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FILE NO. 250538 AMENDED IN COMMITTE 6/30/2025 ORDINANCE NO. 114-25 [Planning Code - Priority Processing for Certain Commercial Uses] Ordinance amending the Planning Code to update eligibility requirements for the priority processing program for certain commercial uses, including enabling eligible uses in the North Beach Neighborhood Commercial District, the North Beach Special Use District, the Calle 24 Special Use District, and Formula Retail uses with fewer than 20 establishments to participate in the program, and updating scheduling and extension requirements for the priority processing program; reaffirming the Planning Department's determination under the California Environmental Quality Act; making findings of consistency with the General Plan and the eight priority policies of Planning Code, Section 101.1; and making findings of public necessity, convenience, and welfare pursuant to Planning Code, Section 302. NOTE: Unchanged Code text and uncodified text are in plain Arial font. Additions to Codes are in single-underline italics Times New Roman font. Deletions to Codes are in strikethrough italics Times 1Ve,F Roman font. Board amendment additions are in double-underlined Arial font. Board amendment deletions are in strikethrough Arial font. Asterisks (* * * *) indicate the omission of unchanged Code subsections or parts of tables. Be it ordained by the People of the City and County of San Francisco: Section 1. Environmental and Land Use Findings. (a) The Planning Department has determined that the actions contemplated in this ordinance comply with the California Environmental Quality Act (California Public Resources Code Sections 21000 et seq.). Said determination is on file with the Clerk of the Board of Supervisors in File No. 250538 and is incorporated herein by reference. The Board affirms this determination. Mayor Lurie; Supervisors Melgar, Sauter BOARD OF SUPERVISORS Page 1 (b) On June 26, 2025, the Planning Commission, in Resolution No. 21762, adopted findings that the actions contemplated in this ordinance are consistent, on balance, with the City's General Plan and eight priority policies of Planning Code Section 101.1. The Board adopts these findings as its own. A copy of said Resolution is on file with the Clerk of the Board of Supervisors in File No. 250538, and is incorporated herein by reference. (c) Pursuant to Planning Code Section 302, this Board finds that these Planning Code amendments will serve the public necessity, convenience, and welfare for the reasons set forth in Planning Commission Resolution No. 21762, and the Board incorporates such reasons herein by reference. A copy of said resolution is on file with the Clerk of the Board of Supervisors in File No. 250538. Section 2. Background and General Findings. (a) Fast, predictable, and transparent permitting processes will create new jobs, businesses, and homes, as well as facilitate the City's economic recovery from the COVID-19 pandemic. Commonly referred to as "PermitSF," the City's effort to reform permitting consists of improving the customer experience by streamlining approval processes; promoting government accountability to provide certainty about the delivery of government services; and centralizing technology to create a single point of permitting access. (b) This ordinance enhances the customer experience and promotes government accountability by increasing the certainty and transparency of the regulatory process for small businesses. Streamlining the conditional use authorization process will create a clearer pathway to open new businesses and will help drive the city's economic recovery. Section 3. Article 3 of the Planning Code is hereby amended by revising Section 303.2, to read as follows: Mayor Lurie; Supervisors Melgar, Sauter BOARD OF SUPERVISORS Page 2 SEC. 303.2. PRIORITY PROCESSING FOR CERTAIN USES IN COMMERCIAL SPACE: EXPEDITED CONDITIONAL USE REVIEW AND APPROVAL PROCESS AND REDUCED APPLICATION FEE. (a) Findings. (1) In April 2013, the Planning Commission adopted the Small Business Priority Processing Pilot Program. The stated goal of the pilot program was to accelerate the review of certain small business applications without compromising the review times of other applications. (2) Building on the success of the pilot program, Planning Department staff in consultation with staff from the Office of Small Business proposed expanding the program to additional types of applications. The expanded program was adopted by the Planning Commission in February 2015 and renamed the Community Business Priority Processing Program. As expressed in the Commission's adoption Q[_Resolution No. 19323, the intent was to support the business community - especially small and mid-sized businesses - and to increase efficiencies in the way the Commission and Department handle related applications. (3) By enacting this Section 303.2, the Board of Supervisors underscores the importance of small and mid-sized businesses to the economic vitality of San Francisco's neighborhoods and to the City as a whole, its residents, and visitors. The intent of this Section 303.2 is to expedite the review and hearing process for these vital small and mid-sized businesses without compromising public notice and input or the review times of other applications, and to build upon the success of the Community Business Priority Process Program by expanding the scope of eligible projects and ensuring that all eligible projects are considered accordingly, while preserving critical opportunities for community input and accountability to the legislative branch of government. Mayor Lurie; Supervisors Melgar, Sauter BOARD OF SUPERVISORS Page 3 (4) Due to the Calle 24 Special Use District's unique history and