Legitimization Application Deadline Approaching Soon

As avid readers of our update know, the Eastern Neighborhoods (EN) Legitimization program provides “amnesty” for existing uses that were legal under the old pre-EN zoning but had no building permit or other authorization to back that up, and are no longer permitted uses under the EN zoning. The legitimization program was intended to only apply for a short time after the Eastern Neighborhoods Plan was enacted, and the Planning Department will no longer accept legitimization applications after January 18, 2012.

There is still time to get a legitimization application on file. Legitmization can be especially important to properties that were rezoned from an M district to a PDR district, as the PDR district allows a very limited number of uses – and office use is generally prohibited. If you are interested in determining the eligibility of your property for legitimization, or want to take advantage of the legitimization program, contact our office at (415) 567-9000 for more information.

2012 Condo Conversion Lottery Tickets Now On Sale

Ticket sales for the 2012 Condominium Conversion Lottery commenced on Monday, November 28th. Lottery tickets may be purchased at the Department of Public Works, Bureau of Street-Use and Mapping (BSM) at 875 Stevenson Street, Room 410. The ticket cost is $275 per application. The lottery application may be obtained at the BSM office indicated above, or online at www.sfgov.org/site/sfdpw. Ticket sales will end on Friday, January 20, 2012. No lottery application will be accepted after 4:45 pm on January 20, 2012.

Multiple tickets may be available for applicants providing proof of previous unsuccessful participation in the condo conversion lottery. Note that only building owners or authorized agents bearing a letter of authorization from the building owners will be allowed to purchase lottery tickets. See the DPW website above for further information.

The 2012 Condo Conversion Lottery drawing is scheduled to be held on Wednesday, February 1, 2012. The drawing will be held in Room 400, City Hall, 1 Dr. Carlton B. Goodlett Place. The condo conversion lottery consists of 200 units. A lottery winner’s list and standby list will be available from BSM 7 days after the drawing.

Reuben & Junius, LLP has extensive experience processing condominium conversions, as well drafting condominium and homeowners association formation documents. For further information or assistance with the condo conversion lottery, please contact Jay Drake.
The issues discussed in this update are not intended to be legal advice and no attorney-client relationship is established with the recipient. Readers should consult with legal counsel before relying on any of the information contained herein. Reuben & Junius, LLP is a full service real estate law firm. We specialize in land use, development and entitlement law. We also provide a wide range of transactional services, including leasing, acquisitions and sales, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work.

Copyright 2011 Reuben & Junius, LLP. All rights reserved.

 

 

It has been eight years since the City created its last Historic District (now called “Landmark Districts”), that being the Dog Patch Landmark District, established in 2003. For those that don’t follow historic preservation issues and rules closely, a “Landmark District” is the highest level of protection that a group of buildings in the City can receive. Landmark Districts are reserved for the City’s most important historic areas and collections of intact historic buildings. In this case, the proposed Duboce Park Landmark District was identified and documented as eligible for the National Register back in 2008. The proposed district is composed of 89 residential buildings within the area bounded by Scott, Waller, and Steiner Streets.

On December 7, 2011, the Planning Department is hosting a drop-in event at the Harvey Milk Center where Planning Department staffers will be ready to answer your questions and explain how the district works and what it means to property owners in terms of what they can do to the exterior of their building. For those that are interested, the Duboce Park packet for that Neighborhood Outreach Meeting can be found at this link. http://www.sf-planning.org/index.aspx?page=2849

If the district is ultimately created (which requires approval of an ordinance by the Board of Supervisors), many exterior alterations to the homes within the district would be required to go through a new permitting and entitling process and receive a “Certificate of Appropriateness.” In some cases (i.e. any exterior addition, for example), this new requirement will trigger a hearing at the Historic Preservation Commission (HPC). For certain work designated as “minor alterations”, the approval power can be delegated to the planning staff without a hearing. However, the staff’s approval of that “administrative” Certificate of Appropriateness without a hearing is subject to an appeal right, and any member of the public may appeal that administrative approval directly to the HPC (requiring a public hearing before the Certificate can be either approved or denied).

The Department does point out that a Certificate of Appropriateness (CA) is not required for any interior alterations or seismic work or ordinary maintenance and repair. That said, owners within this proposed district should understand that many exterior changes to their home will likely be subject to this new process.

