Included should be submitted to the clerk. There are eight supervisors in the chamber. We are now convened as the special meeting of the board of supervisors. Call item number one. A motion for an election to be held and an ordinance amending the business and tax regulation on persons keeping ground floor commercial spaces and commercial districts and for neighborhood commercial [indiscernible] thank you very much. Supervisor ronen . I am happy to make a motion to move this. Great. Thank you, chair fewer, members of the special budget and finance committee. I dont think i have ever been more nervous to talk about something given the amount of work it has taken to get to me. First and foremost, thank you again on behalf of supervisor peskin. His regrets for not being able to be here today. The letter in the legislative file speaks to that. For members of the public, by way of brief background, this was last at the budget and finance committee and we made a number of amendments based on feedback from stakeholders as diverse as the chamber of commerce, to merchant groups, the members of public and commercial brokers who we spoke with. We spoke with supervisors who have expressed concerns. Those amendments are geared and making sure this will not be affecting individuals and landlords. We are trying to do the right thing to activate our storefront so in order to do that, we inserted additional exemptions for vacancy. For instance, if the department of building inspection is continuing to consider a permit application, the property will not be vacant from the time of application to issuance of the permit. And for a year after the issuance of that permit, so you can engage in those actual improvements and improvements to your property. We have proposed a deadline for the City Planning Department to act on a conditional use authorization. If that conditional use is not decided one way or another within six months, the property would not be assessed in that tax year. We have done other things to accommodate concerns, most recently we amended to provide that if a tenant goes out of business with additional time left on a lease, that they are not going to be punished for the additional remainder of that lease and the tax cannot be assessed for the remainder of that lease. We have amended to provide a two thirds threshold for amending this at the board of supervisors , provided it is consistent with the intent of the measure, and to the extent that there are outstanding concerns or unexpected anomalies in the way this is implemented down the line. I think that this should provide some comfort that we can amend to improve and make sure this tax provides its function. I want to thank the Small Business commission. The office of Small Business director for their wholehearted support of this, which is actually the end result of a lot of work with the department and the commission to accommodate concerns that they had, again to the stakeholder commute community, i would also like to thank cosponsors ronen, walton, and haney, and as a final statement, commercial rent control requires an amendment to state law and i truly believe this is the most powerful and effective tool that we have to stabilize rent for existing Small Businesses. For perspective Small Businesses that need more leverage to bring those rents down, and to engage in lease negotiations, and ultimately to try to get these vacancies along our most vibrant commercial corridors built. I am available for questions. Thank you very much. Would this be a good time to make a couple of comments from the conversations we had . Yes, absolutely. I had good conversations with the sponsor. I just wanted to put on the record i know that the timeline of everything is condensed because for many different reasons, but we dont have time to make any additional amendments now before we would put it on the ballot, but i want to talk about some of the things that i thought were important in terms of the conversation that can be considered either internal legislation because of the timeline that we had to get this on the ballot. One of which is more of a technical thing as we are calculating the tax, the way that the legislation talks about linear footage along the public rightofway. I wanted to ensure that we are also not including an ingress or egress that is not related to the business itself. Often times our commercial storefronts on public rightofway his have a walk up to an apartment above the business. It has nothing to do with the business so we want to ensure it is clarified in the legislation that the tax is not being applied to the business for a space that has nothing to do with the business. We will work with the project sponsor on that. Secondarily, and this is a lot more important to me as well, is that one year construction period. Understand that the allowances that are made in this legislation to discuss the permitting, conditional use, so on and so forth, with the businesses, for instance, in my district often are not always fully capitalized. Or always not coming with everything that they have to the table. And often that means slightly longer construction period, or sometimes disruptions in that construction period that are or not the intent or the fault of the Small Business itself. And talk through that with the project sponsor for the sponsor of the legislation. There are a few realworld examples in my district where either the business partner, one of the Business Partners walked away from the field temporarily and they were able to find new capital to finish the project, or simply they were waiting to have the savings enough so they could finally finish the work at hand. And in each scenario took a little longer than a year. My request would be for the sponsor of the legislation to consider an 18 month period for construction. I think that would be more fair. Anything beyond that, then