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AMENDED IN COMMITTEE FILE NO. 200673 8/31/2020 ORDINANCE NO. Supervisor Peskin BOARD OF SUPERVISORS Page 1 [Planning Code - Conversion of Certain Limited Restaurants to Restaurants - North Beach Neighborhood Commercial District Special Use District] Ordinance amending the Planning Code to allow certain Limited Restaurants in the North Beach Neighborhood Commercial Special Use District to convert to Restaurants that may apply for liquor licenses; and affirming the Planning Department’s determination under the California Environmental Quality Act; and making findings of consistency with the General Plan and the eight priority policies of Planning Code Section 101.1. 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 New 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. The Board of Supervisors of the City and County of San Francisco hereby finds and determines that: (a) Environmental and Planning Code Findings. (1) The Planning Department has determined that the actions contemplated in this ordinance comply with the California Environmental Quality Act (California Public Resources Code Section 21000 et seq.). Said determination is on file with the Clerk of the Board of Supervisors in File No. 200673, and is incorporated herein by reference. The Board affirms this determination. (2) On August 27, 2020, the Planning Commission, in Resolution No. 20779, adopted findings that the actions contemplated in this ordinance are consistent, on balance, 182-20

Supervisor Peskin BOARD OF SUPERVISORS

Page 2 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. 200673, and is incorporated herein by reference.

(3) On August 27, 2020, the Planning Commission, in Resolution No. 20779, approved this legislation, recommended it for adoption by the Board of Supervisors, and adopted findings that it will serve the public necessity, convenience and welfare. Pursuant to Planning Code Section 302, 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. 200673, and is incorporated herein by reference herein. (b) Specific Findings.

(1) The COVID-19 pandemic has created unprecedented challenges for small businesses in San Francisco, including for food establishments that fall under the definitions for Restaurants and Limited Restaurants under the Planning Code. The City has responded with multiple policies to provide food establishments and other small businesses with grants, low- and no-interest loans, and allow innovative uses of the public realm through the Shared Spaces program.

(2) The North Beach neighborhood has among the highest concentrations of liquor licenses of any neighborhood in San Francisco, and has long restricted new liquor licenses as well as adopted policies to decrease the number of liquor licenses in the neighborhood through various attrition mechanisms. That said, surveys by restaurant industry stakeholders now suggest that the financial impacts of the COVID-19 pandemic many have long-lasting effects on the restaurant industry, potentially prompting as many as 50% of restaurants in San Francisco to close entirely, and many to dramatically alter their business models as they seek ways to adapt to the new economic conditions.

Supervisor Peskin BOARD OF SUPERVISORS

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(3) The actions contemplated in this ordinance aim to provide relief to Limited Restaurants that also operate as Bona Fide Eating Places in the North Beach Special Use District but that have nevertheless been precluded from acquiring liquor licenses due to the aforementioned high concentration of liquor licenses and resulting policies to reduce the number of liquor licenses in the neighborhood. This narrow relief is intended to apply to Limited Restaurants that have provided meal service to patrons and otherwise have met the definition of Bona Fide Eating Places under the Planning Code, even though the definition of Limited Restaurants also includes specialty food establishments like gelaterias and specialty bakeries that do not provide meal service.

Section 2. The Planning Code is hereby amended by revising Sections 722 and 780.3, to read as follows:

SEC. 722. NORTH BEACH NEIGHBORHOOD COMMERCIAL DISTRICT. * * * * (6) NORTH BEACH LIQUOR LICENSES FOR RESTAURANTS (Section 780.3): A Restaurant Use may only add ABC license types 02, 23, 41, 47, 49, 59 or 75 as a Conditional Use on the First Story if, in addition to the criteria set forth in Section 303, the Planning Commission finds that the Restaurant is operating as a Bona Fide Eating Place as defined in Section 102. Should a Restaurant fail to operate as a Bona Fide Eating Place for any length of time, the Conditional Use authorization shall be subject to immediate revocation. To verify that the Restaurant is continuing to operate as a Bona Fide Eating Place, records of the Restaurant’s gross receipts, showing that a minimum of 51% of its gross receipts within the last year is from food sales prepared and sold to guests on the premises, shall be provided to

Supervisor Peskin BOARD OF SUPERVISORS

Page 4 the Department upon request. All records and information shall be submitted to the Department under penalty of perjury.