In its materials, the Planning Department staff states that “Landmark District designation ensures that rehabilitation and new construction is compatible with the neighborhood’s historic character.” We respectfully disagree. There are already significant controls in place both under the California Environmental Quality Act and the existing (and well used) Residential Design Guidelines, and the Planning Department’s UDAT process. And of course any exterior alteration is already subject to Section 311 notice and possible Discretionary Review.

In our opinion there are more than enough regulations in place to protect the historic fabric of this neighborhood. It is unfortunate that the City believes that yet another level of process (and more costs and fees) is necessary.  And speaking of costs, we think it would be appropriate as part of the outreach to notify residents within the proposed district about the new fees and costs that would be triggered by the CA process.

That said, the materials prepared by the staff that inform the public of what types of changes to the exterior of each building façade will trigger what type of review is certainly helpful and should guide homeowners in decisions with respect to what things trigger what new process. Many of the standard repair and maintenance work appear to only require an administrative CA. Of course, any new construction in the district or exterior alterations not listed by the City or visible additions proposed for the historic structures will require a full Certificate of Appropriateness which means a hearing in front of the Historic Preservation Commission.

The issues discussed in this update are not intended to be legal advice and no attorney-client relationship is established with the recipient. Readers should consult with legal counsel before relying on any of the information contained herein. Reuben & Junius, LLP is a full service real estate law firm. We specialize in land use, development and entitlement law. We also provide a wide range of transactional services, including leasing, acquisitions and sales, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work.

Copyright 2011 Reuben & Junius, LLP. All rights reserved.

 

 

 

On November 10, 2011 the Planning Commission approved proposed Planning Code amendments regarding student housing and sent the proposed ordinance to the Board of Supervisors for further action. The next procedural step will be a hearing at the Board of Supervisors Land Use Committee, which should be scheduled within approximately thirty days. The proposed ordinance would amend the following sections of the Planning Code:

Section 102.36 would create a city-wide land use definition of “Student Housing”. “Student Housing” must be owned, operated or controlled by an accredited post-secondary educational institution, and may take the form of dwelling units, group housing, or single room occupancy building (“SRO”). Student Housing will be permitted wherever a dwelling unit, group housing or SRO is permitted in the zoning district in which the property is located. Usable open space requirements will be reduced by 1/3 the amount normally required for a dwelling unit.

The required minimum dwelling unit mix in Eastern Neighborhoods districts will not apply to Student Housing buildings. Conversion of existing residential units to Student Housing is strictly prohibited by Section 317.

Conversions from Student Housing to any form of residential use that is permitted by the underlying zoning district would be approvable by the Zoning Administrator, provided that all Planning Code requirements have been met or appropriately modified for the form of residential unit desired.  Dwelling units that are less than 350 square feet plus a bathroom, including Student Housing, would have the same reduced open space requirements (1/3 that of regular dwelling units) as group housing and SROs, pursuant to proposed amendments to Section 135(b)(2).  A change in use to group housing within a Neighborhood Commercial District would require a neighborhood notice pursuant to Section 312. Section 401 would be amended to allow a Student Housing project to consist of all or part of a building.  Most Student Housing will be exempt from the Inclusionary Housing Program requirements pursuant to Planning Code Section 415.3(c)(5)(C)(iii).

The purpose of the proposed ordinance is to encourage the production of new Student Housing, while prohibiting the conversion from any form of existing housing to Student Housing. The incentives provided in the ordinance to construct new Student Housing include the exemption from unit mix requirements within RTO, NCD, DTR, and Eastern Neighborhoods mixed-use districts. In addition, open space requirements for small dwelling units are reduced by 1/3, and an exception is provided from the Affordable Housing requirements.

The issues discussed in this update are not intended to be legal advice and no attorney-client relationship is established with the recipient. Readers should consult with legal counsel before relying on any of the information contained herein. Reuben & Junius, LLP is a full service real estate law firm. We specialize in land use, development and entitlement law. We also provide a wide range of transactional services, including leasing, acquisitions and sales, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work.

Copyright 2011 Reuben & Junius, LLP. All rights reserved.

 

 

While the final votes have just been tabulated, political consultants are looking ahead to local and statewide races in 2012. The 2011 elections will be remembered for the complexity, oddity, incomprehensible (choose your adjective) ranked choice voting for the Mayor, District Attorney and Sherriff’s City and County of San Francisco races and the widespread use of campaign contributions to independent expenditure committees.

