standards. those are included in the covenant. it has not yet been recorded, but must be recorded in order to close this deal. commissioner antonini: because it is in the language and it is a condition, are approval would make it necessary that these be done. it seems like these concerns would be addressed when the final sale is approved. >> right. i am relying on that 2009 ordinance passed by the board of supervisors. it included the template language for this economic justice covenant. commissioner antonini: thank you. >> even though -- are condition only reference is a first source

hiring. it does not reference what we were just talking about. i have a question to the city attorney about whether we can include a condition to reference the covenant. >> commissioners, deputy city attorney. there are two different issues. one is the city acting in its proprietary capacity, entering into the purchase and sale agreement. that is what the ebb -- as a condition of the purchase and sale agreement, the economic justice covenants or a condition of that sale. -- are a condition of that sale. in your motion, there is a standard condition related to first source hiring. that is what will be a condition

of your approval. you are acting in the city's regulatory capacity. as you are aware, the national labor relations act constrains the city's ability to effect labor relations acting towards regulatory capacity. the city cannot ->> if the spone reason, something happens to that covenant, cannot move forward with the project, is that right? >> that is correct. >> even though it is passed through the planning commission. you are saying that we cannot condition it with a covenant. let's say eight gets approved, -- let's say it gets approved, they are still facing the purchase agreement, which has

this clause in it. for some reason, if that does not pan out, they cannot move forward with the project. >> there is a board of supervisors ordinance that required the economic justice covenant be in the purchase and sale agreement. the wrappers and the desk from my office can confirm they have already entered into -- the representatives from my office can confirm the a party entered into the agreement. >> -- they have already entered into the agreement. >> there will be no building permits issued until this is done? >> to echo the deputy city attorney's point, that is correct. entrance into an economic justice covenant is a required condition before closing.

q >> just prior to closing, they will not have ownership of the property. >> correct. >> i have one final question. a number of speakers came up to talk about on-site affordable, but my understanding is based on the palm our decision -- palmer decision. since this is rental, that is not allowable unless there is some definite benefits given to the developer that is above and beyond to what would normally be applied. i do not believe that is really on the table. maybe i could have an answer to that. >> yes, that is correct. this city has options for a satisfying that requirement. this project has satisfied. we cannot dictate which option

they choose, but they have set aside the requirement. >> even if they opted -- unless they worked out some sort of a different type of arrangement, they would not be able to satisfy it, i do not believe. almost the nature of the project were changed, i think. >> they could, but because the city is granting them certain rights or providing certain types of approvals, there would have to be a separate agreement. the point is there are some speakers mentioned and that they were not providing affordable housing, i want to make it clear that is not what is happening. they have the option, just like any developer does, to be used elsewhere. i think you heard from the director that that was his preference in the case because that funding would make

available -- make funds available for providing other projects in other locations. >> thank you. i will comment again at the end of the hearing. commissioner miguel: i am. pleased to see this come before the commission. -- i am very pleased to see this come before the commission. i served 13 years on the central freeway octavia boulevard task force. this is finally coming to fruition. as to the vision at that time. this is also, because of the market octavia plan eir, here is

a project -- exactly how it was planned to do. i am pleased with the north- south corridor. i think it opens up the block. this is what we're trying to do in a larger south of market block and due out the city. the east-west works for the interior courtyards. i like the concept for hickory alley and the manner in which they're going about that, exactly what should be done. using three different architects for one building is something we do not always find. the architectural expressions relate to each other and yet the center of the project has a

little different feel to it, as do the two bookends. they have the presence of being so in a different iteration. that is very pleasing. i am satisfied with the explanations from moh and economic development. i understand differences and repercussions there. i look forward to the development. i am glad to hear from -- i am glad to hear that it is coming soon. i look forward to seeing that. it will complete what will be, to my knowledge, the largest true in feel -- infill situation

that this city is likely to see. in the middle of residential. here is a massive site that is in the middle of a residential area. if it was not for the freeway coming down, we would not even have that. is a very interesting concept, even in the middle of a major city. i am very pleased with it and with that, i would move for approval with the conditions as stated. >> second. commissioner borden: i live right by the sight. i walk by it on a regular basis. i am sad about the farm going away, of course, but we all knew it was a temporary proposition. this project, not withstanding

