with the liquor license. i would rather see something go in there. i am going to be supporting the motion here it commissioner antonini. commissioner antonini: i'm going to vote against this form of the motion because i think that it has been presented very clearly that we have two entities who operate independently economically. some beer and wine sales do help to make it feasible for cvs to operate. probably not a huge percentage of their sales, but enough to make it possible for them to operate at that site given the square footage. it is a business decision. we are getting in the way of business decisions for not a valid reason, as far as i can seek. i am very much in favor of the project and i hope it does pass in a different form. we'll see how the vote goes. vice president miguel: i do not want to continue this too much further but i just want to tell

commissioner sugaya that i agree with him and i understand why he is voting against the motion. i brought it up originally -- the fact that they should have separated and we would have prevented -- and we were prevented from considering them separately. i hope i do not see that again in the future. i am agreeing with commissioner olague and that the space has to move ahead. >> i am not like to complicate this but you can vote on one form and not the other. bundling them -- you do not have to vote on the package. you can go separately. -- you can vote separately. commissioner borden: in the tenderloin, they are having a hard time getting a grocery store. i do not want to belabor the point, but for whatever reason,

we do not have a lot of grocery operators. i think the reason you have these two uses is for other reasons. trader joe's model is not for large stores like safeway. they cannot get a grocery retailer. in reality about the size and space of this site that has put us in this situation -- i would caution against bifurcating the two because the issue is the only works by bringing these parties together. it seems to be the case. i think we have the labor the point around what concerns us and we have taken the best measure that we can. but at the end of the day, we do want to see the space filled. the size and scope of the space -- this seems like the best kind of outcome at this point until

late redevelop the project and do something different. commissioner moore: i believe it is perfectly fine to approve this. i believe it the city attorney could provide additional clarification as she was indicating, on these of the matter of two licenses in this particular location. if there is a subdivision of property, there is a whole nother issue. i would entertain approving trader joe's with the intent to look at cvs until the conditions of the -- president olague: at the moment, we have a motion on the floor. commissioner moore: i would like to hear the director clarify that for us. commissioner sugaya: to the developer, i have one quick question.

how long are in your leases to these two entities. >> the primary term of the leases are 15 years. commissioner sugaya: thank you. president olague: we have not had a conversation about a lot of the items that seem to relate to this project. they need to happen. currently, we are operating with a set of rules that -- that is the way it is. i think the rules are pretty clear. let's call the question. >> you have a motion on the floor for approval as proposed with modifications. the board requests abc that they not allow the liquor license for cvs but if they do, that they limit the hours of the sale of liquor. commissioner antonini: aye.

commissioner borden: aye. commissioner fong: aye. commissioner sugaya: no. vice president miguel: aye. commissioner moore: no. president olague: aye. >> that motion passes. you are now on case #10. 340 fremont street. >> good afternoon. the case before you is a performance request at 340 fremont street that would extend the approval period to november 13, 2012. the planning commission originally approved this project in june of 2006 and due to the fact that the extensions must be obtained annually, this product has received three previous extensions as detailed in the

case report. the project proposes to demolish the two buildings on site and construct a 400-foot tall tower with an 85-foot tall podium. up to 32 dwelling units with 40% being 2-bedroom units. a four-level underground garage, half of which would be access to the ballet system. no changes to the original project are proposed. the project sponsor states the infusion of capital will allow the project to a for construction documents in 2012. i will lead the progress on for elaborate on that. the planning department did not receive public comment on this case. the department recommends a -- recommends approval of this with conditions. i am available for any questions. president olague: project sponsor.

>> good afternoon, president olague and commissioners. my name is ezra mercy. i am representing my company jackson pacific. i am going to make some brief comments today. i am not going to use of all of the time. in support of our application. i would like to touch on four key areas. our project sponsorship, economic background, are scheduled for 2012, and some more general comments about the rincon hill plan. jackson pacific and artstone are the sponsors for the approved residential high-rise. there has been no change in the ownership of this site since

its first planning commission approval in 2006. the same project sponsor that was committed to the site and the project remains in place and we look forward to moving forward with construction as soon as possible. we are now requesting a one-year extension to the entitlement and our actions to date we believe show our commitment to the project and to the rincon hill plan despite the impact on 340 fremont street of the global recession. artstone is making a major new financial commitment to the project. we are in the process of assembling the project team. we plan to complete and design documents during the year 2012 and be ready for construction. we remain very positive about the potential for 340 fremont street and the rincon hill neighborhood. economic background -- the

