Transcripts For SFGTV Small Business Commission 20240712

You are limited to three minutes unless otherwise established by the presiding officer of the meeting. Speakers are requested to state their name. Sfgovtv please show the office of Small Business slide. Hello. Today we start with reminder the Small Business commission is the official publicly forum to voice your concerns about policies affecting the Economic Vitality of Small Businesses in San Francisco. The office of Small Business is the best place to get answers about doing business in San Francisco during the local emergency. If you need assistance with Small Business matters, particularly at this time, find us online or via telephone. Our services are free of charge. Before item one i want to thank Media Services and sfgovtv for the live stream and a specials for monitoring the line. Please call item 1. Call to order and roll call. Commissioner adams. Here. Commissioner dooley. Here. Commissioner hule. Here. Commissioner laguna. Here commissioner zouzounis is absent. Yoyou have a quorum. Item 2. Board of supervisors file no no. 200214. Come use review and approval process priority possessing and reduced application fee for certain uses of commercial space. Affirming the California Environmental quality act making findings of consistency with the general plan and the eight priority policies of planning code and adopting findings of public necessity, general welfare under planning code. Presenters are lee hepner and aaron starr. Welcome, lee. Thank you for being flexible with your time. We appreciate that. Also to aaron who will present on the Planning Departments recommendations. Lee, you have the floor. We will start with you. Thank you very much, commissioners director for facilitating this hearing this afternoon. Good afternoon. I dont see the Vice President with us but hello commissioners. I will jump into a presentation on this file. Pardon me while i get that going and share my screen. I am wanting for a goodlooking presentation. The information that is here, i am here to present on the Small Business legislation out of supervisor peskins office cosponsored by ronen, fewer and haney who are working closely with the amendments and moving this through the stakeholder process with merchant groups and neighborhood groups. By way of background, neighborhood commercial districts, this is from 1983. It is just about when neighborhood commercial districts were created and article 7 of the planning cody signed to provide an approach to gentrification. They have evolved over the past 35 years to become interesting and unique zoning regulations for neighborhoods from north beach to the castro to the asbury to outer mission. There are a total as of early this year a total of i believe 28. That expanded by 12 earlier this year for a total of approximately 40 neighborhood commercial districts in San Francisco. That is the zone we are talking about here. Neighborhood commercial districts and transit districts are uniquely zoned to prioritize active ground floor commercial uses and limit the size of the spaces to incentivize Small Business growth. This is giving the merchant corridors throughout the city the very unique granular feel and allowed Small Businesses for the large part to flourish. Moving forward additional contact where this comes from as this commission is well aware earlier this year voters approved the storefront vacancy prop d on march 7th ballot. It is funny to me to think that we werent thinking about the coronavirus as a variable on march 7th. There was talk but this passed by 70 on that date and suggested the named neighborhood districts if they are leftvi cant more than six months. The reason the number of districts expanded from 28 to 40 because of the word named right there. Significantly, district 10 got its first neighborhood commercial district as a result of the Bayview District this year and a handful of others. The storefront vacancy created exemptions. Two year disaster period after fire or earthquake. Construction period if there are tenant improvements delaying the application of storefront. Significantly a six month conditional use exception where in a storefront is not being vacant for six months following the application for conditional use authorization. Over the course of the election cycle earlier this year, we heard and investigated ourselves how long does it take for a Small Business to get a conditional use authorization . We learned in that process six months is actually a very optimistic view of that process. Often times Small Businesses paying rent on the space they intend to activate sitting longer than six months waiting for that conditional use authorization to be granted. Why do we talk about conditional use authorizations at all . As this commission knows, there are tables across the city, various uses are in some instances not permitted. In neighborhood commercial districts in areas like chinatown governed by article 8. Office use is not permitted. The logic there being there are parts of the city zoned for office use and we do not necessarily want that dead ground floor space in the vibrant commercial corridor disrupting retail and restaurants. There are not permitted uses which are designated by the code. Those are uses we want to incentivize, Hardware Stores, for instance. Then there are uses subject to public hearing pursuant to conditional use authorization. Those are uses that have demonstrated predictable impacts on neighborhoods, they tend to gentify neighborhoods for a number of reasons are subject to standard of review in planning code that is necessary and desirable before they are approved. Who decides what is desirable . The Planning Commission. It is a critical opportunity for Community Input and the groups over the course have cautioned us not to for go the process. It is one of the most important tool goes to create gentrification. They can appeal to the board of supervisors. It is extremely rare to appeal to the supervisors. We see a hand full from time to time. More often about large building developments. The c. U. S still serve a purpose to put the project sponsor to meet with neighborhoods and come to agreement on the lines of i am opening a nightclub, i promise not to have amplified noise past 10 00 p. M. There are conditions communities and project sponsors and entrepreneurs arrive at so that they are not so they avoid that appeal to the board of supervisors. Small businesses seeking conditional use authorization should be entitle to a timely hearing and not suffer extraordinary delays. That is the basic principal under this legislation and for which i will ask for your support today. A quick worse case scenario. Over the past year a county 526 columbus in north beach when we look at the six months is long enough exemption. They didnt get the c. U. Hearing until 326 days after the application. It is hard for us to determine if that is an outlier scenario. They would have been eligible for priority possessing and we hope to avoid situations like this. A little more background. Sorry i am talking so much. I will try to get through this. The community possessing program is the basis for what we are attempting to legislate today. This was a resolution passed by Planning Commission in 2015. Streamlines the conditional use process for certain small and Midsize Business applications, eligible uses include a lot of the Small Businesses that are subject to c. U. S in the corridors. It requires the submission of separate application. One of the problems we noticed is that as we track certain c. U. Applications that would be eligible for this priority possessing they werent aware there was such a thing and havent been able to avail themselves because they never submitted a separate application for it. This is the announcement of this legislation. Supervisor peskin requesting we meet for months around these issues. This is one of several ideas around Small Business needs. To the legislation. Eligible uses for priority possessing under our c. U. Permit streamlining. We are talking about nonresidential uses, no commercial uses on ground floor that do not form retail. If they form retail uses subject to c. U. It would be subject to c. U. Not able to be in priority possessing. Uses that do not result in the consolidation of storefrontses the neighborhood commercial districts for Small Businesses to occupy storefronts, and businesses that do not propose to sell alcohol unless it is conjunction with bonafied eating place, restaurants. These are types of uses that would not be eligible for priority possessing. Adult entertainment, bars, cannabis dispensaries. These are the uses that have predictable impacts on the community in which we wapell weo make sure there is a thorough opportunity for community vetting. Everything else is. For those eligible businesses they are entitled to expedited hearing before Planning Commission on consent calendar within 90 days of application submission subject to onetime extension of 60 days triggered by the Planning Commission or a neighborhood organization. There is a list of neighborhood qualified organizations maintained by the Planning Department. No separate application is required. As we track the implementation of this ordinance, one thing we intend to work within the Planning Department is to ensure that eligible businesses are screened for that eligibility and priority possessing upfront without having to separately submit an application to avail themselves of priority possessing. In addition to streamlining the process as much as the applications are put on the consent calendar without rigorous staff report analysis, we are reducing the application fee by 50 . If the Planning Commission does not hold a hearing to the timeline set forth in the legislation, that applicant be is entitle to full refund of that application fee. Planning commission this is backward calendar. Heard this on may 28. Forwarded with positive recommendation. Today we are at Small Business commission. From here it will go to the land use and transportation committee. That date is to be determined and eventually the full board of supervisors. I want to thank this commission for its input on this legislation. It is still at the stage where we can work to modify this proposal, and i am available for questions and eager for your input today. I will turn it back to you, mr. President. Thank you, lee. Commissioner adams. Thank you, lee, and supervisor peskin. I know and kathleen, we both worked on the cp3 deal. I really like what you did about cleaning it up here. I am very, very comfortable with these changes. I think you did a good job. This is stuff that i feel should have been addressed awhile ago. I want to make sure we need to get this out to people because you said something that was very key in your presentation. There is a lot of people who didnt know about that program. I could Say Something and i dont know if aaron is on here or not. When you have your intake with planning, they should tell you this. That wasnt happening. We have to make sure that if this gets passed by the board that we have got to make sure that people who want to open up Small Businesses in commercial districts dont have to figure this out, you know what i mean in this is very good. I want to thank i know you worked on it and supervisor peskin. This makes my day. Thanks. Any comment. No, thank you. Commissioner ortizcartagena. Thank you, supervisor peskin and the outreach in my neighborhood on 24th and Mission Street. I appreciate you taking the time for 24. We were concerned. The work in our neighborhood is contingent on the c. U. Process. You excluding the cultural corridors i appreciate that. Thank you. Commissioner dooley. You said hard core. I need a beer. I wish i could pass you one through the screen. We thank you. You have done a great job. My only comment is that having the personal experience of having to wait two years to have a c. U. Hearing about the cannabis dispensary from my neighborhood which is outrageous. I am wondering if there is any way to add things that arent available for the new legislation could have some kind of limit. We had Staff Members quit at planning and find out they hadnt done any of the work, a and, you know, i dont how many deep pockets are out there. We have been paying rents for several years now. You know, just