Independent expenditure committees

After the United States Supreme Court in 2010 ruled in Citizens United vs. Federal Elections Commission that corporations, labor unions and individuals had in essence a First Amendment right to spend without restrictions in support of or to oppose candidates outside of campaign law restrictions, independent expenditure committees have been key contributors to federal, state and local races. The United States Supreme Court, in a 5-4 decision, held that the First Amendment prohibits government from censoring political broadcasts in candidate elections when those broadcasts are funded by unions or corporations. The decision struck down certain provisions of the McCain-Feingold Act that prohibited corporations and unions from broadcasting election communications. Justice Kennedy wrote for the majority: “If the First Amendment has any force it prohibits Congress from fining or jailing citizens or associations of citizens, for simply engaging in political speech”. The State of California’s Fair Political Practices Commission has acknowledged the increasing role of these committees and an effort is underway to make these committees accountable and require greater disclosure. Independent expenditure committees in the San Francisco’s mayoral race funded widely distributed paperback books and an MTV worthy music video, that has received more than 385,000 youtube hits. While President Obama was opposed to independent expenditure committees in his 2008 race, it is unclear what 2012 holds. It is estimated that independent expenditure committees are prepared to spend hundreds of millions of dollars in the 2012 congressional and presidential elections. California State Representative Bob Wieckowski will be introducing a resolution in the Assembly requesting that Congress draft a constitutional amendment that would overturn Citizens United. He is joined by other state legislatures and local governments that are introducing similar resolutions.

State ballot propositions

As of today’s date, there are 26 state initiatives circulating for signature and another 22 pending with the State of California Attorney General’s office for 2012 according to the Secretary of State. It is not expected that all of the pending and circulating propositions will qualify for the ballot on November 6, 2012. The proposals focus on: public employees’ ability to bargain collectively and limitations and reductions in retirement benefits; taxes on oil and gas extractions and dedicating that revenue toward education; restrictions on obtaining concealed weapon permits; “Amazon” sales tax; regulation of marijuana; ending the death penalty; foreclosure modifications and term limits. Requiring parental consent for teenage girls under 18 prior to receiving an abortion may also find its way onto the ballot. Governor Brown may introduce budget and tax related initiatives as well.. Three initiatives are already set for the November 6, 2012 election, including a tax on cigarettes to fund cancer research and an 11.1 billion dollar bond measure to upgrade California’s water supply. We will also have a chance to vote on an amendment to term limits-currently State senators are limited to 8 years in office and State assembly members are limited to 6 years, for a total of 14 years. The proposition will limit an office holder in the Assembly or Senate to a combined total of 12 years in either chamber.

Ranked Choice Voting

On Election Day, Supervisors Mark Farrell and Sean Elsbernd called for repealing ranked choice voting, and they hope to place a charter amendment on the ballot in June.  Farrell and Elsbernd will need the support of six members of the Board of Supervisors or sufficient signatures to qualify the initiative for the ballot. Supervisor and mayoral candidate John Avalos has promised to oppose the initiative and has requested that the City Attorney’s Office draft legislation to compete with Farrell and Elsbernd’s proposal. After redistributing second and third choice votes in eleven rounds of voting for the next Mayor of San Francisco, battle lines are quickly being drawn for 2012.

 

The issues discussed in this update are not intended to be legal advice and no attorney-client relationship is established with the recipient. Readers should consult with legal counsel before relying on any of the information contained herein. Reuben & Junius, LLP is a full service real estate law firm. We specialize in land use, development and entitlement law. We also provide a wide range of transactional services, including leasing, acquisitions and sales, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work.

Copyright 2011 Reuben & Junius, LLP. All rights reserved.

 

 

 

The Court of Appeal recently provided a reminder that the courts can and will use their powers of equity to fashion interests in land belonging to another. In Tashakori v. Lakis, the owners of a landlocked undeveloped lot brought an action for rights of ingress and egress over a shared driveway on their neighbor’s property so they could access their property from the street. (196 Cal.App.4th 1003). The Court of Appeal upheld the lower court’s decision to create an equitable easement across a portion of the Lakises property, in this case the “burdened owner”, on behalf of the Tashakoris, or the “benefitted owner”.