approval process represented a 24-month effort by our design team working closely with south of the planning department. by late 2007, we had invested approximately $4 million in soft costs plus land acquisition of $18.5 million. until 2007, during the bubble, construction costs were escalating over 10% per year, far outpacing rental apartments. in 2008, the u.s. and the global recession began, putting millions of people out of work he had virtually shutting off construction financing. like virtually all major developments in san francisco and throughout the united states, 340 fremont was put on hold until economic

many developers and investors, both jackson pacific and artstone remain very engaged in the san francisco residential market. in 2010, my company, jackson pacific, completed construction of one hawthorn and entering the process of selling out the remaining inventory. one hawthorn was the last high-rise condominium to be built in san francisco. artstone acquired several major residential sites including most recently dagette place at the foot of patrero him in anticipation of development and increasing the supply of rental housing in san francisco. unlike the run-up to the housing bubble, when project financing was heavily biased toward ownership housing, with all the mortgage bubbles that we're still living through, we believe that the current recovery, slower but more sustainable, represents a basic shift in demand toward rental housing. and we are placing a substantial new investment behind that belief.

2012 schedule, the u.s. and the bay area for sale housing markets have endured a major recession that's not yet over. i've already said that. however, the rental housing market is showing signs of strength which if sustained should be great enough to allow financing and construction of new downtown high-rise rental projects. those with the best location and strong sponsorship. in anticipation of this more promising environment, artstone has authorized up to $4 million of additional capital investment in 340 fremont street and we intend to use this investment to complete design and construction documents during 2012. and then be ready for project financing and construction start. with this investment, and our own steady work, and a consistent, stable rental financing market, we expect to be ready to start construction approximately 12 months from today.

the rincon hill plan, the ideas behind the rincon hill plan, high-rise, high density housing located downtown near jobs, near transit, and near amenities. were the right idea when the plan was created and even more so, they continue to be the right ideas today. with the -- with a bit of patience all the projects within the rincon hill plan will be completed. the residential buildings, the public realm improvements, and the closely linked affordable housing investment. and this will be visionary substantial san francisco planning success. we are requesting the commission to grant 340 fremont, the proposed one-year approval extension. rincon hill is a long-term plan, the project ownership represents just the type of sponsor that can best help the city realize the vision for rincon hill. both jackson pacific and artstone have an excellent track record in san francisco and we are committed to moving

forward at the earliest possible time. that concludes my comments. i'm available for any questions you may have. and rick juarez from artstone is also available for any questions you might have. thank you. president olague: thank you. i would like to open it up for public comment at this time. >> one minute. wow. sue hester. i have as much to -- on this project as they do. we have been asking at the community level the department to do a dashboard showing. what type of housing is being proposed, pardon me, approved by the department, and constructed by price level? we've been asking for it for four or five years. peter cohen and i particularly have been diligent on this. we've been asking it so that you would have something to

look at that shows what are we building, how does it meet our housing needs, and we keep being shined on by staff. it always is going to be a project that we're going to deal with in the next year, the next six months, whatever. but we don't have it. and more is the shame because rincon hill is one of the areas where it needs attention. what is being built in rincon hill? what is being approved in rincon hill? is huge. it's a huge chunk of what you're doing. and where is it skewed? skewed toward very high end housing. rental housing, we're glad is being proposed in this project. but what are the price points? who is this going to be marketed to? it's very different if it's rental housing for people that are of moderate means and another thing to aim to a really high price point. i don't know how to get the attention of the planning department unless the commission instructs it. i listen to the entire presentation at the beginning at 10:00. and i heard peter cohen raising

similar questions about housing and how everything is one off. why don't you, when you're doing your housing check at the last -- at the next meeting, tell the planning department staff if they don't have a dashboard, if they do not tell us what price points, what level of housing are we being constructing in this city, that you aren't going to approve the projects? why do people like me have to keep bringing it up? what we know is when we see the list, we see we are doing pretty well at the lower end. we are going off the charts at high end. and we have nothing in the middle. and the middle is what people are desperate for. so i would ask who is the price point for? they know. what the rents they are planning on charging and what market is that in terms of the housing needs of san francisco and tell your staff to get off their duff and get it done.

