Planning Commission - Regular Meeting

Okay, good afternoon and welcome to the San Francisco Planning Commission hearing for Thursday, May 21st, 2026. When an item is called that you would like to submit testimony for, we ask that you line up on the screen side of the room or to your right. Each speaker will be allowed up to three minutes. When you have 30 seconds remaining, you will hear a chime indicating your time is almost up. When your allotted time is reached, there is a second chime indicating that your time is up. And I will announce and take the next person queued to speak. There is a very convenient timer on the podium where you can see how much time you have left and watch your time tick down. Please speak clearly and slowly. And if you care to, state your name for the record. I ask that we silence any mobile devices that may sound off during these proceedings. And finally, I will remind members of the public that the commission does not tolerate any disruption or outbursts of any kind. At this time, I'd like to take roll. Commission President Campbell? Here. Commission Vice President Moore? Here. Commissioner Braun? Here. Commissioner McGarry? Present. Commissioner Soe?

Present.

And Commissioner Williams?

Here.

Thank you, Commissioners. First on your agenda is consideration of items proposed for continuance at the time of issuance. There were no items proposed for continuance. However, we did receive a somewhat late request for a continuance for item 2, case number 2022-012254CUA-02-2. for the property at 2001 37th Avenue conditional use authorization under your consent calendar requesting a four-week continuance to June 18th 2026. I have no other items proposed for continuance and so we should open up public comment members of the public this is your opportunity to address the commission on their continuance calendar only on the matter of continuance You need to come forward. Last call. Seeing none. Public comment is closed. Your continuance calendar is now before you, commissioners.

Commissioner Braun.

I hope that the continuance for this item gives an opportunity for continued dialogue with the concerned neighbors. Just to be clear for anyone in the room, this is the item that is the bike parking at St. Ignatius. So it's being continued by four weeks for a hearing. I move to continue the item. Second.

Thank you, Commissioners. On that motion to continue, Item 2 to June 18th. Commissioner McGarry? Aye. Commissioner So?

Aye.

Commissioner Williams? Aye. Commissioner Braun? Aye. Commissioner Moore?

Aye.

And Commissioner President Campbell?

Aye.

So moved, Commissioners. That motion passes unanimously 6-0, placing us under your consent calendar for Item 1, Case Number 2026-002251, CUA 5238 Diamond Heights Boulevard, Conditional Use Authorization. Members of the public, this is your opportunity to request that this matter be removed from the consent calendar and heard under the regular calendar today or at a future hearing. Again, you need to come forward. Seeing none, last call, public comment is closed, and your consent calendar item is now before you, commissioners.

Vice President Moore? Move to approve.

Second.

Thank you, commissioners, on that motion to approve item 1 on consent. Commissioner McGarry? Aye. Commissioner So? Aye. Commissioner Williams?

Aye.

Commissioner Braun? Aye. Commissioner Moore?

Aye.

And Commissioner President Campbell?

Aye.

So moved, commissioners. That motion passes unanimously 6 to 0, placing us on commission matters item 3, the land acknowledgment.

The Commission acknowledges that we are on unceded ancestral homeland of the Ramaytush Ohlone, who are the original inhabitants of the San Francisco Peninsula. As the indigenous stewards of this land and in accordance with their traditions, the Ramaytush Ohlone have never ceded, lost, nor forgotten their responsibilities as the caretakers of this place. as well as for all peoples who reside in their traditional territory. As guests, we recognize that we benefit from living and working on their traditional homeland. We wish to pay our respects by acknowledging the ancestors, elders, and relatives of the Ramatushaloni community, and by affirming their sovereign rights as First Peoples.

Thank you. Item 4, consideration of adoption draft minutes for May 7, 2026. Members of the public, this is your opportunity to address the Commission on their minutes. Again, you need to come forward.

Thank you.

Seeing none, last call. Public comment is closed. Your minutes are now before you, Commissioners.

Move to adopt the minutes.

Second.

Thank you. Commissioners, on that motion to adopt your minutes, Commissioner McGarry? Aye. Commissioner So? Aye. Commissioner Williams? Aye. Commissioner Braun? Aye. Commissioner Moore?

Aye.

And Commissioner President Campbell?

Aye.

So moved. Commissioners, that motion passes unanimously 6-0. Item 5, Commission Comments and Questions.

Seeing none, Jonas.

Very good. Department Matters, Item 6, Director's Announcements.

Good afternoon, commissioners. Great to see you again. I wanted to make sure your attention was called and the public's attention was called to an announcement by Mayor Lurie and Supervisor Myrna Melgar earlier this week, a point near and dear to this commission's heart and a question that you have asked us repeatedly over the last six to eight months about How do we shore up funding for affordable housing in a sustainable and sustained way? So the announcement was the introduction of a measure for this fall's ballot that will look to more than double I don't know what the percent is. From 50 million to 125 million, the city's affordable housing trust fund, which is the annual amount that will be dedicated from our general fund to permanent affordable housing production or acquisition. THAT MEASURE WILL BE FUNDED THROUGH INCREASED PROPERTY TAX REVENUE AS WE CONTINUE TO SEE OUR PROPERTY TAXES GO UP POST-COVID AFTER THE DROP THAT WE SAW. THERE IS, YOU KNOW, IT IS BEING PAIRED WITH THE RECOMMENDATIONS OF THE TECHNICAL ADVISORY COMMITTEE HOSTED BY THE CONTROLLER'S OFFICE ON INCLUSIONARY HOUSING REQUIREMENTS. SO THAT ASSOCIATED LEGISLATION WILL COME BEFORE YOU IN COMING WEEKS AND WE'LL DISCUSS THAT. But the permanent affordable housing measure, voters willing, is, I think, a strong response to some of the questions that you've been asking us over the past period of time. So thank you for your leadership on that. Also, the planning department and DBI, we went in parallel together. to the Budget and Finance Committee last week and this week to bring our budgets, again, separate budgets, but jointly planned forward and through the Board of Supervisors. So we look forward to continuing that as the city approaches the July 1 deadline. And then lastly, just to note that Monday is a holiday. The Permit Center and the Planning Information Counter will be closed, but we'll be back busy to serve the public on Tuesday. Thank you.

Seeing no questions for the director, we can move on to item seven, review of past events at the Board of Appeals and the Historic Preservation Commission. I have no report from the Board of Supervisors for you.

All right, good afternoon, President Campbell and commissioners, Cory Teague, zoning administrator. The Board of Appeals did meet last night, and they heard a case of interest to the Planning Commission. It was not a case that was before the commission, but generally of interest. And this was the emergency demolition permit for 659 Union Street. And the first hearing was held about a month ago for that. There was an emergency demolition order issued by the director of DBI. The structure became so unsafe, it was an imminent safety risk. That permit was issued per that order, and it was appealed. Again, the Board of Appeals heard it a month ago, had some concerns about what led to the state of that situation now. There had been an original fire in 2013, a second fire in 2018, and the building has not obviously been redeveloped in any way since that time, although there had been a lot of process with the community and with the department working through that. And there are also questions about whether or not the demolition, if it went forward, would have any impact on a legal right of return for any of the tenants who were there previously. So the Board of Appeals originally continued that hearing for about a month to last night to allow all the parties to provide more information on those questions. And that happened through new briefs, new testimony, new Q&A. The board generally still expressed some concerns with kind of how things got to where they are now, but ultimately did vote unanimously to deny the appeal and allow the emergency demolition permit to move forward. But I'm available for any questions you may have.

The Historic Preservation Commission also met yesterday where they considered a slew of landmark designations, the first being the House of Latin Rock on 25th Street, which included the Casa Bandido mural that pretty much envelops the entire House. Then they took up about 20 landmark designations for District 8 in response to the family zoning plan. I won't go into those individually, but that was their day yesterday. Commissioners, that will place us under general public comment. At this time, members of the public may address the Commission on items of interest to the public that are within the subject matter jurisdiction of the Commission except agenda items. With respect to agenda items, your opportunity to address the Commission will be afforded when the item is reached in the meeting. When the number of speakers exceed the 15-minute limit, general public comment may be moved to the end of the agenda.

