avalos. i'm with the san francisco department of emergency management. the item is the annual urban area security grant the u.s. department of homeland security grants to the entire bay area region. it is in front of you today. as you know, san francisco is the fiscal agent for the bay area, uasi. the total grant is approximately 22 million. the grant supports projects and public safety agencies throughout the bay area. the money is not just for san francisco; it also funds the almeda sheriff, police department, san jose police, santa cruz county fire department, the fremont fire department and many other public safety agencies. here in san francisco the grant will fund planners at my agency, department of emergency management. it will fund radio communications equipment for the police department and department of public health. apparatus for the fire department. supplies and equipment and things many first-respond errs use in san francisco . this resolution creates no

new positions in san francisco and there are no matching funds required by the city. the resolution is retroactive because the performance period for grant began the day we received the award letter, october 12th. we have a short time to spend the grant, 18 months. i'm happy to answer questions you may have. >> thank you very much. for this item we did not have a budget analyst report because san francisco is acting as a fiscal at. the money is accepted legally through us. we distribute it per the grant requirements and uasi, or regional body. why don't we go to -- before public comment we have a question. supervisor avalos? >> thank you. just a quick question. you mentioned nert as being one of the services funded locally in san francisco with the grant wha. are the services within nert that will be funded. >> what the grant will be paying for will be equipment used by the nert

volunteers. so it is the safety equipment they might use. there is portable lighting. trailers to store their equipment. it is not funding for personnel but for the physical equipment the volunteers use. >> great, thank you. just a question about nert. i'm pretty interested in a program. i have done a lot of work with residents in my district who are volunteers with nert. but i don't see the volunteer base expanding in a visible way and wondering perhaps we can have a conversation moving forward and where we see the program going and how to make sure that the program can actually be as robust as it needs, given a disaster happening in our neighborhoods and how do we do, looking at recruitment and where you see the program moving forward. >> i appreciate that comment. i think the nert program is appreciative from the board of supervisors. as you know main leadership is at the san francisco

fire department. i think my agency and fire department would be happy by to follow up and have a lengthy conversation about that. >> and i know a lot of the uasi grant money goes for funding equipment. but is there also funding that can actually, you know, help fund boots on the ground, networks of people in san francisco who are not necessarily staffed at one of our department but community members. not to fund their work but make sure we have an organizational structure in san francisco that can be responsive in our neighborhoods, given a disaster. >> that is good question and worth looking into. the grant does fund some ongoing existing positions in san francisco government. you know, some of the work our planners do has to do at dem has to do with engaging the community. one of the positions funded through this grant is at the general services. the job is to engage

community organizations organize folks in neighborhoods to participate in disaster planning and response and recovery. so i am not sure the funds could actually fund individuals that are outside of city government but i can tell you right now it does fund city positions whose job it is to reach out to and coordinate with folks in the community, including in your neighborhoods. >> i'm not interested in people getting funded that are not part of city government but just within a structure that exists perhaps outside city government that people can connect with from our neighborhoods to actually have a solid, you know, network on the ground folks who can be involved in disaster relief in neighborhoods. >> sure. it is worth looking into. if it is not through this particular uasi grant, there are a number the federal government offers including one specifically for nonprofits for disaster preparedness that may be a source of funding for the type of activity you are discussing. >> we can talk about it

off-line, just wanted to bring it here on the mic and appreciate your time. >> great, happy to follow up on that. >> ra quell is the person to reach out to. >> why don't we open this up. are there members who wish to speak on item six? come forward. >> hi again, supervisors. tom king. congratulations to the department for securing such a great enlarged grant. i run a small charity myself. unfortunately our grants are several decimal points to the left. i think the presenter in front of me answered a lot of the questions i had. my main hope is that some of the moneys can be used to stop the huge problem in san francisco we have with human trafficking, especially trafficking of women. look at the back pages of san francisco weekly or bay guardian for confirmation of this enormous issue. i hope that could be

allocated in some fashion, thank you. >> thank you. are there other members of the public who wish to speak on this item, item number six? seeing none, public comment is closed. colleagues, do we have a motion to send the item forward with recommendation? we have that motion, we can do that without objection. thank you. item seven. >> item seven, resolution finding the project proposed by gsw arenas, llc, an affiliate of the golden state warriors to rehabilitate port property at piers 30-32, develop on the pier multipurpose venue usable for public uses and other events such as convention, warriors home games, cultural events, family shows and performing arts and other uses including public space. retail and related parking facilities and develop on seawall lot 330 residential, hotel and/or

