individuals have issues with this level of affordable housing, if you could articulate at what level you would be more comfortable with affordable housing, because, again, without having a conversation with this body in public, i would like to get a sense from you what you think is fair. i did that 5 percent is a fair number, and i would like to just know what folks would be comfortable with. secretary: president chiu has presented an amendment. is there a second? please call. secretary: rea -- [reading roll] president chiu, supervisor chu, supervisor cohen, supervisor elsbernd, supervisor farrell, supervisor kim, supervisor mar.

there are four ayes. >> the amendment fails. president chiu? president chiu: let me see if i could get affordable housing information, whether or not you would go for it. rather than 14, i will ask for two, and i think that is, again, that willises dramatically while we can do on affordable housing, and given the level of profit here, colleagues, i think that is a very, very modest suggestion. >> : -- a motion is made by president chiu. is there a second? a second made by supervisor campos. commissioner: what is that

affordability? president chiu: i am happy for that affordably to go to something you are always concerned about which is not just low and moderate income housing but middle income housing as well, so a to 140%. commissioner: what is the low end? right now, there is an affordable housing payment, and my understanding is that typically in lieu payments, they can go in a lot of different payments. they tend to go towards low and very low-income housing as opposed to, for example, inclusionary on such, which tends to be more able -- middle income housing. that is my question. $11 million that is already being paid as part of the agreement. president chiu: actually, if i could ask city staff if you could answer that question. >> through the chair, my

understanding is that the affordable housing, first of, i should not say -- i am not an expert on affordable housing, and other cities that might be better suited to answer this question. my understanding is what has come up in front of committees is that the affordable housing impact fees, the impact study looked primarily at providing affordable housing in the low to moderate income range, and they were targeted at a certain amount of housing. we are looking at the full cost of housing in providing that. commissioner: 50% to 80% sun is not moderate income. that is low income. supervisor chu: could i just said, there are many areas that

need funding, to a number of projects in district 10, and also i believe on laguna, one in the pipeline, so i did in general there is no real application on how that of an dollars million gets bad, which, from my understanding, goes into the overall budget. i just also want to state that we cannot dedicate where these $11 million go, but i know certainly in my conversation with the director of the mayor's office on housing, we have had conversations about the potential of the parallel project that is going forward, which is the commitment by the port for affordable housing on the seawall log on broadway. this would be a waterfront parcel that would be dedicated to affordable housing, and i certainly of interest in assuring that some of those funds will be going there as well. to balance the market rate that we are building on the waterfront.

>> thank you, supervisor kim. is there any other comment on president chiu's proposed motion? president chiu: i would like to, through the chair, supervisor wiener, i am familiar with your concern that there is housing at all levels, particularly for work force housing, and if that is something we may want to do with this. again, this is a project that is creating housing for the wealthiest of the wealthy, and i think when we provided thailand to do that, we also need to make sure there are benefits for housing throughout the rest of the city, so i just wanted to say that, through the chair. supervisor wiener: i guess, through the chair, when it came up about affordability, every

time i try to bring up front of the range, there were some folks who got shot down on that, still asking for more affordable housing money for this project, and i know when some of the opponents were talking to me, they were very focused on moderate income and middle income housing, that was very important to me, but then it looks like this money is not really going to go to that need, which is a dramatic need, and that does not take away from the dramatic need for low-income housing. the two are not mutually exclusive. that is a concern that i have. we could raise the ami level for the entire fund or for a good portion of it, and, you know, perhaps, a small increase in the

affordable housing money that might be warranted, but right now, i do not feel comfortable raising it when it is going to part of the spectrum of the need but not the remaining spectrum of need. >> thank you, supervisor wiener. president chiu: thank you, mr. chair, i would suggest that this portion go to that portion or at least be expanded to go to an expanded portion of that ami so the we can assure the we are addressing different parts of the need. i happen to think that if you have $2 million that go to the low part of the spectrum, that provides in the less pressure for us to use moneys elsewhere, but i will make the amendment with the suggestion in comments that we have heard today.

chair: supervisor campos? supervisor campos: thank you. i am still not sure what we are doing here. just as we need to deal with the housing, we're talking about luxury housing, and not just for the wealthy but very wealthy, the impact on low-income housing is pretty significant, so i am still trying to understand what exactly it is that you are proposing through this motion. i am supportive of adding $2 million, but i am not sure where this is going. chair: president chiu? president chiu: let's be clear about where the votes are going. this is to contribute a certain amount to go to the city fund to create more housing, and i agree with many of you that our first priority should be for lower- income housing, but i'd also

like to assure that we're able to see some level of additional money going to house ecologist given weatherization is today, so my suggestion for an amendment would be would be some flexibility for the low-income affordable have been developed and a glut of moneys that could go towards work force housing that i know supervisor wiener has been championed -- championing. chair: do you accept the amendment? this is not approved by the new seconder. is there a new seconder? president chiu, would you stick with your first? president chiu: yes. chair: could we have an roll

call vote on the regional amendment? secretary: [reading roll] supervisor campos, president chiu, supervisor chu, supervisor cohen, supervisor elsbernd, supervisor farrell, supervisor kim, supervisor mar, supervisor olague. there are five ayes and six nos. chair: the amendment fails. are there any other items? president chiu: there are a couple of other questions, one for the budget analyst. from my perspective, i think this means the developer.

