Hans Hansson | March 28, 2014

I asked a well-known architect friend of mine what he thought of San Francisco's architecture. His answer surprised me. He responded, "I don't."

He went on to say that San Francisco lost its architecture in the 1906 earthquake. He explained, "I knew of the grand downtown of our city and its wonderful displays of building architecture. In looking at old photos of the city before 1906, I never fully understood the beauty of the homes that we lost that day on April 18th."

San Francisco was the center of the west coast in 1906. It also was the home to some of the wealthiest families in the world. Many of those wealthy families built their homes in the South of Market district of our city, SoMa, as it's known. Homes on all corners of Folsom, Bryant and Harrison Streets were lined with magnificent works of art in their buildings. They were so grand, that no house today in our Pacific Heights district could come close to comparison. It was where the city's money and power lived.

Since the earthquake, South of Market turned into our industrial district, home to coffee roasters, manufacturers, and all sorts of service-related businesses. By the 1940's the area was transformed again into the area that supported our auto body and auto repair businesses, along with printing companies.

Then in 1996, Mayor Frank Jordan supported two very important ideas, which again transformed the district. The first was the installation of the first fiber optic line, which ran down Howard Street. The second idea was adding technology firms to a new zoning called "service light industrial" in order to avoid slowing the growth of this new industry due to previous office building restrictions.

SoMa San Francisco

Since then, through the boom and bust of the Dot.com era and now today experiencing the second wave of the technology boom, the South of Market is shining like it never has, even prior to the 1906 earthquake. Within a few years the skyline of our city will be changed forever with new highrises touching the sky at levels never built in the city before. At today's prices of $1,000 to $1,500 dollars per square foot to buy a condo, South of Market will also become the area of the city where the rich and famous will once again live. San Francisco's South of Market has truly come full circle.


Hans Hansson | December 28, 2013

I run a commercial real estate company and I am also an independent contractor as a commercial real estate broker. I currently have insurance through a small business plan with my wife. Based on my initial understanding of OBAMACARE, I thought that my real estate company would be unaffected, since we have less than fifty employees. I also believed my health plan with my wife would be unaffected since my policy provided me with all the necessary services required under OBAMACARE. I was wrong.

Two weeks ago, my nightmare began. I received what looked like a formal letter in an envelope from Kaiser Permanente, marked with a tag that read, "See if healthcare reforms will affect you." I almost did not open the letter, thinking it was probably junk mail. I was wrong.

The letter in fact canceled my small business plan policy, stating that under federal and state law, small business plans that do not include at least one employee, was no longer legal. It identified ways in which I could now either switch to an individual plan or go onto the OBAMACARE website to seek insurance options. The letter further stated that if my insurance was expiring by November 30th, that I needed to secure new insurance no later than November 15th, which was six days after I actually received my notice. Frankly, I had no idea when my policy was set to expire, so the nightmare unraveled as I made my call that day to Kaiser.

Of course, I went through the various transfer stations, which are common today anytime you call customer service from most organizations. The days of the five-minute customer service calls to learn how to solve your problem and get off the phone is all gone when they eliminated true decision makers on the other end of the phone. I wanted to accomplish three basic things with this call. Firstly, I wanted to confirm that my policy was in fact canceled. Secondly, I wanted to learn my options and thirdly I needed to know when my policy actually expires. Two and a half hours later, I finally got the answers I needed and ended my call.

There are several reasons why the call took so long. The first issue was with Kaiser. If you have a small business plan, then your records will not show up in the individual plan service department. They simply have no record of you. That posed the first major problem, because without knowing when my small business plan was to be canceled, I had no idea when I needed to pull the trigger on my new insurance options. If they had transferred me to the small business department, then my efforts would have had to start again with the individual policy department. This would have meant another ten minutes trying to connect with a real person, let alone connect with someone who had knowledge about what little I was already able to learn from my first counselor.

After almost three hours, what I learned was that my policy actually expires on March 1st of 2014. I will not be able to buy another small business type policy. My choices now are to either buy an individual policy that will cost me about $250.00 per month more than I am paying now for the same services, or I can join my company plan at a cost of $900.00 more per month.

Within one week, I received a half-inch package from Kaiser called the "small business renewal information package" which must have cost Kaiser at least five dollars a piece to send out. I'm not even eligible to apply because I do not have enough employees.

Interestingly enough, the main story capturing the nation is the millions of individual policies that are being cancelled. I have not seen one story about the small business plans that are also receiving notices. If you take into consideration the number of "mom and pop" businesses there are in the United States, it would be interesting to see just how many plans are also being canceled and how much more we are all going to have to pay for this Affordable Healthcare Act. So far, this law does not seem to be at all more affordable to the majority of Americans.