a thought for the future is that even though like the cannabis dispensary is not part of this. There are those out there who have had terrible problems. My neighborhood is waiting to get the dispensary open on a block that is half empty. It is a thought to maybe push this a little further because that is just unacceptable. Thank you. If i may address that comment. I fully appreciate that, commissioner dooley. Just to let the commissioners know this legislation i hope is a starting point as we try to in a lot of delays on the city side. The bottleneck around cannabis dispensaries is region at this point. I think a lot of the delay commissioner dooley experiences is that legalization made everybody cautious. There are, of course, approval that need acquired through the office of cannabis. With respect to whether this is going to solve every problem for every Small Business, absolutely not. As we found that applications approved by the Planning Commission and passed to the department of building inspection for Building Permits there is an opportunity for delay there. I should phrase that as another opportunity for us to reduce delay once things get passed from the Planning Department. That is a conversation ongoing with the departments in our office. Mr. White house is doing great work to streamline and to coordinate round table discussions. We are now in the d. B. I. Quagmire with no idea when anything will move forward. Commissioner wrec. What causes it to be under 26 day long delay between application and someone being heard . That is a great question. Maybe a question that planning staff is better suited to respond to. With accounting homemade i think at one point there was in the citys defense a response that was required from the private sponsor or tweak that restarted the clock. In any event our sort of provocation with this legislation and the provocation is that no Small Business even if there are tweaks in the plan should it is there for that long. I am not sure i have the best answer to your question. How long do you and supervisor peskin think a business should wait to be heard before the Planning Commission . What is the optimum amount of time to be heard . For that category that require conditional use authorization, which is a small percentage of the permitted usage in any given district. What we set forth in the legislation is 90 days. Three months you are entitle to that hearing. There are a host of other uses that are permitted which we could talk about and how long it should take for something that doesnt require a hearing to be turned around and permitted should be shorter. 90 days, three months for community negotiations to take place and that is what we hope for. If we can do it more quickly you might see an amendment a year or two down the line to shorten that time. Two questions. Why the 60 day ability to extend by any one member of the Planning Commission or a lot of other people . If the idea is to grant ex peed de yen see to businesses why build in the 60 days as extension, what is that about . We are envisioning the rare scenarios where three months is not enough. We tried to limit the scope who can invoke that extension to a limited number of folks. That is the planning director, who i would hope with evoke take extension very, very rarely as well as Planning Commissioners and neighborhood groups. It is t to account for. That is not a small group of people you said the entire Planning Commission, planning director and neighborhood groups. That is a lot of people who could unilaterally extend by two months. Who is missing from that equation . That is pretty much everyone. To clarify i totally appreciate the reaction, by the way. It is worth discussing whether we can further taylor that if that is a recommendation the commission would like to make. We are open to that. The neighborhood groups so we know, that is a codified list of eligible neighborhood groups, not any individual under the sun. There are institutionalized neighborhood groups to invoke that extension. One irritable neighbor is not to invoke take extension. There are many irritable neighborhood groups to utilize that extension. In we all agree this process should be you brought up the example of a business taking a year to be heard. We want to solve the problem to make this easier for businesses. I think adding an extra two months out clause for commissioner or planning director makes it relatively use less. Now it is five months. I dont know about you but five months, i think, it is subjective. One should be able to work out kings and issues of the community in three months or less. If you cant work it out in three months that should be the maximum. Adding two months makes this weaker and would mean that it is something i wouldnt support. Last question. What is the Planning Departments guidance currently on this right now . Through the president. This might be a good time to instrike aaron star from the Planning Department to do his presentation and provide the information. Is he going to be here or are you hop on and hospital off . I am present. We will get to aaron. We wanted commissioners to have the opportunity to give their questions to lee immediately after his presentation. Anything relevant to aarons presentation we can ask aaron afterwards. Just a quick question. Do you not agree with the Planning Departments. Perhaps i could encourage you to hold that question until after the planning has made their presentation so the public will understand what planning has recommended. Lee, dont go away. He cant. Heap is here for the next item as well. I am done. Thank you, mr. President. Commissioner ortizcartagena. Nofor the mission. That means 24th street and and e mission are carved out . Thank you for that clarification. It bears on the question that commissioner was asking as well about why we could invoke a 60 day extension to the 90 days. We have gotten some feedback and you know meeting with the commission on this legislation we received some input. They raised some instances where they have requested for extensions of c. U. Hearing multiple times while they workout m. O. U. S with the community. This is fundamental to the Mission Every assisting gentification of the districts. This is a proposal to exclude the special use district and commissioner Ortiz Cartagena. I dont know what the boundaries are. We are talking mostly 24th street. That is an ongoing conversation with other cultural districts and maybe the compromise where we will land on this is if we take the commissioners suggestion to take out the opportunity for neighborhood groups to extend that would probably come with proportion at consideration for the cultural districts who asked for an exclusion from this in the interest of not inhibiting their tire less work. Those two things are very lated to each other. To your question why you need a negotiator. Yes, there is a deep need for negotiation between community and neighborhood groups and proposed uses, and in many instances over the past couple years they were able to cite that resulted in m. O. U. Around staffing and neighborhood consideration to make sure there is a welcoming integration of the new business into the community. Right now the legislation is written are they excluded yes or no . They are not excluded in the current legislation. We are working on those amendments with the City Attorneys office. We will continue to work on that amendment language. We are also working with district 9 supervisor to make sure we come around to a suitable language to serve that purpose. Thank you. A couple questions. When did the process of drafting this legislation start . Was its conceived in a precoronavirusser have or drafted in reaction to the Current Crisis . The first thing i would say is that, you know, at the inception this is about Planning Commission action in 2015 with the planning staff creating a lot of this program. When w we started the implementation that was around when we were talking about the vacancy and the six months exception. That is when we tried to zero in on this to make sure implementation was as effective as possible to ensure that we were facilitating seamless implementation of the vacancy as well. I am sure you can understand why first of all. My overall reaction. The legislation is welcome. Thank you and thank to the supervisor for your work on it. I know most people in the commission appreciate the intent in spirit of the legislation. I think what some of us are nudging you guys to do or to consider is push harder, go faster, do more because the Current Crisis demands speed and flexibility for Small Businesses to get up and going. You know, for instance one thought i have is you are at 90 days. Why not 30 . These are largely setting aside cultural corridors in commercial districts, which i am completely supportive of a higher level of Community Input there, but elsewhere in the city is there any reason for a business use that is already largely determined to not be an adult establishment or cannabis or bar largely uncontroversial retail use. Cant we get to the bottom of that within 30days or 45 . Is there any way to accelerate the 90 daytime line . What is the commitment to 90 days. To me that seems like an excessive amount of time. I can probably anticipate how aaron star would reply to that and how i would reply to aaron starr and we can have that conversation. The way i would respond is that we are talking about a small subset of proposed uses in commercial corridors. There is no reason why a business shouldnt be overthecounter permit granted quickly. We are talking about businesses subject to commercial use authorization. Conditional use authorization. It is to facilitate communications with community, neighbors to apply conditions that meet the needs of the neighborhood, and i think that communication in most instances i think there is no reason that should take more than 90 days. I have heard where it doesnt take longer. I am not sure 30days is long enough to get it on the Planning Commission calendar, a, and to ensure that neighborhood groups and Community Organizations and merchant groups have an opportunity to weigh in, b. Someone it is allocated when we dont want to incentivize that use in the first place. There is a high profile where the building at the corner of vallejo and colum coup bus. That he on he o columbus. That facilitated the neighborhood conversation and organizing required for the first and only hard wear store in north beach under that space. It is a Community Serving use for thousands of residents in the neighborhood. When we talk about c. U. We are talking about subset of uses we dondont want to rush into it d for go the first ever Hardware Store in north beach. This legislation is saying we believe the c. U. Should take 90 days and no more. That is also there is no reason why that should take over a year. We are if that makes sense we are getting at both angles. To push back on that a little bit or challenge that assumption. I can imagine how important it would be to get the first Hardware Store in north beach, however, in the current climate with restaurants dropping left and right like flies, i am not sure that communities are harmed by having somebody deciding to dip toes into the water. I think our failure rate is greater than success rate. I guess i would just encourage you and your boss to consider liberalizing this a bit more. I think what this moment calls for is a tremendous amount of flexibility and to give the Small Business community as much room as they need to move forward. I guess, you know, i wanted to echo commissioner wreck commissioners comments about cultural groups. Outside of that area i have personally observed a dedicated person who has an officer position in one of these groups cant enforce a hecklers veto on business that, you know, would otherwise be well received by a majority of the community. I tend to agree with commissioner yekutiel that is getting them an additional 60 days to me seems unreasonably burden some when they have 90 days to make their feelings known. That is it as far as my questions and comments. Is aaron here . Ready and waiting. Perfect. Welcome, aaron. You have the floor and please feel free to make your presentation. Good afternoon, commissioner, aaron starr manager of legislative affairs. The Planning Commission heard this