New Planning Code Amendments Would Exempt Student Housing from Affordable Housing Requirements Tomorrow, the Planning Commission will consider proposed amendments to the Planning Code that would recognize “student housing” projects and would exempt them from the Planning Code’s affordable housing requirements. Currently, all new residential projects, including student housing, containing 5 or more units must pay a fee or construct affordable units on- or off-site. However, these requirements are less justified when applied to student housing: many students receive need-based assistance from a school, government or other source that already reduces the cost of housing. In a sense, student housing is inherently affordable housing, and it accommodates students that would otherwise occupy generally-available lower-cost housing. The amendments would create several definitions to recognize qualified student housing projects. “Qualified students” are those students receiving or eligible for need-based financial assistance. “Qualified student housing” is student housing that a post-secondary educational institution owns or holds under a master lease of at least 20 years in which at least 30% of the rooms or beds are occupied by qualified students. Qualified student housing would be exempted from the Planning Code’s affordable housing requirements so long as the project does not convert existing rental housing. Schools must also file an institutional master plan with the Planning Department making certain findings and an annual report with the Mayor’s Office of Housing. The San Francisco Housing Action Coalition has been the driving force behind these amendments, first by identifying the issue and then working with the student housing community to draft the amendments. You can show your support for this HAC initiative at the Planning Commission hearing tomorrow at City Hall, Room 400, at 1:30 p.m. North Beach Library Preservation Controversy Continues Preserve or replace? Ultimately it will be the Board of Supervisors that will decide the fate of the North Beach library. And this week, we finally got to see where some of them stand on the issue. At the Board’s Land Use and Economic Development Committee on Monday, Supervisors Chiu, Maxwell and Mar all voted against making the library a city landmark. If made a landmark, it would be all but impossible to demolish and replace the library. The ordinance that would landmark the North Beach library will now go to the full Board of Supervisors with a recommendation that the Board not adopt it. A Draft Environmental Impact Report analyzing the demolition of the existing library to be replaced with a new one has been published and will soon be heard by the Historic Preservation Commission and Planning Commission. Update on Bus Rapid Transit Along Van Ness and Geary: Don’t Hold Your Breath Bus Rapid Transit (BRT), a public transit system more efficient than typical busing with lower costs than rail, is currently being studied along the Van Ness Avenue and Geary Boulevard corridors. BRT dedicates one or more lanes of traffic to bus use only, making buses faster and more efficient since it is less impacted by traffic. After a number of years of studying BRT’s potential in San Francisco, draft environmental impact reports will be published in 2011 for the system along Van Ness and Geary. Staff at the San Francisco Municipal Transportation Agency reported to the agency’s Board on Tuesday that, while the completion of environmental analysis for the projects was nearing, groundbreaking is not expected to begin until 2013 for Van Ness and 2014 for Geary. And that’s only if the projects are approved by the city, an unsure bet considering the strong opposition posed by business owners along the corridors who fear construction will hurt their businesses. Add to that a funding gap of $130 -$235 million, and the outlook for BRT is pretty hazy. For a copy of the slide show presented to the Agency Board, go to “http://mytinyurl.com/9r5zfxkjkv”.  To learn more about BRT, go to “http://mytinyurl.com/671yw8qk3v” and click on “Geary Corridor Bus Rapid Transit” or “Van Ness Avenue Bus Rapid Transit.” Planning Code Amendments Would Increase Affordable Housing Requirements in the SoMa Youth and Family Special Use District Another set of amendments to the Planning Code that would increase affordable housing requirements in the SoMa Youth and Family Special Use District will also be considered by the Planning Commission tomorrow. The district, generally bounded by Natoma, Langton, Harrison, and 4th Streets, was established by the Eastern Neighborhoods Plan to expand affordable housing and restrict uses to promote an environment especially favorable to children and families. Currently, residential projects which contain 5 or more units, are greater than 40 feet in height, and are not adjacent to major streets in the district are subject to the highest affordable housing requirements: 22% for on-site units and 27% for off-site units or the affordable housing fee. Elsewhere in the district, the city-wide affordable housing requirement of 15% and 20% apply. Proposed by Supervisor Daly, the amendments would apply the heightened affordable housing requirements everywhere in the district for projects that contain 5 or more units and are taller than 40 feet. The Planning Department is recommending disapproval by the Planning Commission, citing that it is too early to adjust the balance between development and community benefits created by the Eastern Neighborhoods Plan. 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 2010 Reuben & Junius, LLP. All rights reserved.    

