protections that were included in this development agreement are not enforceable. could someone make a reasonable argument of that? >> charles sullivan, city attorney's office. as you know, i have given extensive testimony in the board -- to the board on open in closed session on this issue. part of the difficulty results from the fact that we relied on two exemptions. the first one was the exemption under the state's 10-city bonus. there is no case law on that, and that is part of what we were advising you. there is a lot of reasons why we believe we fit within that exemption. there is the second exemption that came up later that we discussed, at that we found that deals with replacement housing units built on the same property within five years. there is case law that actually supports that.

at the end of the day, -- i do not know it is worth repeating, but all of these things are to make it enforceable, and also to provide that -- to require that the demolitions and relocation have been in advance before anybody -- and the unit is demolished. at the end of the day, we concluded there were strong arguments to support the enforceability of the rent control provisions. supervisor campos: again, i conceded that. the question is, is a reasonable argument on the other side? >> the only argument would be the cost of hawkins does not allow the city to impose rents on new units. there is an exception, and we have told you about that and why we believe it applies here. supervisor campos: you are saying no accordance

could provide these provisions are not enforceable? >> i cannot predict finally what any court would do. all i can do is give you the advice we of given you on this. supervisor campos: i think that is the problem. because we're talking about issues were some of these there are no legal precedents that say you can do some of the things you are doing at the end of the day, no one can provide the guarantee. while i appreciate that we have gone as far as we could possibly go, i actually think that at the end of the day we're still dealing with some risk, and again, while i understand there are strong arguments as to why the risk will not materialize, the fact remains that the risk exists. i have yet to hear from any of the tenets advocates and the

folks who came out in opposition to this project as to any feeling that their concerns have been addressed or they have been given the reassurance of having the protection, the level of protection that is needed. i always been the of what would you do if you had a family member in that situation, i would want as many protections as possible. president chiu, would you like to add anything? supervisor chu: sure, given those comments. i need to reiterate that the deputy city attorney in city attorney have stated over and over again that we have strong arguments that will prevail in court. one can think of all of the possible things that could happen, but at the end of the day we had very strong arguments we believe will prevail. even if some of the arguments do not prevail, there are back of

arguments. there are legal protections behind those. even of those do not prevail, we have a close to two wondered million-dollar fund to compensate tenants in the worst- case scenario. -- $200 million fund to compensate tenants in the worst- case scenario. the tenants who currently live in this space who will not have to move until they have a brand new unit they can move into what otherwise see their capital improvement cost passed on to them, the rent go up, and because you do not have a list act protections, it is very likely that this developer have done that you will have parcels sold off without any protections in your units that have been in place for decades that are already deteriorating will likely be developed by others who will not be able to guarantee contract protections

against the ellis act. we have discussed this before, and we have a difference of opinion. i need to say that these decisions are not easy, and the decisions we make here at the board we're not necessarily during for any reason other than what we'd think is in the best interests of san franciscans and the best interests of tenants. i think those of us that support the project truly believe well it may not be the public show -- politically popular thing to do, it is the right thing to do for the future of the residence. i ask that we amend the resolution as i proposed and move forward. supervisor campos: again, we do have a difference of opinion here and i give you in the folks who have been working on this for trying to do as much as legally possible, and i think you have done that.

it is just a question of is that enough? with that we have a motion. supervisor chu: if i could just ask, what would you have done differently? supervisor campos: one of the things that was suggested at one point was that we work with our state representatives to see if we could provide clarity in state law and actually have that be addressed to get that level of certainty before we actually move forward with the project. that is something that i think we could have considered, and i certainly was in favor of going that route. supervisor farrell, did you want to add to that? supervisor farrell: i would say that we agreed on the project, and only thing i would say is that we do a lot of things here at the board and has a lot of laws and ordinance that do not have absolute guarantee that

certainty. we do things -- some we agree with and some we object to, and that is fine, but to make a statement that we're only going to do things if it is one under 100% it is a bit of a fale standard compared to what we do on a a normal basis is a bit of an anomaly. we certainly have not done this in the past, and i personally have objected to a lot of things in the past for what has been really pushing the limits. i would say that i do think we've done a lot and have had a bac a lot of dialogue back and forth. some of us disagree, but we'll we of done the best thing we possibly can. we have to take a look back and say what is in the best interest of the city? i do think in this case,

obviously we're in thon the same page we have done that. supervisor campos: i appreciate that. i think you're right about that. i think that is not the standard we always follow, but the question was in the context of this case, what is the level of comfort for an individual supervisor? given the people involved, given the testimony from so many of the tenants, for me, i thought we needed more assurance, but i think you're right that that is not a standard that we follow. i think at the end of the day you have to make your judgment on each individual case, and that is where i was on this. so we have a motion by president chiu. supervisor chu: is it better to say we disagree with the findings in refer to the second

