introduction. thank you. >> today's -- ken i speak in this microphone? >> i think so. yes. >> sorry about that. for today's presentation, i am going to start by giving an overview of the parkmerced project, so you have a general way of the land in terms of what is proposed. then michael will get back up and discuss the development agreement, the economic and fiscal benefits, phasing, and housing and rent control issues. just to remind you of the general hearing schedule, today we have the first informational hearing. tomorrow at the full board is the appeal of the eeo are -- the eir for the parkmerced

project. assuming that is upheld, we will be back for a second hearing when we will go into more detail about the physical aspect of the plan, including transportation, open space, and so forth. in mid may, assuming all goes according to schedule, we will be at the full board for the hearings on the ordinances. just to step back to the origins of parkmerced, it was built in the '40's and early fifties by the met life corporation. it was one of several developments of its kind around the country, such as stuyvesant in new york, returning gi housing. it was advertised at the time as a suburban enclave in san francisco. it is pretty much uniformly residential. "reliant on the automobile and so forth.

you will hear more about that. in terms of where part merced sits in the city. it is in the southwest corner of the city, but very transit oriented as far as the west side goes. it is adjacent to the muni m line and a bart station. it is an appropriate location for more infill housing to meet the region's housing needs. the basic principles for the project include environmental sustainability, increasing house an opportunity both for this location and as a city resource, and to make this a transit- oriented neighborhood. right now, it is sort of transit adjacent. to create a social and commercial heart for the district -- no one has really walked to meet any of their daily needs. it provides for a burst range of

household types. the basic project components are these. i will go over these quickly. at the next hearing, we will talk about these in more detail. we thought it was important to go over them in a basic sense. one is a reconfiguration of the streets. improvements to open spaces and other public amenities. comprehensive transportation program. the pretty comprehensive sustainability program that includes infrastructure for water and energy. the block pattern today is not what we would call pedestrian oriented. it consists of very large blocks, much larger than we typically find in san francisco. you can see the radio pattern. it is fairly diffusing. there are not many connections to the outside grid. the project is going to be in filling the existing grid with

new public streets and alleys. many of the existing streets will remain. there will be improved and brought up to better street standards of today. what that means for the buildings is that the existing 1114-story towers would remain in their place. over the course of 20 to 30 years, all the existing garden apartments below those scale buildings would be replaced with new buildings that fit this new block pattern over time. you can see that up on the screen. the land use program -- as i mentioned, all the existing powers would remain. right now, about 50% of the existing units are towers and 50% are in the garden powers. -- are the garden apartments. the garden apartments represent

1600 apartments. those would be replaced with new rent-controlled units in new buildings. an additional 1500 units would be added to the site. there would be about 230,000 new square feet of neighborhood- serving retail. we are not talking about regional destinations, but retail like you might find on irving street. about 50,000 square feet of that 230,000 is predicted to be new grocery stores for the neighborhood. very small amounts of office space. the replacement elementary school for the one that would be replaced on site. the community and fitness center. there would be about 68 acres of open space. this is a few acres, about 5 acres less than currently exists on site. as you will hear when we talk

more in detail about the open space program, we feel the proposed open space provides more public benefit and a more useful configuration than the current open space on site. to show you what this looks like in terms of land use, you can see the dark brown in the center of the neighborhood, down toward juan batista circle. that would be the new shopping street -- ground floor shops, housing, may be small-skill offices. that is linked in the northeast corner so it serves the san francisco state community and is tied in with the light rail and transportation infrastructure. that is also where the greatest density on the site would be located. around the neighborhood, other orange boxes are what we think of more as corner stores, very small-scale convenience retail, so that every resident is within

