tv Government Access Programming SFGTV February 26, 2018 5:00am-6:01am PST
franciscoens. that's great. what i would like to see, when i was at dbi, we would get a meeting, a pipeline report, of projects, you know, like big projects in the pipeline and where they were in terms of, you know, first permit all the way to certificate of occupancy. in theory, we have the technology that we can match these up. i know you're smiling. >> it's scary. >> it's scary, but it would be great if we could do that, right? if we could have a report that sort of has that full picture of how we're doing in terms of, you know, are we obligations and permits that are entitled and actually built so we compare it. and if we had it on a regular basis -- and i'm not saying, like, you know, every meeting,
but on a regular basis, we could forecast and look at trends and see, you know, if things are working in the way we intend. >> so we do have a pipeline report, but we have not been able to do summaries. we've been able to produce the data sets. i think it's being used widely. if we get a new person, we can resume that report. it's been available online for the last eight years. i think it was the only report that we've been producing strictly online. i guess we've not made the effort to really broaden the base for who gets this report. >> is that available -- is that a current report that's online now? on the website? >> well, just the data set. we're hoping to get summaries
because basically, that data set is the basis for what we give you. i suppose we've always assumed that the data nerds were interested. >> you do such great work. i really appreciate all this. >> we would be -- we're hoping to have summaries available for the commissioners as well. we could add that to the list that we submit to you. >> awesome. thank you. >> commissioner richards? >> i will say this, again, mrs. ojeda, if you ever resigned, we wouldn't accept your resignation. i think this is amazing for everybody to get up here and say they all agree that it's much more enriching, and it tells a broader, bigger story. that's exactly what we want. one of the things i struggle with when i look at this, there's a lot of abstract here. moderate, very low, low.
i'm trying to understand anchor it to what would the rent be for a single individual. what were their rent be for aly -- a family of four? what would their price be? >> the information is online, but we also have that information in the housing inventory. >> okay. and it doesn't change much yearly? >> well, it's in increments. i think we have 19 and table 20 in the housing inventory, which says what the maximum rents are by household size and by household income. >> okay. does that change once a year? >> sorry? >> does that change every time we do an inventory? >> yes. >> is there a way, since it's fixed, to just attach it? >> to the report itself?
>> yeah. >> we could do that. >> it would make it even better for people to understand. >> yeah. >> the director is nodding, maybe. [off microphone] >> one of the advantages is it's readable. i don't want to make a 20- page report, but we'll try figure it out. how we do it graphically, just defining what these are so the people on the street can understand. >> so commissioner hillis' suggestion that we put the ami -- >> along -- yeah, somewhere. >> prices. >> in prices? [off microphone] >> how big a report it would be -- >> sure. what's interesting is there's so many different kind of data things in my head floating around. like this whole 1.9 million is demonstrably unaffordable, but everything below that -- would
the zoning administrators based on the assessors, above the numbers that are moderate and affordable, is everything underneath considered affordable? and where would the housing balance report fit into this? i think to commissioner melgar's point, we have all this data, and they're all really good things, but what do they mean when you put them all together, right? this is data. >> commissioner melgar brought up the point of the turn and the tenants and all. what does it all mean? like each thing by itself tells a story, but when they're all put together, it tells a big story. i'm not saying you have to do that, but how would you look at the housing balance report in light of what we have in this report? >> the housing balance report is actually two things. it looks back through the last ten years and shows the trend
over the last ten years. it does include what will be coming up. we have a limited pipeline the same as in this report, a limited pipeline in that only projects that have received building permits are included. >> okay. >> so that's like a shorter term. >> okay. so there's some element of this in the housing balance report on the forward-looking piece. [off microphone] >> it also includes other data, lots of rent-controlled units and evictions. >> yeah. >> great. what would be interesting is something i would consider affordable. we're looking at the place on 79 space 28th street, with an elderly couple in it, it would be 1.2 million because there's an elderly couple in there. if they were to be evicted, they could get 3 million, or whatever the number is going to be. so there's a lot of factors that go into affordability, based on