Scott Sanchez Named New Zoning Administrator This week, after a months-long search, the Planning Department announced Scott Sanchez’s promotion to be the permanent zoning administrator (ZA). Mr. Sanchez had been acting ZA since June 7. Mr. Sanchez received a BA from Berkeley with a major in geography and a minor in city and regional planning and received an MSA in international relations from the Australian National University. He has been with the Planning Department since 2006. We wish Scott the best of luck in his new role at the Department. SoMa Historic Resource Survey Results Posted This week, the Planning Department posted on its website the results of a South of Market Historic Resource Survey that it has been conducting since 2007. The survey was conducted to analyze existing properties in the South of Market area to identify those buildings that are historic resources and would be eligible for listing on the California Register of Historical Resources. Three new historic districts were identified and the expansion of the existing South End Historic District is supported by the survey. 2,142 properties were analyzed in all. The Planning Department is holding a community workshop on the SoMa survey on Wednesday, November 17, and the Historic Preservation Commission is currently scheduled to hold a public hearing on the survey on December 1. The survey, and its findings, will not go into effect until adopted by the Board of Supervisors. Once the survey is adopted, individual historic resources and properties that contribute to a historic district will require heightened environmental analysis for proposed alterations or demolition. Go to “somasurvey.sfplanning.org” for more information. Park Shadow Task Force Steps into the Light The Planning Department has announced the formation of a Park Shadow Task Force to examine the City’s codes and policies that restrict shadows cast on parks by new development. The task force is the result of an effort earlier this year by Supervisor Chiu to place a proposition on the ballot to remove all discretion the City has to approve development projects that cast any new shadows on parks under the jurisdiction of the Recreation and Parks Commission. Seeing that most downtown development, including projects considered in the Transit Center District Plan, would effectively be killed by the measure, the development and land use policy communities organized a strong opposition to putting it on the ballot. Ultimately, the measure was not placed on the ballot, and a task force was formed to discuss the issue further. Those interested in receiving updates about future meetings of the Park Shadow Task Force should call Kevin Guy at the Planning Department at (415) 558-6163. Governor Signs Modest CEQA Amendments into Law In state lawmaking news, Governor Schwarzenegger recently signed into law two bills amending the state’s CEQA law. The key word here is “modest”- most of the changes tighten up language regarding tiered EIRs, mediation, expedited litigation and standing for organizations formed after a project subject to CEQA is approved. There is at least one substantive improvement though: a newly-added provision authorizes sanctions to be imposed against a CEQA litigant for bringing a frivolous claim. The Governor aptly summed up the new amendments by saying “[t]hese bills are 99 percent garbage.” The bills, SB 1456 and AB 231, can be found at “http://www.leginfo.ca.gov/bilinfo.html”. Impact Fee Cleanup, Transferable Development Rights Amendments Passed by Board On Tuesday, the Board of Supervisors passed on final reading the impact fee cleanup legislation and the TDR amendments that we have discussed in several recent updates. The ordinances now go the Mayor for final approval. 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 leases, purchase and sale agreements, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work. Copyright 2010 Reuben & Junius, LLP. All rights reserved.    