retail uses and accessory parking in fiscally feasible and responsible under code 29 urging city and port officials to make evaluating and proposed project among its highest priorities and to take all appropriate steps to further environmental review of the proposed project. >> thank you very much. on this item we do have a number of presenters. we first will have jennifer, from the office of economic and workforce development who will give a presentation. after jennifer completes her presentation, we will have monique morrier, offering her comments and to the budget analyst report on this item. before we begin, just for folks who are in the overflow room, we have an overflow room, room 263 that is available. if there are members of the public who are in that room that wish to speak during public comment we will make sure you have the

opportunity to speak. just want to make sure you are aware of that. jennifer. >> thank you, good morning, supervisors. i'm jennifer matz from the office of economic and workforce development. i appreciate you holding this hearing under the somewhat compromised circumstances of no power. or compromised power. this is a meeting for the proposed warrior arena, the piers 30-32 and seawall project. by way of background fiscal faoez bt, its purpose is for the board of supervisors to determine whether a proposed project is fiscally feasible before substantial predevelopment costs are incurred. it is a gate keeping measure that ensures costs are not occurred on infeasible. does not include approvals or entitlements. fiscal feasibility is required by law when a project is on city-owned property, construction costs over $25 million and pre-development costs of over a million.

the determination must be completed before environmental review can commence. it is a relatively recent law. we have not done physical feasibility on all but we have done reviews of the explore tor yum, america's cup and san francisco wholesale produce mart. i would like to invite rick welts up to talk about this project. it seems a little bit -- doesn't seem to give enough context as we talk about fiscal feasibility for a project that you haven't seen or heard the description or seen or heard this opportunity. we will be having a full design and transportation presentation in board of supervisors land use committee next monday but i wanted to give warrior's president rick well ts a couple minutes to talk about the vision for this arena. i want to yield to him. >> thank you, jennifer. supervisors. i am going to take a couple minutes to do an overview of the project design that

has been released to date, the image you are seing in front of you right now is looking at the south part of piers 30, 32 and view north toward the bay bridge. couple of things of note on this. the design is meant right now more amassing design than architectural design. the arena that's placed 600 feet away from the embarkadero as far as it can be for several reasons, to enhance the view corridors, preserve the views of bay bridge, especially for those coming from the south. the arena will be transparent in nature, utilizing primarily glass so that it is as transparent as it can possibly be on the site. as you can see, the early design concept shows that on the south side of the pier recreational use that steps down in the water. this slide shows more of

the entire site plan. you can see the position of proposed arena. also see along the embarkadero on the piers 30-32 site about 135,000 square feet of retail proposed. perhaps the most distinguishing feature you can see on this slide is the fact that over 50% of the site -- in fact, quite a bit more than 50% of the site in the plan that's been proposed, over seven acres of new open public space, that obviously with investment and rehabilitating the piers is what we think is a tremendous new public space opportunity in san francisco. the perimeter on all three sides will have access to the public at all times for pedestrian traffic as well as bicycle traffic. you can see that it actually from the water side on the south steps up

to a plus 45 on the north side of the pier. that allows us to do several things. from an experience of those patrons who will be coming to events there it allows us to enter those patrons on the main con course and go down to their seats, or up to their seats, which will greatly experience the fan experience. one of the other things you see is robust maritime opportunities. part of the plan proposes to relocate the fire boat station to this site. the three vessels you see on the north side to the left represent the city's fire boat fleet. there is a placeholder on the north and south side of the pier that is envisioned to accommodate water taxi, ferry landings and private craft in the lower right-hand corner of the site. we are very excited about

having this enter into the review so these ideas can be fully vetted. the design will evolve as that takes place. >> in order to do the fiscal feasibility analysis it was important to come up with a broad outline of the proposed business terms for this deal. so the warriors in the city in port work to come up with a conceptual framework. that is not before you today as part of the resolution. i think it is important to take a few minutes to describe the framework that forms the assumption in the feasibility report. the framework says this. the warrior also privately finance all development on piers 30, 32 and seawall lot 30. the city and port will reimburse warriors for agreed upon improvements for city-owned infrastructure. expenditures for improvement are reimbursable expenditures

are capped at $120 million. funds for reimbursing those are limited to three sources. let me take each of those three individually. the warriors will privately finance all development. all buildings and improvements, including the multipurpose entertainment venue will be financed by the warriors. estimated cost is $1 billion. they will also finance rehabilitation of piers 30-32 with estimated cost of $120 million. the public open space and maritime amenities and other amenity also be privately financed. that includes as rick mentioned 50% will be public open space, public small craft boat launch on suit side for kayaks. anticipate ferries and water taxis and excursions on the north side and exploring the feasibility of maintaining deep water berth on the east side of the facility. the city will reimburse -- city and port will reimburse warrior for agreed upon improvements the city owned