the human aspect of it that we see. >> yeah. it's actually -- i'm not pretty sure -- >> it's almost impossible. >> the housing balance looks at evictions and the loss of what is considered affordable because they're rent-controlled units. >> based on the tenancy, if someone has been in a rent-controlled unit five years, ten years, or 20 years, you can probably assume if they've been there 20 years, it would be affordable to a low income or middle income, but if they leave, it would go to market rate. that's kind of what happens. there's all these other factors that play into that. one of the things mentioned was the prices for these homes is --
i went to an open house recently. i was amazed that the place was listed for 1.99 million. then the listing agent told me, i think we're going to get 3 million. you can't look at list price. you have to look at the sales price, which you actually get. i was stunned they would list it so low to get a high price. >> i would like to remind the commissioners, too, that one of the tables that we have in the housing inventory includes initial housing prices, the sales prices as well as the initial rents for the new units. >> okay. because i was at an event last night, and i was talking with somebody who was one of these financial engineers for one of the development firms. really nice guy. i said, what are you seeing as the new trend? he said smaller units. i said, well, that's great. for sale, how much are you getting per square foot? >> he said, gosh, we're getting up to $1,700 per square foot because people can afford a million dollar for a 400 square
foot unit or 500 square foot unit or 600. it's amazing it's kind of affordable, but you're getting the small bag of potato chips that's expensive instead of the costco bag. so that's playing into some of the things i'm thinking about when i read this. $1,700 a square foot? really? it's nuts. one last question. with construction costs where they are, we're putting adus into the middle income or modern income category, what does it cost at 650 a square foot, whatever it is, is there a way we can even build moderate income housing and make a profit? or take a loss? how do you build moderate income housing with construction costs so high, beside the bmrs and stuff you kind of take? do you know of anybody doing it? ? maybe it's these 400 square foot
units that are a million bucks. maybe mr. davis could tell us. where is moderate income housing being created in the city at market? [off microphone] >> it's an outstanding question. it's one that we think about quite a bit. is to the project that was delayed, whatever, continued today, star city, the project in the tenderloin, that is co-living. it's a co-living plan. so that's a market -- it's one idea of a market rate solution to try to find middle income housing. whether that's going to pan out or not, it's a lot of out-of-the-box thinking. i would say adus are by design naturally. moderate income housing, i think i would agree that i think kind of thinking of them as moderate income makes sense, but, you
know, i think a lot of the affordability by design is something that we really need to be thinking about, but this co-living is becoming very popular in, like, boston and new york. we have some projects going on in san francisco right now. >> so i think when we say -- what i'm hearing you say is: when we consider moderate income, we can't look at a traditional way of a housing unit. you have to kind of give up something in order to get the moderate part of it, which is the shared living spaces, the shared amenities versus owned. >> i don't think there's a simple answer to this, right? i mean, it's one of those arguments, right, if we waved our magic wand and dropped a million units of housing on stasan francisco tonight, there would be a lot of housing available tomorrow. there's not one magical fix, right? there's a bunch of different things. the inclusioniary legislation
includes bans, even the rental of deed restricted moderate income housing. so that's one way, right? so when we think about workforce housing, right, allowing for more workforce housing, that could be by design moderate income housing. so there's not one thing to do. there's 25 things to try. i think it's in the eyes of the beholder which is most effective. >> thank you for your perspective. >> you're welcome. >> and being able to drill down each week is great. >> i want to point out that this is an imperfect report. not because the report is great, but the rhna is a limited view of the universe, you know, and that's what this is. it's a pipeline report on how
