sfosb@sfgov.org, and you can communicate with our staff dedicated to helping you with your permitting needs. we hope that people will consider consulting with us before you even sign a lease so that we can help you on the path to success and understanding the journey of setting up a small business in san francisco. >> well, thank you so much. i really appreciate you coming on the show, miss tang. thank you for the time you've given us today. >> director tang: thanks for having me. >> and that's it for this show. we'll be back shortly. you've been watching san francisco rising. for sfgovtv, i'm chris manners. thanks for watching.

in person in city hall, room 400 and broadcast live on sf gov tv and available to view online or listen to by. calling (415)!a655-0001. the small business commission thinks media services and sf gov tv for televising the meeting which can be viewed on sf gov tv2 or live streamed at sf gov tv.org. we welcome the public's participation during public comment periods. there will be an opportunity for general public comment at the end of the meeting and there will be an opportunity to comment on each discussion or action item on the agenda for each item the commission will take public comment first from people

attending the meeting in person and then from people attending the meeting remotely. members of the public who will be calling in the numbers. (415)!a655-0001. the access code. is 266146220771. followed by password 7221. press pound and then pound again to be added to the line. when connected you will be muted and in listening mode only. when your item of interest comes up. dial star three to be added to the speaker line. if you dial star three before public comment is called, you'll be added to the queue. when it is your time to speak, you will be prompted to do so. public comment during the meeting is limited to three minutes per speaker. an alarm will sound once the time has finished. speakers are requested but not required to state their names. sf govtv. please show the office of small business slide.

oh today we will begin. oh. today we will begin with a reminder that the small business commission is the official public forum to voice your opinions and concerns about policies that affect the economic vitality of small businesses in san francisco. before item one is called, i'd like to start by thanking media services and sf govtv for coordinating this virtual hearing and helping to run the meeting. please call item one. item one roll call. commissioner carter is absent. commissioner dickerson present commissioner gregory. present commissioner herbert. present president. huey present. commissioner ortiz cartagena here and vice president ziziunas is absent. president, you have quorum. thank you. the san francisco small business commission and office of small business staff acknowledges that we are on the unceded ancestral homeland of the ramaytush ohlone, who are

the original inhabitants of the san francisco peninsula as the indigenous stewards of this land and in accordance with their traditions, the ramaytush ohlone have never ceded, lost nor forgotten their responsibilities as the caretakers of this place , as well as for all peoples who reside in their traditional territory. as guests, we recognize that we benefit from living and working on their traditional homeland. we wish to pay our respects by acknowledging the ancestors, elders and relatives of the ramaytush ohlone community and by affirming their sovereign rights as first peoples. please call item number two. item two approval of legacy business registry applications and resolutions. this is a discussion and action item the commission will discuss and possibly take action to approve legacy business registry applications presenting today is richard carrillo legacy business program manager with the office of small business. thank you. thank you so much for coming today. good afternoon. president hewey commissioners, city staff,

members of the public. i'm richard carillo. legacy business program manager. i would like to acknowledge michelle reynolds, my colleague in the office of small business, who assists with the processing of legacy business registry applications. sfcv. i have a powerpoint presentation. before you today. are four applications for your consideration for the legacy business registry. each application includes a staff report, a draft resolution on the application itself, and documents from the planning department. the applications were submitted to planning on july 19th and heard by the historic preservation commission on august 16th. item two a is the irish bank, bar and restaurant. the business is an irish pub, opened in 1996 and nestled in its own alleyway in union square at the edge of the financial district. the irish

bank bar and restaurant is a destination for tourists and locals alike with an outdoor patio that graces an entire alleyway. the facade has traditional, whitewashed cottage edge appearance adorned with brass plaques, hanging flower baskets and a 19th century water pump, creating an impression of a rural tavern. the interior includes antiques, photographs, historical documents, antique mirrors, church pews, a confessional, and other memorable items creating a very warm and intimate decor. the irish bank sells great irish food and drinks, and it is an excellent place for people to come and watch both european and local sports. although the business is not yet 30 years old, it has contributed to the history and identity of union square in san francisco and if not included in the registry would face a significant risk of displacement. the core feature tradition in the business must maintain to remain on the legacy business registry is bar. is

mario's bohemian cigar store cafe. the business is a cafe that was founded in 1971 when italian immigrants mario and liliana krizman, bought a smoke shop called bohemian cigar store . mario's bohemian cigar store cafe. today is a third generation establishment offering amazing food, great service and a cozy atmosphere where everyone feels at home. there delicious oven baked sandwiches are served on focaccia bread from nearby liguria bakery, and their espresso is made from beans from graffeo coffee down the street, mario stopped selling cigars in 1992 when san francisco passed a law that bans tobacco products from being sold with food. but they kept the historic name to represent their rich legacy. the core featured tradition the business must maintain is restaurant, featuring italian

cuisine. item to see is mitchell's ice cream. the business is an ice cream shop founded in 1953 and a treasured san francisco landmark. mitchell's ice cream owned and operated by the mitchell family for its entire history, serves award winning ice cream in 40 flavors. v vegan ice cream sorbets sundaes, milkshakes, ice cream sandwiches and ice cream cakes. their ice cream is made fresh in the store every day, using 16% butterfat from milk that comes from hormone free cows that graze in open pastures . they use the finest ingredients from local sources from around the country and from around the world. mitchell's ice cream is committed to making the best super premium ice cream and providing the best service to their customers. the core feature tradition in the business must maintain its ice cream store. item two d is san francisco go club. the

organization is the oldest continuously operating go club in the united states, founded by japanese enthusiasts. in 1931, it was officially incorporated with the california secretary of state. on october 4th, 1982, san francisco go club is an integral part of the asian community of san francisco and is currently located in the japan center mall. the club is a place for casual play weekly lessons and tournaments and people of all ages can be seen at the board's member. owners are eager to teach and show the wonders of this mysterious game to the many tourists and passersby. the core featured tradition the business must maintain is promotion of go . all four businesses met. the three criteria required for listing on the legacy business registry and all four received a positive recommendation from the historic preservation commission legacy business program staff

recommends adding the businesses to the registry and has drafted four resolutions for your consideration. a motion in support of the businesses should be framed as a motion in favor of the resolutions. thank you. this concludes my presentation. i'm happy to answer any questions. there are business representatives in the room and possibly online who would like to speak on behalf of the application during public comment. right. thank you so much, commissioners. any questions yet? at this point, no . okay, let's go ahead and open it up for public comment. if public commenters want to line up here near the tvs, you can just come forward and stand at the mic. good afternoon, commissioners. my name is ronan o'neill and i am the owner of the irish bank bar and restaurant. thank you for this honor and fantastic opportunity to hopefully join a list of great legacy businesses already

in san francisco and thanks to rick at the legacy business program for all the hard work and help with this application on the irish bank is located in union square at the border of the financial district. and unfortunately, we are at risk of displacement too, due to the record low number of pedestrians and foot traffic in the area since covid, since the covid pandemic. i move to san francisco from ireland 29 years ago and for over 27 of those years i've spent working at the irish bank nine as an employee and 18 as an owner. we've seen a lot of ups and downs over those years with more ups and downs. thankfully but the years since 2020 have definitely been the hardest. if you take a 2 or 3 block radius from the bank, approximately 80 to 90 businesses have shut down in the last two, 2 or 3 years. buildings are locked and boarded up with no sign of reopening. we are fighting and working very hard for that. not to happen to us getting listed on the legacy

business registry would help us stay in business by providing the irish bank with recognition , business assistance and access to the rent stabilization grant . your recommendation is very much appreciated. thank you. thank you. hello. i am matthew vargas and i stand before the small business commission. today is a proud representative of the san francisco go club with the utmost respect and appreciation , we are honored to have our application for legacy business presented today. i would like to extend a heartfelt thank you to rick and the and the dedicated legacy business team at the city for their invaluable assistance in navigating this process. the san francisco go club holds a distinct place in american history. as the oldest go club. its origins deeply rooted in the aspirations of japanese immigrants who established it within the vibrant heart of japantown almost a century ago. as custodians of this cherished legacy, we acknowledge the challenges and trials that have

tested our club's resilience throughout storied journey through the decades, the club has persevered and has served as a bridge between cultures a meeting ground where generations gather to learn, play and connect the legacy of the san francisco go club is not solely defined by its longevity, but by the profound impact it has had on countless lives. it has nurtured friendships, sharpened minds and ignited a passion for the intricate beauty of the game of go. as we reflect upon our journey, we are reminded that our story embodies resilience, community and the unwavering dedication of those who have upheld this cherished institution. even as we seek legacy business status, we humbly request the commission's recognition of the enduring cultural significance of the san francisco go club. granting this distinction would not only honor our past, but also pave the way for future where the club continues to inspire and educate and enrich the lives of all those who enter its doors. thank you for your time and thoughtful consideration. thank you. good

afternoon, commissioners, and thank you for consider the san francisco go club for legacy status. i joined i moved to san francisco from detroit, michigan in 1974, and in 1975 i had the great fortune to discover the san francisco go club. the san francisco go club. as you've heard, was founded by japanese americans. however, it's the most culturally diverse go club in the world and every other place where go has has immigrated and come from its home. countries of china, korea, japan, taiwan. there's a chinese club, a japanese club, a korean club and a dominant culture club. but in san francisco go the leader of the club at the time who's now passed away and

left us with his legacy. he was able to bring everybody together in one place and that was to my great fortune to find so much cultural richness in that one place and start learning about the wonderful things that east asia had to offer me as a young american working in silicon valley and subsequently i had the great pleasure in 1989 to be part of the us friendship team that toured south korea, playing different teams in south korea and ultimately doing my doctorate in psychology on go there have been about 17 or 18 daca actors that have been on go mostly all of the other ones were in math and artificial intelligence, but mine was in

psychology and it was about understanding east asian philosophy and philosophical principles using the game. so the we're really grateful for you making this consideration and it really means a lot to the go club. and we've the young people who are running the go club now have done a great job in bringing it back into japantown and even deeper in by putting it in the japantown mall where we're really working hard to spread it to young children in the area in the bay area. so thank you very much. and we look forward to working with you in the legacy status. thank you. any other public comment.

