May 30, 2006
Volume 12, Number 3

This Issue of the BOMA-San Francisco Advocate Is Brought To You By

  City Park

Special Election Issue!

BOMA SF PAC Makes Endorsements
BOMA’s Political Action Committee Board of Directors has issued its recommendations for the upcoming June 6th primary election, and has the following slate to present:
      For Lt. Governor: CA State Senator Jackie Speier

      For CA State Senator, District 8 (San Francisco/San Mateo Counties): Leland Yee

      For CA State Assembly, District 12 (San Francisco/San Mateo Counties): Fiona Ma

      For CA State Assembly, District 6 (Marin/Sonoma Counties): Cynthia Murray

San Francisco City Propositions:

A - Special $10 million annual budget set-aside for homicide prevention services – VOTE NO.

BOMA has historically not supported special carve-outs of the budget by ballot measures, as it limits local government’s ability to address immediate civic needs and reduces the flexibility of city leaders in allocating expenditures. Funds for any homicide educational and/or outreach programs should be budgeted appropriately in the regular budget process, not carved out as a set-aside. While the purpose of the measure may have merit, and is limited to three years, it is still not the proper way to address this problem of increased violence in the City.  BOMA Opposes.

B - Eviction Disclosure mandate for residential sales – VOTE NO.

On the issue of residential evictions and disclosures, it’s already required that potential buyers of residential property in San Francisco be notified if there was an eviction at or before closing, and buyers have the ability to pull out of the transaction at that time. This ordinance would require additional advance written notice to all interested buyers while the property is listed that an eviction has occurred. This measure is overkill and unnecessary. BOMA Opposes.

C - Re-organization of the Transbay Joint Powers Authority – VOTE NO.

The desire to modify the composition of the Transbay Joint Powers Authority, which is managing the development of a new public transit center at the site of the current Transbay Terminal in downtown San Francisco, is totally political. The measure was written by Supervisor Chris Daly because he couldn’t get the current agency Board to agree with him on a number of votes. By changing the process by which people are appointed to this body, the balance of power of the JPA will shift from the Mayor to the Board of Supervisors. BOMA Opposes.

D – Creation of Special Use District for Laguna Honda hospital to limit medical services there – VOTE NO.

The use of the city’s planning codes to decide which type of patients should be housed/admitted to Laguna Honda hospital  is most definitely a misuse of the planning process, and a stretch of competencies of those in the Planning Department. This measure was prompted by a bad administrative decision on the part of the County Public Health Director, which has since been rescinded. The need to push for changes in the planning code is more about promoting new private development on public lands than it is about admissions policies at the hospital. BOMA Opposes.

Business Associations File Prop I Lawsuit Against San Francisco City Government
The Committee on Jobs and the San Francisco Chamber of Commerce filed suit in San Francisco Superior Court May 22 to compel the City to enforce the requirements of voter-mandated Proposition I.  BOMA, the Hotel Council of San Francisco, the San Francisco Taxpayers Union, the San Francisco Apartment Association, the San Francisco Association of Realtors, the Coalition for Better Housing, the San Francisco Hispanic Chamber of Commerce and the Geary Boulevard Merchants Association are supporting this lawsuit.  Proposition I was approved by the voters on November 2, 2004 and passed into law on December 17, 2004. The law requires the City and County of San Francisco to create an Office of Economic Analysis (OEA) and for the OEA to analyze any legislation pending before the Board of Supervisors that might affect the overall economic health of the City before the Board votes on it. The lawsuit asks the court to compel the OEA to immediately begin a review of legislation pending before the San Francisco Board of Supervisors to determine whether any of the proposed laws will have an impact on the City’s economy through loss of revenue, job creation or other factors. More than 18 months has elapsed since voters approved Proposition I and only two ordinances have been studied by the Controller, according to Nathan Nayman of the Committee on Jobs. “Before San Francisco asks its residents and businesses for another dime, it ought to show us the results of these backlogged economic analyses,” he said.