we're doing with our rhna obligations. and there's so much more to the world than that. as you point out, commissioner richards, you know, the moderate income is a tricky thing. when i think of moderate income, i'm thinking of families. they're not going to go into an sro unit. some are because they have to, but is that what we want? so if we're going to be looking at a spectrum of unit sizes and designs and also income, you know, whether or not we're meeting our rhna obligations is not going to answer that question. it's much more nuanced and complicated than that. perhaps what we want is to have a different conversation, you know, about how to weave all these things together at some point and what data that we need to have that conversation, and that's just much, much bigger than this. you know, for this pipeline report and how we're doing with
our rhna or not doing with our rhna, i think this is really great. i appreciate the expansion of it and the efforts that you guys have made to meet people's needs. so thank you. >> commissioner richards? >> one last question. maybe ms. rogers or ms. switchesski. for sbi purposes, which number is used on which one of these tables? seriously. i know i'm way below. is it the ones incrementally over seven years, like we should be? like you said we should at at 70%. we're only half that. which is the triggering number? >> commissioner, we don't have the exact information, but we believe the sb-35 looks at a four-year prorated cycle,
checkpoint through the eight-year cycle. it's broke into four-year chunks. there's basically two income tranches. 80 and below. so it's the two lowest brackets, and then there's the overall target. >> okay. if you could clarify that at some point, that would be great, in the future. >> the report was published if we were meeting the targets, and san francisco is only not meeting the 80 below target. for january, we're meeting those tarts. -- targets. >> okay. thank you, ms. ojeda. >> retail study and neighborhood commercial districts informational presentation and retail to office conversions
within union square informational presentation. >> good afternoon, commissioners. i' know we are pressed for time. items 17a and 17b are being called together, but they're actually going to be two separate presentations. item 17a is a state of the retail sector within the neighborhood commercial districts. it's the result of a study conducted by the office of
economic and workforce development. item 17b will be the second presentation and will focus on the c3 zoning district. with that, item 17a, i would like to introduce lisa pagon from the office of economic workforce development who will be presenting the presentation along with strategic economics. >> good afternoon, commissioners. i'm lisa pagon, director of policy and planning at the office of economic and workforce development. thank you for including oawd today in these two informational hearings. the first one is an overview of our recently completed study. state of the retail sectors, challenges and opportunities for san francisco neighborhood commercial districts. and this will be the presented by our retail study consultant, ally nimero from strategic
economics who is here with us today. following allison, i will follow data about vacancy rates in our corridors and considerations that oawd and planning are looking at. you know, the reason we have an interest in conducting this study, you know, it stems from our evolving policy and programmatic work to support districts and from our understanding that the retail industry, you know, has changed dramatically in the last 40 years since the neighborhood commercial district zones were first established. stakeholders in some neighborhoods in san francisco has observed the long-standing retail uses that once served the neighborhood with needs are disappearing and being replaced. depending on the neighborhood, by personal services and restaurants and sort of experience-oriented uses, financial services and others that are not traditionally
considered retail. so at the same time, neighborhoods are struggling also in certain areas of the city with the lack of diversity retail they want. so with that, we wanted to study what's going on with the retail sector to help inform us on our policies and the programs that owad has, how we can make them stronger. with that, allison? >> thank you, lisa. so as lisa mentioned, strategic economics conducted three related issue briefs on the subject of retail in san francisco. the first is focused on national retail trends for the city and the second is the factors that contribute to a successful san francisco and city and the third is about the cost and channels of doing business in san francisco. i'm going to review some of the highlights from the study today, focusing on our conclusions and the implications for the ncds,
most parts of the country. so the good news is that san francisco's retail industry has been somewhat insulated from the national trends. retail and food sales in san francisco have grown more quickly than the national average. that has a lot to do with the city's competitive advantage for retail. the city and the region's strong economy, a local culture that values eating and shopping locally, and strong tourism trends. however, it appears that sales may be levelling off in the last couple of years and even declining a little bit from the anecdotal data that we have, it looks like rents for commercial space in the ncds are starting to plateau.
