support this solution. i understand you are saying it is more expensive, but that's the way it goes. i cannot support this particular application. olague commissioner borden? commissioner borden: i understand commissioner moore's concerns, but i disagree given that the 15 feet is the same because of the width on haight street is roughly the same and the lack of banks available and 24-hour cash opportunities actually was pretty surprising to me. and the volume of withdrawals from the previous a.t.m. definitely indicates it was a high use or highly desirable and needed a.t.m. so i actually am inclined to support this one. and give the project sponsor the hardship they claim in recessing it. olague commissioner sugaya? commissioner sugaya: the

sidewalk, i believe, right where the a.t.m. is going to be is nowhere near 15 feet wide because there are planters in front of it, which effectively reduces the sidewalk width to about 8 feet. vice president olague: call the question. all right. commissioners, the motion on the floor is for approval. commissioner antonini? >> aye. >> commissioner borden? >> aye. >> commissioner moore? >> no. >> commissioner sugaya? >> no. >> that motion passes 4-2 with commissioners moore and sugaya vote nothing. >> commissioners, you are at general comment to fall within 15 minutes and each member of the public may address you for up to 3 minutes, keeping in mind

that the entire category has a 15-minute time limit. >> i have one speaker card. >> paul wormer. >> good afternoon, commissioners. my name is paul wormer. fist let me say thank you. i have heard a lot of issues of concern to myself and others that have been considered or will be considered and it's good to hear that those things are making it to the top. i did have one request and i was here before on this issue relating to cpmc and one of the things that would help us is if cpmc and some planning expert could participate in neighborhood meetings to answer questions with the clear understanding this is not a public comment period. this is not the formal input but to enable the public to ask clarifying questions and the neighbors have one specific set

of concerns and in pacific heights we have very different set of concerns for the pacific site buildings. and similarly, i expect the davies folks have some concerns and st. lukes have a different set of concerns. i don't know if there is a legal impediment to this when i had the discussion with cpmc, they first said yes and then, oh, no, mea staff have told us we should don't this and are upset about it. please, i would like to get some clarification on that request. is there some legal impediment? i understand that can't get discussed now but perhaps someone from planning could contact me and help me understand what's going on. thank you. >> is there any additional public comment? >> i'm sorry, i want to add congratulations to the two re-appointed commissioners and to the new grandfather. >> thank you. olague r is there any additional

public comment? seeing none, this category is closed. >> thank you. commissioners, you are ready to start your regular calendar with item number 8. case 2010.0499u, development stimulus part ii. >> amy rogers, and that item is titled development stimulus part ii and contains two resolutions and a joint facilities agreement between abag and the city. as a resolution this, item is not required to come before you but it has been asked from the mayoro bring it before you to get your feedback and thoughts on the issue. the first entitled the area plan infrastructure finance committee introduced by supervisor maxwell would establish the finance committee to supervise a study to develop policy on the use of

the i.f.d.'s in the newly adopted planning areas and the steps to take to establish an i.f.d. and supervise the formation of one pilot i.f.d. in rincon hill. the second resolution approving the formation of a c.f.d., community facilities district, and financing by abag. this resolution was introduced by mayor newsom and south korea duffy and with the issuance of a special tax bond for city impact fees and also approve the form of joint community facilities agreement and grant authority to city officials to implement that. so. i go through the department's analysis and recommendations, i would like to introduce michael ya yarney who will describe the intention behind the resolution and more of the specifics and

technicalitieses about how the two districts would work. >> thank you. michael yarney, happy to be here this afternoon. and as anmarie mentioned, there are two separate resolutions and i would address the area plan infrastructure commission first and then address the citywide c.f.d. resolution second. i do want to elaborate a little bit on the reasons we're having the resolution forming this committee. the area plan infrastructure finance committee or the apif. there was a previous committee you may remember the eastern neighborhoods structure finance group which was created to specifically come up with recommendations for ideas to

finance the significant deficit and infrastructure monies that the planning department identified and not only eastern neighborhoods plan but in other recently adopted area plans as i think all of you know very well, the impact fees only cover a portion of the identified infrastructure need. and we have been interested in our office working with the planning department and the capital planning group to find other tools to finance infrastructure development in the neighborhoods. and we can have what we all call complete neighborhood development. so the recommendations from that report were that a consultant study be done on the eastern neighborhood on the implementation of an i.f.d. and

