Permitted where restaurants are allowed to be opened. For background, as s. F. Planning presented, they consider virtual and gross kitchens to be catering uses. However, we know that those that some virtual and gross kitchens have previously sought permitted under mobile restaurants and food facilities, and the department is currently reviewing those definitions. Caterers are usually permitted in Industrial Areas of the restaurant. Limited restaurants are usually permitted in neighborhood commercial corridors. Virtual and gross kitchens are considered to not Exchange Money for services on the property. If a fastfood change wanted to open up their own kitchen, they would be principally permit today do so as a catering use. Dominica go ahead. For this particular section, i feel like there was there was some stronger feelings and less stronger feelings about whether or not formula retail should be allowed in catering uses. I think i was in the strong feeling that it shouldnt be. Okay. I guess my question is on process of this. Are we going to go through each section and agree this is what was said, and if we go through as a body, then we question . Yes. Okay. Then ill hold my questions. Okay. As more businesses open, congestion may thusly increase due to an increase in use of those delivery apps. Effectively, youre determining what. [inaudible] whos a virtual kitchen versus whos a brick and mortar, and effectively, they recommended the city come up with a way to make a better determination of whos who and study it for the impacts. So effectively, your conclusion was that the city should formally support the food fair delivery act, which is at the state level, but also should explore local regulations that could ensure brick and mortar businesses have adequate protections in the thirdparty delivery space. What was not fully discussed at the meeting on february 25 was legislation thats been proposed in various states and localities, including the fair food delivery act, which to be perfectly honest, ive not done a thorough analysis of. Im hoping my counterpart can speak somewhat to it, but it was introduced recently, so give us a little space to better understand it. The state of rhode island has proposed legislation regarding disclosures and regulation. The state of new york has proposed legislation regarding Health Inspection grades. The city of new york has proposed the most robust package of legislative proposals relative to this space, six pieces of legislation in particular, which are outlined on this slide. Again, i havent had the time or band width to fully understand each piece of legislation, but we have an idea of what they are generally proposing . You have that, i believe, in your binders, and if not, i will email this out to you. And with that, i am happy to take questions at this time. Commissioners, do we have any questions . Okay. Well, it was a super interesting hearing. Ben, did you want to speak at all to has there been any Development Since the hearing in terms of how the Planning Department is looking at this . Sure. Good morning, commissioners. Ben van houten from the office of economic and workforce development. I agree this created a lot of interdepartmental dialogue. I wont speak for the folks at planning or d. P. H. Other than to say weve had good follow up conversations with them, and i think we all have a more keen eye on this emerging set of models. Based on that hearing and the discussion tonight and the memo and the recommendations you provide, i think thatll be really helpful in terms of approaching thursdays hearing, which, again this is all the beginning of this conversation if it ultimately all goes up into legislation, im sure thisll all be back before you in this conversation, and itll continue on. Sure. Appreciate the presentation and appreciate you being here tonight. I think oh, what . Oh, there is . Oh, sorry. Do we have any Public Comment . Yeah, i got it. Seeing none, Public Comment closed. So my observation was, at the hearing, there didnt seem to be any dispute between the restaurants or us when we us, when we debated it, that there should be opt in or opt out. I think there was broad consensus, i think we all agreed on that one. That does not need further discussion. I think we all need on the health score, and i didnt hear any objections from the Restaurant Industry, either, and it doesnt seem like its a big ask of the delivery services. But that seems fairly nonconfrontational whats the controversial . Yeah, thats what i meant to say. So the live issues, from my perspective commissioner yakutiel, you mentioned formula retail and how that plugs into it. And then, you know, i dont get the sense that the you know, there was a ton of debate about catering and limited restaurants other than there was a sense that the Planning Department should be aware of this and, you know, obviously, we dont want to have a lot of ghost kitchens suddenly clogging up commercial corridors and competing with brick and mortars on some sort of an unfair playing field. It sounds like they are going to take a look at it, but if anybody feels like we should not take a look at it. Yeah. I think there was a difference between limited kitchen, ghost kitche kitchen, and pop up kitchen. It does seem like the Planning Department was noting it was happening in certain cases and trying to clamp down on it. And i think if were giving a recommendation to planning, it is thank you for doing that. Please continue to do that because i dont think anyone had major issues with it happening, it was where it happening. Right, and where it could potentially lead. Right. As commissioner ortiz said, you know, sometimes our job is to make sure that a potential bad thing doesnt happen in the future because we didnt keep our eye on it. Yeah. So on that point, i think dominica, thank you for writing that there. I think my point would be to specifically say that ghost and cloud and virtual kitchens should not be allowed to be zoned as limited restaurants. They should be zoned as catering, and they should not be allowed in our major corridors. I agree with that. It doesnt say that with as much teeth, but thats how i think it should