is this correct? >> the sellers of the condominium pay the transfer of be, so when it is moved to the subsequent sales, it is the owner of a condominium who would be paying the fee at the time of the sale, if that is the question. president chiu: yes, that is right. so, colleagues, they did no analysis on the rate of return for this project, the deal they developed was to let the developer off the hook from paying a fee off the first sale to the second sale, and as you know, colleagues, there are legal risks to this. we have encountered this issue before. we know that it is possible years down the line when the second sale occurs, there could be a lawsuit brought by the second purchaser to not have to pay this because it would be

deemed a tax rather than a transfer fee. this is an issue we have had in recent years and is in the budget analyst's report, and frankly, i believe it is something that we were discussing with the america's cup as to why it was important for us to do the second sale as opposed to the -- the first sale as opposed to the second sale. so contingent's, moving the transfer fee from the second sale back to the first sale. chair: president chiu has made a motion. seconded. commissioner wiener: i do not know the question that is directed. i know there has been some flux over time about when the transfer tax -- or the fee was going to apply. >> supervisor, through the

chair, the portion. the transfer of the as i think was clarified at the budget year, the legal risks, my understanding is that the legal risk comes from the city requiring property owners and especially -- essentially turning it into a contract and that future fees be diverted to the city. in this case, the city or the port as the party under can enter into that contract directly. the legality issue has to do with requiring property owners to enter into such a contract. the city or port can voluntarily enter into such a contract. >> -- supervisor wiener: subject of a motion? >> the president alluded to the conversation with america's cup. i think the budget analyst's is correct in saying that the first sale is essentially the one that the developer is directly party

to. however, subsequent sales, the sale value does affect the first sale, support, i would say, agreed to negotiate in that regard for two reasons. one, we still believe it will affect leo rosales of the developer, and two, it allows essentially a rebalancing, as we always do, with capital funds of fraud in a long term annuity fund, if you will, over time, to help us maintain and operate the waterfront, so given the trade- off that the president has pointed out, there are moneys we are passing up on up front, we are treating it for money over future years, and we thought it was appropriate in this case. chair: any other comments or questions on this proposed amendment? seeing none, supervisor cohen?

supervisor cohen, can you get a little bit closer to the microphone? supervisor cohen: yes, supervisor, can you repeat? >> the developer to get away

scot-free. this does not kick in for many, many years down the line. this is a fee that is still relatively untested. in the budget analyst's report, it stated that the time they are aware of involves a property in tahoe, and the issue has been raised by attorneys that down the line, there is a purchaser on the second sale that does not want to pay this date and/or tax, they might have a strong financial interest to actually sue the city because oftentimes these types of transfer fees should be considered as transfer taxes that would require voter approval, so there are real risks with the approach here, but that being said, i think that this is significant in indicated when it is keyed off of the first sale. any other comment -- chair: any

other comment? mr. clerk, could you please call the roll? clerk: [readinig roll] supervisor cohen, supervisor cohen, supervisor elsbernd, supervisor kim, supervisor mar. there are 3 ayes and eight nos. clerk: the amendment fails. are there any other items? president chiu? president chiu: colleagues, thank you for your patience. i know there has been a long discussion. i want to thank staff and the team. i know this is likely not going to the end of the story in part because there will be a signature gathering campaign on the part of community activists around some of these issues, and i do understand that there will

likely be a number of lawsuits to move forward. that being said, i do not think it is not a surprise that i do not tend to vote for the underlying items today. i understand that for a number of folks, there were deals that were cut with regards to this process, this project, due to politics. i get that. but from my perspective, this project is nowhere near where it needs to be a for the city and county of san francisco for us to ensure that all of us gets to continue to live in san francisco when we have some of the most expensive condominiums in the city that are going to be going up and all of the other issues that i know you have heard about that, so with that, colleagues, i do plan to vote no. i have an idea about where others will vote on this, but i would appreciate your support on that. clerk: supervisor kim? supervisor kim: thank you. i just wanted to clear up some

of the confusion about my previous in. it will be raised at full buildout for juan rincon hill, each unit -- for one rincon hill, i consider this to be luxury development in san francisco. the units are gone for at least $2.30 million. with eight washington, a much smaller project, and you are seeing a much smaller amount. this is double than what we got from one rincon hill. this is not to say that we should not always ask for more from our developers, but to say that we are not getting a good deal i think belies this point. i think there are a number of on president things that we're able to gain from this project. one is be inclusionary housing, which i think is appropriate given the value of the housing that is being built here, $11 million that will go into the mayor's office on housing fund.

