>> what a beautiful morning. welcome to our san francisco structures forum. i do not remember which one it is, but we're always said a delighted. i kind of see everyone in the business here. it is great to see all of the. what a great energy we have in this room. we need to sort of transmit this out there into the world today. i am the publisher of san francisco business times, and along with our partner and title sponsor, and other sponsors, we're so delighted to be your host this morning for

discussion, our annual look at the future of our magnificent city of san francisco. today, we're going to hear from our major and from san francisco's planning director and from a group of developers, leaders, stakeholders who will discuss the bold vision and projects and policies that are shaping san francisco's future. while the headlines of the past few days are unsettling, this morning included, the financial market news is grim, but you know, our country is stumbling and stuttering through a weak recovery, but it seems like san francisco has been a continued bright spot in our little -- i hesitate to use the word bauble, because that can be missed and shrewd -- misconstrued. but i was told that it is a banana belt that we are in. there's a lot of good news to

celebrate, not to say that it is not still * to be a little bit concerned, but at the same time, quite optimistic. so many significant wins have happened, even since that time less than a year ago when the giants to comb the world series trophy, and we're going to talk about some of those wins and what they mean to the future of the city. and we will also peered into the future to look at wins yet to come as we envision the city. we do strike every year to paint the picture in the form of san francisco's future vision with some attention to the built environment and a look a key projects and a look at the economic and political forces, the policies, and economic drivers that influence our direction.

our speakers paint a picture and tell us what it means, the things they are involved in. but we are so fortunate to be situated here in the city of innovation, with its rich resources of the magnificent waterfront. many ties to asia, our great educational and research institutions, and just a wonderful entrepreneurialism, inventive culture here, a true city of dreams and ideas. with all of the complexity in some of its politics, certainly. many things you will hear about, i do not want to reiterate during the headlines so much. but the announcement from salesforce about its mission de kamp last year certainly have a trigger effect, a big impact, followed on by the america's cup announcement -- the america's cup announcement. we will hear more about that in the wide-ranging attack. there is a twitter of fact and

renewed look at revitalizing the market. the wrecking ball tipped around the transbay terminal, and there is work in progress, significant progress has been made there. that is a whole new neighborhood within the city that will build up. announcements of the moma expansion, the ucsf cardiovascular center at mission bay completed this year, and a hospital under way. the master developer announced great strides with treasure island, hunters point, part in merced, and work continues on doyle drive. there's so much to talk about. we cannot possibly capture it all. there's so much to look forward to. the projects all have a synergistic effect on our economy and jobs and all of the industries here. we have had such a profusion of technology companies, which have

driven a robust office market. and biotech and clean tech incubators as well as large companies. we have discussions underway for the largest private construction project in the city, and those are progressing. some of the players are in the room today. and many, many things. we cannot even talk about it all. but it is so exciting to imagine our future. it will be so different, even in three years and five. so let's talk about the progress, and let's talk about some of the problems as well and how we can collectively address those. and the impact on the economy and how we will drive some job- creation here in this great city. unquestionably, there is a transformation under way, and we're paving the way for our next era. i do want to thank our sponsors

again. shepard mullin, a longtime partner. they are a full-service law firm with 560 attorneys in 14 offices in the u.s., and of course in san francisco. the clients include more than half of the fortune 500 and they represent investors, developers, builders, major landowners, lenders, and local agencies to fund every aspect of commercial and residential real estate. and they are involved in some of the region's and san francisco's must " -- most high-profile projects, many of which i just mentioned. even at work on the america's cup. we think david. we will bring him up in a minute. he is special counsel. so many of you know and work with them. the real estate land use and natural resource part of that full-service firm. in addition, please join me in

thanking our other longtime partners and sponsors, and they are at the way din -- hathaway dinwitty. are you now over 100? they had the big 100 anniversary celebration. they did a big part of building san francisco, this region, and of course down in its los angeles and all the really great areas throughout our state. they are one of the most active, creative, and innovating builders in northern and southern california, providing general contracting, a complete management services in california's most dynamic markets, helping top companies and institutions developed landmarked structures and quality interior spaces throughout the bay area, a silicon valley, and southern california. you will recognize many of the court just landmarks like getty center, a transamerica pyramid,

