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This Week In Land Use – Sept. 21, 2011

September 21, 2011April 12, 2017 | Andrew Junius

Making it easier to rebuild nonconforming uses

This week the Planning Commission is considering amendments to Planning Code Section 181(d), clarifying procedures that will apply to rebuilding of nonconforming uses destroyed by fire or other calamity. Generally speaking, nonconforming uses cannot be enlarged, intensified or relocated under longstanding provisions of the Planning Code. However, there has always been the recognition that nonconforming uses destroyed by fire or other calamity could be rebuilt to their existing size and nonconforming use, so long as the rebuilding started quickly. Current Planning Code Section 181(d) states that an owner may restore the former nonconforming use “provided that such restoration is permitted by the Building Code, and is started within one year and diligently prosecuted to completion.” It has never been very clear as to what “starting a project within one year” really means. These welcome amendments will provide some guidance and flexibility for owners placed in a difficult spot as a result of severe damage to their property.

If adopted, following a fire or other event that destroyed an owner’s nonconforming use, the owner will be able to continue the nonconforming use so long as within one year they either (1) file an application for a building permit for alteration, repair or replacement for the damaged or destroyed building, or (2) submit to the Planning Department evidence of a resolution with the owner’s insurance company accompanied by a schedule of payments to the owner and a commitment by the insurance company to pay, or (3) submit to the Planning Department plans and evidence of efforts to the owner to conduct pre-application review with the Department of Building Inspection or the Planning Department. This covers pretty much everything an owner would likely be doing if they were serious about re-building quickly, which is what the City wants.

For those unfortunate enough to be in the situation where they have been struck by a fire or other disaster that destroys their building, these provisions will make it much easier to preserve the nonconforming use going forward without the possible draconian cutoff of “starting a restoration within one year.” The Planning Department is recommending that the Commission support these changes and we hope they do.

HPC Update

Today the Historic Preservation Commission continues its review of changes to Articles 10 & 11 of the Planning Code. These portions of the Planning Code contain specific zoning provisions that apply to historic buildings throughout San Francisco. This effort ran aground several years ago after the passage of Proposition J which created the HPC. Since its creation, the HPC procedures have been somewhat in limbo pending the amendments to Articles 10 & 11. This time around, it looks like they might get it done. Review of Articles 10 & 11 by the Planning Commission will follow the HPC’s review. As we get closer to get final adoption, we will keep you informed of any major changes to Articles 10 & 11.

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.

This Week In Land Use – Sept. 14, 2011

September 14, 2011April 12, 2017 | Andrew Junius

After a summer hiatus, the R&J update is back, ready to provide you with the latest on land use and real estate law and developments in San Francisco and the Bay Area. This week, we provide an update on the Redevelopment dissolution fight and the status of the West SoMa Plan.

Supreme Court to Hear Challenge to Redevelopment Dissolution, Laws Mostly Stayed for Now

As expected, the newest stage of the Redevelopment dissolution fight is in the courts. On August 11, the California Supreme Court agreed to hear a challenge to the two bills the California Legislature passed and the Governor signed in June. To recap, the first bill effectively dissolved all Redevelopment Agencies in the state, effective October 1, 2011. The second bill allowed Redevelopment Agencies to continue past that date if they make massive annual payments to the state.

The California Redevelopment Association and the League of California Cities, among others, brought a lawsuit challenging the bills. In addition to agreeing to consider the suit, the Supreme Court stayed the first bill, with the exception of the provisions prohibiting an agency from taking on additional liabilities, and stayed the entirety of the second bill. The court agreed to an expedited calendar and expects to rule on the suit by January 15, 2012. Effectively, Redevelopment Agencies will continue to exist on October 1. However, it is likely that those agencies that have passed continuation resolutions with the expectation of making a payment to the state and remaining in existence will be barred from taking on additional liabilities or conducting new business until the lawsuit is resolved.

In local Redevelopment news, Fred Blackwell, director of the San Francisco Redevelopment Agency, has agreed to take a position with his hometown of Oakland as its Assistant City Administrator. He will oversee the Community and Economic Development Agency (which houses Oakland’s Planning and Building Departments) as well as several other departments.