we talked about generating an additional $30 million per year from whether it is real estate transfer tax or the gross receipts tax. this is $11 million that we're getting from one project, so i just want to put this in comparison when we talk about dollar amounts. no, it will not build a full affordable housing on the seawall lot, which would be affordable housing on the waterfront, but i still think it goes a long way. the other point i want to speak to on the parking surcharge, this was based on the city model, where my predecessor ask for 20 cents -- that we find that out. sorry. the number actually, i just do not remember, but where we got 20 cents to 30 cents per car up to with a cap of $1.80 million to mitigate traffic that would occur on fifth and market due to the parking garage that would be built there. in this case, the developer has

agreed to 50 cents per car surcharge, and it is for the life of the parking garage. there is no cap. this will continue to raise revenue. for dpw to reduce street skating on jackson street and for the chinatown master plan. a number of the other waterfront infrastructure that we may need. this will be a fund that will continue in perpetuity as long as the life of the parking garage, and i think this is an important game that was made in this project as well. finally, i think we need to look at what was currently on this site. if this was a public recreational center, i think that we would be having a very different discussion, but when we're talking about a surface parking lot and a private recreational center, really out of the needs of many of the folks who live here in the intercity, and we're not talking about displeasing residents or certainly not talking about the demolition of and housing.

i think what we are achieving here is a higher and better use of the land. if we were talking about affordable housing, i would give pause to this project, but the only things i have heard in the last five years in the discussion of this project is a low rise hotel or an centre shop, and i am not sure that either of those types of projects which the benefits that we would see through this project. i do think it is a tough issue given the type of housing that this project is building. any luxury and market rate housing, i understand your opposition, but if your opposition is based on community benefits, i actually think what we have before us is a good deal. chair: supervisor olague? supervisor olague: this is one of those projects where i think at the end of the day, the impacts are being mitigated by the benefits that we are receiving from the developer. again, i do not believe this has

some of the impact that we have seen of other projects that have been heard here at this level or certainly that i have heard on the planning commission level when i sat on the planning commission, when we look at issues like park merced, we were talking about the demolition of 1500 units of rent-control housing, which, despite the fact that some assurances were given in the development agreement later on, i still believe that there were concerns given the fact that costa hawkins, the state law that regulates rent control in the state of california has been challenged in other development agreement situations and other counties, including los angeles with the polymer decision, and my conversations with several advocates, there was a lot of concern that perhaps that would not hold, and in that case, i was concerned with the fact that

it was a 30-year phase-in project that demolished 1500 units of rent control housing. hear, we are seeing the demolition of parking lots and a private swimming and tennis club, which, i know that does represent a loss to many of the individuals who use it, but it will be replaced with a swimming pool, and i have heard that there are long lists of youngsters who are waiting to access swimming lessons at the recreation facilities at the park, and some of the medications would go to making sure that some of the young people on those waiting lists, it would make sure that would include some of the residents of district 5, that they be included in this mitigation and be allowed access, swimming

lessons at the site. also, there is a high level of unemployment, as many individuals no, among labor workers, carpenters, and other union workers, but trades, and this is an issue that the labor council has very much stated their support of to help insure that some jobs can be acquired by their members, and that is something, the creation of jobs in this case, i think is very important. also, the design, it does not reach a height of the golden gate commons. i believe it is still a few stories below that. and i know that some of the

opposition has come from some of the office buildings in the adjacent area, so although i understand the arguments of it representing the type of construction of housing that the city does not necessarily need, i do also have some concerns given the dissolution of the redevelopment agents say and the need for us to still acquire some income so that we can construct affordable housing. perhaps this is not the ideal way of reaching those and, but this project did go above what is required of them, so we will be seeing at least some indications, it will go to the mayor's office on housing to construct some affordable units as a result of this project. so, again, i think, supervisor

kim laid out the comparison pretty accurately, and i do believe what needs to happen in the future is that there needs to be some more thought given to a planned unit developments and if a unit goes outside the underlying code that perhaps we can start looking at more certainty and have those conversations with the development community, the affordable housing community, and others have said that there is more certainty in the process so if they request additional heights, then there are some set negations in place for the city and the community as they benefit from their developments, so, again, this was not an easy decision. i think relatively speaking when we look at trinity plaza and the balance between what the

developer got there, what the community got, i think this is comparable. i believe these are comparable. again, as i said, there have been some projects that i have not been able to support because i did not feel the mitigation greenplace to justify supporting them, but in this case, with only 134 units there and the captioning of some mitigation, this is an ok deal. it is a balanced deal, and i think in the future, i would like to see some legislation drafted or some thought given to planned unit development. chair: thank you, supervisor olague supervisor campos? supervisor campos: i want to

thank my colleagues. i believe it has been a very substantive conversation in the past few weeks. let me say that i appreciate the efforts on behalf of supervisors kim, mar, and olague to make this project a better project, and i think there is a point about this project in some ways being comparable to what was accomplished with other projects, and i see the validity of that point. i personally would not have supported several of the projects that it is comparable to, whether it is trinity plaza juan rincon hill. so that is not necessarily for me and analysis that is that compelling, but i do appreciate the fact that more money was added to affordable housing and that the project being voted on today is certainly better than the project that was first introduced to us. that said,