Thank you. Good afternoon, George Ashutosh. I sent you the email about that case. It's one of my favorite things to read. And I'm just so sad that it was never published, because a public case, if it's not published, doesn't mean anything, except if you'd like to read it. And I suggest people read it, because I think it gets to the heart of so many matters. And thanks to Agency Counter. And Mr. Cabrera was helping me get onto agency counter. I saw that the subject of this court case has come back to life. And I saw the permit application, the plans. And there was an Ellis Act eviction there of the gentleman who lived there who was involved with this case back in 2007 when it was decided that it was a demolition, not an alteration. But the subject site is back. And when I looked at the application, I thought, it's ironic that it doesn't ask anything about if there are tenants living there. Now, I know the gentleman was gone. And he was Ellis since over 10 years. So I guess they didn't have to. But it just seemed to me. that every application other than, say, the SB 330 application, which has request information about tenants, and the SB 9 application, but all those other applications, and there's a whole bunch of them now, including like the one for this site on San Jose, small residential project application. STREAMLINE MULTIFAMILY PURSUANT TO SB 423, HOUSING CHOICE SF, EVEN VARIANCE APPLICATIONS AND MIXED USE PROJECT APPLICATIONS. THEY SHOULD HAVE A LITTLE BOX TO SAY, ARE THERE TENANTS THERE? AND I THINK THAT WOULD BE VERY HELPFUL FOR THE STAFF WHEN THEY DO THEIR JOB. IT WOULD BE HELPFUL FOR THE PUBLIC. IT WOULD CERTAINLY BE HELPFUL FOR THE TENANTS. AND I DON'T THINK THAT IT WOULD BE a constraint on or a hardship for a project sponsor to have to fill that in. So I know, as I said, it's on the SB 330. And sometimes people also fill in another application. And I don't see why it couldn't be on every form. I don't think it would be duplicative. And I think it's really important now, given the frenzy we're living in. And I'll just give an example. of a project that didn't have that box, and that's the Carl Jensen flats. And we only found out about that because of the neighbors. So that's one example. There are others that I've come up with recently that are concerning that I think it would be nice for the project sponsor to put on there that there were tenants there. And so I'll leave it at that. So again, just please fix the forms. I mean, they're online. I would think it'd be pretty easy to fix that you could just add that little box to all the applications. Are there tenants or have there been tenants at any time? Even if it doesn't apply to any of the rules, just to know that there are tenants there. And there's my 150 words for the minutes. Have a very nice three-day weekend. Thank you. Take care.

Okay, last call for general public comment for items not on today's agenda. Seeing none, general public comment is closed. We can move on to your regular calendars, excuse me, your regular calendar, commissioners, for item eight, case number 2026-002589, PCA, hotel uses in RH districts. This is a planning code amendment.

Good afternoon, commissioners, Joseph Sackey, planning department staff. The item before you is an ordinance introduced by Supervisor Mandelman that would increase the maximum number of guest rooms for hotel uses in RH2 and RH3 zoning districts from five or fewer rooms to eight or fewer rooms. Prior to staff's presentation, a representative from Supervisor Mandelman's office is here to introduce the item.

Good afternoon, commissioners. My name is Ranil Bajoi. I'm a legislative aide for President Mandelman. Thank you for having me today. I'm here on his behalf. As was just mentioned, he introduced this ordinance earlier this year. It makes a relatively modest change to the planning code. Under current rules, small hotels in RH2 and RH3 districts are conditionally permitted only up to five guest rooms, which is a threshold that, as was noted in the staff report, traces back to a building code definition and hasn't been revisited in a planning context. This legislation would increase the number of rooms that are conditionally permitted to eight. The immediate catalyst for this legislation was a constituent in Noe Valley who's here today. We have a longstanding bed and breakfast that's really beloved by the community called Noe's Nest. It's operated with eight guest rooms and a lot of community support. But there's currently no pathway under existing code to legalize that use. As we dug more into this issue, we realized that the issues facing Noe's Nest were by no means unique. There's several bed and breakfasts around San Francisco. We have a large stock of historic properties that are costly, and I think especially in light of our housing crisis, potentially inappropriate to maintain solely as single-family residential uses. Allowing modestly larger small hotels, importantly still subject to conditional use authorization, we believe would allow for more expansive activation of these properties in a way that would unlock both economic opportunity as well as add to neighborhood vitality. Staff has also made several recommendations, I think three recommended modifications to this ordinance. We are fully supportive of all of them and we think that they make the legislation much stronger. So we appreciate the department's careful work on this and the strong community support that this legislation has generated. And with that, I'll pass it back to Joe and respectfully ask your recommendation for this item. Thank you.

Good afternoon again, commissioners. So as mentioned, the immediate context for the legislation is related to a specific case, but the ordinance would apply throughout the relevant zoning districts. And again, just to clarify, the proposed ordinance applies to hotel uses as they're defined within the planning code, which are retail uses. It does not apply to residential hotels, single room occupancy hotels, which are residential use. and are unaffected by this legislation. Under the planning code's definition, there is functionally no difference between a hotel containing five guest rooms or eight guest rooms. There are potentially implications under the building code, but the complete recitation of those are outside of my expertise. The residential districts affected by the proposed ordinance are generally characterized by residential buildings that are limited in scale and suitable for family occupancy with limited residential uses. So hotels in the RH2 and RH3 districts are small scale and most likely to be located in converted residential buildings. The ability to establish these hotels provide property owners revenue generating opportunity while also allowing them to maintain the property as a permanent residence. The proposed ordinance would increase the allowable number of guest rooms for hotels, but would otherwise not affect the permitted locations or the approval processes for hotel uses. In terms of public comment, the planning department has not received any direct public comment, but the supervisor's office did forward approximately 50 letters and signatures submitted in support, which positively endorsed the expanded opportunities for these small-scale hospitality uses that advance preservation and maintenance of historic properties while contributing to local economic activity. So staff do have some recommendations. So the staff recommends that the commission adopt a recommendation for approval with modifications of the ordinance. The department supports the overall goals of the ordinance because it would modestly increase the potentially permitted intensity of hotel uses while still retaining the conditional use requirement and ensuring that each case is considered in context. The proposed ordinance could be further enhanced with the following recommendations. The first is to modify the ordinance to apply a consistent standard across the residential zoning districts that currently restricts hotels to five or fewer guest rooms. So for example, the RM districts, the residential mixed districts, and some of the RTO districts also impose this five-room cap. And generally, RH districts are the most restrictive in terms of allowed uses and intensities So we think it just makes sense to apply a kind of uniform standard across the residential districts. The second recommendation is to increase the maximum number of guest rooms permitted from eight to 10. Although the legislation applies more broadly, the number eight kind of is generated by this specific case. And our thinking is essentially if a hotel use came in with nine guest rooms, it would make sense to potentially remove the need for further legislative process and just kind of preemptively up it to 10. And then finally, for the third recommendation, we do recommend amending the hotel and motel findings of 303 to include a criterion for cases where a hotel use is established within a single family home specifying that the Planning Commission consider the effects on the existing home's quality and viability as an independent dwelling unit. This is not a new situation introduced by the ordinance, but it could potentially be exacerbated where a single family home converts a portion of the building for hotel use, leaving only a very small portion of the home that qualifies as a dwelling unit. And under the planning code, that would not count as a full residential conversion requiring a conditional use authorization for the conversion or the removal of a dwelling unit. But I think among discussion and staff, we just want to make sure that the kind of viability of the retained dwelling unit is considered. So that concludes my presentation. I am available for any questions.

With that, we should open up public comment. Members of the public, this is your opportunity to address the commission on this item.

Good afternoon, everyone. My name is Carol Yenny, and I'm a former president of the Noe Valley Merchant Association. Currently, I'm a treasurer. Also, I'm on the executive board of the Council of District Merchants. This wonderful bed and breakfast is in our neighborhood, Noe's Nest. We love it. It's the only one like it, and we are here to support Sheila Ash and also the request of Supervisor Mandelman to change the code for this. It's a wonderful addition to our neighborhood, and we have many people that come to visit families with children, need a place to stay, love the convenience of the bed and breakfast in our neighborhood. So we'd like to ask for your support for this. Thank you very much.

I'm George Von Bozai. I had a bed and breakfast in Napa in Calistoga. And it would have been disastrous if I couldn't have rented all of my available rooms because it requires full rental occupancy because there's also vacancies to consider to even just maintain the overhead of the Bed and Breakfast. It was a wonderful place and I am also familiar with Noe's Nest and this too is a beautiful Bed and Breakfast that really should be given a maximum occupancy. It seems like a win-win situation in that the Bed and breakfast would achieve more income for operating expenses. The city would get its taxes and other benefits from having guests stay there. And of course, the guests would have more availability to be in locations they want to be in. So it seems like a triple win. Thank you.