Planning Commission Begins to Consider Western SoMa Plan

Anyone looking at the Eastern Neighborhoods Area Plan map will notice a big hole between Eastern South of Market area and the Mission/Showplace Square/Central Waterfront areas. This was due to the fact that during the Eastern Neighborhoods rezoning process the Western South of Market community got the Board of Supervisors (with a big push by then Supervisor Daly) to agree to remove the West SoMa area from the larger rezoning so it could go through its own, unique rezoning process. That process has continued on for several years now, and the Planning Department is gearing up for its ultimate adoption, likely in early 2012.

In preparation for that event, the Planning Commission is holding two hearings this month and next on the West SoMa plan. Last week, the Commission considered the current version of the West SoMa community plan.

Proposed rezoning districts appear to have remained relatively the same from the previous draft of the community plan. Those areas above Harrison Street are generally zoned for mixed use and neighborhood commercial uses. Most areas below Harrison Street fall within an art and industrial zone where residential and office uses are not permitted and arts and industrial uses are encouraged. The north side of Townsend Street between Fourth and Seventh Streets is proposed to be rezoned to encourage new office uses.

As for height limits, much of the West SoMa area is currently zoned for heights between 40 and 50 feet. Much of the area above Harrison Street is proposed for heights of up to 65 feet. The north side of Townsend Street is zoned for heights of up to 85 and 95 feet. The expanded office use controls and higher height limits along Townsend Street are planned to accommodate high tech and other office uses located near the CalTrain station.

The plan also calls for some unique zoning proposals. On large development sites, projects can take advantage of increased height limits if community benefits such as open space, child care facilities and streetscape improvements are provided. In the art and industrial districts below Harrison Street, projects can take advantage of increased height limits if ground floor space for arts uses are provided for the life of the project.

The Community Plan includes no significant discussion of the proposed stabilization policy that the Board of Supervisors considered earlier this year. In an earlier update, we reported that the stabilization policy adopted by the West SoMa community task force called for placing strict limitations on development when certain ratios of market rate housing to affordable housing and the number of jobs to the number of housing units were exceeded. The Board of Supervisors adopted a watered-down resolution, urging the Planning Commission “to ensure that policies to maintain the historical balance between affordable and market rate housing and the jobs/housing mix are incorporated into the Western SoMa Community Plan.” More details on this policy should be forthcoming during the adoption process.

Next month, the Planning Commission will hold an informational hearing on the Planning Code amendments related to the West SoMa Plan. This will be the first time the public will see the actual Planning Code changes, which will set use controls, development fee amounts, and design controls for the area. We’ll update you when the amendments are provided.

AB208 – New Life For Stalled Subdivision And Condo Maps

July 20, 2011April 12, 2017 | Andrew Junius

Throughout the Bay Area and state, subdivisions and condominium projects have been delayed during the downturn in housing construction over the past few years. Many residential and mixed-use projects have stalled in the middle of the mapping and entitlement process, before the project’s map has been recorded. Delayed maps are at risk of expiration, with the potential loss of vital project approvals and permits. In recognition of these critical issues, and in an effort to bolster the housing industry, the California legislature enacted a new law to enable developers to extend the life of tentative and parcel maps and related state agency approvals until such time as developers are able to complete such stalled projects. The law was signed by the Governor last week and takes effect immediately.

Tentative Map Extension

Assembly Bill 208, enacted on July 15, 2011, extends for 2 years any existing unexpired tentative map, vesting tentative map or parcel map that would have otherwise expired before January 1, 2014. To be eligible for the extension, a map must have been valid on July 15, 2011, and set to expire before January 1, 2014. The 2 year extension is in addition to any other extensions provided under state law or local ordinance. For those maps extended by 2009’s similar state measure, AB 208 will provide an additional 2 year extension. See Cal. Govt. Code Section 66452.23.

Related State Agency Approvals Also Extended

Important for those projects receiving other state agency approvals, such as a San Francisco Bay Conservation and Development Commission Permit or California Coastal Commission Coastal Development Permit, the new law also extends for 2 years related state agency approvals for those projects that extend their maps under AB 208.

Local City & County Approvals Not Included

AB 208 only applies to tentative maps, vesting tentative maps, parcel maps and related state level approvals. The new law does not extend local city or county approvals or permits. Conditional Use Permits, Variances, Special Use Permits, building permits and other local approvals remain subject to local regulations with respect to expiration periods and available extensions, if any. However, in San Francisco the Planning Commission has extended certain existing local approvals for some projects. Interested property owners or developers should contact Andrew Junius concerning San Francisco project approvals that may be eligible for an extension.