anybody on the line? there are no commenters on the line. well, seeing that no public no other public comment in the room or on the line, public comment is closed. commissioners, any questions? as commissioner ortiz? cartagena no. i appreciate everybody here their time. your contribution to san francisco last last week was my birthday and on the way to the office, one of my colleagues said, let's go to mitchell's, get some ice cream and we went to go mitchell's and we got some ice cream. so that's how important you are in san franciscans day to day life. so i just appreciate everything you all do here for the city and for your commitment. and congratulations. to commissioner dickerson on it's always a great it's a love the opportunity to be able to say thank you for

your hard work, your long hours, your contribution to the city. i always love to make it a point that if it had not been for you and your diligence and your perseverance and your vision for a better city, i don't think many of us would be able to have the experiences is yes, i am you three feet, but i eat mitchell's ice cream, so don't judge me. i won't judge you. but i just want to say thank you. thank you. i love the to hear the culturally diverse go club. it always warms my heart to see how enrichment culture can be, regardless of where it's at. i think it's the unification that it brings is that it brings the value. and so again, to each and every one of the businesses, i just want to say thank you. thank thank you,

thank you for you all are very great examples of small businesses that are arising today. and so keep shining. thank you. commissioner herbert . hi yeah, i want to i want to echo what commissioner dickerson said. small businesses like yours are what make san francisco special. so please keep persevering through the ups and downs. i think i have been to every one of these except the go club and i have to, like, check out what go is all about. um, we serve mitchell's ice cream at our at my business. and of course, love mitchell's ice cream. thank you for being around. and it's the best ice cream in san francisco. and the bank is awesome. mario's bohemian cigar store is like a

must, you know, go to an and i'm just proud to be a part of the business community and be right there with all of you guys because it's super important, especially right now that we are providing ing our services to the residents of san francisco and making life interesting and rich and good. so thank you. and i would approve all of these legacy businesses. oh, i just turned off my mic. um thank you very much. thank you very much, rick, for bringing forth such an amazing group of legacy or to be legacy businesses. um, it's interesting because they always kind of seem to curate around certain themes. and i feel, i don't know if you do that intentionally, but i feel like, you know, all of these

businesses are really fun, really highlight the diversity, i think in, in just activities and, and kind of like how how passion kind of like shows through in people's businesses and people's endeavors. um, i took a picture of the mitchell's certificate as i was signing it earlier because that's going to make me really famous, like at my house because my, my family's going to be like, oh, you finally made it. they're super stoked about mitchell. so i think hopefully everybody here will celebrate with a scoop later. um, but yeah, thank you very much for all of that. all that you do on behalf of just our commission, i think we, we really appreciate how much effort and how much heart you put into your businesses every day and your your, you know, these are not just jobs. these are really things that encompass your entire lives, i'm sure. and not just your lives, but the lives of your family and friends

as well. so, i mean, we can definitely appreciate how it's a whole ecosystem that you live in. and you took the time to come out here tonight to celebrate yourself. so thank you very much for your time tonight. and um, yeah, i think we're ready to take a vote. let's see. let's see what happens. as does somebody want to make a motion to. i'll make a motion to. oh i'll make a motion for the legacy businesses. i second that motion motion to approve the applications by commissioner dickerson seconded by commissioner herbert. i'll read the roll. commissioner carter is absent. commissioner dickerson. yes commissioner gregory. yes commissioner herbert. yes vice president hughie. yes and commissioner ortiz. cartagena. yes commissioner ziziunas is absent. a motion passes. congratulations is.

congratulations is so. item three presentation on business tax implications of remote work. this is a discussion item. the commission will learn how the city's business tax system is being challenged by recent trends toward remote work. the several taxes that the city imposes on businesses, including the gross receipts tax, the homelessness, gross receipts tax, the commercial rents tax, and the overpaid executives tax comprise the city's largest second largest source of tax revenue after property tax. present today we have ted egan, chief economist with the office of the comptroller, and sarah dennis phillips, director of food. thank you so much, director, for coming today. commissioner sarah dennis phillips, executive director of ewg. great to see you again. before i even launch into this issue, i just want to note that we gave last week, we had a

number of exciting things happen last week, including the opening of ikea, the launch of our vacant, vibrant program with small business starts and the six month update on our roadmap to san francisco's future, which was the mayor's map to recovery. and i just want to note and i'll make sure katie and carrie get to you that we did a presentation that we put out a press release on about all the achievements that we've made in the last six months since the publication of that roadmap. and one of our biggest successes, and you'll see in that two pager was in our small business sector. how many small business starts we've seen, how many new businesses are growing and expanding in san francisco. so i just want to make sure that you all know that the work you're doing is such a fundamental component of that other work that we came and talked to you about. and it continues to be, frankly, one of the areas, despite the challenges that will continue to work on where the city is succeeding and we're getting positive press and people know that that is an area where san francisco is on the upswing. so thank you for your work. but business taxes. so i'm

just here to give an introduction to ted and give you a little background on the process. our business tax system , as you know, does a lot of things. it funds the city and are all of our services, many of which businesses, including small businesses, rely on whether that's transit, affordable housing and frankly, the great grants and programs that pd provides. it also, though, has an impact on business right? how our businesses function, the complexity of doing business here, whether they can afford to stay here. and so those are those are things we need to weigh as we look at our system. we find ourselves in a situation post pandemic where we have an opportunity to make sure that our business tax system is sustainable to the extent that we can continue to have a city that works and is not subject to fluctuations year and year, that puts critical services at risk and also supports supportive of the factors that our businesses

need to be able to stay and grow here. and so those are a lot of that's a lot of tall orders. and so ted is not going to have answers for you today. but the controller's office is first off, leading the work to understand the risks we face given the complex tax system and the way it's built right now. and ted, ted is here to kind of go over those for you that that introduction that you'll hear from ted tonight will lead into what will be a longer process. and he'll highlight that at the end of his presentation, not just to understand the tax system that we have and the risks and benefits of it, but to make changes and recommend actions to that to create a more sustainable, fair and long term balanced system as we you know, it's the controller's job to explain what is going on and to put out there options for balancing that system. it is our job, pd's job to make sure that you you here as a small business commission and all of the small

businesses you represent and the other businesses in the city are one aware of that process two are engaged in that process, including to whatever extent makes the most sense for individual businesses. there'll be a series of workshops and any business that wants to be a part of those directly can be involved. any business that wants to stay more apprized we will make sure we create outreach summaries for people to stay apprized and then three, that we and this is where we differ from the controller's office advocate on businesses behalf. and that's our job as part of economic development. so with that, i'll turn it over to ted, and i'm happy to answer questions at the end as well. oh, great. good afternoon, commissioners. my name is ted egan. i'm the chief economist in the controller's office and carrie is just setting up my laptop and then we'll be ready to go on with the presentation. i think everyone knows that san francisco suffered a major economic shock in the covid

pandemic and while we on the process of recovering and in some ways we've surpassed where we were before the pandemic, there are some aspects of the city's economy that have not recovered and may take some time to recover or or may be in for permanent change. and one of those is in the way office space is used in san francisco. offices, of course, were covered by the shelter in place order and people were prohibited from coming downtown to offices. but what we found in san francisco and really across the united states is that when those public health controls were lifted and people were able to go back to the offices, they didn't they didn't go back at the same level . so on a typical day in san francisco, there's 45 to 55% of the foot traffic or attendance at office buildings that we would have seen before the pandemic. and that is not an only in san francisco phenomenon. you see that in cities across the country. it means a lot for san francisco's economy and a number of ways.

and, you know, i've presented at this commission and elsewhere at the city about what it means for small businesses or what it means for the city's property tax, what it means for transit. our office, along with the treasurer's office, was asked by supervisor rafael mandelman last year about what does it mean for business tax. as sarah said, the business taxes, which we would call the gross receipts tax homelessness, gross receipts tax overpaid executive tax, commercial rent tax. collectively, that's about one and one half billion dollars a year of general fund revenue, directly or indirectly. it's affected by how much people use offices and how much people are physically working. in san francisco. so we were asked to assess what are the risks to this revenue stream by this tendency for people to work at home and not come into the office. and so i'd like to share the results of this report, which we issued last month. and as sarah said, this is going to

kick off a process that will have internal work by our offices, as well as outreach with with businesses and other affected stakeholders in the city. really we found three things before i got into the details. the first is that over the past 20 years, san francisco's business tax revenue has become increasingly concentrated in exactly the industries that are most hit by remote work. i'll show you a slide in a few minutes that three industries in the city information professional services and financial services make up about 70% of our business tax revenue. those industries are number one, two and three on the list of which industries are mostly doing remote work. so this trend to remote work is sort of directly hitting the core of our business tax base. there are also important connections between how much people are working in san francisco and how much they

owe us. when people are office, workers are working from home and they don't live in san francisco. they're business owes us less business tax. and we have estimated in our report that were it not for the remote work that we saw during the pandemic, the city would have had close to $500 million more in business tax revenue in 2021 than we would have in in 20 than we would have if we had not had that tendency to remote work. so it's got a powerful impact on our on our our finances on remote work. secondly the city's business tax system has an overall tax system has evolved in the last 20 years in a way that makes it increasingly concentrated on commercial property and activities related to commercial property. so we've, for example, had several increases in the transfer tax rate, all of which target large commercial properties. so that by 2020, voters approved a doubling of the tax increase on

large commercial properties to now 6. those are mainly commercial properties. when commercial properties are growing in value, that is a if you like, a good thing for the city to bet on. unfortunately because of remote work, we're seeing weakness in commercial property values and that weakness may be permanent. last year our office did a report on our weakness in commercial property tax, which is a totally different tax. so but but in the world of what we would call business tax, we have a big reliance on transfer tax that's heavily reliant on commercial property. and we also have a commercial rent tax that is directly proportional to how much people pay in rent when there's less demand for offices, office buildings, either aren't selling or they're going to sell for much less. so transfer tax is reduced and commercial rents, we expect to be weak for the foreseeable future. and so there's going to be weakness and that revenue stream that funds

early childhood care and education programs. so our reliance in commercial property as a kind of a golden goose to fund tax revenue is at risk in this world of remote work and then likely we have a third risk, and that's a risk related to volatility because of tax policy changes in the city and also which have basically increased the number of taxes that are aimed at the very largest businesses in town. and also because the largest businesses in town have grown a lot more than other businesses as a result of those two factors, as we now have a very large percentage of our business tax revenue coming from a handful of companies. as i'll say in a moment, 24% of our 1.5 billion in business tax revenue comes from five companies that is considerably more than what it was, say, when i joined the city 16 years ago. it's a lot bigger tax revenue pie, but it's

a lot more concentrated in an era of remote work where large office employers are reducing their office space. they're looking to consolidate their office space. when we look at san francisco's competitive business and the tax burden you would face in san francisco compared to other alternative locations in the bay area, we do not fare well. and so in an era where businesses are retrenching, their office needs , we feel that there's a greater than normal risk that that businesses will basically consolidate outside of the city and potentially save a lot on taxes. and that's a source of volatility for us. so those are the highlights. i think i've told most of what the conclusions i want to tell you, so i'll walk relatively quickly through the rest of the slides and then i'm happy to answer your questions. first, a bit of background on the city's economy. a big part of why the city's business taxes are so big is because the city has had so

much economic growth. the past 20 years that growth has really been fueled by the tech industry , which is now close to half of the gdp. in san francisco, up from perhaps 10% 20 years ago. the tech industry's gdp has grown three times the rate of the rest of the city put together. the rest of the city put together has still grown pretty fast. but the tech industry has definitely led growth and that has had implications for tax revenue. this is a chart showing per capita tax revenue across all taxes in san francisco. since fiscal year 1999. and really the story there is when you adjust for the city's population growth and for inflation tax revenue has more than doubled in that 20 year period. the color sort of bars on top indicate the revenue that comes from new taxes. so we had a lot of revenue growth from taxes that existed before 2008. but starting in 2008, we began

to add many new taxes and those have also contributed to revenue growth. so the city has seen a lot of economic growth. that growth has continued through 22, notwithstanding the pandemic, our tax revenue in fiscal 22 is at an all time high, although partly that was due to tax new taxes and tax rate increases, not just economic growth. i mentioned the heavy concentration in office industry , gis information, financial services, gis professional services account for about 70% of our business tax revenue. this is a chart showing the effect of remote work on the office market in various office markets across the country. san francisco is notable for having one of the highest office vacancy rates in the country, which is a complete 180 from where we were before the pandemic, when we had the lowest vacancy rate in the country by this chart, which i think is taken from the middle of last