At this height, I have to take this down about a foot. Thank you all for the hearing. I'm going to address two elements. One is San Francisco as a world destination, the charm, the restaurants, the energy here, and very much the neighborhoodliness In those neighborhoods, there are families, and a lot of people come here to stay close to their families. There's a place for the large hotels, conventions, et cetera, but not in these small neighborhoods. And people from around the world come here to San Francisco as a world destination. So I think it's really important to keep the beds and breakfasts alive. When I travel, I look for a bed and breakfast. I want that sense of community, of sitting with people who have come to that particular area and learn from them what else there is to discover. So when people come here to visit friends and family, they want oftentimes to go to a bed and breakfast. They don't want the big hotels. They want to be able to walk to their friends or their colleagues. In specific, Noe's Nest is extraordinary, and its proprietor is Sheila Ash. She gives to charities. She opens this bed and breakfast, which is in impeccable condition, to charities at no charge. She opens it to community at no charge. She has gatherings, small gatherings, to help raise funds for different good purposes, all of which contribute to how incredible San Francisco is. Because we're not a huge, sprawling metropolis. We are a charming, incredible city that is a world destination. And those neighborhoods contribute to the sense of community and uniqueness that we have in San Francisco. So supporting our local beds and breakfasts with a way to keep them economically viable based on an economy of scale of a certain minimum number allowed these small businesses to stay in business. A number of bed and breakfasts have had to close. We know many small businesses have had to close. Economics is increasing. It is really important to the city to continue to maintain the charm of the neighborhoods and the accessibility to others to visit their families and friends, and for people who want to relocate. Our neighborhoods are unique, and the beds and breakfasts in those neighborhoods are extraordinarily unique. So please help them to stay open and help Noe's Nest because that's an incredible place inside and out. Thank you.

Hello. Get this over here. Well, first of all, thank you, you guys. Thank you for bringing this to the attention of the community. My name's Noe. I wanted to start by saying that bed and breakfast are something that attracts local neighborhoods when people come and visit us. Now more than ever, I think we're ready for You know, we're on the up and up. I think the world can see that with what's going on here with the mayor and all that, which is, I'm all excited about that. And we're a destination. So when people can come out and meet these local businesses that are opening up these nice homes and these places that are to entertain the community, I think it's It's a way to show different parts of the city to a city that has so much to offer, that diversity. And in particular, Noe's Nest, I think there's a lot of the community in Noe Valley is so vibrant with families that come and visit their kids, and they want something close. So a place like Noe's Nest has been very inviting. And Sheila Ash, the owner, has been very vibrant in the city for a long time. And she's out there and she's promoting organizations she's involved in. And I've learned to really find that really beautiful technique in these small bed and breakfasts that's around the city. Because there's other ones that we know of too. So overall, I just want to say that consider what's being asked and it's all for a good cause to make San Francisco You know back on the map and let's go. Let's go San Francisco. So thank you.

All right Hello, thank you for being here My name is John Scott. I am was born and raised in Connecticut. But I've lived in San Francisco since 1973. And most of those great years, I lived in Noe Valley. And that's how I became introduced to Noe's Nest. And I've had the pleasure. of having friends and family, be able to stay at Noe's Nest when I was in Noe Valley, and to be able to be close, to enjoy the neighborhood. I mean, it's a very happening neighborhood, walking distance to a lot of great restaurants, coffee shops, you name it. And I'm just here to give a yay Noe's Nest. And I hope you will not only help Noe's Nest, but help other people who would like to successfully run B&Bs in the city. I think they're a positive. Thank you.

Perfect.

Good afternoon, commissioners, and thank you so much for hearing us, for listening. I'm here to endorse the economic and historical viability of the traditional bed and breakfast. In my research, it looks as if, as of May 2026, there are only 30 to 40 traditional bed and breakfasts still existing in San Francisco. That's not much. You've got a concierge at a hotel that greets you, maybe with a little more formality. But the traditional welcome that makes you feel at home, makes you remember the city, it's invaluable. And that's my first choice when I travel. I guess the best example I can give you, which is so touching, and it touches to our hearts as well as the viability of making this economically possible, is this little seven-year-old boy walked out into the lobby near the kitchen, of course, in the bed and breakfast, and looked at me and said, where's Sheila? And his parents, in a follow-up to passing that little comment on, the parents said, he wants to come back when he's grown up after college and live in this bed and breakfast. I mean, that tells it. Anyway, thank you.

Hello. Thank you. My name is Jennifer. I live in Sebastopol. I've been staying in Bed and Breakfast for about 30 years. And I am a fan of San Francisco. And as a pedestrian, I come here and I always stay in Bed and Breakfast. I think it's a taproot. I think it's an opportunity to witness the culture and the history. I also enjoy the fact that it's intimate. There's a lot of care. And in this world, a lot of things are switching to AI. There's just a lot of corporations that are taking over. And so there is something special about Bed and Breakfast that allow us to stay and to get the love and the care that you cannot get when you stay in some of these big hotels. So I'm a fan of expansion. I'm a fan of you reviewing all of this and making the ability from it to be a five-room situation to expand it to eight for all bed and breakfast here in San Francisco. And thank you for allowing us all to come here and share our thoughts. Thank you.

Hi, my name is David. I had the pleasure of staying at Noe's Nest Bed and Breakfast while I had a house renovated in the East Bay. But as prior to that, I used to live in San Francisco. I used to manage big corporate hotels. And I can truly tell you, after staying at Noe's Nest, having known how you're supposed to run a hotel. It is 100% on the up and up. It's clean. It's friendly. You get to meet the guests every morning over breakfast, something you don't get to do in a big hotel. So I totally encourage you all to have some consideration that this passed and Sheila gets eight rooms. Thank you.

Hi. My name's Dave Kong. I'm a resident. I think there have been a lot of excellent points already made. I'm not going to belabor the point here. I just think the ordinance is good for the city, and I think it's good for the owners, and I hope you approve it. Thank you. Just for the record, I'm also for number nine, too.

My name is Eric Barreto, and I work in the travel business. And I can tell you that San Francisco does not have many bed and breakfasts because I have customers who ask me. And everyone loves a bed and breakfast because it's very intimate, it's small, and you can be in a neighborhood which otherwise you couldn't. So I would encourage you guys to pass the ordinance from 5 to 8 to have more access for customers. Thank you very much.

Hi, my name is Anais, and I'm a local resident. I've worked in hospitality for the past 20, 25 years. And it's interesting. A lot of people who go to bed and breakfasts are coming for local events, for interviews, for medical reasons for UCSF. it's more than just that it's more to come to a bed and breakfast it's something that affects them and they come back to time and time again because they love it and it's a unique experience and some people although a lot of travelers do like to go downtown and stay at those hotels they want a unique homely experience that they only get at a bed and breakfast. And so a lot of people who call, I think, say that when they go to the bed and breakfasts it's nice, but they can only get so many rooms because there's only so many available. There's only so much available at a time. So a lot of bed and breakfasts are in places like Napa and Sonoma, but it's nice when you have a bed and breakfast in San Francisco and they can get that homely experience. Thank you.

Hi, I'm Ellen Levine. I have lived here since the late 70s. I have been in the hospitality and had a little travel business. Been all over the world, and I always I can't stress enough how wonderful it is to come back to this B&B that is so amazing for the neighborhood. And it's a win-win-win, as was said before. And I so appreciate you hearing us. And please pass this. Thank you.

Hello.

My name is Mindy Cantor. And I just want to say that San Francisco, as you know, is a destination city, world class. It's known for its uniqueness and its charm. And I just want to say that B&Bs offer that charm and a real San Francisco experience. Would you rather stay in a cookie cutter hotel whose rooms look the same in any city across our nation, or stay in a very unique, warm place? I mean, big hotels are for some people, but not for everybody. B&Bs are being bought by corporations. It was a beautiful B&B on that was bought by a corporation. Inn of San Francisco was bought by an AI company. It really makes sense to raise the occupancy rate for B&Bs to make it more economically viable. Also, there's a huge demand for B&Bs in that I've been told that they're actually turning away. people because they don't have the room. Three additional rooms would make a huge difference and would not affect the big hotels, but it will keep these B&Bs in business. So I do hope you pass this ordinance. Thank you.

Good afternoon. My name is Sheila Ash, and I own Noeus Nest Bed and Breakfast. Thank you for the opportunity to be here today and speak. My building is 137 years old, and I am slowly inching that way. My passion is fashion and hospitality. I put people above profit. And I would like Noe's Nest to become a legend in San Francisco. and will draw people here and be able to accommodate them. I don't think I could say anything more that hasn't been said. I'm just asking that this is a gateway to make it more affordable, more homey, and put Noe's Nest on the map.

OK, last call for public comment. Seeing none, public comment is closed. And this matter is now before you, commissioners.

Vice President Moore.

I am delighted to see Supervisor Mandelman, President Mandelman, bring this forward. I think it's an extremely important element to bring to the attention of the public. I did not know, actually, that there are only so few a bed and breakfast in San Francisco. My neighborhood truly lacks one. And I couldn't be more delighted to acknowledge all of your testimony, because you really speak to the heart of the neighborhood. That is what many neighborhoods would like to say about themselves. However, there lacks the infrastructure of scattered bed and breakfast within reach of the community actually needing them. Homes in San Francisco are relatively small. And to host two or three friends from abroad is almost impossible. So you kind of stagger around trying to find small hotels, which may be not really even convenient for you to, by foot, show your friends what's available in your neighborhood. So they may be in a completely different area. You don't even know if it's safe enough for them to walk to where you live. I am delighted to see this well thought through. The increase from five to eight is not an issue whatsoever. And I think I could even support staff recommendation to go to 10. That does not mean that everybody will push the 10 room envelope. It's just a broader range. of achieving a model which I think all major world cities have, except it's not as well known in this city because there's more Airbnb pushing itself as an alternative to small hotels in front of you than bed and breakfast, which are a real extension of neighborhood businesses and the type of ingredients we want our neighborhood corridors to maintain and champion on their own because they're all different and they offer really the particular ingredients with that little variety that each neighborhood has. I'm very fond of Noe Valley and I'm very happy for you, but I also congratulate your supervisor having had the thoughtfulness to take an example, a real viable example, and bring it forward. So I couldn't be more convinced that this is just the right time to support this legislation. I'm not going to make a motion. I want to first hear my fellow commissioners, and I'm sure somebody else will jump on making a motion to approve this.