be said about it. You know, the only thing i have is laurie from g. G. A. Said these can sometimes fill spots that can be vacant, and she sort of outlined that that was a good or she recognized that that was potentially a good thing. I dont know if she was speaking against her interests. I think that maybe speaks to a larger issue that we can delve into during our retreat. You know, there are a lot of businesses that are, you know, maybe not anybodys third choice, but, you know, maybe third, fourth, fifth choice in their neighborhood, and theyre, you know, filling a vacant spot. And id like to get a sense of the commissions point of view in terms of how much weight does that hold, you know, the fact that theyre filling a vacant spot . Is that enough weight to say yes to maybe another non nonretail use, non you know, depending on each neighborhood, everybody has a different kind of feel. All of our corridors feel very different to one another, and noncomplementary business. Is that, like, okay because were just, like, trying to fill spots right now. Right. And to that spot, aunjon spoke quite eloquently to that spot referring to that model. We drove him to that model and aligned forces with businesses that practice that model, and now were going to recommend pulling the rug out under that model. I think its where the business is. I think in this specific instance im talking, like, more about the neighborhood commercial street, right . Like yeah, but i think the businesses that he has, i think theyre, like two block away. Yeah, its off of 24. I think that if the spirit of some of these regulations could work. The problem, the way they stand, a Small Business could take two or three years going through conditional use. Thats the real problem, because if conditional use would actually work, then poof, a couple months, the community has input, you can stay here, whatever the community wants. Thats the spirit of conditional use. The problem is its not working the way it should be working, and thats the problem, like you said. The problem is storefronts, neighborhood districts, they want them all filled. If thats what they want, thats what they want, but unfortunately, thats not going to happen in San Francisco. Yeah. I think this is a tough one in San Francisco because i do think we have an issue of vacancies in our commercial corridors, but the way i think about it is i do think that these businesses could, in the immediate or longterm, pose a threat to restaurant. I think in the shortterm, were squeezing restaurants, and this is an opportunity to generate more revenue. But this is a [inaudible] oh, my goodness. If these spaces are able to, in the medium and longterm, lower their prices and have their own kind of brands in there that are reducing time and costs for restaurants that are now in direct competition for businesses on the corridors, it could have a direct impact on an industry that is already under threat. So when you and i think about this journey together thats happening on commercial co corridors, i think about the businesses that are already there that have helped the community. I dont think i think we can have an open mind. The issue is i actually see that this particular kind of business could hurt if it is hurt, if it is located on a commercial corridor, the brick and mortar locations on that corridor. We have concentrated neighborhood commercial corridors for a reason. I think, you know, we all want to be very careful with the commercial corridors, and i think its well said. I think its a real concern. I i guess part of me is wondering whether this particular component is quite ripe for us putting our stamp on, you know, recommending a specific course of action. And by that i mean, so far, we have a sample size of one. Were seeing a possibility of a trend, a possibility of harm, but we dont have actual harm yet. And im a little concerned just lightly and i think reasonable minds can look at this two different ways. Im just wondering if maybe the right time to sort of advocate sort of forcefully for an issue is when people are complaining about it . Or is it premature for us to get involved when g. G. A. Says there isnt a problem right now . I think, with respect, thats why were here, and were trying to be proactive and not reactive. And i dont see a reason why we would not, having taken all this information and provide some clear prescriptions of what we think should and shouldnt happen. Wouldnt it be easier to do it proactively, if there isnt anybody right now trying to get in the neighborhood corridors, to just say we dont want it there before we have a bunch of permits that go out, and then, we have to get them stuck in the c. U. Process or whatever it is . Right. Now we have to remember, with the businesses that are there, theyre giving them, like, a oneortwoyear extension, and its a lot harder to undo something in the community. Oh, yeah. I think its a very fair point. Steph steven, i think you have a viewpoint on this. Oh, yeah, i like what shes saying. I agree with that. Okay. I think the catering, thats where we can be the most proactive. Theyre doing exactly what uber did, and after, its too hard. Yes, dominica. Just one point of clarity, the one virtual and ghost kitchen that has been allowed in a neighborhood commercial corridor was allowed on permit because it was miscategorized, and i think that had been maybe lost in the conversation on the 26 . And so corey, the planning administrator, explained it, that the concept would be catering uses, which are generally permitted in the Industrial Areas of the city and not on the commercial corridors save for i think its the mission and c. T. So the instance that were thinking of may in fact not actually be may not have passed muster to begin with, and so were would ordinarily not be allowed to proceed under the status quo . Correct. Okay. Thats helpful. But thats when they right now, their current model is they get a facility, and they cluster group, correct . Right . Individuals, some proviivate, thats their model now. But if i wanted to bypass this, i didnt want to cluster this and have a single caterer use, thats how i would bypass them if i wanted to