This Week – New Big Box Requirements? BK For Borders; Condo Update

SB469 Would Require Economic Impact Study For New Big Box

At a time when many Washington politicians are rallying against government regulation and pushing to relax restrictions on businesses across the board, one California bill is swimming in the other direction. California Senator Juan Vargas, District 40 (Riverside), has introduced new big box legislation in the California Senate. SB469 would require an applicant seeking permits from a local government for a “super store” to submit an “economic and community impact analysis report” along with the application. Superstore is defined in the bill as “a single tenant retail establishment that exceeds 90,000 square feet.”

Among other things, the impact analysis report must include an assessment of the extent to which the proposed super store will capture a share of retail sales in the economic and community impact area; an assessment of how the store will affect the “supply and demand for retail space in the area” and an assessment of the number of retail jobs in the area and an analysis of whether the proposed store “will result in a net increase or decrease in employment in the economic and community impact area, and a projection of the costs of public services and public facilities that would result from construction and operation of the store”.  These are expensive and time consuming studies.  Big box stores in California are becoming increasingly difficult to permit, and if passed, SB469 will not make it any easier.

And Then There Were Two (Big Bookstores in San Francisco)

Just five months after last updating you on the big bookstore industry in San Francisco, Borders Group – the owner of Borders bookstores – declared bankruptcy last week. The move will reportedly result in 200 stores closing nationwide, with 11 closing in the Bay Area. The Borders stores at Union Square and at the Westfield Centre are expected to close, leaving Stonestown as the only remaining location in town. The Borders on King Street in Mission Bay closed in October. The Borders in Alameda will close and the location in Emeryville will remain open.

Industry analysts and brokers are bullish on the soon-to-be-vacant large retail spaces throughout the country. Many of the properties are in major markets that are relatively difficult for retailers to enter (read: San Francisco). And unique uses are being proposed: bowling alleys, gyms, supermarkets and office supply stores according to one analyst. The former Borders space on King Street was temporarily used as a Giants gift store selling World Series paraphernalia. Here’s hoping the owners of these properties can continue to find innovative – and more permanent – tenants for these unique spaces.

AB 208 Offers More Help For Stalled Subdivision And Condo Projects

In furtherance of a law enacted in 2009, Assembly Bill 208, introduced on January 31, 2011, proposes to extend the life of qualifying tentative maps and related state agency approvals until economic conditions permit the completion of stalled subdivisions and condominium projects.

Tentative Map Extension. AB 208 would automatically extend for 2 years any existing unexpired tentative map or vesting tentative map that would otherwise expire prior to January 1, 2014. To be eligible for the extension, a map must have been valid on July 15, 2009, 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, and in addition to any extension provided by AB 333 in 2009. 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 (BCDC) Permit or California Coastal Commission (CCC) Coastal Development Permit, the proposed law would also extend 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 and related state level approvals. The proposed 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.

The Trade Off. For those projects utilizing the 2 year map extension under AB 208, there are a few tradeoffs. In order to offset any potential adverse impacts on local cities or counties from multiple extensions of tentative or vesting tentative maps, AB208 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.

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.

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