Thank you. Thank you. Commissioner Braun.

Yes, I want to first thank all the speakers who came out to speak about this legislation. It's a fairly modest change, and there's a lot of enthusiasm that's been expressed about it. So I think that really speaks to how passionately people feel about this. And just although we're discussing legislation generally, I'll say I see the positive impact of a bed and breakfast like Noe's Nest. It's within a short walk of my own home. And just to illustrate Commissioner Moore's, Vice President Moore's point, the tiny cottage that I rent in Noe Valley can't accommodate all our friends who come through town. And Noe's Nest has actually been very helpful. And I also always appreciate the decorations in the windows of Noe's Nest. So I think that when it comes to bed and breakfast generally, these properties aren't overwhelming neighborhoods. I think the change from five to eight, or with staff recommended modifications to 10 rooms, is a modest change. I do want to thank department staff for especially the first and third recommended changes, modifications to the legislation, because you proactively address concerns that I had when I first started reading the legislation. The first point being having this limited to just RH2 and 3 districts seemed unnecessarily limiting. So I'm glad that the recommendation is to broaden the residential districts to which this would apply. And then for the third staff recommended modification, the other concern I did have was about the potential loss of viable housing in our neighborhood, since I want to make sure that we are maintaining and sustaining our housing supply. And so, you know, having consideration of retaining the housing unit and making sure that it's still viable is really important. I'm glad to see that that is also included in this. And so this has my full support. And I'm also not going to make a motion to say let others speak, but this does have my full support, along with the staff recommended modifications.

Thank you. Commissioner McGarry.

So I'm atrociously biased here. I was actually brought up in a bed and breakfast, the west coast of Ireland. So I learned the art of hospitality. Basically, I was served breakfast, bus tables, washed. I could trade some stories, because bed and breakfasts have the best stories you can possibly come across. San Francisco is great, but the bed and breakfast part of any society or part of society is it brings not just a unique, but a boutique experience to wherever it is. So it really does put the local back in local. Hotels are great, but they're downtown. It doesn't cater for that Noe experience, the Castro experience, North Beach experience, the Chestnut or Union Street, that are individually unique in their own right. And you're not going to get those if you go for lunch when you're staying downtown. But if you're staying in a bed and breakfast within that, it's pop. You are part of the neighborhood. And the neighbors know you, both sides. So I'm full support on this. And I would like to make the motion to pass this.

Second. Commissioner Williams.

Thank you, fellow commissioners, for all your input. Thanks for the public for coming out. I have no issues with bed and breakfast. I think they're great. The only issue that comes up for me is the loss of housing. I WAS HERE PRIOR, LIKE MANY OF YOU, TO AIRBNB. AIRBNB CAME IN AND TOOK THOUSANDS OF UNITS OFF THE MARKET AND HELPED CREATE THE HOUSING CRISIS THAT WE'RE IN NOW. NOT TO SAY THIS IS THE SAME THING, BUT I JUST WANT TO ACKNOWLEDGE THAT THERE'S A CONCERN. My question to Supervisor Melderman's staff is, how are we assured that thousands of people won't want to get into this business if this legislation is passed and start displacing residents and things of that nature?

I appreciate that question. I think it's a very valid concern given the magnitude of the housing crisis we're in and the affordability crisis. What I'll say is that I think the safeguard against that massive sea change and people maybe kicking out tenants and setting up a hotel use, is that this change only applies as a conditional use authorization. So I think baked into the conditional use authorization process is an ability to look at each request for this case by case and say, OK, how is this actually impacting the community? Is this going to lead to a massive loss of housing? Or is this just something that a business needs a little extra kick to function and thrive and survive, as so many of the commenters have said, in San Francisco? So that's what I would say in terms of how are we going to ensure that we preserve housing to the maximum extent. It's through that conditional use authorization process where ultimately we can look at everything on a unique individual basis and determine does this impact the community and doesn't this impact the community positively thank you for that i um again i

So that's a major concern just for me. And the conditional use authorization is a great way to vet these projects as they come through. And so I don't know. I'm just curious. feel very strongly about displacement. We've had a history of a lot of people losing out on their homes across the city for many, many years now. And so I'm very sensitive to that. And so I just wanted to make that known. Thank you for coming up here.

Commissioner So.

Thank you everyone for coming today and I hear a lot of support and I also live really close by Noe Valley and I also know that we really have very small number of bed and breakfast compared to a city of similar size and diversity. So this is a really great one step forward. And I actually wanted to find out more about how many existing operating bed and breakfast are in precisely like Sheila's situation where they got kind of been not knowing they needed to convert into these hotel use and it's still running as a single family home and if this, basically I wanted to know if we pass this, how do other people know about this and they don't end up get caught in a lot of, you know, stress and distress that happened to the owner that operates this bed and breakfast and I want to make sure that how can we benefit in not just one businesses but also any other one that is operating right now.

Sure. Thank you for the question, Commissioner. I think by virtue of the question about how many are operating without conditional use authorization and may need to convert at some point in the future, we don't have a precise census of how many that might be. I did kind of go through the available industry data that we subscribe to, and I think it was around 20 or so that we found that were registered. But again, the data was also a little bit out of date. But to the broader point about public education, obviously, we maintain the planning information counter. There's the Office of Small Business is able to provide guidance to business owners on the permitting process more holistically. And then I think, obviously, supervisors' offices, depending which district it's located in, can also serve as a resource and point business owners to either the planning department, building So I think just generally the city is available for public education, but in terms of how proactive we can be with existing businesses, I think it would be challenging if we don't know precisely where they are or who they are.

Okay. All right. Thank you.

Thank you. Thank you, everyone, for coming out as well. I echo my fellow commissioner's sentiment here. I'm in full support of the Planning Code amendments. And I always appreciate when I, as I'm digesting these packets, when staff's recommendations are the same things that are running through my head. So I really appreciate how this idea about being more consistent across residential zoning districts. And so one and two were particularly exciting for me to see in terms of recommendations. I think one question I had was around two which was upping the number from 8 to 10. And while I thought about RH2 and 3, I thought that made really good sense, but as we expand it, which I like the expansion to, you know, typologies I'm imagining in RT01 and RM3, especially those, I'm visualizing larger buildings, and so I'm just wondering what thought went into the number 10.

Sure, so based on the research that we did, the justification for the five room limit appeared to be the building code definition. And when you look at the occupancy restrictions on hotel uses or other transient lodging, it's either, Again, this is maybe a little imprecise, but it's based on my research. It's either that five-room threshold or a 10-occupant threshold. So that, I think, was part of the inspiration. But ultimately, I do need to concede that it doesn't have a precise basis, but it seems like a nice round number. And I don't know if that addresses your question specifically.

I guess I'm just wondering if there are larger, denser buildings with bigger footprint and more levels and if there's more room for additional units and might this limit. So there's maybe a different type of calculation we could apply that could accommodate larger, denser buildings. Just a thought. And I think the director maybe wants to address this. I just thought I'd pop in because we did talk

It was a fun conversation with our staff as we thought about what is the right number, right? It's always hard, especially when there's not an alignment in the building code or with state law to find the perfect threshold. And unfortunately, our buildings, to your point of how do you calculate, are just so numerous and diverse that it's pretty hard to come up with a threshold for that. So I think you raise an excellent point. And there may be... Someone smarter than us may be able to come up with a formula that could accommodate what you're talking about. We think that would be pretty hard to implement, though, when we talk about Commissioner So's question about how do we share this information with businesses out there. It's a whole lot easier just to understand a number. So I think probably the best way to respond to your question is just for us to do what we do as planners and keep our eyes out To what's happening in the world and just like this was adjusted in this proposed legislation by supervisor Mandelman We can continue to update that that's something we look to do always appreciate that. Okay.

Thank you Commissioner Williams

Thank you. Another question came up. So for planning staff, what type of residences or what type of buildings are we, or let me rephrase that. What type of clients do you think or homeowners or property owners are going to be entering into this business if they're not already? And kind of walk me through it because...