lisa is going to speak more about the data late e but there's survey data that shows increasing vacancies in some ncd corridors. and what brokers tell us is fewer traditional retailers are seeking space, but there's increase interest in ground floor space from uses like personal services, fitness centers, restaurants, and medical services. in addition to the national trends that are affected the retail industry, there are also some other specific challenges for san francisco businesses. these include employee recruitment and retention challenges related to the high cost of living in the bay area and low rates. there are some local challenges that are related to land use regulations and permitting. so permitting requirements can add cost and time, significant cost and time to the process of opening a business in san francisco, and some laws that
have been passed to try to protect traditional retailers have unintended consequences, for example, making it more difficult for retailers to adapt to changing conditions by incorporating a food and beverage serving into their retail use. and then finally, public realm challenges like concerns about cleanliness, order, safety, long-term vacancies and other things that contribute. so in response to the rising costs and competitive retail market, many businesses are adopting creative strategies. these strategies aim to sales and revenue streams. some of these strategies include developing a stronger presence on social media, working with delivery services, expanding sales, and experimenting with ways to provide customers with a more interesting experience.
some businesses are thriving by using these strategies, and there may be policies and programs that can support businesses in adopting these types of changes, but at the same time, it's important to keep in mind that some businesses do not want to change or cannot overcome fundamental challenges, like a lack of sufficient market demand or for products and services. so i'm going to move into our conclusions now. based on the study we've developed four main conclusions, each with a set of implications for businesses and ncds. i'm going to go through those four conclusions. the first is to thrive in a challenging business environment, retailers need to embrace new technologies. i've discussed some of these in the past few minutes. online sales, social media, app delivery services are examples. businesses may benefit from technical support. adjust inventories or make other
adaptations. the curb policies they be revisited. it's important for businesses to be able to work with app-based delivery services, but that has implications for what's happening at the curb. we need to maintain public access and the overall health of the corridor, as well as making sure that independent small businesses can remain viable. these are important to conversations around transit planning in the future. the second conclusion is that retailers need to be flexible and creative and provide customers with a more interesting experience. examples of retailers doing this is workshops, hosting events, and serving food and beverages to bring shoppers into the store. in order to accommodate this flexibility, land use policies they need to be modified, particularly around the area of serving food and beverages in a retail setting. concluded in three focuses, the
mix overuses in the ncds to help with customer base. generally businesses rely on each other and in other uses in the district to generate foot traffic. for example, customers may come to an ncd to eat lunch or get groceries or get their hair done and stay to shop. retail demand include cultural uses and offices and housing. in order to support a diverse mix of uses, new ground floor retail should include a range of store front sizes, and it should be adaptable to diverse uses. office and housing uses could be located above the ground floor or on the periphery. new development to the strongest locations could help reduce vacancies.
finally, by offering an attractive, fun experience, ncds can help retailers draw foot traffic. enhancing the public realm is critical. supporting high capacity district management organizatio organizations. thank you. >> so what is a healthy vacancy rate? it's an interesting question. i think it varies a lot for perception -- from one community's perception to another. for us, as economic development specialists, we like to see between 5 and 10% vacancy, in general. lower than 5, rents and leases go up. there's not enough room for change in the corridor.
we work for actively with certain areas. again, in general, that's what we look at in terms of the healthy range. so this data shows citywide data. this data shows that since 2009, we've had a pretty stable citywide vacancy rate. it's 3.2%. lease rates have come down slightly as the vacancies are starting to inch up between 2016 and 2017 citywide. that's that. in terms of our districts that have active programs in through invest in neighborhoods, the highest vacancy corridors average 16.4%. so definitely certain parts of the city and certain corridors
have vacancy concerns, understandably. so we have programs working in these areas. 6.6%, definitely about a third of our corridors and our neighborhoods, we saw an increase of about 2% vacancy since 2016. there's definitely pressure on retail, and that we acknowledge. in terms of policy and program changes, you know, we're looking at the strong personal assistance portfolio and how we can learn from this study and help businesses adapt to the technical opportunity for retail. we're going to continue supporting district management programs to support merchant associations and business districts. i think that's key in keeping a vibrant corridor. we're looking at development regulations and design