special identity, the projects within its boundaries require special consideration in order to retain, enhance, and support its character. It is, therefore, exempted from the priority processing provisions of this Section 303.2. The City first recognized the area's unique history and special character in 2014, when in Board of Supervisors Resolution No. 168-14 it established the Calle 24 C"Veinticuatro") Latino Cultural District. The Resolution memorialized "a place whose richness of culture, history and entrepreneurship is unrivaled in San Francisco." A 2014 report by San Francisco Architectural Heritage found that many of the long-standing community-serving businesses within the area were at risk of displacement due to San Francisco's volatile economic climate despite continued value and a record of success. The special character of the area was further recognized in 2017 when Ordinance No. 85-17 was enacted to establish the Calle 24 Special Use District. In enacting that ordinance, the Board of Supervisors specifically found, among other things, that "[t]he mix of businesses and uses, including Legacy Businesses, murals, festivals and architectural neighborhood design and character in the Calle 24 Special Use District contribute to a strong sense of neighborhood and a unifying identity." This area continues to require special consideration in order to retain, enhance, and support its unique history and character, including providing economic and workforce opportunities for local residents, supporting the production and offering of local or Latino artwork, and making sure that the area offers a range of goods and services available and accessible to residents, including immigrant and low-income and moderate-income households. {4§2 On June 26, 2025 the Planning Commission adopted Resolution No. 21761 to consolidate the Community Business Priority Processing Program with the priority processing Mayor Lurie; Supervisors Melgar, Sauter BOARD OF SUPERVISORS Page 4 program under this Section 303.2. As many o(the features o(these two programs overlap, consolidating the two programs will promote efficiency and reduce confitsion. (4) The Calle 2 ,1 Special Use District is still in its infancy., and due to its 1,mique history and special identity the projects ,1,•ithin its boundaries require special consideration in order to retain, enhance, and support its charactf!r. !: is, therefore, exonptedfrom thepriorityprocessingprm·isions o-f this Section 303. 2. The Cityfir~t recognized the area 's unique history and special character in 201 4, when in Resohttion l'·f.o. 168 1 4 it established the Calle 2 </ (" Veintirnatro ") Latino Cultural District. The Resolution memorialized "a place H1hose richness &/culture, history a11d e11treprenettrship is unrivaled in San Francisco. " A 2014 report by San Francisco Architectural Heritage found that many &jthe long standing comrmmity serving bblsinesses within the area were at risk &/displacement due to San Francisco's volatile economic climate despite contim,ted value and a record of success. The special character o-fthe area wasfarther recognized in 2017 when Ordinance No. 85 17 was enacted to establish the Calle 2 4 Special Use District. In enacting that ordinance, the Board spectficallyfound, among other things, that "{t}he :·'11ix of businesses and uses, including Legacy Businesses, murals, festh;als and architectural neighborhood design and character in the Calle 24 Special Use District contribute to a strong sense of neighborhood and a unifj,·i,"lg identijj,·. " This area contim,tes to require special consideration in order to retain, enhance, and su-pport its uniqtw history and character, including prmiding economic and ',Forkforce opportunities for local residents, stt-pporting the production and o-ffering of local or Latino artwork, and making sure that the area offers a range ofgoods a11d services avaiiEtble Etnd accessible to residents, including immigrant and low income and moderate income households. (b) Priority Processing for Certain Uses. Applications for Conditional Use authorization that comply with the requirements of subsection (c) are eligible for priority processing and a prorated application fee. Eligibility for priority processing shall not require Mayor Lurie; Supervisors Melgar, Sauter BOARD OF SUPERVISORS Page 5 any application separate from a completed application for Conditional Use authorization. Unless modified by this Section 303.2-, the provisions of Section 303 shall apply. (c) Eligibility for Priority Processing. An application for a Conditional Use authorization qualifies for priority processing ("eligible application") pursuant to this Section 303.2 if it is seeking to establish, alter, enlarge, or intensify a commercial use on the first story or below, or on the second story where the commercial use would operate on both the first and second stories, in the subject building and if it complies with all of the following requirements: (1) It pertains exclusively to Non--Residential Uses; (2) It is limited to changes of use, tenant improvements, or other interior or storefront work and does not involve any new construction or building expansion; (3) It does not involve the removal of any Dwelling Units or Unauthorized Units; (4) It does not involve a Formula Retail use, unless the Formula Retail use in question has fewer than 20 other establishments; (5) It does not propose or require the consolidation of multiple storefronts; (6) It does not seek to provide off-street parking in a quantity beyond that allowed as of right; a-RG (7) It does not seek to establish or expand any of the following uses: (A) Adult Entertainment,.;_ (B) Drive-up Facility,.;_ (C) Fringe Financial Service,.;_ (D) },{edical Cannabis Dispensary Retai/;-;, (E) Tobacco Paraphernalia Establishment,.