the potential implementation of a c.f.d. this committee that will be formed by the resolution will implement those next steps. it's also a special opportunity because of rincon hill and there is a specific project developer of 333 harrison street that has offered to cover the costs, the consultant cost and the startup costs for the pilot i.f.d. that we're proposing on rincon hill. so this committee that's being formed would oversee the recommendations of the eastern neighborhood group and oversee the rincon hill i.f.d. most importantly, this committee would be charged with setting the policy criteria for when to use i.f.d.'s in the future. the reason that is important, i'm going to take two minutes to explain what an i.f.d. is and if you have any questions, please interrupt or i suppose you can ask me after the presentation. and an i.f.d. is essentially a tax increment finance district but taken outside of redevelopment. unlike the rather involved and legally complicated task of creating a full redevelopment area, this allows the city to have the benefit of tax

increment financing without that procedure. the benefit of the city is we finally have a policy carrot to offer neighborhoods, if you will, that have accepted substantial upzoning and planned development within their areas. and as you know, we talked a lot about if the neighborhood accepts growth and this is a tool to do that. and that that allows the infrastructure to get built sooner, it's a stimulative policy. i like to think of it as a stimulative policy on the public side. and we would be able to do more infrastructure sooner than if we go with policies as usual. a little more background, the city of san francisco normally gets 64.7 cents of ef net new

property tax dollar and the remaining 35% goes to a host of entities, the educational revenue augmentation fund which is a state fund, the san francisco unified school district, the community college district and the bay area air quality management district, so 65 cents of every dollar of new tax increment flows directly to the general fund. the idea on the table here, remember, this resolution doesn't create the i.f.d. but just createses the committee to study and come forward with a policy. we would be looking at what the appropriate percentage of set aside for an infrastructure fund would be. and to give you a preliminary idea on rincon hill, we have looked at numbers with the help of a special tax consultant. if we were to set aside 35% of the net new increment, just 35%, so not even all the money the city would receive but a smaller portion, we could support over the lifetime of the build out of

the rincon hill plan an initial bond offering of $20 million and pmillion for about $76 million f infrastructure money. from an annual perspective, we would look at revenues of about $252,000 at the inception of the district annually to at the end of the district about $8.7 million annually. that is a lot of revenue that could go to infrastructure. that is just to give you an idea. we'll, of course, come back when the committee is foornld we have a more concrete proposal. unless there is any questions, i would like to move on. >> i would like to ask here and there is a little confusion. on the infrastructure finance district, as you mention, tax increment financing outside of redevelopment. and so that new tax above and

beyond the tax base is generated by the new construction and the new projects would be used towards the infrastructure is what we're proposing here. >> we would divert a portion of the tax increment above and beyond the baseline that's already here today to specifically fund infrastructure in that neighborhood. >> even with the incremental, a certain portion of that already has to be committed to bart and schools and others and we only have a certain percentage of that already that we can have discussion over. >> that is correct, although technically if the city wanted to ask for more, we could. as a policy matter, we don't want to do that. so we would as a policy matter let bart, school district, etc. -- >> we use our 65 cents on the dollar and that is what we would be able to use of the increment only. >> correct.

>> and then you said issue bonds, but i think we're talking about the second part or the first part there's bonds being issueed? >> so in one of the advantages is the city could issue bonds based on that future tax revenue and that would allow us to do infrastructure earlier than we would otherwise. it is possible to do a pay as you go where we could rate and collect the annual revenues and build one-off infrastructure projects but often people want to see the infrastructure earlier. that's the idea. commissioner antonini: that makes a lot of sense because you issue the bonded a the bond is based on the projected tax revenue over the 20-year course of the buildout or whatever it would be and as long as we have good reason to believe that that's money that is solid and the bonds would be obviously good bonds and we get our money sooner to be able to start doing it. okay.