the symphony hall, mission bay, and on and on. we congratulate them. thank you to the president and ceo. and the coo. all so very involved in so many of the big, big projects and significant future projects in the bay area is smithberger architects. we want to thank jim, who is healthcare practice leader for the firm, and smith group is at work for the future construction of san francisco, including the medical center, institute for regenerative medicine, the cardiovascular -- these are some just completed cardiovascular research buildings, and honored as one of the best architecture firms in the u.s. by "architect," indymac is dean of the architects in america.

senior living, higher education, research facilities, and workplace projects in san francisco. thank you to the smith group. we want to thank our partnering association. it has a great leader. the san francisco chamber of commerce and its great leader. the center for economic development and a great executive director. all these are great leaders, and the -- and they all work together. thanks to dave metcalf, urban land institute, as well. our cable sponsors are all part of the fabric of getting san francisco going and growing. california pacific medical center, the realty corporation, shorenstein, sterling bank, tng partners, and wilson, menni, sullivan. thank you to all but you will see our sponsors on the cover of

our june 24 san francisco structures special edition. there are copies available here at our table. it is a full look at the project progress and it's sort of economic future of san francisco. a develop it -- a development mac always at the center of it. you can read the work of real- estate reporters and our economic development reporter. and our senior editor always takes great ownership of this project. we're very proud of it. i am going to assume you have all read it and seen it because you were all subscribers. if you are not, as i always say, why not? but we do have a special offer today that would save $15 off the price of a subscription. just go to the business times table right back there. you can also enter a contest. there is a $200 amex gift card.

you may want it that if your portfolio has gone down. so put your car in to get that. also signed up for a subscription. you get full access to all premium content on line and a book of lists. do not forget to sign up for our free morning call daily e- newsletter and our afternoon e- newsletter. we're kind of a 24/7 operation. and my own economic indicator, our print subscriptions have been growing all year long. that is a good economic indicator to me. circulation up, advertising up, profits up -- healthy media organization. i only say that to all the people who come up to me and say, how are you doing? assuming something, but we're doing great. and thanks to all of you, because you are a big part of that. on to our program.

to open the program and set the stage for our presenters, please welcome david, special counsel in the real-estate land-use and environmental practice at shepherd mullin, our long time title sponsor. they are involved in so many of our bay area's high profile projects. he will offer his perspectives on what lies ahead and set the stage for our presentation. thank you, david. [applause] >> thank you, mary. i appreciated. welcome, all of you. obviously, i am not joan story. she would normally make this introduction, but she has asked me to express to all of you her greetings. i also, of course, want to thank the business times and mary for organizing these activities and for the sibling this terrific

cast of speakers. we all appreciate the opportunity to get together and congratulate ourselves for having survived this year. however difficult things may be for four -- for certain segments of the development business, particularly for the residential foresail end of the business, compared to the misfortune that has befallen the rest of the company, the bay area has been in relatively good shape. some remarkable changes have taken place over the past couple of years. in the 13 years since the mission bay redevelopment project areas were created by the board of supervisors, the area north of the china basin channel has been completely built doubt. when i worked on that project, those project areas, i frankly did not expect to live long enough to see mission bay north built out, but it is just about finished, quite remarkable.

mission bay south has also seen an enormous amount of development over the last couple of years, including substantial progress in completing the ucsf research campus and the start of construction on the new children's hospital and the eventual development of a women's hospital. for this progress, the agency and its staff, particularly , blackwell, amy neches, and kelly cahn deserve a huge amount of credit. [applause] finally, a couple of days ago, the agency commission voted to approve the first phase of the design approval process for the two million square foot headquarters campus for salesforce.com. this will be the largest project built for the city sent

embarcadero center, also a redevelopment project. we will hear more about this from one of our speakers, and it is an interesting question why salesforce elected to make this enormous investment in land, some $279 million, and construction for an open campus in the city when most of the technology and biotech giants have chosen to build closed campuses in suburban communities. the founder and ceo put it succinctly. he said, the talent is in the city. something to keep in mind. twitter, by the way, seems to have agreed, having decided to take on the challenge of rehabilitating the merchandised market. with the gray hulk of the merchandise mart on its way to a new life, that should kickstart longstanding efforts to revitalize the midmarket area.