Whether you are a self-employed business owner or an employer, you will need to be insured by 2014 to meet the individual mandate of the Affordable Healthcare Act, according to the NFIB. This is regardless of whether your business falls under employer mandate going into effect in 2015 or not. The lesson I've learned is, don't wait until the last minute to get information on requirements and how to proceed.

Hans Hansson | December 18, 2013

The SEIU union has embarked on a national fight to increase the minimum wage for fast food workers to $15.00 an hour. From McDonalds to Burger King, workers have had walkouts and protests causing facility shutdowns across the country.

On one hand, this is a classic union organization effort to tap into a large non-union represented workforce as well as the blight of poor workers who live on minimum wages, which no longer is able to support the 4.1 million workers in the industry.

On the other hand, you have jobs that are providing young adults and middle-aged employees with part- time and full time work. According to the Bureau of Labor Statistics, one in four of fast food employees are working to support their family of at least one child or more. These jobs also provide employment opportunities for one third of their workers who are in the process of earning their college degree. Lastly, the fast food industry provides products that service a large population of economically deprived Americans.

Currently, the federal government minimum wage is $7.25 an hour with cities and states across the country offering higher wages including San Francisco, which pays $10.55 an hour for minimum wage.

So what are the potential consequences of having fast food operators paid $15.00 an hour? Payment for fast food operators will certainly go up. At $15.00 an hour, operators will likely see the next higher level of employees now willing to work for them. This could lead to a large round of layoffs, affecting the younger or currently underemployed workers, which will greatly affect their livelihood.

If unions are successful in organizing the fast food workers into unions, employees may gain better protection under the union negotiations. However, these union negotiations will come at a cost of paying union dues and competing for jobs with those currently uninterested in working for the fast food industry and who might be better qualified for the positions. Younger people could be the most negatively affected, as they currently make up thirty percent of the fast food employees in the United States.

So how do we solve this dilemma? Very simply, we could allow tips to be earned by fast food workers. For years, full service restaurant workers have made minimum wage. However, they make the majority of their income on tips. This model is also extended to food delivery employees, who receive minimum wages, but also earn tips upon deliveries. Fast food operators, however have never been offered tips to employees.

There is no doubt that fast food personnel work extremely hard. Food service in general, is not easy. Patrons are accustomed and understand that tips are required as an added cost when dining at restaurants. If fast food operators begin to promote tipping, then workers will enjoy the benefit of an increased income without having to unionize and risk changing the system, where losing their jobs could be a greater possibility.

Hans Hansson | November 5, 2013

Supervisor Mar has just introduced an ordinance to expand the definition of Formula Retail to include businesses that have eleven or more other outlets worldwide (it currently defines as having eleven stores in the United States) and to include 50% or more owned by formula retail businesses (currently if you are under 11 stores but owned by a formula retail identity you are exempt). Mar is further asking for expanded notification procedures for formula retail applications and also to require an economic impact report as part of the conditional use application and adopting findings. This includes environmental findings, planning code section 203 findings, and findings of consistency with the general plan and the priority policies of planning code section 101.

What is interesting about Supervisor Mar's position is that he represents the Richmond District that currently has over thirty vacant retail stores. Also, formula retail businesses are now completely ignoring Geary Boulevard retail if it falls under neighborhood commercial zoning after PETCO was rejected on the former Walgreens site. The results of such restrictions are so obvious on Geary merchants. You have less buying traffic and therefore less interest in all retailers wanting to be there.

On another front those groups against formula retail restrictions being proposed has asked the Planning department to study the economic impact on these new restrictions. The Planning Department has applied to the Friends of City Planning for $35,000 to help fund a formula retail study but word has it that the FOCP is leaning against it. Some members of the FOCP board oppose the grant request and are against the study entirely, for fear it will favor formula retail over independent businesses.

It appears that the stage has already been set to approve major new formula retail restrictions that will have a severe impact on our neighborhoods. We should step back and press city officials to do a economic impact study to determine if these restrictions will indeed cause negative damage. Also this issue is so big that it should be up to the voters to decide.

Hans Hansson | July 15, 2013

Storytelling is the most important form of communication in the history of mankind and sadly, the threat of its extinction is close at hand. The way that we have communicated our history, educated and entertained new generations through tall tales, anecdotes and legend is indeed becoming a lost art form.