item may 29th. Voted to recommend with modifications in lou of codifying the Program Principal uses of vitality as the first story for a period of three years, two, maintain control of specific uses on restricted use districts or other measures quantitatively limiting them. Rationale is twofold. First the existing program that this ordinance seeks to could cy is working. It will not help the Small Businesses. It processes 18 cb 3b applications per year. It takes staff 68 days from application to Planning Commission. This is within the 90 daytime line. It is rare for the commission to deny the application. Second. Codifies will remove the commissions ability to respond to Small Business needs. The planning policies the program can be amended by a resolution. It only takes a couple weeks under the discretion of Planning Commission. Codifying requires changes through legislative process for five or six months and places control under the board of supervisors. We dont have the benefit of being involved with the decisions on the weekly bases. Rather than codifying the process working, the commission instead proposed modifications to keep the spirit of the ordinance, streamlining approval for Small Businesses and providing a more certain timeline for approval. The Commission Proposes this by permitting uses o on the ground florto compete in ecommerce. Uses like restaurants and entertainment and gyms. In recognition of the planning work the Commission Recommended keeping existing limits on specific uses like eating and drinking within the mission. The Planning Commission shares the goal to reduce permitting time and costs for Small Businesses. Lessening regulations rather than codifying the existing process would be more effective. That concludes my presentation and i will answer any questions. Commissioner yekutiel. If the goals are the same of making this process simpler, easier and less time consuming, why not just follow this Planning Departments guidance versus codtifying the existing process . I would respond to that in two ways. The Planning Commission did recommend support of this legislation. I would rather clarify that i dont think it was the Planning Commission not to codify. They did support the legislation with modifications. The recommendation as to a different approach which amounts to removing the c. U. Requirement altogether instead of proceeding with legislation to streamline that process is going to be a different conversation really. The conversation that needs to be had and not exclusive and can happen separately and in tandem with this legislation. Our approach is not to dictate what is afforded c. U. And what should not. It is counter to underline premise of the districts which evolved into unique zones throughout the city. To talk about things that activate the commercial corridor like nighttime entertainment use are subject to c. U. In the broadway neighborhood commercial district. If folks are familiar with that step of broadway between columbus and embarcadero, everything is a nightclub. That is where you have everything from hooters to condoor. The suggestion to start alleviating the c. U. S is a worthwhile but separate conversation and not what this is trying to address. Did the Planning Commission approve this legislation . Did it vote on this legislation and give its approval to it . No. It said in lieu of the first story uses for a period of three years. They were not endorsing codifying this program. They were saying in lieu this is what we should permit these things on the first floor . Yes. That is different. Here is the thing. The legislation gets tough, lee. If there is a lot of carveouts, if we add nuts and bolts to allow two months extensions here and there, i actually worry it might make the process harder. When i was going through the planning process i am probably the Small Business owner on the Small Business commission that went through planning and building. I sat down with my adviser in oewd and they explained the cb 3p program is filled with pitfalls as well. There is a lot of paperwork, issues. It is expensive, and there are not a lot of assurances. It is the Planning Department which administrators the programs. To make this easier why not go with what they want to do . I am assuming that is a rhetorical question. No, not rhetorical. What we are getting at here is that what we are trying to do is take away some of the flexibility of Planning Department to allow eligible businesses to fall through the cracks. We are cutting the fees that the Planning Department gets by 50 . I understand where planning staffs recommendation is not to do that and why they resist the added pressure. Frankly, what we are doing by codifying this, removing requirement for separate application, cutting fee 50 is broadening eligibility for a priority process conditional use application. Whether uses should be afforded c. U. Or be permitted is a separate conversation among neighborhood groups, merchant groups citywide. I believe in neighborhood commercial districts. I am not going to district what the castro does from the destruct 3 office. Aaron, does the Planning Department take issue to cut fees by 50 and eliminate them if they are not heard within a certain amount of time . No. Like i said we only had 18 applications. It is not a huge hit to our budget. I dont think it is the cost so much we are concerned about. There is not a fee study done. It is random 50 they are taking off. It could be less or more. We are cost recovery. We are to charge based on how much it costs to process the permit. Wif people dont know about the program that can be implemented through Planning Department changing to make sure we ask every applicant. Do you fall under these or catching them better. That is more implementation. It doesnt mean this Program Needs codified in the planning code. It is something staff developed that we are proud of, commission endorsed and we have been doing for a couple years and working fairly well. We dont quite understand the need to do the coddy fiction if we are meeting the goal and if there are problems with it, we are open to amending the program to find out where those problems are. This is my last question. I am passionate about this. The problem with this it seems to lean a lot on the belief and who is in the chair a bit and the hopes. The presentation you mentioned that you hope the planning director or commissioners or neighborhood groups wouldnt overly utilize the 60 day extension. You hope that with changes to the procedure the next aaron starr wouldnt decide to change all of these again. I think it is very important that whatever process is being built to make this easier that we actually make this a whole lot easier. If it is not actually going to filter down to Small Business owners, especially multi lingual not able to do it in a way respectful to the community. We need this process. We need to keep our eye on that. Not create too many exemptions to make it harder. Thank you. Commissioner hule, did you have a question . Are you still with us . Okay. She is fine. Aaron, i have a question for you. Legislation that has been drafted would primarily impact the cp3p applications, is that correct . Is that what this legislation is targeted to, in your view . Yes, it is basically the same. I think it includes a couple more that we didnt have if i can get the staff report. It includes massage uses, which we didnt include. General entertainment and Outdoor Activity areas, but the program also includes form laretail with 20 or fewer locations. That is really intended because we normally see that locally start up retails have 20 or fewer. It was a way to address that issue. So i guess in the presentation you had you mentioned you received 18 applications per year. I guess the first question beginning with lees presentation he spoke about italian homemade. Wouldnt that be one of the 18 . I dont know what italian homemade does. I assume it does qualify. I dont know why, i dont understand the reasons why it took over a year to do that. It is often between Communications Problems between applicant and planning staff. On average it takes 68 days to get to completion . That is what our numbers showed, yes. Do your numbers show the range on that distribution . For instance, on average 68 but the ranges from three days to 400 or 68 ranges from 20 to 70 . I am sure we could probably find be that out. I dont have the information in front of me. One of the challenges with bringing conditional use to the Planning Commission is the impact of scheduling. We do legislation at the Planning Commission, we do e. I. R. , conditional use, discretionary review. The more you add on to the calendar the harder it is to get on the calendar. That is why we are reducing the c. U. S in the planning code so things can move through the system faster. If the legislation was adop adopted, then this c. U. Process would move out of planning and into the board of supervisors or does it still stay in planning . Does it reduce your workload or is it neutral or does it now just add a new layer with supervisors . I think it may increase it, i dont know. They are adding a couple and taking away formula retail. Our office was in a wash on implementation. The issue is that the Planning Commission can add just their policy bypassing the resolution. All that takes is for us to agendize it and draft a resolution to change the policy. To change this it has to go to the board, transminute to us, hearing, back, land use hearing, board of supervisors, signed by the mayor and effective 30days after. That is a minimum five months process. If this legislation passes should we decide at a later date we want to change it, it could take time to enact those changes. Is that the correct understanding . Correct, yes. That is it for my questions. Are there any members of the public who would like to comment on this item . There are no callers at this time. Hearing no callers, Public Comment is closed. Commissioners, is there any additional thoughts or questions or comments you would like to make . Excuse me, sir, one did pop in right now. Would you like me to take it . Please, absolutely, yes. We would love to hear from them. Caller good afternoon, commissioners. I am with the San Francisco council of district merchants. I would like to thank all of you for all of your tough questions. This is what makes San Francisco work and this is what makes legislation more effective when things are presented and proposed for Small Businesses. We are struggling out here. You know that because you own Small Businesses. I want to thank you for everything you are doing and please keep the dialogue going if this is codified or amended. I encourage the dialogue. It was a delight listening to you today. Thank you very much. Commissioner. Aaron and lee, how do you think people will apply if so much work was done to have it expedite . I am happy to take that. I will say that it is our suspicion based on anecdotal experience tha that there are at more businesses eligible for priority possessing than coming through the program. That is why we want to legislate it to sort of perfect that. I will point to the two examples over the past year where i was personally acted as permit expediter. I followed an application from submission to application hearing and ultimate approval. Those were the homemade examples and the example of the proposed indoor childrens gym at polk street. Both of those applications would have been eligible for cp3p. They were not flagged. They did not submit the separate application required to avail themselves of priority possessing. It took our office to really push for a timely hearing date on that application. I dont know if better numbers exist. The two applications i followed over the past year both would have been eligible and were not routed through priority possessing. Are people at the information counter trained to bring this up a lot . Honestly, this is not necessarily a Planning Department so much. People when they get to pick, they made the decision how to apply or what they are going to do or maybe they go to planning information counter. Maybe this is oewd thing . It is osd that connected me to katie. If that hadnt happened i would not have known about it. Maybe it is something all of us can do better on, supervisors tells the Small Business applicant, mentioning