edition by this as embodied by the letter, or do we need to incorporate the text in the resolution? >> i do not want to step on the toes of the legislative analyst, but i think either purchased find. it is really your preference. >> i believe you can say and a corporate the findings. that has been done in prior years. supervisor chu: the specific amendment would be to disagree with the findings and incorporate the findings of the administration has embodied by office of work-force and economic developments letter of july 13, 2011. just a quick question on that, procedurally to we have to vote in each finding, or can we take the boat collectively? -- vote collectively? >> also have to vote on the

recommendation. supervisor campos: we have a motion by president chu. is your motion with respect to the findings only? supervisor chu: in disagreement with the findings for the reasons inc. and the summary that we have described, and then we report that we also disagree with the recommendation. supervisor campos: if we could have roll-call on that recommendation, please. and >> roll call on the motion. supervisor farrell? >> aye. >> supervisor chu? supervisor chu: let me read read the recommendation. -- reread the recommendation. >> two in agreement, one in

disagreement. supervisor campos: colleagues, any other thoughts or comments on this? again, i want to thinank everyone for coming out. with that, is there any other business before this committee? >> are no other items. supervisor campos: meeting adjourned.

supervisor chu: good morning. welcome to the regular meeting of the budget and finance committee. the agenda was noticed with five members of the committee, but because we passed the budget yesterday, the true committee for the budget finance committee

is now the three-person committee comprised of myself, supervisors kim and mirkarimi. mr. young, do we have any announcements? >> please turn off all cellphone. please submit your speaker cards to myself if you wish to speak. if you submit items to the committee, please provide them for the file. supervisor chu: thank you very much. please call item no. 1. >> item #one. ordinance amending the san francisco administrative code sections 12r.5, 12r.7, 12r.16, 12r.17, 12r.18, and 12r.25 to -- enhance the office of labor standards enforcement's enforcement of the city's minimum wage ordinance by

clarifying agency access to places of employment -- require a policy to resolve complaints or initiate enforcement actions within one year -- raise the penalty for employer retaliation -- impose a penalty for failure to post minimum wage rates -- provide for posting notice to employees upon commencement of an investigation and public posting of employer non-compliance, and impose penalties for violation of these posting requirements -- impose a penalty for failure to provide employer's name, address, and telephone number to employees -- allow for back wages held in escrow for an employee for three years or more to be used to enforce the minimum wage ordinance or other laws enforced by the office of labor standards enforcement if the office of labor standards enforcement cannot locate the employee -- provide authority to immediately issue an administrative citation upon sufficient evidence of certain violations -- require industry- focused outreach materials for employees. supervisor chu: thank you very

much. i believe we have a representative from supervisor campos' office. i do not see them in the room at the moment. let's perhaps pass through this item first. back to the city attorney, last week we heard a testimony and a presentation that we submitted an amendment to. do we need to submit public comment for this item? or have we dispense with that? >> the purpose of the item was to take this for amendment. supervisor chu: let's go forward first with public comment on this item. are there any members of the public that wish to speak on item number one? >> good morning. we wanted to thank the supervisors for hearing the public comments last week on this ordinance. numbers were briefed on the

changes to the ordinance. if there are any questions about ordinance, we would be happy to answer. >> thank you very much. are there any members of the public that wish to speak on item number one? seeing no one, public comment disclosed. colleagues, given that we do not have representatives from the supervisor's office, but that we did hear testimony and presentation last week, are there any questions? do we have a motion on this item? supervisor kim: motion to move with positive recommendation. supervisor chu: without objection.

item number two, please. >> item #two. resolution authorizing the execution and performance of an option to purchase the approximately 33,000 square foot industrial building and land at 1 newhall street for $5,304,500 contained in a lease dated for reference december 20, 2006, by and between 1 newhall, llc, as landlord, and the city and county of san francisco as tenant; adopting findings unde. supervisor chu: thank you very much. we have dr. amy heart from the migrant center. >> good morning. my name is john updike, acting director of real estate. today we see the recommendation to acquire this property that jennings and newhall in the india basin subdivision. i have a general map in the overhead. the property is on a street that leads to the postal service facility and is somewhat

disconnected from the basin as a result. it does a for the city to secure an excellent match for the office of the chief medical examiner, subject to design, cheaper review, and authorization of funding over the left -- the next two to 2.5 years. originally leased in 2006, housing the laundry facility, dislocated from a hospital project. primarily as a result of an arbitration between union representative laundry workers and the city. set aside, subsequently, the laundry is now an outsourced function that never moved into this location. however, the property jurisdiction has been used as a warehouse for off site storage

during construction. it served a very valuable purpose, housing everything from art works to kitchen appliances. in the past year the property has not been put to any particular use, although the city did to engage in an aggressive attempt to sub-lease the property. one final alternative uses conformance. the 10-year lease has 35 your options for renewal with options for purchase. the current term expands the january 1, 2017. recognizing the serious deficiencies in the current space at the hall of justice outlined in our report and in the budget analysts report, a robust study of the space needs began a few years ago. pressuring to prepare for the additional inclusion by a

measure of 2010. while it was not included in the final package, the subsequent review of the space needs leads us to today's actions. critical spaces have not risen, nor has pressure from the credit ratings agency, the national association of credit ratings managers. there were several other properties examined, but none matched this properties ability at a fair market value in the location for appropriate sizing and the property entitlements that go with that this property. some of the details of the purchase agreement before you, it is for a 33,000 square foot building on a lot over the entrance. there are further is a in the particulars of the lot location.