Major religions began though tales told before they were ever put into writing. Traditions were passed on through generations along with knowledge that was important for the survival of generations to come; storytelling is the way in which we communicate. The art of embellishment and weaving an engaging tale is a tradition that is slowly dying off and as a salesperson; I am concerned with how this will affect the future of sales.

When I am asked what makes me a successful salesperson, I tell people that my greatest attribute by far is my ability to weave a yarn and tell a great story. I keep my clients interested, show that I have knowledge and develop their confidence in me through my storytelling. Most people who know me know that I have a story for almost anything and, as I have gotten older, my library of stories has grown. I like to tell a good story as much as I enjoy hearing a good one.

During the annual ICSC convention this year, I sat down with my friend, Howard Carr; Howard is one of the oldest members at TCN. Over the years we've known each other, we have enjoyed taking walks, sitting down and trading stories. I have certainly learned a lot from him and I hope he feels that he has learned from me. We reside on two different coasts and have lived entirely different lives but our common denominator is our professional lives. He has opened my eyes to a number of things that I could not possibly have learned by reading about them or even being in a place where I could experience what he had for that matter. Simply by listening to his stories I have absorbed new and valuable knowledge.

With the advent of virtual communication such as text messaging, emailing and social media, the art of storytelling has slowly fallen by the wayside. The death of the story has much to do with the fact that our electronic gadgets have replaced face-to-face communication. Instead of long-winded stories we communicate with short half sentences and end them with 'LOL'; which I still have trouble remembering the meaning of. I am sure that if text messaging were available during the time of our greatest world events, then the true facts of history would have been properly explained with an LOL.

As a salesperson, I urge you to use the art of storytelling to your advantage. It may be a lost art but if used properly, it will separate you from your competition and people will be drawn to you; even though you may be regarded as a very unique individual because of it.

Starboard TCN Worldwide Commercial Real Estate | July 4, 2013

There are a large number of both bank, and non-bank lenders, willing to make loans at a price. One of the most important factors in determining the cost of a loan is the financial strength of the borrower. 
 
Financial strength is often shown as the difference between the amount of money that the borrower is making and the amount of money that the borrower is spending. Financial strength is also shown through a personal financial statement.
 
Determining financial strength is typically done by reviewing the borrower's tax returns, personal financial statement and credit report as well as related documents as needed. From this information the borrower's "Cash Flow" can be determined. Please note that unreported income is not likely to be counted.
 
A loan with an extremely financially strong borrower can get an interest rate today (depending upon the terms of the loan and the property) that will most likely never be seen again for decades. This would be considered cash flow lending.
 
If a borrower has bad credit and especially if there has been a foreclosure the opportunity to get a good loan is limited. The borrower had best be currently making money to even have a chance and don't expect the best interest rate compared to other commercial loans.     
 
The lenders that work with people who either have bad credit or do not show enough cash flow (via tax returns) to cover the monthly payment are private money lenders. These lenders make loans based on the loan amount as compared to value of the property. This is known as collateral lending and due to perceived risk the interest rates are much higher than cash flow lending.
 
Most people have financial strength somewhere in the middle. Also most borrowers and have no idea of the type of loan that they are qualified for. Furthermore everyone wants the best rate and terms possible. 
 
Where the desire to get the best loan possible becomes a problem is when a borrower thinks that the terms that he can get are better than what he actually can get. This misconception can lead to massive amounts of wasted time or working on deal s that never have a chance to happen.
 
As a real estate professional who basically sells your time and expertise it is important to know what type of borrower you have.
 
So how do you find out what type of borrower you have?
 
At the very beginning of the sales process insist that your buyers put together the following information:

1. Last three years tax returns, both business and personal complete with all schedules and company provided K-1's.
2. Have them fill out a financial statement that is very similar to what I have attached.
3. A copy of their credit report that shows the borrowers continuing obligations as well as their credit score.

With this information you would have a very good start in determining what type of loan that your borrower would qualify for. This will allow you to set the appropriate expectations and avoid headaches during the lending process.

Bill Hand
Vice President, Valley Community Bank

Hans Hansson | May 28, 2013

SocketSite recently published an article on the San Francisco Planning Commission's rejection of Starbucks' proposal to take over the existing corner 2,500 square foot retail space at 2201 Market Street and it got me thinking about what is wrong with this city's formula retail restrictions. Here is a recap of the Socketsite article:

The basis for the Department's rejection:

  • There are currently five formula retail uses within 300 feet of the Subject Property that include Peet's Coffee & Tea, Wells Fargo Home Mortgage, Community - A Walgreen's Pharmacy, Chase Bank and Verizon Wireless. The proposed Starbucks would bring the concentration of formula retail to 21% within 300 feet of the Property.
  • The Upper Market NCT is well served by existing similar eating and drinking establishments that are considered coffee houses, including Church Street Café, Peet's Coffee & Tea, Sweet Inspiration and Café Flore.
  • The Project would be detrimental to the neighborhood by occupying a prominent corner lot with a formula retail use that uses standardized color schemes, decor and signage that will detract from the distinctive character of the Upper Market Neighborhood which includes primarily local, independent retail businesses.
  • The Project would displace an existing business that is independent and locally owned.