the stuff at the table more than they are. Osb and oewd will help more people use the program. Sure, planning all i can say about the planning staff is they are trained. They are a planning staff, a planner. Your sound is cutting out. Sorry. Air pods are not the best for this. They cut in and out. You know, our planning staff sees Small Business people come in, and they understand that we put up a lot of hurdles to that. They are constantly trying to make the process easier. I know that from working on the pick and from people working on the pick. The two examples that lee has are not necessarily evidence of our failure of the program. If it is a matter of making people aware that we can do a better job. We can do a better job making people aware of things. I take issue with the fact that we would not want people to know about this. It is easier for us to process these things faster, to do shorter case report, easier to tell the public your application isnt going to take six months, it will take three or 68 days. We are committed to the process. We are the ones that developed it. We created it and brought it to the Planning Commission. We want to see it succeed. We think it is working fine. It can be improved. We want to make it better. Some. Some people at the planning counter extremely generous and want this to work. I had edgar who was incredible and amazing. Some people at the planning information counter seeming to make it want to be as hard as humanly possible and frustrating so that anyone who came there with hair leaves without it because they pulled it out. It is like the dmv where hopefully you will get someone to help you. I challenge you from someone who went through this. It depends who you get. Everyone knows that. It shouldnt be up in the air depending on the planner you get. I agree with you. I went through this planning process myself. The person at pick dropped my application and it took two months to get an answer. I brought this up to higher ups and no one could figure out why i couldnt get any answers or anything happened for two months. I will agree with 110 . I just went through this. My application took 10 months. That is all i am going to say. I agree with you, too, you are what planning should be, i love edgar. He helps everybody out. It is our version of dmv. This triggers a question, aaron. Is there any reason why this p3p process couldnt be automated. A business hits the criteria, it is automatically enrolled in this permit program and doesnt require any awareness or selection from the Business Owner . It might be a dumb question and i am sorry if it is. I am not sure i can answer the question. I dont know how it would be automated. One problem is change of use permits are Building Permits that originate with the department of building inspection and come to us as a referral or review agency. We have tried in the past five to seven years to get on the same system and it hasnt worked. It doesnt look like it is going to work anytime in the near future. Well, i will say broadly, generally i want to be supportive of any legislative attempt that would reduce the time for a Small Business to receive their permits, to get through the planning process, to get up and rolling and start making money. Particularly, in this time. There are elements about the legislation that make me a little bit nervous. Introduction of folks being able to extend it another 60 days, and i guess i am still a little unclear. It feels like there is an existing program. It seems to be working within that 90 day period. The average is 68. I dont know if that is reflective of reality or not. I guess, you know, i am not sure at least from my perspective that this is screaming for legislative input, but i am interested what other commissioners think. Does anybody want to make a motion . Commissioner hule, please go ahead. Thank you for your presentations. I was looking forward to this. Reading through it is different than getting the drafts that you were able to get into. I also appreciate the questions that were asked. I also just really didnt know what questions were going to come up. I really appreciate all of my cocommissioners and input and thoughts. I feel like i am in a very similar space as what commissioner laguna just said in terms of, you know, i am weary. For sure i want to see things streamlined. I also want accountability for that. At the same time i dont know i am not sure if legislation or adding more legislation to something that already exists is the right channel. I dont know how to put this in a question form. That is what i am struggling with right now. It doesnt have to be a question. You are not obligated to ask. I do think in the Task Force Meetings we have been in for the Recovery Task force there is a planning component. I am curious in terms of how does this all fit into this larger picture . It does seem like this is a very small thing going to affect i am not sure how many businesses. The overall picture is that i dont know how many Small Businesses want to open any time soon and rent space any time soon. I do think there is an opportunity right now to revisit and look at what we think ground floor retail should look like. It doesnt look entirely feasible it is going to look the way it looked five years ago. I dont think that is what ground floor retail is going to look like. I guess i am not sure how this fits into the larger picture of the situation right now. Commissioner ortizcartagena. One of the things i guess i would include the cultural districts especially the mission corridor. I need that on record if we do make any motion. I would say, commissioner, some of the cultural districts might want to make it easier for people to come in to create new businesses. I think rather than carving out every cultural district. We have one in every neighborhood these days. If there are specific cultural districts to include they should. The castro might want to make it easier or harder and not carve out. Just 24th and Mission Street is what i am asking. You know, i guess something i am dwelling on is what i think is most needed in the city right now is speed and nimbleness. We have got to make it easier for businesses to do whatever is needed to do. We also have to make it easier for government to do whatever is needed to be done. I guess upon further reflection i am concerned, you know, if we pass this legislation, maybe i am hopelessly naive and optimistic, i think i am inclined to want to give planning the benefit of the doubt in terms of being able to come up with processes to respond to this moment versus legislation that might be difficult to change later, but i am still waffling. If somebody wants to make a motion, i am all ears. I have to say i am torn right now. I see if there could be legislation that makes this process streamlined, easy and good and makes it a lot better and it is into law, we dont have to rely on the well run Planning Department to make it happen. I mean this with no offense, air aaron, but i am not taking that bet. This seems to create problems and makes it hard to support if there are carve outs to extend by two months. As proposed today, i wouldnt support it. If you cuts out the 60 day extension period then i would vote to support it. But that is a big problem for me. I am torn. If the plannings recommendations were in lieu of codedifying cp3p, it would they recommend permitting at did first story uses contributing to the retail vitality for three Years Limited restaurant, gym gm restaurant, social verse, health services, public facility, post secondary educational instruction and personal services. We could, i guess, i would be interested to hear from commissioners that they would want to support plannings recommendations. We could move in support because this would principally permit many of the uses that seem to be caught in this process. I have a quick. I am working on that extra 60 days. The premises when we did this was 90 days, and no more than 90 days. I have to get rid of that to support it. Commissioner lee has had his hand raised and kathleen has her hand raised. Sorry. Lee, please go ahead. You are welcome to jump in it it is your legislation. I want you to defend it. Respectfully it is your commission. Thank you for the opportunity. The path forward i would recommend for the commission. I have heard two recommendations that i think that our office can work with here. One, removal entirely of the additional 60 days or at least further restricting the parties who can invoke that 60 day extension. That is one recommendation. The second recommendation and conversation going on in the background relative to commissioner Ortiz Cartagenas request for the Mission Street as cultural district not a need would be a second recommend. My recommendation would be to recommend legislation with those modifications. Then you know, that is support if amended as opposed unless amended. I would appreciate that support with recommendation for those modifications. Quic followup. Commissioner dooley. In the ncds, the way it is now are the ncds have priority in terms of, for example north beach has 10 million restaurants so we need a c. U. For that. Will this superside that and force the neighborhood to accept yet another restaurant . I like to have clarification how farreaching these things are in terms of changing the existing ncds. So the north beach is peculiar. It is come plated with a lot complicated with a lot of regulations. It would be difficult for a new restaurant to qualify to be in the north beach. For some reason one did qualify to move forward, this would mean that it would be heard at the Planning Commission within 90 days like we would process any other application. It doesnt get rid of the c. U. Requirement, but, again, north beach you have to you can only have a restaurant in a space that was a bar or restaurant previously. Commissioner. I know we have other things on the agenda. I propose to accept a motion to approve with two recommendatio recommendations. Only if two recommendations amendments. To make it so no one can extend 60 days, not to give that power in the removal of the ability to extend. To allow individual cultural districts to be carved out if they desire. I think specifically on this commission the Mission Street. I would second that. You know we will do something new with motions. I had a conversation with the executive director over the week. Before we vote on the motion, we will have an opportunity to have a discussion about the motion being made. Any comments about this motion . Go ahead, aaron, please. Sorry. As much as i dont want you to codify this, conditional uses are not permitted unless the Commission Takes an active vote to approve them. If the commission feels cornered and they are at the commission and cant go past 90 days with 60 day extension they might be likely to disapprove it. I dont know if they will, but the extra time can give them time to let the community and the applicant Work Together to come to a resolution. If there is no resolution, then the commission may feel obliged to disapprove the conditional use application. That is my only concern about getting rid of that. I understand the comments about extending for no reason, but i think that is another reason they put that in there. So it is an extension that could be to the benefit of the business if enacted by a commissioner or the planning director . Correct. If something is before the commission because discretionary review, that use is permitted. If the commission fames to act fails to act it is approved by default. If they fail to act it is disapproved by default. Any more discussion about the motion in front of us . I am going to suggest that we go ahead and give the director and commissioners the opportunity to extend it. Perhaps language i cant think of a way to say extend for the benefit of the business and not to the detriment of the business. Certainly, that is what i am hoping for here. I think the issue from what i have been hearing from the planning process is the rules are annoying to people and seen like arbitrary and made up by angry individuals or groups. I am putting that question. That i understand. The other rules. The issue is how long it takes and how like how arbitrary it seems to take to move through the process. Even if it means that like it is shorter but you