Transcripts For SFGTV Small 20240703

Public comment at the end of the meeting and there will be an opportunity to comment on each discussion or action item on the agenda for each item the commission will take Public Comment first from people attending the meeting in person and then from people attending the meeting remotely. Members of the public who will be calling in the numbers. 415 a6550001. The access code. Is 266146220771. Followed by password 7221. Press pound and then pound again to be added to the line. When connected you will be muted and in listening mode only. When your item of interest comes up. Dial star three to be added to the speaker line. If you dial star three before Public Comment is called, youll be added to the queue. When it is your time to speak, you will be prompted to do so. Public comment during the meeting is limited to three minutes per speaker. An alarm will sound once the time has finished. Speakers are requested but not required to state their names. Sf govtv. Please show the office of Small Business slide. Oh today we will begin. Oh. Today we will begin with a reminder that the Small Business commission is the official public forum to voice your opinions and concerns about policies that affect the Economic Vitality of Small Businesses in San Francisco. Before item one is called, id like to start by thanking Media Services and sf govtv for coordinating this virtual hearing and helping to run the meeting. Please call item one. Item one roll call. Commissioner carter is absent. Commissioner dickerson present commissioner gregory. Present commissioner herbert. Present president. Huey present. Commissioner ortiz cartagena here and Vice President ziziunas is absent. President , you have quorum. Thank you. The San Francisco Small Business commission and office of Small Business staff acknowledges that we are on the unceded ancestral homeland of the Ramaytush Ohlone, who are the original inhabitants of the San Francisco peninsula as the indigenous stewards of this land and in accordance with their traditions, the Ramaytush Ohlone have never ceded, lost nor forgotten their responsibilities as the caretakers of this place , as well as for all peoples who reside in their traditional territory. As guests, we recognize that we benefit from living and working on their traditional homeland. We wish to pay our respects by acknowledging the ancestors, elders and relatives of the Ramaytush Ohlone community and by affirming their sovereign rights as first peoples. Please call item number two. Item two approval of legacy business registry applications and resolutions. This is a discussion and action item the commission will discuss and possibly take action to approve legacy business registry applications presenting today is Richard Carrillo Legacy Business Program manager with the office of Small Business. Thank you. Thank you so much for coming today. Good afternoon. President hewey commissioners, city staff, members of the public. Im richard carillo. Legacy Business Program manager. I would like to acknowledge michelle reynolds, my colleague in the office of Small Business, who assists with the processing of legacy business registry applications. Sfcv. I have a powerpoint presentation. Before you today. Are four applications for your consideration for the legacy business registry. Each application includes a staff report, a draft resolution on the application itself, and documents from the Planning Department. The applications were submitted to planning on july 19th and heard by the Historic Preservation commission on august 16th. Item two a is the irish bank, bar and restaurant. The business is an irish pub, opened in 1996 and nestled in its own alleyway in union square at the edge of the financial district. The Irish Bank Bar and restaurant is a destination for tourists and locals alike with an outdoor patio that graces an entire alleyway. The facade has traditional, whitewashed cottage edge appearance adorned with brass plaques, hanging flower baskets and a 19th Century Water pump, creating an impression of a rural tavern. The interior includes antiques, photographs, historical documents, antique mirrors, church pews, a confessional, and other memorable items creating a very warm and intimate decor. The Irish Bank Sells great irish food and drinks, and it is an excellent place for people to come and watch both european and local sports. Although the business is not yet 30 years old, it has contributed to the history and identity of union square in San Francisco and if not included in the registry would face a significant risk of displacement. The core feature tradition in the business must maintain to remain on the legacy business registry is bar. Is marios Bohemian Cigar Store cafe. The business is a cafe that was founded in 1971 when italian immigrants mario and liliana krizman, bought a smoke shop called Bohemian Cigar Store. Marios Bohemian Cigar Store cafe. Today is a Third Generation establishment offering amazing food, Great Service and a cozy atmosphere where everyone feels at home. There delicious oven baked sandwiches are served on focaccia bread from nearby liguria bakery, and their espresso is made from beans from graffeo coffee down the street, mario stopped selling cigars in 1992 when San Francisco passed a law that bans Tobacco Products from being sold with food. But they kept the historic name to represent their rich legacy. The core featured tradition the business must maintain is restaurant, featuring italian cuisine. Item to see is mitchells ice cream. The business is an ice cream shop founded in 1953 and a treasured San Francisco landmark. Mitchells ice cream owned and operated by the Mitchell Family for its entire history, serves Award Winning ice cream in 40 flavors. V Vegan Ice Cream sorbets sundaes, milkshakes, ice cream sandwiches and ice cream cakes. Their ice cream is made fresh in the store every day, using 16 butterfat from milk that comes from hormone free cows that graze in open pastures. They use the finest ingredients from local sources from around the country and from around the world. Mitchells ice cream is committed to making the best Super Premium ice cream and providing the best service to their customers. The core feature tradition in the business must maintain its ice cream store. Item two d is San Francisco go club. The organization is the oldest continuously operating go club in the United States, founded by japanese enthusiasts. In 1931, it was officially incorporated with the california secretary of state. On october 4th, 1982, San Francisco go club is an integral part of the Asian Community of San Francisco and is currently located in the japan center mall. The club is a place for casual play weekly lessons and tournaments and people of all ages can be seen at the boards member. Owners are eager to teach and show the wonders of this mysterious game to the many tourists and passersby. The core featured tradition the business must maintain is promotion of go. All four businesses met. The three criteria required for listing on the legacy business registry and all four received a positive recommendation from the Historic Preservation commission Legacy Business Program staff recommends adding the businesses to the registry and has drafted four resolutions for your consideration. A motion in support of the businesses should be framed as a motion in favor of the resolutions. Thank you. This concludes my presentation. Im happy to answer any questions. There are business representatives in the room and possibly online who would like to speak on behalf of the application during Public Comment. Right. Thank you so much, commissioners. Any questions yet . At this point, no. Okay, lets go ahead and open it up for Public Comment. If Public Commenters want to line up here near the tvs, you can just come forward and stand at the mic. Good afternoon, commissioners. My name is ronan oneill and i am the owner of the Irish Bank Bar and restaurant. Thank you for this honor and fantastic opportunity to hopefully join a list of great legacy businesses already in San Francisco and thanks to rick at the Legacy Business Program for all the hard work and help with this application on the irish bank is located in union square at the border of the financial district. And unfortunately, we are at risk of displacement too, due to the record low number of pedestrians and foot traffic in the area since covid, since the covid pandemic. I move to San Francisco from ireland 29 years ago and for over 27 of those years ive spent working at the irish bank nine as an employee and 18 as an owner. Weve seen a lot of ups and downs over those years with more ups and downs. Thankfully but the years since 2020 have definitely been the hardest. If you take a 2 or 3 block radius from the bank, approximately 80 to 90 businesses have shut down in the last two, 2 or 3 years. Buildings are locked and boarded up with no sign of reopening. We are fighting and working very hard for that. Not to happen to us getting listed on the legacy business registry would help us stay in business by providing the irish bank with recognition , Business Assistance and access to the rent stabilization grant. Your recommendation is very much appreciated. Thank you. Thank you. Hello. I am Matthew Vargas and i stand before the Small Business commission. Today is a proud representative of the San Francisco go club with the utmost respect and appreciation , we are honored to have our application for legacy business presented today. I would like to extend a heartfelt thank you to rick and the and the dedicated legacy Business Team at the city for their invaluable assistance in navigating this process. The San Francisco go club holds a distinct place in american history. As the oldest go club. Its origins deeply rooted in the aspirations of japanese immigrants who established it within the vibrant heart of japantown almost a century ago. As custodians of this cherished legacy, we acknowledge the challenges and trials that have tested our clubs resilience throughout storied journey through the decades, the club has persevered and has served as a bridge between cultures a meeting ground where generations gather to learn, play and connect the legacy of the San Francisco go club is not solely defined by its longevity, but by the profound impact it has had on countless lives. It has nurtured friendships, sharpened minds and ignited a passion for the intricate beauty of the game of go. As we reflect upon our journey, we are reminded that our story embodies resilience, community and the unwavering dedication of those who have upheld this cherished institution. Even as we seek legacy business status, we humbly request the commissions recognition of the enduring cultural significance of the San Francisco go club. Granting this distinction would not only honor our past, but also pave the way for future where the club continues to inspire and educate and enrich the lives of all those who enter its doors. Thank you for your time and thoughtful consideration. Thank you. Good afternoon, commissioners, and thank you for consider the San Francisco go club for legacy status. I joined i moved to San Francisco from detroit, michigan in 1974, and in 1975 i had the Great Fortune to discover the San Francisco go club. The San Francisco go club. As youve heard, was founded by japanese americans. However, its the most culturally diverse go club in the world and every other place where go has has immigrated and come from its home. Countries of china, korea, japan, taiwan. Theres a chinese club, a japanese club, a korean club and a dominant culture club. But in San Francisco go the leader of the club at the time whos now passed away and left us with his legacy. He was able to bring everybody together in one place and that was to my Great Fortune to find so much cultural richness in that one place and start learning about the wonderful things that east asia had to offer me as a Young American working in Silicon Valley and subsequently i had the great pleasure in 1989 to be part of the Us Friendship team that toured south korea, playing different teams in south korea and ultimately doing my doctorate in psychology on go there have been about 17 or 18 daca actors that have been on go mostly all of the other ones were in math and artificial intelligence, but mine was in psychology and it was about understanding east asian philosophy and philosophical principles using the game. So the were really grateful for you making this consideration and it really means a lot to the go club. And weve the young people who are running the go club now have done a great job in bringing it back into japantown and even deeper in by putting it in the japantown mall where were really working hard to spread it to Young Children in the area in the bay area. So thank you very much. And we look forward to working with you in the legacy status. Thank you. Any other Public Comment. Anybody on the line . There are no commenters on the line. Well, seeing that no public no other Public Comment in the room or on the line, Public Comment is closed. Commissioners, any questions . As commissioner ortiz . Cartagena no. I appreciate everybody here their time. Your contribution to San Francisco last last week was my birthday and on the way to the office, one of my colleagues said, lets go to mitchells, get some ice cream and we went to go mitchells and we got some ice cream. So thats how important you are in san franciscans day to day life. So i just appreciate everything you all do here for the city and for your commitment. And congratulations. To commissioner dickerson on its always a great its a love the opportunity to be able to say thank you for your hard work, your long hours, your contribution to the city. I always love to make it a point that if it had not been for you and your diligence and your perseverance and your vision for a better city, i dont think many of us would be able to have the experiences is yes, i am you three feet, but i eat mitchells ice cream, so dont judge me. I wont judge you. But i just want to say thank you. Thank you. I love the to hear the culturally diverse go club. It always warms my heart to see how enrichment culture can be, regardless of where its at. I think its the unification that it brings is that it brings the value. And so again, to each and every one of the businesses, i just want to say thank you. Thank thank you, thank you for you all are very great examples of Small Businesses that are arising today. And so keep shining. Thank you. Commissioner herbert. Hi yeah, i want to i want to echo what commissioner dickerson said. Small businesses like yours are what make San Francisco special. So please keep persevering through the ups and downs. I think i have been to every one of these except the go club and i have to, like, check out what go is all about. Um, we serve mitchells ice cream at our at my business. And of course, love mitchells ice cream. Thank you for being around. And its the best ice cream in San Francisco. And the bank is awesome. Marios Bohemian Cigar Store is like a must, you know, go to an and im just proud to be a part of the Business Community and be right there with all of you guys because its super important, especially right now that we are providing ing our services to the residents of San Francisco and making life interesting and rich and good. So thank you. And i would approve all of these legacy businesses. Oh, i just turned off my mic. Um thank you very much. Thank you very much, rick, for bringing forth such an Amazing Group of legacy or to be legacy businesses. Um, its interesting because they always kind of seem to curate around certain themes. And i feel, i dont know if you do that intentionally, but i feel like, you know, all of these businesses are really