today is going to the temporary uses. they have been wonderful. while they have all come about because there has been a real partnership and reasonableness both from the city and from the userson the understanding that r temporary, and bringing his creativity for writs of of we do not have a vacant lot, but great communities and activated spaces, we have a great deal of interest with the uncertainty over the redevelopment parcels as to what sort of time frames exist so that these parcells remained activated for as long as possible. most prominent of these in terms of current discussions, parcel o. we do not want there to be safety issues during the

construction of parcel p, we would like an accurate assessment as to the ability to continue to use or vacate and read-use parcel o when it is safe said that is desirable use can continue, if possible. again, thank you for your support. supervisor chu: thank you. >> the afternoon, supervisors. my name is whitney jones, development housing director for chinatown cbc. we are the co-developer of parcels a and c. when the community is completed, it will provide 200 units of senior housing in between 200 to 300 residents of the community. our projects have also resulted

in about $75 million in investment in the community. we want to stress the benefit of the affordable housing to the community. we also think there is great value to the transportation and the civil uses there. we do think that it is important that supervisors keep in mind the initial pledge of money that is really important. thank you. >> good afternoon, supervisors. in the executive director of the community housing partnership, crab developer and owner of three of its 65 fulton street, which has been mentioned by others. i will address two issues. the value of affordable and supported housing. when it was built, it 13 international architect awards

for its beauty. it has provided a sort of clear open space to the performing arts bureau and has brought three new retailers in, one of them being a bakery and coffee shop that will be opening in a couple of months. we hope it will become a city hall favorites. we also had two private commercial ventures. one is a frame shop, the other is a [unintelligible] shop. we are helping to support the economic vitality of the corridor. this is built strongly around a rich, mass transit system for our tenants for low-income and for san francisco as a whole. we feel it is important to take this back to the mayor's office of housing. what president of this set if funds were pledged to build critical housing, only to have other governmental entities

years down the line come back to say that the agreement has changed. we think it is critical that this housing development continue in san francisco. thank you. supervisor chu: thank you. >> ♪ sunset, richmond, all districts, broadway, is that district two? the valley is not mine, but luckily for you, if you find a district like the valley, you love this district too, diamonds, rubies, hayes valley is the district too, if you spend a lot of money and district it seems it is the way that ahayes valley is the

district should be, it is not mine alone, but luckily for you if you find a district you love, like hayes valley, district you love, then that district is your district, too, hayes valley, this one is for you ♪ >> always a tough act to follow. [laughter] calvin welch. it is important to understand that sb 798, the state law that actually governs -- really, not a sovereign state of the city and county of san francisco. this is state land. implemented, all the votes in san francisco, and the planning process, that was sb 798.

at its hub is section 792.1f1. it states in part that upon the full funding of the city's share of the octavia street project, the city shall utilize any remaining proceeds from the sales of excess rights of way solely for the transportation and related purposes authorized under the california constitution. the question is, is the affordable housing true? is it an actual share of the city's funding for octavia boulevard? state law says that first to be covered is the cost to the city in the project. now, our question was always, when we asked and it was answered, that it was part of the project costs. imagine our surprise to hear, now, that only transit,

transportation, can be used from the sale of the parcels. we were once part of the city, now we are not? if that is the case, i think the matter has to be clarified. we need legislation requiring the actual true up. thank you. supervisor chu: thank you very much. are there other speakers that wish to comment on item number 13? seeing no one, public comment is closed. supervisor kim? >> i would like to thank supervisor olague for spot -- supervisor kim: i would like to thank supervisor olague for sponsoring this hearing. representing a portion of the plan, you get the pieces and it is good to see an overview of what we were expecting to build out through the tear down. i think it is a really important, much-needed happening that we need to turn

the city into an open space. many of our residents have talked about this, and it is very needed, particularly when you live near, around, and under freeways. there are public safety issues around living under and near freeways, and activating the open space is important in addressing actual public safety issues that come up by the construction of freeways, which equaled traffic. one of the unfortunate outcomes of using traffic for vehicles is we have public safety issues. whether it is violence or other types of crime that occur in the areas, that needs to be mitigated with this kind of activation of open space. i was very disappointed to hear that there is a disagreement about whether we have the true obligation to affordable housing agencies.

i think that when we are advanced funding to complete a transportation project like market octavia boulevard, there is an expectation that if the loan was more than the actual market value of the parcel of land, that that would be repaid, because we are able to facilitate the construction of the market octavia boulevard. i do not know why this has only come ordered -- come forward so recently. i would hope that an issue of this magnitude, when it comes forward, i would hope we would be able to sit down and have multiple partners work out the solution to the legal issues that may have been brought up. i think that there are other ways that we can help to manage that. from my perspective of the reading, both of the transfer agreement, already in place, i think that is not release he

said, she said, it actually clearly articulates that there was an expectation that if there was a difference in terms of the shortfall and what the city or read of it -- redevelopment agency is given, it would return to the agency. anyway, i look forward to working with multiple agencies and departments on this issue, but i think it is important that this obligation is stated as existing and i hope that we will replenish affordable housing for the best transportation projects here in the city. supervisor chu: thank you. supervisor olague? supervisor olague:. i would like to hear the report from the senate -- city attorney's office about the issues that we heard today, about the disposition of the funds. so, since we received that memo yesterday, obviously it is too