Market Octavia Plan Area May Grow Soon In late September, the Planning Commission initiated a process to amend the Planning Code that would effectively expand the boundaries of the Market Octavia area plan to include both sides of Market Street between 16th Street and 17th Street. The expanded area will also include the northwest corner of Castro Street and 17th Street and the northwest and southeast corners of Noe Street and 16th Street. Currently, the plan area extends down Market Street and ends at 16th Street. The parcels proposed to be included within the plan area are currently the only parcels zoned within the Upper Market Street Neighborhood Commercial district in the city, and are not proposed for rezoning. Instead, the Planning Code amendments would subject these parcels to specific regulations and fees that are otherwise applicable to properties along Market Street within the Market Octavia plan area. The changes include: Rear yards would now be required at the ground story; Commercial ground floor uses would now be required; Parking spaces would no longer be required, but instead permitted up to a certain limit; New curb cuts for driveways and loading access would not be permitted along this portion of Market Street; Dwelling unit divisions would be restricted; The Market Octavia Plan Community Benefits Fee would apply to the new block (as written, the Market Octavia affordable housing fee would not apply); The draft amendments are the outcome of a planning process that was conducted between the Planning Department and neighborhood groups. The Planning Commission will hold a public hearing on the amendments on or after November 4, where changes to the amendments can be made. For a copy of the proposed amendments, go to “http://mytinyurl.com/5294jv6mdv”. Regulations on Historic Properties May Change Soon In other Planning Code amendment news, the Planning Commission and Historic Preservation Commission will hold a joint hearing this Thursday to discuss proposed revisions to the articles of the Planning Code that regulate historic properties. An attempt to significantly amend Articles 10 and 11 was made soon after voters approved Prop J and created the Historic Preservation Commission. Many problems with those amendments were identified and the process stalled for a bit. Recently, a new set of amendments were proposed by the Planning Department that started with a modest set of updates that incorporate the Historic Preservation Commission’s duties and authority in place of the former Landmark Preservation Advisory Board. The amendments must be approved by the HPC and the Planning Commission before they head to the Board of Supervisors for final consideration. The contents of the amendments are still in flux (the HPC held a hearing last Wednesday and Friday and will hold another hearing this Wednesday before the joint hearing with the Planning Commission). We will continue to update you on the progress of the amendments as their substance becomes clearer. The most recent version of the amendments can be found here: “http://mytinyurl.com/v9kb7db0ch”. Are you Launching or Running a Small Law Firm? The Solo and Small Firm Committee of the Bar Association of San Francisco will be holding a one-day informational seminar called “Strategies for Launching or Running a Small Law Firm” this Saturday, October 23 from 8 a.m. to 2 p.m. at 301 Battery Street. Topics include employment issues, public relations, accounting, ethics and choosing a traditional or home office. Tickets are $95 for members, $115 for non-members. 2.25 hours of MCLE credit is available, including .75 hours in legal ethics. For more information or to sign up for the event, please contact Kevin Rose in our office. 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 leases, purchase and sale agreements, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work. Copyright 2010 Reuben & Junius, LLP. All rights reserved.    

TDR Legislation Moving Forward The Board of Supervisors Land Use and Economic Development Committee finally passed amendments to the TDR program after changes were made to the original proposal. Originally, the amendments required the proceeds of all future sales of TDRs to be first spent on the preservation, rehabilitation and ongoing maintenance of the building transferring the rights. The modified amendments require a preservation, rehabilitation and maintenance plan be submitted for approval with any application for a statement of eligibility for TDR. (A statement of eligibility officially identifying the amount of TDR available must be issued by the Planning Department before TDR may be sold.) Once a preservation/maintenance plan is approved, the property will be subject to the plan and the owner of the property must submit a status report within one year of the issuance of the statement of eligibility showing compliance with the plan. The TDR amendments will be before the full Board in two weeks. No further modifications are expected before its final passage. Contact us for a copy of the latest version of the amendments. Commissioner Gwyneth Borden Confirmed for a New 4 Year Term By a unanimous vote on Tuesday, the Board of Supervisors confirmed the Mayor’s reappointment of Gwyneth Borden for a new four year term to the Planning Commission. Commissioner Borden’s term ended in July of this year and she continued to sit at the Commission during a holdover period that ended in early September. The seat has been vacant since that time, and Commissioner Borden was reseated at the Commission at yesterday’s Commission meeting. We congratulate Commissioner Borden and wish her luck in her new term. The Commission is now almost back to full strength, with 6 of 7 seats occupied. We hope nominee Rodney Fong is confirmed soon, which would complete this latest round of appointments. Zoning Administrator Pick Expected Soon The pool of applicants seeking to be the next permanent Zoning Administrator has been whittled down to three. It is now in the hands of Planning Director John Rahaim. We will update you as soon as this very important position has been officially filled. North Beach Library Update: Historic Designation, Study of Demolition, Move Forward In the continuing battle over the future of the North Beach Library, two conflicting processes are moving forward concurrently. On September 1, the Historic Preservation Commission voted 4-3 to designate the library a city landmark, which would effectively block any plan to demolish and replace the 51 year old structure. The landmark designation ordinance was introduced at the Board of Supervisors this week, which will be heard by the Land Use Committee before heading to the full board. On Wednesday and Thursday of this week, however, the HPC and Planning Commission held hearings on the Draft Environmental Impact Report being prepared that studies the demolition of the library to pave the way for construction of a new one. This fight has been brewing for over a year, and there are still no clear signs of an ultimate decision. Keep you eyes out for the landmark designation ordinance, as the fate of that will likely determine the fate of the library…and remember a new Board of Supervisors will be seated in January. 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 leases, purchase and sale agreements, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work. Copyright 2010 Reuben & Junius, LLP. All rights reserved.    

