financial liability. if we try to protect against every single thing we're going to have a lot of concrete and not a nice place to live >> any other speakers? >> hello, i'm mary king and i live in lambert and was part of the planting. we made a big mistake on the redwoods. i remember one of the department members said i without the possibility of parole plant those trees there. the one tree i was successful was to get a buff japanese maple planned. i would ask we continue to have japanese maples 34r57bd there are that the key thing about the

presentation is that she hadn't been at the site. and anybody coming to that site it was teeny, tiny. we know about victorian houses. a lady rank our doorbell and we had a neighbor who would throw candies up on the roof. so i'm not 1 hundred present sure that property was used for the 'cause she said.

we have a neighbor who sold their vejsz in a farmer's market on a small space near there. so if anybody has any questions call me. thanks >> thank you. >> hello, i'm trish. i live at one cottage row. i really appreciate mr. kernz presentation. i think it was debate and to her and on point. i think that there's a consensus among the cottage row residents that will support his violative as well and a thank you >> thank you any other speakers on this item. seeing none, we'll close public comment. okay. no other comments we'll

move on >> the market sale from publically annoyed properties. informational presentation and a commissioners good afternoon dan with the planning department. about a year ago commissioners we came to you with an overview. one of the issues we talked about during that presentation were the 3 and a half million or so secret - square feet. and on one hand the sale of that quantity of p dr could provided the revenue meanwhile for the rehabilitation and maintenance of landmark buildings. and on the other hand, it could cause a disruption that could

have negative impacts on the t dr program. earlier this year we got data on the market analysis to better see and we have key members from our department here who have spent numerous amounts of time for particularly publicly owned t d railroad. they're here today to present their finding for you and with permission >> thank you davrn. good afternoon, commissioners. can everyone see the power point in front of you.

okay. so we're going to give you an overview of the presentation and a review of the t dr and the purpose of our study. we look back at the t dr activities since the program inception in 1980 that. we looked at t dr programs in other cities and a look at the transactions of the markets in san francisco because the t drs are unique and we want the recommends on the programs to refine it and to make recommendations of the publicly owned properties. just a quick review of the t drs.

it's from a preservation property to ultimately, the it updated property. the term also referred to the limits. under the t dr program landmarks go consult t dr folks to make sure the code is being followed. the purpose of our study was to review the market and our method daughter-in-law was to review the database. it was a very expensive database. we also looked at body the price of t dr but it was difficult to

find base it wasn't until the end of 2010 so that's something now we can get information on. so we interviewed brokers and other t dr market stakeholders to get information. we looked programs in other cities. we were guided by a committee led by the planning department. and in addition to planning staff we also had the real estate division and the controllers office and the office of capital planning. i'd like to thank tim frye and others who spent a lot of time with us answering our questions and how has the promising program worked in practice? >> the number certified is

1.8 million. there were there are others that could be certified. so that t dr was certified from 1 hundred and telephone buildings and the $2.7 million has been used ton 34 development projects it involves 24 buildings. so of the 32 buildings 80 percent of 26 buildings were newly constructed and the other 6 were to do expansion. so i'll give you the range of sizes those have been certified you can see quite the range. the smallest has been 8 hundred and the larger is from the

annex. 3 thousand 9 hundred ways used on the millennium tower. we have to accommodates the projects 13 required one transaction and the others required other tractions per development. we had the list of those buildings that are certified t dr in the apexes you may be interested in. okay. so what does the market look like. this is 20000 and in the light blue is the number of unused buildings in existence.

in no year it dips below 2 million t dr that have been certified and unused. it tends to fluctuate with the market value 2005 and 2008 are peak usage t dr for the developments. most traksdz have been in the range of 18 to $25. again, this is the prices we're able to find. based on that we're saying the co co- related tractions have occurred. looking at the composition we're focusing on demand.

the t dr has created a significant supply. there's 2 had the 6 million that hadn't think used but brown there's about 3 hundred thousand that's reported as used but the projects didn't ignored and they were not scald. so that leaves 2 hundred 3 million unused t dr out there. so there are 12 buildings that have certified t dr but haven't transferred any of the t dr. and the demand side we're seeing the current dammed is 1.6 million and that's made up

of pipeline projects projects that are in the pipeline projects right now. so of this 1 point 67 million 8 hundred and 6 thousand have been acquired by pipeline projects. then the t d projects put together it looks like there's a demand for 8 hundred and 60 t drs. sow looking at into the future for t dr demand and supply oh, i should point out that the lowest price for t dr is $5.51. you can see most of them have been in the range of 18 to $25

given the program has been in existence for almost thirty years a lot of 3 may not be certified. it's interesting after the board of supervisors approved that the t dr can go beyond the borders but we don't anticipate a lot. the t zone properties that are adjacent to the downtown district that are eligible could sift 6.3 million t drs. it could be increased in the future with planning and zoning

projects as eligible. we saw that with other project there were 3 thousand properties that were eligible to be certified. we see in terms of demand. the program is limited to the 3 sdiblths located in the downtown. many of the remaining opportunity sites are in the t d c p and the marketplace. those are limited the needs of t dr. so land limitations don't create t dr potential demanded. so at this point, we're not promising a significant increase for demand for t dr. are in terms of t dr for publicly owned property.