fun, really highlight the diversity, i think in, in just activities and, and kind of like how how passion kind of like shows through in peoples businesses and peoples endeavors. Um, i took a picture of the mitchells certificate as i was signing it earlier because thats going to make me really famous, like at my house because my, my familys going to be like, oh, you finally made it. Theyre super stoked about mitchell. So i think hopefully everybody here will celebrate with a scoop later. Um, but yeah, thank you very much for all of that. All that you do on behalf of just our commission, i think we, we really appreciate how much effort and how much heart you put into your businesses every day and your your, you know, these are not just jobs. These are really things that encompass your entire lives, im sure. And not just your lives, but the lives of your family and friends as well. So, i mean, we can definitely appreciate how its a whole ecosystem that you live in. And you took the time to come out here tonight to celebrate yourself. So thank you very much for your time tonight. And um, yeah, i think were ready to take a vote. Lets see. Lets see what happens. As does somebody want to make a motion to. Ill make a motion to. Oh ill make a motion for the legacy businesses. I second that motion motion to approve the applications by commissioner dickerson seconded by commissioner herbert. Ill read the roll. Commissioner carter is absent. Commissioner dickerson. Yes commissioner gregory. Yes commissioner herbert. Yes Vice President hughie. Yes and commissioner ortiz. Cartagena. Yes commissioner ziziunas is absent. A motion passes. Congratulations is. Congratulations is so. Item three presentation on business Tax Implications of remote work. This is a discussion item. The commission will learn how the citys business tax system is being challenged by recent trends toward remote work. The several taxes that the city imposes on businesses, including the gross receipts tax, the homelessness, gross receipts tax, the commercial rents tax, and the overpaid executives tax comprise the citys largest second largest source of tax revenue after property tax. Present today we have ted egan, chief economist with the office of the comptroller, and sarah dennis phillips, director of food. Thank you so much, director, for coming today. Commissioner sarah dennis phillips, executive director of ewg. Great to see you again. Before i even launch into this issue, i just want to note that we gave last week, we had a number of exciting things happen last week, including the opening of ikea, the launch of our vacant, vibrant program with Small Business starts and the six month update on our roadmap to San Franciscos future, which was the mayors map to recovery. And i just want to note and ill make sure katie and carrie get to you that we did a presentation that we put out a press release on about all the achievements that weve made in the last six months since the publication of that roadmap. And one of our biggest successes, and youll see in that two pager was in our Small Business sector. How many Small Business starts weve seen, how many new businesses are growing and expanding in San Francisco. So i just want to make sure that you all know that the work youre doing is such a fundamental component of that other work that we came and talked to you about. And it continues to be, frankly, one of the areas, despite the challenges that will continue to work on where the city is succeeding and were getting positive press and people know that that is an area where San Francisco is on the upswing. So thank you for your work. But business taxes. So im just here to give an introduction to ted and give you a little background on the process. Our business tax system , as you know, does a lot of things. It funds the city and are all of our services, many of which businesses, including Small Businesses, rely on whether thats transit, Affordable Housing and frankly, the great grants and programs that pd provides. It also, though, has an impact on business right . How our businesses function, the complexity of doing business here, whether they can afford to stay here. And so those are those are things we need to weigh as we look at our system. We find ourselves in a situation post pandemic where we have an opportunity to make sure that our business tax system is sustainable to the extent that we can continue to have a city that works and is not subject to fluctuations year and year, that puts Critical Services at risk and also supports supportive of the factors that our businesses need to be able to stay and grow here. And so those are a lot of thats a lot of tall orders. And so ted is not going to have answers for you today. But the Controllers Office is first off, leading the work to understand the risks we face given the complex tax system and the way its built right now. And ted, ted is here to kind of go over those for you that that introduction that youll hear from ted tonight will lead into what will be a longer process. And hell highlight that at the end of his presentation, not just to understand the tax system that we have and the risks and benefits of it, but to make changes and recommend actions to that to create a more sustainable, fair and long term balanced system as we you know, its the controllers job to explain what is going on and to put out there options for balancing that system. It is our job, pds job to make sure that you you here as a Small Business commission and all of the Small Businesses you represent and the other businesses in the city are one aware of that process two are engaged in that process, including to whatever extent makes the most sense for individual businesses. Therell be a series of workshops and any business that wants to be a part of those directly can be involved. Any business that wants to stay more apprized we will make sure we create outreach summaries for people to stay apprized and then three, that we and this is where we differ from the Controllers Office advocate on businesses behalf. And thats our job as part of economic development. So with that, ill turn it over to ted, and im happy to answer questions at the end as well. Oh, great. Good afternoon, commissioners. My name is ted egan. Im the chief economist in the Controllers Office and carrie is just setting up my laptop and then well be ready to go on with the presentation. I think everyone knows that San Francisco suffered a Major Economic shock in the covid pandemic and while we on the process of recovering and in some ways weve surpassed where we were before the pandemic, there are some aspects of the citys economy that have not recovered and may take some time to recover or or may be in for permanent change. And one of those is in the way office space is used in San Francisco. Offices, of course, were covered by the shelter in place order and people were prohibited from coming downtown to offices. But what we found in San Francisco and really across the United States is that when those Public Health controls were lifted and people were able to go back to the offices, they didnt they didnt go back at the same level. So on a typical day in San Francisco, theres 45 to 55 of the foot traffic or attendance at Office Buildings that we would have seen before the pandemic. And that is not an only in San Francisco phenomenon. You see that in cities across the country. It means a lot for San Franciscos economy and a number of ways. And, you know, ive presented at this commission and elsewhere at the city about what it means for Small Businesses or what it means for the citys property tax, what it means for transit. Our office, along with the treasurers office, was asked by supervisor Rafael Mandelman last year about what does it mean for business tax. As sarah said, the business taxes, which we would call the gross receipts tax homelessness, gross receipts tax overpaid executive tax, commercial rent tax. Collectively, thats about one and one half billion dollars a year of general fund revenue, directly or indirectly. Its affected by how much people use offices and how much people are physically working. In San Francisco. So we were asked to assess what are the risks to this revenue stream by this tendency for people to work at home and not come into the office. And so id like to share the results of this report, which we issued last month. And as sarah said, this is going to kick off a process that will have internal work by our offices, as well as outreach with with businesses and other affected stakeholders in the city. Really we found three things before i got into the details. The first is that over the past 20 years, San Franciscos business tax revenue has become increasingly concentrated in exactly the industries that are most hit by remote work. Ill show you a slide in a few minutes that three industries in the city information professional services and Financial Services make up about 70 of our business tax revenue. Those industries are number one, two and three on the list of which industries are mostly doing remote work. So this trend to remote work is sort of directly hitting the core of our business tax base. There are also important connections between how much people are working in San Francisco and how much they owe us. When people are office, workers are working from home and they dont live in San Francisco. Theyre business owes us less business tax. And we have estimated in our report that were it not for the remote work that we saw during the pandemic, the city would have had close to 500 million more in business tax revenue in 2021 than we would have in in 20 than we would have if we had not had that tendency to remote work. So its got a powerful impact on our on our our finances on remote work. Secondly the citys business tax system has an overall tax system has evolved in the last 20 years in a way that makes it increasingly concentrated on commercial property and activities related to commercial property. So weve, for example, had several increases in the transfer tax rate, all of which target large commercial properties. So that by 2020, voters approved a doubling of the tax increase on large commercial properties to now 6. Those are mainly commercial properties. When commercial properties are growing in value, that is a if you like, a good thing for the city to bet on. Unfortunately because of remote work, were seeing weakness in commercial Property Values and that weakness may be permanent. Last year our office did a report on our weakness in commercial property tax, which is a totally different tax. So but but in the world of what we would call business tax, we have a big reliance on transfer tax thats heavily reliant on commercial property. And we also have a commercial rent tax that is directly proportional to how much people pay in rent when theres less demand for offices, Office Buildings, either arent selling or theyre going to sell for much less. So transfer tax is reduced and commercial rents, we expect to be weak for the foreseeable future. And so theres going to be weakness and that revenue stream that funds Early Childhood care and education programs. So our reliance in commercial property as a kind of a golden goose to Fund Tax Revenue is at risk in this world of remote work and then likely we have a third risk, and thats a risk related to volatility because of tax policy changes in the city and also which have basically increased the number of taxes that are aimed at the very largest businesses in town. And also because the largest businesses in town have grown a lot more than other businesses as a result of those two factors, as we now have a very large percentage of our business tax revenue coming from a handful of companies. As ill say in a moment, 24 of our 1. 5 billion in business tax revenue comes from five companies that is considerably more than what it was, say, when i joined the city 16 years ago. Its a lot bigger tax revenue pie, but its a lot more concentrated in an era of remote work where large Office Employers are reducing their office space. Theyre looking to consolidate their office space. When we look at San Franciscos competitive business and the tax burden you would face in San Francisco compared to other alternative locations in the bay area, we do not fare well. And so in an era where businesses are retrenching, their office needs , we feel that theres a greater than normal risk that that businesses will basically consolidate outside of the city and potentially save a lot on taxes. And thats a source of volatility for us. So those are the highlights. I think ive told most of what the conclusions i want to tell you, so ill walk relatively quickly through the rest of the slides and then im happy to answer your questions. First, a bit of background on the citys economy. A big part of why the citys business taxes are so big is because the city has had so much Economic Growth. The past 20 years that growth has really been fueled by the Tech Industry , which is now close to half of the gdp. In San Francisco, up from perhaps 10 20 years ago. The Tech Industrys gdp has grown three times the rate of the rest of the city put together. The rest of the city put together has still grown pretty fast. But the Tech Industry has definitely led growth and that has had implications for tax revenue. This is a chart showing per capita tax revenue across all taxes in San Francisco. Since fiscal year 1999. And really the story there is when you adjust for the citys population growth and for inflation tax revenue has more than doubled in that 20 year period. The color sort of bars on top indicate the revenue that comes from new taxes. So we had a lot of Revenue Growth from taxes that existed before 2008. But starting in 2008, we began to add many new taxes and those have also contributed to Revenue Growth. So the city has seen a lot of Economic Growth. That growth has continued through 22, notwithstanding the pandemic, our tax revenue in fiscal 22 is at an all time high, although partly that was due to tax new taxes and tax rate increases, not just Economic Growth. I mentioned the heavy concentration in Office Industry , gis information, Financial Services, gis professional Services Account for about 70 of our business tax revenue. This is a chart showing the effect of remote work on the Office Market in various Office Markets across the country. San francisco is notable for having one of the highest Office Vacancy rates in the country, which is a complete 180 from where we were before the pandemic, when we had the lowest vacancy rate in the country by this chart, which i think is taken from the middle of last year, our Office Vacancy rate was around 26. Its gone up a little bit since then, but its notable that the east bay, the peninsula, the santa clara county, have much lower vacancy rates, despite the fact that theyre in the same region and also have a tech dominated Office Market. So there is something about San Francisco that is leading to higher vacancy rates and that creates a challenge for us as we try to fill those buildings or our business tax creates a challenge. This is some detail on the point about business concentration that i talked about. It basically shows how much different sizes of Companies Pay collectively for our business tax and how thats changed. So in 2012, the top five businesses paid 30 million together. That was 7 of the total. And the top ten paid 48 million or 12 of the total by 2022. With all of the growth in the new taxes, the top five pay 339 million, which is 24, and the top ten pay 441 million, which is 31 of the total. The point here is if those ten businesses decide to leave or have a bad year, it has a very disproportionate effect on our finances. I mean, these ten big businesses will fund an entire city department, for example. So