Recent Rezoning of Lots in Eastern Neighborhoods
Sep 14, 2011
AMNESTY PERIOD ENDS JANUARY 2012
RECENT REZONING OF LOTS IN EASTERN NEIGHBORHODS HAVE MADE ILLEGAL AT LEAST A THOUSAND RESIDENTIAL, OFFICE AND RETAIN SPACES WHOSE ALTERATION PERMITS ARE NOT CLEAR.
Two and a half years ago, almost 1,000 lots formerly zoned M-1, which allowed a wide assortment of uses including residential, office and retail, were rezoned to industrial only (PDR).
WHAT ARE DEEMED ILLEGAL USES THAT HAVE TO TERMINATE?
The rezoning has made existing office uses (or retail or residential uses) in PDR districts into either "legal" nonconforming ones or "illegal" non-conforming ones. Illegal ones are those without Building Department permits which explicitly call out the use as office (and can show a "change of use" from industrial to office that has the words approved by Planning Department). Notices have gone out to 7,000 owners recently telling them this. If the uses are illegal, enforcement by the Planning Department will commence January 19, 2012. Those that are legal may continue indefinitely as long as (1) the alteration permits by which they moved in indicate on them that the proposed use is "office" (2) there is no physical expansion or intensity of use, (3) there is no period of office vacancy for three or more years, and (4) there is no change of office use to a PDR use in the past or at any future time.
WHAT IS THE JANUARY 2012 DEADLINE ABOUT?
If an occupant of a space has moved in without benefit of permits and has been in the space for more than two years as of January 19, 2009, the occupant or owner will have until January 19, 2012 to legalize by paying a fee of $10.50 to $12.50 per square foot. Any City determination to allow legalization (or not) can be appealed to the Board of Appeals.
The legitimization procedure can be used to legalize office, retail or residential space in new industrial only (PDR) areas that no longer allow such uses. The only thing you cannot legalize is live work space without benefit of permits.
SINCE LEGALIZATION IS EXPENSIVE, IS THERE AN ALTERNATIVE?
One can ask one's legal advisor or other consultant to prepare a Request for Letter of Determination requesting the Zoning Administrator to concede that some permits which do not explicitly call out a use as office in fact created a legal office use nonetheless. These Requests (which ask the City to determine that legalization is not needed) should be submitted as soon as possible, since a negative response coming from the Zoning Administrator which arrives too late can cause one to miss the legalization application deadline of January 2012.
WHAT IF LEGALIZATION IS IMPOSSIBLE?
If for certain reasons a particular space cannot be legalized (for example, the user of the space has moved in after 2007), there is another possibility, at least for a brand new user or tenant. If one is moving into a space for the first time and has a combination of PDR space and office space (even where the office space is as much as 2/3 of the space), one can seek approval as an Integrated PDR Space ("IPDR Space"). For very small spaces, even a lesser percentage of the square footage must be PDR. The City has decided to allow this for only a limited number of older buildings, and may extend it to other buildings once the City determines the success of this.
WHY LEGALIZE AT ALL?
Many owner and tenant alteration permits may be challenged by those political groups who want the Eastern Neighborhoods to become mostly industrial. This may start after January 2012. This is because most owners and tenants left the submittal of alteration permits to contractors, who may have filled in the "proposed use" box in an alteration permit in a wrong way. Also, in the dot-com boom, the immediate needs for office space were so intense that owners may have placed tenants in spaces without going through the lengthy San Francisco permit approval processes.
Should you have any questions on this, please feel free to contact Brett Gladstone Esq. or Susanne Kelly Esq. at (415) 434-9500 or by email to: firstname.lastname@example.org
M. Brett Gladstone
B.A. 1980 Harvard University, Magna Cum Laude
J.D. 1983, Duke University
Member, Lambda Alpha Society
Disclaimer: This newsletter is not a substitute for legal advice and, since the facts of all matters differ, readers are cautioned not to take actions without seeking the advice of a real estate attorney. The issues discussed in this newsletter are not intended to be legal advice and no attorney-client relationship is established with the recipient. Readers should consult with legal counsel before relying on any of the information contained herein.
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