are likely to get a decision if you can do that. Most people would be okay with that than like allowing it to go for a long time on the hopes the interest of the business is kept in mind. I just dont know there is a way to put that in the way of the letter of the law. I dont know that we can solve for both. We want to say the city of San Francisco will tell you whether or not you can do what you want to do where you want to do it. They are not going to waste your time and make commissioner dooley pay rent for two years for the cannabis dispensary while three noodle on it. I agree with that. Any other comment on the motion in front of us . Seeing none, do we want to move to a vote . Can you read it back . The commission secretarys role. There is a motion by commissioner yekutiel including carve out for cultural districts specifically Mission Street and quatro and amendment which would strike the 60 day extension period available to the parties that are written in the legislation. Seconded by commissioner adams. Roll call vote. Commissioner adams. Yes. Commissioner dually. Yes. Commissioner huey. Yes. Commissioner laghana. Yes. Commissioner ortizcartagena. Yes. Commissioner yekutiel. Yes. Passes. Thank you, aaron for your presentation. Congratulations, lee. Next item, please. Item 3. Board of supervisors file no. 200398. Police code. Thirdparty food Delivery Services. I have that as item 4, is that wrong . I think you are right. It is a item 3. Board of supervisors file 200398. Police code thirdparty food Delivery Services. Ordinance amending the police code to regulate thirdparty food Delivery Food Services by capping fees to restaurants at 10 abrestricting restaurant pricing and prohibiting Delivery Services from charging restaurants for telephone calls to the Delivery Service not resulting in any food or beverage order requiring retention of and city access to the records substantiating compliance with these restrictions, authorizing the imposition of penalties for violations and authorizing the office of economic and Work Force Development to implement and enforce this ordinance. Welcome, mr. Hepner. Thank you. Good afternoon, commissioners. Commission president , directors. Thank you for hearing this next item on your calendar. It is my honor to present two items. A shift for anyone who curious about these things. I am whereas the item previously was regulated internal city process. This next item is an exercise of police code which regulates industry outside Industry Private stakeholders. It is a different dynamic relative to moving through the process and that is the case. I will launch my presentation with that prelude. This is a topic that is not new to this commission. I understand you have taken up this issue some months ago, which feels like years ago given how the last few months have been. This is a piece of legislation we are referring to as restaurant recovery, cap on food Delivery Commissions. It does contain other regulations. Introduced by supervisor peskin in midapril with cosponsors mandelman and safai and supervisor walton cosponsored this item as well. We will start with th the statef the restaurant industry. You are experts in this field and tracking this on a daily basis. Covid19 has been anything but friendly to the restaurant industry. The headline is from may 3, 2020 from the survey which indicated that San Francisco could permanently lose half restaurants to the covid19, half. If i recall that is about 4,000 restaurants citywide. We are talking about thousands of businesses that are being impacted in this field. Other revelations from the golden gate Restaurant Survey 419 responders, a tenth of the restaurants in the city. 47 of San Francisco Restaurant Owners are laid off during shelterinplace. Among the 73 of restaurants open for takeout, 60 are losing money, hardly staying afloat. 87 cant survive on just take out and delivery. I know that people watching this or who have been working with our office in the background are eager to see reopening while being, of course, cautious about the Public Health impacts of doing so. This is a little bit more background and my way of saying the issue around food delivery regulations has predated covid19. This is from may 13, 2019. Karen, cofounder of a wonderful institution that closed down in the mission last year. The quote we will not participate. She is referring to the food delivery economy. We will not be exported from. This is really what we were seeing even a year ago when we first started talking about this regulation. These 25 to 30 commissions the Delivery Services demand are really making it impossible for businesses to recoupe their costs when they are prevented from charging higher rates for delivery customers. That is critical what platforms prohibit restaurants from setting their own prices in the app. While restaurants have suffered during covid19, it is no surprise to anybody that food delivery has exploded in this same period. Platform to Consumer Food delivery prior to covid19 was 10. 9 billion industry in the united states. 25 yearoveryear growth. As these companies go public you would expect them to be valued rather high with that type of growth. The number of americans using these applications is expected to hit 20 by 2024. During covid19, Meal Delivery spending jumped 70 in one year of march 2020. This is just experiencing explosive growth as restaurants are suffering. This plays why we are bringing this legislation now. To be clear about who the Major Players are on the industry side. There is a lot of consolidation taking place. We anticipate the four big players together i want to say that i dont have the number before me. Comprised Something Like 80 of the entire food delivery market. I can research and provide that number to the commission. Another phenomenon which existed prior to covid19 is the emergent economy of ghost kitchens. Ghost kitchens were profiled in a San Francisco chronicle article in early february of this year. Known as cloud and dark kitchen. They have no dining rooms designed to serve delivery only. The c. E. O. Of uber has backed Cloud Kitchens. We see this in some of our commercial corridors throughout the city. There are a few in the financial district. The question what impact will this have on in person dining . Maybe that is a question to myself but i would pose it to the commission. If Cloud Kitchens and delivery only is the future, what does that mean for restaurants trying to operate instore Dining Experience . What does that mean to incentivize people to get into the commercial corridors to enlighten these places that have been destinations in the city for a long time . Here is a sample contract from grubb hub. I have redacted this to protect the individuals who provided this to me, but you can see that at the bottom highlighted the total commission being recovered from the restaurant is 30 . They split it between nonscatterring and Delivery Commission not catering and delivery. We can talk if that is relevant. The second page of the contract includes additional terms. This informs the regulations before you today. That number one the agreement may be canceled for any reason or no reason upon three days notice. That is actually a good thing and not all of the industry stakeholders provide that clause. In number 2. The restaurant will ensure the hours of operation and othertics required for grubb hub are uptodate. We will i highlighted that because that is regularvant to the regulation nonpartner versus partner agreements. Here on number three and this is one that the restaurant menu pricing items through the app must be at least as favorable to the customer as that available on the restaurant standard menu or offered to any thirdparty service and grubb hub may match more favorable terms if available elsewhere. That is to say that if i am offering a burger for 7 at my restaurant. I cant charge more than than 7 through the grubb hub app and cannot recover the 30 commission from the consumer. That 30 comes out of my bottom line. These are the three terms that i just referenced in the prior slide. On april tenth the mayor imposed 15 cap on food delivery. Supervisor peskin and safai a joined the mayor in the emergency declaration. This is what is in place for now during covid19. It was updated june 13, 2020 with the 19th supplemental. That order currently is set to expire when Indoor Dining resumes. It was to resume recently on july 13th which means that 15 cap would lift on july 13th. In our conversations with the mayors staff expressing the insecurity that all stakeholders have about how rushed this conversation is around this permanent legislation, the Mayors Office indicated they are willing to extend the 15 cap as long as echoired to avoid as required as long as required between implementation of the permanent legislation. There are two main components to our legislation. One, prohibits the predatory repractices as we have referred to them in stakeholder groups between golden gate restaurant and District Merchants Association and a number of stakeholders invested in this conversation. Two, we proposed a Commission Cap of 10 . Which is consistent with how other jurisdictions we are proposing that cap. I want to go into each of those. What do we mean by predatory repractices . Prohibition on restricting restaurant pricing. We would like for restaurants to be able to freely access their restaurant in the app and be able to set higher prices if they want to do so. On a purely competitive level, we would like for restaurants to feel free to set Prices Higher in the app so customers can dine on site. We would like restaurants to have flexibility to set higher price to recover commissions taken out by the app. We think this prohibition on restricting the restaurant pricing providesness flexibility and the Golden Gate Restaurant Association is joining us and calling for. Two, prohibition on telephone order charges. This is a practice that was highlighted in a precedent last year where restaurants were charged a Commission Even if a telephone call did not result in an order. Restaurants were being charged by platforms for orders that did not exist. It is fair and agreeable to prohibit that practice. Three, a number of outstanding issues and amendments we intend to we are working on the language. We are part of the conversation in the background stakeholder conversations. Partner versus nonpartner delivery. You saw the grubb hub contract that they are to have an updated menu as term of the contract. If there is no contract, that means you are nonpartner restaurant. One of the problems we have heard particularly highlighted by Laurie Thomas at Golden Gate Restaurant Association. I hope she joins us today. If you dont have a written contract with the app, often times there are orders for items that no longer exist. If they get an order and somebody picks it up and they are like we dont serve that any more, it is a real big problem. As far as i know, only one or two of the platforms are participating or pursuing the nonpartner delivery approach. All others have adopted a partner approach which requires the written contract between the platform and the food vendor. We also found the grubb hub contract a three day termination provision. We hope to codify that to make that Industry Standard so restaurants have a portal to say i want out, dont list me on your platform any more and the platform would have to honor within 72 hours. We are nearing settlement for that to be in the regulation. The third please gratuities is based on the Consumer Protection angle. A Worker Protection angle, sorry. It would prohibit customers from changing gratuities after the order arrives. This is a sort of broad foundational question that i would put to this commission and to anybody watching online. Who pays the cost of convenience in society . This is a question that surfaces in a lot of industries. In this context where existing contracts for 25 to 30 of the fee on the restaurant while restricting what they can recover from higher price on the platform. The consumer is the beneficiary of the convenience. This is the other big component of the legislation. The mayors sets the cap at 15 . We set 10 . I think we are ready and nearing a compromise which would set our legislation at 15 . Of course, if we set that at 15 , the Delivery Platform apps are free