limit. the first one is for products only. the second one is for services and related products. the issue has to do mostly with the fact that services tend to be in big chunks, in terms of big projects, so they tend to come up with larger dollar values. the third item is an amendment to the existing contract en pointe technology sales. we came before the board of supervisors in june for an increase. at the time, they were reaching their limit of $24 million on the product side. we increased by about $4 million. we currently have enough funds in the contract for another 30 days at the core rate of spending. therefore, we are asking for an increase in the contract limit, for en pointe technology sales.

in all three of these contracts, the contract increase enables our administration to continue utilizing these contracts to continue having competition for any purchase orders or acquisitions above $100,000. we recommend approval. the budget analyst office recommends approval. it enables the department to get good, competitive prices, having all of the vendors able to compete. supervisor chu: in general, the way the city does business in terms of technology contracts, we either purchased services or products. we do this through a competitive bid process where we go out and say, give us your best prices for computers, certain services, etc. we get a number of bidders to win the bid. we have a pool of vendors which

the city goes out and purchase the products and services from. what you had said was that we had already extended one option for a one-year renewal, but we still need to increase the contract limit value, so these companies can continue to receive the business, correct? >> correct. supervisor chu: as individual departments have dollars in their budget, they can go forward and solicit among this pool of vendors. whoever has the best price is the one they go with. this allows xtech and en pointe to continue to compete for that business? >> yes. supervisor chu: let's go to the budget analyst report. >> madam chair, supervisor kim, there are these three resolutions before you come as shown in our report on page 4,

for the technology services and products contracts. xtech, of the four authorized vendors, has received 68% of the purchases, which is a lot of the rationale for why they are requesting the increase before you. from the $40,000 to $60,000 limit. in addition, on table 2, page five, en pointe and xtech have been the predominant vendors that the city has used to purchase and their technology equipment. as you have indicated, all expenditures for certification -- for technology services and products are subject to separate appropriation approval in each of the city department budgets, subject to the border supervisors approval. based on our expenditure data,

based on the average monthly spending by all city departments, from january 1, 2009 through november 30, 2011, coupled with three specific pending requests by the puc and the airport, we concur with the amount that the department is requesting. therefore, we recommend approval of the three resolutions. supervisor chu: thank you. supervisor kim? supervisor kim: you had mentioned xtech was part of our local business program. is en pointe also a local business? >> they have an office here, but are based in gardenia, calif.. supervisor kim: how many of these companies are locally based? >> we have a set aside program for micro lbe's. four contracts, the vendors.

xtech is a joint venture. cornerstone is a joint venture between one firm here in san francisco, and another international firm. supervisor kim: thank you. supervisor chu: thank you. why don't we open up these comments -- these items to public comment. is there anyone from the public that would like to comment on this item? seeing none, public comment is closed. we have a motion to send these three items forward with recommendations. motion. we can do that without objection. thank you. item 9. >> item 9. resolution approving port commission lease no. l-15004 with bauer intelligent transportation, inc., a california corporation, for certain real property located at pier 50, sheds a and c, in the city and county of san francisco, for a term of ten years.

>> good morning. my name is jay edwards. we are here today to seek board approval -- committee approval to move forward with the lease with bauer intelligent transportation systems, it is a 10-year lease at pier 50, comprised of 4370 square feet of office space, 60,777 square feet of shed space, and approximately 50,0034 7 feet of pay the spirit -- exterior space. our transportation has been a tenet of the port since 1999. we have worked over the last year closely with them to secure a new location at pier 50, adjacent to the ballpark. it is a facility that will allow them to expand their operations and retain them as a tenant and

employer in the city of san francisco. we have negotiated the terms of the lease, which include some additional rent abatement and credits, as well as the escalating rental payments over the term of the lease. we concur with the budget analysts report on the financial aspects of it. we are here to answer any questions you might have. supervisor chu: thank you. why don't we go to supervisor kim. supervisor kim: thank you. i was wondering if you could explain the rationale behind the port's policy on rent abatement and credits only apply to leases five years and under. why was it specifically articulated for short-term leases? >> that would allow us -- on a lease of five years or under, we can go to the port commission for approval on a parameter, with up to three months of rent