guidelines, talking with planning departments about, you know, needing to look at curb management issues with sfmta. we're talking with dbi on their program that enforces vacancies, and the supervisors had a hearing on that to look at how to strengthen that program. with that, i'm going to let audrey finish up and talk specifically about planning department related possibilities. >> all right. so just very quickly to kind of tie this all into planning, the planning department has been coordinating with oawd to better understand how their findings can be incorporated in our work. one of the most significant conclusions we've reached thus far is san francisco's neighborhood commercial districts are very unique, which makes a one-size-fits-all legislative fix kind of impossible. so with that, in better comprehending the challenges,
the department citywide division has been conducting a number of projects, including the ones on the slide. the projects set to take place next fiscal year will help the department to better develop recommendations that will benefit districts based on their specific needs. so in terms of our initial conclusions, we have kind of these set of three recommendations. the first is pretty self-explanatory, which is that we should continue to support these projects that look at the ncd districts so we can look at their strengths and weaknesses. also, allowing a greater use, which includes allowing better use, co-working spaces that would only be open for dinner service, would be an example of this. and the third is to look at our office uses. thank you. >> thank you. we recognize these are somewhat
distinct. i mean what you gave us can help inform the more granular discussion on union square. and then we'll take public comment. >> good afternoon. we're switching gears now, going to the downtown, which is a lot different than the neighborhood commercial district. in march of 2017, the planning commission held a public hearing on office conversions in the downtown retail according, or cr3 districts. at that hearing, a report was submitted that showed trends versus national trend. since then, they've conducted research analysis connected to tenant space sizes, specific to c3pr. i'm joined here by my colleagues. lisa pagon, who just spoke to
you. she'll walk you through the research. the department suggests policies to help guide decisions related to office conversions in the district. based on the studies and analysis, the department has created a framework of limitations for non-retail sales and services use by size and location that will go over in more detail after lisa's presentation. >> hello again, commissioners. lisa pagon. in addition to the retail study presentation you just heard describing the national retail sector trends and its impact on retail san francisco, i'm here to present data on union square specifically. we hope that this combined information will city the planning department in policies regarding union square. it's a very important designation for residents and visitors, as we know.
so we came a year ago and talked with you about some data that we had done on union square. so now with the retail study's information and the additional updates, this is the c3pr zone. union square is the pink area that we're talking about, the boundaries, as you can see north bush, east kearnny, fifth and powell. according to a study that was done by the international downtown association, union square is an economic employment multiplier for the city and provides cultural amenities for all to enjoy. it's home to 15 structures, two plazas, open spaces, ten event
buildings. 37 hotels. the businesses generate 2.1 billion in annual sales. they generate 13% of of our city's tax revenue, totalling $21 million in sales tax revenue annually. it has 7% of the total retail space in the city and 24% of the city's retail businesses. 11% of san francisco's total jobs and has 7,700 of our tourist hotel rooms. according to the report by san francisco travel, union square seems to be the most visited. we're looking at what policies we should encourage in the future to help keep this a vital neighborhood for consumers and retail. so what's interesting about the data you're seeing in this
chart, union square -- well, there's with the charts that highlight how the city's retail vacancy and lease rates interact and how retail trends compare to the whole city. they show that union square retail lease rates have out grown the citywide lease rates by a wide margin in the years after the last recession. per wakeman data collected through a field survey at union square, the vacancy was 4%. so very low, below the 5% we were talking about, which is actually a little bit higher than the citywide average we saw at 3.2%. both citywide and union square vacancy rates are low. citywide retail vacancy and lease rates, within the last eight years, showing consistently very low vacancy rates and increases in lease rates. so everyone is concerned about lease rates and retaining their
retail, but because we have low vacancy rates, it contributes to that. and while the rates recently cooled down a little bit from the high of $45 a square foot to $41 a square foot there's still 26% higher at the end of 2017 than in 2010. so that's a pressure that retailers are facing that want to lease. the rents are high. the second chart takes the citywide trend in orange and overlays union square statistics. what we see is from 2010 to 2017, citywide retail lease rates went up 26% during the same period union square retail rates went up to $58 per square foot. so that's a challenge. clearly, there's strong demand for union square retail. there's low vacancy rate and with rate this is high, combining with increase
competition from online counterparts, the experience-based industry, we understand that is why retailers are looking to reduce their overall size and reduce their space. a big national trend is these larger retailers are shrinking in size and so retailers are looking at sort of smaller size floor plates. so 86% of non-retail sales and services uses and commercial spaces are 5,000 square feet or less in union square. what we're looking with in this union square chart is what were the sizes of existing firms now. should we convert to other resources, what is it now? so looking at the market, we were looking at what is the non-retail sales and services uses in the district, including