to recover that cost from other sources. I want to be clear about that. Because they cant recover the full cost of service from the food vendor and restaurant doesnt mean they cant recover the cost as needed to continue providing the service from the consumer. I dont think it is unfair to think the consumer should bear the cost of that convenience and restaurants should not bear the entire cost of convenience if it cuts the bottom line. There are thin margins and they are suffering right now. The timeline on this. I want to acknowledge the Small Business commission had a marathon hearing on this february 26th. Ituneed in and out while i was busy with other work. The Small Business commission has provided a lot of good thought. That is in these stakeholder meetings. The mayors supplemental was on april 10th. We introduced on april 21st. We have this hearing then to Public Safety and Neighborhood Services committee of the board of supervisors. That ithat date is tbd then to e full board of supervisors. Core principals for the discussion. Convenience comes at a cost. Where the rubber hits the road is who should pay the cost . Restaurants rely on delivery during the covid19 pandemic to survive. They need flexibility. That is what we are trying to provide here. In spite of the rigidity of legislation, i think what we have through the predatory repractices is lack of flex bit to continue operations in a sustainable manner. Lastly, i think that getting back to the conversation about the ghost kitchen economy. Restaurants must have at least the opportunity to survive this pandemic. Recovery is going to take a long time. Not just going to be until the end of the year. Restaurants are rethinking how they operate and are going to recover for years to come. Golden gate Restaurant Association can pea speak to th. I appreciate their involvement in this. Thanks to the Golden Gate Restaurant Association, council of district merchants that sent the letter of support and other folks involved in these conversations. A good advocate about this since the precovid19 days. Dan came to our office early on with these concerns and numerous restaurants to millers east deli, mission pie. Everybody is grappling with this and we are eager to take it on. I should at that the industry stakeholders from uber to door dash have engaged with our office and those conversations are ongoing. What we are intent oncoming around to is a solution that works for everyone and the Golden Gate Restaurant Association will love i am saying that. We want a permanent solution for all sides of the equation. Thank you to them. With that i turn it back to you, commission president. Thank you for indulging my presentation. I am eager to answer your questions. Thank you, lee. Any commissioner questions . I will say i have been privileged to participate in those discussions. I have been struck by the level of engagement that everybody has been and good faith everybody has been engaging in, the delivery apps. Restaurants, your office, lee, it seems like everybody is working hard to find a way to make an economy that works well for everybody so the city can get what it needs. With that, commissioner ortizcartagena. Thank you for the presentation. We love what you are doing. I have a few comments and a question. First, i want to say to the legislators, this is the result of over legislating Small Businesses. Predatory recompanies can come in and do what usually or in the past restaurants used to have their own delivery guy. With all of the other things with Small Businesses they get these. There are so many now there are ghosts running around. My actual question. Can we legally tell any business how much they can charge another business . Yes, i am happy to respond to that. This is a proper exercise of the citys police power. The City Attorney told us this is entirely legal to cap the commission. We are proceeding accordingly. To your point and i should have inserted this. There are you mentioned restaurants used to have their own delivery operations and that regulations caused that to be a much more difficult thing. I would like to say that we have also been entertaining conversations as recently as today i was emailing with kelly from hot cookie, another establishment in the castro. About how much is there an alternative so restaurants can provide an alternative to the multinational industry food delivery stunt . San francisco has a robust history of it. Before there was uber and lift that was a homegrown not for profit entity for Taxi Services to r. F. Q. People. I use it periodically. It does have the feel of local homegrown alternative to the distanced and often complicated experience of uber and lyft. Maybe there is something to allow for homegrown alternative. I am here for that conversation and invite anybody to participate in that as we brainstorm. Just on that thought. I want to shout out to the latino task force. They have brought latino businesses to the mission bay. They contemplated a homegrown Delivery Service so people are thinking of that. Thank you to mention that. Commissioner doo leveled ey. A quick question. I hurt myself badly and had to rely on Delivery Services for grocery ifs. I have noticed that many times the deliveries are being delivered via one of these Delivery Companies like door dash. Of course, they have just, you know, it makes ordering really, really expensive. I wondered if that would be included in this legislation in terms of capping that, also. Now that i am able to get around i realized i was paying almost double the price for the groceries that i would have paid in the store. If i may, it is not lost in this process. There are a lot of folks relying on delivery and dont have an option. Far be it for me to suggest everybody can get outside and hike to the restaurant. There are families at home with kids who need delivery, people aging in place, folks who are temporarily housebound and need this service. That is not locked on us. Part of our engagement where the stakeholders can find a solution for everybody. I think the question was does this apply to grocery Delivery Services . It doesnt. On some level, you know, maybeie it should. We started with food delivery because this was brought to us by restaurants. Somebody asked on a recent call why nottencinstacart . On some level it kind of i am a little nervous starting at square one and trying to understand how the entirely different industry operates. Maybe that is a conversation we need to continue here. Commissioner hul hule. Thank you for bringing this to us. You know, i guess everybody like the mayor and supervisors working on this. I have only been on the commission since january. This is one of the first times i feel like we were heard in terms of having an extensive discussion and having legislation be responsive to several of the points that i think we had, you know, discussed. This is really cool for me to see this actually happening. Thank you very much. One of the things i had was just the 10 cap then moving to 15. I know that is like a point of negotiation you guys are still using. I feel like i would like to give my support to keeping it at 10 . I feel like i just know the margins restaurants are working on, i feel like every little percentage point really counts. When you do the books at the end of the month, it is a tough thing to look at those numbers. That is one of my suggestions. I like the way you framed the wore principals who should pay that cost . That ties it exactly with what you are saying in terms of percentages. Somebody is going to pay for this, and i mean as a consumer i have been trying to make more choices with my money. With restaurants i have been going to pick up my food because i can. I recognize that is a privilege that i have to be able to do that, but i also love that you have offered alternatives. There might be Community Alternative goes to help. I would be happy to pick up food for a neighbor as well. The landscape has been changing. The idea of convenience versus what i want to save in my world. There are many Small Businesses that we always ask people to shot at and to shop local, go to the local Hardware Store instead of ordering on amazon. It is not unfair to ask the consumer to pay for convenience of the Small Business who stocks candles should be able to not have to compete with the much lower priced candle online. I think there should be some cost to that so the consumer if they do value the neighborhood businesses and value the community bases. That is a very interesting question. Maybe polarizing in some respects but a real question we have to ask as consumers and also community members. Thank you very much for posing that. Thank you. Thank you. I have very strong feelings about this as some of you may have remembered from the hearing. Before i get to those strong feelings which i am excited to express. I have one question which is i know that even with the legislation or ordinance, many delivery apps were charging the same fees. What are the repercussions for a business that is charging more than the city said it is allowed to charge . Have there been repercussions . We forwarded a couple instances to the City Attorneys office. Of course, in our legislation which i didnt cover this piece but there is a reporting requirement to sort of ensure transparency and compliance and provide enforcement before the complaints driven thing. That is in permanent legislation. There are a couple instances where there was a misunderstanding about when the Effective Date of the 15 was and we were able to work with door dash or whoever it was to refund that fee. It is imperfect when you do legislation like this. You have to have an eye toward is it capable of being implemented and enforced . If the law is i exists and is not enforceable does it exist . That is with the office of labor standards and enforcement and the City Attorneys office and one we will continue to explore. I know my friend add ggra and i am a Restaurant Owner and i think about this a lot and we had conversations about the apps. There is a lot of concerns making it harder for the apps to function. Now for a lot of Small Businesses this is the lifeline. If they didnt have the apps they wouldnt be open right now. I want to hold that and understand that. Also, i want to think beyond here. Look at who we are talking abo about. Grubb hub is worth 2. 7 billion. It has received 284 million in funding. Caviar purchased 410 million. Door dash has received 2. 5 billion in funding at this point. Now what i am going to hear from these companies is we are not making money. We are not making profit. You cant do this. What i have to say is if you have received 2. 