Sure. It's a good question. It's a little hard to predict. There's not a huge amount of past precedent that I was able to find. But to go back to your earlier question about concerns about the conversion of housing, these cases were probably from 10 years ago or more. But I did find instances where conditional use authorizations were denied by the commission because of concerns about the impact on housing so it's just to to put the point out there that this eu process has been effective um in that regard in terms of who might come forward i think um just theoretically an example would be a family that either has inherited or otherwise owns a large single family home that they don't necessarily have ready access to capital in order to maintain. And this does provide a revenue-generating opportunity. I'm not familiar enough with the kind of day-to-day running of a hospitality business, kind of how difficult or otherwise it might be for a family without that expertise to enter into, but it would provide them that flexibility and that option. And again, I mean, there's the potential that somebody could buy a large single family home with the explicit intention of converting it for use as a bed and breakfast. And I think at that point, it would be at the discretion and expertise of the commission to decide if it's a contribution to the neighborhood or if it seems somehow inconsistent with either the general plan or the commission's policies.

So thank you for that. Multi-unit buildings are... Are they a part of this?

Technically, they could be. But if an entire dwelling unit were going to be converted and, say, there's a building with a lot of studio apartments and somebody wants to turn those studio apartments into hotel rooms, that would require conditional use authorization for residential conversion. And I imagine that neither the department nor the commission would support converting a large multi-unit building into a hotel use. So I think it's feasible that somebody could apply to do so. It's less likely that they would find support from either the department or the commission to remove the housing.

So one of the things that I'm concerned about is, let's say, For example, there was an Ellis Act eviction or something like that, an action that took place and displaced folks, and then they wanted to turn around and make a hotel use out of it, a B&B. Is that something that's possible, or am I being over-worried about that?

Again, I think it's within the realm of possibility that somebody could try. But I do think it's something that would be flagged through the plan review process, through the kind of fact-finding investigation that goes into preparing for conditional use authorization hearings. So again, I don't think the concern is unfounded. I just do think the safeguards that are already in place would be sufficient to address those. And just to echo the point, this isn't changing where hotels are permitted. It isn't changing the approval process for hotel uses. The change really is just to the number of guest rooms that could apply. So again, this could exacerbate some of the concerns, but it doesn't, to my mind, at least introduce new concerns necessarily.

Thank you. So I envision a multi-unit building that's not occupied and someone, instead of going into our housing stock, as it turns into an Airbnb. But again, thank God for the CU. A, that gives us a chance or this body a chance to determine if it's right for the neighborhood or not and make sure that folks aren't getting displaced, make sure that we're supposed to be adding to our housing stock. But again, thank you for your input.

One last word of wisdom. The definition of bed and breakfast has very specific expectations attached to it. Intimate, quaint, one of a kind. And the larger building types are never going to be a successful Airbnb because they just by definition aren't. With a bed and breakfast comes the expectation, you know the owner. You meet people in the breakfast room. You sit in a lounge reading the same newspaper, handing it to somebody you don't even know. There is kind of like a family context, familiarity with it, which is thought out particularly by people who are experienced in foreign travel and indeed seek neighborhoods rather than the big hotels to feel comfortable in lodging. So I think the fear of a studio apartment becoming an Airbnb, it may become a kind of hotel, like an efficiency hotel, as you see in Japan. But I don't think it is going to meet the definition or expectation of a traveler who's looking for a bed and breakfast. And I think what we're really trying to do here is open the door wider that bed and breakfast becomes something to help a neighborhood discover those buildings which are underutilized because of, as staff described, family cannot really inherit the building like that and does not know what to do with it. And I think this is the best way of integrating and maintaining those types of buildings for the use of bed and breakfast and letting the expectations of why people choose and travel with bed and breakfast find exactly in those environments of what they're actually designated to be. So I think we need to kind of stronger supports a clear definition of a bed and breakfast as intimate, quaint, one of a kind in order to have people not overstep and seek approvals for use for which certain larger buildings are just basically not made up to be. So that is what I would strongly encourage we add.

Thank you.

Okay, Commissioners, if there's no further deliberation, there is a motion that has been seconded to adopt a recommendation for approval with modifications. On that motion, Commissioner McGarry? Aye. Commissioner So? Aye. Commissioner Williams? Nay. Commissioner Braun? Aye. Commissioner Moore?

Aye.

And Commissioner President Campbell? Aye. So moved, Commissioners. That motion passes 5-1 with Commissioner Williams voting against. Commissioners, that'll place us on item nine for case number 2026-002588, PCA, for the Cannabis Cafe. This is a Health Planning, Police, and Business and Tax Regulations Code amendment.

Okay, good afternoon, Commissioners Kerr-Bowt and Planning Department staff. The item before you is the proposed cannabis cafe ordinance. The legislation was sponsored by Supervisor Mandelman. Sophie Marie from his office here today will speak on the item after staff's presentation. And representatives from the Office of Cannabis and the Office of Economic Workforce and Development are also available for questions. So the proposed ordinance would amend the planning, police, and health codes with the primary changes occurring in Article 16 of the police code. Specifically, it would establish a new cannabis cafe permit administered by the Office of Cannabis. Under the proposed framework, licensed cannabis retailers would be permitted to allow on-site consumption of pre-packaged cannabis products along the sale of non-cannabis food and beverages. The ordinance is a response to State Assembly Bill 1775, which authorizes local jurisdictions to permit these activities while maintaining local oversight and operational standards. The proposed Planning Code amendments would update the definition of the cannabis retail to accommodate on-site consumption uses. Currently, on-site consumption is limited to an accessory use occupying no more than one-third of an existing cannabis retail establishment's floor area. The proposed changes are intended to align the Planning Code with the new cannabis cafe permit established under Article 16 of the Police Code and would not create a new land use category. The ordinance would also provide limited flexibility to the existing 600-foot buffer requirements by allowing cannabis cafes under common ownership to locate within 600 feet of one another. However, the ordinance would not prohibit any new cannabis cafes from operating within 600 feet of existing schools. Cannabis cafes with food service would be required to have both cannabis retail and limited restaurant lanes approvals to ensure compliance with all applicable zoning controls. Alcohol sales would be prohibited and all cannabis operations would remain subject to Article 16 operating standards administered by the Office of Cannabis. So a key component of this proposal is it's a phase implementation approach. During the first year of eligibility, it would be limited to existing cannabis retail operators only. Currently, there are 66 citywide. This initial phase would allow the city to evaluate implementation, operational performances, and neighborhood impacts before considering a broader eligibility. So the department recommends approval of the proposed ordinance. The legislation modestly expands cannabis retail activity, supports implementation of state law, advances the city's equity goals, and creates new economic opportunities within the regulated cannabis industry, particularly for equity applicants and small businesses. This concludes my presentation, and I am available for questions. And I believe Sophie Marie.

It's really janky. Good afternoon, commissioners. My name is Sophie Marie, and I'm the chief of staff for President Mandelman. Today I'm joined by my colleague Ben Van Houten from OEWD and my colleagues Nikesh Patel and Ray Law from the Office of Cannabis to help with any industry-specific or technical questions that I'm not able to answer myself. I want to begin with just a little bit of background about why this legislation exists and why it's important to the cannabis industry. I also want to note that we have a few operators here as well today that will be able to provide comment on why it's so important to them. So cannabis businesses operate under a uniquely difficult set of economic, regulatory, and financial conditions that most other small businesses do not face. Even though cannabis is legal in California, operators must navigate overlapping local, state, and federal rules that increase costs and create a lot of uncertainty if they will be here for a long period of time. Due to cannabis being a federally controlled substance, the cannabis businesses cannot have direct access to traditional banking services, loans, credit, insurance, and other services. things that would make day-to-day operations a lot more costly in comparison to other small businesses. And cannabis operators must also comply with extensive regulations, including licensing requirements, security plans, seed-to-sale tracking, inspections, and zoning restrictions that some of you may be familiar with. These compliance obligations are really expensive and especially difficult for small equity owned and locally owned businesses here in San Francisco. And in California, cannabis businesses also face a layered tax burden. They pay the same small business taxes such as payroll, gross receipts, but they also have to pay annual permit fees, licensing costs, and a state excise tax. So at the same time, these small businesses are competing with an illicit market, which other small businesses do not face. And the illicit market does not pay the same taxes. It does not look at the same regulations. And it doesn't have similar overhead costs. So policymakers have taken a lot of steps to provide tax relief. Last year, Assemblymember Haney helped stall an increase in the state excise tax. And although in 2018, local voters in San Francisco approved a local cannabis small business tax, President Mandelman has done a pretty solid job since 2021 of suspending the collection of that tax. So it's never been collected and it's been suspended until 2035. But I want to acknowledge these measures are really only a Band-Aid solution or partial relief to the cannabis business industry. It doesn't really resolve the broader structural challenges facing this industry. So instead of these band-aid solutions, this ordinance actually really creates real opportunity for cannabis retailers and prospective retailers to thrive. So allowing cannabis cafes would really offer a meaningful opportunity for these businesses to diversify their revenue streams, to attract more customers, and operate more sustainably within the current regulatory environment. So our ordinance proposes two minor changes to the planning code. Firstly, the ordinance would create a narrow exemption to the existing rule that prohibits two cannabis retail establishments from operating within 600 feet of each other. This exemption would allow existing cannabis retailers to open a cannabis cafe near their current retail location without being blocked by that 600 foot restriction. So a good case study for that is if there's an existing retailer that doesn't have the square footage for a consumption on site at their existing business, this would carve it out. So if they wanted to open a cannabis cafe just down the street, they wouldn't run into this existing restriction. The second minor amendment that we're making to the planning code of this ordinance revises the definition of cannabis retail to make consumption a principal use rather than merely an accessory use as it is under current law. I want to be clear this ordinance does not change any existing zoning requirements including principally permitted use in green zones or proximity restrictions near schools. Operators seeking a cannabis cafe permit will still need to comply with all existing zoning rules, including conditional use approval when required and where required, as well as all applicable Department of Public Health uh and office of cannabis and california department of cannabis control laws and rules we've held multiple meetings with the planning department about this legislation and they've been great partners and while this is a complex ordinance because it amends four different codes we believe that the planning code amendments are relatively straightforward commissioners today i really ask for your support on this legislation and my colleagues and i are available for any questions you might have I want to acknowledge I did have a question brought to us ahead of the hearing that I am available to answer whenever that question comes up as well. Thank you.