The lawsuit also asks the Court to invalidate certain rules passed by the Board of Supervisors related to the implementation of Proposition I. As passed by the voters, the ordinance urged the Board to only waive economic analysis in times of crises and only with a two-thirds majority of the Board supporting the action. In August 2005, the Board of Supervisors passed a set of rules which gave the President of the Board the power to waive an economic analysis of any legislation before the Board; allow the Board to vote on a piece of legislation without an economic report; and exempted certain kinds of legislative documents such as resolutions from being subject to any analysis under Proposition I.  The lawsuit asks for all of these rules to be invalidated, as they circumvent the will of the people and intent of the proposition.

Several pieces of legislation are currently pending at the Board of Supervisors that are likely to have an impact on the City’s economy, including the Minimum Wage Implementation and Enforcement Ordinance which would require businesses to pay an annual fee to enforce minimum wage laws, proposed changes to the City’s Inclusionary (Affordable) Housing Program and a proposed Moratorium on Condominium Conversions and new market-rate housing. The move to close JFK Drive in Golden Gate Park on Saturdays without an economic analysis of such a decision on the city’s museums located there was yet another example of the current Board’s so-called “progressive” majority’s complete disdain for Proposition I and its author, Supervisor Michela Alioto-Pier. The lawsuit asks that the Controller’s office complete an economic analysis of all pending legislation within 30 days.

California Public Utilities Commission Votes for Critical Peak Pricing Mandates
On May 25, 2006, the CPUC voted 4-1 to reject a compromise 2006 tariff agreement that PG & E had negotiated with its various customer classes on energy rates and that had been approved by a PUC Administrative Law Judge. Their reasons revolved around their desire to push the utility to make peak period power more expensive to its commercial and industrial customers, and to force those large customers (over 200 kW) to curtail their consumption on certain days during the summer or face punitively higher rates, up to five times normal rates, for power consumed during those peak hours. Currently, the issue of participation in any load-shedding programs has been left up to the local utility company to manage, and was completely voluntary on the part of the building owner. Now, with the adoption of the state’s new Energy Action Plan, the PUC has decided to get tough on the state’s commercial and industrial customers and to force them into load-shedding programs or face punitive rates as a penalty. The issue of marginal rate costs has yet to be decided, and BOMA will advocate for a fair determination of that figure for commercial office buildings. It is our contention that it is far cheaper to supply an additional kilowatt of power to an office building on a hot summer day than it is to a home in the Central Valley. On that note, BOMA San Francisco has applied for funding from BOMA International’s Industry Defense Fund to help increase BOMA California’s advocacy efforts before the CPUC on the issue of critical peak pricing and rate parity, and has been joined in its request by all the other BOMA Locals in the state.

Daly/Peskin Parking Restrictions Defeated – New Legislation Introduced
BOMA and other business groups scored a victory for moderation when the Mayor’s veto of the proposed parking restrictions on new downtown parking spaces was upheld by the Board of Supervisors. Thanks should be extended to the four Supervisors who voted to support the Mayor and a more moderate approach to limiting parking in new residential buildings built in the C-3 District. They are: Supervisors Michela Alioto-Pier, Bevan Dufty, Fiona Ma, and Sean Elsbernd. The new proposal presented by the Mayor’s office and introduced by the Board President Aaron Peskin will still not allow a 1 – 1 ratio in units of less than 1,000 square feet, a serious flaw, and it only added a couple of levels to new above grade garages that might be proposed for construction in the future. Nevertheless, BOMA, the Chamber, SFSOS, and others will continue to work with the city planning department and the Board to push for the maximum of 1 – 1 parking ratio (parking space per new apartment or condo unit), and for more flexibility in parking garage construction regulations.