soon to hear any kind of response, but we will want to have a more in-depth discussion about that. i did receive some requests from the valley folks about parcel o. i want to understand the plan for that site. >> in terms of the development schedule, there are a couple of things related to the development. first, the private market rate developer on parcel p is anticipating going through with the planning process and on trying to start construction as quickly as possible. i am presuming that they will -- and part of that responsibility in their development is also the alleyway between parcels p and o, which does not exist at this

point. they will have to do some staging for their development. whether they stay john ge on p , they will need access to the site. it will be a construction site, probably starting late this year or early next year for a period of 18 to 24 months. i think we are anticipating, and we are budgeting for it in our next two budget -- two year budget, r f p four parcer parceo begin development as the next octavia parcel. >> there is a huge report for that idea of moving the valley to a different site. i think there is still a desire to see a site in hayes valley, or closer to where it currently

is. we are just keeping that in mind. >> we will keep in mind. if our schedule slips and there is a possibility, we will keep an open mind about it. a lot of it depends on what extent the adjacent developer needs our site for in those purposes. >> i know that everyone is cognizant of the agreement and understanding that at certain times they would vacate the site, but if there is an opportunity -- >> in fact, part of their lease -- one of the final actions of the redevelopment agency is the farm debt returned to the agency to renew their lease and get back into their least, renewing their insurance. it was clarified, at that point, again, that it was temporary use and that at the time the development started, they would

vacate. but we will keep an open mind about the return. supervisor olague: i am not sure that anyone at that time envisioned what a wonderful project it would be. of course, you know, if we can have that conversation at some point, that would be nice. with the understanding that we may have to keep to the original schedule. supervisor chu: thank you, supervisor. colleagues, we have heard the presentation and public comments. is there a motion to continue this to the call of the chair and transferred to the land use committee? >> the motion is to refer this to the land use committee. supervisor chu: we do not need to continue it, then? >> no, we do not. supervisor chu: can we do that without objection? thank you. >> i wanted to thank the supervisor for moving this item up on the agenda so that members

of the public could speak to it. thank you for that. >> thank you, supervisor. -- supervisor avalos: -- supervisor chu: thank you, supervisor. item number nine, please. >> item #9. resolution approving port commission lease no. l-15108 with golden bear restaurant company iii, dba mission rock resort, for restaurant building, deck, and land of approximately 7,924 square feet located at 817 terry a. francois boulevard in the central waterfront with a 15 year term and one five year option. supervisor chu: thank you very much. on this item, i believe we have elia riley? >> yes. i am from the port of san francisco. i am here today to request approval of the agenda item number nine, which was just called. i will log go through the entire title. the particulars of this agenda

item are set forth in information packages previously provided to you for review. in addition, as you consider this, i would ask the you know the following items. first, the existing lease for this restaurant is currently owned by a man who purchased it out of bankruptcy for $335,000 in january 2012. the bidding process for the purchase was ordered in handled through the bankruptcy court. mr. osborn, in conjunction with the court, is currently requesting termination of these with the remaining term of 11 years and that approval of the new lease for 15 years with one five-year option. the reason for this is that it will enable and advertise approximately $1.5 million of improvements to the existing site, which was deemed necessary in order to ensure the future success of the restaurant. mr. osborn comes to us with

credentials, for those of you who do not know him, as a local restaurant to work. -- restauranteur. we anticipate the development of the resort will provide approximately 60 additional jobs. this concludes my request. thank you for your consideration. supervisor chu: all right, yes. thank you. let's go to the budget analyst report. >> madam chair, members of the committee, page 4 of the report, we report that the port has provided us with a list of the capital improvements just referenced. estimated cost $1,490,000. the proposed lease before you requires that they post a performance bond equal to 100% of the cost of constructing

capital improvements. according to mr. riley, they have posted performance bonds of $1,567,000, exceeding the estimated cost. on page 5 of our report, we have the table. table no. 1 provides a summary of the estimated revenues to the port over the 15 year term of the proposed lease. the including annual rent increases of over 3%, $3,535,000 and a percentage of rent that kicks in, if it exceeds the base rent over the 15 years in the term, then the rent will be payable to the port estimated at $3,905,772 over the five-year term of the lease.

on page 6 of the report noted that under the retail leasing policy, in order to negotiate a source like the one before you, the port must first determine whether the existing candidate is in the standing, evaluate their suitability, and received a review of a business plan for financial statements and tax returns. all of these conditions have been met for the proposed source of these awarded to golden bear according to the report. we have considered approval of the proposed resolution to be a policy matter for the board of supervisors. supervisor chu: thank you. let's open it up to public comment. are there members of the public that wish to speak on item number nine? >> ♪ the big bear golden valley restaurant and i hope you will care and i hope you will visit

the golden bear restaurant valley in the big golden bear, where states are rare, and i know that you will be there and you will always care, the big valley and the golden bear, where the stakes are delicious and rare and always with care, and you will be there, the golden bear, resting always and always there, the big bear golden ♪ supervisor chu: thank you. are there other members of the public that wish to speak on item number nine? seeing no one, the item is closed. colleagues, we have a motion to send the item forward with recommendations. the bill do that without objection. thank you, item number 10.