OK, if that concludes staff presentation, we should open up public comment. Members of the public, this is your opportunity to address the commission on this matter.

Good afternoon. My name is Mercedes, and I'm here speaking in strong support of the Cannabis Cafe Ordinance on behalf of Spark Dispensaries. As someone who's worked in the industry for years, I've seen firsthand how cannabis spaces can create community, connection, education, and safe access. I truly believe this legislation is an exciting and important next step for San Francisco and for the future responsible cannabis hospitality. Overall, we strongly support this legislation and appreciate the opportunity to help move San Francisco cannabis industry forward in a thoughtful, community-centered way. Thank you, Supervisor, for bringing this forward and thank you for your time.

Good afternoon, supervisors. I'm Harley Melson. I've worked with Spark since 2011. We've operated consumption lounges for almost two decades coming up, so we do have some good experience with that. We're in support of the cannabis cafes here in San Francisco. It's the future of San Francisco's small business economy. The cafe can help in a lot of ways as well. Reducing consumption in public spaces, as we know it's illegal to consume cannabis in public. It happens every day. So the more spaces we have for people to consume safely and compliantly, maybe the less we'll see of people consuming in public. Also reducing littering and loitering of those products in places. It could also boost the economy for the city, create a new form of tourism. And we support this bill and thank you for hearing us about this and appreciate your time. Thanks.

Good afternoon, commissioners. My name is Eric Pearson. I'm a founder of a cannabis company called Spark. We have been operating in San Francisco since 2009. I think Commissioner Moore was on the Planning Commission when she approved our permit. one of the first one in San Francisco. Anyway, I'm an OG, they call them. I've been around a while. I spend most of my time now in Sonoma County, where we are developing a farm that we just passed legislation to have on-site sales, tastings, tours, and promotions. And so this legislation here in San Francisco is just one more piece of what I believe is necessary to make cannabis normalized and legal. And just to sort of put it in perspective, I'll be working with my company and my compliance team and lawyers between now and June 22 to file 15 applications with the federal government as a medical cannabis license holder, all state licenses. Most state licenses have medical and adult use listed on them. And so of all things, this Trump administration right now is accepting applications for medical cannabis businesses, which is essentially all of them in California, to apply for a DEA license to be able to ship their cannabis products across state and ultimately to the rest of the world. So as we sort of think about is this a big deal as it relates to cannabis and so on and so forth, I think that's a great sort of analogy to realize like, hey, this is not a big thing and should not be a controversial thing. It affects existing businesses. And if it would negatively harm existing dispensaries, the precautions that the supervisor's office has put in here where there's no carryout, where there's also a runway for existing operators, and there's also necessary setbacks, I think that should appease most other operators. And as an operator with three retail locations in San Francisco, I really am not concerned about our bottom line and our businesses. being able to lose revenue as a result of this. Our personal approach to this legislation will be we already have a cafe. We're probably just simply going to add coffee and pastries and other products to that cafe to make it more usable. It's just not used that much when it's only cannabis, other items and things people want to consume. while they're doing their homework and schoolwork and real work in one of the cafes. So I'm rambling a bit, but I just wanted to let you, I came down here from Sonoma County, wanted to thank the supervisor's office for putting this forward, as well as let you all know as an existing operator, we strongly support this legislation.

Okay, last call for public comment. Seeing none, public comment is closed, and this matter is now before you, commissioners.

Vice President Moore.

Indeed, I have looked at this for a long time, and I have a question for the last speaker, if you don't mind coming up. Yeah, you. Sorry, I only can call you Mr. Sparks, but I apologize. It's been a while. We sit in this commission in various combinations now for quite a while and particularly even under current circumstances in particular neighborhoods the discussions about cannabis are extremely time consuming and painful. There are indeed large blocks of people in the city who are very afraid and opposed to any form of cannabis either in dispensaries or very controlled environments. How are we going to overcome that opposition when it now comes to cafes operating with a dual purpose of becoming more like Amsterdam or Holland in general? What do we do? What do you anticipate? And what advice would you have to a planning commission who spends hours and hours and hours on people opposing cannabis, no matter what?

Well, time is on our side. As the younger generations become more influential and understand policy decisions, I think we're seeing the tides turn. In the immediate, I feel I think a lot of it is just hard to overcome prejudices against cannabis. A lot of folks have real personal backgrounds and stories in their family of people who have had issues with drugs. Typically, they're not cannabis, though, but oftentimes they get lumped in together. I think all we can do is continue to move forward in a responsible way, like the city has, I imagine if you ask folks who are opposed to cannabis to really cite issues that we have at dispensaries or cultivations or whatever, they're relatively low. Security through the Department of Cannabis Control requires us to have a certain amount of backup data and storage for our cameras. It's real. The Office of Cannabis It really comes out all the time. It looks at our cameras as well. The state comes out, much to our frustration. We have a couple agencies doing the same thing, oftentimes. But cannabis dispensaries are highly regulated. And there's a lot of surveillance on these locations. And that can oftentimes be a good thing to a neighborhood that otherwise doesn't have that sort of activity on the block. But, you know, unfortunately, I've been at this for 25 years, and we just keep pushing forward. And, you know, eventually we'll get there. But we can't make everybody happy.

I appreciate you getting into a little bit more detail, given the years of your experience. I am actually interested in seeing cannabis cafes loosening the tightness, the kind of like semi-tightness camera, guard at the door, et cetera, impression of these types of retail operators. The only thing I want to make sure is that, indeed, we are still creating an environment by which cannabis cafes are equally carefully observed and monitored. Because you may know that about six or eight months ago, we had a complaint that somebody was using their food truck in a neighborhood and selling cannabis products. You probably have heard about that.

Well, we would be opposed to that, being licensed retailers.

Well, we were very surprised, obviously. But this is all possible. I just want to make sure that we are indeed not over-exaggerating how we indeed monitor these cafes but make it kind of more a normal part of how we live in our city. That's right. That would be my position. Yet I appreciate that everybody is coming together and that next chapter perhaps will evolve with those neighborhoods you indeed are comfortable with that saying, yes, that's what we want to do and others basically organize and tell the supervisor that they don't want to go that route. Ultimately, I think it has to go through different forms of acceptance and we are one part of that approval. But in principle, I believe that this is a right step in the right direction at this particular time. I would agree with that. Thank you. I appreciate your particular insight.

Commissioner So.

I want to begin by thanking Supervisor Mandelman's office and the Office of the Cannabis for bringing this forward-thinking ordinance to our commission. By modernizing our local framework to fully implement the California's AB 1775, this legislation smartly aligns with San Francisco's planning and health codes with state-level policy. What strikes me most about this proposal is how thoughtfully it balances economic vitalization with necessary neighborhood guardrails. Our legal cannabis industry faces immense pressures from high cost and the illicit market, giving small businesses an equity applicant a pathway to innovate with Cannabis Cafe, not completely necessarily the exact Amsterdam style, where patrons can possibly enjoy food, non-alcoholic beverages, and community space is a much needed shot in the arm for our commercial corridor and nightlife economy. While at the same time I appreciate the ordinance doesn't compromise community safety, it maintains strict protections for underage children by anchoring these spaces within established permitted storefront operations and preserving robust environmental controls. This ensures that our neighborhood corridors remain vibrant, safe, and family-friendly. However, I have a primary question and concern. As we move forward, the success of this new model relies heavily on proactive management and effective governance. So my question for staff is especially regarding to Article 16 of the Police Code and the oversight capacity of the Office of the Cannabis. What specific mechanisms, staffing resources, and interdepartmental protocols that are being established to proactively mitigate public nonsense and safety issues before they escalate? And furthermore, if behavior or operations at a cannabis cafe do get out of hand, what is the exact mechanism to hold operators strictly and swiftly accountable? I wanted to ensure the Office of the Cannabis has the teeth and the tools to manage this rollout effectively so that our neighborhood corridors sees only the economic upside of this vibrant new spaces.

