The Land Use Week in Review: Starts and Stops and Starts

| Thomas Tunny

SB 50 Advances Out of Committee

Two weeks ago, we wrote about State Sen. Scott Wiener’s SB 50, a new version of last year’s SB 827 that aims to boost housing density near public transit.  It’s one of the more ambitious initiatives to address California’s housing crisis – and one of the most controversial.  This week, the Senate Transportation and Housing Committee voted to advance the bill in a 9-1 vote.  There already is more progress than SB 827 made, which never made it out of committee.  The legislation still faces a long process, with the next step being consideration by the Senate Governance and Finance Committee in late April.

San Francisco Supervisor Gordon Mar has introduced a resolution opposing SB 50, claiming that the legislation would “entitle real estate developers to increase both residential and mixed use development with significantly less public review.”  Supervisors Mandelman, Ronen, Peskin, Walton, Fewer, and Board President Yee all support Mar’s resolution.  Mayor Breed and the Mayors of Oakland and San Jose support SB 50.

Residential Demolition/Expansion Legislation

Another measure we have reported on previously and continue to track is Supervisor Peskin’s residential demolition and expansion legislation.  Originally introduced in December 2018, the legislation proposed changes to what constitutes a demolition, thereby dramatically increasing the number of projects needing a Conditional Use approval of the demolition.  In addition, the legislation required Conditional Use approval for many more residential additions, with heightened criteria making them almost impossible to get approved.

Following its initial introduction, facing significant opposition, Supervisor Peskin has been reworking the legislation.  A new version is expected any day now, but as of now, this writing has not been released.  The Planning Commission is scheduled to consider the revised version in a joint hearing with the Building Inspection Commission on April 18.

Central Subway Possibly Delayed

The Central Subway, originally scheduled to be substantially complete by February 2018, and then pushed to December 2019, appears to be encountering new delays.  Opening is now targeted for May 2020.  Among the reasons for the delay are cost overruns, water leaks, contractor disputes, and worker shortages.  Worker shortages also troubled the opening of the Transit Center.  As of the beginning of this year, the project was 80% complete.

Transit Center Woes

The Transit Center also faces construction issues, as has been well-documented.  Unsurprisingly, the parties involved are disputing the cause of the cracked steel girders that have kept the transit hub, retail center, and rooftop park closed since last September.  Previously, an independent review board of engineers attributed the fractures to “a perfect storm” of factors, including the strength of the steel, which met industry standards; the fabrication, including the cutting of holes in the girders; and the design of the girders.  Following that review, officials of the Transbay Joint Powers Authority claimed a different cause.  They concluded that three teams of quality-control inspectors working for the center’s structural steel contractors didn’t discover a critical construction flaw, and that the Authority’s own spot inspections also missed the oversight.  The contractors dispute this, and point to the process used to cut holes in the girders.  In the meantime, work to re-open the Center continues, which is expected by mid-June.

Streamlining Construction Permits

| Gillian Allen

Meeting the needs of commercial projects after entitlement can be difficult when City agencies are tasked with solving a housing crisis. The Small Business Permit Streamlining Ordinance seeks to update several areas of code that affect various agency processes and may contribute to an elegant solution for commercial property owners exploring options with tenants for shared space.

The ordinance proposes to align regulation of restaurant enclosures for outdoor food service and restroom requirements with state standards; amend the Planning Code to clarify that a Type 23 liquor license may be used in conjunction with a Bar or Restaurant use;  amend the definition of a Bar to provide for consistent treatment of Type 64 liquor licenses; to reduce the distance measured for Retail Sales and Services uses in Neighborhood Commercial zoning districts to any neighborhood commercial district; to reduce the distance measured for nonconforming uses in RH (Residential, House), RM (Residential, Mixed), and RTO (Residential, Transit-Oriented) districts to any neighborhood commercial district; and importantly, to allow Limited Restaurant use as an Accessory Use which would enable more flex use spaces in neighborhoods who want to encourage and maximize a thriving local scene. For more information on this, read the legislation here:  File No. 181211.

These are times that keep the City focused on a healthy socio-economic future requiring balance between housing and the associated commercial infrastructure needed to sustain the inhabitants, pursue cultural growth and allow neighborhood flavor to emerge in partnership with neighborhood community groups questing to influence use of their local spaces.

Commercial property owners may also be interested in following the crafting of recently proposed legislation which would amend the Building Code to require the assessment of a fee within the first 30 days of vacancy for any storefront that is not tenanted regardless of whether it is offered for rent or lease; and require annual safety inspections within sixty days of the annual registration renewal and the issuance of a Notice of Violation with a penalty of four times the registration fee for failure to register within thirty days. If passed without reform, this legislation has the potential to over-burden the property owner and require them to navigate substantively bureaucratic code enforcement issues especially if their potential tenants meet with delay working through after entitlement permitting for their tenant improvements. For more information on this, read the legislation here: File No. 181213.

The Small Business Permit Streamlining Ordinance may offer some relief, but it does not provide additional staff to assist with the increased review times for commercial projects due to ADU and housing being given priority. In a City that lacks housing, prioritizing these projects without increasing staff or allocating paid overtime for in-house review can critically impact commercial alteration projects and contribute to costly and seemingly ever moving targets for start of construction.

San Francisco entitlement and permitting processes offer unique challenges to estimating project timelines. Stakeholders need to more carefully assess what to include in the initial permit set being supplied for Planning review when construction timelines, which are dependent on the after entitlement issuance of building permits, are a factor. The Planning Department can review an architectural set – best known as a “Site” permit set for entitlement; however that same permit set does not and cannot be converted to a “Full” building permit set automatically after planning review.  Filing with a design plan as a Site permit locks the project sponsor into a two-phase review process and may contribute to a property owner realizing excessive, financial impact, if the afore-mentioned vacant storefront legislation does not include a provision giving deferral for fees, enforcement and penalties while a tenant improvement is under permit review. The Land Use Committee should be encouraged to expand the vacant storefront legislation to include alternative paths for property owners who can demonstrate that a potential tenant is in process of entitlement and subsequent permitting.

While projects requiring more than an hour of review, do not qualify for over the counter processing at the building department, in house review of a full permit can cut permitting time in half and is one way design professionals and property owners can help guide a prospective tenant toward a more rapid occupancy of their buildings.

 

Authored by Reuben, Junius & Rose, LLP  Permit Consulting Manager Gillian Allen

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 & Rose, 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.