year, our office vacancy rate was around 26. it's gone up a little bit since then, but it's notable that the east bay, the peninsula, the santa clara county, have much lower vacancy rates, despite the fact that they're in the same region and also have a tech dominated office market. so there is something about san francisco that is leading to higher vacancy rates and that creates a challenge for us as we try to fill those buildings or our business tax creates a challenge . this is some detail on the point about business concentration that i talked about. it basically shows how much different sizes of companies pay collectively for our business tax and how that's changed. so in 2012, the top five businesses paid $30 million together. that was 7% of the total. and the top ten paid $48 million or 12% of the total by 2022. with all of the growth in the new taxes, the top five pay $339 million, which is 24, and

the top ten pay $441 million, which is 31% of the total. the point here is if those ten businesses decide to leave or have a bad year, it has a very disproportionate effect on our finances. i mean, these ten big businesses will fund an entire city department, for example. so we'll have to find the money from elsewhere. if there's an adverse reaction by these businesses. this is just a graphic display of the average amount these businesses owe in the top five, the top ten or the top 100 or the remainder over the past ten years. and you can see again, the largest businesses were paying an average of 7 or $8 million ten years ago and are paying the top ten more than $40 million. and the top five close to $70 million a year in business taxes . we compared this as i mentioned, to what they would

pay an alternative locations they might consider in the bay area in general with the possible exception of the city of oakland, a business would pay anywhere from 20 times more to 100 times more. in san francisco versus an alternative location in the south bay. many of these south bay cities have raised taxes recently, but they haven't raised them to anything like what you would pay in san francisco. if you are a large tech company which dominates our our business tax base. so this is potentially a real problem in an era where businesses are looking to save on office space anyway. where kind of production is more footloose. a lot of it's working at home and the office is less important. and maybe some of the advantages of a san francisco in the office in the past may not still be as strong . and this is just a summary of how how the tax policy changes

that the city has made since 2008 have affected the volatility. i mean, i would say we would say pre 2008, we had one volatile tax, which was the pre 2008 transfer tax. the property tax is remains a low volatility tax and that's our largest revenue stream. and the business tax hotel tax sales tax utility user tax are sort of in the middle. the new taxes that we've added, the transfer tax increase, overpaid executor homelessness, gross receipts, tax, they're paid a lot. a few businesses pay a lot for each of those taxes. and so that has increased our overall volatile city and risk. and the other two, the gross receipts tax and commercial rent tax are more medium volatility. i'd like to close with an item that isn't in our major report because it doesn't deal with the impact of remote work. but it it's something that's been on our radar screen for a while, particularly related to small business and the financial

burden that falls on small business of being in san francisco. and this is a chart that our colleagues and the treasurer and tax collector's office prepared that basically shows what's the effect of gross receipts, tax rate for businesses of different sizes, if you count license fees and registration fees as if they were taxes. and of course a small business is paying them. so they feel like a tax. we just don't call them a tax. but when you include license fees and you look at and license fees are fees for permits and other things that every business pays the same regardless of how big they are. businesses with less than 100,000 in gross receipts. when you consider license fees are effectively paying a tax that's over 2% of their gross receipts. the largest businesses in town, they're really ones that benefit from our progressive formal tax system pay about 1.5. so what that means is just because of license fees, we actually have a regressive business tax system

for businesses sort of at less than a million. and so to kind of skip ahead when we think about issues that we want to work on for this review, you this is not a major revenue issue, but we do think it's a major issue for small businesses and so the things we are working on for this process in the fall are the overall complexity of the tax. there are many, many different taxes and they all have different rules and complying with taxes can be a very complex task. there are issues about simply the timing of when you owe the tax and when the payments are due. that could be rationalized. and we're certainly looking for ways in which we can make the process simpler and less painful than that. don't cost any revenue at the very minimum. on that note, we're looking at the predictability of future tax liability. the city, as i mentioned, has adopted a number

of new taxes that a business might not have foreseen when they came to san francisco. there were a number of other tax ideas that are discussed every year or two that don't necessarily make it on the ballot. and we're going to look at the predictable reality of tax liability, but we're also to follow on my previous slide, we're looking at ways to incorporate the revenue that comes from these license fees, which is not a great deal of revenue from the context of $1.5 billion of business tax to take that out of license fees and put it into the overall business tax base to hopefully sort of restore the progressive civility that we had wanted to have in the business tax system. but we don't have when you consider the flat license fees that that disproportionately affect the smaller businesses, there's also a number of industry specific issues that make the tax complex and make compliance challenging in industries like construction and retail and residential renting and a few others. and

then there are also some litigation and legal risks that the city has, which will make us want to revise some of the aspects of the tax as well. so there are a number of kind of items on our plate that come right off of the what we've learned from this report. there are other items that we know we've wanted to fix that will be part of this review process. i think sarah can speak more about the process, but i'll just give you a high level overview of the calendar we issued as i mentioned, our report in july, and mayor breed and president peskin have asked us to continue work on this through the fall with the aim of getting a legislative solution by the end of the year. us so starting next month through november, we're going to have regular sessions with stakeholders, businesses and others. we're going to be doing our internal work on options and legal vetting of different possibilities by december, we'll have some final options to the mayor and the board and then in the first half

of next year, we'll be supporting whatever legislative and policy discussions need to take place to prepare for something for the november 24th ballot, when hopefully we can get some of the fix in place to remove some of the risks that the city faces as a remote of remote as a result of remote work. so i'm happy to take any questions on any of this. and sarah is here as well. thank you so much, ted. um, let's see. the commissioners do have some questions lined up. commissioner gregory, thank you for that report. i do have a few questions and i'm kind of new to this, so i'm not too sure you're going to have to talk to me like you would talk a normal person, not somebody in the city that knows about taxes. so so speaking of construction, so if there's a construction company that does not have an office in the city of san francisco, but comes and does work on projects,

do they pay city taxes? well i'll say at the outset that i'm not the person who decides whether you pay tax and how much you owe. that would be the treasurer's office. but i can give you my general understanding of things which shouldn't be seen as sort of taxpayer advice and that is if you are doing construction in san francisco, you would be subject to the tax generally. so is that in one of these categories or no, you guys have not put that in a category yet. it's something we're looking at . i'm not aware of a problem related to that specific issue, but it is generally true, just like if you don't have a business, if you're a retail owner without a business in san francisco, but you sell into san francisco, you probably owe the tax as well. i'm just wondering because i know now that there are there's a lot of money that are coming from outside construction companies, gcs, down in la, everywhere in the city of san francisco. so i'm

just wondering when they pay that tax, it's you're saying it's not in this list right here, is that right? it should be part of the totals that we're looking at, yes. oh, okay. yeah. all right. thank you. okay oh, wait, i might have. oh, okay. so . to talking about the commercial rents, right, right. and how you're saying right now there is a lack of people renting commercial properties, but here at the office of small business, we're hearing that a lot of the landlords are not willing to work with renting those spots. so so is there something the city is doing like , i don't know. for me, it would be like, why do you like it seems like they're holding out on the spot to get more rent, but then it's also affecting taxes, right? i have heard that as well about the rent problems

facing small businesses. the commercial rent tax is heavily, heavily paid by downtown an office and not by neighborhood. small businesses just the sort of overall, not numbers that we're talking about. and so when we see weakness going forward in commercial rents, it's really because of remote work business offices are not needing as much space, so they're not paying as much rent. and we're we're anticipating a correction in that market. so what we're concerned about looking at that revenue stream as a whole isn't necessarily the same concern that you're talking about. i think for small businesses, if i understand you correctly. sorry. um but it's still a commercial building that would have to have the rent. yeah, they would pay. i believe they would be liable for the tax on the on the rent they collect in that building. if it's, if it's occupied. so one more question. sorry. so so somebody could come in, a

corporation could come in and rent a one desk office, this in a building downtown in san francisco. and have 50 employees that all work remotely and they don't have to pay tax on those employees as well. they would pay commercial rent while their landlord would pay commercial rent tax on that one room's worth of rent and work from home. they would probably owe significantly less business tax to the city, especially if they're working at home outside of and they live outside of san francisco. then they would be if they all came to an office. yeah, that is the crux of the problem with remote work is that businesses owe us less than they would have if everybody was coming into the office like they did before the pandemic. i don't know. i'm sorry. i just don't understand that if their office is in the city of san francisco , wouldn't they have to pay no matter what their how many employees are there? it would just be off of their revenue that that company is making that

i think that's my disconnect where i'm not fully understanding. okay. it's an excellent question. how much business tax you owe us for gross receipts, for example, is a function of what's your overall gross receipts for your business and then how much of that can we apportion to san francisco? we basically we're only constitutionally allowed to tax a fraction of that. so, for example, if you're a national coffee chain, we can't tax your national sales. our tax has to say, no, no, no, we only want to tax a piece of that that we can attribute to san francisco. okay. so the rule that our tax uses for attributing a company's total revenues to san francisco partly depends on how much of your total wage cost is in san francisco. so, for example, if you're $1 billion company and 10% of your total payroll is in san francisco, so then you then

then your san francisco gross receipts are 10% of a billion, which i believe is $10 billion. and then you pay the tax rate against $10 million. but because of remote work, if people are not coming into san francisco and they're working at home from the east bay or somewhere else, maybe now only 2 million of your total payroll is actually in that office in san francisco. so now you owe us 2% of that billion dollars. and so that's how even if your company's top line is the same, because you're spending less time working in san francisco and you incur less labor costs in san francisco, you owe us less tax. and that's that is the crux of the problem we have with remote work. now if your people are working from home and they live in san francisco, it shouldn't matter. but if your people are working from home and they don't live in san francisco, then you owe us less tax. i hope that makes sense now. yeah. um,

commissioner ortiz, cartagena. thank you, president ted, as always, pleasure. excellent report. unfortunate lately. every time i see you now, you scare me. and the last time you were here, i didn't sleep for a week. and property tax and commercial tax cost me. yeah that's the real bomb. i want to reiterate some stuff that you said, and then i have a couple questions. so so from remote, we've lost because of remote work about half a billion in 2021. yes that's straight up. currently of the 1.5 billion, 24% of that comes from just five companies. that's right. um. as long as i served in this commission, i remember we were based on payroll tax. what would be the difference if that still happened? if we were based on payroll tax as opposed to gross receipts, would we be in a

better situation in. it's hard to say exactly because as of 2021, we don't collect the payroll tax anymore. but i don't think it would be that different . the payroll taxes also vary concentrated in the biggest businesses. yes, it's not as progressive, but a lot of the concentration is just due to the fact that the biggest businesses in town grew a lot. they had a lot of growth in payroll expense and gross receipts and whatever we wanted to tax. and that's why our tax revenue, you know, basically doubled in a ten year period. if we had a payroll tax , we would still have the same risk from remote work because when we had just the payroll tax, you only owed payroll tax on payroll that you incurred in san francisco. so to answer your question, it would be a little bit better because the payroll tax was flat. but, you know, ten years ago we wanted to switch to a progressive tax and then subsequent changes to tax policy

made it more and more progressive. and that's why we wound up, uh, that's partly why we've wound up in the situation that we have. then if you could show slide nine and explain a little. oh, great, do it faster that way. can we go back to slide nine, carry? oh, i'll do it. yeah. i'm sorry. i'm down this one? yes. okay so i see oakland is the only one that is worse off potentially than us. that we're. we're at least a little bit more attractive than oakland. i'm not totally confident. i don't know that this is the version actually, that we used in our final report. i think we hedged our bet with oakland because it's a new tax. we're not exactly sure what a business would pay. uh, we might have grabbed that from a from an earlier draft. but oakland and san francisco are