i understand it would make sense for the consideration of this to take place. I probably should have started by saying, in particular in my district, i look at this from two different ways. From the perspective of the people in the neighborhood that are frustrated with the high levels of vacancies, and i think we have one of the highest levels of storefront vacancies in the city, we have worked aggressively to come up with legislation to work with the city, to work with the Small Business community, to work with landlords, to aggressively change the process by which businesses can open up. We went through a permitting process where many of the businesses, if they are principally permitted, would be allowed to go to overthecounter permits. I think it would be healthy as part of this conversation with this ballot measure to have that conversation. I know that myself and supervisor tang did that jointly , but theres other parts of the city that also have those barriers. And im talking about if you are going for a change of means or the use, in many cases that have not been permitted prior. And in our district, these were not allowed on ground floor. We change that is part of our process, and now there are two or three arts organizations that have co located and opened up, which is added to the vibrancy of the commercial corridor, as well as the vacancies. At the same time, some of the businesses that were going in that were occupying spaces that were a different use did not have to go through the cumbersome process of neighborhood notification because we knew in the end it was a principally permitted business. I think it would be helpful to have a parallel conversation on this ballot measure. I think it would be something that the Small Business community would embrace, and i think it would be a complement, not of any contradiction to this legislation. So i am cautiously supportive of this legislation. I think the intent is to change the balance of power with the negotiations between Small Businesses and landlords and i think that is a good outcome. I think it is intended to aggressively deal with our vacancy and i think, as the project as the sponsor of the legislation has said, the intent as we wont collect any of this tax, that we will occupy these empty storefronts, and i think that is also very important. I am cautiously optimistic and supportive of this, but i would like to see a few changes that i have asked for incorporated into the legislation, and then also that we have this citywide conversation about streamlining the permitting process for Small Businesses because i think all of us have heard over and over again from our small merchants and businesses that they want San Francisco to be more friendly and more able to open up Small Businesses in a fast manner. So i think that is important. That does not mean completely remove any neighborhood input, what it does mean, lets have this conversation if we are going to create a tax, we should also talk about creating less barriers to opening up those businesses. That is it. I just wanted to say those few things and incorporate into the record some of the things that i had talked about with the sponsoring of the legislation that we would like to see incorporated into the discussion , into the final piece of legislation. Alternately that would trail this ballot measure. Thank you very much. Supervisor haney . Thank you, chair fewer. Congratulations and thank you to supervisor peskin for your years of work on this legislation and extraordinary leadership in bringing all of the stakeholders together and taking the feedback and amendments. This is obviously something that is critically important to everyone in the city, to all of the districts that we represent. District six has the highest vacancy rate and it has severe impacts on our neighborhoods when we have so many vacancies. Obviously our Small Businesses are struggling and i feel like every week i hear about a business that is closing or being pushed out because of rent , and the way that we can figure out a whole policy agenda to be able to better support them are critically important. It is also, for district six, it is an issue of Public Safety when you have corridors we have so many vacant buildings and vacant stores, and you dont have a lot of activity. There are without people Walking Around her people coming in and out, these are areas where we have a lot of other bad activity that is happening. I hear a lot about areas where we have vacant stories that other suspicious activities are happening there. If we can have more positive things happening, that adds to the quality of life for everyone this is one of the main things we need to do. I appreciate theres more about how we can facilitate speedy approvals and provide a relief from fees. All of that is so important. And also, in my district and other districts, theres also a lot of feedback about how we can address some of the other challenges that Small Businesses face relating to homelessness and Mental Health crisis. All of these things together with this vacancy tax will help to create an environment that is more friendly for not just Small Businesses, which is very important, were more healthy and vibrant neighborhoods generally. Thank you for your leadership. Thank you very much. Supervisor brown . Thank you. Just a couple of points. I definitely agree with supervisor safai that probably the 18 month period is probably more reasonable. I also really want to look at the size of the space because i will take, for example, in my district. They have larger spaces, and they do not want formula retail, but they also have a moratorium Liquor License moratorium, so why restaurants could actually come in, have a Liquor License, and probably take those spaces, they are not going to do that. There is no way for them to even get a beer and wine license and restaurants have