BOMA California Legislative Conference a Success!
The eight BOMA locals in California united in Sacramento recently to discuss issues of importance to commercial real estate with our state legislators. BOMA San Francisco members met with Assembly Members Leland Yee (who was given BOMA Cal’s Public Official of the Year award), Mark Leno, Joe Nation, Gene Mullin, and aides to State Senators Jackie Speier and Carole Migden. The top issues for BOMA this year included: the revision of the California’s commercial lease laws governing security deposits (AB 1161), the expansion of “good Samaritan” protections for building owners who install AED (automatic external defibrillators) on their properties, and the revision of commercial (not consumer) contracts to allow a waiver of jury trials. BOMA members expressed their need for legislation which would allow businesses and/or property owners the ability to correct small defects that technically violate disabled access or Proposition 65 laws before legal action can be filed. This so-called “right to cure” concept would give the business or property owner 30 – 90 days to “fix” the problem before legal proceedings could be initiated. Unfortunately, this concept is vigorously opposed by some attorney groups and certain disabled activists, and is not expected to move far in the Legislature. BOMA members also expressed their desire for the Legislature to pass an infrastructure bond for consideration by the voters in November. 

Post Office Blues
Many BOMA buildings in downtown San Francisco have been facing extremely poor service from the U.S. Post Office lately, and their affected tenants are very unhappy with deliveries that have been made later and later in the day. After many weeks of trying to set up a meeting with the Post Office, assistance was received from Senator Boxer’s office and a meeting with Robert W. Reed, Manager of Customer Service Operations for San Francisco, and Larry K. Frost, Manager for Customer Services at the Embarcadero Post Office, was held on April 20 at the BOMA Office. At this meeting it became clear that much of the problem was due to a total revamping of the local post office that eliminated VIMs (vertically integrated mail systems, i.e., mail chutes) and installed new mail box systems. Another part of the problem has also been the increased shifting of post office personnel, particularly in the ranks of downtown SF mail carriers, and that transition has hurt timely deliveries as well. Postal union “bumping rights” allow employees the right to pick any open delivery routes for up to two years, based on seniority, so the transitional time can be very long before a permanent carrier replacement is decided. BOMA offered to be a conduit for any future discussions between the Post Office and downtown San Francisco office buildings whenever there are problems or new policies that need to be aired. A special briefing on how to properly address mail for speedier deliveries will be held at the BOMA office on Tuesday, June 7th, at 10 a.m. All members are invited.

The Post Office did provide the following list of supervisors to contact whenever you have problems with mail deliveries.

Downtown San Francisco Post Office Supervisors – Email addresses (as of April 30, 2006)

94102 = Stephanie.Porter.Reid@usps.gov
94103 = John.T.Yang@usps.gov
94104 = Kathleen.P.Chung@usps.gov
94105 = Kelly.Loh@usps.gov or Daniel.Penrose@usps.gov
94107 = Emma.Rivera@usps.gov
94108 = Kian.Yee.Chung@usps.gov
94111 = Marlon.Veloso@usps.gov or Warren.Lo@usps.gov

New SF Fire Marshal Appointed
Barbara Schultheis was appointed Assistant Deputy Chief of the Division of Fire Prevention and Investigation and the county’s Fire Marshal earlier this month by SF Fire Chief Joanne Hayes-White, succeeding Paul Chin, who recently retired. Ms. Schultheis, 44, has served 13 years in the San Francisco Fire Department as a Firefighter, Fire Inspector and as a Lieutenant supervising Plan Check in the Bureau of Fire Prevention. ADC Schultheis is a native of Evansville, Indiana, and has lived in the San Francisco Bay Area since 1979. She received her BA from San Francisco State University. Importantly for BOMA, Ms. Schultheis has extensive training in the building and fire codes and is certified as a Building Plans Examiner UBC, NICET Level II Fire Alarm Tech, and NFPA Certified Fire Inspector. She has served as a trainer for SFFD and DBI inspectors and participated in the annual BOMA Building Code Seminars in 2002 and 2003. In her inaugural May 24th visit with BOMA as our new Fire Marshal, Ms. Schultheis stated she wanted to push for more training opportunities for her staff, and that she would be adding a new Fire Protection Engineer to plan check in July, with another position requested. Lt. Bill Mitchell has been promoted to head the Fire Department’s Plan Check operations and Cpt. Mario Ballard will head up enforcement. The new Fire Marshal can be contacted directly by phone (415-558-3320) or via email at Barbara.Schultheis@sfgov.org.  Congratulations, Barbara!