The Trade-Off

For those projects utilizing the 2 year map extension under AB 208, there are a few trade-offs. In order to offset potential adverse impacts on local cities or counties from multiple extensions of tentative or vesting tentative maps, AB 208 modifies Cal. Govt. Code Section 65961 by (i) reducing from 5 years to 3 years the period of time after recordation of a map during which a city or county is prohibited from imposing new conditions on a building permit if such conditions could have been imposed as conditions of the previously approved tentative or vesting tentative map, and (ii) eliminating the prohibition on a city or county imposing new local fees upon the issuance of a building permit.

If you have any questions or would like further information on AB 208 and its applicability to a particular project or map, please contact Jay Drake.

Oakland Extends Entitlements; SF Adds Flexibility to Affordable Housing Program; New SF Census

July 15, 2011April 12, 2017 | Andrew Junius

Recognizing Economic Climate, Oakland Provides Blanket Entitlement Extensions

Late last month, the Oakland City Council enacted an extension of all non-expired entitlements in the city through December 31, 2012. The Council’s action extends a previous citywide extension of entitlements in the City that was to expire December 31 of this year.

Councilmembers Brunner and De La Fuente, sponsors of the resolution, cited the continuing weak housing and credit market in support of the measure. The councilmembers acknowledged that, faced with the prospect of re-entitling a project, builders may instead choose not to develop a property, leaving a dilapidated or underused lot in place. Ultimately, they recognized that “when an entitled project is built, it results in many benefits for the community and the City,” including new housing, jobs, infrastructure and taxes.
The extension applies to all entitlements granted under the Planning Code as well as creek protection permits. Take note, however, that existing entitlements are not automatically extended. A project sponsor must submit a request with the City and pay an administrative extension fee of $450.97. The extension will not apply to properties that have been issued a citation pursuant to the City’s blighted property ordinance.
This is one area where San Francisco could follow Oakland’s lead. The San Francisco Planning Commission has heard a number of entitlement extensions since the economic downturn in 2008 – some projects having requested an extension several times now.

San Francisco Planning Commission Adds Flexibility to Affordable Housing Requirements

The San Francisco Planning Commission is also to be commended this week for making a common-sense policy change to its affordable housing program. Last night, the Commission approved a resolution that delegates to the zoning administrator the authority to administratively approve a project sponsor’s request to change the way they comply with the affordable housing program. This removes the costly and timely step of having to go to a public hearing before the Planning Commission for such a move.
Last year, the Board of Supervisors amended the affordable housing program to comply with the recent Palmer decision. Among other things, it gave a project sponsor of a residential project who has elected to provide below-market rate units on- or off-site the ability to instead pay the affordable housing fee up to the date that building or site permit addendum is pulled without obtaining Planning Commission approval. In an effort to encourage on-site below-market rate units to be built, the policy adopted last night would allow a project sponsor who has chosen to pay the affordable housing fee the ability to build for-sale below-market rate units on-site instead, without Planning Commission approval. The zoning administrator can approve this move administratively, which would be subject to appeal to the Board of Appeals. Project sponsors would have this option all the way up to the first building permit or site permit addendum being pulled.
In addition, project sponsors of residential projects that were entitled prior to January 24 of this year (the date the affordable housing program amendments went into effect) did not have the option of paying the affordable housing fee after they had elected to provide on- or off-site below-market rate units. The policy would also allow projects entitled prior to January 24 to switch from providing on- or off-site units to paying the affordable housing fee.
This policy shift will provide more flexibility to project sponsors and will avoid spending unnecessary time on a Planning Commission hearing for a relatively modest change to a project. And the Planning Commission could use the break – they didn’t conclude their meeting until 10 p.m. last night – after starting in closed session at 10:30 a.m!

Updated Census Numbers Confirm Housing Growth in Districts 6, 10 and 11

The Planning Department has crunched the latest 2010 Census numbers and are now able to provide information on population growth in the city by supervisorial district. As expected, District 6, consisting of South of Market and Mission Bay, was the fastest growing district over the past decade, adding 24,590 people. Districts 10 and 11, covering the Bayview, Potrero Hill, Visitacion Valley, Excelsior, and other neighborhoods grew the next fastest, with roughly 5,400 new residents each. The greatest population loss occurred in District 9, consisting of Bernal Heights and parts of the Mission and the Excelsior. It shrank by 5,370 people.
All of this data will pave the way for redistricting the supervisorial districts next year. Earlier this month, Mayor Lee appointed the final members of the nine-person resdistricting task force. The group must present its redistricting plan by April of 2012.