about two minutes' walk of one of these cafe or dry cleaner locations. everyone is within a 10 minute walk of the potential commercial district. in terms of urban form and building heights, the west side of the project would be predominantly characterized by three and four story buildings, typical of what you might see in the sunset or richmond district. the east side of the site would be characterized primarily by six story structures. throughout, there would be the addition of eight story buildings and a few 11 story buildings, mostly on the east side, to add variety and texture so it is not just a uniform landscape across the district, as well as to mark important locations like important activity nodes and other things of that nature. there would be a series of new towers added primarily on the

east and southeast part of the site, up to about 140 feet, which is the maximum height of the current hours. no new building would rise above the existing powers. open space -- we can talk about this in more detail at a later session. there are these small neighborhood commons that are anchored by the corner stores. they are about a third of an acre. there is a major open spaces as a spine that leads down toward lake merced. that includes a new stream that has recreational and ecological benefit. it will be a new organic farm. a new athletic fields complex. the redesigned juan batista circle. a new transit plaza. this will serve ocean view. it would be the major stop for

this part of the city. we will talk about that in a second. a substantially enlarged community gardens. this would exponentially increase that in size so more residents have an opportunity to participate in gardening. all these new streets and walkways throughout the district would be designed to meet our new better streets standards. that means not just in terms of sidewalk widths and bicycle infrastructure, but ecological function in terms of storm water and so forth. the major transportation investment on the project is the realignment of the m oceanview light rail line. it currently runs along a busy corridor, with major pedestrian safety issues. we probably consider it an overburdened stop. people overflow into 19th ave. it is a dangerous condition.

we understand about 90% of the writer ship comes from the west side of 19th avenue. -- of the ridership comes form throm the west side of 19th avenue. this relocates to the west side of 19th avenue in a generous public plaza that would be a major stop. there would be plenty of room for people to board and wait for trains, as well as by a cup of coffee and have a public gathering space. this realignment offers other operational opportunities for the mta, which will hear about more in detail. it offers the opportunity to send trains back down the existing alignment, as well as set up future improvements and

investments in this part of the city, including an extension to the daley city bart station. there are other transportation programs that are part of the project, including a free shuttle program that is meshed with the other bus system, as well as a transit pass subsidy to provide each unit a subsidy for transit passes. there are improvements that go beyond the internal part of the site. there are intersection improvements that are planned for all of the major intersections abutting the project, not just to improve traffic circulation, but to improve pedestrian safety and other ways of getting around. the last component of the project is ecological utility assistance. the specter streets we are talking about will have a major storm water function to restore

the watershed that formally linked to like -- to lake merced. we are currently sending all the storm water to the sewage treatment plant. the new system of other infrastructure would provide a major improvement to the water flow in the district and relieve a lot of the pressure on the sewage treatment plant, as well as hopefully address some of the ecological issues. the project would also be investing in new distribution piping for future hooking up to the recycle water system, which the puc is planning so that in the future a lot of water needs would not be met through hetch hetcyhy, but through recycled water. there is a commitment to provide -- to construct at least 10% of the demand in renewable

facilities either on site or off site, build new generation facilities, and to exceed title 24 standards by at least 10% to 15%. a couple words about how all of this is implemented. in terms of the land use, the detailed land use controls, this is all being implemented through the planning code, through zoning. this is not a redevelopment area. all the core planning codes would live in a special use district in the planning code. that includes all the land use regulations. these new land-use districts would be mapped on the zoning maps. the height and bulk controls would be mapped on the height maps. the would-be controls for residential open space and parking. there is a very comprehensive set of other design standards and guidelines. this district becomes the kind of neighborhood that everyone in

visions. these are all codified in the document design standards and guidelines, a supplement to the special use district. it includes rules for the ground floor treatments, setbacks, locations of pedestrian walkways, and so forth. it includes a detailed appendix called the regulating plan, which shows the site in extreme the tab, showing the boundaries of all the hype districts and building parcells, as well as the new streets and alleys and so forth. it is all there in great detail. this document also contains design standards and guidelines for all these open spaces, as well as the streets. the last thing the special use district does is establish a design review process for subsequent review and entitlement of the actual buildings on the site. what we are talking about is the