Thank you for that question, Commissioner. What I can say is within Article 16 of the police code, there are regulating standards that basically put a lot of handcuffs on this cannabis cafe to say how people get over served. I mean, it's like when people go to a bar. But again, there are standards of the amount of, I believe it's eight ounces per serving per person. There's a singulatory how much people can consume in these consumption lounges in one day. Again, there's a lot of handcuffs and guardrails that come with this cannabis cafe permit. I would like to pass the torch to Office of Cannabis if they can speak more on it. But I know they have a very robust enforcement team. They're very on top of the regulatory agreements. And also, it's baked into the police the Article 16, that police essentially can enter this establishment and do sting operations anytime. And also, too, to speak to that is just to speak in operators, they kind of self-regulate. So nobody wants to be doing more than what they're allowed because, again, there's a finite amount of these uses and there's a finite amount of space. So it's very, very regulated and monitored from my sense. But, yeah, I'd like to pass it to Office of Cannabis to add to that.

Good afternoon, commissioners. My name is Nikesh Patel. I'm the director of the Office of Cannabis. And I just want to say that I appreciate the question. We spend a lot of time in the office thinking about how to balance the regulations that are on the books with the resources that we have available with the lived experience that we hear from operators and community members on a daily basis. We're in a pretty unique position in that there are fixtures within the code that create a feedback loop between community and us. there's a good neighbor policy anytime that a neighbor or a resident has an issue with a cannabis business we will get those complaints they'll come through 311 there'll be a call to our office we field over a hundred complaints regularly and that is a really good window into how communities specifically in certain neighborhoods feel about the businesses that are there so Once we get those complaints, we're able to engage with the operators there and work towards a resolution. We've been very successful to date in managing these complaints and getting to an outcome that responds to the complaint, but also is balancing the very real requirements that are on the books. to the issue of over consumption and i know that that's a it's a general concern it's something that we've talked about in the office as well there are some guard rails that are in place in the proposed ordinance that i want to draw your attention to but before i do that i think one of the inherent challenges in this conversation around over consumption of cannabis is unlike in the alcohol space there is no legal limit to when someone is considered inebriated or not. What we've learned just through what we've read and then user experience as well is that the inebriation limit varies from individual to individual. And it's really rooted in that person's relationship to the product, how long they've been consuming, their physical structure. These are all things that still need to be studied. And one of the benefits of reclassification of medical cannabis from Schedule 1 to Schedule 3 is We believe that there will be more research into issues just like this. But I bring this up because I think inherently it's a challenging conversation around overconsumption. What one person consumes may be overconsumption for them, but for someone else it has very limited effects. There are legal limits that are in place in terms of what businesses can sell, and then there are legal limits in terms of the amount of cannabis that can be in individual packaging of products. Those are in place and they're regulated at the state level, and then we also regulate them here locally. The guardrails that I think that are unique and that are incorporated in this proposed ordinance are primarily around the no-carry-out limitation. So what I mean by that is if you purchase cannabis at a cannabis cafe, you are not allowed to take that product off-site. It can only be purchased for consumption on-site. That's how it's written in the code right now. We think that that creates a guardrail for overconsumption because if you are a consumer and you understand that you can't take that product off-site, then you are being more careful about how much you buy because you will have to dispose of whatever you don't finish. So that inherently provides a guardrail. And then I think it also impacts the way that the business operator is conducting business because they, much like a... bartender has to be paying attention to how much someone is consuming. If that person overconsumes and they're ultimately responsible for that person on site, they're responsible if that person does something right outside of their building, we will get those complaints and we will engage with the operator immediately thereafter. The other piece in all of this is that I think the operator, because they ultimately have to enforce this restriction of product being taken off site, it makes them more vigilant on the point of sale. How much is actually being sold? Because if you oversell to somebody and you suspect that they can't actually consume all of that, then you're going to have to do the heavier lifting on the back end of making sure that they don't leave your store with all that product. If they do and those complaints are coming in, then we from the Office of Cannabis will show up and have to have conversations with the operator about how are you enforcing this because the regulations make very clear you can't sell product that can be taken off site. I hope that answers your question generally. I do want to address one of the points you made around what teeth does the office have to actually enforce. From a staffing standpoint, I don't know that there's any additional staffing that will be provided through this ordinance. So we are an office of nine. We have significant responsibility across permitting, enforcement, compliance, grants, We do a lot, and I think we're able to do a lot because we've been in the office for a very long time. Office leadership is actually, I think, has an average tenure of 7.1 years for an office that's been about eight and a half years old. So we've cultivated relationships. We work well with other departments, and we're able to leverage a lot of the city's resources in making sure businesses are compliant. That being said, there are over 150 regulations, or rules, rather, that apply to cannabis businesses that we have to enforce. So could we use more support? Absolutely. Do I think that we'll be able to manage the influx of applications based on the way the ordinance is drafted? Yes, and I say that sort of cautiously, but yes, I think we will be able to, provided we have the present staffing levels, because we have the systems in place to process applications, to review business processes, documents and make sure that all of the regulations that apply to dispensaries are still being observed in this context and we're moving businesses through. I think where this gets a little bit more challenging is on the enforcement side once the business is operational and patrons are coming in and we start getting complaints of businesses potentially or not even businesses, but individuals leaving a business with product. That one, to me, is probably the hardest to enforce. But I do think that there are ways around it. And the biggest tool that we have in our arsenal is we have very good relationships with most of the operators here in San Francisco. And the feedback loop is pretty strong. So I think they understand that if there are complaints that come in that people are over consuming or people are purchasing product and then leaving in violation of what the proposed ordinance says, they know that that means consequences on their permit. And no operator here is getting into this line of work to have action take against their permits. It would be highly disruptive, and we always try and work with the operator to make sure that they fix the underlying problem versus being unnecessarily punitive. So I hope that answers your question. Lots of words, but I'm happy to clarify as well.

Well, I really appreciate your thoroughness about explaining to not just myself, but everyone who can listening into your response. It's very comprehensive. Really appreciate it. I'm asking this not just for myself, but for San Franciscan at large. And also recognizing that you are a staff of nine, so that's very limited. to be able to leverage a lot of resources that we have. I really strongly encourage, or if there's anything that Supervisor Mendelman's office can help to work with the police to help the Office of Cannabis to strengthen a little bit of the enforcement side of things, that would be super helpful. Or maybe there's something already in place that... I think public might be helpful to know and to get some sense of reassurance in that regard.

Yeah, I can certainly speak to that. Over the years, we've cultivated a relationship with the police department. There is a liaison from the police department that works with our office to mitigate issues when they arise, primarily around breaking and enterings of cannabis businesses. So that is a strong feedback loop. But I certainly appreciate what you're saying there in terms of being a small team, having a lot to do. And we would certainly welcome any resources on the enforcement side. So thank you for saying that.

Thank you. So I think I have just a follow-up question with the supervisor Mendelman's office representative. Thank you for bringing this forward and I would really like to see if you can really strengthen that connections between the Office of the Cannabis and the police department. Do you mind sharing with us and the general public if there's something already established or what can you think of can be done in the future?

Yeah, 100%. It's a very good question, so thank you for raising it. We are not intimately involved in between the relationship between the police department and the Office of Cannabis, but I will say one thing that is absolutely not lost on our office is that the city and county is in its budget process right now, and the nine staffers that the Office of Cannabis have are very important to retain throughout the budget process. It is an ongoing conversation, and Immediately, I think the most important thing that our office can do is ensure that the enforcement staffing that the Office of Cannabis does have remains solid throughout the budget process, and I'm happy to look into how they can better partner with the police department on enforcement.

Okay, thank you.

Commissioner Braun.

I want to thank Vice President Moore and Commissioner So for raising and asking about issues and concerns that are often brought up by different members of the community. I have no concerns about this legislation, especially given that we already do allow on-site consumption as an accessory use. And so I move to adopt a recommendation for approval.

Second.

I'm also in full support of this. I did have one question. We have obviously a lot of safeguards in place. And one burning question for me, and this might not even be our purview, but one thing I thought of that I'd love just maybe something we could expand on is how we're mitigating, assuming some of this product is smoked, how we mitigate smoke and smells from adjacent neighbors and people passing by.