the labor issues, it is a strong project. i really like what it is doing for the corner. i love what it is doing with hickory street. it seems that someone has determined that it is their car storage. i wonder why they never did ticketed. they have been there for a long time. hickory, where it dead and there, it is not a usable space. -- dead end there, it is not be usable space. this is an area that is very easy to park in. i do not own a car, but my fiancee it does. when they were doing work on our street, there were plenty of other places to park. i do not understand what the concerns are. it is not a difficult place, even with all of the people that

come to the neighborhood. a number of people really do take public transit and walk and bicycle and those communities. it seems to work in that neighborhood. i also think that it is important that we look at this project in the way that it is contemplated. as a good model of how we can develop a pretty large site. that is something we often struggle with at the commission. i am very disappointed with the developer that they did not do the necessary outreach with the unions. it will have been very nice if we did not have to get blindsided by that today. you have to do the work, it would have been a lot better for us all if you -- if that effort had been made in advance of the hearing. we would like to think that the developers are working to keep

economic justice and making sure that people have jobs locally. the final issue about on-site affordable housing, i understand there -- the limitations of the mayor's office of housing for funding right now. that would provide housing in the neighborhood, but i prefer it on site as well. i do not necessarily know that it has to be in the same exact building. a lot of people live in buildings to gather that do not relate to each other. people relate within neighborhoods, not necessarily within buildings. i do have a question about parcele o and what is being planned for that site. >> we have not selected a particular sort of population to

serve. at the redevelopment agency prior to the parcel being transferred to us, the agency contemplated either family rental housing for senior housing. i think that to we are inclined to look at it as a family rental housing. we have senior housing at parcels a and c. one of the most difficult things to find in san francisco is affordable large units. i think we are inclined, at this point, to family rental, but we've all reach out to stakeholders prior to making that decision. that would be 100% affordable. using low-income tax credits and tax exempt bonds and financing from the mayor's office.

we will retain the land as affordable housing. commissioner borden: o is immediately adjacent. it is as close as you can get to having on-site affordable. i love the art exhibit that you walk by when you go back -- when you go by that building. it makes me more comfortable with the options that we have. if you can find a way to do on- site affordability, i guess it is hard to make a decision relating to the housing trust fund. i think that is an interesting thought process. i would love to have the commissioners think about if we would want to have any language around that. it is an interesting approach and idea. it is something we should think about more in the long term.

commissioner wu: i have a question for the project sponsor. isn't this project intended to be a rental project? could it be turned into condos in the future? >> yes, this will be a rental project. would you mind repeating? commissioner wu: could be sold in the future? >> we build to own. we go into every development assuming that we will own it for 15 years plus. commissioner wu: i have a question for mouwd. i am wondering what steps your office takes to monitor and enforce the covenant.

>> in section 2a, as a part of the covenant, the owner is required to deliver written notice. in addition, required to deliver a copy of the record related to prevailing wage. that is the first enforcement measure prior to beginning any construction. similar to any legal contract that the city enters into, it is a binding contract. commissioner wu: thank you. ok. one more question. probably for planning department staff. you mentioned that improvements could result in a reduction of other fees. what fees might those be?

>> the market octavia infrastructure development impact fees. commissioner wu: where would that money go? >> many different traffic calming ideas, public parks. the way that the funding goes, the cac gets an opportunity to prioritize which projects are most needed. commissioner wu: i appreciate the hard work, the unions coming out to testify today. i think there does seem to be a legal path to enforcing the covenant. i want to stress: poor and that is for the city, for local hire -- stress how when portents that is for the city, for local hire. on the question of an

exclusionary, i want to support the mayor's office of housing and not restricting where fees go to. i was thinking through its and thought that you do not want to set the precedent that inclusionary housing fees can only be spent in the neighborhoods in which they are generated. that is a tricky balance. i do value of the importance of having mixed neighborhoods, economic diversity. i am happy to see that this neighborhood has so many dedicated parcels. there is an opportunity to create that kind of neighborhood that we want to see. that is my comment. commissioner moore: i would like to say that -- we had eight --

coming up with a combination on hickory and the more traditional building facing the south side, i think it is phenomenal. not even talking about using three architects. i think it is a wonderful example of how to really create tively use the freeway. all of the legal foundations in place for labor, for affordable housing, etc., i am comfortable with and i greatly appreciate mr. lee being a strong supporter. in the end, i believe the