framework of the plan, not actual buildings. when subsequent developers propose specific buildings, they would come through a design review process. smaller buildings would be reviewed more administrative a. larger ones would require a public hearing at the planning commission, where the public could weigh in and comment on the design of the buildings. this would be similar -- this would be similar to the 339 process or the 309 process for downtown. this special use district also would design -- would establish a design review process for community review, especially streets and open spaces. these are public improvements on private property. they would be directed to the planning department and the planning department would coordinate interagency review of all these streets to make sure they met the intents of the plan as well as other agency

specifications and needs. there are other plan documents in addition to the design standards and guidelines that are sort of components of the development agreement. there is the transportation plan, the sustainability plan, and the infrastructure plan. we can get into more detail at a future hearing. they are universally called the plan documents, implementing mechanisms of the development agreement. with that, i will turn it over to michael yarney. chairperson mar: thank you. before he comes back, we have supervisor elsbernd. thank you. mr. yarney? >> excuse me. good afternoon. good afternoon, supervisors. i want to apologize in advance. we will have copies of this presentation for all of you.

we had a little printer malfunction prior to the hearing. i am going to read off a laptop for the time being. i am going to cover four topics, some quickly. my main focus is on rent control placement units, since that is the primary issue we are hearing feedback from the public on. i am going to discuss development agreements in general, and how the structure of the development agreement works. i am going to briefly summarize the economic and social analysis the city has conducted on the project. i am going to speak briefly on the phasing of the project under the development agreement. first, i want to emphasize that development agreements have been around in the state for some time. they are nothing new. there are over 500 in existence.

the original statute was passed in 1979. the reason i am emphasizing this is there has been some confusion in the public as to whether the development agreement itself is a novel idea or whether the hawkins ideas are new. development agreements are state law. they are used commonly. what we are putting to you today is not something that is a radical or susceptible to challenge. there is a ton of case law on this. it is very well established law. i will get into hawkins a little bit later. development agreement is essentially a contract between the city and a private party, in this case the developer and the land owner. the statute says clearly that the development agreement must result in greater public benefit then what would be achievable under conventional

land use rules and regulations. we have definitely done that. the development agreement gives the city certain freedom. the city does not have to follow traditional nexus requirements to negotiate, which allows us to do many things we could not do with normal zoning. this is an extremely important point. development agreements run with the land. they are not attached to a particular owner, bank, or financing company. this will stay with the 152 acres that make up the project site unless and until this board either terminate the agreement or agrees to modify it. that is incredibly important. i have heard a lot of concern about what happens if this developer goes away or goes bankrupt. this agreement we negotiated will run with whoever owns the land. we have also negotiated pretty extensive transfer agreements and that may clear that even if this master developer is here for the next 30 years, if they

transfer any parcels the rights and obligations go with those parcels. there are extensive protections. in sum, the development agreement is a miniature constitution for governing development in the next 30 years of this person. everything that happens in this happens under the framework of rules set up in this development agreement. with that, i am going to focus on the economic analysis which conducted. these are the highlights. this document has been posted on the planning department website for some time. it is a public document. any member of the board can download it. we published it many months ago. there may be one final update before this appears before the board in may. but everything i am citing here is presented in much greater detail on line. simply put, we have estimated this development agreement achieves $500 million of net

additional public benefits. these constitute about $200 million in capital improvements, many of those things that josh was pointing out about infrastructure improvements. all of these add up to a pretty considerable sum. second, this commits the master developer and eventually the master hoa to permanent maintenance of pretty much all the improvements on the site except for the streets. all the parks, sidewalks, storm water system, transit plazas -- all these will be maintained in perpetuity by the developer at no expense to the city and county. we anticipate these costs will amount to approximately $156 million of benefits to the city and people of san francisco. we have done our best to estimate what the value of the

