supervisor chu: we are adjourned.

supervisor chu: good morning. welcome to the regular meeting -- actually, the subcommittee meeting -- of the budget and finance committee. unjoint by supervisors mirkarimi and kim -- klein joined by -- i'm joined by supervisors mirkarimi and kim. do we have announcements today? >> yes, please turn off cell

phones and pagers. if you wish to submit public comment, please turn in a speaker card to myself. if used -- submit documents, please submit a copy for the record. items row that the board today will go before the board on march 15 unless otherwise specified. item one, resolution authorizing the exercise of a 10-year option to extend the lease of the 12,417-square-foot building located at 1421 broderick street for the department public health. supervisor chu: thank you very much. >> good morning, members of the committee. the item before you today is an option for the renewal of an existing lease for and is it -- additional 10-year term at the 1421 brodericks street. i will put the map of the property on the overhead.

property is improved with 12,417-square-foot building located on broderick, across from kaiser's medical facility. it is operated as a 33-bed residential care facility. currently, the city pays $12,661 a month for this lease right today under the current lease, and under the proposed renewal, that rate would move to $12,914 per month, a 2% increase. then, it will increase annually by the consumer price index, but that is choler at no less than 2% and no more than 6%. the data provided by staff to the budget analyst and included in the budget analyst report supports this rental range as being competitive and at the lower end of that range, paid for similar buildings. this adult residential facility it is a community-based long- term stay home for 33 adults that have persisted --

persistent medical -- persistent mental and medical illnesses. there's a separate contract with dph for facility management and maintenance that is not part of this item, and program delivery. the terms and conditions of the contract are detailed in the budget analyst report. rams provides residents an array of services including room and board, care, supervision, therapeutic activity groups, behavioral analysis, and wellness and recovery services. residents are charged a fee, which is set by formula by the state of california. i wish to make one minor correction to the resolution in front of you on page two, line 12. the word "including" should be replaced with the word " exploiting."

that puts it in conformance with the standard language of that clause regarding standard issues. -- replace with the word "excluding." i enjoy today with staff from the department of public health, housing, and urban public division, and we are happy to answer any questions you might have about this proposal. supervisor chu: why don't we go to the budget analyst report? >> madame chair, members of the committee, as mr. updike has stated or indicated, this red would only go up by $253 on a monthly basis -- this rent would only go up. we show in table two, the monthly rental rate per square foot paid by the city ranges from 91 cents to $3.17 in the six other sro hotels der the

dph's direct access to housing program. this monthly rate of $1 4 cents per square foot is approximately 23% less than the $1.35 a weighted average monthly rental rate per square foot paid by dph at the other six sro hotels. we recommend you approve this resolution. supervisor chu: thank you very much. why do we open this item up for public comment? are there members of the public who wish to speak on this item, item one? seeing none, public comment is closed. we have that a request -- we had a request from the sponsor to fix a typo. city attorney, is that substantive? >> it is not.

there is also another typo i noticed on page one, line 7. i think they mean to say "aka" and it says "fka. supervisor chu: do we have a motion to make those two amendments? ok, and on the item itself? supervisor mirkarimi: motion to approve. supervisor chu: we have a motion to send the item forward with recommendations, and we can do that without objection. let's go to item two. >> resolution authorizing the recreation and park department to enter -- general manager to enter into a lease with our wide activities for the operation of a master buy rental concession in city parks -- operation of a master bike rental. >> good morning, supervisors. assistant director of property

and concessions management for the recreation and parks department. this is an item we are very excited to present. previously, we have had these concessions in only two of our parks -- golden gate and marina green -- and we are excited about the opportunity to expand these concessions to other city parks. in 2009, we submitted requests for a false -- request for proposals, and it stipulated that the winning respond in what have the exclusive right to rent bicycles in city parks. the selected respondents was parkedwide activities, a joint venture of three of the largest bicycle companies in san francisco -- parkwide activities. together, they have over 30

years of providing state bicycle rental experiences in san francisco, and they also have experience operating in some of our busiest commercial neighborhoods -- providing safe bicycle rental experiences. the proposed terms of the lease. it would be a five-year lease with one potential three-year extension. the minimum annual rent would be $127,000 -- $127,400 in year one, increasing by 5% annually. they would additionally pay a percentage read, in the event that gross receipts were less than $1.5 million. they would pay a percentage rent equal to 13.5%. should gross receipts exceed $1.5 million but not to million dollars, they would pay a percentage rent of 15%, and should gross receipts exceed $2

million, the percentage rent would be 17%. additionally, there would be a $20,000 security deposit. pursuant to the lease, parkwide would operate bicycle rental concessions in four parts. they would operate adjacent to the music concourse in golden gate, and excitedly for us, on car free saturdays and sundays, they would have a kiosk out on jfk at 10th avenue to provide bicycle renting experience to all the people out there enjoying our car-free saturdays and sundays. they operate in justin herman plaza, marina green, and union square. the lease also provides that in the event that the department

and concessionaire in the future desire to expand the number of locations to include additional parks, that such approval would require the commission's approval. projected revenue -- in year one, we have a base rent of $127,000, escalating up to $154,000 in year five, but the projected rent starts out slightly higher than the base rent of $132,000. due to substantial growth in business, we see that in your 5, the annual projected department revenue is $345,000. lastly, just wanted to provide a comparison to the existing five -- bike rental contracts we have. the bicycle rentals are operated as a sublease to the primary

