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SAN FRANCISCO-Proposition M – the 14-year-old slow-growth measure often referred to as an artificial barrier to the City’s economic growth – will remain in effect indefinitely if Proposition L is ultimately defeated. As of Monday night, with 277,934 votes counted and several thousand more to go, the more restrictive of the two measures was losing by 1500 votes, up from 938 votes earlier in the day. On election night, while K was being soundly defeated, L had held a sizeable lead, but that was before absentee ballots were counted.

If the trend holds, the ultimate winner will be M, the 14-year-old landmark growth initiative that will continue to limit new office development to 950,000-sf. Those in favor of more construction say M was introduced before the dot-com explosion and has crippled office space building in San Francisco at a time when demand far exceeds supply. Slow-growth advocates disagree, however, and their Proposition L if passed would have been far more restrictive than Proposition M in limiting growth, says Carol Piasente of the San Francisco Chamber of Commerce. Proposition L would have banned the development of any new office space in the South of Market area (SoMa), the Mission District and Potrero Hill. According to the Grubb & Ellis study, Proposition L would have allocated an additional 6.6 million sf through 2004, whereas Proposition K, the less restrictive alternative put up by Mayor Willie Brown to give voters a choice, would have provided more flexibility and allowed for 8.5 million sf.

Given that both measures failed on the ballot, Proposition M’s cap on office space will remain, says P.J. Johnston, a spokesperson for Mayor Willie Brown. There is the potential to put a new measure on the ballot in early 2001, but Johnston predicts that any new propositions mirroring the current ones will only fail. Suggested modifications to Proposition M include creating an additional 6 million sf of office space over the next 4 years and allowing 3 million sf of projects in the planning stage to move forward. Proposition M reform activists also want to ensure adequate room for arts organizations and nonprofits that cannot afford the skyrocketing rents.

By maintaining Proposition M, the Grubb & Ellis study found that with a good economy, overall vacancy rates would decrease to about 4.5% through 2005. However, under Proposition K, the vacancy rate would increase to at least 11% while Proposition L would likely increase the vacancy rate to 7%. According to the study, 10% is a healthy rate.

A preliminary final election result for Proposition L is expected by Wednesday, says Elections department spokeswoman Christiane Hayashi. The election should be officially certified several days after that, but doesn’t have to be until Dec. 5. Regardless, interested parties have five days to ask for a recount once the election has been certified. If they do, and follow all the correct procedures, a recount will occur, Hayashi said.

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