Buildings and Birds

July 1, 2011April 12, 2017 | Andrew Junius

Bird-safety has become an issue in San Francisco, and the City’s Planning Code will likely include new provisions in the near future that are designed to protect our fine feathered friends. There are approximately 400 resident and migratory species of birds in San Francisco, due to the diverse habitats of the Bay Area and its position on a coastal migration path known as the Pacific Flyway. Studies show that birds living in or flying through large cities face special hazards. Research suggests that buildings and windows are the top killers of wild birds in North America. As a result of this increasing awareness, San Francisco is likely to join cities like Toronto and Chicago that have recently passed ordinances creating mandatory “bird-safe” building guidelines.

On June 14, 2011, the Planning Commission will hear public commentary and take action regarding the proposed adoption of the Standards for Bird-Safe Buildings, which will include additions to the Planning Code. The Planning Department has received more than 2,200 pieces of correspondence regarding this legislation, the vast majority of which has been in support. A brief summary of the new code provisions is below.

Hazard Triggers

The proposed Standards for Bird-Safe Buildings would apply to all building projects that are deemed hazardous due to their location or inclusion of specific building features. There are two “hazard triggers” that projects will have to navigate as part of these new standards:

Location-Related Hazards. Projects (new construction and certain types of additions or alterations) located inside of, or within a clear flight path of less than 300 feet from an Urban Bird Refuge (any open space 2 acres or larger that is dominated by vegetation; open water areas; and some green rooftops) would require bird-safety treatments to a portion of their façade.

Building Feature-Related Hazards. Regardless of the project location, development that includes certain features deemed hazardous for birds in flight, including free standing clear-glass walls, greenhouses or other clear barriers on rooftops or balconies; free standing clear-glass landscape features or bus shelters; skywalks and balconies that have unbroken glazed segments 24 square feet and larger in size, would require bird-safe treatments to 100% of the feature.

Bird-Safe Treatments

Once a hazard is identified, a series of bird-safe treatments would be required for effected projects.

Feature-Related Hazards would require bird-safe glazing on 100% of their area. Location-Related Hazards would require bird-safe glazing such that the Bird Collision Zones consist of no more than 10% untreated glazing. Bird Collision Zones begin at building grade and extending upward for 60 feet, and including equal portions of glass facades directly adjacent to large landscaped roofs.

Permitted glazing treatment may include fritting, netting, permanent stencils, frosted glass, exterior screens, physical grids placed on the exterior of glazing or UV patters visible to birds.

The vertical elements of the window patters must be at least ¼ inch wide at the minimum spacing of 4 inches, and horizontal elements shall be at least 1/8 inch wide at a maximum spacing of 2 inches. Minimal lighting is allowed, and when used lighting shall be shielded.

Discretion and Exceptions

There are 3 exceptions to the controls within the proposed Standards:

Treatment of Historic Buildings. Treatment of glass facades for structures designed as City landmarks or located within landmark districts, or any building designated a Category IV or V and located within a Conservation District, shall conform to Secretary of Interior Standards for Rehabilitation of Historic Properties.

Treatment of Location-Related Hazards for Residential Buildings within R-Zoned Districts: Residential buildings that are less than 45 feet in height that have an exposed façade comprised of less than 50% glass are exempt from new or replacement glazing treatments, but must still comply with feature-related and wind generation requirements. Residential buildings that are less than 45 feet in high but have an exposed façade comprised of more than 50% glass shall provide glazing treatment such that 95% of all large, unbroken glazed segments that are 24 square feet and larger in size are treated.

Waivers or Modifications by the Zoning Administrator. The Zoning Administrator may either waive the requirements for location-related and feature-related hazards, or may modify them to allow equivalent glazing treatments upon the recommendation of a qualified biologist.

Letter of Intent or Lease….One In The Same?

