last question is, do you typically see these businesses are coming for assistance, are they dealing -- i'm not really -- i don't know about the commercial property industry -- are they typically corporate commercial landlord, or is it the type like small commercial landlords they're tackling with, just trying to understand the type of landlord that you're dealing with in san

francisco when you're trying to help these businesses? >> yeah. that's a great question, supervisor chan. and that also varies across the board. we also don't track data -- track that data, but anecdotally speaking, i've seen all kind of landlords ranging from small mom-and-pop that only own one or two properties to very large corporate landlords, to medium to large-sized landlords whose names come up quite a bit in talking to other partners, including oewd. we they're they own quite a bit of property across the city. >> that will be helpful for us

to move the legislation forward to start thinking about, you know, who in terms of property landlords that we're tackling with. it will help us understand just a level of support. [please stand by] [please stand by]

>> supervisor preston: are you struggling with back rent? we know from the surveys of small businesses, there would

be a flood of not hundreds but thousands of small businesses. i just want to say that that is artificially constrained because in my opinion i haven't heard anything about an actual proactive plan on the part of san francisco through oewd or any other entities to reach out to businesses across the board to see if they need assistance. supervisor mandelman, were there any other comments or presenters or can we move to our very patient real experts, the people who have been standing by waiting for public comment? >> i think it's time to go to public comment.

>> clerk: -- and then press star, followed by three, to enter the queue to speak, and mr. chair, i'd like to request that our interpreters introduce themselves one more time in spanish and chinese respectively so we can be sure we hear from everyone. >> chair preston: please.

[speaking spanish language] [speaking cantonese language] [end of translation]. >> thank you. >> clerk: thank you both. mr. zuniga, could you bring us

our first commenter, please? >> hi, there. are you able to hear me? >> clerk: yes, we can hear you. >> hi, there. hello, supervisors, and hello, supervisors mandelman and ronen and thank you for all the other supervisors present, as well. my name is jonah rafa, and i am a small business owner in san francisco. it's been an interesting time. really quickly, we -- the vcma has been able to work with the supervisors. been very helpful and we've been able to do a lot for small business in that area.

we're also illuminating the corridor from 14 to 24 street, bringing some much needed life and light to the corridor, as well. speaking to my two barber shops in san francisco, they are very different stories. valencia has been doing very well, recovering, and by recovering, i mean doing about 25% of our business in february. our other location is a different story. our landlord has renegotiated our lease. our market street shop, which is at 973 market street and

particularly relevant to this conversation. it is still closed. we have been closed since march. we briefly reopened for a couple of, you know, maybe a month in the fall, had to shutdown. we are -- >> clerk: thank you for sharing your comments, jonah. could you bring us the next caller, please. >> hi. can you hear me? >> clerk: yes, we can. >> okay great. thank you. thank you to the board members and city employees working hard to protect s.f. businesses at this time. the public policy considerations that take on

questionably immense for our neighborhoods and fellow citizens. many small business owners need no additional data entered into the public record at this time to reach the fundamental and commonsense recognition that they are facing financial ruin [inaudible] in particular, in my direction experience and initial anecdotal evidence [inaudible] to continue to threaten to take legal action against tenants for future rent, attorney fees, and contract penalties despite the clear and recent guidance to the rent and lease framework stated clearly in the ordinance. landlords continue to assert that full prepandemic market

values for back rent despite that the pandemic has dramatically shifted the value of rental property in the city through no action of tenants. to address the numerous comments about limits under the state statutory regime [inaudible] i ask the board of supervisors to please immediately enact additional ordinance or legislation which states, in simple terms, that the city's legislative intent is to be consistent with section 1511 of the california civil code with respect to -- >> clerk: thank you very much, jeff, for sharing your comments. could you bring us the next caller, please. >> thank you for taking my call in my public comment. my name is dean ericson, and i'm a small business owner in the fitness industry in san

francisco. i'm a member of the san francisco fitness coalition team. i'm here today to share my experience with my landlord. i'm also a commercial owner as well as a -- one who rents a commercial space. to date, we've seen a 90% reduction in our business space. we've made numerous attempts to propose plans for back rent, with no response from our landlord. we've paid what we can each month over the course of the last year. to date, we owe about $40,000 in back rent thus far. we are a small family owned business and that $40,000 rent is a huge amount for us. our landlord assumes that we are open and should pay full rent even though we're limited open and occupancy. we may not be able to continue beyond our lease terms in order to makeup the lost time, and no

options on communications or support for landlord grants have been communicated thus far. the ordinances that we'd like to see [inaudible] we'd like to see landlords engage and entice to be engaged by the city for covering back rent given the surplus on the budget [inaudible] i hope that the city of san francisco and the state of california can recognize their power that they have with trying to establish and revive the economy moving forward and be able to not only support landlords but those who are also -- >> clerk: thank you very much, jeff ericson, for sharing your

