Questions you might have. Thank you. Thank you very much for that overview. I know that our office work add lot on the registry issue. Given that a law was passed but we also noticed that it wasnt really updated as well. And i think as we go on into our other presentations, one of my observations now is that even if we were to have this wonderfully filled database of all the vacancis that that still might not address the issues that were dealing with in terms of the changing nature of retail. I really like the suggestions that were offered in this report. Supervisor fewer . Thank you very much. I just have one question. You mentioned that the city of chicago charges a vacancy property Registration Fee every since months if property is vai cants with higher fees charged if the property is reported by complaint rather than selfreported by the owner. Cefjs im wondering has the city of chicago spaoefrntion add decline in vacant store fronts since it has implemented higher fees and propertis that were not selfreported to see if its had any impact . We do not have information looking at it over time, supervisor. We saw we got a point in time and saw that, you know, they still have a problem also. But the interesting question would be to see if fewer are being reported by complaint and we could get that information, but yoift on hand. Thank you very much. Thank you. And seeing no other questions or comments, thank you to the budget analyst office. I will now turn this over to the Economic Office and Workforce Development and they have a presentation on neighbourhood retail and strategies for store front vacancies. Good afternoon, chair tang. Committee members kim, safai, yee and stefani. Thank you for including oewd about these informational items. We recently completed a study and our strategies for addressing store front and other commercial vacancies in our neighbourhood. Today ill be copresenting with my colleague amy cohen and with our retail study consultant sarah graham strategic economics. Our joint presentation will start with an overview of National Retail trends and key findings from our recently completed can study by strategic economics and this information will them city department, policymakers and the public understand the restrictions that were working within. The Retail Centre reviews Current Research and best practice which is will help inform and guide our policies and programmes so we may better support our store front businesses and neighbourhood shopping districts informed by the notable shifts in the National Retail sector and local economy. Amy and i will also share afterwards oewds goals, strategies and considerations in support of vibrant, neighbourhood commercial districts and how we work to prevent and manage store front vacancies. Aaron starr from the Planning Department will provide an overview of its tools as well that relate to store fronts. Well close with considerations and next steps. So, thank you very much. Hi. Good afternoon. As mentioned, im sarah graham. Im with strategic economic for an urban economics Consulting Firm located in berkeley. And im going to be going over the findings from our forthcoming report of state of the Retail Sector, challenges and opportunities for San Franciscos neighbourhood commercial districts. And youve no doubt seen the headlines of the current challenges that the retail second is to is facing and these concerns about how National Retail trends can impact us here in San Francisco were one of the motivating issues that that led to this study. So other motivating issues are about the specific challenges faced by local businesses and how businesses and n. C. D. S may need to adapt to remain competitive in the change retail environment. So to explore these issues, we have prepared a study that includes three issue briefs and a related executive summary. I think you may have the executive summary in front of you today. But the report is forthcoming later this month. The focus of the study, it looked at the types of uses that typically occupy grounds floor retail space in the corridors. In the n. C. D. S. So, we didnt focus in on Everything Else in those corridors and Everything Else that goes into commercial space, but rather focused on traditional retail, restaurants, night life and entertainment and personal services and fitness centres. So, the conclusion to the study that ill be getting to in this presentation reflects the changes that are occurring and the uses that are going into those spaces and corridors now, under current conditions. So probably the big trend that has been making headlines is store closures. Youve probably seen articles talking about all of the major retailers that are closing. But it turns out that the story is quite a bit more complicated than that. And that there are a lot of stores closing, especially in categories like apparel, electronics, Office Supply and. Department stores. Other types of stores are actually seeing continued growth and store openings. So, stores like discount retailers like dollar stores, discount Clothing Stores and Warehouse Stores have actually been adding stores and sales at restaurants. And bars also continue to grow. And the other big trend that has been making a lot of headlines is nationally online sales are driving retail growth. So and not only driving the growth, but expanding into new categories. It used to be that we thought of online sales as being, you know, amazon was a book seller. But we all know that thats expanded into a lot of different categories now ands that online retailers are taking on a growing portion of growth. So,s in 2016, what we call nonstore