leaseholder there. at golden gate park, there is an additional $10,000 in base rent paid to operate the bike rental concession with the department receiving percentage rent equal to 10%. in 2010, the department received $19,000, pursuant to the bicycle rental operations. at marina green, there is no additional base rent paid to operate the bicycle rental concession, and again, the department's percentage rent is 10% with the rent received in 2009-2010, approximately $1,200. you can see that the parkwide lease expand not only the number of parts we are operating rental concessions in, but also the amount of revenue generated for the department. basement of $127,000. barry and percentage ranges, and the projected percentage rents

of approximately $132,000. with that, i would make myself available to any questions you may have. supervisor chu: thank you very much. why don't we go to the budget analyst report? >> on the bottom of page 5 of our report, we point out that this lease would require parkwide to pay teh rpd -- the rpd, the greater of either the minimum guarantee rent, or a percentage of gross, whichever is higher. those gross percentages are detailed on the bottom of page 5 and the top of page 6 of our report. on page 6, we point out that, as shown in table 5, on page 6 of our report, they would pay at

least $703,966 over the first five years of the lease, based on the minimum annual guaranteed with 5% increases each year after the first year. however, the department is estimating that the percentage of gross will exceed the minimum annual guaranteed, and that is why on table 5 it shows that the department expects to collect over the five years $1,081,049. on the bottom of page 7 of our report, we point out that the proposed master bicycle lease rental concession lease would permit part wide to increase the number of bicycle rental concessions from the currently proposed five sides to an undetermined number of additional not specified city park locations in the future, subject to approval by the recreation and park commission, but not subject to approval by the board of supervisors.

it rental concessions and additional park locations are added, then -- that increases the minimum annual guaranteed and changes minimum rental structure. it will be negotiated prior to the operation of new bicycle rental concessions, but those percentages and minimum annual guarantees again would not be subject to further board of supervisors approval. our recommendation on the bottom of page 8 -- the state if the board of supervisors wishes to retain the right to approve future expansion by an undetermined number of bicycle rental concessions at additional non-specified city park locations that have not been specified in the proposed lease, then we recommend that you amend the resolution, as stated in the policy considerations section of our report. the language is on the top of page 8. on the other hand, if the board of supervisors does not wish to

retain authority to approve expansions at additional non- city five locations, we recommend you approve this notification. supervisor chu: we have three speaker cards here. i'm going to call the names of. [reading names] >> good morning, supervisors. i'm the executive director at the union square b.i.d. the lease before you today is all about location, location, location, and i'm happy to say we have locations at union square, the favorite destination of visitors to the city. it remains so based on recent surveys by the convention and visitors bureau, now known as the san francisco travel association.

i'm here today to express a concern about safety for launching cyclists into traffic in the union square area, and i would like to elaborate on that. already, we have lots of pedestrian traffic around the square, which is where the service will operate. automobiles transferring through the area and also into the garages in the area. more recently, an explosion of tour bus operators that has at any time two or three tour buses parked to load and unload passengers on the south side of the square. add to that central subway construction that has just begun. stockton street is torn up, as our -- are gary and soon ellis street. all traffic south were down on

stock and is now being diverted at sutter or coast. coast is the street that would be used by cyclists as they depart from union square. we in no way are critical of the park wide activities group. we know they have a stellar reputation. we would urge you to, if you approve this lease, eliminate the nine-month trigger point at which the lease could be revoked if the conditions should arise. thank you. supervisor chu: thank you. next speaker please. >> good morning. i am with the san francisco bicycle coalition. we are already seeing a huge demand for better biking in the city. right now, seven in 10 residents biked last year, and more and

more, i'm seeing more visitors choosing to use bicycles as a mode of transportation through our city. some of the sales have outnumbered their sales on their fishermans wharf location, meaning that visitors to the city want to explore more downtown and go shopping and visit restaurants. what i have seen is that there is a huge demand for bike rental and sharing systems to of for visitors this option. we believe that allowing people to explore the city by bicycle will fuel the economy, connect visitors to restaurants and businesses all around the city. we have a vested interest in making sure that everybody on the bicycle is able to travel safely and comfortably, and that is why we work with a lot of community groups on particular issues. we work with various city agencies to make sure our

infrastructure is up to date and to make sure that our roads are on the smooth surface and that construction activities do not impact safe cycling. we're pleased to be working with all the different community groups that will be part of the concession system as well as operate is to get their voice into the ears of the various city agencies. it is our belief that the number one thing that makes biking safer is more people biking. we're seeing recent improvements to market street in particular, attract more people biking, and i hear almost every day from mothers or women or people that maybe never bite before or did in other parts of the city, now choosing to do so here because it is safer -- maybe never biked before. supervisor chu: thank you. >> hello, good morning. i am the program director for san francisco's sunday streets

program. i'm here today to speak in favor of parkwide llc's concession to rent bicycles in various locations in san francisco. my experience working with these three companies has really demonstrated -- they have rarely demonstrated their professionalism and dedication not only to the sport and recreation of cycling, but also to the city of san francisco. for the past three years, these three vendors have provided free bicycle rentals to sunday streets participants. to date, we have had 17 events over three years. they sent a team out to provide a fleet of bicycles, which are well-maintained. and provide a valuable service that really has created -- contributed to the overall success of sunday streets.