San Francisco Planning Department

The First 550 Conversion Credits:

To implement the Ordinance the Planning Department has established a queue for use of the first 550 Conversion credits.  Each member of the queue holds credits that allow the hotel to apply to the Planning Commission for permission to convert a fixed number of Large Tourist Hotel Rooms.  The credits and the Planning Commission's approval are conditions precedent for conversion, but confer no development right or entitlement.  Applicants must in addition obtain all local and state approvals for the proposed conversion.

In fall of 2008, the queue was established as follows:

In January 2009, the Section 41F.2 definition of "Convert" was amended and, as a consequence, the Ordinance no longer applies to the St. Francis Hotel's 12-room conversion (No. 2 in the queue).  Under the amended Ordinance, the Mark Hopkins Hotel is eligible to use the remaining 11 Conversion credits.

As recently amended, Administrative Code Section 41F.3(b) establishes a hotel's place in the queue based upon the date by which the hotel completed its environmental (E) application or their subdivision (Q) application.  Queue members have until August 12^th, 2009 (nine months), to make diligent and good faith efforts to convert their hotel rooms.  For purposes of satisfying the diligent and good faith effort requirement during the initial nine months after issuance, applicants must, at a minimum, submit to the Planning Department a Section 41F.3(f) application and be proceeding or completed with environmental review.  In addition, all queue members must obtain Planning Commission approval for conversion prior to November 1, 2010, as required by Section 41F.3(b).  Credits will expire if applicants fail to diligently and in good faith pursue conversion for any 18 consecutive months. If any of the Conversion credits from the list above are deemed expired, the Mark Hopkins Hotel at 850 Mason Street is next in line with a request for 179 Conversion credits. Others wishing to be added to this queue should file a 41F application with the Planning Department along with an environmental “E” application or a subdivision “Q” application.

Inventories of Large Tourist Hotels:

Section 41F.3(g) of the Administration Code requires the Planning Department to adopt a “Baseline Inventory” of the number of rooms commercially available for rent as of March 1, 2009, in Large Tourist Hotels (hotels with over 99 rooms). This Section further requires that an “Annual Inventory" of the number of Large Tourist Hotel Rooms commercially available for rent be updated each year thereafter. The Planning Commission adopted the Baseline Inventory on February 12, 2009. As required, Planning Department staff sent a memorandum to the Commission on March 6, 2009 confirming that the Baseline Inventory adopted on February 12, 2009 remained accurate as of March 1, 2009. The Planning Commission will adopt the first Annual Inventory after March 1, 2010.

Future Lotteries for Large Tourist Hotel Conversion Credits:

The Planning Department will hold future lotteries if the following criteria are met:  1) the Annual update to the Baseline Inventory shows a net increase of at least 100 Large Tourist Hotel Rooms over the prior year's inventory; and 2) conducting a lottery would not result in a reduction in the number of Large Tourist Hotel Rooms below the Baseline Inventory.  (Note: this means that new Large Tourist Hotel Rooms will need to be created to replace the up-to-550 pre-lottery Conversions and an additional 100 rooms before the first lottery is held.)

Once sufficient Large Tourist Hotel Rooms have been built to allow a lottery to be held refer to Section 41F.3(d) for more information about how to apply for the lottery. After the first lottery is held, the following will apply to those who are issued Conversion credits through a lottery. To satisfy the diligent and good faith effort requirement during the initial nine months after lottery issuance of Conversion credits, applicants must, at a minimum, submit complete applications to the City for all associated permits.  In addition, credits will expire if applicants fail to diligently and in good faith pursue conversion for any 18 consecutive months.