infrastructure capped at 120 million with 13% cost of capital. the cost is estimated to be $120 million but if the conceptual framework creates space that if through cost saves thing rehabilitation of piers is less than 120 the city and warriors may negotiate for other public improvements up to the cap. those would include increased amounts of open space and maritime amenities. there's been a great deal of conversation around this 13% cost of capitol. i want to take a minute to hopefully clearly explain what that means. when you look at other public private partnerships the city has engaged in over the years in which we have asked private partners to improve our infrastructure, there is a cost and rate of return which is often negotiated in those deals. in the hunter's partnership yard the rate of return was 20%. treasure island was 18.5. the lend lease deal

proposed for piers 30-32 years ago had a 12.5 rate of return. the 13% rate of return reflects the risk that the warriors are taking in investing in our infrastructure. as i will continue to descrape because the sources are capped and because the sources may never equal 120 million, it is extraordinary risky for them to invest in our infrastructure. the funds for reimbursing costs are limited to three sources. rent credits from piers 30-32, valued at 1.9 million a year. the sale price of seawall lot 30, valued at 30 million a year and new property tax revenue generate bid the yards your's development on both locations through creation of infrastructure financing district, estimated to yield about 5.8 million a year. >> to clarify the sales price is not per year, it is one time.

>> one-time. the estimated total value of an infrastructure financing district, the amount that we could bond against for future property tax revenue off these two is approximately estimated to be 50 million. these values were determined by an appraisal that was conducted by the department of real estate with instructions provided by the city and port. there is then -- >> just one second. jennifer, we do have a few questions. supervisor a loss. >> thank you, chair chu. feeling a need to kick the tires a little bit. but looking at my notes here, when we had america's cup before us. >> yep. >> there was a discussion about seawall lot 330, that being a portion to use to help subsidize development, at that time the seawall lot 330 was assessed at

33million, now 30 million. how are we at the difference? we have seen property values increase generally over the past few months. how are we at a lower property value? >> we did three appraisals under the america's cup. the value,ly need help from brad, who i know is here, we did three appraisals piers -- excuse me, the seawall lot and take the value of the america's cup and that was lower than the 30 million that we are valuing it at. we had one that came in at 3 3 million, we had two others that brought an average down to an amount we agreed upon to use for transfer value, lower than 30 million. 30 million that is reflected came out of one appraisal in today's dollars and determined based upon looking at

comparable sales -- recent comparable sales. >> right now we have not necessarily an agreement but understanding about 30 million. >> we have an understanding that is the number we will be using with some index for time when the transfer actually occurs. >> when we have term sheet, probably be more set in stone? >> absolutely. that is one of the recurring points i would like to make in the hearing is it is through the term sheet that all financial assumptions i'm presenting will be born -- borne out and backed up with a robust fiscal analysis, that will be back to you this spring. it is that time we will ask you to opine on interest rate and structure. now this is conceptual, it create an outside framework for where this deal is going. >> i know the value of $30 million for seawall lot 330

comes with some assumptions about size, height, usage. what are we assuming? >> assuming current zoning and current conditions, what we asked the appraisers to do is look at highest and best use to maximum the development potential. whether or not as we all know waterfront development in san francisco is contentious and often times the maximum development that is allowed under zoning winds up being something that is a negotiation. so it anticipates -- the appraisal was based on the maximum development on that site. >> include what is kind of height. >> the heights today i believe are 105 feet on that site. >> okay. thank you. >> thank you. i also wanted to ask in terms of what supervisor avalos was alluding to, we will see the term sheet that will come before us probably sometime next year. >> that will layout specifically the items. in terms of creating a conceptual framework, the

thinking is we are able to put some level of price, some kind of value on these three different reimbursable sources so that they will be able to say reasonably we can get to 120 million to be reimbursed. >> yes. create an early understanding of a cap of costs and a cap of sources. i think one of the things we all struggled with during america's cup was trying to put limits on what the parameters of the deal were, so it felt important to create real structure around this. the numbers need to be fleshed out and fully developed but the structure will remain. there will be these three sources as sources of reimbursement and cap of 120 million. >> thank you. >> a followup question. just a cautionary note. we are looking at the value of seawall lot 330 based on current zoning. you know, if somebody is moving forward, i just want