do that. I see ben walking up. This is one of the most complex pieces of it. My understanding it four facilities, if you dont allow a member of the public to walk up, and youre only doing delivering out of a kitchen, that is a catering use, and catering uses are not generally permitted in the neighborhood commercial corridor, so anybody that is doing that business should be under active neighborhood enforcement. So the point was to treat businesses the same way in the neighborhood commercial corridors. I think it was the discussion that you had about directing planning to keep up the good work to make sure that folks arent doing that. Where the catering retail and formula uses intersect is in the more Industrial Areas where catering is permitted, formula retail are already permitted. To the extent that there are questions around this feels different than other catering other types of catering you know, when we think of catering, we often think of somebody catering an event or a wedding or that sort of thing. I think that moving forward, when we talk about where catering uses are permitted, these things these types of new types of models are permitted and thinking on an individual districtbydistrict level, that seems certainly an area ripe for consideration moving forward. But i think in the future, making sure that businesses are consistently treated in the neighborhood commercial corridors to prevent any sort of unfair advantage. That seems like the most immediately attack there. So how hard would it be to say catering resources cant have formula retail in them. Im sorry. Im confused. Those two things are both permitted in the same area, but this is one business that is a catering use but also has formula retail in it, so its like a business within a business. Isnt that different . Well, i dont know that the Planning Department would take that same assessment that its a formula retail. It has formula retail in it. If the facility is not operating for public walk up, its not public retail at all, so the argument around formula retail is different. Its the look and feel it doesnt really lend itself to a nonretail use. That being said, i think, certainly, when we talk about catering, different types of catering, in the neighborhood commercial corridors right now, a neighborhood restaurant can do some accessory catering as long as it doesnt do catering directly to consumers, so theres different ways to think about catering. So im just not sure again, i would defer to the Planning Department on this, but thats the argument on trying to use a formula retail sort of approach. Were talking about being equitable and protecting Small Businesses from competition. What i think were trying to get at is a mcdonalds shouldnt be able to open up in noe valley versus direct delivery. I dont know how we think you guys get there, but if thats what the commission believes, it should be clearly stated, that we dont believe that formula retail should be able to operated in catering areas where theyre allowed. Is that whats written here . Effectively. I just want to make sure this has teeth. Thats all. Yeah. I know its not making sure its full molar, claw, but i think its important. I think the purpose of thursdays meeting is to layout what the issues are . I dont think that this document is intended to be in its final version . I think that that should be reserved for the march 23 meeting, where something more formal can perhaps be put into place after the discussion on on thursday . So yeah, i agree. Let me just say and this, i think, encapsulates it. We know what catering is. You deliver to the bar mitzvah, you deliver to the wedding. Retail is you walk up to the place. This is a gray zone between catering and retail. This is a customer where theyre ordering from mcdonalds, and its coming from mcdonalds, but its coming out of this third area. Its catering retail or retail catering. Its this third category, and i think thats where we are all sort of struggling is it does seem like a place thats ripe for inequitable distribution even just in terms of, you know, when i go on grubhub, its pretty clear that some restaurants have paid more money or done a deal, but theres some reason why some restaurants always come up near the top. Its not a stretch to think that companies with better resources have more chances to exploit that, and it would be more challenging for new businesses to come up. I dont know how to sort of describe that to the Planning Department, if thats the issue, or but i agree with commissioner yakutiel, that however we describe that, it needs to have some oomph behind it, that thats the concern. And, i mean, thats actually new information to me. I did not know that a major fastfood chain was the number one delivery option for those two services. So for me, even, like, right now, that changes the math a bit in terms of where i see the potential concern is because we definitely want to protect, you know, these unique mom and Pop Restaurants that are what makes its why many people come here. So dominica, where are we making a motion were not voting on anything today. Can i do one more . Im so sorry. On the city economyist piece, i understand the desire to analyze the terms and kind of what the metrics are, but why wouldnt we if were going to provide a recommendation to provide an Economic Analysis, dominica, help me understand, you said it in the way you described it, but you said, the way its written, its really about the metrics. Can we ask the city economyist to do a more flushed out study how many people are dining out in our city, what apps are being used, what hours . I think, for me, the chickenortheegg question we know restaurants are suffering for a lot of reasons. We heard them, but is part of the reason theyre suffering is these apps are taking people out of their restaurants and theyre eating in their homes or are these apps sort of giving them a buoy . If thats something we could ask the city analyst, that would be extremely helpful. So the way that and i am not an economyist. But the way that its explained to me is we collect sales Tax Information based on, like, hotel and restaurant sales and these entities are being