a hard time making it without be a and wine. When we are looking at having a taxation on certain corridors like that one, we need to look at the details of it. No formula retail, and then no restaurant that could have beer and wine, then what do we do with the larger spaces . I think that is kind of unfair for landlords that if we are restricting them, then how do we work with these landlords to make sure that there are options for them to get people in, and also definitely streamlining. That is really important. Theres so many of those spaces where ive talked to landlords and they want to rent, but when people come in and they find out it might take them two years to open up, they just do not have the financial ability to do that i think those things have to be in conservation as we move forward. Thank you. Thank you very much. Supervisor walton . Thank you, supervisor fewer. I want to make a few comments in terms of what we are attempting to do for Small Businesses. We definitely understand the issues that exist and how hard it is for Small Businesses here in San Francisco. Supervisor fewer and i are currently convening and talking with our Small Businesses in a working group. One of the conversations is about streamlining the permitting process. I want everyone to know we are listening to our Small Businesses and we are working towards a solution. It is also very real and some of our corridors. Some of it is due to irresponsible landlords and the decision that they make. If you are working hard to get businesses into your community, if you are working hard to get a broader investment in your community, nothing is worse than businesses and potential businesses looking at blighted communities and seeing empty storefronts and vacancies on some of our commercial corridors so this Initiative Ordinance works to address that and i just want to thank supervisor peskin for taking the lead on that, and everyone else who cosponsored so this could be on the ballot. Thank you very much. Lets open this up for Public Comment. Would anyone like to speak on this item . Good afternoon, supervisors. First of all, i want to thank leigh hepner for coming up. He was also at the Council Meeting last week. I also appreciate the fact he understood some of the recommendations. There had been amendments made to this legislation. Not all these landlords are bad actors. Most of them are really good. Some of them have only increased their rent annually. But then you have the ones who are really determined to keep their place is empty for years and years and years. Something has to be done. How long can we put up with this it doesnt impact all your Small Businesses in the area. Also, there are less people on the streets. It will make it safer. We have to look at the characteristic approach. We need to have a character. Why is it only that some can do that and others cant . Lets make it apply to every Small Business that wants to open this city. A conditional use hearing, up to nine months, if not more than that, plus the cost. It should be must much less than that. Formula retail, fills coffee, a local company. Born and raised in the city. They want to move into a place, they have to wait just like everybody else. I think we can look at that. Once again, i do think this legislation is good, but the time element of the supervisors that they pointed out can be a problem. On the whole, it is really good to see this moving along. Thank you for all your hard work thank you. Next speaker, please. We are a local San Franciscobased company that specializes in street retail. I had been attending a number of these meetings. I attended the last Small BusinessCouncil Meeting where supervisor peskins aid was testifying what this ordinance is, and the question was asked, county vacancies are there . And supervisor peskins aid it says he thought it was around 3,500. The Small Business council head said, i think it is more like a thousand, maybe 500. The reality is, the report im providing to you is what commercial Real Estate Brokers used to find property, all the information. It is available on a subscription basis. The reality is, step one, knowing what your vacancy problem is is to know how he vacancies you have. Today we have only 148 buildings that are actually vacant, with 323 Spaces Available in the m. C. Zone. All other vacancies are currently under the permitting conditional use process. If you look at the report that i gave you, you will notice that when a property becomes available, it is a 14 month process before the space gets least. That is clearly falling to the problem of how somebody needs to get a permit to get through the process. It takes time. It is not just formula retail. The reality of formula retail needs to change because 11 stores is no longer a big business. To be a big business, you need hundreds of stores. Thank you very much. Next speaker, please. Hello. Storefronts maybe reducing potential sales sales and subsequent sales tax revenue and the proposed excise tax on empty storefronts might encourage competition in marketing. Such properties resulting in the potential increase in business formation and possibly more favorable lease terms and resulting in the collection of the excise tax on property which remains empty. And excise tax may also have the opposite effect, driving up rent while making it harder to market a property if the ordinance amendment were to pass. Exempting nonprofits from the excise tax may equip such organizations with a competitive advantage providing that such spaces are least or sold on favorable terms, however, the added pressure to fill the space undermines the justification for the assumed process of the excise tax to begin with. The old bank belonged to a nonprofit in the field of healthcare, but it has remained sheltered, shattered, and empty as an eyesore in the neighborhood for many years, absolutely littered wit