to make sure we are talking about current zoning and if anything is changing of current zoning we would expect a change in value as well. i know we have had projects come before us that require new zoning. i would think that if there is anything that came forward that showed that we would have to do new zoning for seawall lot 330, that would change the value of that land. we would expect that to be reflected in future agreements. not they want to go there but if it ever happened we would expect something greater than what is suggested right now. >> i don't know if the value would change. if final approves include zoning changes. the warriors are proposing -- warriors are paying predevelopment including entitlement and taking the

risk. oftentimes the city will be reimbursing private developers for that cost. so there is really shared risks in the entitlements. if the warriors are proposing zoning changes that will come before you, evident in term sheet and move forward through the planning department processes, the costs and risks associated with that would be borne by the warriors up front in the entitlement process. i hear you and i will take that. >> thank you, supervisor. also a clarification. you have the three reimbursable limited services, one, two and three. does the term sheet or does the conceptual framework anticipate we exhaust one before moving to the next, or it is interchangeable? >> it doesn't specifically create a waterfall. but this also sort of gets to the issue of the proposed return on the cost of capitol. it is the city's intention

to negotiate to try to repay the warriors for their expenditure as quickly as possible, with as much up -- as large sort of chunks as possible. so the value is something that could come in early as a 30 million credit. the ability to bond against future property tax is a large chunk of money that could be put towards the reimbursing for those infrastructure costs. what the framework anticipates another source of credit in it a lump-sum early to create net present value of what a 66-year lease is and apply toward the expenditures. what i think is important to understand is 120 is a cap. it is a cap that if those expenditures are not met, if they are not needed in

order to rehabilitate the substructure, there could be an excess of value in the three buckets, in which kay they would not be exhausted but our goal is to have repayment as quickly as possible. >> thank you. >> some of the -- >> i have a question. >> are you finished answering the question? >> i am. >> we do have another question. supervisor kim? >> thank you. i have a couple questions regarding the buckets. the questions are how to lower impact of 13% interest rate which has created a lot of interest among the members of the public. it is clear the sale price of the seawall can be paid up front. with property tax generated over time, the bond, is

that something we can pre-credit it to reduce the 120 million? >> you can't pre-credit it until something is built. one of the things we are looking at and already talking to public finance experts that we engage, tom lockhart, chris lynch and assessor's office, we are engaging at an early stage, is a way to create a strategy that might allow community facilities district to create revenue that you could bond against as early as possible. even before traditionally you can create infrastructure financing district that relies on revenues that are flowing from a completed project. in order to create a revenue stream that you can go out to the market and bond against in order to bring back that chunk of revenue in order to pay back the warriors. so we are -- to your question we are exploring ways to accelerate as much as possible in order to

ensure quick repayment to warriors. >> i'm jumping a little ahead to the budget analyst report but it was stated it is possible we could reduce liability in terms of what we would owe 13% on, down to 29.6 million if we were able to use the estimated 34 million from the expected revenues and bond revenues. is that feasible? is that something from the get-go we could take out as to what we would owe 13% interest on? >> that is right. we are attempting to have that remaining number of 30 million be something taken out early. if we can negotiate a value for the 66-year lease at net present value where you look at annual increases, look at what a reset would be, calculate the present value of those -- that rent stream today and give a credit, that would take out

the reminder. >> okay. >> that is actually something i want to show. >> right. in the report it said even if you could not do that, that what remained was the 29.6 million, that is 13% annual rate on the 29.6 million is 3.8 million. that would exceed estimated annual fair market rent of 1.9 million. in that case because they have exhausted the three buckets that would be what the city would be committed to giving. nothing beyond that. >> i think that's been one of misconceptions. if warriors have rate of return and more owed, whether because they exceed the 120 million of reimbursable expenditures or because there is a rate continuing to grow that somehow the city is still on the hook. this deal is being crafted to ensure there are only

three sources of reimbursable -- by which warriors can get reimbursed for the substructures. it is a cap on total amount spent and cap on sources. >> my last question just on this point is what you had said regarding what if construction costs fall below 120 million. i have seen written the port could then negotiate other improvements to the site that would meet up to the cap. is it possible that actually that we could leave as an option that what we -- our lability to warriors would -- >> i want to be clear to explain why that is in the conceptual framework. because we drafted this at such an early stage we wanted to create space now to figure out if there were improvements. not ones we described that warriors are taking on, not open space in improvements described but if there are additional improvements or ones city wants