certainly up there significantly higher than the other areas in the bay area, which have a lot of tech employment. so can can you just explain the math on the relation to like redwood city with the 3800 to like so redwood city. so this chart is basically saying we basically looked at what are the ten cities in the bay area that have the most information which is the tech industry employs it. and then we calculated what this a sample a large tech company with 30 billion in sales and these other details would pay in each of those areas and some of them have a head count tax and some of them tax the amount of office space that you use is i think 1st may have a payroll based tax, but no matter how they do it, with the exception of oakland, which is now adopted a gross receipts tax, it's somewhat similar to san francisco. all the other cities have much lower tax rates. yes. and some of them have a maximum

tax like palo alto and santa clara. and so business us would save significantly more money if they consolidated outside of san francisco and, you know, it's important to remember that san francisco has always had the biggest business tax in california. and this is not a new finding, but the thing that worries us is that before the pandemic, you could point to a lot of advantages about a san francisco office like you've got transit to downtown and you can get people from all over the bay area. well, transit is probably less of an advantage now because people aren't coming into the office as much. and even people who do come into the office are taking transit less and driving more. so i think we're a little less confident that this state of affairs is sustainable. and before the pandemic, you could say, oh yeah, san francisco is the highest taxes. but look, san francisco is still growing faster than all these other places. so it can't matter that much that their taxes are so high. i don't think we're as

confident about that now. i think now that taxes are high and we're seeing in a world of reduced office demand, how do we justify that? that's the concern . and then and then lastly, because the last time we reported you really scared me. and i think, to be honest, the city, we're not being realistic about the commercial, especially around class a assets. um, you know, hedge funds like blackstone, they got a 30 billion rit and a lot of their perspectives is targeting san francisco because i think that's the biggest upside right when the thing resets san francisco's market for class a assets has the biggest upswing. how does that intersect with what you're saying? are our commercial vacancies? you know, what's how do we define the problem? because they both intersect right? especially when people start giving these assets back to the bank. and if you have, you know, the fund that doesn't have to rent and could, you know, wait it out, obviously

eventually things come back up. you know, the market resets, whatnot. but there's going to be a period where that both factors intersect it and that could be very catastrophic for us. um, i do see your point and it's worth worrying about. commissioner i mean, i think at the highest level we've seen, office vacancies very high for a pretty long time. by this point. you know, we're well into our fourth year of elevated office vacancy, and it doesn't seem to be correcting, as you might have normally expected, that it would. meanwhile we're seeing businesses not take office space. they they're taxes they owe to the city are reduced. and we probably haven't seen the worst in in transfer. well we may have seen the worst in transfer tax but not in property tax and not in commercial rent tax. what you would expect to happen over the next however

long it takes, when the office market shakes out, is that vacancy rate comes down a set of tenants who are either are 2019 tenants or new people who are attracted by lower rents to san francisco. start filling up that space and they're kind of apportionment factors. go back up and we get a bigger piece of their revenues. do we get 500 million back? i don't know, because if they're not, you know , super big tech companies, maybe they're just not going to be paying as much tax. but we should be able to fix the vacancy problem. but when we fix the vacancy problem, that will kind of set in stone our property tax problem. so it may be that there's a lot of risk there, but it may be that that 500 million we experienced in 2021 is as bad as that number gets and that number starts to get smaller and smaller, i hope. but the property tax problem is going to be there for as long as people just don't need offices

as much as they did in 2019. and there's a story every week, look who's coming back to the office and there's a lot of optimism now. but i would say the aggregate numbers are not pointing toward, you know, recovery in office usage. and if that ever happens, it seems to be a far way away. but i think to answer your question, commissioner, that's how i see it. i see the business taxes like an immediate shock to revenue. and that's what we saw in 2021. i hope it will get better as the office market works itself out. it's taking a long time, but that office market adjustment is going to mean less transfer tax revenue, less property tax revenue, rents will be lower, so less commercial rents revenue and that's kind of the permanent weakness. and from a time perspective, because there's that flux until everything kind of corrects itself and we get whatever the new values on these class a assets are. when do you think 25, 26 i mean, i know nobody could predict, but what

would be your best guess that we kind of know what we're in for. the answer to that question hinges on a lot of data that i don't have any access to about where things are with loan delinquencies and people's plans about properties. i mean, i've heard a lot about about leases coming due and challenging environment for refinancing this year and next year. it does look less like the federal reserve is going to quickly cut interest rates, which would have made life a lot easier for people who own those assets. so i don't know. but i would say i think we'll know more by the end of next year. but i think the news that we're starting to hear about distress sales and people turning properties back to the bank is going to become more common and the time to come. thank you, ted. appreciate you. and hopefully pretty soon we'll have positive and cheerful. i

promise to come back when i have good news. um, let's see. commissioner gregory. oh, sorry . commissioner herbert, thank you very much for your report. it it's very. it's kind of fascinating. it seems as though now san francisco is a city has put we've put all our eggs in one basket and we enjoyed reaping the benefits of those baskets. and now there's nothing there, right? is that right? so it's really fascinating from an urban planning perspective because to have a healthy economy from an urban planning perspective, you want a really healthy bank of small businesses that that serve the people that live in the areas. so this is looking more and more like hartford, connecticut, right. i don't know if you know that model. um, and so and on the bar

graph that you were showing, it seems like the businesses in the 2 to $7 million range pay a lot of gross sales tax or gross receipts tax, is that right. i'm i'm going to try and bring that slide back. um i mean it's interesting because it's similar to the 7 to 15 million in yeah. this this chart is heavily influenced by i mean the commercial rents tax is like a 3.5% gross receipts tax that just commercial real estate pays . so in those in those bars that have a lot of commercial real estate, they have a high rate, an and the commercial rents tax explains that. okay that makes sense. but it seems as though if we could attract more small business like armies and armies of small businesses to san francisco, it could help the situation. i mean, is there a

lost opportunity there? i don't think there's a lost opportunity . i mean, i do think that it's a long term trend, that small business has been weak in san francisco for 25 or 30 years. and in every indicator later shows it, the number of people who work in small businesses, the number, the creation, the birth rate versus the death rate , the average age of people starting small or running small businesses in san francisco. and there hasn't been a lot of sign of that turning around. part of the problem is that the tech driven economy that that's been built in the city over the past 25 years, you know, tech is sort of the fuel of everything. and not just tech being here, but like tech being in the office and tech companies having a supply chain and tech workers spending a lot downtown. i mean, a lot of small business is downtown in or broadly speaking

, in the northeast sector of the city. tech fuels business, tourism and conventions. and that also is a is a major market for a lot of small businesses. so i would say the neighborhood small businesses have probably a better outlook like they haven't had a great three years compared to most parts of california, but they have a better outlook or the challenges are really about the challenges of running a business in san francisco. but in terms of demand, it should continue to be there. we really need the office market, though, to adjust, to create new opportunities for businesses, for small businesses downtown. and i guess the only kind of silver lining i would point to is there has been a lot of small businesses that have gone out of business. so there is a lot of opportunity when demand returns to downtown, there's going to be a lot of space, i think, for new ventures. but to really sort of reorient the city's economy so

that small businesses are growing faster, that's going to basically, i think, require the changing the cost structure of living and working in san francisco and operating a small business. these are very long term trends, i think. but tech companies really don't have any incentive to bring their people back to the office if it costs them less to have them work at home, right? well, we're not really seeing tech companies. i mean, we saw this in 2020 with a lot of companies with a flourish saying the office is done, move wherever you want it. we'll live in the cloud. that's not really what people are doing, what they're doing and it's interesting. there was a story i just read yesterday about meta, and this was framed as a return to the office mandate, but the return to the office was three days a week for people who weren't already allowed to work at home forever. so it's not the strongest return to office. but what you're seeing is companies say, look, 2 or 3 days in the

office and everyone is kind of agreeing on that. so what that means is you still need an office. maybe you don't need as big an office or and there's no there's no denying that businesses, including large tech companies, have let go of space that accounts for the office vacancy that we've seen. but really, the model is not for the companies that sort of led san francisco before the pandemic. it's not really move wherever you want and never come to an office. and so they're going to need some office space. it's not clear that it has to stay in san francisco. i think that's a big question mark. but i do think we have an opportunity there. i'm also not seeing anything else sort of rising to replace tech. i mean, when we look at the latest tax filings, you know, i can't identify companies, but it's fair to say tech is in that top five, top ten list of companies. so they really haven't gone away. and they're they're still a major force in our economy. and our finances. so we just need to build dorms

for the people that work in tech and have them all live downtown. i mean, i would generally say we've got economic growth and we should plan for it. that's that's an old refrain in this town. so thank you so much. commissioner ortiz cortina. i just want to put out this this not necessarily directed to you, but a thought when some of these class a assets do eventually get transferred in the reset. i think there should be some legislation passed where similar to what we do with storefront vacancies that these new you know, owners pay a tax because they're hedging on the reset. and, you know, they got they're going to get these properties at a very 50% at least, or 25% discounted rate. so there should be incentive that we pass just like we do with small business on the storefront that, hey, you got to fill it out or pay a tax. just i don't know if that's in the talks if we could do that,

but, um, i will not. i note your comment, commissioner, but i'm not going to analyze it on the fly, if you don't mind. um thank you. i'm trying to organize my. actually, i have a bunch of questions. i'm trying to figure out if some of them or where to even begin. your presentation was, was a fascinating, a little disturbing and so i agree that i'm going to have a lot to chew on tonight and worry about. but um, i guess one of the questions that i have initially is have i guess maybe we're not here yet, but is this report going to somehow connect in the next few weeks or as you start to have the series of stakeholder meetings with the plans that we

have in planning? so i guess as we move forward with how we reuse this space downtown or how we consider space, is this information meant to inform that conversation? like, are we looking at the whole ecosystem holistically? i may defer that one to sarah. i don't think we were planning to look at the downtown reuse conversation as part of business tax. but but what we're doing may be of interest to that process. i don't know if i made my question clear, but i know you had and to kind of play that out, commissioner, i think you're looking at if we you know, if we rightsize or rational eyes taxes on commercial office, but then we convert a lot of buildings to institutions or residential, what does that mean overall? is that kind of where your question is, does that change kind of like what the tax outlook looks like or outcome kind of looks like? i mean, it is a factor that we wd and the city in our

recovery plans will consider particularly as this work on business taxes march forward with hopefully some proposals being clear by the end of the year. i will say that we regardless of that and i think to your point about hartford, which is where i grew up, we at wd, in addition to wanting a rational tax system that supports our business community writ large and allows us to have a functioning great government moving forward that's relatively stable and not going to fall off a cliff at the drop of a hat. we also have a larger goal of trying to create in land use terms and in urban planning terms a place that is diverse. so that it will be resilient over the long term and that we aren't in a place and i will say my assessment, while our downtown has not restricted other uses like residential and

institutional to this point, what it did was it did allow the highest and best user who could pay the most to take over and that result in kind of the singular land use that we see downtown. so it is our goal to try to introduce and support conversions and introductions of other uses in addition to the small business and office that exist downtown. and i think we will do that regardless. we're not going to change on those points just because keeping it office at some point will result in more taxes overall for the city system. so we're going to both end it. if that makes sense. yeah, that makes sense. i mean, i think my thoughts going into it were really like as we start to think about what legislation will look like to change, you know, the tax structure that we kind of keep in mind the future, kind of like possibilities for, for, for, i guess, land use and, and planning and things like that so that we're not kind of just not seeing the full picture at that