June 16, 2011April 12, 2017 | Andrew Junius

A case decided this year in the 9th Circuit highlights how important it is to properly draft a letter of intent (“LOI”). In First National Mortgage Co. v. Federal Realty Investment Trust, the 9th Circuit upheld a district court decision to award the proposed landlord $15.9 million dollars in damages based on an anticipatory breach of the LOI, despite there not being a signed lease in place. 631 F.3d 1058 (9th Cir. 2011). First National involved a LOI that was called a “Final Proposal” which stated its terms were “hereby accepted by the parties, subject only to approval of the terms and conditions of a formal agreement”. The LOI was signed by both First National Mortgage Company (“First National”), as the proposed landlord, and First Realty Investment Trust (“First Realty”), as the proposed tenant. The LOI provided for rent at $100,000 per month and gave a “put” option which would allow the landlord to require the tenant to purchase the property at any point during ten years. After the LOI was signed, the parties tried to negotiate a lease, but ultimately could not come to terms. First National filed suit in federal court against First Realty for anticipatory breach of the LOI. The District Court awarded First National $15.9 million dollars in damages for lost rent and for the loss of its “put” option under the LOI.

Federal Realty appealed to the 9th Circuit arguing that the LOI was not binding and was a proposal, further evidenced by its title as a “Final Proposal”. The court held that it was in fact binding and distinguished the language that it was “hereby accepted by the parties, subject only to approval of the terms and conditions of a formal agreement” from Rennick v. O.P.T.I.O.N., in which the LOI in Rennick expressly provided that it was “of no binding effect”. 77 F.3d 309 (9th Cir. 1996). The court further found that calling the LOI a “proposal” did not change the outcome of the case citing that the California Supreme Court has recognized that it is important for the parties to be certain that their interim agreements will be recognized. Gavina v. Smith, 25 Cal. 2d 501, 504 (1944).

Federal Realty also argued that the LOI fell within the Statute of Frauds, thus it was not binding because it omitted an essential term in the form of the duration of the Lease. The Statute of Frauds requires that certain contracts, including those that cannot be performed in one year, must be in writing and include certain essential terms, in order to be enforceable. The court explained that just because the term of the lease is an essential term does not mean it has to be express in the contract. In fact, extrinsic evidence can be used to explain essential terms that were understood by the parties. In this case the court found it could imply a 10 year term of duration based on the LOI citing a “put” option within 10 years.

First National Mortgage Co. v. Federal Realty Investment Trust underscores that it is critical for parties to properly draft letter of intents to ensure that they are a means of negotiation, rather than a contract subject to a breach and recovery of damages. In addition, parties cannot rely on the fact that a LOI might not specifically list all of the essential terms as a way to avoid enforcement, if the term can be implied based on the nature of the contract and the surrounding circumstances. The LOI should be clear that it is of “no binding effect”, otherwise one party could be left paying the other substantial damages due to an alleged breach even if the operative contract is never executed.

This Week: West SOMA and Prop M Office Updates

June 10, 2011April 12, 2017 | Andrew Junius

Western SoMa Rezoning Update: Fault Lines Emerge Between Planning Department and Board of Supervisors

With the final details of the Western SoMa rezoning being hammered out, differences between the Planning Department and some Board members are coming to the surface. On Monday, the Board’s Land Use Committee held a hearing on a Board resolution that would encourage the Planning Commission to include a Community Stabilization Policy in the Western SoMa community plan that it ultimately adopts.

The stabilization policy, approved by the local Western SoMa citizens planning group in 2009, would seek to maintain the existing character of the Western SoMa neighborhood, especially with regard to the ratio of market rate housing to affordable housing. First, the policy would require that at least 30% of all housing units approved by the Planning Commission in any given year be affordable housing. Applications for projects that would create a mix of greater than 70% market rate housing in any given year will be put on hold until the 30/70 ratio is met. Second, if the annual number of new neighborhood jobs compared to new housing units falls below 6.6 to 1 over the course of two years, a conditional use requirement would be applied to all new housing projects for “the maximum legally allowable time frame or until all options to restore the 6.6 to 1 net new jobs/housing mix have been exhausted by the [community advisory committee] working in conjunction with all appropriate San Francisco agencies.”