comments. could you bring us the next caller, please. >> good afternoon. i'm shawn higgins, coowner of d and h jewelers in the castro district. in the early days of the pandemic, we formed a group in our building. our landlord told us it was illegal to discuss rent amongst other tenants in the building because it's a private matter between landlords and tenants, but that's not true. the final note from our landlord before communication dropped off was we were told we obviously didn't know how to run a business, so we could close our door and make room for a new business. this is our tenth year of business in the castro. walking around the neighborhood, it is apparent that more and more businesses

are closing, despite the graph from oewd. small business has long been a staple of san francisco, and we need your help to deal with the bad acting landlords who can afford to keep stores shuttered for a year or two while they wait for bigger rents. thank you to supervisor mandelman who has gone above and beyond in helping with this bad acting landlord, but without new legislation, there is nothing we can do. we have a state senator and supervisor send a letter on our behalf, and nothing has changed. i do believe we should add an advertising campaign and messaging campaign as mentioned from -- and i'm sorry. i'm doing this from my phone, and i don't remember her name. many san franciscans want to support our small businesses and local economy and keep the

heart of san francisco alive. we are an amazing city, and we'll always be a light to others around the world. let's not forget how we have remained a small town in a big city. >> clerk: thank you, shawn higgins. could you bring us the next caller, please. [please stand by]

>> i request the city put efforts in as testing to get legal help. real legal help. thank you. >> could you bring us the next caller, please. >> i am jeremy chan. i am a board member of the japan town task force and also a staff attorney at asian pacific island outreach at assisting small businesses in the asian american community. we have lost 14 businesses since the start of the pandemic. they are a pillar that needs protection or japan town will cease to exist. we are vulnerable because the property in japan town is owned by a hand full of land lowers. they see no possible way out.

several are making negotiation especially difficult. measures like the moratorium help resolve the issues. i thank the supervisors. this is kicking the can down the road. i appreciate the recognition we need more tools to directly address rent debt. otherwise the small businesses see no way out at the end. thank you for your continued efforts to support our small businesses. >> thank you for participating in the discussion jeremy. bring us next caller, please. i am calling as small business owner and founder of bar alliance. we have 450 mariners part of the

group. we have a lot of experience with difficult landlords. thank you for having the hearing. we appreciate the work you have done. i want to call out the incredible work oewd has done for the bar owners and restaurant owners and entertainment community. they are a lifeline for us. i thank them for that. the issue of commercial rent is sticky. the problems is leverage. the landlords have it or think they have leverage over you. it is really hard to negotiate when they think they hold the cards. we have seen real action that has helped especially from supervisor peskin's office the vacancy task and the restructuring of rent rules has made real difference in leverage. we have seen supervisor haney put in zoning controls for

entertainment. that is helpful. i would just ask that we just keep considering creative ways to give leverage to the business owners and take away from the landlords to help with negotiations. sharky mentioned voting positive on shared spaces. that is huge to make more revenues. also just releasing red tape in general will help from the bar community. it is not easy to pick up the bar and move when you are in renegotiations. it is almost impossible to move the bar. that happens for many businesses not just bars. if we are able to remove the red tape to make it easier to take away barriers we get more leverage. i appreciate you having this. thank you for the work you have done.

>> we are 21 storefront bay can't. during the pandemic that is now up to 33 vacancies, one in five storefronts are vacant. this is -- personally i have been able to renegotiate my lease to provide through this period of time when we see sales fallen below 50% due to lack of high foot traffic and tourism in

our neighborhood. we also have had the experience of seeing leases more complicated. the first lease was five pages long. last was 43 pages long. there is a severe need for not just legal assistance but also standardization. to ensure that small business owners and entrepreneurs are not signing up for personal guarantees or in case prop 13 is reversed taxes and increase commercial property taxes skyrocketing. there are a number of ways to help small business community sustain through the period and thrive. i really appreciate your work on creating a pool for legal assistance. i would also advocate for

speeding along the -- >> thank you for sharing your comments. next caller, please. >> caller, you are unmuted. >> my parents cannot speak english very well. i have talked to many small businesses around the mission area. we are heading towards the 29th

year of being here. we are trying to stay as long as we can. it is harder and harder. before opening up 25% we were maybe making like 20% of what we used to make even with what we had before. i appreciate you guys being able to understand and know that we are having hard times. i really hope you guys can also, you know, i am not sure what else to do. you did point out a lot of things. this meeting i feel like could have happened a little earlier, honestly. i know you guys have a lot of things to do. seeing my parents and a lot of other businesses we have worked with for the 29, 28 years we have been here, it is hard to

see everyone slowly opening later and later and later. besides that i do appreciate that you guys are able to figure out some solutions to this and also to know about the legal things you are allowing us that are open to us. i hope that may be you guys can make like a bigger article to show us that small businesses are able to use. because of all of the information going around it is hard to see what is actually real information to use and not a scam. >> thank you very much for sharing your time and comments. could you bring us next caller, please.