point and like voting on legislation that only solves for one thing and not for or kind of like a greater a greater outcome or, you know, the greater picture. absolutely agreed. and i think it's a great point. and that's why we want to be very involved in this system so that it is not. i think one of the things that has contributed to the imbalanced system that we see today and relatively risky system that we see today is adding new taxes cumulatively has kind of looked like free ice cream in a way. right like why not put it on if we can get that revenue and we want to make sure that we're thinking about the balance picture of what we want our city to look like as we're doing those. so and you know, it looks like so, so yeah, you know, one of the conversations is, is really that this tax structure and this i don't know , like how much our businesses are paying in taxes versus other municipal cities like in the bay area has been significantly high for a long time. but it's been

worth it. like what you were saying is that people have been willing to pay more to be here. has their i mean, i guess, are we trying to figure out what that more could still look like? like you know what what are the things that still make san francisco kind of like, you, you know, worth it or is that, um, i guess i'm not really asking a question. i'm kind of. or i should be asking a question. i have a question somewhere in here, but it hasn't. hasn't worked its way out out yet. it's kind of like, are we hoping that we're going to be getting back to the same level of taxes like now that we see like what that number looks like, like where are we going to get this? where are we going to get this same level of tax base. well, i mean,

one of the things i would say is that although you know, i mentioned that the remote work phenomenon cost us close to $500 million in 2021, we actually did have nearly as much business tax revenue in 2021 as we did in 2019, because the businesses that pay had two monster years of growth. and even though they they would have owed us a lot more, they didn't save very much because essentially their top lines grew so much that even though they owed us a smaller percentage of that to the city, you know, the overall amount they owed was not nearly reduced by that amount. i don't know if i'm being clear, but what i want to say is the $500 million is really a hypothetical loss that we would have experienced if our 2021 businesses had been in the office as much as they were in 2019. it's not saying that in any year we lost $500 million

from the previous year. okay. in fact, we lost quite a bit less because voters approved new tax increases and also because the businesses grew so i think, you know, notwithstanding ending the risks that i've talked a lot about, it's not unrealistic to think that we will surpass our previous business tax revenue because tech is continuing to grow and the tech layoffs seem to be behind us. and those companies are haven't fled. san francisco yet. so i don't think they're necessarily going to go away. but the risks are there. and i think it's just a question of do we need to change mindset from a situation in which we looked at it and said tech needs to be in san francisco and they need san francisco offices, and if we raise taxes on them, they won't leave. is do we do we still think that that's true? and this new reality and personally me, i'm more i'm less confident about that than i was four years ago. and i think we all are. and i think that that's

part of what we're trying to solve with with this reform effort. i as i as i mentioned, i don't foresee tech being a smaller share of the city's economy. i don't think the economy is going to evolve into something else. we may have suppressed office demand for a long time, but again, i don't think we're going to see the tech companies all move away unless, again, something something dramatic happens related to this tax to this tax difference liability issue that we've talked about. commissioner gregory, thank you. i just have a few more questions that were coming up about construction because because. okay. so, yes, maybe a lot of people left their offices in in the 2020. right. and they work from home. but construction didn't the mayor did not stop construction. and we have seen construction grown the most in the pandemic. so i'm

just wondering, in. okay. let me just ask you this question right ? like i'm a layman person in terms. okay, you own a construction company in la and i own a construction company in san francisco and you win a bid over here and you have you and your project manager come up here. but i am going against that, going against you for a bid. and i have my whole team here, my whole office here, all my employees are from san francisco. who pays the most taxes? you do. okay, so when did it make sense to kind of tax those companies that are coming into san francisco a little bit more? because they are reaping millions and millions of dollars in the city and taking that money outside the city. so isn't there a way to get some kind of

money for these construction companies? there may be a way to do that, and it is not only in construction that we're looking at this issue. the reason it was set up this way is because we wanted to reflect, checked a tax burden that was sort of proportional to how connected a company was to san francisco. so, for example, if a company that's not in construction is in san francisco, all their people are in san francisco. but all of their businesses is outside of san francisco. we don't want to tax them zero. we want to tax them based on the fact that all of their people are in san francisco and construction. it's both. it's both a function of how much of your payroll is in the city and how much of your sales is in the city. so when your hypothetical example, yes, the outside company would pay higher taxes and that is something we can fix and that is something that we're looking at. okay. that's i just know that a lot of small business construction companies and

professional services are losing a lot of business to outside companies in the city. and i think i mean, honestly, the best part of being from san francisco is being from san francisco is to say, my i work in san francisco. i live in san francisco. and so there has to be a way to protect the small businesses and construction and professional services. why if you do come into the city of san francisco, you have to pay. that's it. thank you, commissioner herbert, just one last thing. i agree with commissioner gregory. i think san francisco should hire to make a point of hiring san francisco companies and taxing the companies that want to come in from the outside heavily be they have to pay to play basically understood. commissioner, there are constitutional issues in saying you can't target a non san

francisco company with a higher tax. but there are ways to do it that we're not penalizing a company just because they have people here. okay. and my last comment is just that san francisco is an amazing city. so it will come back. but there are a thousand reasons that people would want to be here. they still want to be here. it's beautiful. i won't name all 1000 reasons, but you know, we're going to make it back in my opinion. it's just going to be a little rough for a while. so thank you again. yeah i think my , my questions are not quite formulating in my mind yet. there's so much to take in. i think for us as a commission, we'd love to continue this conversation on and i don't know, see how i think as your as your work continues, for us to be able to explore how this

affects like our small business community, because i think, you know, the things that we see on the ground is really that i mean, it's exactly what you're pointing out is there's a balance to be had, right? like there's we can't create so many barriers to starting a business at any scale or barriers for any business to come into san francisco so that the risk becomes too great for them, that they don't want to invest in san francisco and it's kind of like, how do we how do we rightsize all of these things for everybody? and i think what you noted about the small business impact is really interesting that for small businesses that that barrier is quite large and it's interesting that it's happening on the top or in the kind of top middle end as well. but for us, as you saw, kind of the legacy businesses, these are the impacts are very individual and very hard for our families. so i think, you know, i think

this hopefully our commission can be of a resource for you as you have stakeholder engagement going into the next few months and formulating how things appear. i know that our our little drop doesn't seem to be as large of a part of that bucket. but i think when we're thinking about diversification of businesses, i have a feeling this is just kind of like the very beginning of that kind of conversation. conversation okay. thank you very much. um oh. any other questions? no. okay. thank you. oh, public comment. any public comment on the line or in the room? uh, there's none. okay, great. um no public comment. public comment is closed. uh, next item. thank you very much. item for shared spaces program update. this is the discussion item. the commission will hear an update from the shared spaces program,

including an overview of applications and upcoming permitting deadlines. and we'll discuss how the commission can support the program and amplify communications. presenting today we have annie yellen public relations and communications manager with the planning department and monica munich. shared spaces program manager with sfmta and gregory slocum department of public works, who is on the line. hi. thank you so much for coming. hi, good afternoon. good evening. good evening. we have some slides prepared for you all today. carry you'll be able to load them up. awesome thank you. well good evening, monica. minich sfmta shared spaces program manager. it's been a minute since we've been to this group to present to you all and give you an update and we have a ton to update you on. and a really important milestone coming up. so this is a very timely discussion and eager to give you guys an update. and we have an

ask and some help from you guys as well. so with that, i'll get started. and yeah, annie yellen planning department is here with me and gregory slocum public works is on the phone for any questions. so to get started to topics for tonight, we mainly want to focus on where we're at in this transition from the pandemic to permanent or post pandemic program. give you an update on where we are in our applications processes. some statistics on scale and numbers and all the efforts we've been engaged in to support businesses and get people through this milestone. so key timeline, as you probably recall, the pandemic program ended at the end of march and we've been in this 180 day grace period that the board of supervisors legislated a grace period intended for pandemic operators to have more time to get their new permits in order so that 180 day ends september 27th. we're

about a month away from a really important deadline. and what this means is that pandemic operators will have had to not only submit their application, finish having it reviewed by city departments after that point, they get a conditional approval. but there's also steps after that. so there's still a lot of work underway that businesses are eagerly working to get their to get to the september 27th deadline. and that's after applications are reviewed and approved. and there's a ten day public posting , a parklet operator needs to make modifications to come into compliance and then there's a post construction inspection by public works and fire department and then you were able, if you clear that you're able to get your permit. so i just want to lay that out that represents a lot of work and a lot of touch points with the city that we're really committed to supporting businesses to get them to get them into new permits, new legislation and legal permits.

so to give a sense of scale and some important numbers, we're currently working through about 639 post pandemic parklets applications. that's down from, you may remember, numbers height of the pandemic. 11 1200 parklets just to give a sense of scale of kind of where we're at, the sort of landscape of pandemic permits or permits that are here to stay parklets are here to stay. and as a frame of reference, i think it's really important to sort of remember and understand some of the growing pains that are part of this transition, which is that in the pandemic we were really reactionary. it was a very stressful time for the city, for operators. we were under very intense, obviously, indoor restrictions. and so it forced us to be rapid, adaptable, make a lot of compromises. fast forward three years later in this new era where we still have this streamlined process, we're

really proud of streamlined procedures, but we're looking at solutions that are more sustainable. parklets are here to stay as we sort of look at permitting occupancy in the public right of way, some more statistics before i pass it on to annie to talk a little bit more about our communication efforts. we have reported about 121 parklets people that have already removed their parklets. it's more than that. obviously we had 1200 at one point, but we've gone out and folks that have since march closed down their parklet out. but there's this 639 in the mix and only three of them have gotten their permit, their post pandemic permit. why is that? a lot of reasons. one thing is that it's really been very difficult to get response and stay on top of the scale and applicants that were and businesses that were working on and through, for example, the sort of kind of

categorizing three different buckets of folks. the first number, that first bucket is 179. of that 689, 179 that have made it through permit review. they made they submitted public mta, reviewed it and approved public works, reviewed and approved. and but they still need to build, get an inspection and then their permit. so they're really far along. but there may be there's maybe they're within their window to build, which is about 60 days. some folks have like haven't done it for a couple of months. so it's these are really the folks we're focusing on to get through the finish line. but another 144 are have incomplete applications and are at the beginning of the sort of approval process. they haven't even gotten through. mta review, the first department that reviews it. so those are we sort of call them incomplete applications. they applied. they're still haven't made it out of our queue. and then another one, 313 made it through

sfmta but then are sort of stuck in that second departmental review. so yeah, 144 and 313 haven't gotten to that step that the 179 did. if i, if that makes sense. happy to go over this again. but we've been combing through the data very thoughtfully and intentionally to really understand and the different ways we need to support people and where folks are getting challenged, where we can just be strategic. so happy to elaborate on this, but with that in mind, annie will start to talk about how we've been targeting engagement with these businesses. so so since march, we've been doing in well before that as i'm sure you've been aware, in previous briefings, we've been really offering businesses consistent only that one on one case management support that comes through emails, that comes through one on one video calls, and then we

have at least once a month an in-person office hours event where a business can come physically to 49 south venice and receive feedback on their site plans from staff and we're always willing to offer in language support as well. so in addition to that, we've done a lot of phone banking. we've even sometimes done text messages when we can't get through to an applicant. we're partnering with office of small business. our grantee partner, sf new deal, who also is plugged in with other nonprofit members as well as planning mta and public works, all making those phone calls and answering people's questions and letting them know what they're missing. and maybe you missed that email and then sending it again. and then the next step is going to be noticing those applicants who are still missing information nation in order to make their