the city's conversion in rehab of the chronicle building will make a major contribution to that effort. the waterfront is in force -- has and forced significant attention. the port has picked for our city to rehabilitate existing historic buildings at pier 70, which had life as a center of shipbuilding, which goes back well into the 19th century. many thousands of shipwrights and other workers labored there to build warships and cargo vessels as recently as world war ii. in addition to this historic rehabs aspect of the project, which are daunting, they will have the right to develop upwards of 3 million square feet of newly constructed space on that pier. salesforce's acquisition of the last large parcels in mission bay suitable for development of the scale currently being planned made a major contribution to intents

developer entrants in the port's rfp for pier 70. pier 70 is about a half mile south of the southernmost reaches up mission bay. it is a reminder of this quite small in densely populated city that everything is connected to everything else. finally, we have what is a contest to complete an environmental impact report that is masquerading as a sailboat race. [laughter] this is probably the first time in its long history that the america's cup has drawn the attention of real-estate developers. as most of you know, there will be several desirable sites along the waterfront. the development that is expected to go forward on those sites will provide the cup with in

effect a permanent endowment. because cup events are distributed over many months, they're expected to be a major economic driver for the city. development of the waterfront sites should provide developers with a number of opportunities over the next several years. with that as background, i want to return the gavel to mary, it will introduce the next speaker. thank you. [applause] >> thank you, david, for putting such great contact on our conversation this morning. by the way, shepard mullin has this little tool and flashlight kid that you might need. you might need one. it might be the only thing in my disposal should something go wrong. we're so decide -- excited to have major ed lee with us this morning.

it continues our tradition of having the mayor here to give us his vision and his priorities. i am always so optimistic after i hear mayor lee speak, and i'll was it the sense that we're getting things done in the city. we have asked the mayor to join us to give us his vision and his take on projects and priorities and some of the sectors with the most promise. i will go light on the introductions, because i want to give our speakers more time. mayor lee is our 43rd mayor of the city. he was appointed to succeed mayor new some when he became lieutenant governor. of course, we're so proud to have our first asian american mayor, but he is so much more than that. so i am going to not go through his long and productive resume in public service, because i

really do want to give him his time. i know use very focused on issues such as central subway, pension reform, and so many things that he counts among his priorities. he is a candidate for mayor. we wish him well in that race and continuing to do the good work for this great city. please welcome san francisco mayor, ed lee. [applause] ♪ >> good morning. how is everybody? all right, all right. well, you know, we're going to need your help. first, i want to thank all of you for being here this morning. it is my pleasure to join this group and to report to you everything that we're doing. as you can tell, i am kind of excited about this city. it is worth everything that we can possibly do to continue its success.

and i want to thank all of you, because every one of you are engaging yourself in this wonderful effort to create jobs and make sure we have a stable economic climate and a bank sure we're making the right decisions at city hall. i also want to make sure that i thank the team that was assembled even before it became your interim mayor. people like jennifer and john ram and ed riskin, monique at the port, and a wonderful teams of people i have had the privilege of working with. i also want to thank gavin newsom, because he has such a vision for this city. i got to work with the men inherit this wonderful effort that is going on, and then put my own little color in a scheme in blessings on and so many other things to get things done. i am going to talk a little bit this morning about business growth, a central market, development projects before john

mack those you in with a lot of the details, and get you involved in the wonderful environmental impact plans that we all have. then a little bit about our payroll tax. before i do that, i do want to say that we are going to need all of you to be part of a little miracle prayer for our giants this next week. [laughter] you know, obviously it is something we're all watching. but they are going to need a little bit of a miracle. that says to me that when it comes to our economy and job creation, we cannot depend upon any miracles at all. we have to stay focused, the professional, and stay engaged in our business community. we have to make right decisions every day. yesterday i was at a very successful launch of a little program was started in hunters point called college track. it takes some of the most