SF Building Department Deputy Director Carla Johnson Introduces New Downtown Inspectors
The Building Department is also going through a lot of new personnel changes. Recently, the newly-appointed Deputy Director Carla Johnson (415-558-6676) visited with BOMA members at our Codes and Regulations Committee meeting to introduce a new group of building inspectors who will work overseeing tenant improvements and other construction projects in the downtown areas. There are three new downtown inspectors: Y. Tam Chiu (District 1 – eastern half of SOMA – Phone: 415-558-6111), Patrick O’Riordan (District 2 – NOMA Financial District – Phone: 415-558-6105), Rick Halloran (District 3 (western half of SOMA – Phone: 415-558-6110), and a new Back-Up Inspector for the three downtown districts, Edward Greene (415-558-6123).  Dan Lowrey (415-558-6127) is the new Senior Building Inspector for the three downtown districts, and Daniel Dukes (415-558-6210) will cover Mission Bay and SF Port projects. The Department has also hired a new Public Information Officer, Bill Strawn (415-558-6131), who will help disseminate bulletins, promote outreach efforts, and build more awareness of the Department’s rules and regulations. BOMA welcomes these new inspectors and looks forward to building a great relationship with all of them.

San Francisco Board of Supervisors Considers Employer Fee to Enforce Minimum Wage Laws
As if the employers in San Francisco weren’t taxed enough already, Supervisor Sophie Maxwell (District 10, Bayview/Hunter’s Point, Potrero Hill) has proposed a new fee that all employers would pay to enforce the city’s minimum wage laws. Originally written as a flat $39 annually per employer, the fees have now morphed into a graduated scale with a small business exemption, to become effective with the city’s next fiscal year (July 1, 2006). The amount of the fee will depend on the employer’s business license registration fee, which is based on the employer’s payroll expense attributable to San Francisco. Nonprofits, charities, and other organizations exempt from Federal income taxes would be exempt from this fee. The City Treasurer/Tax Collector would collect the new fee employers at the same time as it collects the registration fee each year. If the employer’s business license registration fee is $150, the minimum wage enforcement add-on would be $23. If the business license fee is $250, the add-on would be $38, and if the employer business registration fee is $500, the minimum wage enforcement fee add-on would be $77. Those fees would increase to a maximum of $111 in fiscal 2007-08 for businesses paying an annual $500 registration fee. After FY 2007-08, the Controller would adjust the fees annually based on the CPI, but could also raise the fees if he determine that the fees are not adequately covering the expenses of monitoring the city’s minimum wage laws.

This proposal will be heard in the Budget and Finance Committee at City Hall on June 7th at 1 p.m.

San Francisco Studies New Transit Fee on Downtown Businesses
Recently the City issued an RFQ for consultants interested in doing a nexus study to justify creating a new fee for downtown employers to pay to help subsidize MUNI. The rationale is that downtown businesses are better served by public transit, and should pay more for it. Supervisor Aaron Peskin, who represents downtown San Francisco, has called for more taxes on the downtown business community, and stated so publicly at a BOMA Board of Directors meeting last year. In a letter to Ed Harrington, the City Controller who will select the consultant to do the study and will define the parameters of the study, BOMA admonished the City to consider that any fee for MUNI service improvements should be assessed citywide, as downtown is a destination for residents living in all parts of the City, as well as outside of the City. BOMA also urged the city to consider the fees that are already being paid by downtown property owners and businesses for public transportation, including the Transit Impact Development Fees, the annual fees paid for Transportation Management reports, and Commuter Checks given to employees. Lastly, BOMA urged the City to consider raising the fares as the current $1.50 charge does not even cover 25% of the system’s costs, far below national averages, and, to better enforce the collection of fares from passengers. BOMA also recommends that 100% of the city’s parking tax be dedicated to MUNI, instead of the current 50%. BOMA will monitor the progress of this study.