application complete. so the legislation states that the it has to have a complete permit application in the system by september 27th. so we're continuing to do big pushes in order to get people ready with all the missing materials that they may have. we're also offering a few grants at this time. we're also we're offering our shared spaces as equity grants. those are back open and businesses can be reimbursed for up to $2,500 to bring their parklets into compliance. we also offer that grant for table and chair permit holders as well. and then we also have a new grant. the arts and culture grant, which is in partnership with us at new deal that is up to $10,000 for merchants, associations, nonprofits to really do individual activations in their community and on their streets. so those applications are rolling. the priority deadline was august 1st, but we

are accepting applications for that grant up until january three and for the equity grants . the deadline is september 27th to also match the permitting deadline as well. and then i'll bring it back over to monica to talk about the fee waiver update . kate hopefully short presentation. this is our second to last slide. so fee waiver. earlier this summer, the board of supervisors deliberated and ultimately approved a fee waiver for the next year. and we just wanted to explain a little bit about what went into effect. you may have we've put out some communication and emails, but it's a little confusing. so we're spending some time understanding exactly who's benefiting and how. so basically to break it down, if you had a parklet during the pandemic and you were transitioning your initial permit fee is waived. so

there's two different fee types. there's a permit fee and an annual license fee. and those are both waived until july 20th, 24. if you're obviously a shared space parklet a pandemic one and you're removing, there are no fees. it's not like retroactively you have to pay for a permit. in the past. so if you're not transitioning to the new program, you simply need to remove your parklet by july. by september 27th, the end of the grace period and if you're applying for a new parklet so you're someone brand new, you never had a parklet during the pandemic. you also benefit from the fee waiver. excuse me, your initial permit fees are waived for the first year. i believe the annual license fee is the only one that does apply. and i should mention this is mentioned this last point, but for all of this, the threshold, the other thing that the legislation did

is raise the threshold from 2 million to 2.5 million annual gross receipts to be eligible for the 50% off waiver. so eventually, when you are paying fees, say, in july 24th, if you are eligible, all you are, you have waived for a whole year and you're half of what they are, 50% off. hopefully next makes sense. we can go back to that. but just want to make sure you were all aware to put out the good word about what got passed and how that's supporting small businesses. so to wrap up, we of course have enormous amount of respect for your sort of committee and you've so plugged in and have been so helpful over the years of the program and would love your support to help continue to put out the new word, the word especially as we are in the last month. and as you can tell from the presentation, we are doing so much intentional work to reach folks. but you can help us put out the good word. and if there's anything more we can do

on that, we're happy to send you live posts. for example, like we mentioned, we've really curated and really dug into the numbers. we're happy to share some of the folks in these different categories. maybe you guys, they're in your network and you can help put us a word. just let us know how we can what we can provide you. so with that, any questions? and thank you so much for your time this evening. thank you so much. that was it was good to have a status update. sounds like there's a lot happening in the next month . commissioner ortiz, cardona thank you, marcus. it's been a while. i want to first thank you for the presentation and i want to commend your outreach work. that's for real. like you know, always when it's good, it's good and it's been good. those workshops have been really good for people that actually make it, but they are good. i've had some of my colleagues attend and i know specific, but it's good. and brian, my email is full of

his emails. so like brian's doing his job right, like he's making me work, so he's doing the job. if we could go back to the slide on the fee waivers, i think i understand it. but just for the people that are seeing, especially the nonprofits, so i got a permit, let's say i'm williams bakery. i got a permit during the pandemic. i'm one of the few that have all the approvals and everything. i will not have to pay any fees for anything until july of 24, when i start that fiscal year. that's correct. yeah a little. it's so right. the legislature specifically waived it until july 24th the way that treasurer tax collector, the unified license bill works. i believe it's like that cycle. it's mrs. that cycle. so it ends up being another i'm sorry, a good year. i think it's march that those are assessed on. it will be

april 2025 on your unified tax bill. okay because it missed the anticipate receiving your first bill. so william march 24 it misses it with july 24th, right . just to clarify this, sorry only applies to parklet operators. so the legislation was specific to parklets. it did not include street closures or table and chair permit holders. copy that. so straight chair spaces. parklets. so i'm williams bakery. i got everything. i won't have to pay something out of pocket until march of 25. correct okay. and then the second one, i am crazy and i started a business right now in san francisco williams winery and i'm applying for a parklet and i'm doing the process right now. when do i eventually pay or how much do i pay? so the annual license fee applies right away, and i don't know. the permit fees are one, two and $3,000. i don't know

that off the top of my head. the annual license fee, it's not. it's in the hundreds of dollars. so that goes into effect. but if that also misses the unified license bill in march, does that also get means that it's pushed out to 25? i actually don't know, off the top of my head. so a the permit has to go through the full cycle of being approved and then everything. and then what i can do is i can carry am i connected to wi-fi, i can pull up the fee schedule on the on the website because as monica stated, it really depends on the amount of parking spaces like percentage wise, i'm brand new. you don't have to give me the exact figure. i know. i think top of my head, but i would have to pay right now. today, 50% of whatever the fee you want to spaces. yeah. 50. not this year . not until next year. 24 of 24 for the for the permit fee and that is the bigger number that one, 2 or 3000 versus a public movable or fixed parklet totally

waived for me to even me my new revenue, correct? yes. okay. i get it. and then lastly, and i don't know if you could answer i don't know if it's data, but it's like a reduction of like almost 50% in in parklets reapplication, reapplication. do you do you have a sense why is it because all the rules or you know. yeah yeah, yeah. some of that anecdotal and i may have some additional insight from where where i sit what i've seen it's a mix of things. there are folks that are feel like they don't need it. they're like, we're back indoors. we don't have the same like it's not the same period of time. it worked for us then. we don't we no longer need it. they're hard to maintain. they don't pencil out right there. graffiti. there's is homelessness issues. there's neighbor disputes. it's it may not pencil out financially because of the modifications they need to meet or period to sort of where they look at the demand and how much extra sort of staff they need. those are

the ones i hear about maintenance modifications, penciling out any other categories? yeah, i know. i think i think you know it's that in terms of penciling out often times a lot of parklet operators are finding themselves in a position where they would need to make modifications or have to rebuild the parklet and entirely so we're weighing cost benefit analysis. and then in some cases but i would say this is much more rare. some parklet operators are not able to carry on into the legislated program because their footprint doesn't qualify. so oftentimes that's because of a red zone or an inability to daylight the parklet, right? yeah the far minority like less than i'm trying to think of. i can't think of any like for the most part, footprint changes do need to happen, but we can still make a parklet happen. it just may look very different, but yeah, there are probably some few occasions, maybe a parklet that

could be in a bus zone because the bus was not operating. it's finally coming back. they have to go away. but probably less than ten. that totally cannot are going away because they simply there's no space for them and last one and by the way, as of new deal, great partner they're on top of it. they work a lot with my colleagues at glitch. so they walk around, shared space. just a technical question. when does the parklet have to have available spacing to the public? yes. right. yes. yeah. the portion of it. how much of that? like let's say i'm a single parking space. parklet. yeah every. so the legislation is vague but also explicit. it explicitly states that every parklet of 20ft has to have a public bench or a public seating area of some sort. doesn't specify how big it needs to be, how many people it should accommodate loosely. we've been our interpreting is as a person and a enough for two people. but where it is in the footprint is up can be very flexible

depending on no dimensions, black and white. so i make a bench for one person. yes, within 20ft. so for every 20 foot. so if you're a bigger parklet, you may need more than one. and there's maybe and i don't know if public works, hopefully is not there may be other accessibility requirements that obviously it has to like can't be placed somewhere that inhibits some other sort of design parameter like ada access . but yeah, we've seen pretty creative solutions about where they're placing them, but there are it's not we do review it and approve it. it can't be like maybe overhanging in some situation that would be unsafe or impede access street side right, right. exactly exactly. yeah. and then lastly, lastly, lastly, so obviously from my nonprofit, i'm working with a lot of people that haven't been as responsive or just don't have, you know, the consent from a neighbor, etcetera. right. the deadline is pretty close as realistically and your team has

been amazing. so i know monica, we've worked on a ton and i know i could reach out. i know i could reach out. and i think, you know, you're accessible. everybody what's realistically the enforce like, is it going to be punitive? 27 comes and we're going to come with the wrath of god to our small businesses or or we're we're going to work with them. yeah a little bit of both. we will be intentional and have to prioritize guys who we're noticing right away. so, for example, it's october. our public works enforcement team is not going to have the bandwidth and we wouldn't even want them to go out to hundreds within that first week. we will look at and sort of start with the obvious folks, the folks that we applied six months ago never responded. that initial email like never responded to a phone call. they're going to receive a notice that says your pandemic parklet is expired. please remove within a certain amount of time and then a citation and a fee. so we'll be rolling out that as we get past september

for. but start with the most egregious but sort of the obvious stakeholders that feel like they're we have a good sense that they're not wanting to continue in the permanent program and go from there. yeah. so it won't be everyone. it will be intentional, strategic. we're trying everything, every toolkit we have, every contact that we have to work. so that is a last resort, right? thank you. you've done a great job on the outreach . so add one thing to that. only one fine has ever been issued to date. so there have been corrective notices sent out to folks who may be operating like a very unsafe situation, but only in one instance since over the last many years. so that's good to hear. we really we really pride ourselves on really working with the businesses and just ask for that consistent communication just to let us know, like, i hear you, i see you, i'm working on it. i just

need to do this or let us know what's going on. i appreciate that. that was a good that's good. thank you. appreciate you all. thank you. commissioner herbert. uh, first of all, thank you for all your hard work. i've been receiving all those emails , too, and it's great. i probably have to circle back about one of my parklets one has to go away. um and i did have some feedback for you guys. um i think a lot of people went to considerable expense to build the parklets during that period where it sort of anything goes, you know, we're going to die if we don't have one, and then on the rules started adding up. and so some people have spent a lot of money on parklets and now they have to tear them down because they don't comply. you

know, like the 20ft from the cross walk rule. so i'm one of those people. um, and so, so i guess what i would just come out and ask which is probably not possible but you know, the weather is part of business for restaurants and, and october is a really nice weather month. everything starts to go downhill sort of at the end of october. so just putting out an ask, if you don't ask, you don't get you know, would it be possible to stretch it until you closer to the end of october so that restaurants specifically can continue to profit from that nice weather while the sun is still shining kind of thing? um, that being said, i really appreciate all the work that you guys are doing and um, it would be great to know. so what do

apartments are requiring? what what does that make sense like? is it the fire department that's requiring the 20ft from the crosswalk? is it dpw that's doing requiring something else? it's been a little bit confusing to know like what who's requiring what and when. um, and then my question is, will there be oversight of the parklets that are still existing? like how will your department maintain oversight of them, making sure everybody's keeping their parklet up and looking good and, um, being structurally sound is there a plan for that with the existing parklets as we move forward. um. and yeah, it would. i understand that the whole process has been an

evolutionary one, right? you've sort of made discoveries about what works and what doesn't along the way, but it would have been really ideal if the rules were the rules from the beginning, and i guess that just wasn't, i mean, almost an impossible task, right? so that everybody knew, okay, you know, i shouldn't build this thing because i'm going to have to take it down eventually, right. i'd love your feedback on that. totally yeah, yeah, yeah. well, i'll start there. and i do want to address your other questions. totally. i think we think about that all the time. like if we could go back in time, how we, how would we do things differently? that being said, we're operating. you can't recreate the sort of the period of time we were in and sort of having to right size that now, now and as we are, have that opportunity now to be like, how would we want to do it? which we couldn't necessarily in all that that we are pulling together in may of 2020. um i think it's a