We update you this week on the results of the Board of Supervisors Land Use and Economic Development Committee’s packed hearing this past Monday: Transferable Development Rights (TDR) Ordinance To Be Amended to Require Maintenance Plan, Remove Use of Proceeds Requirement First up, the proposed TDR amendments that were sent back from the full Board were modified by the Land Use committee. Instead of requiring that the proceeds of all future sales of TDRs must first be spent on the preservation, rehabilitation and ongoing maintenance, the ordinance would now require a preservation, rehabilitation and maintenance plan be submitted for approval with any application for a statement of eligibility for TDR. (A statement of eligibility officially identifying the amount of TDR available must be issued by the Planning Department before TDR may be sold.) Once a preservation/maintenance plan is approved, the property will be subject to the plan and the owner of the property must submit a status report within one year of the issuance of the statement of eligibility showing compliance with the plan. On one hand, the changes are an improvement on the original legislation, as there is no express requirement that proceeds of a TDR sale be spent on the preservation or maintenance of a building. On the other hand, the preservation/maintenance plan will almost certainly require money to be spent, and there are still no clear standards for what must be included in a plan set by the legislation. The Old Saint Mary’s rezoning was “split” from the ordinance and was passed on first reading at the full Board hearing last Tuesday; but note that all the original language is still in that ordinance, and will be passed, and will still need to be amended later. That amendment process will continue on this coming Monday’s Land Use committee hearing, with an expectation that the good changes discussed above will be made, and that package will be before the full Board two Tuesdays from now for final votes. The process inches forward. CEQA Reform Early signs of opposition to the CEQA reform ordinance were present on Monday, with a handful of individuals opposing what they characterized as the “streamlining” or the “weakening” of the local CEQA environmental review process. To review, the major purpose of the CEQA reform ordinance is to establish a clear, 20 day period after Planning Department issuance of a categorical exemption or Planning Commission adoption of a negative declaration when an appeal of these documents may be filed with the Board of Supervisors. Currently, Planning Commission adoption of Environmental Impact Reports is already subject to a 20 day appeal period. While many comments were made by those attending the hearing that this would “pro-developer,” the ordinance simply balances the fairness of San Francisco’s environmental review process. Currently, categorical exemptions and are subjected to an open ended process where any one person in the city can appeal the environmental review up through all consideration and appeals of the project itself. There is no reason why appeals of environmental review documents should not be considered at the same time any appeals to a project are made. The current situation gives project opponents two bites at the apple: one on a project’s appeal, and then one on the environmental document appeal. The ordinance was continued to October 25, to provide more time for discussion of the issue and so its sponsor, Supervisor Alioto-Pier, could be present at the hearing. Impact Fee Clarifications The ordinance clarifying impact fees was presented at the Land Use committee hearing, but was continued for a week to October 4, in order for amendments to be made by the Planning Department. Commissioner Update – Borden Clears Rules Committee Yesterday, the Rules Committe of the Board recommended reappointment of Gwyneth Borden to the Planning Commission.  This comming Tuesday, the full Board will vote on Borden’s reappointment. Changes to Green Building Standards on the Way In other news, San Francisco is preparing to adopt new green building regulations as part of the larger process of adopting the 2010 California Building Code. Legislation to do so was introduced at the Board of Supervisors a few weeks ago, and will soon be heard by the Land Use committee. It is expected that building types currently covered by San Francisco’s existing green building regulations will not see much of a change in the new regulations; however, those building types and projects not currently covered by the San Francisco-specific rules will likely be covered by the State’s new CalGreen green building code, which will become effective on January 1, 2011. We will take a closer look at the details in an upcoming update as the regulations make their way through the Board of Supervisors. For those looking to understand the differences between CalGreen and the other green building rating systems used in San Francisco’s code, which are LEED and Build It Green, a detailed comparison of the codes was just released and is available at the USGBC-NCC’s website: “http://mytinyurl.com/qt6qgh5t1c.” 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 leases, purchase and sale agreements, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work. Copyright 2010 Reuben & Junius, LLP. All rights reserved.    

