Small business owners and landlords in South San Francisco are claiming a potential tax intended to help pay for clearing traffic congestion east of Highway 101 is unfair and unnecessary.

Merchants such as Andreas Hildebrant who may be asked to support the community facilities district spanning the jobs-rich corridor adjacent to the city’s thriving biotechnology hub stridently opposed the measure.

“This tax could put me out of business,” said Hildebrant, who runs beer distribution company S&H Independent Premium Brands West from a warehouse on Harbor Way near the Bayshore.

Officials earlier this year detailed a community facilities district proposal which would require property owners in a specified boundary to pay toward nearly $356 million worth of capital improvements.

City Manager Mike Futrell said tax revenue is needed to finance traffic relief programs which will ease existing congestion and prevent problems from growing worse over the coming two decades.

“Traffic is bad now and traffic will get worse. We need to be proactive today to make sure everyone is successful,” said Futrell, who is leading an outreach campaign to property owners who may be asked to pay the tax.

No final decision has been made on the initiative. If officials decide to pursue the measure, approval from the South San Francisco City Council would be required. The proposal would then be floated to property owners, and a supermajority support would be required to pass.

If approved, some commercial property owners could be asked to pay as much as $1 per square foot of development, which Hildebrant feared would sink his company under the weight of an unaffordable tax bill. But Futrell suggested that rate could be flexible so as to not overly burden small business owners, warehouse property owners or others not generating much traffic.

But Jim Porter, who operates bike parts wholesaler Merry Sales on San Mateo Avenue, questioned the motivations of officials proposing the district.

“It’s just ridiculous,” said Porter, who suggested the burden should be shouldered by Genentech and other large biotechnology employers who he believes are largely responsible for traffic issues.

Futrell noted Genentech supported the proposal and would also face the largest portion of the fee, expected to be in the neighborhood of $5 million annually. But the life science titan is unwilling to solely fund projects standing to benefit the entire area, he added.

Among the projects proposed to be addressed by the revenue include a new $100 million overpass connecting to Highway 101 at Utah Avenue; a flyover connecting to Highway 101 to Interstate 380; roughly $90 million to improve connectivity to train stations and fix bicycle and pedestrian access issues; as well as an additional $35 million proposed in improvements to the east side of the city’s new Caltrain station.

The work is badly needed to fix the gridlock which forms each work day throughout the Bayfront area generally spanning from San Francisco International Airport to Oyster Point Marina, Futrell has said.

But Piera Giannini, who owns the land at 225 Shaw Road where her business Giannini Garden Ornaments, Inc. is located just west of Highway 101, questioned Futrell’s claims.

She said she rarely experiences traffic backups during her commute and that her customers or employees are not responsible for clogging the streets with cars in the small segment of the proposed district which reaches across the highway.

Furthermore, Giannini claimed the proposed tax primarily serves large life science companies with limited benefit to business owners or landlords like her.

“Biotech is not the only game in town. They seem to think it is because it looks all shiny and new, but it’s not,” said Giannini, who added she has discussed the measure with a variety of other like-minded land owners who also plan to oppose the tax.

For Futrell, he said more outreach is necessary to get tax critics on board with the proposal. He said about 350 property owners could face the tax, and officials have communicated directly with 100. Input provided through the discussions will inform the way the proposal is potentially crafted, he said.

“Let’s go do what people agree on. We are not going to force this down peoples’ throats,” said Futrell, who added officials are hopeful community discussions will lead to identifying a rate that all potential payers could support. Beyond that, he suggested the boundaries of the district could ultimately be amended to target a more specific area.

And if it is found that no consensus could be reached, Futrell said the tax idea may be pulled from the table.

“There’s no guarantee this will happen,” he said. “If the business community can’t come together, there is no Plan B.”

For his part, Hildebrandt appreciated the Futrell’s willingness to consider the perspective of critics, adding he does not flatly oppose paying a tax which could improve the community’s quality of life.

“I welcome the opportunity to speak with them,” said Hildebrandt, who also took issue with the outreach strategy adopted by officials, since he first heard of the proposal from a real estate broker.

Futrell said he anticipates more discussions around the measure as well, balancing that perspective against the firm belief that the proposal is necessary to fend off further future gridlock.

“We either fix it ourselves or we just watch the traffic get progressively worse,” he said.

(650) 344-5200 ext. 105

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