Planning Department representative AnMarie Rodgers asserted the Department’s opposition to the policy, noting that quotas of this sort have never been applied in the city. Further, since the required below market rate percentage for new housing projects is below 30%, the policy would in fact require that 100% affordable projects be constructed in order for typical housing projects to move forward. For example, if a single housing development of 30 units is approved in a given year, and the generally-applicable 15% BMR requirement is applied to the project, the 30/70 mix will already be exceeded and a new market-rate project could not be approved until the following year. The 30/70 mix could even create a de facto 30% BMR requirement, since even the first project approved would exceed the 30/70 mix. Ms. Rodgers pointed out that the Planning Department has not had the chance to review the impact of the policy on the area to determine if there are enough sites that are viable for 100% affordable projects (a basic requirement to ensure the policy doesn’t create an immediate halt to housing projects).

Supervisor Kim, the sponsor of the resolution, maintained that the neighborhood has been maintaining a 40/60 affordable housing to market rate housing mix since 2001 and that this policy would simply ensure that this appropriate level of affordable housing is minimally maintained. She also cited the fact that the City’s new housing element calls for two-thirds of all new housing units be affordable, and that the stabilization policy is modest in comparison.

The Committee ultimately sent the resolution to the full Board without recommendation, after all three members expressed concerns about the Planning Department’s opposition. If passed, the resolution would simply indicate to the Planning Commission that the Board desires to see this policy included – and would likely include it in the final plan if the Commission failed to do so. Environmental review for the Western SoMa Plan is expected to be completed late this year, with adoption hearings in early 2012.

Plenty of Space Available for Office Allocation Within the Prop M “Cap”

In 1985, the San Francisco voters approved Proposition M, which required that any creation of at least 25,000 square feet of new office space (whether through new development or a change of use) must obtain an office space allocation from an annual citywide office limit from the Planning Commission. The annual limit of office space allocation is 950,000 square feet, which accumulates over time if the limit for a particular year is not fully allocated in that year. Each year, a pool of 75,000 square feet of the office limit is reserved for smaller projects consisting of 25,000 to 49,999 square feet of office space.

In a worst case scenario, where the pool is running low, office projects compete against each other to secure the limited amount of allocable office space each year, in what was referred to as a “beauty contest.” We haven’t had a beauty contest in ten years, and it doesn’t look like one will be likely anytime soon. According to the Planning Department, which presented its annual office limit update yesterday, there is currently 1,004,460 square feet of space under the “small” office allocation cap and 2,633,442 square feet of space under the large office allocation cap. To put that in perspective, the large office allocation cap could cover the 1.4 million square-feet of office space proposed for the proposed 80-story Transbay tower, and would still leave room for a handful of major office towers.

While the office market seems to be picking up, the Prop M cap is not likely to be a factor for awhile.

This Week: Local State Reps Respond to Changing Land Use Environment; Oakland Skyline Growing

June 2, 2011April 12, 2017 | Andrew Junius

Assemblywoman Ma, Senator Hancock, Introduce Bills to Make Establishing Infrastructure Financing Districts Easier

Back in April, we wrote about the potential use of Infrastructure Financing Districts in the city should Redevelopment be eliminated, as proposed by the Governor. These IFDs provide a similar mechanism to capture and redirect increased tax revenue back to the district and to issue bonds backed by the captured tax revenue. To see our previous update on IFDs, click here: http://mytinyurl.com/htpb42mpp6.

As a creature of state law, any tweaks to the IFD law must go through Sacramento. And, possibly also foreseeing a greater reliance on IFDs in the near future, a couple of our local representatives have introduced bills that would make it easier to establish the districts.

Assemblywoman Fiona Ma, from San Francisco, has introduced AB 485, which would eliminate the requirement that a vote be held by district property owners or residents to establish an IFD or issue bonds when the IFD implements a “transit village plan.” Transit village plans can be established by cities and counties in order to encourage high density neighborhoods anchored around a rail or light-rail station, a ferry terminal or a bus hub or transfer station. Ma’s legislation would also require that at least 20% of tax increment in these IFDs be used to fund affordable housing. AB 485 was approved by the full Assembly two weeks ago.

State Senator Loni Hancock, from Berkeley, has introduced a bill that goes even further. SB 310 would eliminate the requirement that a vote be held by district property owners or residents to establish an IFD or issue bonds in all situations. If enacted, IFDs could be created, and bonds could be issued, merely by a majority vote of a County Board of Supervisors or City Council after a public hearing. SB 310 was approved by the full Senate the same week as AB 485.