The Test

The court applied a three part “relative hardship” test to determine whether an equitable easement would be created in this instance, without the burdened owner’s approval:
First, the benefitted owner must be innocent. More specifically, his or her encroachment must not be willful or negligent. Here, the benefitted owner made a diligent and good faith effort to determine whether their lot had an easement to access the street. The court determined that the benefitted owner reasonably relied on inaccurate representations by the real estate broker and prior owner that such an easement existed benefitting their property.

Second, unless the rights of the public would be harmed, the court should enjoin the encroachment if the burdened owner would suffer irreparable injury regardless of the injury to the benefitted owner. Here, the burdened owner never used the shared driveway and did not pay for the upkeep of the driveway. Furthermore, the shared driveway was used for ingress and egress by two other single family residences. Therefore, the court said that use by one additional family (the benefitted owner) would not provide a significant burden on the land on which it was located.

Third, the hardship to the benefitted owner must be greatly disproportionate to the hardship caused to the burdened owner by the continuance of the encroachment and this fact must be proved by the benefitted owner. In this case, the benefitted owner proved they would be irreparably harmed because their lot would essentially be unusable as they would not be able to legally walk onto their own land.

No Damages?

The burdened owner not only appealed the decision granting the easement itself, but also the lower court’s decision not to award any damages to the burdened owner for granting such a property right to the benefitted owner. The Court of Appeal acknowledged that typically when the court creates an easement, the burdened owner is normally entitled to damages. However, in this case the burdened owner did not demonstrate that their property would suffer any diminishment in value as a result of permitting the benefitted owner to use their shared driveway to access the benefitted owner’s property.

The Holding

The Tashakori decision highlights that the courts will use their equitable powers to create property rights in lands of another, by weighing the level of harm to the parties. Furthermore, the courts will not necessarily compensate the burdened owner, unless such party can demonstrate actual damages. As San Francisco properties can have easements burdening and benefitting them, or more often than not no easements in place but a clear need to have access to a neighbor’s property (for example to do repairs or maintenance on a property where there is no side yard and the building is built to the property line), this case makes it clear that if necessary courts are willing to impose burdens on properties over the objection of their owners.

Art Update

The Planning Commission voted unanimously last week to recommend approval of the Chiu/Lee ordinance with the changes recommended by staff. Staff recommendations included elimination of art commission review for art included in development projects. They also make clear that any in lieu fee is an option to be exercised by developers, i.e. not mandatory. The Mayor and Sup. Chiu agreed to the changes.

Staff also recommended that the fee be expanded to commercial developments over 25,000 s.f. in the Eastern Neighborhoods and South of Market districts. Representatives of the Mayor, Sup. Chiu, and the Arts Commission said they wanted time for more outreach before moving forward with this component. The Commission did not formally recommend the wider fee be included, but “strongly recommended that the Board consider” including a citywide art requirement that would apply to both residential and commercial developments larger than 25000 sq. ft.

The issues discussed in this update are not intended to be legal advice and no attorney-client relationship is established with the recipient. Readers should consult with legal counsel before relying on any of the information contained herein. Reuben & Junius, LLP is a full service real estate law firm. We specialize in land use, development and entitlement law. We also provide a wide range of transactional services, including leasing, acquisitions and sales, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work.

Copyright 2011 Reuben & Junius, LLP. All rights reserved.

 

Responding to the concern that the rights of unit owners in a Common Interest Development (CID) to rent their units should be protected, the California legislature has enacted Senate Bill 150.  This new statute limits prohibitions on the rental of units in CID.  The new law will go into effect on January 1, 2012.

Background

A homeowners association (HOA) for a CID may generally impose reasonable restrictions on rental or leasing of units in the project, such as minimum lease periods, requiring that a copy of a lease be provided to an HOA, and requiring that a lease be subject to the project’s governing documents (such as CC&Rs, Bylaws and HOA Rules and Regulations).  Some HOAs have also adopted prohibitions on renting units in a project, including imposing a cap on the number of units that may be rented at any given time, or an outright prohibition of rentals.

Many HOAs believe that such rental prohibitions ensure that residents have a stake in their community, promote maintenance of the property and preserve property values.  Moreover, Fannie Mae, Federal Housing Administration (FHA), and some banks and insurance providers, may also look at projects with high percentages of rentals in a negative light.  This may limit the ability to obtain mortgage financing for units in such projects or result in higher insurance rates.