little bit of both. i think we're mindful of wanting to take pieces of the pandemic program with us. we now have a streamlined permitting process of 30 days before my understanding pre-covid. it would take like eight months to a year much more robust. i think we want to take those bits that worked really well. fast responsive, adaptable, but but balance those trade offs. it's a it's a real experience. we see it, we hear it, we know it. it's a fair criticism that evolution that happened. that being said, you know, we do look back and it's sort of like it wouldn't have made sense, i think about that to not allow something in may 2020 that we thought in three years from now, this won't fly like, no, you can't be in it. so it sort of we made the right call, i think, for the time and we're trying to make the right call for this time. and it just inevitable, at least from where i sit. and fortunately that there's just going to be growing pains like we talked about in the very beginning of the presentation. it doesn't mean hopefully that

we're doing a terrible job. i think is just sort of an inevitable as we grow and get into the next era, something that's more sustainable and that not that it matters, but at the time i think we hoped it was the agreement was mutual and understanding that the permit s were temporary, they were temporary. the thing we actually issued had like a timeline at six months. we only offered little six month chunks. regardless, people invested and they're at the situation. they're now, now. and it's hard to do that sort of reverse action. but they were intended to be this whole thing has been an experiment. but to go back to some of your other questions and i don't know if annie has anything you want to elaborate on, on about sort of that last question of the three, who's going to be maintaining it? um public works issues, these permits, they always have. they have an enforced agent team, fire department has an enforcement team, and that team has always been around. but i

think as we stabilize and we're at more of a place of having bandwidth to keep on top of compliance and inspections, those will be the departments at the front and center. but we're really hoping the permitting process is how we get it right. like we hope you get a permit because you did everything right and there's not these like like fixed after the fact. but yeah, those will be the sort of departments in those capacity edges. and in terms of who does what, i'm curious if you have more additional insights on how we could make that better. i know our manual, at least it's very long, very dense, but at least is color coded by section. so it is somewhat an easy way. i think fire might be red. i could be wrong, but like the red pages are like, you know, you're in this section because this is fire department requirements. ada you're in this section because this is something public works looks at mta footprint. so i think there are different colors, more or less by department. and i also know our compliance advisories, which seemed like so long ago. i know

at the time when we developed that for every business and we sent them to every business, they were, i think, coded by like the department fire mta public works and like the code section. but that's the two things i could think of that's like at least readily available where we try to interpret it, the guidelines by department, but if you have other pieces of feedback or how we could do better with that, yeah, i'd feel remiss if i don't invite you to our parklet design training and office hours this thursday. i know everyone here operates a business and is busy, but that is a great space to make that visual connection between monica at mta delivering the mta portion of the training. gregory from public works delivering that portion and then just kind of connecting the dots with that visual representation of the individual who's representing that department. so i just wanted to plug that in. this moment, if i may. thank you. and

you guys have done a great job. i mean, the fact that we have parklets has been, you know, a gift and an aid. i do have one last question, which is it's going to be really expensive to take them down to get to get rid of the materials that were used. right. that's costly. is there anyone to help with that? that i heard something about the boy scouts wanting the materials or something. there was a great rumor about the boy scouts, but we were unable to verify that we did pursue it. but newly you can apply for a shared spaces equity grant for removal of your shared space. so that would be $2,500 towards the removal of your shared space. okay yeah. and just, you know, it we do know the disposal and the rental of a truck is probably the most cost costly portion of that. but it,

it doesn't it doesn't require skilled labor to, to do it. so just putting that out there and hope hopefully that you'll apply for an equity grant too. great. thank you. i'm asking for other operators as well. so thank you commissioner ortiz. cartagena. yeah i just want to highlight on on 24th street our cultural district, we had veinticuatro and you guys did amazing. everybody's wearing new deal, your offices. it was it was dope. and regarding disposal glitch my nonprofit we've been doing it so we've been doing before the shared space grant came out. so hopefully now we can help them apply. so we've been fronting the costs of removal. it's not it's not that much. it's not that bad. so some people that didn't want to proceed and we got the laborer and we did the dump and all that stuff for them. curious how much it cost on average about 700 on average. so that's good. that's wonderful. great. any other

comments? i mean, it sounds like i mean, my assumption is that department of public works like dpw. i don't know if it was a and then mta everybody is like ready to help process with every like process. all of these. and now we're at a stage where you're having a really challenged time getting a hold of the business owners, right? that is the ask essentially for us to be able to reach out to our network. so i think after this meeting, you had offered to be able to share some of the businesses that you're having a tough time getting a hold of. i think we can definitely, you know, kind of help with that that load. and maybe, carrie, you can, i don't know, help figure out how we delegate that effectively. and so, i mean, it sounds like the 313 that have not yet cleared the second

department review. i mean, those are most likely to be the ones to be cleared by the september deadline. and then on. and then we still have 144 who are and 179 who are kind of like missing really a lot of a lot of the steps. so potentially a lot of the parklets that we see right now could be eventually not not used or have to be taken down. so i hope not. yeah i hope it's continued engagement, but it's more realistically a lot of folks that are potentially getting notices as a last resort , targeted and strategic. but but we're hopeful. all these people are so close to getting over the finish line, they're just making final decisions, getting missing materials is. but yeah, it's a significant number. yeah yeah. i mean, i think the vast majority of like people that we talk to, at least in my neighborhood like residents and things love having

parklets love having more outdoor space people really enjoy being able to like sit outside and, and have coffee or whatever it is you know, and, and so i think, you know, for all all the millions of people who are listening to our commission meeting tonight, hopefully they will encourage their neighbors and their merchants that, you know, that not just to ask them to like move forward, but if there's a way that they can really pitch in and help out because maybe maybe some of this is bandwidth for businesses. right. and so, um, you know, hopefully we'll, we'll all be able to kind of help with that. so thank you. thank you very much for your time and your presentation. oh, actually, if you don't mind staying for public comment, we probably have several thousand people. we have we have one caller in the queue. oh, nice. welcome. thank you so much for attending the meeting. oh caller

. yeah thanks for having me at the meeting. this isn't a while. i know you guys are primarily not primarily, but here for the shared spaces program and we're having all of these meetings. we had another meeting, i think, at the coffee place about at the sextant coffee rotisserie, about the little girl that got hit by the car and killed and to give you a little bit of a background on myself, um, i've been hit by two cars in your city, and i've not been knocked to the ground. and those drivers drove off. so i'm a convicted felon. i have just been rejected on four applications for housing and we

have all of these meetings. and i'm just. i'm so curious because i sit there, i have the funds for housing and we say we're concerned with people's safety. even put in the context of drivers and stuff with these parklets. but we're still not concerned with the real issue, which is i have money for housing and i'm being denied funding for housing. but there's all of these programs for me to go to fuel your guys's jobs. meanwhile i'm left homeless and then people bitch about their car windows getting broken and stuff like that. and i could go stand at fourth and market right now. and i know that's not where your guys's parklets are located, but i can go stand there for 12 hours during the day and for every single, every

single hour that i am standing there, we're going to probably have to cut off standing there. i know our caller. i'm getting to my point here. this item is about shared spaces. so if your comment is not about shared spaces, my comment is about the shared spaces because we're focusing on funding and where that funding is coming from, but we're not paying attention to the real issues of all of you guys. miss, spend money and it is staring you in the face of what is outside. and i have spent over $100 applying for apartments and i am being denied. i have a full time job. it sounds like this is about housing. so we're going to we're going to cut you off now. okay. thank you very much. all right. well any other public comment at about about shared spaces more specifically, there is none. none. uh, seeing no callers on the line. seeing no callers in

the room. thank you so much for coming tonight. thank you for your time and support. good evening. thank you. all right, um, next item, please. item five amendments to small business commission bylaws as this is a discussion and action item, the commission will discuss and possibly take action on proposed amendments to the commission's bylaws as and uh, just a note, this is regarding our switch from meeting, uh, twice a month to meeting monthly and just codifying that in our bylaws. do we need to present on this piece or do you just present it just right now? yeah. yeah. that summarizes it. okay. um should we take any commissioner questions? does anybody have any questions about. i mean, i, i think i just have one thing is that, um, you know, i really appreciate that our

commissioners right now have so much, you know, so much passion for what you do that you do spend so much time outside of the commission meetings in your communities and in your not just in your businesses, but really like within your community and within the city advocating and doing all this work. and so, you know, i think a lot of this is because i want you to be able to spend more time focused on on those types of things. and for us to be able to, you know, be more efficient with our with our commission time. but i just really appreciate you all so that's kind of i don't know, i'm not making a lot of sense tonight, but it's really a recognition that you do so much outside of this time. so and i

want to encourage people to really step up to like commissions and spend time doing these kind of things. so the commission should feel like, you know, it's a pleasure to get together and that we're really doing good work together when we're when we're here. so yeah, so that's thank you president hui. and because of that, you reduced our workload by half. i appreciate you. i love your leadership of the commission. i think the results are like beyond, you know, they're under your stewardship. the best, the best tenure so far. so does anybody else have any other comments, though? i definitely want to be open to things. if anybody feels different, know. okay well, seeing no other questions or comments, any public comment, there is none. seeing no public comment, public comment is closed. should we make a motion? i'll move. motion

by commissioner ortiz cartagena seconded by commissioner dickerson and commissioner carter is absent. commissioner dickerson. yes commissioner gregory. yes. commissioner herbert. yes. president hui. yes commissioner ortiz. cartagena. yes and vice president ziziunas is absent. motion passes. we shouldn't tell the commissioners that absent. item six approval of draft meeting minutes, discussion and action item, the commission will discuss and possibly take action to approve the june 26th, 2023, draft meeting minutes commissioners. any questions? no. seeing no questions. any public comment? there's none. no public comment . public comment is closed. does somebody want to make a motion to approve the draft meeting minutes? i will. i'm trying to give y'all another. i will. say

my brain. what am i going to do? you're going to make a motion. all right, i'll make a motion. i'll second the motion. okay. motion by commissioner dickerson , seconded by commissioner herbert. commissioner carter's absent. commissioner dickerson. yes commissioner gregory. yes commissioner herbert. yes. president howie. yes. commissioner ortiz. cartagena yes. and vice president ziziunas is absent. motion passes. item seven general public comment discussion item allowing members of the public to comment generally on matters that are within the small business commission's jurisdiction, but not on today's calendar and suggest new agenda items for the commission's future consideration when there are no comments. others in the room any . there's no comment from us. so no commenters on the line rate public comment is closed. next item please. item. eight

directors report. this is a discussion item. i will promote our director. hi everyone. can you hear me? yes. yes. hi oh, so good to hear you. i apologize today. so a couple of items and update. s wanted to share that with regards to the awning program, um, as you recall, we talked about this several times at this commission where were in the winter of 2023, 2024, approximately 200 businesses had received either complaints and or notices of violation for having awnings installed without permits. and this was sparked by , it appears to be an individual who made complaints. and so we had worked with department of

building inspection planning department, fire and department of public works to create a more streamlined permitting process to allow people to come into compliance and this streamlined application process also means that you don't have to pay any permit fees as well as you don't need to submit out formal plans as part of your permit application. and so as long as you have an existing permit, sorry, an existing awning or sign, you can take advantage of this program, you need not to be a business that has received a complaint or a notice of violation. so we are encouraging people to submit applications starting today and the program runs through june 1st of 2024. so so i really want to thank the office of small business team. last week, two staff members went out to the neighborhood ads and actually conducted outreach directly in person to the