sales, and so thiss a big term basically to refer to anything bought online and some other things. But those nonstore sales accounted for 12 of total National Retail sales. But more than 50 of recent growth in retail has been happening online. So its a small segment to date, but it is taking up a lot of the growth. And it is a segment thats growing fastest. The influence of ecommerce is also playing out in employment where National Retail employment has been flat but ecommerce employment is growing. Along with this is changing technology that has been influencing how traditional retail is occurring. So, retailer, Restaurant Owners and Service Providers are sbeg rating their brick and mortar sales and locations with online sales strategies. You see this if you order food on a Third Party Delivery app or if you use an Online Booking platform for restaurant reservations. And the final trend that im going to talk about today is the growing importance of offering an experience or what is sometimes referred to as experiencial retail. Households in the u. S. Are spending more and more on eating out, fitness, buy advertise and travel. So retailers have been looking for way toss appeal to this increased emphasis on experience by doing things like Holding Classes and events or serving food and drinks in a retail location. And on the slides here, we have a couple of examples of this in San Francisco the retailers. On the left is a store called byrd and beckett with a music event. It is a record and bookstore. And on the right is san francycle with another event where people are encourage to come from the event, but these types of veterans draw in shoppers and hopefully also to purchase. Well, so then im going to move on to the impact of these National Trends on San Francisco retail. And im going to start with the good news first. The good news is that San FranciscoSan Francisco has been somewhat insulated from the National Trends in retail and this sufferst buffering is in part due to our many competitive advantages in San Francisco. And these are and these advantages include the really strong economy, a local cull thursday that places high value on buying local and on dining out. And strong tourism trends. However, recently sales in the general consumer goods categories and some other categories have been leveling off and even declining in the most recent pers for which data is available. So we see that the Retail Sector in San Francisco now appears to be slowing. Other indication of this are weve heard from brokers that rent for commercial space in the n. C. D. S have plateaued after years of increased rents. They have now at least leveled off, if not declined in some places. And also fewer traditional retailers are seeking space in retail districts. To counter this, there has been an increase in interest from personal service assist, restaurants and medical services. Or offices. But the brokers are reporting a decline in traditional retail seeking space. As was mentioned in the previous presentation, oewd surveys 24 corridors biannually. Looking at vacancies. And those surveys also show an increase in vacancies in some corridors. And oewd staff is actually going to provide more detail on this in a following presentation. In addition to these pressures, these National Trends and other pressures on local retail, there are other challenges for San Francisco businesses. The challenges that we found in talking to retailers, to businesses here in San Francisco and through the research include employee recruitment and retention and high labour costs. The high rents in many of the n. C. D. S, the loss of longtime customers as households move out of the neighbourhood or even out of the city all together. And also land use regulations and permitting requirements. You know, some of these oh. And public realm challenges as well. So those include challenges like real and perceived feelings around safety and cleanliness, longterm vacancies, the perception of vacancies, how they look on a corridor and other factors that may droiblt a sense of disinvestment. [please stand by] please stand by] and many. And many businesses are thriving by providing these strategies. Some businesses dont want to change. Theyve theyve been in their business for dlever, and they dont want to change or they may not be able to overcome fundamental challenges, like a lack of market demand for what theyre selling or their services. And that brings us to assisting individual businesses is not enough. Its actually the strong the district, the importance of the district really influences the aspects of businesses. So we found that Retail Businesses function as part of as part of the neighborhood commercial districts. And they rely on each other and other businesses in the districts and food traffic in a way that cannot be accomplished by themselves, so customers may come to an ncd to shop or get groceries or get a haircut, and then they may stop and shop at other stores when theyre there, so each individual business can provide some of the foot traffic that helps support other businesses. Other drivers of retail demand include local employers, people on their break at work and cultural, educational and medical institutions, professional services, medical, and other offices. So im now going to move into the conclusions of our study. So based on the data and study, weve developed four main implications, and that will wrap me up. So we have these four. The number one conclusion is to thrive in a more challenging business environment. Retailers need to embrace new technologies, and ive mentioned several of these technologies already today, and