5 billion in money to do what you want to do and you are not profitable, then you probably shouldnt be doing this or there is something wrong with your business model. It is mel ark key or whatever joe bidens word is. There was alive before door dash and grubb hub. There will be the life after them when they are done. There is a way for the community to facilitate delivery of food and other goods to other parts of the Community Without chomping at the very limited margin the Small Business owners have. Lee, your positioning is who is paying the price for convenience. To commissioner hules point we shouldnt fault people for the convenience. Now in the pandemic tha that is allowing some people to stay safe. Look at who else is paying the price for this convenience. Look at uber and lyft some of these drivers were driving 18 hours to make a living and who is receiving millions when they go public . Someone is making a lot of money off this convenience. You know who is not making money . Caviar, door dash drivers and restaurants and Grocery Stores just trying to save alive. I am 100 in favor of making these less predatory reand harder for the companies to get rich off the backs of Small Business owners. Please pass this. Thank you so much for proposing it. Quick question to executive director. I seem to recall that when Public Comment is made we are not to engage with the Public Commenter. I do believe that the commission can ask questions of a commenter. Is that a correct understanding . The commission may ask a clarifying question or followup question to something that the Public Commenter has stated. I just wanted to be clear on that point of order as we approach Public Comment. I will say, lee, it is a privilege and honor to engage with this process quite a bit outside this hearing and talking with the various restaurants out there and workers and what their perspective is. I think it is interesting to me that very surprising, actually, how often restaurants owners are worried about whether there can be a viable Delivery Service that many of them are deeply relying on it. They suggested it could be stockholm syndrome. I have heard from some that said i dont have bandwidth to one Delivery Service and what these guys do generates value. From my perspective not being a Restaurant Owner, i am listening very closely to what the Restaurant Owners say. I am hoping that as a commission that we do a good job every flecting all of the restaurants communities input and suggestions, not just those represented by the Business Associations but those little mom and pop pizza shops and hamburger places and everyone relying on this, and, you know, i fine the deeper i get in this issue is more complex it is. It has been reassuring to see the amount of good faith everybody has been approaching this process with across the board. That is heartening. Before we move on to the next phase i think it is important the get Public Comment. I know there is a couple people who have relevant information for us. They are likely to be on the line. With that we will open it up to Public Comment. You have two questions remaining. Caller i am marie ray. I am the Public Policy and partnership at door dash which including caviar brand. The purpose of my testimony is to clarify the roll the commissions play in food delivery and express strong opposition to a cup. We support restaurants across the country throughout and prior to the Health Crisis with integrity and transparency. With our continued hope we can Work Together to find solutions to help local restaurants recover. Our c. E. O. And cofounder has seen the challenges of restaurants. He washed dishes in his moms restaurant and that led him to start the company in San Francisco and helping Small Businesses and strong earnings. The number of stops to provide relief to local restaurants. Voluntary account before the emergency declarations. Fees for 50 reduction. Those fees were below the mayors cap. 1500 San Francisco restaurants received that discount. We also eliminated commissions for pick up orders and delivery on saturdays to help the restaurants attract new customers and to keep delivery affordable. This amounted to 120 million in savings for local restaurants. We want the Services Affordable and accessible when the delivery is necessarity. We supported contact less delivery, two weeks of health assistance. They earn 28 per active hour. The partners with the central kitchen and sfmbo to power delivery of 1500 grocery boxes and 7,000 prepared meals to the medically vulnerabilities residents including seniors. The cap will negatively affect the restaurants that you hel hoo help. They agree to Pay Commission for services rendered. These have costs and they are expensive which is why restaurants do not have their own fleets. They pay for delivery worker pay and background checks, insurance costs like occupational accident insurance, auto liability insurance, credit card fees as high as 3 to 4 . Advertising and marketing costs. You have two questions rema remaining. Next caller, please. Caller this is lower rethomas, executive director of gold ebb gate golden gate restaurants. I would like to thank you for taking up this item and the hard work, lee, from jurors and getting together to hear our feedback. I think we all know it is a rough week and we anticipate it is going to get rougher for restaurants. We are worried the dine this is going to be pushed off for a long period of time. That is not confirmed for San Francisco. We are concerned that is the direction we are moving in. With that in mind, it is more important than ever that we need delivery in order to keep doors open. That will leave restaurants with takeout delivery and limited outside dining as Revenue Generating options unless they are selling groceries or Something Like that. As we outlined in our letter. Predator repractices from the third parties need to stop. I experienced that and it was unintended consequence but we need to see contracted partnerships between the restaurants and the folks delivering the food. We have been in conversations for several months to work on the solution. I think we heard from door dash there is interest in working with the community and helping out on that especially during the shelterinplace. We appreciate that intent and that time. We are also very interested in and are happy to hear the temporary cap will continue. I would recommend we continue to take time. Now is not time for restaurants to be able to spend time negotiating anything other than how do we get workers back to work and stay afloat now that he we are not sure when dine this is available in San Francisco. We would like to offer the stay at the table. We would like to keep this temporary supplemental in place and try to come to whatever the correct negotiated solution is and i am happy to give input and answer any questions. Thanks. This is president laguna. With respect to the Commission Rate. From your perspective on behalf of the restaurant industry, how important is the Commission Rate as an overall part of this package . It is near the top, but some of these practices again are important as well. The delivery can has allowed a lot of restaurant members to come closer to breaking even and that is very helpful. I know a delivery cap is something that i am not sure how legally that works. I would like to see a negotiated solution. It is extremely important. I am supportive what lee and i discussed. The consumer to the degree they can should share more of the cost for the convenience. With respect to that if the restaurants had more flexibility with pricing separately away from the app as we mentioned earlier, does that have a Material Impact how you view the Commission Cap or no . Well it is passing more cost to the consumer. If we can raise the price. If you would have come to our restaurants and dine in and the entry was 18. If you had the ability to price that, a couple dollars higher for delivery, the restaurant is the one getting the passthrough price to the consumer. It helps. Again, the commission is a direct feed. I would like to see change where it is not based on percentage of what is ordered more the delivery component. Thank you. You have one question remaining. Caller this is ben. I am the founder of San Francisco Bar Owner Alliance and bar and Restaurant Owner myself. Chairman of the entertainment commission. My words are my own. I have been part of these negotiations and taking a harder line. I dont think delivery apps are in their current state are bad for the community. They set up a cycle for the Small Businesses. The people surged in San Francisco came here from all over seeking jobs. Their concern seemed to be convenience. They want to stay home and stay in the neighborhood. The delivery apps fed to the fear of interacting with others. Restaurants found themselves relying on the delivery apps to survive. Then the delivery apps started increasing fees and things were worse than that. They have had one thing on their mind. I am getting acquired by a Bigger Company or dominating market share. Small businesses are suffering. There are predatory repractices that echo those of the mafia. It is clear th the companies ubr included want to build ghost kitchens. Brick and mortar businesses care about the community. We are the community. We know neighbors names and the people next to us. They are relying on the delivery apps. Make it clear. The apps do not care about our community. They claim to but they dont. I will tell you how i know. Look at the people at the top. Who is the biggest owner of uber east. He had a columnist murdered. He does all of the marketing that they care about communities. He made 16 billion. Maybe they should have him for 30 commission instead of preying on Small Businesses. I celebrate this legislation. I will climb to the top of the twin peaks with a bull horn and sing praise. Thank you for drafting it. I encourage you all to approve it. Thank you. No further Public Comment. Public comment is closed. Commissioner ortizcartagena. Thank you for the Public Comment, especially the last commenter. Everybody knows i grew up the mission. To be honest what the App Companies are charging, there were loan sharks charging less rates. 30 . They even gave out turkeys. You are predatory reand we are stopping that. We over legislate Small Businesses and allow the predators to prey on Small Businesses. Thank you, lee, this is much needed. We hear you, Small Businesses. We will not let these companies bleed you dry. We promise you that. Something resonating for me. Who pays . One thing that i think from Public Policy is disserving. If you cannot raise the rates for the delivery side of your business and have to charge the same as if you walk into a store, you are basically the people that come into the store are subsidizing the people getting the deliveries is how that pencils out. We are encouraging now more vehicle car trips, it seems like that comes at a detriment to all of us collectively if a Small Business doesnt have the flexibility to decide how they are going to price things. You know, i happen by virtue of having participated in a lot of these discussions, i happen to know that there are active negotiations. They are moving forward in good faith. It does seem hopeful that everybody will get to a place where they feel comfortable moving forward, particularly the restaurant community. I have reminded the delivery App Community we are the Small Business commission, not the delivery app or tech commission. We represent Small Business. I think we all feel pretty strongly about supporting the restaurants and Small Business in whatever way we can. We all perceive this legislation as being an attempt to do so at a time when they need it more than ever. I would move that we support the supervisor moving forward with conversations with the community and working towards building consensus so that we can have a vibrant economy and so that everybody can move forward. I would move to support the supervisor moving forward. Is that us voting to officially approve or endorse this legislation . So the reason i couch that and i thank you for the clarifying language. Lee, correct me if i am wrong, there are still a few open points of discussion, is that fair to say or is it a done deal at this point . No, you were correct. Honestly, we are continuing to engage with all stakeholders. I think if you have specific recommendations that would be more constructive than, you know, support for the spirit of it. I dont think that respectfully to anybody who disagrees that supporting the legislation is any different than supporting the spirit of it. I think it will be more impactful if we can say we have the support of the Small Businesses moving forward to committee. Commissioner dooley. I want to support this. It is time to stop this predatory reactivity. I have to say that i was very inspired by the idea of perhaps getting the local restaurants to get together and somehow figure out away to bypass these type of Delivery Services entirely. In my neighborhood a Residential Group has been doing that. They say this week we will deliver if you live in the neighborhood from these three restaurants. I think clearly that is a great idea. In our community we need to move forward with that to take control back to the restaurants themselves. I guess we have to vote on the motion. Not yet. I would say propose a motion we endorse the legislation as written or as proposed here in the conversation and take a vote on that. Second. The reason i am sitting here thinking about this. I am thinking about the conversations today. There is an opportunity to play a helpful and constructive role in those conversations as we indicated i think there is some interest in getting suggestions and input on moving forward. That is the only reason i am pausing for a second. I guess i dont think that one predisposes the other. No, not necessarily, but i would like the motion to be inclusive of our recommendations and our suggestions as well as our