On the other hand, rental prohibitions may create hardships for unit owners who desire to rent their units when faced with family illness or death, job relocation, military service or other exigent circumstances.  In the current housing market, it may take time to sell a unit, requiring an owner to temporarily rent until the unit is sold.  Rental prohibitions may also prevent investors from buying and renting units, even when such investor-owners may help HOAs financially struggling due to owner bankruptcies and high vacancies.  SB 150 has been somewhat controversial, with legitimate concerns being expressed by HOAs, unit owners and other interested parties.

The New Rules

SB 150 adds Section 1360.2 and amends Section 1368 of the California Civil Code, part of the Davis-Stirling Common Interest Development Act.  The key points of SB 150 are:

• An owner of a CID unit shall not be subject to a restriction in a governing document that prohibits rental or leasing of that owner’s unit, unless such restriction was effective before that owner purchased his or her unit.  Such owner would be exempt from a rental prohibition that became effective after the owner purchased his or her unit.

• The exemption from such rental prohibition applies to an owner who purchased his or her unit before the restriction became effective.  Once the owner sells his or her unit, the new unit owner would be subject to such restriction.  However, certain transfers involving family members, probate, trusts and business entities would not cause an existing exemption to be lost.

• An owner who would otherwise not be subject to a rental prohibition may consent to be subject to the restriction.

• Owners are required to disclose the existence of any such rental prohibition to prospective purchasers before sale of a unit.

A rental prohibition that becomes effective after January 1, 2012 will not apply to existing owners who purchased their unit before the restriction become effective – as the restriction was not in effect when they purchased their unit.  New owners purchasing after January 1, 2012 would be subject to such restriction – as the restriction was in effect when they purchased their unit.

Since the new law is not effective until January 1, 2012, an HOA could impose a restriction and avoid the impact of SB 150 by modifying the project’s governing documents, so long as the restriction becomes effective before January 1, 2012.  The typical approach would an amendment to the project CC&Rs.

If you have questions or would like further information on SB 150, please contact Jay Drake.

Special thanks to law clerk Melinda Sarjapur for her research on this topic.

 

The issues discussed in this update are not intended to be legal advice and no attorney-client relationship is established with the recipient.  Readers should consult with legal counsel before relying on any of the information contained herein.  Reuben & Junius, LLP is a full service real estate law firm.  We specialize in land use, development and entitlement law.  We also provide a wide range of transactional services, including leasing, acquisitions and sales, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work.

Copyright 2011 Reuben & Junius, LLP. All rights reserved.

At long last, the proposed Planning Code amendments for the Western SoMa area plan were released earlier this month. Planning Code amendments are where the policies of the plan get translated in to cold, hard zoning rules that apply to properties within the plan area.

The rezoning map remains the same as previous versions. New commercial districts will run along 9th and 10th Streets from just below Mission Street to Harrison Street. A new neighborhood commercial district will run along Folsom Street, the new “main street” of Western SoMa, from 7th Street to 10th Street. Remaining properties north of Harrison Street in the Western SoMa area will be rezoned to residential and mixed use districts. Most of the area below Harrison Street will be rezoned to SALI – an extremely restrictive zoning district similar to the PDR districts of the Eastern Neighborhoods Plan. The north side of Townsend Street from 4th to 7th Streets will be rezoned to an office mixed-use district.

Some high-level highlights of the Planning Code amendments include:

Office Use. Similar to the Eastern Neighborhoods Plan, office use (and all uses) is proposed to be principally permitted in all buildings designated as landmarks, contributory to a historic district, or eligible for the California Register. The one exception to this rule is in the SALI district. In non-historic buildings, office is permitted on either the first or second floor in the commercial districts above Harrison Street, permitted without limitation in the office mixed-use district, and not permitted in all other districts.

Residential Use. Residential use is heavily encouraged north of Harrison Street. In the commercial districts, almost no non-residential uses are permitted above the second floor. In the residential districts, non-residential use is either prohibited or only allowed up to a 1:1 floor area ratio. In the general mixed use district, retail is also limited in most cases to 10,000 square feet. No density limits apply to residential uses in these districts.

SALI District. As expected, the SALI district is looking very similar to the PDR districts that were created as part of the Eastern Neighborhoods Plan. In the SALI, residential and office uses are not permitted. Retail uses are only permitted up to 25,000 square feet with conditional use authorization. Industrial, entertainment and arts uses are the most unrestricted uses in the district.