-- we will do that without objection. thank you, item number 10. >> item number 10. resolution authorizing a lease amendment to extend the term of the city attorney lease with brcp 1390 market, llc, for premises at 1390 market street, consisting of approximately 69,402 square feet, by five years and granting to the city two additional five year extension options. supervisor chu: thank you very much. for this item, we have john updike. >> good afternoon. so, this is a lease renewal for the city attorney's office at 39 market street. our landlord at this location is broad reach capital partners. it just trips off the tongue. before i get into the details, i wanted to give you context of the activities this past winter that we have engaged in. i think it will help you to get

a sense of where this one is coming from. as many of you know, we have been actively engaged in discussions with various civic center property owners with options for addressing long-term space needs. those discussions entered a very serious stage late in last year through this spring at 1275 market street, with the current owner. 1275 market is the former state compensation insurance fund building. i thought it was appropriate to bring up, at this time, the status of that, because i think it has import to this, as well as many others that you will see. both sides were as creative as possible to develop a mutually acceptable transaction. we were very close, but we were unable to deliver a deal that was financially advantageous to the city.

we will continue dialogue with those owners, as well as others, who have assets that could play a role in solving our long term space needs. we will always entertained opportunities to stabilize those expenses for the long-term. while those negate -- negotiations were on going and knowing that we had a number of renewals and terminations stackup, my staff was also working on alternative plans. should a single building lease and purchase not materialize. this item today is one of a series of items you will be seen in the coming months that addresses the immediate need for leasing that takes us through solutions to the end of the decade. so, the specifics of the deal before you today are in these of just under 70,000 square feet. a five-year term with two renewal options. those options would proceed at 95% of fair market rat -- rent.

considering we have secured three months of rent fully debated by the landlord as part of our negotiated agreement, it is an effective rate of $28.50 per square foot, per year, for the entirety of the term. the other expense that will be incurred is the electrical pass through, which is really just to plug glove, not entire electrical output of the space. that is that the puc rate. it also includes the area occupied by infant care. that was from the original lease, carried forward through renewal. office city attorney's staff receives the first opportunity to place children in to that facility and other employees are for the next opportunity, if there are openings. then the facilities opened to

public use. it is a fairly small facility and only serves up to 12 babies, no older than 24 months. it is an important component of this development and was key for the city attorney's office consideration of this space. toddler and preschool needs are addressed here in this building, of course. i am very proud of the 19th delivery of this particular lease extension to you. we have done this amidst the strong headwinds of the surging market of the civic center. as an example, right across the street you just saw an announcement for the equivalent, because of the size and location across the street, 1355 market. that transaction is a seven year deal and is 80,000 square feet, roughly equivalent. there is a net affective rental rate of $48.50 per year.

this leased before you is $28.50 per square foot, per year. king's lane was also recently announced within the last couple of months. same location, 52,000 square feet. affective rental rate of $41 per square foot, per year. i have other compare both to show you within the area that range from the mid to upper 30's per square foot. did i mention that this is $28.50 per square foot? this is an excellent transaction for the city. it also brings in the coming fiscal year a little bit over $500,000 in savings to the city attorney's office budget. by not moving to another location there's also a savings destruction, which was a concern if we had to move, but the cost of the move could have been another million dollar expense. we have maintained the status quo in a very favorable transaction.

supervisor chu: supervisor avalos said well done. thank you. let's go to the budget analyst report. >> table number one, page 3 of the report, showing total estimated cost on the lease, including the electrical closet for over five years, the first five years, that would be $9,969,354. we recommend you approve this resolution. supervisor chu: thank you. let's open this up for public comment. are there members of the public debt wish to speak on item number 10? >> ♪ land lease, exciting renewal,, board, we are expecting budget and finance issues, the love but jet --

budget, we will be making another run, the love finance budget promises something for everyone, a course for adventure, your mind on a new finance and budget will not hurt any more, letting it go for an open land short, welcome aboard, it is planned renewal love supervisor chu: thank you. are there other members of the public of which to speak on item number 10? seeing no one, the item is closed. recommendation without objection? done. thank you. are there any other items for the budget subcommittee? >> that completes the budget subcommittee agenda. supervisor chu: thank you, we are adjourned in by the subcommittee. if we can start the next

committee? >> the 1:00 p.m. budget committee, on the agenda, item number one. hearing to receive update on the fire department's budget for fy2012-2013 and fy2013-2014. supervisor chu: thank you very much. colleagues, again, we have a number of departments coming forward to talk about the budget. today we have the fire department with us. i would like to thank the chief's patients in sitting through our earlier session, thank you. >> good afternoon. joanna white, san francisco fire department. we have a presentation prepared to give you a high level overview of the budget we have proposed. we want to let you know that as we are setting up the presentation, and we will go over some of the major changes. this was a two year budget. we have met the target