support. Put it this way. Our support is implicit. I think the legislation has broad support. The question is how can we play a helpful role here in making the legislation more effective and also getting the parties to have a meeting of the minds . What it sounds like, and i dont want to put words in your mouth, lee, it would be helpful for the Small Business commission t to support this legislation and it should be passed. In addition, if you believe, lee, that there are followup hearings or conversations or we should bring other organizations to this body over the coming weeks to make potentially proposed amendments or additional enforcement mechanisms. Talk to the City Attorney, it seems like i dont want to speak for the commissioners. That would be helpful. The Small Business Commission Wants this to be passed and how can we be helpful, i guess . To that question, thank you, commissioners. The reality is what we have heard from at least a couple of the stakeholders, uber eats in particular have expressed they are committed to meeting us on the predatory reprincipal pieces. We have established that as the barrier to entree to get to the conversation what the Commission Cap should be. As a baseline we want the prapredator repractices, 10 , 2 , 15 whatever. I dont was president to suggesi dont want to suggest. I suggest we are getting further along in the presentation that i provided that reflects amendments that are not in your packet, not before the commission today but that indicate the direction we are going. I would like the commissions support of the legislation and if you would like to couch that as support with the modifications in the form of amendments set forth in the presentation, you know, that would be helpful, but i would appreciate the commissions support of the legislation and appreciate the questions for clarification. Can you correct me if i am wrong. When a motion is made and seconded is there a requirement the Commission Vote on that motion . There is a requirement, but there still can be discussion. At some point there will need to be a vote unless the commissioner who made the motion is willing withdraws the motion. Thank you. A couple things. One, lee, is there anything in the legislation that if a delivery app makes a mistake that the restaurant will not be charged for the delivery apps error . You know what i am talking about . When the driver screws up, goes somewhere else. Currently my understanding is the restaurant that gets charged the refund. I understand what you are saying. That is not in the legislation currently. That is not an issue raised in the constituent stakeholder conversations. I welcome input in there are other concerns. That is the other predatory repractices we identified. I have not heard about that so far. I did bring it up with you twice. Maybe as i think about it to the extent that restaurants are in some instances, and i am not pointing at a single platform are charging if the order doesnt result or changing gratuities after the fact maybe that is the same idea. Something not in the legislation yet. This is director. One point of clarification that i failed to mention in terms of dealing with the motion is that a commissioner may offer a friendly amendment to the original motion and the commissioner who made the motion can accept or not accept that friendly amendment as part of their motion. That is what i was considering. I think i am going to hold off on that. I am trying to recall one or two other sort of dangling issues. Maybe just the length of this hearing. They seem to have escaped me. I think we want to support the legislation as written. I think the motion is straightforward. I would add a couple thoughtful suggestions but now, i am drawing a blank. I am going to say lets vote on the motion as submitted. Do you want to read it back to us . I will do that. There is a motion to support the legislation as presented seconded by commissioner dooley. Roll call vote. Commissioner adams absent. Commissioner dooley. Yes. Commissioner hule. Yes. Commissioner ladoga in. Yes. Commissioner Ortiz Cartagena. Yes. Motion passes with two absent. 50. Thank you. Next item. Item 4. Approval of draft Meeting Minutes june 22, 2020. Action item. Are there any members of the public to comment on item 4, the minutes . No caller on the line. Public comment is closed. I move to accept the Meeting Minutes. Second. Motion by commissioner laguna seconded by commissioner dooley. Commissioner adams is absent. Commissioner dooley. Yes. Commotionner rule. Yes. Laguna. Yes. Commissioner Ortiz Cartagena. Yes. Passes 50. Two absent. Next item, please. Directors update and report on the office of Small Business and Department Program and legislative matters, announcements regarding Small Business activities, discussion item. Good afternoon. Director of the office of Small Business. I wanted to bring to your attention a couple updates. You are likely aware of them. The Health Officer issued new directives for outdoor dining, and this is a direct result of the spike that we are seeing to the coronavirus increase here in San Francisco. Of course, last monday the businesses that were hoping to open were not able to open due to the increase. I want to make sure that we have this acknowledgment and maybe have a discussion. I would like to hear from you as we are balancing trying to work with incentives around shared space and providing those opportunities. We are taking one or two steps forward and then unfortunately having to take a step back. The Health Officer did issue for personal services that we were hoping we were going to open on the 29th, we have issued those directives preliminary guidelines so that businesses can see what those Health Directive guidelines are and begin to prepare businesses so that when the Health Officer makes the announcement for the businesses to open they are able to do so. In addition, i do want to hear from the commission about their experiences with the Health Orders as they are coming, challenges in businesses are experiencing both in those that are trying to work with all the new programs such as the shared Space Program and those that are still challenged by not being able to open. I would like to solicit your feedback from that. Is there any feedback around experiences around the shared Space Program . Things to give consideration to . I see that commissioners have some comments. Commissioner ortizcartagena. Feedback on my experience with shared space in the mission district. The rollout was too fast. Citywide i appreciate it was so fast. It wasnt culturally centered or equity based so a lot of communication was in english. There is a lot of artificial barriers such as spurn insuranch Small Businesses have trouble identifying the city and it is hard for Small Businesses. Oewd have helped rectify those issues. It is reactive as opposed to reactive. Small businesses of color are left behind and trying to catch up with other businesses of noncolor. Definitely as we roll on you things out we have to look through an equitable lens. I am a Small Business person and i want it speed of lightning. We need to look through the cultural lens and slowdown. Thank you. Commissione commissioner ner doo le commissioner dooley. I would like to make comments to the visitors to the shared visitors that they need to keep in mind they need to wear masks unless they are eating. They should not be hanging around on the sidewalk drinking alcohol, which is in violation. Just to be considerate of the fact i have heard from many residents they have to now walk in the street because some of these businesses have taken over both the sidewalk and the parking spaces. They just, people need to be more aware of the community. Not just make it so people are uncomfortable now walking down those streets. I think it is a great idea. The restaurants are enjoying it. It is adding to a better atmosphere in north beach. Please, there is no enforcement right now at this point of groups gathering and so before we have to be calling for enforcement, please be considerate so we can continue on and have success. Commissioner hule. I have almost nothing to report in terms of Like Movement in d1. We are still on directors report. In terms of shared spaces, right . That is what i mean. I think you know the last time i had mentioned if it would be possible to get some sort of the president laguna called it an open source kit, photos, resources, budget, things that other districts could use as a template so the rollout citywide for districts where we dont have that type of funding nor maybe like outdoor culture already as part of our neighborhood could easily look at it to see which portions of things we could use. I know that there are people who have offered services. I think having somehow all of it in one space so that every neighborhood has the opportunity to not have to start at square one but already have a Nice Foundation for the program. There are neighborhoods successfully rolling this out. That is my comment for the shared basis. I worry a lot about the equity issues that commissioner Ortiz Cartagena brought up. I worry a lot about the ability of smaller businesses and poorer businesses to take advantage of this. You know, i also understand and appreciate that we had to move forward quickly on this because of the urgency of the moment. I will say that commissioner ortizcartagena, i didnt mean to interject. Go ahead. One more thing. It is unfair just the General Health ordinances are not in spanish. Just talking about equity, come on. We have the capacity in San Francisco. Come on. We have people translate to run it through that in theory . Maybe there is a reason we cant. Couple things. One, i think one thing that came up during the erts meeting where we talked about shared spaces at length was that as commissioner hule pointed out. Some businesses might not know what to do, might need help. Dont know supplies or materials or dimensions. Somebody pointed me to a plan that is on an idea that baltimore prepared and director i will forward you the link to the plan that is beautiful. It is gorgeous. It has all kinds of different ideas can dimensions and how to build them, very inexpensive. People are doing incredible things with milk crates and items that would not be expensive to put out. To commissioner dooleys point about sufficient space for people walking by. I have heard from a number of people some concerns about that with social distancing and the restaurants and tables right up on the sidewalk and people dont have masks on because they are eating or drinking and people are walking by inches away. It seems to me we should prioritize the use of the parking spots as much as possible. If not full street closure wherever possible because that will enable people to create that space. I think it makes it for a moreen vitting space overall. I encouraged oewd to emphasize street closing over sidewalk and the sidewalk the fall back option is my personal take on it. I know there is an awful lot of considerations into all of those things, and i am not try to substitute my judgment for anybody elses. You know, from the perspective of trying to keep everybody safe, it seems like that is a legitimate concern whether there is enough social distance on the shareshared spaces. Commissioner wreck a yekutie. After a month of constant coordination, maybe six or seven coordinating calls with the mayors and the supervisors and Fire Department and Community Leaders and the merchants association, as well as individual residents and merchants that it is not official yet but we have moved into these Community Input stage of shutting down valencia on thursday to sunday noon to 10. Full road closure. I want to give credit t to everyone. S. F. M. T. A. Is figuring out how to make this work. They are trying to see if this works on valencia and will work in other parts of the city. I would propose coming up with a resolution to make the street closure process easier and less expensive for Small Businesses. We were happy on valencia. Having bun almost through it we are in the final round, the last part of the race. The homestretch. We are in the homestretch. This is very, very complex. As an example right now the way it is orchestrated for the street closure the Fire Department is requiring that both ends of the street be staffed the entire time this is