Next Monday’s calendar for the Board of Supervisor’s Land Use and Economic Development Committee is chock full of legislation that could have significant effects on land use and real estate in San Francisco. Here’s the rundown: Transferable Development Rights (TDR) Amendments The TDR amendments that we discussed a few weeks ago are back at the Land Use Committee, after being in front of the full Board last week. To recap, the amendments would expand the universe of lots that individually landmark buildings could transfer TDRs to as well as create a new, generally applicable rule that any seller of TDR may be required to spend some of the proceeds on the preservation, rehabilitation or maintenance of their historic building. In addition, Old St. Mary’s Church would be rezoned so it can take advantage of the TDR program. The preservation requirement has been the most controversial measure in the amendments. Many argue that the requirement is unnecessary and harmful, as many lenders already require owners of historic properties to keep the buildings in good condition and also require that any proceeds obtained from the building must go towards paying down the loan. The preservation/maintenance requirement could in fact jeopardize historic properties by deterring lenders from loaning money for things like seismic retrofits. Last Tuesday, after stakeholders pressed these concerns with the Board, the Board divided the legislation, leaving the Old St. Mary’s rezoning as a standalone measure, and sent both items back to the Land Use Committee for further consideration. We have reason to believe some positive changes may be in the works. The committee will take up the ordinances on Monday. We will keep you posted. CEQA Reform We first reported to you last spring about the CEQA reform ordinance was first introduced. Among other things, the ordinance would set a 20-day appeal period for categorical exemptions and negative declarations, ending the current situation where these documents can be appealed at any time up until a project is approved an all other appeals for the project have been extinguished. Since the ordinance was first introduced, some amendments have been made, including expressly subjecting community plan exemptions to the 20-day appeal period. This reform package makes significant progress towards making the CEQA appeal process more efficient and equitable. The Land Use Committee will consider the ordinance Monday as well. Contact us if you would like a copy of the most recent version. Impact Fee Clarification Another ordinance has been making its way through the legislative process that, while technical in nature, substantially clarifies impact fees that are charged to projects located in specific plan areas (e.g. Eastern Neighborhoods, Rincon Hill). Among the more significant clarifications are: • Legitimization of offices uses in the Eastern Neighborhoods would be subject to a $2/sf Transit Impact Development fee and a $8.50/sf Jobs Housing Linkage fee, with no Eastern Neighborhoods impact fee, for a total of $10.50/sf. • Rincon Hill and Market/Octavia impact fees and SOMA Stabilization fee will be reduced, but the fee now will be based on the addition of gross square feet, as opposed to net square feet; the intent is to make these fees consistent with other fee calculations in the Planning Code, and also not to increase the actual amount charged (i.e. the use of the larger gross floor area number is off-set by the lower per square foot fee). • Clarifies impact fees and the Jobs Housing Linkage fee for changes of use which reduces the fee based on the existing use. • Subjects additions to existing structures to impact fees when there is an increase of 800 square feet, rather than 20% of the existing structure. • Subjects all changes of use in the Eastern Neighborhoods to the Tier 1 (lowest) impact fee. This ordinance will also be heard by the Land Use Committee on Monday. Creative (Potential) Plans for the King Street Borders What to do with the soon-to-be-closed Borders on King Street? LiveSoma.com reports this week that there is talk of a Lucky Strikes bowling alley, with hours until 2 a.m. and a full liquor license, being considered for the uniquely-sized space. Now that’s the kind of creative re-use we were expecting! (Can you tell that we are fixated on the big bookstore issue?) Status: Planning Commission Nominations The re-appointment of Planning Commissioner Gwyneth Borden is scheduled to be heard by the Rules Committee on September 30, 2010. Ms. Borden has served on the Planning Commission since 2008, and her term expired on June 30, 2010. The Mayor has also submitted nomination for the last, currently vacant, seat on the Planning Commission. Rodney A. Fong has been nominated for the Planning Commission seat previously occupied by Bill Lee. Mr. Fong is the current President of the Port Commission, and has served on the Port Commission since November 2006. Mr. Fong prior or current affiliations include Board President for the Fisherman’s Wharf Community Benefit District, President for the Fisherman’s Wharf Merchants Association, Board Member for the San Francisco Convention and Visitor’s Bureau, Chairman of the California Travel Industry Association and Board Member-Lifetime Seat for California Chamber of Commerce. We believe Mr. Fong would be a great addition to the Planning Commission. 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 leases, purchase and sale agreements, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work. Copyright 2010 Reuben & Junius, LLP. All rights reserved.        