It's a very good question. And multiple small business commissioners raised this. So you are not alone in this concern. So there are existing limitations in our health code that really ensure that none of the smoke inside of a consumption space is able to leave. Most importantly, they have, you know, hundreds of thousands of dollars worth of ventilation systems, and there's 17 pages worth of regulations in our health code that talk about this exact topic. I'm happy to share those with you. And then I want to also just note, there is a, although we are increasing the amount of Space consumption space can take within a business in this legislation from a third to larger than that There's still a buffer zone that is required So you can't the whole cafe cannot be one large consumption space Because there would be a worry that you'd open the front door and smoke would fly out on to passerby on the sidewalk So I just want to be clear there is there has to be a buffer zone between the consumption space itself And like the front door of the establishment leading outside Thank you.

Those are all my questions. Commissioner Williams?

Thank you. Just had a question around, first of all, let me say thank you for everyone who spoke. Thank you for all the explanations. And I mean, for me, The decriminalization of cannabis is something that I always keep first and foremost, because I think it's been really positive for a lot of communities, especially where I come from. Having said that, one of the concerns I had, we have three cannabis stores along Mission Street. I live in the Excelsior. And I'm just wondering if this, I don't really have an issue with what's in front of us. But just in case, let's say one of those stores is having issues. How is that going to be addressed? I know that this is, I read in here that there's like a timeline of a year, or you're going to revisit something. So I just want to get some clarity on is, if this doesn't work out for some of these existing cannabis stores, what kind of safeguards do we have? Recourse, is there going to be for the community, let's say, if there's a lot of opposition or if there's issues around worst case scenario?

I may just ask some questions to make sure that I'm understanding the question entirely. It sounds like what you're maybe concerned with is if there are existing businesses and something doesn't work out for one of those businesses, what might be the sort of consequences or what happens after that? Is that sort of encapsulating what you're asking for?

Yeah, and also is there a timeline? Is there like is this being rolled out? Is it going to be temporary or is it going to be – or is this going to just continue on from once it's, if it passes, if it gets through, is this just going to be the way it is from here on out?

Right, and I'm happy to defer those questions to Sophie and Ben, but I can at least address or try to address some of the questions around the implementation of someone wants to go through this process, it doesn't work out, what happens? So I'll just take one step back. The way that the ordinance is structured, how a cannabis cafe permit would be delivered or admitted, ultimately issued at some point, is sort of the following. There is a period of time where only certain types of businesses and owners are eligible to apply for a cannabis cafe permit. Right now, I believe that window of time is one year, and the eligibility requirements are such that you have to be someone that is a part of a current ownership of a business that has an active retail permit. I won't get into all of the details of how that will be administered, but that is the gist of it. So in order to even apply in this first year window, you would have to be someone that meets those basic eligibility criteria. Then you would submit an application to the Office of Cannabis. We review that application. The location for your proposed business could be very close to your existing business. It could be a different location altogether. We would review it and we would make sure that it comports with the limitations of the ordinance. So is it within 600 feet of another business? Those sorts of considerations. You go through the process just like you do for a lot of the businesses that you see that are seeking storefront retail permits. If that business is ultimately successful, they're issued a permit, and they can become operational. If that business is unable to navigate the permitting process, or they have business owners that have disagreements and they can't advance, or a myriad of other issues that create complexities for businesses to open, then we'll work with those operators as best as we can. there are limitations to what we can do and so ultimately it is dependent on that business, their owners, to be able to push the application through the process. If they're ultimately not able to do that, then it's much like any of the businesses that we process right now. They will reach a point where they withdraw their application or we remove it from the process or they'll continue to look for other investors to the extent that they can because they still have to be eligible based on the eligibility requirements. I can't answer any more specifically than that, but the idea here is that they have an opportunity to open up a cannabis cafe business, and if they're able to do that, then they can. If not, then we'll work with them to see what other options there may be.

I appreciate that. You explained yourself very well. Again, just one of the concerns, again, that I've heard from a lot of neighbors, not me, but I think that whenever you have a change of views, there could be some consequence, right? There could be. And so I just want to, on the record, just say that The change of views for me, I think, is OK. I think you guys have all the safeguards in place. I think there's plenty of regulation. There's plenty of oversight. So I think that's good. But there is a community out there. And if, in fact, there's many complaints or there's complaints over this change of use, I think we need to pay attention to that. Again, I don't think there's anything that I see that's wrong. do want to be sensitive to our neighbors that are concerned. And so that's all I would say for the record. Thank you. Thank you.

Commissioner McGarry. I think decriminalization of cannabis is not what we do.

My concern, I think we have sorted out, like bars, there's always somebody going to try to take a drink home with them. It's going to be hard to regulate people trying to take something that hasn't been consumed and isn't in a glass or a bottle. So I see there could be issues there. But I think we're set up to sort that out. My concern would be from a Department of Public Health point of view, because I don't think we've actually, we have examples of this. So we don't know if something can go wrong, it will go wrong. And I'm not saying something bad is going to happen, but somebody's going to have a medical reaction at some point in time popping into one of these establishments, and I think As quickly as we can call the police to have a situation to sort out, which we're set up to sort out, I don't think we have a record or history of that happening with an ambulance or whatever may be required. If it's required, God knows, never required. So I would suggest that these establishments do have a... I wouldn't say, you have to, the staff there have to have the ability to know if somebody is basically past their limit. And I don't think we have that right now. And I think if I read it correctly, the staff don't, they can't be mandated to go in and see the people because the smoke is there. So you can't ask your staff to go in and check out, much like bar regulation was with smoking at the end. So who is going to check that the patrons are actually well? And if somebody is totally inebriated, and requires. You're going to do it. But you can't be there all the time. And then it would go to, like, I'd be concerned about the setup of it. Are we kind of going back to the day of a speakeasy? Because you can't be front of house. It's got to be back of house. And there has to be that separation of the front door in and out. So I'm just curious as the whole business model. But I do realize we're set up, society is. But this is new. So I'm worried about the medical aspect of it and basically somebody being over the limit in this way, shape, or form that has not, today, we can't encapsulate it and realize it because it can't be measured. How do we get that person the help they need if they need it, and how are we aware of it?

Thank you, Commissioner. Ben Van Houten from the Office of Economic and Workforce Development. I guess a couple of observations as part of this. First of all, as part of this ordinance, this ordinance does propose removing the prohibition on requiring an employee to enter into a smoking room as a condition of employment. So further integrating into that hospitality model, having employees who have close touchpoint to patrons. Additionally, I do think it's worth observing that there are, I think we landed on 11 consumption permits currently for cannabis consumption in existing cannabis retailers. So there are people already purchasing product and consuming product in these spaces. If anything, I think that the the shift toward more of a hospitality-focused model, as opposed to buying product at the front, taking it into a room, and then that kind of being the end of the hospitality, the engagement between the business ownership and the patron, and creating something that is a bit more fluid in terms of that hospitality experience and is really focused more on selling and serving product that is designed in quantity for consumption on the premises will provide more touch points between operator and patron and actually facilitate a better ongoing engagement. Although I do think that there is a precedent given the existing on-premises consumption to speak to that operators are already working with patrons and ensuring patron safety in that way. Thank you.

MS. Vice President Moore.

OF THE EIGHT APPLICATIONS YOU JUST MENTIONED, IS THERE ANYBODY WHO IS JUST DOING THE CAFE TO SEE IT AS A PILOT REALLY SETTING A STANDARD THAT OTHER PEOPLE COULD EMULATE? THAT'S MY QUESTION TO YOU. I'm sorry, of the commissioner of the... You were saying there were eight pending applications?

No, no, there are between eight and 11 existing consumption permits for existing cannabis retailers that have on-premises consumption.

So there is not yet any cafe application per se?

There are operators...

In your district, Ms. Murray?

There are operators who are interested in pursuing cafe-style operations. There are applications that are with the planning department right now for operators who are waiting on this legislation to be able to fully realize that ability. This legislation is will send that signal that a operator could operate with, in terms of, sorry, I should be a little bit more clear. In terms of the ability to have food preparation and service on site in addition to cannabis consumption, there are operators that are already in the pipeline that have plans and have that as part of their vision. And then there are folks who have not yet come to the planning department, but that we've spoken with who have shown us plans envisioning more of that sort of social operation. In terms of a on-premises only cannabis cafe, there are no applications yet because the permit doesn't exist and this is the discussion we're having here today.

I think it would be very interesting to create a prototype and watch that as a model for others to emulate if this goes through and becomes indeed an open door for people to find new opportunities to help create standards that are acceptable, transparent, and indeed inviting, rather than too tightly monitored and too tightly looked over the shoulder. I think that would be, as far as the industry itself has a positive invitation, the right way to travel.

Okay, commissioners, if there's nothing further, there is a motion that has been seconded to approve or to adopt a recommendation for approval. On that motion, Commissioner McGarry? Aye. Commissioner So? Aye. Commissioner Williams? Aye. Commissioner Braun? Aye. Commissioner Moore? Aye. And Commissioner President Campbell? Aye. So moved, commissioners. That motion passes unanimously 6-0 and concludes your hearing today.