abatement. otherwise, we have to seek board approval. supervisor kim: in general, the ports policy is silent on whether it can apply to long- term leases. >> that is my understanding. supervisor kim: have we applied it to leases that are 10 years or older? >> have there been rent credits? yes, there have been. supervisor chu: thank you, supervisor kim. let's go the budget analyst report? >> madam chair, supervisor, i am from the budget and legislative analyst office. under the proposed new lease, the total net revenues to the port over the 10-year term would be about $8.45 million, a total of $9.3 million in total rent revenues plus the $871,000 in rent credits and abatement. as indicated, these revenues are

about 20,000 more than the estimated rent of the port of $8.4 million based on the rental rate parameters established by the port commission we discussed. based on this, we recommend approval of the proposed resolution to enter into a 10- year lease with bauer intelligence. supervisor chu: thank you very much. are there members of the public who wish to speak on item number nine? seeing none, public comment is closed. >> excuse me, i do have a statement we would like to read to the resolution, if possible. i would like to revise the clerk. may i read it with your permission? supervisor chu: yes, do have a copy for the committee members, and what is the nature of this? >> it is to add to the resolution on the environmental impact report, having to do with the appeal. supervisor chu: ok. read it into the record. >> thank you. this is on page two of the 12th

whereas, where it defines the least bit of the language would read as follows -- whereas the environmental impact of actions contemplated in the lease or analyzed and the final environmental impact report, final eir for rent, which the planning commission certified on december 15, 2011 by its motion number 18514, which certification is now on appeal for the board of supervisors, and a copy of the final eir is contained in the board file number 111358. thank you. supervisor chu: ok, so we do have a recommendation to amend the resolution to include that

final whereas clause. so it has been read into the record, and we will provide a copy to our clerk. i think that we can accept that without objection. on the item, i believe because this item is caught up with the america's cup cruise terminal eir appeal that has been scheduled tentatively for january 10, what i would recommend this that we have already accepted the amendment and we send the item forward as amended without recommendation at this time. >> motion to move forward without recommendation. supervisor chu: we have got a motion to send the item forward without recommendation as amended. we will do that without objection. thank you. >> thank you. item number 10, resolution authorizing the sale of city property the northeast corner of fulton street and gough street to the boys and girls club of san francisco for $2.5 million subject to a declaration of

economic covenants and a product use restriction, adopting and barnett of findings and other findings that the actions are consistent with the city's general plan and the eight priority policies of the city planning code, section 101.1, and authorizing other actions in furtherance of this resolution. >> we have kelly with the law d as well as john updike with real estate. >> good morning. i am with the office of economic and workforce development, here to speak about the below market estate sell a parcel f. in december, it was recommended that a number of amendments to the purchase and sale agreement be made, and i am happy to report that five amendments for the purchase and sale agreement have been made. i will describe them. the first would be an extension of the use restriction, which requires clubhousep userequiresool, gym, and recreation system -- center for low-income children in san

francisco. that has been extended from 30 to 40 years. and then the provision under which after 10 years, the city has the right to buy back the property for the boys and girls club of san francisco's actual land acquisition costs should the boys and girls club of san francisco default on any of their responsibility under the purchase and sale agreement. third amendment, but the 40-year restriction expires, the city would receive 40% of the proceeds associated with any sell the property. in the event that the sell the property includes a clubhouse component a perfect, the price to be established the independent third-party appraisal. fourth amendment, inclusion of language stipulating that a 50% participation in any commercial component would also be included in the purchase and sale agreement. if it in final amendment is the requirement that 30 residential units be entitled on at the site, ensuring that the city will participate in 50% of the proceeds generated from the sale of the entitled resident or component.

it was expressed that the board wanted to see a guarantee of participation in residential component, and we're happy to report that has been added. in complemented these five amendments, as recommended that the resolution authorizing this sale also be amended. i do have copies available for the park and the committee members. -- for the clerk in the committee members. before the whereas clause, revised to read, whereas the two $0.5 million purchase price is less than fair market value. but the agreement requires the boys and girls club of san francisco to have a profit comprised of the clubhouse that will serve low-income youth, together with a pulse of -- facility and administrative office and residential component of up to 30 units. it is financially feasible and the boys and girls club obtained entitlements needed following environmental review. whereas clause number 5 has been amended to change the reference

to the use restriction from 30 years to 40 years. again in compliance with the amendment made. under whereas clause 9, this is a new clause that has been added, under the advisement and the city attorney's office. as the city is selling this parcel in a proprietary capacity but also has a regulatory capacity under ceqa, whereas clause 9 and 10 have been added to further refine that distinction. whereas the boys and girls club of san francisco will submit an application to the environmental planning division of the city's planning department for environmental assessment of the project and in the project is found to cause significant adverse impacts, there is the right for the city in its discretion to modify the project to mitigate the environmental impacts, to select feasible alternatives to come to regret the implementation of specific measures to mitigate the significant adverse environmental impacts of the project.