New Guidelines for In-Kind Agreements to be Considered by Planning Commission As many readers are already aware of, over the past few years the city has begun to identify specific areas for neighborhood-based rezoning. These efforts have led to the Rincon Hill, Market/Octavia and Eastern Neighborhoods plans, to name a few. These plans impose an impact fee on all new development located within their boundaries. When subject to an impact fee, the Planning Code provides project sponsors the option of waiving the fee if an “in-kind” infrastructural improvement is provided in conjunction with a project. Examples of such in-kind improvements include new parks, child care centers or streetscape improvements. At today’s meeting, the Planning Commission will consider a new policy that will provide the Planning Department and the public guidance on how to pursue an in-kind agreement. The policy was developed by the Planning Department with consultation from area plan Citizens Advisory Committees (CAC). In general, the new guidelines ensure that all relevant parties have a chance to weigh in on a proposed in-kind improvement. The policy requires early notification and consultation with the plan area CAC as well as review by relevant city agencies before a proposed in-kind agreement is considered by the Planning Commission (which must ultimately approve any such agreement). The policy emphasizes (but does not require) that a proposed in-kind agreement should be endorsed by the local CAC. Many CACs will have prepared a list of community improvements that they have prioritized to give project sponsors an idea of what they would like to have built. The Planning Department will also review the proposed in-kind improvement to ensure its value covers the cost of the waived impact fee and to make sure there is a plan in place to maintain the improvement. An important note: if this policy is put in place, project sponsors will be required to complete the in-kind improvement before the first certificate of occupancy is approved for the principal project. Let us know if you would like a copy of the policy. And Then There Were 4…Big San Francisco Bookstores Regular readers will remember that we published an update in July discussing the future of big bookstores in San Francisco. We observed that while these large retailers were struggling throughout the Bay Area and nationwide, San Francisco’s stores appeared to be weathering the storm. Well less than two months later we’ve found the need to update that assessment. First reported on August 24 by the blog www.livesoma.com, the Borders bookstore at 200 King Street has posted store closing sale signs in its windows and will finally shut down on Saturday, October 16. So much for our observation that the store appeared to be humming along, and so much for San Francisco avoiding the bookstore closure wave. What could possibly fill this soon to be vacant space? Community Involvement Our managing partner Kevin Rose serves on the Solo and Small Firm Committee of the Bar Association of San Francisco. This committee is sponsoring a CLE event titled “Strategies for Launching and Running a Small Law Firm.” This seminar will be held on Saturday, October 23, and is targeted at lawyers looking to start their own practice, or as a refresher for newer firms or attorneys that have recently hung their own shingle. Please contact Kevin for more information. 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 leases, purchase and sale agreements, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work. Copyright 2010 Reuben & Junius, LLP. All rights reserved.    

Transferable of Development Rights (TDR) Changes in the Works Next Monday, the Board of Supervisors Land Use and Economic Development Committee will hold a hearing on a proposed ordinance that would make some substantial changes to the way TDR sales are treated. TDRs were created when the Downtown Plan was enacted in 1985. A survey done in conjunction with the plan rated buildings in the downtown area from I to V, based on their historic importance. Buildings rated “significant” or “contributory” had significant development restrictions placed on them. In exchange, owners of these properties were granted TDRs, measured in the number of square feet of developable space that the Planning Code permitted minus the amount of actual improvements on that lot. TDR could be sold to other downtown property owners to increase the amount of space that can be developed on the buyer’s development site. In the 25 years since the TDR program was created, hundreds of thousands of square feet of development rights have been traded downtown, and there are few large blocks left. During the last big development cycle, there was a concern that the shrinking supply of TDR would begin to limit downtown development. The proposed changes, an outgrowth of an attempt to help finance the continuing seismic retrofitting of Old Saint Mary’s Church, would do the following: 1. Currently, the transfer of TDR between lots is limited depending on the type of C-3 zoning district the transferring lot and receiving lot are located in. The proposed ordinance would allow the transfer of TDR between any two lots located in any C-3 districts if the transferring lot is also a designated an individual landmark (i.e. the landmark must be downtown) and the receiving lot is not within a Redevelopment Agency project area. There remain 24 landmarks in C-3 districts that have yet to sell TDR, so this would broaden the group of buyers for these TDR. The Planning Department has indicated it is limiting this loosening of TDR sale rules to individual landmarks in order to study the effects of such a change. If successful, further loosening of the rules for significant or contributory buildings could be proposed. 