SEC. 780.3. NORTH BEACH SPECIAL USE DISTRICT. * * * * (c) Controls. The following provisions shall apply within such District: * * * *

(2) Alcohol Licenses.

(A) A Restaurant may provide on-site beer, wine, and/or liquor sales for drinking on the premises (with ABC license types 02, 23, 41, 47, 49, 59 or 75) as a Conditional Use on the First Story if, in addition to the criteria set forth in Section 303, the Planning Commission finds, based on information submitted to the Department by the applicant, that the Restaurant is and will continue to operate as a Bona-Fide Eating Place as defined in Section 102. Should a Restaurant fail to operate as a Bona-Fide Eating Place for any length of time, the Conditional Use authorization shall be subject to immediate revocation per Planning Code Section 303(f). To verify that the Restaurant is continuing to operate as a Bona-Fide Eating Place, records of the Restaurant’s gross receipts, showing that a minimum of 51% of its gross receipts within the last year preceding the Department’s request is from food sales prepared and sold to guests on the premises, shall be provided to the Department upon request. All records and information shall be submitted to the Department under penalty of perjury.

(B) Subject to the requirements set forth in this subsection (B), a Limited Restaurant that existed as of March 1, 2020, may apply for a permit to convert to Restaurant use within three six months after the effective date of the ordinance in Board File No. 200673.

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(i) The application to convert to Restaurant Use shall include records submitted under penalty of perjury showing that the Limited Restaurant has operated as a Bona Fide Eating Place for at least four three full calendar months between March 1 November 1, 2019 and February 29 September 1, 2020. The Department shall reject the application if the records do not support the application for such conversion; otherwise, it shall approve it.

(ii) If the application to convert is approved pursuant to this subsection, Restaurant Use shall be principally permitted, including for purposes of being eligible to apply for a Conditional Use Authorization and, notwithstanding any other Section of the Planning Code, shall not require separate Conditional Use Authorization to permit the sale of alcohol on the premises under Section 780.3(c)(2)(A).

(iii) Applications to convert pursuant to this subsection shall be exempt from the notice provisions of Planning Code Section 311 and from the requirement under Section 780.3 that Restaurants only occupy spaces that were previously occupied by a Restaurant or a Bar.

(iv) This subsection 780.3(c)(2)(B) shall expire three six months after the effective date of the ordinance in Board File No. 200673, and the City Attorney shall thereafter cause this subsection to be removed from the Planning Code and the remaining subsections of this Section 780.3 to be renumbered accordingly. * * * *

Section 3. 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.

Supervisor Peskin BOARD OF SUPERVISORS Page 6 Section 4. 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 additions, and Board amendment deletions in accordance with the “Note” that appears under the official title of the ordinance. APPROVED AS TO FORM: DENNIS J. HERRERA, City Attorney By: /s/ Andrea Ruiz-Esquide ANDREA RUIZ-ESQUIDE Deputy City Attorney n:\legana\as2020\1900487\01474597.docx Tails City and County of San Francisco City Hall 1 Dr. Carlton B. Goodlett Place San Francisco, CA 94102-4689 Ordinance Ordinance amending the Planning Code to allow certain Limited Restaurants in the North Beach Special Use District to convert to Restaurants that may apply for liquor licenses; and affirming the Planning Department’s determination under the California Environmental Quality Act; and making findings of consistency with the General Plan and the eight priority policies of Planning Code Section 101.1. File Number: September 22, 2020 Date Passed: 200673 August 31, 2020 Land Use and Transportation Committee - AMENDED, AN AMENDMENT OF THE WHOLE BEARING NEW TITLE August 31, 2020 Land Use and Transportation Committee - CONTINUED AS AMENDED September 14, 2020 Land Use and Transportation Committee - RECOMMENDED AS COMMITTEE REPORT September 15, 2020 Board of Supervisors - PASSED ON FIRST READING Ayes: 11 - Fewer, Haney, Mandelman, Mar, Peskin, Preston, Ronen, Safai, Stefani, Walton and Yee September 22, 2020 Board of Supervisors - FINALLY PASSED Ayes: 11 - Fewer, Haney, Mandelman, Mar, Peskin, Preston, Ronen, Safai, Stefani, Walton and Yee Page 1 City and County of San Francisco Printed at 1:46 pm on 9/23/20