· or (F) Wireless Communication Facility:-;'--tfflti~ Mayor Lurie; Supervisors Melgar, Sauter BOARD OF SUPERVISORS Page 6 (8) Is not ·within the Calle 2 'I Special Use District, as described and set forth in Section 249. 59 &/this Code. (8) It is not within the Calle 24 Special Use District (Planning Code Section 249.59); and (9) It is not within the 1\Torth Beach Neighborhood Conunercial District, €lS described and set forth in Section 722, or the North Beach Special Use District, as described and set forth in Section 780. 3. (9) It is not within the North Beach Neighborhood Commercial District, (Planning Code Section 722), or the North Beach Special Use District (Planning Code Section 780.3). If the application qualifies for priority processing, the Department shall notify the applicant &f the date oftwceptance ofthe compkte application andofthe applicant's eligibilityforpriority processing. The application fee shall be prorated pursuant to subsection (I). (d) Expedited Commission Hearing. An eligible application shall be scheduled for a public hearing on the Planning Commission's co1qsent calendar within 90 days from the date that the application has been deemed complete, unless the hearing date is extended pursuant to subsection (e). An application is deemed complete when the application and filing fee have been accepted by the Department. The Planning Commission shall develap rules and regulations to ensure that eligible applications are heard and determined within 90 days without compromising the review times of other applications. (e) Extension of Commission Hearing Date. The Planning Commission may at any time adopt a one-time extension of not more than 60 days of the hearing date for an eligible application beyond 90 days if+ (I) the Pltmning Director or the Director's designee requests in writing that the item be removedfrom the Commission's consent calendar,· or Mayor Lurie; Supervisors Melgar, Sauter BOARD OF SUPERVISORS Page 7 (2) any member ofthe Planning Commission requests that the item be removedfrom the Commission's consent calendar; or (-J)- any neighborhood organization maintained on a list by the Planning Department pursuant to subsection 311 (d)(4) submits within 60 days ofthe submission ofa complete Conditional Use authorization application, or at anypointprior t-0 tJw Pl-anning Co,"lunission 's schedblled hearing, a letter of opposition or written request for a continuanccthat the item be removedfrom the Commission's consent calendar at least one day before the hearing. (g) Repov't to the Board ofSuper,;isors. Orw yearfrom the effective date of this Sectio;1 303.2 and for three years thereafter on an annual basis, the Planning Department shall sblbmit to the Board ofSupervisors a report shmFing t1w number and percentage r:>f eligible applications that are considered within 90 days of the date the Department has deemed the application complete and the reaso11 or reasons ~why eligible applications were not heard within 90 days, ifa,1y. Section 4. Effective Date. This ordinance shall become effective 30 days after enactment. Enactment occurs when the Mayor signs the ordinance, the Mayor returns the ordinance unsigned or does not sign the ordinance within ten days of receiving it, or the Board of Supervisors overrides the Mayor's veto of the ordinance. Section 5. Scope of Ordinance. In enacting this ordinance, the Board of Supervisors intends to amend only those words, phrases, paragraphs, subsections, sections, articles, numbers, punctuation marks, charts, diagrams, or any other constituent parts of the Municipal Code that are explicitly shown in this ordinance as additions, deletions, Board amendment Mayor Lurie; Supervisors Melgar, Sauter BOARD OF SUPERVISORS Page 8 additions, and Board amendment deletions in accordance with the "Note" that appears under the official title of the ordinance. APPROVED AS TO FORM: DAVID CHIU, City Attorney By: /s/ Giulia Gualco-Nelson GIULIA GUALCO-NELSON Deputy City Attorney n:\legana\as2025\2500314\01851502.docx Mayor Lurie; SupeNisors Melgar, Sauter BOARD OF SUPERVISORS Page 9 City and County of San Francisco Tails Ordinance City Hall I Dr. Carlton B. Goodlett Place San Francisco, CA 94 I 02-4689 File Number: 250538 Date Passed: July 15, 2025 Ordinance amending the Planning Code to update eligibility requirements for the priority processing program for certain commercial uses, including enabling Formula Retail uses with fewer than 20 establishments to participate in the program, and updating scheduling and extension requirements for the priority processing program; reaffirming the Planning Department's determination under the California Environmental Quality Act; making findings of consistency with the General Plan, and the eight priority policies of Planning Code, Section 101.1; and making findings of public necessity, convenience, and welfare pursuant to Planning Code, Section 302. June 30, 2025 Land Use and Transportation Committee - AMENDED, AN AMENDMENT OF THE WHOLE BEARING NEW TITLE June 30, 2025 Land Use and Transportation Committee - RECOMMENDED AS AMENDED July 08, 2025 Board of Supervisors - PASSED, ON FIRST READING Ayes: 11 - Chan, Chen, Dorsey, Engardio, Fielder, Mahmood, Mandelman, Melgar, Sauter, Sherrill and Walton July 15, 2025 Board of Supervisors - FINALLY PASSED City and County of San Francisco Ayes: 11 - Chan, Chen, Dorsey, Engardio, Fielder, Mahmood, Mandelman, Melgar, Sauter, Sherrill and Walton Pagel Printed at 8:45 am on 7116/25 File No. 250538 ftL , City and County of San Francisco Daniel Lurie Mayor Page2 I hereby certify that the foregoing Ordinance was Fl NALLY PASSED on 7/15/2025 by the Board of Supervisors of the City and County of San Francisco. t J 11 / 2 ~ Date Approved Printed at 8:45 am on 7/16/25