2. The proposed ordinance would require that the net proceeds of any TDR sale after July 1, 2010 “first be used to pay for or finance the preservation, rehabilitation, and ongoing maintenance of the building” on the transferring lot, as well as to correct any outstanding notices of violation issued by the Department of Building Inspection. There are only limited examples of what this work could entail provided in the ordinance, such as seismic retrofitting and improving access for the disabled. Guidance on exactly what type of maintenance and repair would be required in these situations would be prepared by the Planning Department in the event the proposed ordinance passes. The intent of this provision is to require owners of transferring lots to bring the existing building into working condition. This legislation gives a little, and takes a lot. On the one hand, some downtown landmark buildings are getting some benefit here, as it should be easier for them to sell their TDR. But on the other hand, every TDR transfer going forward (whether a landmark building or not) will be required to spend some of the money generated by the sale on the historic building. That second bit is a major policy change, is not necessary, and will be an incredible headache for both the property owners and the Planning Department to administer. The Planning Commission and Historic Preservation Commission have both approved the proposed ordinance, which now requires Board of Supervisors’ approval as it is an amendment of the Planning Code. We’ll keep you posted on the status of the legislation. To see a copy for yourself, visit: “http://sf-planning.org/ftp/files/Commission/CPCPackets/2009.1180TZM_v2.pdf” And Then There Were Five… You may have missed it while on your August vacation, but two Planning Commissioners’ terms have expired and there are now only five sitting members of the Commission. Commissioners Bill Lee and Gwyneth Borden terms expired on July 1, but the City Charter allows a member to continue to occupy their seat for 60 days if no replacement or reappointment has been made. That 60 days ran at the end of August. As of today, the Mayor has reappointed Commissioner Borden. Since the reappointment must go through the Board of Supervisors Rules Committee and then be approved by the full Board, the earliest Planning Commission hearing she could sit at would be on October 7. No reappointment or new appointment has been made for Commissioner Lee’s seat, meaning it may sit vacant for some time. This diminished Planning Commission can have serious effects. Fewer Commissioners mean less diversity of voices that consider and discuss the projects that come before the Commission. And of course, a project typically must receive at least 4 votes to be approved, regardless of the number of sitting Commissioners. With only 5 members on the Commission, a supermajority must vote in favor of any project, large or small, to be approved. 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 leases, purchase and sale agreements, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work. Copyright 2010 Reuben & Junius, LLP. All rights reserved.        

Mayor Gavin Newsom and Supervisor Bevan Dufty recently proposed an energy efficiency ordinance which would impact “nonresidential” buildings in San Francisco. While the City has already established high environmental performance standards for new construction, it has yet to do the same for existing buildings. According to the ordinance, building energy use accounts for 63% of the City’s carbon dioxide emissions. The ordinance purports to reduce citywide carbon dioxide emissions by more than 70,800 tons within the first five years after its adoption while also providing the private sector with a net present value exceeding $600 million dollars. Most significantly, the proposed ordinance would require nonresidential building owners to: (1) Prepare energy efficiency audits once every five years, and (2) Measure and disclose their buildings’ energy performance each year. Energy Efficiency Audit The energy efficiency audit would require owners of nonresidential buildings with gross areas of 5,000 square feet or greater to conduct a comprehensive energy efficiency audit for each building once every five years. These audits would be performed by, or under the supervision of, an energy professional, which is defined under the ordinance and includes some building engineers. Building owners would then file a confirmation of the energy efficiency audits with the San Francisco Department of the Environment (the “Department”). Building owners would also be required to submit a summary of which measures they have implemented and the sum of estimated energy costs and savings. The Department would make this information available to the public. Buildings constructed within the last five years, buildings that have received the US Energy Protection Agency’s Energy Star Label, and Leadership in Energy and Environmental Design (“LEED”) certified buildings are exempted from this requirement. The specific compliance dates will be specified by the Department of the Environment on a rolling basis over five years. Annual Reporting of Energy Use The annual reporting provision would mandate that owners of nonresidential buildings with a gross area of 5,000 square feet or greater use the U.S. Energy Protection Agency’s Energy Star Portfolio Manager to track the building’s total energy use for each 12 month period and obtain an Energy Star Portfolio Manager Energy Performance Rating (“Annual Energy Benchmark Summary”). This Annual Energy Benchmark Summary must be provided to all tenants occupying buildings affected by the ordinance. Depending on the square footage of a building, with the larger buildings prioritized, the initial submission date of the Annual Energy Benchmark Summary to the Department would be on April 1 of either 