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. we have opened and closed public comment on this item. if there are no other questions, this item is before the committee. supervisor kim: i just want to

say, i do appreciate the work that has gone into this contract. i just want to state that a very much support the outcome of what has occurred. as someone that worked with young people, i think that we have an inadequate number of services and also land parcels that are dedicated to serving youth. i know that this will greatly benefit both the city and also the district representative i am a huge fan of the boys and girls clubs in both the tenderloin and treasure island. their clubhouses are amazing centers for the community. i think this is a value added. to me, the processes where i got hung up, and i am kind of being a stickler peter i really do not want to see a person go out again that is not competitively bid. later, at a member of the public or another nonprofit is to ask why i supported something, a measure, i do not really have that to go back upon. some of the amendments put in,

the percentages do not seem to have an actual measurement or calculation. i understand it was through negotiation, but there was a competitively bid process, i think there would be stronger support with this moving forward. i currently plan on supporting this, but because of the process that this went through prior, i am going to make a motion to move this without recommendation to the full board. supervisor chu: thank you, supervisor kim. >> apologies to the city attorney advised there's one additional amendment to the resolution. if i may read that in, and this is whereas clause number four. as i previously read, i described the resident to component of up to 30 units. the change would change that to a residential component of 30 units and not including up to. supervisor chu: thank you for the clarification bit likable

commons. i want to thank supervisor kim and want to echo some of the same concerns that i have had with this project from the beginning when it was introduced here. i do think that the comments we made were well received and actually did get implemented in terms of changes to your contract, which i think makes this transaction a lot more palatable compared to where it was before. i like the fact that we have extended the lease used to 40 years, instead of 30 but that provides more security of the public benefit going to the community. in terms of potentially as sale, the fact that we're selling this property at a below market rate and the potential for us to benefit back if this property is ever sold with an upside of 40% or the sharing of 40% of the sale price or 50% based on commercial participation makes me feel much more comfortable about that lower price or the non-market reprise that we're selling at. it helps, but did not the best.

in terms of having development, i think that is a useful change. the buyback option is a no- brainer and a good one to have included in there. there was a public process for the market octavia plan. we have made some of these some of the changes to the contract. i could get comfortable with this item. i will be supporting supervisor kim's motion to send the item forward without recommendation. i do think this is a much better proposal than it was before. some want to appreciate that. i do think that this will be a project that i will support ultimately at the board, so i do want to indicate that as well. we do have a number of amendments to make to the resolution. just a clarification from the city attorney. most of the changes are reflective, i guess in the underlying contracts, which we do not have to amend, but we're

adding in the resolution changes, which will not be a substantive change. correct? ok. i believe that it has been read into the record with those amendments would be to the resolution. and you will provide a copy of those amendments to our clerk. so we have an accurate reading. and we can do the resolution amendments without objection. and then it to the motion to send the item forward without recommendation as amendmeed, we will do that also without objection. thank you. item 11. >> item number 11, ordinance amending the san francisco administrative code sections 21c.2 threw 21c.6 and adding section 21c.7 to specify the city contracts for services that are subject to the city's prevailing rate of wage requirement, consolidate consistent standards for determining and enforcing prevailing rate of wage

requirements in all covered contracts, providing all employment transaction times for workers under successor contracts to all covered contracts, and provide that all work on cover contracts be performed by employees and not independent contractors. supervisor chu: thank you. we have been joined by supervisor wiener, the sponsor of this legislation, a key sponsor. so i would like to offer the supervisor in the opening comments. supervisor wiener: thank you, and happy new year, everyone. so this item was in before the committee in in december. briefly, as a reminder, these are amendments to the prevailing wage ordinance. the few things brought in the types of contracts that are covered. it does a fair amount of cleanup and consolidation for consistency with in the ordinance. it creates a six-month transition period when the city changes contractors, and it

requires that certain contracts that the vendors have employees and not in the pettitte contractors, because defining an employee as an end and the contractor can be a way to get around prevailing wage requirements. at the last hearing, i made a number of amendments to the legislation which it then requires a continuance. that is why we're here today. over the last few weeks, we have been in discussion in around the janitorial aspects of the prevailing wage ordinance with hsa, dph, as well as several nonprofits, centering primarily around the legislation elimination of the exclusion from the prevailing wage requirements to nonprofits. a very broad exemption to the we