they include online sales, social media and appbased delivery services. This means that businesses may benefit from technical and Financial Support in expanding their online presentation, adjusting their inventories or adjusting to a changing customer base. In addition, the citys curb management policies may need to be revisited to maintain an enhanced customer access and effectively meeting changing Transportation Needs what i will enabling businesses to take advantage of emerging delivery technologies, and i believe there are some pilot projec projects taking a look at that the second main conclusion is that retailer need to be flexible and creative to provide customers with a more interesting retail experiences. Examples of this are offer classes and workshops, hosting events and serving food and bench beverages at stores, and these events draw shoppers into the stores. This conclusion means that land use policies may need to be modified to provide retailers more exibflexiblity so that th can expand their services, like providing drinks in a retail setting. The third conclusion is about the importance of the district. Diver diver diverseifying can help expand their customer base. The right mix really depends on the ncd or the corridor or the specific district. The components of a healthy mix include an anchor that drives foot traffic to the district, and an anchor could be a fullservice Grocery Store or another large retailer or it could be a cluster of smaller stores, related Retail Stores or restaurants; some sort of use thats a little cluster. Other businesses in a healthy mix include restaurants, nightlife and entertainment that compliment retail sales and provide gathering spaces for potential customers and potential services and Fitness Centers that provide needed services and also help to draw foot traffic. Professional Services Provide needed services in an officelike setting directly to the general public, but even uses like office and housing that may not serve the general public help generate foot traffic and the demand for retail and ncds. So what all this means, diversifying the mixes in an ncd so that retailers can support their customer base, is it should include a range of storefront sizes, and storefronts should be designed to adaptablity, and be able to serve a wide set of uses. It also means that the office uses that that are not open to the general public could be located off the ground floor or on the periphery of an ncd. Limiting ground floor retail requirements for new development to the strongest locations for retail could also help reduce potential vacancies. So we talks a lot weve heard a lot today about vacancies and the work that we did suggests that limiting ground floor retail requirements could help to reduce those vacancies in the future. The final conclusion for our study is around experiencetial retail and the people visiting our entities. By offering a fun dining and shopping experience, ncds can help to draw foot traffic. That means continuing to maintain and enhance the public realm is criticizing, so prioritizing pedestrian comfort and safety, keeping spaces adaptable and attractive can help to draw customers to an area and keep them there to make purchases. Also, as we have seen in ncds in San Francisco, celebrating local, historical and Cultural Assets can contribute to a unique and interesting environment, so programming festivals and events can draw people into the ncds, as well. And finally, high capacity district organizations can help districts to create a great experience for residents and visitors. So these type of organizations include Community Benefit districts, merchants association, Community Development organizations and other types of management organizations. And i believe with that, im going to pass it back to martin. So perthe request, we wanted to go over some investing neighborhoods and go over some of the ncds that support our districts and Small Businesses. But first, we wanted to have a common definition of vacancy. But first, i want to recognize that were all talking about the commercial districts supporting them, their vibrancy, their vitality, and what they have to offer all of us, whether were businesses, residents or workers. And one thing that we all accept as part of a healthy district is vacancies. Its defined as an empty storefront or its occupied with a noncommercial use. As is mentioned beginning in 2013, our staff conducted biannual physical storefront vacancy surveys. Were out there pounding the pavement as part of our program, and we want to also say that while we recognize that these underutilized spaces which may not be open on a regular daily basis, those are not counted at vacant. Those are occupied from our point of view, but while theyre not tech knee vacant, they certainly do have an impact on Community Perception in a neighborhood. What is a healthy vacancy from our perspective. Economic developers usually use from a five to 10 range. That said, the perception of whether or not there is a vacancy problem in a particular neighborhood commercial district can vary. The numbers have value, as does each districts Population Based on their priorities and circumstances. Sometimes even when the vacancy rate is within a healthy range, neighborhood stakeholders are concerned about vacancy. What you see here is that the citywide vacancy rate has stayed low, even through the recession beginning in 20 or coming out of it in 2009. As the bay area economy grew out of the recession, increase for retail space created competition, and we can also see rents growing quite quickly in retail spaces. The retail rent vacanc