i've been asking it for at least five years. before you were even the planning director, because we need that information. we need to know who is being served. and i'm tired of extensions. the market has changed since this project was approved. the economy has changed. and we keep chugging along building really high end housing. thank you. president olague: is there any additional public comment on this item? seeing none, public comment is closed. commissioner sugaya. commissioner sugaya: i have a question for the developer. thank you. you're saying that you anticipated about a year's worth of construction documents, etc. but you're only asking for -- can we extend this longer than a year? no. so it's conceivable that you might be back if you fall short

of your -- >> it's conceivable. commissioner sugaya: ok. that's all i needed to know. president olague: commissioner antonini. commissioner antonini: i'm very much in favor of this extension, certainly with this particular sponsor who has demonstrated with number one hawthorn, which is of course close to being sold out now. and it was the only project that went forward at a time when we weren't building any new for sale housing. and we've seen a number of developments gone forward recently with building his complex out in mission bay and reason to believe that we are going to see a couple of projects also on rincon hill that will be moving forward with in the next year. and construction -- so i think that this is certainly appropriate. and while i would very much hope that we're able to build more middle income housing, i mean, rincon hill, is one of the best sites in the city for a lot of reasons.

and by of course because of its citing and because of what's there, it's going to have a higher price point and the way things are going to be because it's close to downtown, dense, and what we approved a few years ago is exactly what we should continue with. and i think within the next few years, we're going to see the community that we envisioned so i would move to approve. >> second. president olague: commissioner moore. commissioner moore: i believe that because we have extended extension to other projects of like kind, that i would be inclined to do the same. however, i would like to put to record that this is getting old. this is a 2006 project. and i do think for many other reasons, and that is in disagreement with commissioner antonini's comment, the science about buildings, and how we design, systems, changes all the time. and the -- there are bayic assumptions in the building as

it's designed how the systems will work. and i would say that we're coming to almost a crossroad of where should this be in a year from now, i would probably give that more thought. but in the spirit of what we have done and said to others, i am supporting the motion. >> the motion on the floor is for approval on that motion, commissioner antonini. commissioner antonini: aye. commissioner borden: aye. commissioner fong aye. sugaya scag sugaya aye. vice president miguel: aye. >> commissioners, you're now on 11-a and b. case number -- president olague: commissioner antonini has -- antonini snen because of the location of part of this project -- commissioner antonini: because of the location of part of this project, i would ask to be recused for the same reason earlier at 180 which is like right next door. so one would assume it's still

the same distance from a property interest i have. so i would ask for recusal for both projects. because they're linked. >> thank you. >> so moved. >> second. >> second. >> commissioner moore. commissioner moore: aye. commissioner sugaya: aye commissioner fong: aye commissioner antonini: aye president olague: aye vice president miguel: aye commissioner borden: aye commissioner antonini is recused. commissioners, again, item 11-a and b for case number 2002.1302-u. for 2235 third street in-kind agreement amendment. and 178 townsend street in-kind agreement amendment. >> good afternoon, president olague, and commissioners, i'm matt schneider of department staff. again before you is an amendment to two in-kind agreements approved by you, about two years ago to provide a childcare center at 2235 third street, excuse me, 2235

third street, new mixed use development currently under construction in the central waterfront neighborhood. the childcare center is going to be 60 -- 6,200 square feet with a 2,000 square foot outdoor play area. and it will serve roughly 66 children. the agreement is structured to give the project sponsor a free credit for constructing the physical space for a licensed childcare center which will then be provided rent free to a childcare operator. the credit is for a value of $1 .997,608 to be split between the two projects at 2235 third street and 178 townsend street. the agreement that was before you two years ago and indicated that the childcare operation was to include an infant care along with toddler and preschool aged children. however, subsequent to selecting the operator for the childcare center, it was

discovered by the departments of children and their families and through the selection process that the infant care required separate outdoor space which the property cannot accommodate. therefore, the project sponsor and the operator approached planning, dcyf and c.a.c. about amending the agreement. while disappointed by losing the infant care, both departments are amenable to this amendment, a letter from dcyf in connection with the childcare interagency committee indicated their support for the amendment citing the urgent need for childcare at all ages and the need to bring them online as soon as possible. the eastern neighborhood c.a.c. was also amenable to amending the agreement but wanted any known cost savings associated with removing the infant care ramsed or revised value in the

associated fee waiver, we did take a look at the cost basis from the -- for the initial fee waiver value. which was based on the nexus studies for childcare for the eastern neighborhoods and there is no differentiation on square footage basis between infant care and between toddlers and -- or between any age value and then the per child cost was about the same between infants and toddlers. therefore, there's no basis to reduce the value of the waiver. it should be noted that within the in-kind agreement that all costs are to be justified through documentation and that if costs are not actually of the maximum value for the agreements, then they should be reduced accordingly. again, the proposal was -- is to remove the infant care requirement for the in-kind agreements. all other aspects of the in-kind agreements will be remain as they are and as was approved by you. this concludes my presentation.