approximately 200 businesses that received a complaint and or notice of violation. and inform them about this awning amnesty program. so please help spread the word. and of course, you're always welcome to direct people to our office with any questions about that next, with regards to the small business permitting legislation, this is. file 230701. this is legislation we've talked about here at the commission several times as well. and it makes over 100 changes actually at this point, nearly 200 changes to the planning code to make it easier for businesses to get their start here in san francisco or to expand and in san francisco and so i know that when ted egan was talking and we talked a lot about what the barriers to entry when you're a new business, we're really trying to lower that through multiple means. and this particular one has to do with zoning. so the next step for this legislation is that it

will be heard at the planning commission on september seventh. so i wanted to make sure that everyone was aware of that. and then after that it would go to the board of supervisors land use committee and then the full board. and last, ali, i wanted to just make sure that you are all aware of the apec leadership meeting and the ceo meeting coming to san francisco, and it's being hosted by san francisco during the week of november 12th. so this is one of the largest events that san francisco will be holding, hosting in modern times. and we are expecting approximately 30,000 people from the roughly 21 participating economies as part of apec. and these will be heads of state delegates, staff members as members of the press who will be in town and one of the key responsibilities that

our office is responsible for is really helping to highlight and spotlight events that would feature our merchant corridors and small businesses. so that the roughly 29,000 or more people who aren't part of all of the, you know, the vip events, for example, will they have something to do in san francisco while they're in town? so we've reached out to all the merchants associations, the community benefit districts, cultural districts and so forth. one, to let everyone know that apec is coming again the week of november 12th. and if you are already planning to host events around that time, we highly encourage the week of november 12th. otherwise there office. and thank you to michelle from our team has been working to spotlight the different merchant corridors and businesses through our shop dine sf campaign page, which is on sf.gov/shop dine sf. so we'll also continue to stay

engaged with regards to logistics and as soon as we get more details which we do not have at this time, but as soon as we get more details around impacts, especially if there are, for example, road closures or things of that nature that involve or will impact a small business, we will definitely communicate that out. so those are my updates for today and happy to answer any questions you have. thank you so much. commissioner ortiz, cartagena. i don't have questions, director, but i want to commend you and carry on around the legislation. the community outreach. i can attest just in my neighborhood, in my community, how many times you went back, you created solutions. and that was just my neighborhood. so i could only imagine citywide all the compromise eases, all the considerations ease. and you're always patient and you got a lot

of the stuff done. and it's been really positive in our neighborhood or it's going to be really positive in our neighborhood. so i really appreciate the work. it was very heartfelt. so i appreciate you and kerry. um and lastly, um, i'm super excited about apec. you know, we do a lot of events in the mission and we definitely want to show the world like, this is not the doom loop. this is san francisco. so we definitely want to be a part of it. we want to show you lowriding good burritos, you know, some music, some dancing. so we're with it. we ready? so thank you, director. thank you so much. and you were so key to our outreach to the community in the mission. so thank you so much. um any other questions? no i. i think, uh, there are no more questions here. thank you so much, director, for your report. oh, yeah. we'll have

public comment and. but yeah, i just wanted to thank you for your for your report and it's good to see you. um, any public comment. great. no there's none. okay. no public comment. public comment is closed. um, thank you. thank you very much, director. okay next item, please . item nine. commissioner discussion and new business. this is a discussion item allowing the president, vice president and commissioners to report on recent small business activities. make announcements et cetera. um, commissioner or. oh, yeah. commissioner ortiz. cardona yeah, i wanted to. director tang or carrie, if we could follow up on shane's, especially around the shared space because through the nonprofit a lot of the work we do with sf shines grant is we

get the designer to get the parklet design that we know it's going to be approved by sfmta. so we just want to make sure that we're not applying for this grant. if there's no longer any funds, because the first sf shines. what i call 1.0 gets you an architect, and then they draft up an approved shared space. and then the second 2.0 gets you money, you know, to apply some of what is needed. and then i just want to make sure because especially the design portion is been key for us, that was one. and then based on ted's report today, i don't know what our legislators are doing regarding, but i think if we proactively we kind of ask for some legislation around commercial vacancy and specifically a commercial vacancy tax on these class a assets, especially after these buildings are transferred, because right now they're probably going to get back to the bank. so once it's in the bank, then we should encourage and pass legislation where there's vacancy tax. and also, i

wasn't able to pull it in in time, but also we should be having this vacancy tax for buildings that get reassessed right now, google meta and all the big players, they're asking for 50% reductions on their assessment tax. this is public record. i couldn't pull it out in time, but you know, buildings that are 30 million, they're saying there's worth 15 million and they're probably going to get the assessment based on a couple of the comps that just got sold. so if they get approved, there should be legislation where i don't know, like if you're getting that reduction and you're having a vacancy tax, you know, you should get fined for having your building vacant. and then lastly to commissioner gregory. how do we how do we make it this tax somehow like an incentive to san francisco or a disincentive to the like i call them fronts straight up, right. you put one desk and you're walking away with $1 billion construction gig . come on. like you're extra hurting the city's wealth. right. and no more of that. how

do we, like, incorporate this legislation in on this commercial vacancy tax where we encourage small business vacancy and also discourage this front stuff? so if me and commissioner gregory end up missing, you know , what happened to us. great. that's it. i believe director, the director can respond to your initial question. yes. and so noted about your suggestions, and we'll definitely take that into any stakeholder meetings regarding business tax reform and your question about sf shines the program is still available and there are still funds. however the program is very oversubscribed, so there is quite a waiting list right now. um, so at this point i'll, i'll say is that i can't, you know, we cannot guarantee, you know, if you're applying now what your timing will be to receive the grant, whether the design or the

construction. but i know we, we are having conversations about how to make that program work better given the huge demand. thank you. um i just, i, i've been in conversations with people recently who have had a lot of challenges with sf mta construction issues and, and, you know, i feel like i'm fielding a lot of emails from different parts of the city. um, i'm wondering, i think there is interest from sfmta's part to build a relationship with us perhaps coming to the meetings more regularly. i'm wondering if that is something that we can place on the agenda as new items and also open it up to commissioners to kind of think about how we would like to shape that time that we have with

sfmta so that we can effectively kind of understand how we can work more collaboratively and how we can kind of think about this not just as like separate neighborhoods. i mean, we're seeing impacts that i think are are happening throughout the city and i think it's causing a lot of merchant corridors, great anxiety. so i think if we can kind of figure out how we can kind of look at this as a larger city wide kind of conversation, i'm not sure how to go about that. it just because like we really can't you know, we don't have a lot of ability to coordinate those efforts. but maybe i'm just putting that out there that that i would love to have the commissioners all be a part of this because i'm pretty sure in every one of our our corridors, whether you live or work there, you you know, there's somebody impacted by this. so that's. oh,

commissioner gregory yeah, just to follow up with what you were saying about sfmta, they have a huge project coming up the trail bus yard. does everybody aware of that project that's coming up? they're redoing the whole thing. it's going to be the bus yard on the bottom, housing on top. so it would be really nice to have them here because for months and months we've been asking them what their plan is and how they're going to support the construction and professional service. small businesses. and yet we have not got an answer. so yeah, i would love to see them in here. i know a lot of people are still complaining about them, extends the meters. so i'm wondering what their follow up is on that. are they listening to the communities or what? so i think that's a great idea. president

thank you. so i think maybe carry and director tang, you'll kind of follow up with us as to like best way to, to organize that. yeah that would be great. thank you. um, i think that's pretty much all of my new business at this point. um is there any public comment that there's none? seeing none. public comment is closed. um, next item. item ten adjournment sf govtv, please show the office of small business slide we will end with a reminder that the small business commission is the official public forum to voice your opinions and concerns about policies that affect the economic vitality of small businesses. in san francisco. if you need assistance with the small business matter, continue to reach out to the office of small business. meeting's

adjourned. thank you. >> shop and dine in the 49 promotes local businesses and challenges residents to do their business in the 49 square files of san francisco.

we help san francisco remain unique, successful and right vi. so where will you shop and dine in the 49? >> i'm one of three owners here in san francisco and we provide mostly live music entertainment and we have food, the type of food that we have a mexican food and it's not a big menu, but we did it with love. like ribeye tacos and quesadillas and fries. for latinos, it brings families together and if we can bring that family to your business, you're gold. tonight we have russelling for e community. >> we have a ten-person limb elimination match. we have a full-size ring with barside food and drink.

we ended up getting wrestling here with puoillo del mar. we're hope og get families to join us. we've done a drag queen bingo and we're trying to be a diverse kind of club, trying different things. this is a great part of town and there's a bunch of shops, a variety of stores and ethnic restaurants. there's a popular little shop that all of the kids like to hang out at. we have a great breakfast spot call brick fast at tiffanies. some of the older businesses are refurbished and newer businesses are coming in and it's exciting. >> we even have our own brewery for fdr, ferment, drink repeat. it's in the san francisco garden district and four beautiful

murals. >> it's important to shop local because it's kind of like a circle of life, if you will. we hire local people. local people spend their money at our businesses and those local people will spend their money as well. i hope people shop locally. [ ♪♪♪ ] >> my name is sylvia and i'm the owner of the mexican bistro. we have been in business for 18 years and we first opened on

garry street in san francisco, and now we are located in a beautiful historic building. and we are part of the historical building founded in 1776. at the same time as the mission delores in san francisco. (♪♪) our specialty food is food from central mexico. it's a high-end mexican food based on quality and fresh ingredients. we have an amazing chef from yucatán and we specialize on molotov, that are made with pumpkin seeds. and we're also known for handmade tortillas and we make our own fresh salsa. and we have cocktails, and we have many in the bar.

we have specialty drinks and they are very flavorrable and very authentic. some of them are spicy, some are sour, but, again, we offer high-quality ingredients on our drinks as well. (♪♪) we have been in san francisco for 27 years, and our hearts are here. we are from mexico, but after 27 years, we feel part of the community of san francisco. it is very important for us to be the change, the positive change that is happening in san francisco. the presidio in particular, they're doing great efforts to bring back san francisco, what it was. a lot of tourism and a lot of new restaurants and the new companies. san francisco is international and has a lot of potential.

(♪♪) so you want to try authentic mexican food and i invite you to come to our bistro located on 50 moroo avenue in presidio. and i'll wait here with my open arms and giving you a welcome to try my food. (♪♪) >> >> (indiscernible) faces transformed san francisco street and sidewalks. local business communities are more resilient and our neighborhood centers on more vibrant ask lively. sidewalks and parking lanes can be used for outdoor seating,

dining, merchandising and other community activities. we're counting on operators of shared spaces to ensure their sites are accessible for all and safe. hello, san francisco. i love it when i can cross the street in our beauty city and not worry whether car can see me and i want me and my grandma to be safe when we do. we all want to be safe. that's why our city is making sure curb areas near street corners are clear of parked cars and any other structures, so that people driving vehicles, people walking, and people biking can all see each other at the intersection. if cars are parked which are too close to the crosswalk, drivers can't see who is about to cross the street. it's a proven way to prevent traffic crashes. which have way too much crashes and fatalities in our city. these updates to

the shared spaces program will help to ensure safety and accessibility for everyone so we can all enjoy these public spaces. more information is available at sf dot gov slash shared welcome. everyone on the obligation bonds meeting. welcome to presenters and staff from the department. thank you for being he