well have to find the money from elsewhere. If theres an adverse reaction by these businesses. This is just a graphic display of the average amount these businesses owe in the top five, the top ten or the top 100 or the remainder over the past ten years. And you can see again, the largest businesses were paying an average of 7 or 8 million ten years ago and are paying the top ten more than 40 million. And the top five close to 70 million a year in business taxes. We compared this as i mentioned, to what they would pay an alternative locations they might consider in the bay area in general with the possible exception of the city of oakland, a business would pay anywhere from 20 times more to 100 times more. In San Francisco versus an alternative location in the south bay. Many of these south bay cities have raised taxes recently, but they havent raised them to anything like what you would pay in San Francisco. If you are a Large Tech Company which dominates our our business tax base. So this is potentially a real problem in an era where businesses are looking to save on office space anyway. Where kind of production is more footloose. A lot of its working at home and the office is less important. And maybe some of the advantages of a San Francisco in the office in the past may not still be as strong. And this is just a summary of how how the tax policy changes that the city has made since 2008 have affected the volatility. I mean, i would say we would say pre 2008, we had one volatile tax, which was the pre 2008 transfer tax. The property tax is remains a low volatility tax and thats our largest revenue stream. And the business tax hotel tax sales tax utility user tax are sort of in the middle. The new taxes that weve added, the transfer tax increase, overpaid executor homelessness, gross receipts, tax, theyre paid a lot. A few businesses pay a lot for each of those taxes. And so that has increased our overall volatile city and risk. And the other two, the gross receipts tax and commercial rent tax are more medium volatility. Id like to close with an item that isnt in our major report because it doesnt deal with the impact of remote work. But it its something thats been on our radar screen for a while, particularly related to Small Business and the financial burden that falls on Small Business of being in San Francisco. And this is a chart that our colleagues and the treasurer and Tax Collectors Office prepared that basically shows whats the effect of gross receipts, tax rate for businesses of different sizes, if you count license fees and registration fees as if they were taxes. And of course a Small Business is paying them. So they feel like a tax. We just dont call them a tax. But when you include license fees and you look at and license fees are fees for permits and other things that every business pays the same regardless of how big they are. Businesses with less than 100,000 in gross receipts. When you consider license fees are effectively paying a tax thats over 2 of their gross receipts. The largest businesses in town, theyre really ones that benefit from our progressive formal tax system pay about 1. 5. So what that means is just because of license fees, we actually have a regressive business tax system for businesses sort of at less than a million. And so to kind of skip ahead when we think about issues that we want to work on for this review, you this is not a major revenue issue, but we do think its a major issue for Small Businesses and so the things we are working on for this process in the fall are the overall complexity of the tax. There are many, many different taxes and they all have different rules and complying with taxes can be a very complex task. There are issues about simply the timing of when you owe the tax and when the payments are due. That could be rationalized. And were certainly looking for ways in which we can make the process simpler and less painful than that. Dont cost any revenue at the very minimum. On that note, were looking at the predictability of future tax liability. The city, as i mentioned, has adopted a number of new taxes that a business might not have foreseen when they came to San Francisco. There were a number of other tax ideas that are discussed every year or two that dont necessarily make it on the ballot. And were going to look at the predictable reality of tax liability, but were also to follow on my previous slide, were looking at ways to incorporate the revenue that comes from these license fees, which is not a great deal of revenue from the context of 1. 5 billion of business tax to take that out of license fees and put it into the overall business tax base to hopefully sort of restore the progressive civility that we had wanted to have in the business tax system. But we dont have when you consider the flat license fees that that disproportionately affect the smaller businesses, theres also a number of industry specific issues that make the tax complex and make compliance challenging in Industries Like construction and retail and residential renting and a few others. And then there are also some litigation and legal risks that the city has, which will make us want to revise some of the aspects of the tax as well. So there are a number of kind of items on our plate that come right off of the what weve learned from this report. There are other items that we know weve wanted to fix that will be part of this review process. I think sarah can speak more about the process, but ill just give you a high level overview of the calendar we issued as i mentioned, our report in july, and mayor breed and president peskin have asked us to continue work on this through the fall with the aim of getting a legislative solution by the end of the year. Us so starting next month through november, were going to have regular sessions with stakeholders, businesses and others. Were going to be doing our internal work on options and legal vetting of different possibilities by december, well have some final options to the mayor and the board and then in the first half of next year, well be supporting whatever legislative and policy discussions need to take place to prepare for something for the november 24th ballot, when hopefully we can get some of the fix in place to remove some of the risks that the city faces as a remote of remote as a result of remote work. So im happy to take any questions on any of this. And sarah is here as well. Thank you so much, ted. Um, lets see. The commissioners do have some questions lined up. Commissioner gregory, thank you for that report. I do have a few questions and im kind of new to this, so im not too sure youre going to have to talk to me like you would talk a normal person, not somebody in the city that knows about taxes. So so speaking of construction, so if theres a Construction Company that does not have an office in the city of San Francisco, but comes and does work on projects, do they pay city taxes . Well ill say at the outset that im not the person who decides whether you pay tax and how much you owe. That would be the treasurers office. But i can give you my general understanding of things which shouldnt be seen as sort of taxpayer advice and that is if you are doing construction in San Francisco, you would be subject to the tax generally. So is that in one of these categories or no, you guys have not put that in a category yet. Its something were looking at. Im not aware of a problem related to that specific issue, but it is generally true, just like if you dont have a business, if youre a retail owner without a business in San Francisco, but you sell into San Francisco, you probably owe the tax as well. Im just wondering because i know now that there are theres a lot of money that are coming from outside Construction Companies, gcs, down in la, everywhere in the city of San Francisco. So im just wondering when they pay that tax, its youre saying its not in this list right here, is that right . It should be part of the totals that were looking at, yes. Oh, okay. Yeah. All right. Thank you. Okay oh, wait, i might have. Oh, okay. So. To talking about the commercial rents, right, right. And how youre saying right now there is a lack of people renting commercial properties, but here at the office of Small Business, were hearing that a lot of the landlords are not willing to work with renting those spots. So so is there something the city is doing like , i dont know. For me, it would be like, why do you like it seems like theyre holding out on the spot to get more rent, but then its also affecting taxes, right . I have heard that as well about the rent problems facing Small Businesses. The commercial rent tax is heavily, heavily paid by downtown an office and not by neighborhood. Small businesses just the sort of overall, not numbers that were talking about. And so when we see weakness Going Forward in commercial rents, its really because of remote work business offices are not needing as much space, so theyre not paying as much rent. And were were anticipating a correction in that market. So what were concerned about looking at that revenue stream as a whole isnt necessarily the same concern that youre talking about. I think for Small Businesses, if i understand you correctly. Sorry. Um but its still a commercial building that would have to have the rent. Yeah, they would pay. I believe they would be liable for the tax on the on the rent they collect in that building. If its, if its occupied. So one more question. Sorry. So so somebody could come in, a corporation could come in and rent a one desk office, this in a building downtown in San Francisco. And have 50 employees that all work remotely and they dont have to pay tax on those employees as well. They would pay commercial rent while their landlord would pay commercial rent tax on that one rooms worth of rent and work from home. They would probably owe significantly less business tax to the city, especially if theyre working at home outside of and they live outside of San Francisco. Then they would be if they all came to an office. Yeah, that is the crux of the problem with remote work is that businesses owe us less than they would have if everybody was coming into the office like they did before the pandemic. I dont know. Im sorry. I just dont understand that if their office is in the city of San Francisco , wouldnt they have to pay no matter what their how many employees are there . It would just be off of their revenue that that company is making that i think thats my disconnect where im not fully understanding. Okay. Its an excellent question. How much business tax you owe us for gross receipts, for example, is a function of whats your overall gross receipts for your business and then how much of that can we apportion to San Francisco . We basically were only constitutionally allowed to tax a fraction of that. So, for example, if youre a National Coffee chain, we cant tax your national sales. Our tax has to say, no, no, no, we only want to tax a piece of that that we can attribute to San Francisco. Okay. So the rule that our tax uses for attributing a companys total revenues to San Francisco partly depends on how much of your total wage cost is in San Francisco. So, for example, if youre 1 billion company and 10 of your total payroll is in San Francisco, so then you then then your San Francisco gross receipts are 10 of a billion, which i believe is 10 billion. And then you pay the tax rate against 10 million. But because of remote work, if people are not coming into San Francisco and theyre working at home from the east bay or somewhere else, maybe now only 2 million of your total payroll is actually in that office in San Francisco. So now you owe us 2 of that billion dollars. And so thats how even if your companys top line is the same, because youre spending less time working in San Francisco and you incur less labor costs in San Francisco, you owe us less tax. And thats that is the crux of the problem we have with remote work. Now if your people are working from home and they live in San Francisco, it shouldnt matter. But if your people are working from home and they dont live in San Francisco, then you owe us less tax. I hope that makes sense now. Yeah. Um, commissioner ortiz, cartagena. Thank you, president ted, as always, pleasure. Excellent report. Unfortunate lately. Every time i see you now, you scare me. And the last time you were here, i didnt sleep for a week. And property tax and commercial tax cost me. Yeah thats the real bomb. I want to reiterate some stuff that you said, and then i have a couple questions. So so from remote, weve lost because of remote work about half a billion in 2021. Yes thats straight up. Currently of the 1. 5 billion, 24 of that comes from just five companies. Thats right. Um. As long as i served in this commission, i remember we were based on payroll tax. What would be the difference if that still happened . If we were based on payroll tax as opposed to gross receipts, would we be in a better situation in. Its hard to say exactly because as of 2021, we dont collect the payroll tax anymore. But i dont think it would be that different. The payroll taxes also vary concentrated in the biggest businesses. Yes, its not as progressive, but a lot of the concentration is just due to the fact that the biggest businesses in town grew a lot. They had a lot of growth in payroll expense and gross receipts and whatever we wanted to tax. And thats why our tax revenue, you know, basically doubled in a ten year period. If we had a payroll tax , we would still have the same risk from remote work because when we had just the payroll tax, you only owed payroll tax on payroll that you incurred in San Francisco. So to answer your question, it would be a little bit better because the payroll tax was flat. But, you know, ten years ago we wanted to switch to a progressive tax and then subsequent changes to tax policy made it more and more progressive. And thats why we wound up, uh, thats partly why weve wound up in the situation that we have. Then if you could show slide nine and explain a little. Oh, great, do it faster that way. Can we go back to slide nine, carry . Oh, ill do it. Yeah. Im sorry. Im down this one . Yes. Okay so i see oakland is the only one that is worse off potentially than us. That were. Were at least a little bit more attractive than oakland. Im not totally confident. I dont know that this is the version actually, that we used in our final report. I think we hedged our bet with oakland because its a new tax. Were not exactly sure what a business would pay. Uh, we might have grabbed that from a from an earlier draft. But oakland and San Francisco are certainly up there significantly higher than the other areas in the bay area, which have a lot of tech employment. So can can you just explain the math on the relation to like redwood city with the 3800 to like so redwood city. So this chart is basically saying we basically looked at what are the ten cities in the bay area that have the most information which is the Tech Industry employs it. And then we calculated what this a sample a Large Tech Company with 30 billion in sales and these other details would pay in each of those areas and some of them have a head count tax and some of them tax the amount of office space that you use is i think 1st may have a payroll based tax, but no matter how they do it, with the exception of oakland, which is now adopted a gross receipts tax, its somewhat similar to San Francisco. All the other cities have much lower tax rates. Yes. And some of them have a maximum tax like palo alto and santa clara. And so business us would save significantly more money if they consolidated outside of San Francisco and, you know, its important to remember that San Francisco has always had the biggest business tax in california. And