professional services and general office and how they fit into the real estate market. to do this, we looked at square footage data from dunn and brad street for the zip code. this data shows that 86% of the non-retail sales and services are 5,000 square feet or less. so you have retail and services, which include offices that are open to the public, but then you also have other types of office uses that are not necessarily open to the public but all of them combined, the retail plus the office, 78% of firms are 5,000 square feet or less. so 5,000 square feet or less is the norm there today. overall, 82.7% of firms take up 5,000 square feet or less. that's important for us to
understand. union square ended 2017 with the highest office rents in san francisco. this is true across all market classes, despite the older class being class c office, the area close to transit and the desirability in the office market. the office mix is comprised of class b and class c space. about 81% of office space in union square. citywide, the majority of existing office is class a. so union square is very heavily class b and class c. so with that, it helps us understand that, you know, there is pressure, obviously, to convert retail to other office uses because the lease rates are so high in union square for
office, but there also is a strong retail economy still in union square, especially as we're seeing larger stores, national stores go to smaller and need smaller spaces. >> thank you, lisa. >> so with that, the department has crafted some recommendations. first, we would like to suggest non-retail sales and services that do not serve the general public be prohibited on floors one through three. second, non-retail sales and service uses, including general office, would be permitted on the fourth floor and above when 5,000 square feet or less. and lastly, nonsale services greater than 5,000 feet would need authorization. we would need to work further to
refine some sort of criteria that the planning commission would use to weigh those cases that came before you. these limitations attempt to strike a balance between providing greater flexibility and a diversity of uses within the retail core while also protecting against office uses that could serve as a retail center. that concludes our presentation. >> thank you. we'll open this up for public comment. i have one speaker card, but others are allowed to speak. please line up on this side of the room. ben zato. welcome. >> good afternoon, commissioners. my name is ben zato. i'm here as the hayes valley neighborhood association. i would like to offer a few thoughts on the retail report, which i thought was rich and useful, as were some of its recommendations. it's worth noting it's a dense
city. we have our microbureaucracies that are worth understanding with the national trends. street scrape, it's important to everyone. when retail spaces stay vacancy, everyone loses. the neighborhood does less active street scrapes and great businesses can't get started. i want to speak to one of the challenges. many of the vacancy store fronts, when you think of vacant store fronts being too large. we see this in newer buildings, i can draw out the neiman building. developers want one large tenant, are not impacted when there's no tenant, but it's hard to get tenants in there. sometimes there are also bureaucratic challenges like conditional uses that are required for certain usage above
a certain square footage. smaller space are. there's a plant shop in hayes valley that opened up in this incredibly small retail front. it's 200 square feet. they're selling plans and flowers, and it's the sort of thing they couldn't try out in a larger space. so we may need to try some creativity with some of these larger spaces to get there. what could we incentivize or encourage in these spaces. pop-up or allowing or encouraging or incentivizing pop-ups, creative ways of multiple tenants using one space, slightly different uses, you know, repair plus sales in one space. and from the process side, you could look at temporary uses that would streamline a permitting process to get a potential business own tore the
point where they're open and not having to face the costs and the risks and the hearings of traditional businesses and have a path to a longer term use, if it makes sense. so i would like to ask the staff to look at what we can do to invent vise smaller, more flexible and easier spaces for clients. also, figure out how to incentivize on the landlord side and consider new projects as they come through entitlements. have them detail things in advance so we know they're not going to sit vacant over the long term. thanks. >> good afternoon, commissioners. tommy lewis. we're happy to see this report. we're one of the people the consultants talked to. i love how they brought together
our recommendations and lots of others in the report. there's a lot for you to think about. one is we need a retail strategy for the city. we sort of pointed this out in a piece that we published today and in two pieces we published on livable city site earlier this year. we don't really have one. we don't have a land use element of our general plan. so we're out of compliance with a state law there. a lot has changed in retail. we need to reflect that. we also need to really unction the role of retail in creating walkable communities and sustainable communities and livable communities. that's nowhere reflected in the city's plan. nowhere do we say we want retail because it creates walkable communities, eyes on the street, all those things. it's not explicit. the new state general plan guidelines really talk about communities, there's a strategy for all kinds of things, health, equity, livability, sustainability. we really need to embrace that as a city. retail occurs in a lot of different districts.