The counter argument came from the Buena Vista Neighborhood Association (BVNA):

  • BVNA believed that the current, temporary retail use at 2201 Market Street is an under-use and not beneficial to the neighborhood.
  • The building's current structure and appearance have a negative effect on its neighborhood. By contract, Starbucks plans to substantially renovate the site for its new operation. This would bring substantial aesthetic improvement to a corner, which needs that badly. Further, it is a proven retail maxim that "magnet" businesses (such as the proposed Starbucks at this location) bring additional positive customer traffic to their area, another deficiency of the current operation. In fact, even so-called "competitive, independent" businesses nearby can benefit from the proposed new Starbucks, provided that they are smart merchandisers and afford themselves of the opportunity to distinguish themselves.

My concern about both arguments is what has happened to private property rights – I cannot understand why any retailer or landlord should have to go through such a public approval process that costs a fortune and takes so long. Shouldn't the public be able to decide the fate of a store simply by deciding whether or not to shop there? To me, that is the ultimate public approval process.

By rejecting this store, we have lost out on many outcomes that would have been of great benefit to Market Street's revitalization: union jobs to build out formula stores, potential added property tax value as a result of higher rents, a major upgrade of a strategically important corner on Market that is underutilized and negatively impacts the traffic flow supporting the other retailers on the block. This is happening over and over again throughout the city.

I fully appreciate public input and understand the concerns of losing our city’s local retailers, however, this corner space on Market has been available for years with no local takers. The existing building is in need of a major renovation and it will take a retailer paying big rents in order to make the necessary investment to rebuild it. In order to move forward with city planning we need to take bureaucracy out of these decisions. Lets find a way to speed up the process and support new businesses, not make it so expensive and so difficult for business owners that they stop looking to San Francisco as a place to set up shop.

Hans Hansson | April 17, 2013

San Francisco is a progressive city – a leading example of a city that promotes itself as a green leader, and that is something to be proud of. However, when I look at the measures this city is undertaking to promote bike riding over the use of automobiles, I have to say that we are now bordering on insanity.

Take the current fight on Polk Street for example. The proposal is part of an effort by the SFMTA to use Prop B money to improve streets and safety by replacing available street parking with bike lanes, which has set off a heated debate. The Marina Times recently published this article following the debate; here are some key points I took from the article:

  • SFMTA's general goals – particularly the improvement of bike safety – were embraced by a variety of speakers at the meeting, but there was deep division about the best way to achieve them.
  • Save Polk Street estimates that the audience was nearly 400 strong, and opponents of the plan appeared to predominate. Both sides of the debate agree that the matter is far from closed.
  • Supervisor David Chiu said that Polk Street has a higher-than-average number of accidents involving bikers and pedestrians, but he said he hasn't yet "taken a perspective" on the Polk Street shakeup.
  • Kowalski said his group would be fleshing out its proposals for alternative revamps of Polk Street... relying on simple and less-expensive bike safety changes, such as making more obvious demarcation between bike and auto lanes, including painting bike lanes a different color to make them stand out, and improving signage to better alert drivers to the bicyclists and their rights.
  • Support for SFMTA's Polk plan has also come from people concerned about traffic congestion, pollution, and climate change. Resident Madeleine Savit, an architect, told the meeting that this plan would some day seem uncontroversial, arguing that a century ago, the street had no cars, and 15 years ago auto traffic was limited to two lanes, but "businesses thrived."
  • Kowalski says the Save Polk Street group will continue its own outreach... with other neighborhood groups across the City that are having similar disputes with the SFMTA. "The next thing we can do is require SFMTA to do an environmental impact report," which he said would require the agency to take into consideration not just Polk Street but nearby projects such as the Bus Rapid Transit plan for Van Ness and the new California Pacific Medical Center building on Geary and Van Ness.