this is not a new finding, but the thing that worries us is that before the pandemic, you could point to a lot of advantages about a San Francisco office like youve got transit to downtown and you can get people from all over the bay area. Well, transit is probably less of an advantage now because people arent coming into the office as much. And even people who do come into the office are taking transit less and driving more. So i think were a little less confident that this state of affairs is sustainable. And before the pandemic, you could say, oh yeah, San Francisco is the highest taxes. But look, San Francisco is still growing faster than all these other places. So it cant matter that much that their taxes are so high. I dont think were as confident about that now. I think now that taxes are high and were seeing in a world of reduced Office Demand, how do we justify that . Thats the concern. And then and then lastly, because the last time we reported you really scared me. And i think, to be honest, the city, were not being realistic about the commercial, especially around class a assets. Um, you know, hedge funds like blackstone, they got a 30 billion rit and a lot of their perspectives is targeting San Francisco because i think thats the biggest upside right when the thing resets San Franciscos market for class a assets has the biggest upswing. How does that intersect with what youre saying . Are our commercial vacancies . You know, whats how do we define the problem . Because they both intersect right . Especially when people start giving these assets back to the bank. And if you have, you know, the fund that doesnt have to rent and could, you know, wait it out, obviously eventually things come back up. You know, the market resets, whatnot. But theres going to be a period where that both factors intersect it and that could be very catastrophic for us. Um, i do see your point and its worth worrying about. Commissioner i mean, i think at the highest level weve seen, Office Vacancies very high for a pretty long time. By this point. You know, were well into our fourth year of elevated Office Vacancy, and it doesnt seem to be correcting, as you might have normally expected, that it would. Meanwhile were seeing businesses not take office space. They theyre taxes they owe to the city are reduced. And we probably havent seen the worst in in transfer. Well we may have seen the worst in transfer tax but not in property tax and not in commercial rent tax. What you would expect to happen over the next however long it takes, when the Office Market shakes out, is that vacancy rate comes down a set of tenants who are either are 2019 tenants or new people who are attracted by lower rents to San Francisco. Start filling up that space and theyre kind of apportionment factors. Go back up and we get a bigger piece of their revenues. Do we get 500 million back . I dont know, because if theyre not, you know , super big Tech Companies, maybe theyre just not going to be paying as much tax. But we should be able to fix the vacancy problem. But when we fix the vacancy problem, that will kind of set in stone our property tax problem. So it may be that theres a lot of risk there, but it may be that that 500 million we experienced in 2021 is as bad as that number gets and that number starts to get smaller and smaller, i hope. But the property tax problem is going to be there for as long as people just dont need offices as much as they did in 2019. And theres a story every week, look whos coming back to the office and theres a lot of optimism now. But i would say the aggregate numbers are not pointing toward, you know, recovery in office usage. And if that ever happens, it seems to be a far way away. But i think to answer your question, commissioner, thats how i see it. I see the business taxes like an immediate shock to revenue. And thats what we saw in 2021. I hope it will get better as the Office Market works itself out. Its taking a long time, but that Office Market adjustment is going to mean less transfer tax revenue, less property tax revenue, rents will be lower, so less commercial rents revenue and thats kind of the permanent weakness. And from a time perspective, because theres that flux until everything kind of corrects itself and we get whatever the new values on these class a assets are. When do you think 25, 26 i mean, i know nobody could predict, but what would be your best guess that we kind of know what were in for. The answer to that question hinges on a lot of data that i dont have any access to about where things are with loan delinquencies and peoples plans about properties. I mean, ive heard a lot about about leases coming due and challenging environment for refinancing this year and next year. It does look less like the Federal Reserve is going to quickly cut interest rates, which would have made life a lot easier for people who own those assets. So i dont know. But i would say i think well know more by the end of next year. But i think the news that were starting to hear about distress sales and people turning properties back to the bank is going to become more common and the time to come. Thank you, ted. Appreciate you. And hopefully pretty soon well have positive and cheerful. I promise to come back when i have good news. Um, lets see. Commissioner gregory. Oh, sorry. Commissioner herbert, thank you very much for your report. It its very. Its kind of fascinating. It seems as though now San Francisco is a city has put weve put all our eggs in one basket and we enjoyed reaping the benefits of those baskets. And now theres nothing there, right . Is that right . So its really fascinating from an urban planning perspective because to have a healthy economy from an urban planning perspective, you want a really healthy bank of Small Businesses that that serve the people that live in the areas. So this is looking more and more like hartford, connecticut, right. I dont know if you know that model. Um, and so and on the bar graph that you were showing, it seems like the businesses in the 2 to 7 million range pay a lot of gross sales tax or gross receipts tax, is that right. Im im going to try and bring that slide back. Um i mean its interesting because its similar to the 7 to 15 million in yeah. This this chart is heavily influenced by i mean the commercial rents tax is like a 3. 5 gross receipts tax that just commercial real estate pays. So in those in those bars that have a lot of commercial real estate, they have a high rate, an and the commercial rents tax explains that. Okay that makes sense. But it seems as though if we could attract more Small Business like armies and armies of Small Businesses to San Francisco, it could help the situation. I mean, is there a lost opportunity there . I dont think theres a lost opportunity. I mean, i do think that its a long term trend, that Small Business has been weak in San Francisco for 25 or 30 years. And in every indicator later shows it, the number of people who work in Small Businesses, the number, the creation, the birth rate versus the death rate , the average age of people starting small or running Small Businesses in San Francisco. And there hasnt been a lot of sign of that turning around. Part of the problem is that the tech driven economy that thats been built in the city over the past 25 years, you know, tech is sort of the fuel of everything. And not just tech being here, but like tech being in the office and Tech Companies having a supply chain and tech workers spending a lot downtown. I mean, a lot of Small Business is downtown in or broadly speaking , in the northeast sector of the city. Tech fuels business, tourism and conventions. And that also is a is a major market for a lot of Small Businesses. So i would say the neighborhood Small Businesses have probably a better outlook like they havent had a great three years compared to most parts of california, but they have a better outlook or the challenges are really about the challenges of running a business in San Francisco. But in terms of demand, it should continue to be there. We really need the Office Market, though, to adjust, to create new opportunities for businesses, for Small Businesses downtown. And i guess the only kind of Silver Lining i would point to is there has been a lot of Small Businesses that have gone out of business. So there is a lot of opportunity when demand returns to downtown, theres going to be a lot of space, i think, for new ventures. But to really sort of reorient the citys economy so that Small Businesses are growing faster, thats going to basically, i think, require the changing the cost structure of living and working in San Francisco and operating a Small Business. These are very long term trends, i think. But Tech Companies really dont have any incentive to bring their people back to the office if it costs them less to have them work at home, right . Well, were not really seeing Tech Companies. I mean, we saw this in 2020 with a lot of companies with a flourish saying the office is done, move wherever you want it. Well live in the cloud. Thats not really what people are doing, what theyre doing and its interesting. There was a story i just read yesterday about meta, and this was framed as a return to the office mandate, but the return to the office was three days a week for people who werent already allowed to work at home forever. So its not the strongest return to office. But what youre seeing is companies say, look, 2 or 3 days in the office and everyone is kind of agreeing on that. So what that means is you still need an office. Maybe you dont need as big an office or and theres no theres no denying that businesses, including large Tech Companies, have let go of space that accounts for the Office Vacancy that weve seen. But really, the model is not for the companies that sort of led San Francisco before the pandemic. Its not really move wherever you want and never come to an office. And so theyre going to need some office space. Its not clear that it has to stay in San Francisco. I think thats a big question mark. But i do think we have an opportunity there. Im also not seeing anything else sort of rising to replace tech. I mean, when we look at the latest tax filings, you know, i cant identify companies, but its fair to say tech is in that top five, top ten list of companies. So they really havent gone away. And theyre theyre still a major force in our economy. And our finances. So we just need to build dorms for the people that work in tech and have them all live downtown. I mean, i would generally say weve got Economic Growth and we should plan for it. Thats thats an old refrain in this town. So thank you so much. Commissioner ortiz cortina. I just want to put out this this not necessarily directed to you, but a thought when some of these class a assets do eventually get transferred in the reset. I think there should be some legislation passed where similar to what we do with storefront vacancies that these new you know, owners pay a tax because theyre hedging on the reset. And, you know, they got theyre going to get these properties at a very 50 at least, or 25 discounted rate. So there should be incentive that we pass just like we do with Small Business on the storefront that, hey, you got to fill it out or pay a tax. Just i dont know if thats in the talks if we could do that, but, um, i will not. I note your comment, commissioner, but im not going to analyze it on the fly, if you dont mind. Um thank you. Im trying to organize my. Actually, i have a bunch of questions. Im trying to figure out if some of them or where to even begin. Your presentation was, was a fascinating, a little disturbing and so i agree that im going to have a lot to chew on tonight and worry about. But um, i guess one of the questions that i have initially is have i guess maybe were not here yet, but is this report going to somehow connect in the next few weeks or as you start to have the series of stakeholder meetings with the plans that we have in planning . So i guess as we move forward with how we reuse this space downtown or how we consider space, is this information meant to inform that conversation . Like, are we looking at the whole ecosystem holistically . I may defer that one to sarah. I dont think we were planning to look at the downtown reuse conversation as part of business tax. But but what were doing may be of interest to that process. I dont know if i made my question clear, but i know you had and to kind of play that out, commissioner, i think youre looking at if we you know, if we rightsize or rational eyes taxes on commercial office, but then we convert a lot of buildings to institutions or residential, what does that mean overall . Is that kind of where your question is, does that change kind of like what the tax outlook looks like or outcome kind of looks like . I mean, it is a factor that we wd and the city in our recovery plans will consider particularly as this work on business taxes march forward with hopefully some proposals being clear by the end of the year. I will say that we regardless of that and i think to your point about hartford, which is where i grew up, we at wd, in addition to wanting a rational tax system that supports our Business Community writ large and allows us to have a functioning great government moving forward thats relatively stable and not going to fall off a cliff at the drop of a hat. We also have a larger goal of trying to create in land use terms and in urban planning terms a place that is diverse. So that it will be resilient over the long term and that we arent in a place and i will say my assessment, while our downtown has not restricted other uses like residential and institutional to this point, what it did was it did allow the highest and best user who could pay the most to take over and that result in kind of the singular land use that we see downtown. So it is our goal to try to introduce and support conversions and introductions of other uses in addition to the Small Business and office that exist downtown. And i think we will do that regardless. Were not going to change on those points just because keeping it office at some point will result in more taxes overall for the city system. So were going to both end it. If that makes sense. Yeah, that makes sense. I mean, i think my thoughts going into it were really like as we start to think about what legislation will look like to change, you know, the tax structure that we kind of keep in mind the future, kind of like possibilities for, for, for, i guess, land use and, and planning and things like that so that were not kind of just not seeing the full picture at that point and like voting on legislation that only solves for one thing and not for or kind of like a greater a greater outcome or, you know, the greater picture. Absolutely agreed. And i think its a great point. And thats why we want to be very involved in this system so that it is not. I think one of the things that has contributed to the imbalanced system that we see today and relatively risky system that we see today is adding new taxes cumulatively has kind of looked like free ice cream in a way. Right like why not put it on if we can get that revenue and we want to make sure that were thinking about the balance picture of what we want our city to look like as were doing those. So and you know, it looks like so, so yeah, you know, one of the conversations is, is really that this tax structure and this i dont know , like how much our businesses are paying in taxes versus other municipal cities like in the bay area has been significantly high for a long time. But its been worth it. Like what you were saying is that people have been willing to pay more to be here. Has their i mean, i guess, are we trying to figure out what that more could still look like . Like