permanent rent control replacement units are to the city. we have come up with a complex formula in the analysis. what we did was essentially look at what the rents would be if there was not meant control into the future and then look at what we expect the rents to be with rent control. this amounts to approximately 2 $160 million of public benefit. -- to $160 million of public benefit. that is in addition to our existing code and the requirements. to underline that point, the project would have to comply with inclusion very housing requirements as they stand today. we have gone the project's sponsor to commit to doing at least a third of those requirements on site. that is a firm commitment in the agreement that represents about 271 new affordable units within the project boundaries. in addition, if the project

sponsor was to pay fees, that would amount to a sum of approximately $229 million that would be flowing toward affordable housing. i would like to point out that is bigger than the bond we tried to pass several years ago and represents a significant sum for affordable housing construction. from the fiscal and economic impact perspective, this office worked with the budget office, the comptroller's office, to look at how this would affect the city's health. we expect the city to have approximately $17.50 million net fiscal surplus after the project is built up. this is after we met out all the additional costs of the growth and density of population. that represents a significant

increase to the general fund. all of you are dealing with budget cuts right now. this project is a major economic driver for the city. there is also approximately $13 million to $16 million in general fund revenue for the construction years, on top of let me just ask a question, because this is not a new chart. this has been one thing that has been confusing me, if you can clarify. one-time annual, that seems to be a contradiction. it is one time, 20 years, and then that revenue stops, and we shift to 17. whatever in perpetuity after that? in that the way to look at it? >> this is from the construction period, and by one time, i

should clarify that, it means during the construction period. the annual benefit to the city goes away. the 17.5 is the maximum fiscal surplus at buildout. at the same time, we are getting dollars for the general fund. there is also growing general surplus. so i will try to -- thanks for pointing that out. sometimes i do not know if i am communicating well enough. finally, there is also a net positive impact on the sf mta, both during construction and during the buildout. there are those costs in the fiscal analysis that we were dealt extensively with the finance staff, the mta, and others. finally, the economic impact.

the first section was focusing on the general fund. the second section is speaking broadly on the general impacts for the city. this is also a $7 billion project. this would over the life of the project support almost 35,000 construction jobs, and that is a pretty significant economic stimulus in the city a time when we are suffering record unin play. of course, this would be over 20 to 30 years. and then, finally, note we anticipate once construction is complete that there'd be a permanent $300 million annually of economic activity generated for business, retail, and the employees, and that would support about 1600 permanent jobs. i am moving on, and i apologize

we are going so quickly. a lot of questions yet been raised about the phasing of this project. there are four levels of the approvals that this creates. the force level we call basic, and that is the actual approval, what accompanies the special use district. these have to be approved first, and as i mentioned earlier, -- the second level, and this is extremely important, the development phase. this is development approved by the board. this developer or any future developer would have to come back to san francisco for subsequent development phase approvals before they can build a single structure, so the development agreement is just the first phase. there is a public process that must be publicly advertised and

posted. i just want to emphasize the d.a. did not authorize any building to be built. there are a series of subsequent approval. the third level down after you go to the development phase is a design review and approval. earlier, a section 329 process was referred to. what we have done is a discretionary review process, so every building and community improvement in the project has to undergo a designing review process with the planning department and in some cases the planning commission. and at the most detailed level is implementing. every improvement has to get the conventional building permits, st. use permits, and any city permits that would otherwise be required of any other project anywhere else in the city, and i want to emphasize that, because there was some concern we're giving away our discretionary authority. in fact, there are actually

multiple layers of approvals. the important thing about the way facing has been developed. this is increasing like a better neighborhoods plan. . the advance notice in in an orderly buildout. why do i say that? this is the scale of a neighborhood. we are essentially looking at a better neighborhood plan. but it is important to note, like those areas, there is no public land taxes or funds being expended. this is not like candlestick or the shipyard which are truly public-private projects. what does this mean? this means we do not have the same amount of control necessarily on how this evolves. without us having a stake in it, it is hard for us to dictate. so