2011, 2012 or 2013, and then submitted annually every year thereafter. For example, buildings with a gross square footage of over 50,000 square feet would be required to initially submit an Annual Energy Benchmark Summary by April 1, 2011. Extensions of up to one year for filing the Annual Energy Benchmark Summary could be granted depending on whether the building is financially distressed, or if a building owner owns three or more buildings with due dates that fall within the same 12 month period. Confidentiality Protection When building owners inform the Department in writing at the time of submission that the information submitted is the confidential business information of the building owner, the Department will keep confidential any submitted information based on the existing legal definitions of “trade secrets”. Moreover, lists of cost-effective energy efficiency measures and estimated costs and benefits for individual buildings shall be presumed confidential. Enforcement In the event a building owner fails to file the required information for 30 or more days after the deadline, the Director of the Department (the “Director”) would indicate that building’s non-compliance status on line. If 45 days passes after the issuance of a written warning from the Director for a violation of any provision of the ordinance, the Director may impose administrative fines of up to $500 for each violation. In addition to the proposed ordinance, Assembly Bill 1103, signed by Governor Schwarzenegger in 2007, also imposes energy tracking and disclosure requirements on nonresidential buildings at the state level. The bill requires electric and gas utilities to maintain records of energy consumption of nonresidential buildings as of January 1, 2009, and once they have received the affected building owner’s approval, to upload such findings to the U.S. Environmental Protection Agency’s Energy Star Portfolio Manager. In addition, nonresidential building owners or operators must disclose their building’s Energy Star Portfolio Manager benchmarking data and ratings for the most recent 12 month period to any prospective buyer, tenant, or lender. However, a recent Assembly Bill passed in 2009, AB 531, delayed the initial start date for these disclosure obligations (which was January 1, 2010) until the California Energy Commission has the opportunity to develop an implementation schedule. Although well intended, the proposed San Francisco ordinance would impose greater tracking and reporting responsibilities on building owners, which would further increase the cost of doing business in San Francisco. Building owners should prepare themselves for these new requirements. 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 leases, purchase and sale agreements, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work. Copyright 2010 Reuben & Junius, LLP. All rights reserved.  

Real Estate Tax Appeal Deadline is September 15, 2010 Owners whose property values have declined as of January 1, 2010 are eligible to file a “decline in value” appeal with the San Francisco Assessment Appeals Board for the 2010-2011 tax year. If successful, the property tax bill would be retroactively reduced, and the taxpayer would receive a refund of any excess taxes that were paid. These appeals must be submitted or postmarked by September 15, 2010 and include the necessary filing fee. Please note that filing an appeal will not excuse the obligation to pay real estate taxes when due. If you would like more information about this process, or if you would like Reuben & Junius to file your appeal, please contact Kevin Rose. Proposed Ordinance Would Exempt Student Housing from City Affordable Housing Program Earlier this week, Supervisor Dufty introduced a new ordinance that would exempt new student housing projects from the City’s affordable housing program. Currently, virtually all new housing projects with five or more units are subject to an affordable housing fee, with the option of providing on-site or off-site affordable units in certain situations. This would appear counter-intuitive when applied to student housing, since housing provided by colleges and universities to students is normally considered “affordable housing,” when compared to market-rate rents. The justification for placing an affordable housing exaction on student housing is much weaker than for market-rate housing. The ordinance makes a relatively simple amendment to the affordable housing program. If passed, it would exempt from the program new housing provided by an accredited post-secondary institution, where at least 30% of students living at the housing project receive need-based financial aid. We’ll keep you posted on this as it makes its way through the legislative process. Fee Deferral Program May Be Expanded to Apply to Earlier-Approved Projects Last week, the Mayor introduced an ordinance that would make minor tweaks to the fee deferral ordinance. Importantly, one change would affirm that projects approved before the effective date of the fee deferral program, July 1 of this year, are eligible to take advantage of the program, even if the conditions of approval for the project required payment of all development fees prior to the issuance of a building or site permit. All projects, whether approved before or after July 1, need stimulative help right now, and this change ensures a broad pool of projects will be eligible for the fee deferral program. In addition, the ordinance would expressly exclude from the program those projects that have already pulled a building or site permit, which ultimately expired, and obtained a refund of fees. 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 leases, purchase and sale agreements, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work. Copyright 2010 Reuben & Junius, LLP. All rights reserved.