when you think about neighborhood retail, we think of c districts. mixed use districts allow retail. there's very different rules. some have maximum use size, some don't. some have controls, some don't. some have accessory use flexibility, others don't. when you think about retail controls, you can't look at one district at a time, but take a comprehensive look. the majority of the city zoning districts, i think there's 113 of them now, do permit retail, and they all benefit from lively ground floor retail, all the ones that do. the strategy needs to address that. use size, you heard that. you need a mix of small and large. we hear from neighborhoods all the time. they all do retail at the max. you have control. you have discretion through large project review. 309, 321, whatever. when large projects come to, you and they have 15,000 square feet retail. you can say, hey, you can do one
at that. we want a range. that create as diversity of businesses and a diversity of business opportunities in the city. curb management is important. you do sometimes have opportunities. like 701 viae lens za so avoid curb cuts. all of that is more or less in another department. urban design, section 145 of the code is active street front uses. your staff often ignores it. a new building at polk has no store fronts. there's not a single stitch of retail or any commercial use. it's all kind of residential uses. so that's something you need to be more diligent about as a department. we have some good retail controls, about activity on the floor, transparency and all that. they just need to be enforced. >> thank you. >> hi. i'm gail lau.
i'm president of the neighborhood association. i want to call out a couple of things do you i've noticed over the years as you have projects before you. it's defining what we mean by large retail spaces n. most cases, 2,400 square feet is considered small to most develop ares. we're think, as you heard earlier, 200 square feet. 800 square feet is actually a doable space, especially with retail support that goes along with that small space. i would ask you, as developers come forward, to ask them how they're going to be utilizing that ground floor space. there's a project on 17th at south ns. it's a nice condo project. when that was before the housing acts and coalition. i asked the question, what is going to go on the retail section. they said, oh, it's going to be a big restaurant. well, if you look at the context of that corner, putting in a 2,400 square foot restaurant is
gentrification. it is not activation. the idea of activation is it's in the context of the neighborhood. gentrification is imposing a structure on a neighborhood. which, if you look at sf weekly, we just published a hayes valley report about why we're pretty successful with our merchant corridor. part of it is small retail spaces. it is a key point that allows companies to come in. now we're at rates that are comparable to union square, but it also allows us to look at nima, which is sitting there vacant, which it has been since the building was built. why can't that be built into temporary uses? i would ask you to look at developers who are presenting you with spaces at the ground floor and see how they plan to use it. we have avalon bay, which is 4,000 square feet. it's been languishing for years. they're finally getting their
du ducks in a row so the microbrewery will go in there. it's been complicated for everyone. the property owner, avalon bay, has not been cooperative. there's been a lot of hiccups in that process. in the meantime, the space is vacant. focus on developers who say they're going to follow the planning code, but be specific and ask them how they're going to be using that space. thank you. >> thank you. next speaker, please. >> good afternoon. we appreciate the opportunity to discuss these issues with you today and the commission's ongoing efforts. i'm keeping my remarks specific to union square.
this latter point is one in which we can all agree. the retail economy is changing. staff presented that today, and the real estate needs of retailers are changing as a result. we've analyzed the issues before and presented them to you. the presence of retailers on upper floors in union square is decreasing significantly, and vacancy is increasing. this is not just our opinion. this is reflected in the data. i would like to submit this data for the record today. given these changes, we urge the commission to take a flexible view of proposed non-retail uses on upper floors in union square. we submit that there may be circumstances under which the commission would agree that a non-retail use on the third or even the second floor may be appropriate. factors that could be considered in making such a decision just to summarize a few, could
include the location of the building, how long the subject space has been vacant, the other existing uses in the building, the architecture and design of the building and the size of the building's floor plates and not whether the floor plate is large or small, but what implications its size has on proposed uses in a particular building. we urge the commission to develop criteria and a framework for considering such proposed uses on a case-by-case basis. some have expressed concern that allowing non-retail and office uses in upper floors will damage the retail character of union square. we would submit just the opposite. if evaluated and managed properly, allowing such uses and activating these spaces will bring people to the district and, in fact, vitalize the retail character of the union square and ensure its long-term stability. thank you. >> thank you, mr. dunne.