you know what what are the things that still make San Francisco kind of like, you, you know, worth it or is that, um, i guess im not really asking a question. Im kind of. Or i should be asking a question. I have a question somewhere in here, but it hasnt. Hasnt worked its way out out yet. Its kind of like, are we hoping that were going to be getting back to the same level of taxes like now that we see like what that number looks like, like where are we going to get this . Where are we going to get this same level of tax base. Well, i mean, one of the things i would say is that although you know, i mentioned that the remote work phenomenon cost us close to 500 million in 2021, we actually did have nearly as much business tax revenue in 2021 as we did in 2019, because the businesses that pay had two monster years of growth. And even though they they would have owed us a lot more, they didnt save very much because essentially their top lines grew so much that even though they owed us a smaller percentage of that to the city, you know, the overall amount they owed was not nearly reduced by that amount. I dont know if im being clear, but what i want to say is the 500 million is really a hypothetical loss that we would have experienced if our 2021 businesses had been in the office as much as they were in 2019. Its not saying that in any year we lost 500 million from the previous year. Okay. In fact, we lost quite a bit less because voters approved new tax increases and also because the businesses grew so i think, you know, notwithstanding ending the risks that ive talked a lot about, its not unrealistic to think that we will surpass our previous business tax revenue because tech is continuing to grow and the tech layoffs seem to be behind us. And those companies are havent fled. San francisco yet. So i dont think theyre necessarily going to go away. But the risks are there. And i think its just a question of do we need to change mindset from a situation in which we looked at it and said tech needs to be in San Francisco and they need San Francisco offices, and if we raise taxes on them, they wont leave. Is do we do we still think that thats true . And this new reality and personally me, im more im less confident about that than i was four years ago. And i think we all are. And i think that thats part of what were trying to solve with with this reform effort. I as i as i mentioned, i dont foresee tech being a smaller share of the citys economy. I dont think the economy is going to evolve into Something Else. We may have suppressed Office Demand for a long time, but again, i dont think were going to see the Tech Companies all move away unless, again, something something dramatic happens related to this tax to this tax difference liability issue that weve talked about. Commissioner gregory, thank you. I just have a few more questions that were coming up about construction because because. Okay. So, yes, maybe a lot of people left their offices in in the 2020. Right. And they work from home. But construction didnt the mayor did not stop construction. And we have seen construction grown the most in the pandemic. So im just wondering, in. Okay. Let me just ask you this question right . Like im a layman person in terms. Okay, you own a Construction Company in la and i own a Construction Company in San Francisco and you win a bid over here and you have you and your project manager come up here. But i am going against that, going against you for a bid. And i have my whole team here, my whole office here, all my employees are from San Francisco. Who pays the most taxes . You do. Okay, so when did it make sense to kind of tax those companies that are coming into San Francisco a little bit more . Because they are reaping millions and millions of dollars in the city and taking that money outside the city. So isnt there a way to get some kind of money for these Construction Companies . There may be a way to do that, and it is not only in construction that were looking at this issue. The reason it was set up this way is because we wanted to reflect, checked a tax burden that was sort of proportional to how connected a company was to San Francisco. So, for example, if a company thats not in construction is in San Francisco, all their people are in San Francisco. But all of their businesses is outside of San Francisco. We dont want to tax them zero. We want to tax them based on the fact that all of their people are in San Francisco and construction. Its both. Its both a function of how much of your payroll is in the city and how much of your sales is in the city. So when your hypothetical example, yes, the outside company would pay higher taxes and that is something we can fix and that is something that were looking at. Okay. Thats i just know that a lot of Small Business Construction Companies and professional services are losing a lot of business to outside companies in the city. And i think i mean, honestly, the best part of being from San Francisco is being from San Francisco is to say, my i work in San Francisco. I live in San Francisco. And so there has to be a way to protect the Small Businesses and construction and professional services. Why if you do come into the city of San Francisco, you have to pay. Thats it. Thank you, commissioner herbert, just one last thing. I agree with commissioner gregory. I think San Francisco should hire to make a point of hiring San Francisco companies and taxing the companies that want to come in from the outside heavily be they have to pay to play basically understood. Commissioner, there are constitutional issues in saying you cant target a non San Francisco company with a higher tax. But there are ways to do it that were not penalizing a company just because they have people here. Okay. And my last comment is just that San Francisco is an amazing city. So it will come back. But there are a thousand reasons that people would want to be here. They still want to be here. Its beautiful. I wont name all 1000 reasons, but you know, were going to make it back in my opinion. Its just going to be a little rough for a while. So thank you again. Yeah i think my , my questions are not quite formulating in my mind yet. Theres so much to take in. I think for us as a commission, wed love to continue this conversation on and i dont know, see how i think as your as your work continues, for us to be able to explore how this affects like our Small Business community, because i think, you know, the things that we see on the ground is really that i mean, its exactly what youre pointing out is theres a balance to be had, right . Like theres we cant create so many barriers to starting a business at any scale or barriers for any business to come into San Francisco so that the risk becomes too great for them, that they dont want to invest in San Francisco and its kind of like, how do we how do we rightsize all of these things for everybody . And i think what you noted about the Small Business impact is really interesting that for Small Businesses that that barrier is quite large and its interesting that its happening on the top or in the kind of top middle end as well. But for us, as you saw, kind of the legacy businesses, these are the impacts are very individual and very hard for our families. So i think, you know, i think this hopefully our commission can be of a resource for you as you have Stakeholder Engagement going into the next few months and formulating how things appear. I know that our our little drop doesnt seem to be as large of a part of that bucket. But i think when were thinking about diversification of businesses, i have a feeling this is just kind of like the very beginning of that kind of conversation. Conversation okay. Thank you very much. Um oh. Any other questions . No. Okay. Thank you. Oh, Public Comment. Any Public Comment on the line or in the room . Uh, theres none. Okay, great. Um no Public Comment. Public comment is closed. Uh, next item. Thank you very much. Item for shared Spaces Program update. This is the discussion item. The commission will hear an update from the shared Spaces Program, including an overview of applications and upcoming permitting deadlines. And well discuss how the commission can support the program and amplify communications. Presenting today we have annie yellen Public Relations and Communications Manager with the Planning Department and monica munich. Shared spaces Program Manager with sfmta and Gregory Slocum department of public works, who is on the line. Hi. Thank you so much for coming. Hi, good afternoon. Good evening. Good evening. We have some slides prepared for you all today. Carry youll be able to load them up. Awesome thank you. Well good evening, monica. Minich sfmta shared spaces Program Manager. Its been a minute since weve been to this group to present to you all and give you an update and we have a ton to update you on. And a really important milestone coming up. So this is a very timely discussion and eager to give you guys an update. And we have an ask and some help from you guys as well. So with that, ill get started. And yeah, annie yellen Planning Department is here with me and Gregory Slocum public works is on the phone for any questions. So to get started to topics for tonight, we mainly want to focus on where were at in this transition from the pandemic to permanent or post Pandemic Program. Give you an update on where we are in our applications processes. Some statistics on scale and numbers and all the efforts weve been engaged in to support businesses and get people through this milestone. So key timeline, as you probably recall, the Pandemic Program ended at the end of march and weve been in this 180 day grace period that the board of supervisors legislated a grace period intended for pandemic operators to have more time to get their new permits in order so that 180 day ends september 27th. Were about a month away from a really important deadline. And what this means is that pandemic operators will have had to not only submit their application, finish having it reviewed by city departments after that point, they get a conditional approval. But theres also steps after that. So theres still a lot of work underway that businesses are eagerly working to get their to get to the september 27th deadline. And thats after applications are reviewed and approved. And theres a ten day public posting , a parklet operator needs to make modifications to come into compliance and then theres a post construction inspection by public works and Fire Department and then you were able, if you clear that youre able to get your permit. So i just want to lay that out that represents a lot of work and a lot of touch points with the city that were really committed to supporting businesses to get them to get them into new permits, new legislation and legal permits. So to give a sense of scale and some important numbers, were currently working through about 639 post pandemic parklets applications. Thats down from, you may remember, numbers height of the pandemic. 11 1200 parklets just to give a sense of scale of kind of where were at, the sort of landscape of pandemic permits or permits that are here to stay parklets are here to stay. And as a frame of reference, i think its really important to sort of remember and understand some of the growing pains that are part of this transition, which is that in the pandemic we were really reactionary. It was a very stressful time for the city, for operators. We were under very intense, obviously, indoor restrictions. And so it forced us to be rapid, adaptable, make a lot of compromises. Fast forward three years later in this new era where we still have this streamlined process, were really proud of streamlined procedures, but were looking at solutions that are more sustainable. Parklets are here to stay as we sort of look at permitting occupancy in the public right of way, some more statistics before i pass it on to annie to talk a little bit more about our communication efforts. We have reported about 121 parklets people that have already removed their parklets. Its more than that. Obviously we had 1200 at one point, but weve gone out and folks that have since march closed down their parklet out. But theres this 639 in the mix and only three of them have gotten their permit, their post pandemic permit. Why is that . A lot of reasons. One thing is that its really been very difficult to get response and stay on top of the scale and applicants that were and businesses that were working on and through, for example, the sort of kind of categorizing three different buckets of folks. The first number, that first bucket is 179. Of that 689, 179 that have made it through permit review. They made they submitted public mta, reviewed it and approved public works, reviewed and approved. And but they still need to build, get an inspection and then their permit. So theyre really far along. But there may be theres maybe theyre within their window to build, which is about 60 days. Some folks have like havent done it for a couple of months. So its these are really the folks were focusing on to get through the finish line. But another 144 are have incomplete applications and are at the beginning of the sort of approval process. They havent even gotten through. Mta review, the First Department that reviews it. So those are we sort of call them incomplete applications. They applied. Theyre still havent made it out of our queue. And then another one, 313 made it through sfmta but then are sort of stuck in that Second Departmental review. So yeah, 144 and 313 havent gotten to that step that the 179 did. If i, if that makes sense. Happy to go over this again. But weve been combing through the data very thoughtfully and intentionally to really understand and the different ways we need to support people and where folks are getting challenged, where we can just be strategic. So happy to elaborate on this, but with that in mind, annie will start to talk about how weve been targeting engagement with these businesses. So so since march, weve been doing in well before that as im sure youve been aware, in previous briefings, weve been really offering businesses consistent only that one on one Case Management support that comes through emails, that comes through one on one video calls, and then we have at least once a month an inperson Office Hours Event where a business can come physically to 49 south venice and receive feedback on their site plans from staff and were always willing to offer in language support as well. So in addition to that, weve done a lot of phone banking. Weve even sometimes done Text Messages when we cant get through to an applicant. Were partnering with office of Small Business. Our grantee partner, sf new deal, who also is plugged in with other nonprofit members as well as planning mta and public works, all making those phone calls and answering peoples questions and letting them know what theyre missing. And maybe you missed that email and then sending it again. And then the next step is going to be noticing those applicants who are still missing information nation in order to make their application complete. So the legislation states that the it has to have a complete permit application in the system by september 27th. So were continuing to do big pushes in order to get people ready with all the missing materials that they may have. Were also offering a few grants at this time. Were also were offering our shared spaces as equity grants. Those are back open and businesses can be reimbursed for up to 2,500 to bring their parklets into compliance. We also offer that grant for table and chair permit holders as well. And then we also have a new grant. The arts and culture grant, which is in partnership with us at new deal that is up to 10,000 for merchants, associations, nonprofits to really do individual activations in their community and on their streets. So those applications are rolling. The priority deadline was august 1st, but we are accepting applications for that grant up until january three and for the equity grants. The deadline is september 27th to also match the permitting deadline as well. And then ill bring it back over to monica to talk about the fee waiver update. Kate hopefully short presentation. This is our second to last slide. So fee waiver. Earlier this summer, the board of supervisors deliberated and ultimately approved a fee waiver for the next year. And we just wanted to explain a little bit about what went into effect. You may have weve put out some communication and emails, but its a little confusing. So were spending some time understanding exactly whos benefiting and how. So basically to break it down, if you had a parklet during the pandemic and you were transitioning your initial permit fee is waived. So theres two different fee types. Theres a permit fee and an annual license fee. And those are both waived until july 20th, 24. If youre obviously a shared space parklet a pandemic one and youre removing, there are no fees. Its not like retroactively you have to pay for a permit. In the past. So if youre not transitioning to the new program, you simply need to remove your parklet by july. By september 27th, the end of the grace period and if youre applying for a new parklet so youre someone brand new, you never had a parklet during the pandemic. You also benefit from the fee waiver. Excuse me, your initial permit fees are waived for the first year. I believe the annual license fee is the only one that does apply. And i should mention this is mentioned this last point, but for all of this, the threshold, the other thing that the legislation did is raise the threshold from 2 million to 2. 