Removing the requirement of a local vote to establish an IFD makes a lot of sense, considering the fact that IFDs redirect new tax revenue back within the district, as opposed to going to a city or county’s general fund. It’s difficult to imagine a situation where owners or residents within a district would not want tax revenue redirected back to their local neighborhood. As for the issuance of bonds, the argument in favor of a district vote is stronger, considering the fact that the district alone is liable on the bonds. At the very least, eliminating the district vote requirement would take an unnecessary and time-consuming step out of the process to create an IFD.

Senator Leno Attempts to Counter Anti-Inclusionary Housing Palmer Decision

Many will remember the momentous Palmer decision of 2009, where the California Court of Appeal struck down the application of a local inclusionary housing law to a rental housing project in Los Angeles. The Court determined that the local law, which required new housing projects to construct a certain amount of below-market rate housing units, conflicted with the state Costa Hawkins Rental Housing Act, which gives rental property owners the right to set rental rates for vacant units. The decision was seen as a blow to inclusionary housing laws throughout the state, and many expected the state legislature to move in to pave a legal path for these laws.

San Francisco’s own Senator Mark Leno has made such a move this legislative session, by introducing a bill that would expressly supersede the Palmer decision and give cities and counties the right to establish inclusionary housing laws. SB 184 cleared a Senate committee in early May.

While Leno’s bill may provide relief to cities and counties throughout the state by reaffirming their inclusionary housing laws, San Francisco has already taken steps to comply with the Palmer decision. Last year, the city adopted amendments to its inclusionary ordinance, allowing most projects to comply by paying an in-lieu fee or providing below market rate ownership units, but significantly limiting the option of providing below market rate rental units. Expect to see local legislation freeing up the below market rate rental unit option if Leno’s bill passes.

Oakland Skyline Set to Grow

The growth on the ground in Uptown Oakland may soon be matched by growth in the sky. Early in May, the Oakland Planning Commission gave the thumbs up to redevelopment of the Kaiser Center – located on Harrison Street between 20th and 21st Streets. The project would add 1.4 million square feet of mostly office development to the site, by demolishing existing street level mall buildings along 20th Street and Webster Street, and constructing a pair of towers – at heights of 573 feet and 469 feet. For those keeping track, these would immediately become the tallest and second-tallest buildings in Oakland. The Ordway Building, just across 21st Street from the Kaiser Center, is currently the tallest building in the city at 404 feet, with the Kaiser Center the second tallest at 390 feet.

The project is proposed to be constructed in two phases and will take approximately 8 years to complete. Future approvals are still necessary for the project to proceed.

The Kaiser Center redevelopment would continue to cement the renaissance of Uptown Oakland, which has been substantially driven by the Fox Theater redevelopment, the construction of numerous residential projects as part of Jerry Brown’s 10K plan, and the explosion of hip, new restaurants formally only found in San Francisco and Berkeley.

Planning Commission Seeks to Overhaul Zoning Controls on Restaurants

May 26, 2011April 12, 2017 | Andrew Junius

A lot has changed in the twenty or so years that have passed since the Planning Code’s controls on restaurants in Neighborhood Commercial districts were enacted. Back then, going out to eat was a less common event, reserved for weekends and special occasions. Fast forward to today, and many people will tell you they eat at restaurants or eat takeout more days each week than they cook.

Whether this phenomenon is caused by busier work schedules, the fine cooking revolution, or an increase in healthy eating awareness, the restaurant industry has moved to fill this new demand. “Fast casual” restaurants – a term few would have recognized just five years ago – have recently seen tremendous growth. This new dining category is associated with healthier, more diverse menus than fast food, payment at a register with no servers, and higher check averages than fast food ($8 to $15 according to some). Think La Boulange, Boudin Bakery, or your local upscale burrito joint. According to RestaurantNews.com, total visits to fast casuals in the U.S. grew by 17% in the past three years, compared to a 1% drop in visits for the total restaurant industry.

Contrast the change in the industry with current zoning controls in the City’s Planning Code. There are 13 different restaurant categories in the Planning Code. Distinctions are largely based on traditional distinctions between fast food and full service dining, such as whether food is served in disposable wrappers or whether the bill is paid before food consumption. A major distinction is made based on whether the floor area of a restaurant is above or below 1,000 square feet, creating another layer of size regulation on top of generally-applicable use size limits.