San Francisco Revenue Coalition Proposes New Gross Receipts Taxes on Business
A San Francisco-based “revenue coalition” made up of more than a dozen community associations and labor organizations has put together a new gross receipts tax proposal that they hope the Board of Supervisors will place on the November, 2006 ballot. They are pushing for more taxes to add revenue to housing, health and human services provided by the City to low and moderate income people. The coalition is working with Board of Supervisor President Aaron Peskin to restore the gross receipts tax that was repealed in 2000 following a lawsuit from the business community. The initial proposal will hit the real estate industry particularly hard. As it’s currently being discussed, the rate for commercial leases and rents will be 1.39% or $13.95 per $1,000 of rental income. Information and publishing and legal services will be taxed at .3% or $3 per $1,000 of income. All other businesses will pay .1% or $1 per $1,000 of income, unless the total revenue is less than $1 million a year. (i.e., small business exemption) This new tax is expected to net over $65 million a year. It is unclear why real estate rental or leasing income is being targeted for the largest tax bite, given the national profit margins for 2004-5 were 5.2%, far below the average of 14.9% for information-related industries, but it is quite possible that politics contributed to this decision, as property owners only account for approximately 35% of the electorate in San Francisco.

BOMA Government and Public Affairs Committee Adopts New Public Policy Positions
Since it’s inception in 1914, BOMA has been a strong advocate for the commercial real estate industry in San Francisco, and throughout the Bay Area. It currently represents over 250 office buildings in San Francisco, and others in San Mateo, Marin and Sonoma counties. Each year the association’s Government and Public Affairs Committee revises and updates its public policy initiatives to best reflect current needs. Our concerns are focused in several areas:

- Good Government, which means making our city government more efficient and responsive
- Fair and Consistent Land Use and Parking Policies
- Balance Housing Policies
- Enforcement of Quality of Life Laws

For a complete list of our public policy issues, readers are invited to click here

New City Demographic Study Shows Interesting Trends
At a recent BOMA Government and Public Affairs Committee meeting, Ted Egan of ICF Consulting presented a series of graphs and facts that updated the demographic information about San Francisco. In the study, only 25% completed, the initial data (2004 figures) shows that there is no racial majority in the City, and that 39% of residents were born outside of the U.S. In 2004, over 60% of San Francisco immigrants came from Asia, with 28% of those coming from China. Mexico accounted for an additional 20%, with European immigrants accounting for a similar 20%. The real news in the initial findings was the close correlation between education and income, the growing disparity between the “haves” and the “have nots”, and that few people without a college education were now able to afford the cost of living in San Francisco. While the city’s 5% unemployment rate is below state and national levels and over 50% of San Franciscans have a four-year college degree, only 50% of the people who work in San Francisco actually live in San Francisco. The study showed that the city’s small business community was the key to job growth here and that the self-employed accounted for 18% of private sector jobs. Average salary for a college graduate: $72,000/year. Those with graduate degrees earned on average over $90,000. The city’s top jobs are increasingly in the high tech, especially digital arts, and knowledge-based professions (legal, accounting, consulting, biotech, medical). Lastly, San Francisco is poised to suffer the least from increased traffic congestion as new jobs are added if the current commute statistics hold, which show 75% of the City’s downtown employees commute to the City via public transportation, rather than single occupant cars.

Need Summer Help? Check This Out!
The Enterprise for High School Students is seeking temporary or seasonal commercial or domestic jobs or internship opportunities for youth ages 14-18. The mission of the Enterprise for High School Students is to “increase student preparedness to explore and pursue career paths through training and counseling and guidance; to offer a variety of experiential options within the work world and to provide the support network to raise the youth’s expectations for success.” If you wish to discuss a student intern for summer employment, contact Leonard Weingarten, the Director of Business Partnerships, at 415-392-7600, ext. 304. Check out their website: www.ehss.org.  

DON’T FORGET TO VOTE ON JUNE 6TH!