5 million annual gross receipts to be eligible for the 50 off waiver. So eventually, when you are paying fees, say, in july 24th, if you are eligible, all you are, you have waived for a whole year and youre half of what they are, 50 off. Hopefully next makes sense. We can go back to that. But just want to make sure you were all aware to put out the good word about what got passed and how thats supporting Small Businesses. So to wrap up, we of course have enormous amount of respect for your sort of committee and youve so plugged in and have been so helpful over the years of the program and would love your support to help continue to put out the new word, the word especially as we are in the last month. And as you can tell from the presentation, we are doing so much intentional work to reach folks. But you can help us put out the good word. And if theres anything more we can do on that, were happy to send you live posts. For example, like we mentioned, weve really curated and really dug into the numbers. Were happy to share some of the folks in these different categories. Maybe you guys, theyre in your network and you can help put us a word. Just let us know how we can what we can provide you. So with that, any questions . And thank you so much for your time this evening. Thank you so much. That was it was good to have a status update. Sounds like theres a lot happening in the next month. Commissioner ortiz, cardona thank you, marcus. Its been a while. I want to first thank you for the presentation and i want to commend your outreach work. Thats for real. Like you know, always when its good, its good and its been good. Those workshops have been really good for people that actually make it, but they are good. Ive had some of my colleagues attend and i know specific, but its good. And brian, my email is full of his emails. So like brians doing his job right, like hes making me work, so hes doing the job. If we could go back to the slide on the fee waivers, i think i understand it. But just for the people that are seeing, especially the nonprofits, so i got a permit, lets say im williams bakery. I got a permit during the pandemic. Im one of the few that have all the approvals and everything. I will not have to pay any fees for anything until july of 24, when i start that fiscal year. Thats correct. Yeah a little. Its so right. The legislature specifically waived it until july 24th the way that treasurer tax collector, the unified license bill works. I believe its like that cycle. Its mrs. That cycle. So it ends up being another im sorry, a good year. I think its march that those are assessed on. It will be april 2025 on your unified tax bill. Okay because it missed the anticipate receiving your first bill. So William March 24 it misses it with july 24th, right. Just to clarify this, sorry only applies to parklet operators. So the legislation was specific to parklets. It did not include street closures or table and chair permit holders. Copy that. So straight chair spaces. Parklets. So im williams bakery. I got everything. I wont have to pay something out of pocket until march of 25. Correct okay. And then the second one, i am crazy and i started a business right now in San Francisco williams winery and im applying for a parklet and im doing the process right now. When do i eventually pay or how much do i pay . So the annual license fee applies right away, and i dont know. The permit fees are one, two and 3,000. I dont know that off the top of my head. The annual license fee, its not. Its in the hundreds of dollars. So that goes into effect. But if that also misses the unified license bill in march, does that also get means that its pushed out to 25 . I actually dont know, off the top of my head. So a the permit has to go through the full cycle of being approved and then everything. And then what i can do is i can carry am i connected to wifi, i can pull up the fee schedule on the on the website because as monica stated, it really depends on the amount of Parking Spaces like percentage wise, im brand new. You dont have to give me the exact figure. I know. I think top of my head, but i would have to pay right now. Today, 50 of whatever the fee you want to spaces. Yeah. 50. Not this year. Not until next year. 24 of 24 for the for the permit fee and that is the bigger number that one, 2 or 3000 versus a public movable or fixed parklet totally waived for me to even me my new revenue, correct . Yes. Okay. I get it. And then lastly, and i dont know if you could answer i dont know if its data, but its like a reduction of like almost 50 in in parklets reapplication, reapplication. Do you do you have a sense why is it because all the rules or you know. Yeah yeah, yeah. Some of that anecdotal and i may have some additional insight from where where i sit what ive seen its a mix of things. There are folks that are feel like they dont need it. Theyre like, were back indoors. We dont have the same like its not the same period of time. It worked for us then. We dont we no longer need it. Theyre hard to maintain. They dont pencil out right there. Graffiti. Theres is homelessness issues. Theres neighbor disputes. Its it may not pencil out financially because of the modifications they need to meet or period to sort of where they look at the demand and how much extra sort of staff they need. Those are the ones i hear about maintenance modifications, penciling out any other categories . Yeah, i know. I think i think you know its that in terms of penciling out often times a lot of parklet operators are finding themselves in a position where they would need to make modifications or have to rebuild the parklet and entirely so were weighing cost benefit analysis. And then in some cases but i would say this is much more rare. Some parklet operators are not able to carry on into the legislated program because their footprint doesnt qualify. So oftentimes thats because of a red zone or an inability to daylight the parklet, right . Yeah the far minority like less than im trying to think of. I cant think of any like for the most part, footprint changes do need to happen, but we can still make a parklet happen. It just may look very different, but yeah, there are probably some few occasions, maybe a parklet that could be in a bus zone because the bus was not operating. Its finally coming back. They have to go away. But probably less than ten. That totally cannot are going away because they simply theres no space for them and last one and by the way, as of new deal, great partner theyre on top of it. They work a lot with my colleagues at glitch. So they walk around, shared space. Just a technical question. When does the parklet have to have available spacing to the public . Yes. Right. Yes. Yeah. The portion of it. How much of that . Like lets say im a single parking space. Parklet. Yeah every. So the legislation is vague but also explicit. It explicitly states that every parklet of 20ft has to have a public bench or a public seating area of some sort. Doesnt specify how big it needs to be, how many people it should accommodate loosely. Weve been our interpreting is as a person and a enough for two people. But where it is in the footprint is up can be very flexible depending on no dimensions, black and white. So i make a bench for one person. Yes, within 20ft. So for every 20 foot. So if youre a bigger parklet, you may need more than one. And theres maybe and i dont know if public works, hopefully is not there may be other accessibility requirements that obviously it has to like cant be placed somewhere that inhibits some other sort of design parameter like ada access. But yeah, weve seen pretty Creative Solutions about where theyre placing them, but there are its not we do review it and approve it. It cant be like maybe overhanging in some situation that would be unsafe or impede access street side right, right. Exactly exactly. Yeah. And then lastly, lastly, lastly, so obviously from my nonprofit, im working with a lot of people that havent been as responsive or just dont have, you know, the consent from a neighbor, etcetera. Right. The deadline is pretty close as realistically and your team has been amazing. So i know monica, weve worked on a ton and i know i could reach out. I know i could reach out. And i think, you know, youre accessible. Everybody whats realistically the enforce like, is it going to be punitive . 27 comes and were going to come with the wrath of god to our Small Businesses or or were were going to work with them. Yeah a little bit of both. We will be intentional and have to prioritize guys who were noticing right away. So, for example, its october. Our public works Enforcement Team is not going to have the bandwidth and we wouldnt even want them to go out to hundreds within that first week. We will look at and sort of start with the obvious folks, the folks that we applied six months ago never responded. That initial email like never responded to a phone call. Theyre going to receive a notice that says your pandemic parklet is expired. Please remove within a certain amount of time and then a citation and a fee. So well be rolling out that as we get past september for. But start with the most egregious but sort of the obvious stakeholders that feel like theyre we have a good sense that theyre not wanting to continue in the Permanent Program and go from there. Yeah. So it wont be everyone. It will be intentional, strategic. Were trying everything, every toolkit we have, every contact that we have to work. So that is a last resort, right . Thank you. Youve done a great job on the outreach. So add one thing to that. Only one fine has ever been issued to date. So there have been corrective notices sent out to folks who may be operating like a very unsafe situation, but only in one instance since over the last many years. So thats good to hear. We really we really pride ourselves on really working with the businesses and just ask for that consistent communication just to let us know, like, i hear you, i see you, im working on it. I just need to do this or let us know whats going on. I appreciate that. That was a good thats good. Thank you. Appreciate you all. Thank you. Commissioner herbert. Uh, first of all, thank you for all your hard work. Ive been receiving all those emails , too, and its great. I probably have to circle back about one of my parklets one has to go away. Um and i did have some feedback for you guys. Um i think a lot of people went to considerable expense to build the parklets during that period where it sort of anything goes, you know, were going to die if we dont have one, and then on the rules started adding up. And so some people have spent a lot of money on parklets and now they have to tear them down because they dont comply. You know, like the 20ft from the cross walk rule. So im one of those people. Um, and so, so i guess what i would just come out and ask which is probably not possible but you know, the weather is part of business for restaurants and, and october is a really nice weather month. Everything starts to go downhill sort of at the end of october. So just putting out an ask, if you dont ask, you dont get you know, would it be possible to stretch it until you closer to the end of october so that restaurants specifically can continue to profit from that nice weather while the sun is still shining kind of thing . Um, that being said, i really appreciate all the work that you guys are doing and um, it would be great to know. So what do apartments are requiring . What what does that make sense like . Is it the Fire Department thats requiring the 20ft from the crosswalk . Is it dpw thats doing requiring Something Else . Its been a little bit confusing to know like what whos requiring what and when. Um, and then my question is, will there be oversight of the parklets that are still existing . Like how will your department maintain oversight of them, making sure everybodys keeping their parklet up and looking good and, um, being structurally sound is there a plan for that with the existing parklets as we move forward. Um. And yeah, it would. I understand that the whole process has been an evolutionary one, right . Youve sort of made discoveries about what works and what doesnt along the way, but it would have been really ideal if the rules were the rules from the beginning, and i guess that just wasnt, i mean, almost an impossible task, right . So that everybody knew, okay, you know, i shouldnt build this thing because im going to have to take it down eventually, right. Id love your feedback on that. Totally yeah, yeah, yeah. Well, ill start there. And i do want to address your other questions. Totally. I think we think about that all the time. Like if we could go back in time, how we, how would we do things differently . That being said, were operating. You cant recreate the sort of the period of time we were in and sort of having to right size that now, now and as we are, have that opportunity now to be like, how would we want to do it . Which we couldnt necessarily in all that that we are pulling together in may of 2020. Um i think its a little bit of both. I think were mindful of wanting to take pieces of the Pandemic Program with us. We now have a streamlined permitting process of 30 days before my understanding precovid. It would take like eight months to a year much more robust. I think we want to take those bits that worked really well. Fast responsive, adaptable, but but balance those trade offs. Its a its a real experience. We see it, we hear it, we know it. Its a fair criticism that evolution that happened. That being said, you know, we do look back and its sort of like it wouldnt have made sense, i think about that to not allow something in may 2020 that we thought in three years from now, this wont fly like, no, you cant be in it. So it sort of we made the right call, i think, for the time and were trying to make the right call for this time. And it just inevitable, at least from where i