position the department takes is a correct one. however, market octavia -- having said that, i am very comfortable st. exceptional designed -- seeing exceptional designs. how we measure height and how we look at hickory alley, whatever. fees are being used for infrastructure improvements, the extension and the completion is in the spirit of using the money. it would -- it is perfectly

justified. it is not just a self-serving thing. together with the idea of potentially having an agreement for hickory, at an innovative way which reinforces our market octavia it is developing. i think market octavia is one of the most exciting neighborhoods that is happening and i am really happy that we are -- we continue to support innovative design, good design, and neighborhood associations will support the project. i really do not have anything negative to say. the only thing i would have liked staff to do, look for a

-- the reason i'm asking, we want to encourage the architectural design and its detaining express is an attitude towards windows. if you use a very thin board, which might be used on this project, you might get a flatness around the window and the kind of detail and that does not wear very well. we should be encouraging staff to work with the architects, all three, to fully explain that so the building delivers the type of quality of architecture we are all supporting and we need to see at this scale of the building. commissioner antonini: a few

comments on design. i think it is pretty good. the modifications from regulations are fairly minor ones. allows for bay windows to be on the corners, which i think it is a nice feature. most of these exceptions are ones that actually improve the project. a few points on design. i think it is well designed. there are a couple of places on one of the three, i believe it is on the oak street, perhaps a stronger element that is more complementary to everything else in the neighborhood would be better. it does not have to be a traditional in terms of the

architecture throughout the western addition, but something that makes a definite break at the end of the building towards the top. also another thing i was happy to see it was talk about different materials when you're a break between stucco and wood, two elements to differentiate. if that could be done to make sure that we emphasize the individuality of the different units, to make them look like separate units, would be a another good feature. the colors look like they are good ones. hopefully, -- i am using the word tasteful, that is hard to say because everyone has different taste.

the windows, some sort of framing or moldings around the windows were possible to offset them a little bit more would be good. on the landscaping, i have not looked at the plant in great detail, but i hope we have usable areas within these courtyards which would have areas where people could actually sit and enjoy themselves, rather than decorative areas they would look at. that was softened -- their own little parks within the building. it is very good. in regards to parking, and i would encourage project sponsor to work with car share and see if there is a possibility of including more car share. there may be plentiful street parking, a lot of people might

not want to have a car, especially if they leave it on the street and it is broken into frequently. they may prefer to use cart share. it gives them a third option. it will attract a lot of potential renters if they could utilize a car share. commissioner sugaya: thank you. a little detail that does not have anything to do with the project. on your drawing sheets, you have central spelled wrong. [laughter] before you go to the public or whatever, after this meeting, you may want to take a look at that. i have a question with respect -- the city currently on is this parcel, is that correct? -- wonowns this parcel, it is tt

correct? since there seems to be consensus among the neighborhood, locally within the area, and i think among the commissioners, there is a preference for having inclusionary units within the development. quite apart from mr. lee's comment about the fees. with respect to the other -- under the current legislation, we cannot force the developer to do that because he has three options that he can choose from. however, if this is a city-owned parcel, could you have conditions of sale on having inclusionary units within the development? >> i can answer that question.

yes. you could do that. commissioner sugaya: given that answer, does the mayor's office have any comment at this point? i do not think we can condition that, obviously. >> the purchase and sale agreements is a voluntary agreement with team -- two parties. it is a negotiation. commissioner sugaya: i understand, thank you. i do not want to put you on the spot. but maybe there could be some further discussion. i do not know if the commission wants to encourage anything like that, but it is just an observation. this is a little different situation where developers come to us with a property that has been privately transacted. they can choose one of the three. it seems to me if the city is

selling the parcel and it is a -- it is in the public interest to do so, you have strong support from the neighborhood organizations. it seems to me that we would want to encourage some kind of discussions to take place. commissioner moore: i would like to ask the city attorney as to whether or not in our motion there needs to be a request for an in kind agreement regarding hickory street. i do not want to step out of line here, but i would like to see that we extend our support for that to happen. >> that was one of the modifications in the materials before you that i read at the beginning of the presentation. it was adding condition to the it was adding condition to the motion for that agreemen