that is understood. thank you, michael. vice president olague: commissioner moore. >> i have a brief question. the idea itself is very intriguing. i don't understand every aspect of it, but why did you choose as a pilot project rincon versus any other? is that the most needy one or the most immediate one or is there a reason that you could lay out for us of why that is a pilot project? >> the reason is really simple. we have somebody willing to pay for it. we have no money, no budget to do these things and we actually have in this case a public part and a project sponsor who is willing to underwrite the substantial transactional cost of creating and forming the district and so we wanted to take advantage of that to try out a pilot. vice president olague:

commissioner sugaya. commissioner sugaya: under one of the modifications there was a statement i was going to make but it's already in here with respect to studying the long-term effects of the financing program and the effect on the general fund it, because my fear also is with tax increment that it doesn't -- since it's not flowing to the general fund it, and it is being specifically diverted in a sense. in a good way. but with the long-term effects that has on the general fund position. the consultant study will look otoexactly that. moore rr would they study the homogeneous neighborhood versus eastern neighborhood versus market octavia of how that hinders or enhances and obviously in a severe housing

crisis. and rincon hill particularly addresses a particular housing type and are we going to be able to get some reading of how to track from oh more mixed use, multi-use projects within the city? >> that last bit, you said, to detract? commissioner moore: how it would affect. >> i am not sure that the notice is create it and get better at doing others. and we have pledged if we sponsor one in the eastern neighborhoods, we would love to initiate that now and will lay out what needs to be done in the eastern neighborhoods to create the tool kit, if you will, and all we need is the money to

launch the formation of the district. there is a bunch of legal work, frankly, that is required to do that, and that is the only obstacle for doing this and other neighborhoods. and we want a citywide policy so we're not doing these things in an arbitrary fashion. vice president olague: commissioner lee? commissioner lee: i would to acknowledge that if you can think outside the box to produce additional revenue fund, it's got to be you because this is a good way of funding public works projects outside the general fund to fix the potholes, the sidewalks, the infrastructure and create jobs, but i have to say i am amazed every time you come here you have stimulus one, two, and three and somebody public has never done before and i think the city should acknowledge the work you have done with this and you got someone to donate money to do

this which is very important given the next several years that we know we will have a slow economic growth. i want to thank you. vice president olague: i have a question and i know this is at the board in a week or -- >> two weeks. vice president olague: yeah. i guess my question is, and if you can answer that one first. >> i would remind that i haven't gone through the analysis or recommendations, so i would like to provide more information. vice president olague: for mr. yarney, i went through it a couple of times and didn't get a chance to focus on anything. but my question is, how would these committees interface with the cac's? and have the cac's weighed in on it? i know they were charged with

the allocation of the infrastructure fees, at least that's one of their roles, right? how does this all work together? >> they interface two ways. one is this resolution creates the committee. we have a ways to go unfortunately, but we do. and this is just the committee to create the policy and support the study and to guide the formation of the pilot. the first way to interact from the existing c.a.c.'s and the market octavia c.a.c. and two at-large community stakeholder seats. and in a direct way those people will be involved in the process and guiding this policy.

so that is the first thing. and i imagine whatever infrastructure money we get would be pooled together with impact fee monies and grant monies and be managed strategically. and so given we do have a process for the c.a.c.'s to provide input and i forget what it stand for right now, but maybe director ramp can clarify and the acronyms and to the capital planning program. so they are going to be receiving that input from the c.a.c.'s on a regular basis and this would supplement other monies that are already coming in or we hope that will be coming in in the future. and i hope they have a say in what projects get built and what the priority of the projects. vice president olague: that makes sense. and the budget review was sort of limited right now but i don't know if that's going to change in the future or not. they might be more advisory to us. >> does the director want to comment on it? >> i think the role is in both

of those area plans was to weigh in on how monies should be spent towards infrastructure. what michael is talking about is a way of funding those. that would happen before that and the c.a.c. would weigh in on how to spend this money once it's collected through this mechanism. vice president olague: okay. thank you. i have to talk about the c.f.d. and i'll be quick. that concludes my presentation on the area plan infrastructure finance committee resolution and going to speak as briefly as i can on the community facilities district although it is more complicated subject. briefly, what is it? well, the melaruse is a public financing tool, not a land use policy per se, not zoning.