in compliance with ceqa and the city's environmental quality regulations to reject the project as proposed if the benefits to not outweigh significant adverse impacts of the project. or to approve the proposed project upon the finding of the economics, social, or other benefits outweigh the unavoidable adverse impacts. i am happy to answer any questions that the committee might have. supervisor chu: thank you very much for the presentation and for going to the five amendments and changes. i appreciate that the new department has gone back to work to make these amendments, because i do believe the next the proposal a stronger one compared to the one that was brought forward to the board. i did want you to clarify a few things. in terms of the market octavia plan, i know that we spoke about this briefly. there is a central freeway issue, but separately from that, there's a market octavia which overlaps at the geographic area.

in terms of those plans, how does a recreation center fit within the priorities of those planning processes and public processes? >> it also identified specific needs and facilities in the area. two of those needs and five were both for child care facility as well as for a recreation facility within the area. while the market octavia plan went so far in regards to the child care facility to identify potential cost of $17 million to construct, the market octavia plan does not identify any funding nor any mechanism for which these needs would be met. supervisor chu: in terms of the 40% calculation on the upside of the sale, can you explain how we got to the 40% and also to the that the peace and commercial participation? >> i will start with the 50% participation. that amendment was made with the

residents of participation which was also 50%. the 40% participation after the 40-year use restriction, this was subject to the boys and girls club perspective, looking to account for 40 years of use on the facility which would require significant maintenance and renovation. also looking at their long-term construction costs, as well as long-term programming and upkeep costs. that was the perspective on their side, the perspective from the city side, of course, is to see the maximum value in any lanson transaction to 40% was a negotiated figure which allow for the boys and girls club to adequately recoup their costs. but to the city's satisfaction that the city would receive its maximum value should in the transaction occurred. supervisor chu: finally, a question about the way that we structure this bill to restructure this as a sale as opposed to a long-term lease. it is not unusual for entities, such as a redevelopment agency,

which is in its own predicament at the moment, to enter into a long-term lease that make it worthwhile for developers to add on that. entering into a 99-year lease or sound like that. did we consider a long-term lease versus an outright sell? >> we did consider a long-term lease and decided in favor of a sale for a few reasons. the first is that when we look at the net present value of the lease, we estimate, weatherby 60, 66, 99-year lease, as compared to the below market purchase price, but also the additional 50% or participation component, it was determined that the actual wholesale sale of the facility would actually read greater financial benefit for the city, particularly when you take into account that should the city retain ownership of the land, the also retain all the ownership obligations, including taxes and additional liabilities as remaining owner of the parcel.

also, from the boys and girls clubs perspective, as they are raising philanthropic dollars to construct this clubhouse, also potentially looking at financing mechanisms and that are much easier when they have the ownership of the property, rather than a long-term lease. so in the interest in seeing this glove house built and is still wanting to do something that would ensure that that would occur, and then also looking at the financial repercussions of a lease versus a wholesale sale. supervisor chu: thank you. supervisor kim? supervisor kim: i am happy about the amendments put in. the largely address a lot of the issues that i brought up several weeks ago, including extending its to potential commercial developments. i was just wondering how we determine the best efforts? >> certainly. there were a couple reasons that using reasonably commercial efforts was used.

the first is that, from the ceqa perspective, the city is in an interesting perspective, both selling and in the proprietary capacity, and eventually evaluating a project in the regulatory capacity. reasonably commercial efforts was seen as a preferable term. the other point, as well as the purchase and sale agreement goes into great detail as to what constitutes a reasonably commercial effort. under the advise me that the city attorney, that was a more defensible position and terminology to use. 3 can you go -- supervisor kim: can you going to have that was described? >> certainly, i will have to get my notes. supervisor kim: we can go to the budget analyst report -- oh. supervisor chu: why don't we go to the budget analyst report

rawl she goes through that. >> certainly. through the chair, supervisor kim, supervisor wiener, this item was before you before, and there was an overview given of what all the amendments are. therefore, we would just note that while we acknowledge that the proposed amendments to the sale agreement significantly improves the financial impacts on the city, we have changed our recommendations there to an approval of the proposed resolution. it is now the policy decision for the board, because the proposed self for the parcel is $2.5 million is still 5.9% less than the revised estimated market price of $8.4 million. the real estate division did not competitively solicit any other non-profit agencies or 4-private developers to purchase the subject property or conduct a