next speaker, please. >> good afternoon again. i don't mean to be nostalgic, but i was just thinking about the fitzu building. it's where sach's fifth avenue used to be. i only say that because when we think about what we're going to change and demolish, that project had a lot of anger and activity, and not everything does, but i think it's up to you and the staff to think about that. it's an extreme example, but it's an example i wanted to make. the other thing i wanted to say is when i'm looking at these three recommendations for the neighborhoods, i think that examine office controls, recommendation number three, in the ncd districts, that's a pot
potato. can you imagine 24th street all becoming offices, or union street all becoming offices because it's empty? it's a hot potato that somebody needs to think about. in a couple of weeks, you're going to have the change in use for the big building in mid market with all the class. it looks like misconi west. maybe think out of the box and convert it to housing. maybe that's not in your purview, but it's certainly something to consider. thank you very much. >> thank you. >> overhead, please. i have had my office in the cdr since 1980. it's right there. it's a flood building. it's between ellis and eddy and
market. a lot of streets. i've been following this as a person who is there and as a person who follows neighborhoods intensively. there's a lot of things that the staff has done that's a good idea. i want to put things into context. neighborhood districts, ncds affect muni and affect pedestrians. those need to be at the top of the planning department staff as they review projects. muni needs a flow of pedestrians that feels safe going to the muny stop. and the lighting is important, but i've become aware of it. it's a problem. it needs to be in the forefront of what the planning department and dbi actually look at.
the second thing is the hearing that was recently held by supervisor fewer talked about the vacancy rate and the vacancy tax. it became clear looking at the way the city monitors vacancies is really inefficient because dbi is sitting on their hands and not paying attention. i don't think the planning department is doing much better. ironically, there used to be an advocate who wanted to tax property. if it was vacant, it was a higher tax. he was a san franciscoen. that was 100 years ago. a large part of the tenderloin and chinatown also affect retail occupancy because when you have
residential and men that didn't cook, they went out to cafes a lot for their meals. so there was a lot of cafes in neighborhoods in mission, in south of market, in tenderloin because they were part and parcel of the economy of that area. there's a lot of specklatulate . i would ask you to encourage your staff to look at what's out here. it would require changes in the way planning department staff looks at projects. thank you. >> thank you. next speaker, please. >> good afternoon, planning commissioners. my name is karen flood, executive director of the union
square business and improvement district. i would like to speak on the c3. i would like to thank the oewd. we sat down with them to talk about what we've experienced in union square. our board members consist of property owners, retailers, we have a broker on our board, so we hear their experiences every day. we experience walking up and down and seeing the vacancy. we would support the study about allowing for flexibility. we have heard a couple of projects that have come before you, the 222 suter building, also the macy's men's building. these are results, too, of large department stores leaving. storeses are downsizing. they want smaller footprints, as has been said. macy's men, women's, consolidating. these big department stores are
not coming. i think you're looking at a case-by-case basis that's really important. that's sort of what we came up with when we were trying to come up with a policy in our publy affairs committee when we were determining what to support. size and configuration of the building, it's important to have a street presence. if you want retail on the second floors and above, you have to go through the lobby to get up there. there's no signage. it's tricky from building to building. is it facing union square park. before that, it was office on the third floor and above. we would like to continue being part of the conversation and we would really be pushing for more flexible. >> thank you, ms. flood. >> any more public comment on this? seeing none, we'll close public comment. >> i've got several different thoughts on this. i agree that the number one thing is for san francisco to keep active and vibrant