Eastern Neighborhoods Process and Fees. Projects within the Western SoMa plan area will be subject to Large Project Authorization from the Planning Commission, as was established by the Eastern Neighborhoods Plan. There are no proposed fees yet included in the Planning Code amendments, but it appears the Planning Department is considering applying the Eastern Neighborhoods fee to the Western SoMa area.

Stabilization Policy. A stabilization policy has been an important goal of the Western SoMa task force since it was formed. Such a policy would “meter” the approval of new market rate project based on a maximum ratio of market rate to affordable housing and jobs to dwelling units. No stabilization policy has made its way into the proposed Planning Code amendments, and the staff report for the Planning Commission states that the Board of Supervisors is “requested” to enact such a policy after the Western SoMa Plan is approved.

Design Standards. Area-specific design standards are proposed for the Western SoMa area. These standards will apply based on zoning district. There are also design standards that specifically apply to large site development.

Adoption hearings for the Plan are scheduled for early 2012. We’ll keep you posted on the progress.

The issues discussed in this update are not intended to be legal advice and no attorney-client relationship is established with the recipient. Readers should consult with legal counsel before relying on any of the information contained herein. Reuben & Junius, LLP is a full service real estate law firm. We specialize in land use, development and entitlement law. We also provide a wide range of transactional services, including leasing, acquisitions and sales, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work.

Copyright 2011 Reuben & Junius, LLP. All rights reserved.

 

 

Supervisor David Chiu has 344 pages of amendments (“Amendments”) in store for the San Francisco Planning Code. Many of these changes make good sense and will lower the procedural hurdles for transit-oriented development. However, the Amendments include yet another round of revisions to the City’s complex parking regulations. These changes threaten several projects – including those that have been approved or in the pipeline for years – with expensive new approval requirements. Many downtown parking lots would be put out of business with passage of the ordinance, and building owners could be required to remove parking entries to their buildings when making additions or changing uses above a certain size.

The Planning Commission is scheduled to weigh in on these myriad changes on October 20th.

GIVE AND TAKE ON RESIDENTIAL PARKING

Since 2005, San Francisco has amended its parking rules nine times. Maximum parking limits have replaced minimum parking requirements in many of the dense neighborhoods in the northeast part of the City. In most districts, some minimal amount of residential parking is permitted “by right.” Additional parking-up to an absolute maximum-is allowed with Planning Commission, or in some cases, Zoning Administrator approval.

In C-3 (Downtown) Districts, additional parking is approved as an “exception” as part of Section 309 permit review by the Planning Commission. Section 309 approvals are mandatory for all significant new construction downtown, so the parking exception is handled as part and parcel of applications required of any project. Requesting it doesn’t require separate applications or major fees, nor does it trigger new appeal rights that project opponents can use to stall a project.

With Supervisor Chiu’s Amendments, “as-of-right” parking downtown will double from one space per four dwelling units to one space per two units. However, project sponsors will no longer be able to seek one-to-one parking for family-sized units, and a conditional use (“CU”) will be required to build the parking maximum of three spaces per four units.

Within much of the Van Ness Special Use District, changes in the parking rules are more dramatic. Right now, one-to-one parking is required for residential projects and up to 1.5 spaces per unit are allowed by right. Under the legislation, maximum parking would be limited to one space per two units by right, or three per four units with a CU.

The new CU requirement is consequential. It is among the most expensive entitlements; application fees are just shy of $100,000 for most sizable projects. The CU requirement will also make the approval process more convoluted and political. Unlike most entitlements, which are appealable to the Board of Appeals, a CU appeal goes to the Board of Supervisors.

Because the Amendments lack a grandfather clause, projects that have already been approved but not broken ground could have to go back to the Planning Commission for a new approval and/or reduce the amount of parking they propose. Pipeline projects would be faced with similar new costs and procedural obstacles after months or years of Planning Department review.

We understand that the Planning Department will be recommending a grandfather clause for approved projects downtown. However, to our knowledge, no relief will be recommended for projects on the Van Ness Corridor or pending downtown projects. As the City considers the tenth revision to its parking regulations in less than seven years, it should protect pending and approved projects from sudden changes in the ground rules.

ON DOWNTOWN PARKING LOTS…JUST A TAKE

With the adoption of the Downtown Plan in 1985, the City banned permanent surface parking lots downtown. However, existing parking lots were allowed to continue indefinitely. This longstanding provision would be eliminated, meaning that parking lots would be subject to immediate closure or be forced to seek a new conditional use to operate every two years.