Polk Street is just one of the streets experiencing this clash. Market Street was one of the first streets to make way for bike lanes – taking out parking meters in front of stores lining Market Street from Van Ness to Castro. As a result, a number of blocks saw store fronts go vacant while businesses such as antique stores, mattress stores and others that needed parking went out of business because they could no longer handle deliveries with parking eliminated. Other streets such as 7th Avenue and Laguna Honda Boulevard eliminated street parking. As a result, people who used to park there to take Muni from Forest Hill Station could no longer find parking to take mass transportation downtown. Looking at 7th Avenue, I am lucky to see one bike rider in two hours taking advantage of the bike lanes.

My chiropractor is on Polk Street – he has patients with Multiple Sclerosis that need parking in front of his offices because they are not capable of taking Muni or riding a bike for a visit. The Polk Street bike lanes will take away patient access to his offices and severely impact his business. I commend San Francisco for pushing "green" but its motives must still be based upon what is best for the greater good and taking out parking for a minority of bikers is not for the benefit of the greater good.

Hans Hansson | March 28, 2013

In 2011, San Francisco passed a retail ordinance requiring any chain retailer with more than eleven stores to undergo a special review process in Neighborhood Commercial Zoning Districts to determine whether or not the retailer is a good fit for the neighborhood. The purpose of the ordinance is to foster the growth of local markets and retailers while preventing large chain retailers from edging out smaller businesses and creating uniformity in unique neighborhoods. In addition to this new ordinance, neighborhoods have long created restrictions to reduce the amount of restaurants, financial services and other retailers deemed capable of creating a negative impact on a particular San Francisco neighborhood. Both of these restrictions have seriously impacted neighborhoods while creating a negative impact on commerce tied to new store growth. As a real estate broker I have seen first hand how out of touch these ordinances really are – not necessarily in terms of what they are trying to accomplish but in the long delays that retailers must face when going through the application process.

When a chain retailer decides to enter a neighborhood within an NC Zoning District, it is easily a six month to one year or more process simply to find out if their business will be deemed acceptable or not. This means that the space will remain vacant during that entire time period – causing any landlord to lose rental income. The same situation occurs with any change of use: For instance, if I want to put a food use into a retail space that previously did not serve food, I have apply through a notice process to the neighborhood that could take ninety days or more just to find out if I can secure the location or not.

I am not proposing a change to either the 11-store rule or the requirement to seek neighborhood input for change of use. I am however, proposing streamlining the timeline to something that is more realistic. It shouldn't take two weeks or more to post a 30-day notice and then another 30 days wait for approval and a retailer shouldn't have to wait six months to a year for approval. The consequences of these long waits and loss of income affect many people. When I arrange a lease for someone, I get paid when a lease commences. A contractor and architect are paid upon completion of work. The landlord is paid rent and a retailer can begin hiring when the shop doors are ready to be opened. Finally, the government can start collecting taxes when work commences. This issue effects a wide range of service providers and vendors who won't benefit from leases until approval requirements are met and doors are ready to open.

Mayor Lee and the Board of Supervisors need to take note of just how lengthy the NC Zoning District approval process is and work to streamline the process. If this priority is seen to, jobs will be created sooner and neighborhood vacancies will be kept lower – benefiting retailers as well as the neighborhood.

Hans Hansson | December 5, 2012

San Francisco's Tech boom persists as new startups and existing tech firms continue to expand and grab office space. Vacancy rates continue to fall while office rents climb higher and higher. As a result of this boom, our residential markets for both existing and new construction are also on fire. Long waits are standard for single apartment availability and cranes on construction sites are once again all over our cityscape, even with limited financing opportunities for construction. While this may sound good for our economy there is always a downside to be considered.

Anyone planning to remodel a home or build out an office today can expect to have a limited option of contractors and an impressive sticker shock to go with that selection. I recently completed a retail transaction requiring a restaurant and patio area to be built, with the job cost totaling near $250k. The architect developer that I hired to oversee the project brought in his usual four independent contractors to bid on the project – not one did. All four contractors indicated that they had to pass on the project because they could not complete the job in the timeframe requested.

Since San Francisco is in an economic and development bubble while the rest of the Bay Area and the country are stagnant, contractors are now coming into the city to find work. The problem is that on bigger jobs, the local unions are unhappy finding outside electricians and carpenters, even if they are union, because they compete with unions here. Non-union firms are an option but often are not familiar with how to expedite the process at the permit department; causing delays or trouble with projects when they are not started and completed properly though the permit process.

An even bigger issue now is the sourcing of materials. Between Hurricane Sandy and the fact that most vendors to don't always carry stock and their products are built before being shipped causes delays and results in higher prices.

Growth is great if it is feasible to support the engine that provides growth, but without the resources in terms of both qualified bodies and materials, growth will most certainly stall.



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