the project sponsor from martin building company is also here to answer any questions that you might have. president olague: thank you. would the project sponsor care to address the commission at this time? >> patrick mcnerney, martin building company. good afternoon, commissioners. i'm here. you see me quite a few times for these two projects and i'm glad to report that both of them are well under construction. 178 townsend will be complete in february. and 2235 third street is on schedule to be completed in july. and as a reminder, the two projects combined are 290 units. 20% of the units are affordable. at people making no more than 30% a.m.i. and part of our approval was this childcare facility. so i'll just give you a brief background on this and not take too much of your time. but in developing the childcare facility, we took great care in analyzing the space with dcyf and also reviewing it with planning staff.

unfortunately, now in retrospect, all the emphasis was placed on the interior space and license the ability of it knowing full well we only had 2,000 square foot of outdoor space to complement the indoor space. we went through the process as outlined in the in-kind agreement and selected our operator and began working with them on licensing. and it was at that point that it was determined that we did not have such outdoor space to accommodate a segregated area for infants. infants are two years and under. so with that, we realize that the only way for the childcare facility to move forward was to eliminate the requirement of infants. it is still an option of the provider. should we acquire more space from the next door neighbor. but instead, eliminate the requirement and provide for just children 2 to 5 years. so preschool, toddlers and preschoolers. so we are here before you to just strike that one component to the in-kind agreement. i'm available for any questions. >> thank you.

vice president miguel: is there any public comment on this item? >> my name is stacy bartlett and i'm the director of patrero kids and will serve as executive director of patrero kids at daniel webster and the new school on third street. just to give you some background information, infants need their own space because they need to be cared for on their own individual schedule. meaning each child sleeps and plays according to their own schedule and not like a classroom schedule like preschoolers would use. additionally for outdoor space, the equipment and surfacing appropriate for preschoolers completely inappropriate for an infant. that's what's the thought behind the title 22 guidelines that we're beholden to. which means that they need to have segregated outdoor space. if we -- as we mentioned, there's not enough space, and we have very little -- we couldn't even have a tree or a storage unit to put outdoor

equipment, if we don't have much outdoor space -- enough outdoor space. serving preschoolers rather than infants we will be able to serve 16 preschoolers rather than nine infants. and it's also means that we can serve more families because we would serve more children for a shorter period of time rather than growing the child within the program. so there's very little early childhood education in san francisco. and especially in the eastern neighborhoods. this -- we have wait lists that's out the door. we already have more than 2-1 for each space. so converting it to preschool will enable us to serve more of the residents of the eastern neighborhoods. thank you. vice president miguel: thank you. is there any additional public comment? public comment is closed. i happen to pass by both towns and streets but more particularly i'm on third street, in that section a great

deal. and illinois and it's been a pleasure to see everything moving ahead. i understand the reason for your coming for this change. katie, unfortunately, you're going to have to wait two plus years until you can utilize the project. but that's just how it is. congratulations. and with that, i would move approval. >> second. vice president miguel: oh, i can't. i'm the chair right now. >> go ahead. >> we supported this project from the beginning and a well-designed project and we regret that this particular detailed aspect wasn't noticed before. the project still does exactly la we need it to do. so i move to approve. >> second. >> commissioners, the morings on the floor is for approval. on that motion, commissioner

borden. borden boshed aye. commissioner fong: aye. commissioner moore: aye. commissioner sugaya: aye. vice president miguel: aye. olague commissioner olague has stepped out. thank you, commissioners. the motion passed unanimously. commissioners, you are now on item number 12. case number 2001.1209tz. the india basin industrial park special use district planning code map and text amendment. >> good afternoon, commissioners. matt schneider nor department staff. before you is a planning code map and text amendment related to the property at 3453rd street and the india basin industrial park special use district. and just for quick clarity, that's india basin industrial park special use district, not the india basin shoreline. this legislation was introduced by supervisor cohen to enable the location of the center for youth and wellness and also the san francisco child abuse prevention center to occupy two tenant spaces at