we think this could be a potential to meet the demand. the t dr that is available may not be easily assembled. one of the most common concerned was there's a limited supply of limited t dr. we also know that of the t dr that's remaining certified they're in small blocks from 10 thousand to 25 thousand. so we think that publicly owned property can meet the demand for larger sections. and like the service center on dproef street together are certified 6.3 million. the port has proposed modifications that would allow

piers 19 and 31 to certify the t d railroad. if the city were to sift million dollars it could take between 6 and 19 years to be absorbed if the marketplace. about 2 dozens of those projects like new york city and seattle and washington most of them go beyond have other areas of focus such as a affordable housing and open space speaker san francisco's program is very unique in that it allows any third party developers or investor to own t dr without it having to be connected with the ultimate your. there's seven hundred thousand

or 1.6 t dr that's been transferred off the parcel but not been used. that's been noted i think as a positive in the reviews of t dr programs. there isn't the program to go from yours to developer speaker and sifting t dr month jurisdictions track t dr through documents. in terms of pricing there's quite a few a variety. to increase the fdr in some cities you have programs that compete with t dr like other payments and in places where you have those people take the lowest cost options.

in new york city due to the complainants t dr can become expensive it's about 25 percent of land value and the prices go as high as $800 interest some t dr creates revenues through tax. new york politics the transfer taxes on t dr sales. so in terms of our recommendations for publicly owned t dr we're suggesting that t dr for city buildings be certified for eligible for t dr programs and the 10 year capital plans. we suggest that the department of real estate be allowed to

transfer those t drs and the department of real estate will do this based on the tractions. and we also suggest that the board of supervisors considered designating properties owned by port to be eligible for t dr. those 3 piers and one important thing is to set the t dr for the port properties. other remthsdz, you know, we noticed there's a need to balance you know the historic preservation goal paid through by impact fees. you know the t dr program was put in there from 6 to one to 9

to one. but above that there are impact fees charged in the plan. in terms of information that's one of the big exchanges we heard about when he did the interviews. we recommend additional reporting on the annual usage of t dr and the market pricing and that may allow potential buyers to contact the t dr owners. and finally the t dr program be reviewed every 5 years. this was one of the first independent reviews of the program and we suggest that the rough be tied to the report that has to be done every 5 years on the downtown plan the downtown project and the next deadline is

july 1 july 1st do 2015 and we think if the city were to sift the t dr it would be great to check in on that process >> thank you, commissioners so we have questions. >> commissioner pearlman. >> i actually read the entire thing and it's an interesting concept and program. i had a couple of questions. one is this may be directed towards the department. i didn't know there was a specific one for public properties >> when the program was modified in 2003 to include the public properties in the c-3 district they set the 7.5.

we actually - and, you know, >> i was wondering where you got the number from. >> it's an estimate that's something that legislation - you know, there needs to be a discussion on that. >> i assume the pier is the piece of property. how do i determine the boundary of a peer and how - what are the multipleers >> i think they're making a difference between - >> the building maybe bigger a than the property. >> thank you forrd that. i have another question. i said that the usual part of the san francisco program that a third party can buy the t drs is

there a market, a broker why would they do that >> during the course of our interviews there's one broker who knows the area wherever you call people they have questions i call edward. i think because things have to accommodated from other properties and there is a rule for a broker. yeah. >> but i assume there's some financial incentive there as well. >> yeah. you want to discuss the financial >> of course. >> just like any real estate broker. >> so looked like, you know, there's all that t dr that's

been certified and those buildings have been certified. so one hundred believes have been retained but not all of that t dr has been used. so it might be retaining properties maybe there wasn't a user at that time, >> i guess the city or planning department can they be the broker. is there a reason that the specific t dr couldn't go into a bank and you say the city has this many to offer so the broker can go to the city and they can make a transaction. it seemed so complicated >> the city would have large

secto sectors. >> now it seems like the point of this is to make it easier for someone who wants t drs to assembly them did i get that correct. >> yes. >> even though there are only two and a half that are to the

siege from two and a half owners of taser dr from the project. >> on average yeah, but there's another purpose of this we weren't ask to look at it and that's the policy aspect. from the sale of public - >> two fifths of the community. but i noticed there are a lot of ones close to the end of the report those can be taxed >> they are not right now but they can be. >> there was a lawsuit in california and they're a form of lawsuit in the bundle of property rights but it wasn't a statewide decision so yeah.

in other states they're considered property tax. and that's something that the city and county of san francisco could look into. that's what? >> a policy issue. >> yeah. sure but that did strike me as perhaps another aspect of this that ought to be examined with some care. >> i didn't put down all the recommendations but the city could consider implementing a payment of property taxes. >> well, if it's an item of property and it has a value it strikes me everybody ought to participate in the value. >> one of the challenges in no,

it's connected the seller and the buyer. you you know the connection because it's going to the user. we didn't look at what they because the tax on but it would be a lot higher than where it's coming from. how you would value the t dr. >> i think everybody should be allowed to participate in this creation of the value. i think we ought to the city and county of san francisco should consider this as a fair source of revenue >> thank you commissioner john. >> you think my comment comes

in between the two opinions in terms of getting at the policy. and this is an interesting study. i was a planner in san francisco thirty years ago when this program come into fruition so i haven't looked at it seriously until this study it's interesting. but my question goods tow did you look at the use of economic value of t drs in recycling back into the historic preservation program with the view that the idea behind this and the definition of preservation i feel was quite circumstance subscribed at that time, and the t dr was saying we've zoned you

preservation and we're to take this money and say bleeding we're going to take it and use it for another city purpose. but i was just thinking another reconsideration of how those rights are used in 2013 and recycle it back. locking more into recircling back into the program. >> so the program has two criteria. so when it was amended to be eligible for t dr they put in the requirements that the revenue had to be used on