challenged, low-income kids in our mission in neighborhoods and gets them into a track on college. and these kids, from high school all the way to hopefully when they are admitted to some of the best colleges in the bay area or the country, they're sacrificing their personal time to stay away from all of the distractions that we may read about that happens with kids around the bay area. and in that exchange that i had with them, they said -- i said, if you do your job and you make it through and you focus on your education, we will be there with those jobs in san francisco for you. the high-tech, life sciences, bio sciences, the jobs that salesforce is promising, the jobs that twitter is already doing, and others will be there with the best paying jobs if you do your part. that is the promise i want to carry out with all of you. because if we're not creating jobs, what are we doing in the

city? that is what i will ask myself every day as a walk down the hall. i get to do that every day, right? i will look at all the pictures down the hallway, and they have been great mayors. it is my turn to make sure we're on the right path. so thank you for joining me today. if we're going to have a city that is safe, sullivan, and successful, we need to invest in our residents and our businesses right here in our city. what i am going to do is help the staff run through this. because if they can keep up with the slides, you will see pictures of the things i am talking about. hopefully that will resonate with you as i summarized the things we're doing in our business world and in our decision making good that is what jobs and business climate are my top priorities. that means creating and retaining jobs, and creating the conditions for businesses to start here, stay here, and took

root -- and to grow right here in san francisco. in our current economic state, in august, the unemployed married in san francisco fell a little bit, to 8.8%, from 9.1% in july. this is still the third lowest in california, and we can and we will do better. the good news is that san francisco is resilient. and we proved that we are competing and winning businesses, even in these tough economic times. san francisco is home to more than 1500 technology companies. 74 life science companies. more than 225 clean tech and green businesses. and that, my friends, translates into real estate. in the first six months of 2011, more than 4.6 million square feet of office space was leased4 in san francisco leased.6 million.

1.6 million square feet or biotech firms alone. new and expanding technology firms, names you have already heard and may yet have heard. autodesk, mozilla, ancestry.com, yammer, and of course twitter, like you have heard about before. the numbers show that innovation is the key driver of our san francisco economy. it shows that we are a city of innovation and dr. per number two dare to think big and to think outside of the box. -- and entrepreneurialism who dare to think big. there is gaining in cloud computing. san francisco is home to the companies and top leaders that we're putting the in violation -- innovation envelope and key knowledge sectors. we draw our inspiration from being a diversity, a beautiful

city to live in, and an international city. it is a place where people come to discuss and nurture new ideas. we are important people, always working to make things better. it is in that spirit that i want to talk about our efforts on central market. i made revitalizing central market a signature economic development initiative, and the keystone is the central market payroll tax exclusion. the payroll tax exclusion incentivizes companies to both invest in midmarket and create jobs. i want to recognize supervisor kim and board president david hitchiu for their work with me. this is part of a broader strategy that includes redesigning the street and sidewalks for the better market street initiative. that is a streetscape overhaul that will result in a more attractive, walkable, and

business-friendly corridor. the project is in its planning phase right now, and it will be implemented from the ferry building two octavia boulevard in 2015. and the street is -- when the street is repaid. public safety enhancements along market street. in 2012, the midmarket bus station will be open on sixth street. we're also going to partner with the community benefit district to expand coverage of the safety ambassadors, in addition to policing the area. in fact, the safety ambassadors, we plan to hire people from the community to be an additional eyes and ears. because as you know, when you talk to these young technology entrepreneurs and their employees, they're not looking at the st. half the time. they're on their side -- they're not looking at the street have the time.

they're on their ipad or phones. but they also want to be safe. cultivation of art and culture in the area through recruitment and galleries and theaters, as well as restaurants and nightclubs. they draw visitors to the area. you are seeing that happen already. that is an exciting part of our midmarket. we have seen a positive effect on the successes in central market already, with companies like twitter. as you know, they are staying in san francisco and leased up 200,000 square feet. this is the largest tech build of the year so far, and they plan to open in 2012. on what you think twitter and the shorensteins for doing this. $80 million in retrofitting the building. then twitter comes in. one decision,