$4,500 with a close of escrow on september 1, 2001. this was supposed to be an all cash transaction has appeared yesterday in the budget under the general services agency. so, in negotiating this transaction we extended the closing date as long as we could, beyond the range allowed for, technically, the purchase option and a price reduction for the amount that should be followed for an additional savings of $323,044. it compared this purchase to the leasing of property 331 for the same purpose, considering the potential costs of operation, finding the purchase approach with a 11% savings over that time. let me be clear, this item

solely seeks authority to acquire. it does not commit the city to place ocme in to the property for super-review or funding source secure all. although the measure is subject to that design and other findings, should the city choose not to place in this facility, the purchase provides us with a greater our right of options that we have today. holding a lease that does not expire until 2017 and no immediate user. through ownership we create opportunities for direct leasing or direct use by city entities. failing those options, we can also dispose of this asset, given the competitive purchase price and the market's recovery since the appraisal that was almost 1.5 years old, we should

be financially whole on the sale, retaining future option should be used not come to pass. the current circumstance of us having a long-term lease and a vacant asset is a rare. i know it has caused some concern. we have revealed records to see how where this was. we have seen no similar incidents of these improvements that are vacant. that is not the driver of this recommendation. it meets the needs of ocme at the right time to potentially package this for the future. that is why we are here today. i am joined by dr. amy heart, our chief medical examiner. we are happy to answer any questions you might have. supervisor chu: thank you.

doctor, is there anything you would add to this presentation? >> thank you for asking for my comments regarding this. we have been working with the capital planning committee and the people in the real-estate division for many years, trying to find an adequate location. at this time i think that a location that meets all of the needs of the medical examiner's office and fits in with the city's plan has been found. i am in agreement with mr. updike regarding this presentation. i see the purchase of this facility as a good faith from the medical examiner's office in the future, meeting needs for accreditation. supervisor chu: i was curious.

does accreditation, up at the end of 2012? >> correct. supervisor kim: if we move forward with this proposal, you will not be able to move in until 2016. what are your thoughts on the impact on your accreditation? does this impact your ability to get accreditation? >> i see it as a positive impact. i say that because the people that come to do these sections are also people who are in the medical examiner's field and have to deal with issues regarding capital needs for their facilities. so, they have an understanding that the process will take time. it is something we have been working on at the medical

examiner's office for over 10 years. i believe that the purchase in the building will show a good- faith effort on the part of this city to move in a good-faith direction, usually sufficient for an inspector to see that we are actively working to remedy the deficiencies they have identified. supervisor kim: thank you. supervisor chu: mr. rose? >> madam share, on page 6 of the report would point out that the total cost to purchase the facility, as shown in table one on page 6 of the report, that amount does not include the total cost for needed capital improvements. as shown in the second table on page 6, the total capital improvements are currently estimated to range between

25,000 -- [unintelligible] on page 7 of the report, as shown on table 3, the total estimated cost of purchasing an occupying the facility, including acquisition costs, capital improvements, and other costs, would range between $40,000,000.50 $0.2 million. -- $40 million why and $50.2 million. we have compared leasing this facility with purchasing this facility. it would cost about 5,325,000 more, or about 99.1% more to lease, rather than purchasing. of course, capital purchasing would need to be constructive whether it was a lease for a

purchase if this building could use the location for the medical examiner. currently we are considering approval of this resolution for the supervisor and i will be happy to respond to any questions. supervisor chu: let's open this up for public comment. do any members of the public wish to speak on item number two? seeing no one, public comment is closed. supervisor? supervisor mirkarimi: thank you. dr. carr. perhaps you covered this earlier. as the accreditation of the examiner's office ever been a concern bell or in jeopardy? >> it has been continuous, to my understanding, for over 20

years. it is only reason seat -- recently, during the last accreditation, that we had the issue regarding the facility and were told that if we did not seek a suitable replacement, we would lose accreditation. supervisor mirkarimi: how does a warning like that come to be? does that, in a visit by the state or national authorities? is it a three month warning? of one year morning? describe what it looks like. >> the actual inspection is a plan to inspection by the national association of medical examiner inspector. it is a rather extensive process. the physical plant is only one part of it. at the end of the inspection they write a written report, which is provided to the jurisdiction, a summary of their