>> hi, i own new balance. i have three fitness studios. one land lord was able to give us rent relief. the other two aren't really making -- telling us what to do. they are waiting for legislation to pass. we are in the same situation. they want us to sign we will pay everything back within two years, but we are also holding out for legislation hoping something will change. we are in limbo not knowing what is going to happen. in terms of solutions i was going to say there should be some more oversight to where the funds are going such as if a grand is going to small business and they have back rent they

should have to use that money from the city to pay back rent. also, we header through the grapevine some of the people getting the funds from the city don't have small businesses. they have the connection with london breed or someone in oewd and they end up getting porsches and giving $50,000 to their families. more oversight to the money given would be helpful so we know it is going to back rent. thank you so much. i have a five-year-old and new born that are getting into it so i have to jump off. there are a lot of solutions. i hope we keep working towards this problem of back rent. all of the businesses with good business models can stay in san francisco.

>> 1511 of the state civil code. >> i will pause you. did you call back earlier? did we hear from you earlier in the public comment period. >> yes, he did call back. >> sorry. we do have to give everyone the same amount of time. i am note able to take public comment a second time. thank you for participating in the discussion. if you have further comments to share with the supervisors put your comments in writing, send an e-mail to me and my address is on the front page of the agenda for today's meeting. next caller, please.

>> i am founding president of san francisco small business alliance over 350 small businesses in san francisco. i want to start off by saying the meeting started with our closure saved thousands of lives. no doubt of supporting this claim not from governor newsom. please attempt to justify the destruction of the small business community until the data is available to the public. we are locked out of businesses and the economy costing livelihoods and jobs along the way. the city and state seized property. federal government did not force us to close. city and state did this. city and state has not helped and supported us. i have seen and counted the grant amounts that the sfowd is claiming for the past several months. it is well under what they claim. i have been waiting for the loan

amount still waiting after a month and still haven't veep be the numbers. the claims of financial assistance are grossly inflated and false. as of september 2020 half of the small businesses in san francisco closed permanently. if we do not receive rental assistance there will be hundreds of hows more businesses closing if we don't get help. maybe legislation assisted. focus should be hiring creating jobs not paying represent when we were forced to close. without any public data justifying closures we need legal protection. i know dean preston mentioned it is tricky and challenging. we know that and understand and respect that. it doesn't mean this shouldn't be the number one focus of the city right now. all of these people, small businesses we use this word it

is families, employees and employees families. please, please make this. >> thank you very much for your comments. next caller, please. >> hello, this is kenneth win garth. >> we hear you. >> i have a store in the castro on market street. i have had my business in san francisco for 25 years. it is a minority opened gay owned business. i don't have a lot to add for the pain. we were closed for three months. accident is down 55% for the time that we have been opened. our landlord has demanded full payment for every month. giving us no abatement whatsoever. i want to paint a personal picture. this goes deeper to the bigger problem for san francisco than just small businesses. i have my business here.

my husband works for the perkins cooley in the city. we have three children in the public school at mckin leo castro. the current situation with rent we question why do we stay here. why does my husband move to a different office and pull kids out of school and sell our home and leave the city? i love san francisco. i have been here 35 years. it is part of my soul. at a person point you are up against a wall and the city is not helping. i appreciate this meeting. rafael is amazing as the local supervisor to help us. at a certain point one wants to give up. there is an easier place to raise a family than san francisco. that breaks my heart. thank you.

>> thank you. i am a japan town stakeholder working in a small family owned business. the moratorium and deferrals are really cooklation of debt on top of -- accumulation of debt on top of doing business. there needs to be direct funding for back rent for small businesses and incentives and penalties to landlords to get them to negotiate apand work with businesses.

businesses need real professional financial and legal advice and representation. the landlord side needs to be a mandate they are not allowed to separate tenants, prohibit them from talking with each other because that just keeps them in fear and pits people against each other. it is really tremendous that you are listening to the voices of small business owners. there is a lot of pr from landlords that sounds nice. in the end the people who need that help are not getting it. it is just pr. thank you for listening and for all you can do for the small businesses.

>> i have a couple small businesses in san francisco. i have been listening to all of the goings on. where do we begin? san francisco historically has been tough on small business and all of the commercial corridors pre-pandemic. it would be good if the city recognizes that now and tries to help all of the small business and all of the commercial corridors and help bring