sit. And fortunately that theres just going to be growing pains like we talked about in the very beginning of the presentation. It doesnt mean hopefully that were doing a terrible job. I think is just sort of an inevitable as we grow and get into the next era, something thats more sustainable and that not that it matters, but at the time i think we hoped it was the agreement was mutual and understanding that the permit s were temporary, they were temporary. The thing we actually issued had like a timeline at six months. We only offered little six month chunks. Regardless, people invested and theyre at the situation. Theyre now, now. And its hard to do that sort of reverse action. But they were intended to be this whole thing has been an experiment. But to go back to some of your other questions and i dont know if annie has anything you want to elaborate on, on about sort of that last question of the three, whos going to be maintaining it . Um public works issues, these permits, they always have. They have an enforced agent team, Fire Department has an Enforcement Team, and that team has always been around. But i think as we stabilize and were at more of a place of having bandwidth to keep on top of compliance and inspections, those will be the departments at the front and center. But were really hoping the permitting process is how we get it right. Like we hope you get a permit because you did everything right and theres not these like like fixed after the fact. But yeah, those will be the sort of departments in those capacity edges. And in terms of who does what, im curious if you have more additional insights on how we could make that better. I know our manual, at least its very long, very dense, but at least is color coded by section. So it is somewhat an easy way. I think fire might be red. I could be wrong, but like the red pages are like, you know, youre in this section because this is Fire Department requirements. Ada youre in this section because this is something public works looks at mta footprint. So i think there are different colors, more or less by department. And i also know our compliance advisories, which seemed like so long ago. I know at the time when we developed that for every business and we sent them to every business, they were, i think, coded by like the Department Fire mta public works and like the code section. But thats the two things i could think of thats like at least readily available where we try to interpret it, the guidelines by department, but if you have other pieces of feedback or how we could do better with that, yeah, id feel remiss if i dont invite you to our parklet Design Training and office hours this thursday. I know everyone here operates a business and is busy, but that is a great space to make that visual connection between monica at mta delivering the mta portion of the training. Gregory from public works delivering that portion and then just kind of connecting the dots with that visual representation of the individual whos representing that department. So i just wanted to plug that in. This moment, if i may. Thank you. And you guys have done a great job. I mean, the fact that we have parklets has been, you know, a gift and an aid. I do have one last question, which is its going to be really expensive to take them down to get to get rid of the materials that were used. Right. Thats costly. Is there anyone to help with that . That i heard something about the boy scouts wanting the materials or something. There was a great rumor about the boy scouts, but we were unable to verify that we did pursue it. But newly you can apply for a shared spaces equity grant for removal of your shared space. So that would be 2,500 towards the removal of your shared space. Okay yeah. And just, you know, it we do know the disposal and the rental of a truck is probably the most cost costly portion of that. But it, it doesnt it doesnt require Skilled Labor to, to do it. So just putting that out there and hope hopefully that youll apply for an equity grant too. Great. Thank you. Im asking for other operators as well. So thank you commissioner ortiz. Cartagena. Yeah i just want to highlight on on 24th street our cultural district, we had veinticuatro and you guys did amazing. Everybodys wearing new deal, your offices. It was it was dope. And regarding disposal glitch my nonprofit weve been doing it so weve been doing before the shared space grant came out. So hopefully now we can help them apply. So weve been fronting the costs of removal. Its not its not that much. Its not that bad. So some people that didnt want to proceed and we got the laborer and we did the dump and all that stuff for them. Curious how much it cost on average about 700 on average. So thats good. Thats wonderful. Great. Any other comments . I mean, it sounds like i mean, my assumption is that department of public works like dpw. I dont know if it was a and then mta everybody is like ready to help process with every like process. All of these. And now were at a stage where youre having a really challenged time getting a hold of the business owners, right . That is the ask essentially for us to be able to reach out to our network. So i think after this meeting, you had offered to be able to share some of the businesses that youre having a tough time getting a hold of. I think we can definitely, you know, kind of help with that that load. And maybe, carrie, you can, i dont know, help figure out how we delegate that effectively. And so, i mean, it sounds like the 313 that have not yet cleared the Second Department review. I mean, those are most likely to be the ones to be cleared by the september deadline. And then on. And then we still have 144 who are and 179 who are kind of like missing really a lot of a lot of the steps. So potentially a lot of the parklets that we see right now could be eventually not not used or have to be taken down. So i hope not. Yeah i hope its continued engagement, but its more realistically a lot of folks that are potentially getting notices as a last resort , targeted and strategic. But but were hopeful. All these people are so close to getting over the finish line, theyre just making final decisions, getting missing materials is. But yeah, its a significant number. Yeah yeah. I mean, i think the vast majority of like people that we talk to, at least in my neighborhood like residents and things love having parklets love having more outdoor space people really enjoy being able to like sit outside and, and have coffee or whatever it is you know, and, and so i think, you know, for all all the millions of people who are listening to our Commission Meeting tonight, hopefully they will encourage their neighbors and their merchants that, you know, that not just to ask them to like move forward, but if theres a way that they can really pitch in and help out because maybe maybe some of this is bandwidth for businesses. Right. And so, um, you know, hopefully well, well all be able to kind of help with that. So thank you. Thank you very much for your time and your presentation. Oh, actually, if you dont mind staying for Public Comment, we probably have several thousand people. We have we have one caller in the queue. Oh, nice. Welcome. Thank you so much for attending the meeting. Oh caller. Yeah thanks for having me at the meeting. This isnt a while. I know you guys are primarily not primarily, but here for the shared Spaces Program and were having all of these meetings. We had another meeting, i think, at the coffee place about at the sextant coffee rotisserie, about the little girl that got hit by the car and killed and to give you a little bit of a background on myself, um, ive been hit by two cars in your city, and ive not been knocked to the ground. And those drivers drove off. So im a convicted felon. I have just been rejected on four applications for housing and we have all of these meetings. And im just. Im so curious because i sit there, i have the funds for housing and we say were concerned with peoples safety. Even put in the context of drivers and stuff with these parklets. But were still not concerned with the real issue, which is i have money for housing and im being denied funding for housing. But theres all of these programs for me to go to fuel your guyss jobs. Meanwhile im left homeless and then people bitch about their car windows getting broken and stuff like that. And i could go stand at fourth and market right now. And i know thats not where your guyss parklets are located, but i can go stand there for 12 hours during the day and for every single, every single hour that i am standing there, were going to probably have to cut off standing there. I know our caller. Im getting to my point here. This item is about shared spaces. So if your comment is not about shared spaces, my comment is about the shared spaces because were focusing on funding and where that funding is coming from, but were not paying attention to the real issues of all of you guys. Miss, spend money and it is staring you in the face of what is outside. And i have spent over 100 applying for apartments and i am being denied. I have a full time job. It sounds like this is about housing. So were going to were going to cut you off now. Okay. Thank you very much. All right. Well any other Public Comment at about about shared spaces more specifically, there is none. None. Uh, seeing no callers on the line. Seeing no callers in the room. Thank you so much for coming tonight. Thank you for your time and support. Good evening. Thank you. All right, um, next item, please. Item five amendments to Small Business Commission Bylaws as this is a discussion and action item, the commission will discuss and possibly take action on proposed amendments to the commissions bylaws as and uh, just a note, this is regarding our switch from meeting, uh, twice a month to meeting monthly and just codifying that in our bylaws. Do we need to present on this piece or do you just present it just right now . Yeah. Yeah. That summarizes it. Okay. Um should we take any commissioner questions . Does anybody have any questions about. I mean, i, i think i just have one thing is that, um, you know, i really appreciate that our commissioners right now have so much, you know, so much passion for what you do that you do spend so much time outside of the Commission Meetings in your communities and in your not just in your businesses, but really like within your community and within the city advocating and doing all this work. And so, you know, i think a lot of this is because i want you to be able to spend more time focused on on those types of things. And for us to be able to, you know, be more efficient with our with our commission time. But i just really appreciate you all so thats kind of i dont know, im not making a lot of sense tonight, but its really a recognition that you do so much outside of this time. So and i want to encourage people to really step up to like commissions and spend time doing these kind of things. So the commission should feel like, you know, its a pleasure to get together and that were really doing good Work Together when were when were here. So yeah, so thats thank you president hui. And because of that, you reduced our workload by half. I appreciate you. I love your leadership of the commission. I think the results are like beyond, you know, theyre under your stewardship. The best, the best tenure so far. So does anybody else have any other comments, though . I definitely want to be open to things. If anybody feels different, know. Okay well, seeing no other questions or comments, any Public Comment, there is none. Seeing no Public Comment, Public Comment is closed. Should we make a motion . Ill move. Motion by commissioner ortiz cartagena seconded by commissioner dickerson and commissioner carter is absent. Commissioner dickerson. Yes commissioner gregory. Yes. Commissioner herbert. Yes. President hui. Yes commissioner ortiz. Cartagena. Yes and Vice President ziziunas is absent. Motion passes. We shouldnt tell the commissioners that absent. Item six approval of draft Meeting Minutes, discussion and action item, the commission will discuss and possibly take action to approve the june 26th, 2023, draft Meeting Minutes commissioners. Any questions . No. Seeing no questions. Any Public Comment . Theres none. No Public Comment. Public comment is closed. Does somebody want to make a motion to approve the draft Meeting Minutes . I will. Im trying to give yall another. I will. Say my brain. What am i going to do . Youre going to make a motion. All right, ill make a motion. Ill second the motion. Okay. Motion by commissioner dickerson , seconded by commissioner herbert. Commissioner carters absent. Commissioner dickerson. Yes commissioner gregory. Yes commissioner herbert. Yes. President howie. Yes. Commissioner ortiz. Cartagena yes. And Vice President ziziunas is absent. Motion passes. Item seven general Public Comment discussion item allowing members of the public to comment generally on matters that are within the Small Business commissions jurisdiction, but not on todays calendar and suggest new agenda items for the commissions future consideration when there are no comments. Others in the room any. Theres no comment from us. So no commenters on the line rate Public Comment is closed. Next item please. Item. Eight directors report. This is a discussion item. I will promote our director. Hi everyone. Can you hear me . Yes. Yes. Hi oh, so good to hear you. I apologize today. So a couple of items and update. S wanted to share that with regards to the awning program, um, as you recall, we talked about this several times at this commission where were in the winter of 2023, 2024, approximately 200 businesses had received either complaints and or notices of violation for having awnings installed without permits. And this was sparked by , it appears to be an individual who made complaints. And so we had worked with department of building inspection Planning Department, fire and department of public works to create a more streamlined permitting process to allow people to come into compliance and this streamlined application process also means that you dont have to pay any permit fees as well as you dont need to submit out formal plans as part of your permit application. And so as long as you have an existing permit, sorry, an existing awning or sign, you can take advantage of this program, you need not to be a business that has received a complaint or a notice of violation. So we are encouraging people to submit applications starting today and the program runs through june 1st of 2024. So so i really want to thank the office of Small Business team. Last week, two Staff Members went out to the neighborhood ads and actually conducted outreach directly in person to the approximately 200 businesses that received a complaint and or notice of violation. And inform them about this awning amnesty program. So please help spread the word. And of course, youre always welcome to direct people to our office with any questions about that next, with regards to the Small Business permitting legislation, this is. File 230701. This is legislation weve talked about here at the commission several times as well. And it makes over 100 changes actually at this point, nearly 200 changes to the planning code to make it easier for businesses to get their start here in San Francisco or to expand and in San Francisco and so i know that when ted egan was talking and we talked a lot about what the barriers to entry when youre a new business, were really trying to lower that through multiple means. And this particular one has to do with zoning. So the next step for this legislation is that it will be heard at the Planning Commission on september seventh. So i wanted to make sure that everyone was aware of that. And