DRIVEWAY AND SIGN REMOVAL REQUIREMENTS

Much of San Francisco’s building stock predates the Planning Code and many buildings do not comply with current zoning. For years, the Planning Code has allowed these buildings to be expanded or undergo a change in use, so long as there is no increase in the extent of noncompliance. This clear protection gives property owners certainty that upgrades will not trigger requirements to radically alter their buildings; it directly serves the City’s interest in providing for the adaptive reuse and upgrade of the City’s aging building stock.

The Amendments reverse these clear, effective policies in several areas. For example, on the City’s 30+ protected streets where new parking entrances are limited or prohibited (i.e. transit preferential streets, bike lanes, etc.), the Planning Department “may” require project sponsors to remove or reduce the size of driveways or subbasements when certain additions or changes in use occur. There are, however, no criteria to guide planners in exercising this discretionary power. This is exactly the kind of uncertainty that will both discourage property owners from upgrading their buildings and create the impression-if not the reality-of arbitrariness in the planning process.

In a similar vein, noncomplying signs, which can now remain until the end of their normal life, will have to be removed when the business associated with it ceases operation or moves. Code-complying business signs will have to be removed within 90 days of the business ceasing operation.

OTHER CHANGES, MANY BENEFICIAL

Though the Amendments have a number of problems, they do make beneficial changes to the Planning Code. For example, the residential density limit downtown will be eliminated, relieving many projects from a CU requirement. Affordable housing developments downtown will be exempted from the floor-area-ratio limit, again eliminating the need for an expensive CU. As well, the transfer of development rights would be more widely permitted among downtown use districts.

NOTICE TO AFFECTED PARTIES

To our knowledge, no formal city notice of the legislation has been given to project sponsors that could be affected by the new parking regulations or to parking lot operators who would be forced to close their businesses. The Planning Department’s concise summary of the legislation and recommended changes will not be available for public review until one week before the Planning Commission hearing. In a City that gives a 30-day notice to every owner and occupant within 150 feet whenever a homeowner wants to expand their kitchen, the limited notice and opportunity for comment on this 344-page proposal comes up wanting. We encourage affected parties to contact the Planning Department, Planning Commission and Supervisor Chiu’s office to express their reservations about the substance of the amendments, as well as the lack of notice to affected parties.

 

The issues discussed in this update are not intended to be legal advice and no attorney-client relationship is established with the recipient. Readers should consult with legal counsel before relying on any of the information contained herein. Reuben & Junius, LLP is a full service real estate law firm. We specialize in land use, development and entitlement law. We also provide a wide range of transactional services, including leasing, acquisitions and sales, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work.

Copyright 2011 Reuben & Junius, LLP. All rights reserved.

 

 

On October 27, the Planning Commission will hear a proposed amendment to San Francisco Planning Code Section 429, which currently requires that any new building in the Downtown C-3 District of at least 25,000 feet include a work of art equal to at least 1% of the construction value onsite in a privately owned public open space, or onsite and clearly visible to the public, or on adjacent public property or, in the case of a hotel, in a publicly accessible lobby.

The artwork to be provided must be permanent and not merely architectural detailing of building features. There are extensive “Fine Arts Guidelines” that further describe how the cost of the art is determined, the process for incorporating the art into the development, etc. In the 25 years since the adoption of the Downtown Plan, an average of about one project per year has added new art to what is now a permanent public gallery of lasting significance. Although the cost can be significant, most developers understand that the public art component of their project can be an enhancement contributing to the overall perception of quality of the building. Although there have been limited exceptions over the years allowing developers to direct these funds to alternative uses (the Dome at City Hall and restoration of the old Mint Building), in the absence of some compelling reason, developers would prefer that the money they spend on art remain associated with their projects.

In July, the Mayor introduced an alternative ordinance which would amend Planning Code Section 429. The new ordinance would give developers an option to contribute all or a portion of the art fee to a City fund dedicated to support public art. The amendment would establish a Public Artwork Trust Fund funded through these contributions, which would pay for the creation, installation, exhibition, conservation, preservation and restoration of temporary and permanent public art. On its face, it would be hard to understand how any developer would freely elect to divert construction funding for art to some offsite use, not directly benefiting the project itself. However, the ordinance includes a new step in the Section 429 process whereby the Art Commission would be given jurisdiction to review all onsite art proposals. Since judgments regarding art are necessarily subjective, it is easy to see how the Art Commission’s review might be different and more critical than the existing process which includes a review only by the Planning Commission. In fact, the proposed amendments to the ordinance would invite the Art Commission to become an arbiter knowing that their negative reaction to an art proposal could cause the developer to pay in lieu moneys to the proposed newly formed “Public Artwork Trust” rather than continuing to attempt to provide the art onsite.