Spurred by Supervisor Mirkarimi’s recent legislation to make changes to the restaurant definitions and controls in the Planning Code, the Planning Department is taking the opportunity for a re-think of the entirety of restaurant regulations. Department staff presented its proposals at the Planning Commission this afternoon, which include:

Reducing the number of restaurant categories to three: “Restaurant” (food and on-site alcohol), “Restaurant-limited” (food and off-site alcohol), and “Bar” (on-site alcohol only);

Principally permitting “Restaurant-limited” uses in all Neighborhood Commercial Districts;

Pegging the controls on “Restaurant” uses to the existing controls on full-service restaurants (e.g., if a full-service restaurant currently requires a CU or is not permitted, a CU would be required for the new “Restaurant” use).

A more conservative proposal is also being considered, which would actually increase the number of restaurants that would be subject to a CU.

At the hearing this afternoon, the executive director of the Small Business Commission, the director of the Golden Gate Restaurant Association, and the executive director of Livable City all heartily supported the effort. Discussions on the overhaul of restaurant controls will continue for the next few months, and the proposal will be heard again by the Planning Commission on August 4. Those wanting to get involved in the effort should contact planner Aaron Starr at aaron.starr@sfgov.org.

This Week: No Residential TIDF; New Labor Restrictions Considered; New Historic Survey

May 20, 2011April 12, 2017 | Andrew Junius

MTA Drops Proposed Residential Transit Impact Fee

Residential builders and developers, you can breathe a sigh of relief. As reported by the California Planning and Development Report, the MTA has decided not to pursue a proposal to expand the Transit Impact Development Fee to apply to new residential construction. Currently, the fee only applies to new non-residential development.

The expanded fee would have applied a fee on new market rate residential development of between $4 to $5 a square foot and was expected to generate $2 to $5 million annually. According to CP&DR, in addition to strong opposition from residential builders, the Pacific Law Foundation had also threatened a lawsuit over the fee.

No word yet on the proposed increase in the existing TIDF or the proposed new fee to fund bicycle and pedestrian improvements. We’ll keep you posted.

Proposed Statute Would Require New Contractors to Retain Previous Employees

We came across an interesting statute that BOMA (Building Owners and Managers Association of San Francisco) reviewed in its recent “Action Alert.” Upon the sale of commercial property, AB 350 (Solorio) would require certain contractors hired by the new building owner (janitorial, security, landscaping, building maintenance, and window cleaning) to retain any employees of the previous contractor for at least 90 days. This is an expansion of existing law that requires such retention of only janitorial workers for 60 days. The statute would also prohibit the new contractor from conducting any background checks or interviews to determine the qualifications of the employees. BOMA opposes this proposed law because it (quoting from BOMA):

Unfairly forces employers to hire a predecessor’s employees;

Undermines the at-will employment presumption in California; and

Is designated to ensure union representation, despite any changes in employers.

It seems to us that if this statute were enacted, building owners would face uncertainty in selecting new contractors for services, and whether the employees would be of the quality that they expect. There could be cost increases for complying with the new law, especially for contracts that have a set term.

The stated purpose of the bill is to assist workers who have lost their jobs. BOMA asked the question – if that is the case, why does the statue single out the commercial real estate industry, rather than all jobs in the State of California? BOMA also noted that the commercial real estate industry is struggling, so imposing this additional burden is not appropriate.

If you would like more information about AB 350, check out the fact sheet by clicking on http://mytinyurl.com/ccg7zvrvpm, or contact Kevin Rose by email at krose@reubenlaw.com.

HPC to Consider Yet Another Historic Survey in Showplace Square/Northeast Mission: 25% of All Buildings Identified as Historic Resources

On June 1, the City’s Historic Preservation Commission is set to adopt yet another historic resource survey in the Eastern Neighborhoods – this time in the Showplace Square/Northeast Mission area. With many underutilized industrial buildings, this is a prime area in the City for future growth. For that reason, this historic survey could have a greater negative impact than those that have come before it. New development on sites identified as historic in the survey must either meet the highly restrictive Secretary of the Interior standards or must go through a lengthy and expensive environmental review process before being approved.

At a glance, 525 buildings are located within the survey area – 24% of which are identified as historic. The HPC will consider these findings en masse at its hearing on June 1. This hearing will be important for property owners who feel their building has been incorrectly identified by the survey. You can find the proposed survey at http://www.sf-planning.org/index.aspx?page=2666.