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 vacancy last year was was 3. 2 , and this provides some concern when vacancies in a neighborhood get too high, as well they are too low. When vacancies are under 5 , we worry about those rent rising, and a needed change that we li a space for needed changeover time that we see in a corridor. We define vacancies in two different ways, either as active or inactive. Active means we have an identified or commercial tenant. Inactive is we do not have a tenant. We have historically divided these vacancies into these categories so we can refer businesses to storefronts that are technically available even if not proactively being leased. We report these annually to the controllers office, and for the purposes of the retail setting and as a way to gauge corridor health, we analyze a combined effect of both these active and inactive vacancies. They both have a value to us in terms of what residents are seeing and experience and also how we work in a given space. Its interesting to note when we began tracking in 2013 to 2016, that active vacancy rate, where we see our programs really having when packaged and tailored and curated in a way, we can see them having an impact here in terms of the active vacancy rate declining by about 1. 7 , whereas citywide, you see those vacancies actually increasing by. 9 . When we start looking a little closer at the five highest neighborhood have a cab see rates within our invested neighborhoods portfolio or the five lowest, we can see that some are greater than the healthy or normal range, and also some are very comfortable. But the average, generally, is within that healthy range. And im going to ask amy cohen to come up right now to talk about some of those factors that contribute to the vacancies. Good afternoon. The bla report started to identify some of the causes of the vacancies in San Francisco and we just wanted to try to describe it in a very colorful picture quickly. And in our experience, this office has done a lot of work filling vacancies and doing more comprehensive commercial corridor work. In particular in low income neighborhoods, but also in moderate and higher income neighborhoods around the city. And we wanted to just share our experience, which is at the very core of this picture that im calling an on dion is a building owner, and the building may have investors. Anything you do to try to fill a building comes down to the owner and motivation. If they are not motivated or willing to lease the space, its very challenging. A couple of other factors as you work out from there are brokers, who may or may not work for the owner, or round rents. If they think they could get a higher rent they could hold out if the owner is sort of aware of what the considerations are. The next layer out is really the building conditions, and i dont have to say much about that, but that can be an insurmountable challenge. They might not have the capital, or sometimes they do, but then encounter Something Else as theyve already gotten into the process and then they cant afford to move forward. The neighborhood conditions have been talked about a lot today. These influence some retail more than others. Many businesses want to gravitate toward where other businesses like them are successful or where theres a lot of spending power or high income or density to be the spending power. And many of the businesses that are only reliant or very much reliant on foot traffic are very sensitive to challenges in safety and cleanliness or other challenges like parking. The city regulations and processes hit both the neighborhood side and the business side. Again, i dont think these are new issues, but at the building level, theres a lot of regulations to navigate, and at the neighborhood level, there may be use restrictions, some of which are intended to prevent certain types of businesses from coming in, but others which maybe arent, but are hard for landlords and brokers to understand. And then, a prospective tenants ability to navigate all of this is another challenge, and some of them have a lot more capacity than others, and some are only going to have the motivation if theres a very high demand and very big payoff for them to go and open. And this is why we see formula retail sometimes being able to navigate processes because they have the corporate hitiein an support. And then finally outside of this is all the trends in retail generally, which weve been talking about today. I just want to let you know that we have experiences trying to deal with all of these different layers, but it takes a lot of time and understanding to know where the hurdles are, and a lot of Relationship Building and a lot of infrastructure with community partners, brokers, and everyone else. So i think that with that, im going to turn it back. I just heard that the definition i provided might have been captured incorrectly on the closed captions, so active vacancies are defined as those which do not have an existing or identified commercial tenant, do not. In terms of the programs that we provide to support both our corridors and Small Businesses and of course invested neighborhoods, is there to focus on Small Businesses but also the targeted neighborhood commercial district. Our programs are designed and deployed based on significant conversations with Community Around their priorities and desires. Both are internal and external capacity. The resources that we have available to support both Business Services and neighborhood improvement projects, all of those are aimed at realizing an economically thriving safe, resilient, sustainable district that meets the needs of our local residents. Some of our services are available citywide where others are more tailored to a specific neighborhoods needs when we are looking to concentrate and prioritize our efforts. At the time right now we have gun looking through an equity need, where we can inour time and or resources. In those targeted commercial districts, we partner with community, board of supervisors members and other agencies, and through that we have opportunities to develop, package, Deploy Services to address the particular needs of that district. The ability of us to track these vacancies and the data that we shared is a direct result of our vested neighborhoods program. As we track vacancies and make neighborhood resources available, we have employed various tools to prevent and both fill vacancies. Here, youll see when we think about the space as a whole, the commercial district planning and management that we do in support of Economic Development plans, the powerful work that our Community Benefit districts provide, in terms of both a heightened level of services and also a sustainable committed level of resources based on the work that they do, the importance of our merchant associations and our nonprofits who work towards Capacity Building to make sure the Community Members are well supported and informed in what the city can can do in partnership with them in service of their neighborhoods. Cultural district planning. Based on what weve seen very positively achieved in japantown. In addition to that the japantown cultural heritage. And reminding folks that experiences in their neighborhoods can be a very powerful tool both to celebrate the identity of a given place but also to remind the people of the specialness of any given district. And finally, public realm enhancemente enhancements and events that are important to the community. We want to make sure, as we