The Planning Department is reviewing the proposed ordinance and will be providing comments at the hearing before the Planning Commission on October 27. While portions of the amendment may be well intended, the language and mechanics of the process include significant potential for arm twisting developers and project sponsors to divert their funding offsite. At a minimum, the option to elect to pay an in lieu fee ought to be entirely voluntary. The Planning Code Section 429 Art Program has been a success with the Planning Commission reviewing proposals. To date, the Art Commission has not been included in the review of art provided by project sponsors under San Francisco Planning Code Section 429. The addition of an Art Commission review adds time, expense, and uncertainty. Subjective review of the Art Program by the Art Commission could, in of itself, convince developers to offer all or a portion of their required 1% art budget to the newly created “Public Artwork Trust” rather than take on the uncertainty of a second Commission hearing.

We will further report on the Planning Department’s recommendations and the results of the hearing at the Planning Commission on October 27.

The issues discussed in this update are not intended to be legal advice and no attorney-client relationship is established with the recipient. Readers should consult with legal counsel before relying on any of the information contained herein. Reuben & Junius, LLP is a full service real estate law firm. We specialize in land use, development and entitlement law. We also provide a wide range of transactional services, including leasing, acquisitions and sales, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work.

Copyright 2011 Reuben & Junius, LLP. All rights reserved.

 

 

Right to Hire Survives

Thankfully, Assembly Bill 350 (Solorio) has been defeated, and building owners will continue to be free to switch building service providers (janitorial, window cleaning, landscaping, etc.) without being held hostage by an existing relationship with a service provider. In our previous update of May 20, 2011, we warned that AB 350 would have placed incredible burden on commercial building owners to retain and pay the employees of an existing service provider for at least 90 days, even if the owner decided to hire a new company to perform the designated services. This legislation also mandated that any purchaser of commercial real estate retain the designated contractor’s employees. The new statute would have applied to hospitals, commercial properties, restaurants, grocery stores, and hotels. Oddly enough, the purported “right to work” goal of the statute could have put the employees of “new” service providers out of work.

After a heavy lobbying effort that was led in large part by the California Building Owners and Managers Association, the bill was defeated on September 10th of this year. This is welcome news for the commercial real estate industry as this additional government mandate would have limited owners’ rights and stymied efforts to reduce operating costs. In this uncertain economic period, many people believed that AB 350 had the potential to further depress the market and result in additional job loss.

Building Owners Must Disclose Energy Use

The California Energy Commission has confirmed the implementation schedule for AB 1103. This statute requires non-residential building owners to disclose the energy benchmarking data and ratings for the most recent 12-month period to a prospective buyer, tenant of the entire building, or lender providing financing to the entire building. In our update of October 15, 2009, we informed you that the implementation of this requirement had been delayed to avoid potential negative impacts on pending real estate transactions. Even the California legislature realized that more regulations could harm the market’s recovery efforts. The Legislature delegated the implementation schedule to the California Energy Commission.

Although the disclosure requirements are not complicated, owners should be aware of this additional item to add to the transactions checklist to avoid potential liability. Here is the implementation schedule:

• July 1, 2012 – Buildings with more than 50,000 square feet
• January 1, 2013 – Buildings with 10,001-49,999 square feet
• July 1, 2013 – Buildings with 5,000-10,000 square feet.

Gas and electric companies are required to maintain the required records and upload the data to the US EPA’s ENERGY STAR Portfolio Manager. So, the information should be readily available by visiting this website (www.energystar.gov) and setting up the building’s account. The California Energy Commission has also published a helpful flowchart for accessing the information on its website at www.energy.ca.gov/ab1103/documents/index.html.

The issues discussed in this update are not intended to be legal advice and no attorney-client relationship is established with the recipient. Readers should consult with legal counsel before relying on any of the information contained herein. Reuben & Junius, LLP is a full service real estate law firm. We specialize in land use, development and entitlement law. We also provide a wide range of transactional services, including leasing, acquisitions and sales, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work.

Copyright 2011 Reuben & Junius, LLP. All rights reserved.