competitive auction for the highest bidder in accordance with the previous board of supervisors resolution, as is the usual procedure when the city sells city-on property. the real estate division and the office of economic and workforce development cannot conduct a separate formal or public planning process to determine the best use of parcel f. the sales agreement does not require the boys and girls club to obtain a certificate of occupancy until seven years after the date of sale, and the city will not receive the $2.5 million sale proceeds until 30 days after the conditional use permit is approved or 24 months after the proposed resolution approved. therefore, we consider the decision to be a policy matter for the board. >> my apologies. i think the holidays might have got the best of me. i am having a hard time locating

that document. i am happy to follow up, and we have asked the city attorney to join me. supervisor chu: let's go to public comment. then we will come back to you. are there members of the public who wish to speak on this item, number 10? >> good morning, supervisors. my name is douglas dep, and i have lived in san francisco for 59 years. i would like to speak in favor of this resolution. i would like to take this opportunity to thank the boys and girls club for all the good work they have done throughout san francisco. when i was in elementary school, i was a longtime member of the boys and girls club near haight street. one thing i learned from being in the club is you have to defend yourself when you think other people try to take advantage of you. so it taught me a lesson which i use every day when i come to city hall. the boys and girls club should be allowed to run at this new

club as they see fit, and listening to different restrictions that have been discussed it makes me feel a little uneasy. it is obviously, from my point of view, that the boys and girls club will have plenty of users at this facility, so i do not think that there should be excessive restrictions on its use. in the past, the boys and girls club had expanded to hunters point, and in my opinion, that was long overdue. and i kind of wonder why it took so long for an obvious choice for boys club in that part of this city. in terms of this facility, i do not think it is a good idea for the city to try to impose too many restrictions on the club, to run it as it sees fit. i think is obvious that the club will be heavily used. [bell rings] and i think it is also logical

to assume that there will be many instances where local homeless population will, in a certain sense, use the club for valid reasons. i do not know whether that has been discussed or not, but i thing, obviously, people will wander into the club for good reasons and the club should have the flexibility to deal with what it needs to deal with. thank you. [bell rings] supervisor chu: thank you very much. next speaker, please. >> good morning. rob connolly, president of boys and girls clubs. i just wanted to thank you for the back and forth on this issue. we're happy to present the amendments. we're very comfortable with the agreement at this point. we hope that you will support selling the parcel, and we look forward to executing on all the agreements. as i said before when i have been here, we are a wonder 20- year-old institution.

we have history here in san francisco. we have every reason to execute on every one of the agreements we have before you. we do a lot of business in the city, and you can trust we're going to keep our commitments on everything. thank you. supervisor chu: thank you. next speaker. are there any members of the public who would like to speak on item number 10? seeing none, public comment is closed. ok, we will return to the question that supervisor kim asked. >> thank you for the patients. section 4.2d, the grim reads as follows -- represents and warrants as follows, section 1, it shall commit the financial and personnel resources necessary to title the last time we obtained the entitlement to meet the benchmark. section to end up, good-faith pursue all entitlements and be responsible for applying for and obtaining alt entitlements from

any city regulatory agency. without first obtaining cities prior authorization. at the address specified in this agreement. at the same time, delivery to any such city regulatory agency. buyer shall not seek entitlement from non-city regulatory agency without obtaining prior authorization. section four, empire solely responsible for all costs including but not limited to fees for attorneys, engineers, consultants, and other professionals related to the development and construction of the project as the fine, which includes a resident or component. buyers of no claims against the city for any reimbursement for costs. buyers are under obligations and shall survive the expiration or earlier termination of this agreement. supervisor kim: thank you. i also had a second question to you might have addressed this a few weeks ago, but i do not recall. what is the rationale for allowing the boys and girls club

seven years to obtain a certificate of occupancy? >> you notice there's quite a big gap between the requirements for submitting applications and then the final requirement for having final construction. much of that is kind of allowing the city's own discretionary processes in evaluating -- again, the city as a regulator allowing the process to move unfettered. it is an interesting scenario, because the city benefits financially when there is a transaction ever residential or commercial component. there was the submission of applications, which is under the control of the boys and girls club, and tight deadlines as far as environmental applications, and as far as limiting applications for building permits but also acknowledging that the city has its own processes for the actual construction of the building. supervisor kim: thank you. supervisor chu: thank you, supervisor kim