the initial negotiations. it took us awhile to bring them up to speed and get the required signatures in order to bring it to you for approval. supervisor chu: thank you. let's open this up to public comment. seeing none, public comment is closed. is there anyone from the public that would like to comment on this item? seeing none, public comment is closed. motion to send item forward with recommendations. without objection. item five, please. >> item 5. resolution: 1) authorizing the general manager of the san francisco public utilities commission to execute a 20 year lease for an approximately 11.73 acre pipeline right-of- way near the san antonio reservoir in alameda county to chevron pipe line company at an initial rent of $12,500 per year; 2) adopting environmental findings; and 3) authorizing other actions in furtherance of this resolution. supervisor chu: ken thank you.

john updike from real estate. >> good morning. acting director of real-estate. happy new year. this item before to is a 20-year lease between the sfpuc and chevron for an existing pipeline. location is on the overhead near the san antonio reservoir with an alameda county. it is 5.4 miles of pipeline ranging in the whip of 20 feet to 40 feet, covering a total acreage of 11 acres. it is located to the north of the reservoir, south of 680. as i mentioned, a 20-year term lease. the lease has annual cpi in flavors, as well as a reset to fair market rental value every

five years during the 20-year term. this pipeline has been on the property since 1967. . as part of litigation matters that were resolved in 2001, there was a slight change made to the path of the pipelines that then led to this lease agreement before you today. i am showing on the overhead and outlined area here, crosshatched, that will be abandoned in place. the new pipeline slightly above that. this particular lease provision, although the lease rate at 12,005 color dollars a year seems low, as you can see, -- $12,500 a year seems low, as you can see, this is san

francisco. appraisal data suggests the fair market lease rate might be even lower than it must post today at $12,500 a year for the base rate. secondly, due to the nature of the pipeline use, there is a robust security deposit of $1 million associated. heavily negotiated items protecting the property, flora and fauna, watercourse, watershed, equipment, traversing the property, to protect the sfpuc from potential damage to the the pipeline facility we have in the area, or our watershed, of course. it feeds right into the reservoir. additionally, there are also protections if there is construction activity. serious monitoring and mitigation measures required. because this is alan the county,

they process the ceqa and information. i have evidence of a rather sensitive process getting to the final environmental impact report, which has been approved. mitigation measures also approved. the sfpuc approved the transaction in their commission meeting on october 25, 2011, and now before you for final approval. happy to answer any questions. supervisor chu: thank you. in terms of the puc representative, anything that you would add? thank you. mr. updike, in terms of the lease negotiations, the core rate is roughly $12,500 a year in terms of fair market value, based and where is located, probably higher than what about the would be -- market? >> yes, according to one

appraisal report, the rate could be considered slightly lower. we feel comfortable where we are at. certainly, no less than fair market rental values. supervisor chu: the puc has three options to adjust the rest? >> that is correct. supervisor chu: we cannot have a budget analyst report for this. is there anyone from the public that would like to comment on this item? seeing none, public comment is closed. motion to send item 5 forward with recommendations. without objection. please call item 6, 7, and eight together. >> item 6. resolution authorizing the office of contract administration to enter into the third amendment between the city and xtech (part of the technology store procurement vehicle), in which the amendment shall increase the contract limit from $41,000,000 to $51,000,000.

item 7. resolution authorizing the office of contract administration to enter into the fourth amendment between the city and xtech (part of the technology store procurement vehicle), in which the amendment shall increase the contract limit from $40,000,000 to $60,000,000. item 8. resolution authorizing the office of contract administration to enter into the third amendment between the city and county of san francisco and en pointe technology sales, inc. ("en pointe", part of the technology store procurement vehicle), in which the amendment shall increase the contract limit from $28,475,000 to $38,000,000. supervisor chu: thank you. for this item, from the office of contract the ministration, gabe. >> good morning, supervisors. purchaser at the office of contracts and administration. i am here to present a petition on the three contract amendments associated with the technology store. the technology store was a competitively bid process, through an rfp. we were awarded a number of contracts. these three contracts are before you for an increase in the

contract limits, as well as read out to you. i am happy to answer any questions you might have. supervisor chu: why don't you go through each of the items for the benefit of the public to explain what each contract and are, extensions are, and whether we are entering into the third, fourth amendment respectively. explain how many more amendments we have, more ability we have to exercise that extension, and when we have to go back out to bid again. >> there were seven contracts awarded, four under category one, for services and related products. three, four products only. the contracts were awarded in a group, effective january 1, 2009, for a period of two years. they would have ended december 31, 2011, just a week ago.

the office of contract administration has extended these contracts by virtue of exercising an option to renew. every two options to renew available, so we have exercised the first of each of those options. there are still -- there is one more option to renew by an additional year after 2012 is about to end, going into 2013. the first item before you is for a product contract with xtech. excuse me. it is complicated because of the way that it is composed. in the major issue with the product contract has to do with the products that the city departments wish to purchase.

any purchase order worth over $100,000 must be a bit out, must be outreached to three of the technology store vendors. to this point, xtech has been the successful bidder for a number of purchase orders. the second item is for a fourth amendment to a services and related products contract with xtech. initially, we had set it up for $12 million. it was clear that xtech -- by the way, they are the product of a joint venture of two locally-based organizations. these two firms were certified local business enterprises. they have been so successful, that they have graduated from the program. we have had to modify the contract up words. it currently stands at $40

million. this current contract modification is $20 million for and not to exceed the limit of $60 million. the third items -- supervisor chu: in terms of the difference between six and seven, extensions for the xtech contract? >> additions to the contract 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 co