it's a public financing tool that is a creature of state law and this thing is authorized by the state and i believe in the early 1980's in response to prop 13, so it's been around for a long time. and what this resolution does is grant the association area of bay government's finance authority for nonprofit corporations which is a governmental entity, a regional governmental entity that issues these or creates these sorts of districts and gives them the permission to create the districts in san francisco. and this resolution did not actually create a c.f.d. today or when the board approves it. it just simply says to the abag board and all we're doing is opening a door, not taking people through.

and the community facilities district is a special property tax assessment district. it increases the property tax in a given area. unlike the i.f.d. which keeps property taxes the same way and takes away an increment in the future, the c.f.d. increases the property tax overall, so that's an important distinction. and once this district has been established, bonds can also be issued from the c.f.d. and to pay for infrastructure today and those bonds are amortized or paid off over the life of the district and the districts can be from 20 to 30 years in length. the goal here is to create the process by which a project sponsor may go to abag with an application to create a starter district where we say this is a citywide district and there won't be overnight a giant

district and we're giving permission for the project within the city boundaries to apply to create one of the mini assessment districts on their property. that is it. just their property. no one else's. and this will require just a vote of that property owner because unless there's 12 registered voters on the development site, which is usually not the case, there is no need for -- there is no public vote. it is a vote of the property owners. to be really specific, a developer that wants to finance their impact fees through this tool would apply to the abag to create one of the districts and go through a process with the abag finance authority for nonprofit corporations to eventually form a district and eventually sell bonds. i won't get into the details of that, but it's a six to nine month process basically with multiple hearings and multiple resolutions and a lot of the attorney time and special consultant time involved. why are we interested in this?

that's probably the most important thing. we're approaching this as a stimulus policy. that is why my office is involv involved. we were asked two years ago by the mayor to look at ways to stimulate development in light of the downturn. what is the stimulative benefit of doing one of these? there are two benefits. one, it's cheaper money. a developer that is going to pay impact fees will pay by borrowing or maybe directly out of the checking account or finance it through another mechanism. this is one more financing tool and it tends to be more affordable than going through a xhishl lender and certainly taking that money from an equity partner and a 20% turn. and a commercial bank might ask for as much as 9%. these bonds if positioned the

right way and even as cheap as 5.5% in a given year, so there's savings in that. the second reason is it's stimulative is that this is money the the developer doesn't have to find on the market. and all costs included and impact fees, soft costs, hard costs, and they have to go out and they have to find $30 million in equity. and frankly, it is hard to get a project financed with even 50% of equity but let's say we'll be generous. and what this does is it takes that fee amount, whatever it might be, $2 millioner to $3 million, and takes it out of that total project cost category which means it doesn't have to find as much equity money to start a project. so there are two benefits and the cheaper money and on the

dropper spread sheet goes down which means the project is that much more feasible. if you ask me how much more feasible and how many projects will be affected, i will admit ignorance. the projects, each project has a different proforma and this just helps on the margins. that was the goal of the policy. i want to emphasize we designed this to work in con jeks with the fee deferral program and i'll be really specific about that. because we have a program that allows 80% of the fees to be peaked at the first certificate of occupancy, that is, right before the project is ready to be occupied, it will be easier to issue bonds and finance these impact fees with a nearly completed project than it would be if you were selling the bonds before you had anything in the ground. if you are saying i want you to invest in these bonds but just

starting to build, will you trust me and more risky and more expensive than financing if you have a project almost ready to be occupied. this actually plugs in, and this policy plugs in nicely with that fee deferral program and that is another really important point. another really important policy point, this does not defer payment of fees. the city receives the money when they are due today and even though there is a special tax district and all this stuff, the check, $2 million, $3 million, that check is paid the same time it would under any other approach. if it isn't paid, they can't move into the building. i want to be really clear this

doesn't defer feeses beyond the fee deferral program already refers them to. and this is another method for paying fee on time. i would like to quickly address some of our issues in the case record. the first was, and i believe that the city attorney might be here. and if he can answer the specific legal questions if you have any on the project. the question was raised about whether all the impact fees could be funded by the melaruse and the specifically child care and administration and mon the organize of the programs were called out as concerns. we have confirmed that child care the way it's currently administered, this is the downtown child care impact fee, would li