then after that it would go to the board of supervisors Land Use Committee and then the full board. And last, ali, i wanted to just make sure that you are all aware of the apec Leadership Meeting and the ceo meeting coming to San Francisco, and its being hosted by San Francisco during the week of november 12th. So this is one of the largest events that San Francisco will be holding, hosting in modern times. And we are expecting approximately 30,000 people from the roughly 21 participating economies as part of apec. And these will be heads of state delegates, Staff Members as members of the press who will be in town and one of the key responsibilities that our office is responsible for is really helping to highlight and spotlight events that would feature our merchant corridors and Small Businesses. So that the roughly 29,000 or more people who arent part of all of the, you know, the vip events, for example, will they have something to do in San Francisco while theyre in town . So weve reached out to all the merchants associations, the Community Benefit districts, cultural districts and so forth. One, to let everyone know that apec is coming again the week of november 12th. And if you are already planning to host events around that time, we highly encourage the week of november 12th. Otherwise there office. And thank you to michelle from our team has been working to spotlight the different merchant corridors and businesses through our shop dine sf campaign page, which is on sf. Gov shop dine sf. So well also continue to stay engaged with regards to logistics and as soon as we get more details which we do not have at this time, but as soon as we get more details around impacts, especially if there are, for example, road closures or things of that nature that involve or will impact a Small Business, we will definitely communicate that out. So those are my updates for today and happy to answer any questions you have. Thank you so much. Commissioner ortiz, cartagena. I dont have questions, director, but i want to commend you and carry on around the legislation. The community outreach. I can attest just in my neighborhood, in my community, how many times you went back, you created solutions. And that was just my neighborhood. So i could only imagine citywide all the compromise eases, all the considerations ease. And youre always patient and you got a lot of the stuff done. And its been really positive in our neighborhood or its going to be really positive in our neighborhood. So i really appreciate the work. It was very heartfelt. So i appreciate you and kerry. Um and lastly, um, im super excited about apec. You know, we do a lot of events in the mission and we definitely want to show the world like, this is not the doom loop. This is San Francisco. So we definitely want to be a part of it. We want to show you lowriding good burritos, you know, some music, some dancing. So were with it. We ready . So thank you, director. Thank you so much. And you were so key to our outreach to the community in the mission. So thank you so much. Um any other questions . No i. I think, uh, there are no more questions here. Thank you so much, director, for your report. Oh, yeah. Well have Public Comment and. But yeah, i just wanted to thank you for your for your report and its good to see you. Um, any Public Comment. Great. No theres none. Okay. No Public Comment. Public comment is closed. Um, thank you. Thank you very much, director. Okay next item, please. Item nine. Commissioner discussion and new business. This is a discussion item allowing the president , Vice President and commissioners to report on recent Small Business activities. Make announcements et cetera. Um, commissioner or. Oh, yeah. Commissioner ortiz. Cardona yeah, i wanted to. Director tang or carrie, if we could follow up on shanes, especially around the shared space because through the nonprofit a lot of the work we do with sf shines grant is we get the designer to get the parklet design that we know its going to be approved by sfmta. So we just want to make sure that were not applying for this grant. If theres no longer any funds, because the first sf shines. What i call 1. 0 gets you an architect, and then they draft up an approved shared space. And then the second 2. 0 gets you money, you know, to apply some of what is needed. And then i just want to make sure because especially the design portion is been key for us, that was one. And then based on teds report today, i dont know what our legislators are doing regarding, but i think if we proactively we kind of ask for some legislation around commercial vacancy and specifically a commercial vacancy tax on these class a assets, especially after these buildings are transferred, because right now theyre probably going to get back to the bank. So once its in the bank, then we should encourage and pass legislation where theres vacancy tax. And also, i wasnt able to pull it in in time, but also we should be having this vacancy tax for buildings that get reassessed right now, google meta and all the big players, theyre asking for 50 reductions on their assessment tax. This is public record. I couldnt pull it out in time, but you know, buildings that are 30 million, theyre saying theres worth 15 million and theyre probably going to get the assessment based on a couple of the comps that just got sold. So if they get approved, there should be legislation where i dont know, like if youre getting that reduction and youre having a vacancy tax, you know, you should get fined for having your building vacant. And then lastly to commissioner gregory. How do we how do we make it this tax somehow like an incentive to San Francisco or a disincentive to the like i call them fronts straight up, right. You put one desk and youre walking away with 1 billion construction gig. Come on. Like youre extra hurting the citys wealth. Right. And no more of that. How do we, like, incorporate this legislation in on this commercial vacancy tax where we encourage Small Business vacancy and also discourage this front stuff . So if me and commissioner gregory end up missing, you know , what happened to us. Great. Thats it. I believe director, the director can respond to your initial question. Yes. And so noted about your suggestions, and well definitely take that into any stakeholder meetings regarding Business Tax Reform and your question about sf shines the program is Still Available and there are still funds. However the program is very oversubscribed, so there is quite a waiting list right now. Um, so at this point ill, ill say is that i cant, you know, we cannot guarantee, you know, if youre applying now what your timing will be to receive the grant, whether the design or the construction. But i know we, we are having conversations about how to make that program work better given the huge demand. Thank you. Um i just, i, ive been in conversations with people recently who have had a lot of challenges with sf mta construction issues and, and, you know, i feel like im fielding a lot of emails from different parts of the city. Um, im wondering, i think there is interest from sfmtas part to build a relationship with us perhaps coming to the meetings more regularly. Im wondering if that is something that we can place on the agenda as new items and also open it up to commissioners to kind of think about how we would like to shape that time that we have with sfmta so that we can effectively kind of understand how we can work more collaboratively and how we can kind of think about this not just as like separate neighborhoods. I mean, were seeing impacts that i think are are happening throughout the city and i think its causing a lot of merchant corridors, great anxiety. So i think if we can kind of figure out how we can kind of look at this as a larger city wide kind of conversation, im not sure how to go about that. It just because like we really cant you know, we dont have a lot of ability to coordinate those efforts. But maybe im just putting that out there that that i would love to have the commissioners all be a part of this because im pretty sure in every one of our our corridors, whether you live or work there, you you know, theres somebody impacted by this. So thats. Oh, commissioner gregory yeah, just to follow up with what you were saying about sfmta, they have a huge project coming up the trail bus yard. Does everybody aware of that project thats coming up . Theyre redoing the whole thing. Its going to be the bus yard on the bottom, housing on top. So it would be really nice to have them here because for months and months weve been asking them what their plan is and how theyre going to support the construction and professional service. Small businesses. And yet we have not got an answer. So yeah, i would love to see them in here. I know a lot of people are still complaining about them, extends the meters. So im wondering what their follow up is on that. Are they listening to the communities or what . So i think thats a great idea. President thank you. So i think maybe carry and director tang, youll kind of follow up with us as to like best way to, to organize that. Yeah that would be great. Thank you. Um, i think thats pretty much all of my new business at this point. Um is there any Public Comment that theres none . Seeing none. Public comment is closed. Um, next item. Item ten adjournment sf govtv, please show the office of Small Business slide. We will end with a reminder that the Small Business commission is the official public forum to voice your opinions and concerns about policies that affect the Economic Vitality of Small Businesses. In San Francisco. If you need assistance with the Small Business matter, continue to reach out to the office of Small Business. Meetings adjourned. Thank you. Youre watching San Francisco rising with chris manners. Todays special guest is katy tang. [ ] hi. Im chris manners, and youre watching San Francisco rising, the show thats focused on rebuilding, reimagining, and revitalizing our city. With us today is katy tang, and shes talk to talking to us about assistance and Services Provided to local businesses. Can we talk about the role of the office of Small Business . Many Small Businesses are struggling to help. How can you help . Director tang we are here as the citys Central Point of information for all things Small Businesses, so we can help people start, stay, and grow in the city. If you want to start a Small Business, we can pair you up with Small Business advisors, who can talk you through your business plan, help you develop it, whether its regulatory requirements, business permits, and just help you understand the journey that was up ahead. And if youd like to stay in San Francisco and perhaps your business is facing challenges, we can also pair you with a business advisor who can assess your Business Needs and figure out whatside that would best help you. So for example, perhaps you need more marketing assistance or you need to be connected to a loan, a low interest loan or a grant program, if thats available. Those are services we can provide to you, whether youre starting out or trying to stay in San Francisco. And of course, if you want to expand and grow into a new space, we can help assist you with that and help prepare you for the journey ahead. We have a Team Dedicated to assist you you with all the Small Business needs, all the requirements needed to help you establish your Small Business in San Francisco. Do you have an e. S. L. Program for people who want to start Small Businesses . Director tang we have staff that can speak spanish and mandarin and cantonese, and we understand if english is not your first language, it can be difficult, so we want to be as helpful as possible. Excellent. I know that s. F. Shines was created to help with restoring and improvement. Can you tell us more about that . Yes. Its run out of a sister development and its much needed in the Small Business community. If you are trying to improve your storefront, whether its outside, perhaps you want to make some interior improvements, a lot of times, that involves a lot of cost and resources to be able to do so. For example, you may need to hire an architect to submit drawings so you can get your work done. Currently, s. F. Shines is offer a pairing of business sign services. You can be paired up with an architect to get your drawings done to help you start to do the actual work. We hope that people will stay tuned, and you can find out more information on our website. Thats sfgov. Org osb. Lets talk about the shared Spaces Program. Its been a huge success, and Outdoor Dining spaces are very popular. The shared Spaces Program, especially during the pandemic, really helped spaces survive. To have an outdoor space where people could safely gather was critical, and the office of Small Business has been working with these shared spaces during the pandemic. Some may or may not have been up to the citys code regulations, so department of public works and other departments have been trying to figure out what violations are and help businesses come into compliance. The Planning Department and the city have decided that theyll give businesses until 2023 to come into compliance. Also in the meantime, for businesses that want to start new shared spaces, new parklets, that is still an on going program, a new program, so people can always submit their applications for shared spaces regardless whether they started one during the pandemic or not. Do you anticipate there being other shared Spaces Programs in the future and how do Small Businesses go about finding out about them . Small businesses can find out about it by visiting our website, sfgov osb or you can call 4155546134, and we can connect you with the Planning Department and other agencies that would be connected with the shared Spaces Programs. Over the pandemic, businesses have been victimized by vandals and other crimes. How can you help them . The city offers a program called the vandalism relief fund, and this would allow businesses suffering from graffiti or broken windows to apply with the city through our Neighborhood Services division, and you could get up to 1,000 or 2,000 if you submit certain documentation, such as a photograph of the damage or a copy of the receipt or document showing the amount you paid for to correct the incident. We are so excited that the city now has a centralized permit center, where people can come and get their business done, hopefully, in the same day where there are several different agencies, ranging from department of building inspection, Planning Department, Public Health, Fire Department, all here to help people, whether youre building a new business or even new construction, to be able to, again, fit all of your appointments in one day and get things done quickly. So starting in may, our office of Small Business has actually started working out of 49 south van ness at the permit center, and we have a team of two staff who are dedicated to helping Small Businesses through their permitting journey. So we do encourage people, you can come to the permit center or you can email us at sfosb sfgov. Org, and you can communicate with our staff dedicated to helping you with your permitting needs. We hope that people will consider consulting with us before you even sign a lease so that we can help you on the path to success and understanding the journey of setting up a Small Business in San Francisco. Well, thank you so much. I really appreciate you coming on the show, miss tang. Thank you for the time youve given us today. Director tang thanks for having me. And thats it for this show. Well be back shortly. Youve been watching San Francisco rising. For sfgovtv, im chris manners. Thanks for watching. Okay. Seeing no hands raised. I will recess this meeting at good evening this is the