money 2.15 million is the tax increment we'll gained due to the revitalization so all the companies moving there with the highest vacancy rate now the lowest in the city. many nonprofits are excited to see this and feeling the squeeze so in many ways the economic growth should go directly back into the negative growth the displacement that's how the 2.5 million was developed it came through supervisor chiu and working with the controller's office. how the 2 million was actually come up with i'll let supervisor avalos address that we didn't come up with that number. this is our commitment back into

the community we said weight be supporting every speekt of our neighborhood and making them property as well we feel this the appropriate >> thank you. supervisor tang. supervisor avalos do you want to add anything to that that >> sure thank you for your question i want to include the arts they don't get a lot of attention when it comes to our budget process yet i hear a lot of the organizations their struggle as well. i think about the arts organizations they serve as a real economic engine for the city. we look at tourism and hospitality as a big part of our economy but about you as a city we haven't been cognizant of the

displacement and the costs of doing business her that prevents them from staying in the city and we're seeing a lot of arts organizations wondering if they'll be around. in terms of the amount of money it is really based on the work i've done on the budget over the years when we've actually done the increasing we've allocated in some years in 2006 about million dollars and it's been look at since we've made investments. we're also seeing that, you know, taking part in the discussions about our larger events in the city things like conventions and america's cup the arts organizations have been told you'll see real benefits from the revenue that comes in

from tourism and we haven't seen that so i wanted to address that lack of investment through this process >> thank you. supervisor kim anything else >> the 2.515 doesn't include anyone so the 12 point plus million was specified for the arts. >> so, now supervisor tang and thank you. first of all, i do want to recognize what everyone has said the immediate pressing need to help the nonprofit communities. the contributions they make to the city is incredible and we couldn't do much of our work await them i wanted to thank the sponsors. you, however, i want to point out a couple of things first of all, how this measure started out as 2 point e million dollar

and grew to be trice that. i do believe the original measure had a clear nexus between the property tax and the payroll sales tax was established so generally speaking i don't think it's good practice for supplementals to be before the board especially before we adapt the overall budget but germany think it's important as we make the budget decisions we make the budget as a whole and the budget trade offices. so i'm glad the funds are on the budget committee reserve but i would have liked to see the details of the allocation of those funds before it went to the full board of supervisors and it will not make its way

back to the full board of supervisors so we won't as a body see the item again. but with that said, however, i will support the item today and the reason i will support it i believe that in this situation and given the market pressures the only solution is to bridge those entities and prevent our nonprofits from shutting their doors to our community. i recognize that many of the nonprofits located outside of my district serves some of the constituents. its important for us to support the community and organizations so i look forward to see the impact of this in the nonprofits and i hope we have a full evaluation in conjunction with the fund so we can see the effectiveness of the funding. i want to encourage the board to

think behind those initial programs and keep on working with the city departments so figure out long-term solutions especially with our cities arts organizations so we can assure that our arts arts thrive >> supervisor breed. >> thank you. i had a question about the tax increments is that one hundred percent of the tax increments funding that resulted from the tax revenue from the area or the total amount. >> president chiu. >> so the increase the initial 2 and a half million is the today is values for those properties so in terms of the city is a benefiting from the tax property revenues we're

heaping it will go back dot into the nonprofits. >> a hundred percent. >> yes. for that particular area. that being said our controller had fairly reasonable estimates on what the taxable properties are and it's likely those number t is going to get bigger as the construction is completed and try to take a more conservative approach >> but at this point your oracle for a hundred percent only for rent stabilization. >> well, we've estimated i'll ask the controller but, yes it's the taxable interest in the area and i want to clarify if it's one hundred percent. >> the amount is pure a tax

increment in the areas that's one hundred percent of our general funds property taxation and just the tax component it's hundred dollars percent of the tax component that's been requested is the four-point - >> sorry not initial supplemental was 2.5 million was pegged to the estimate of the property tax increment generated in the zone as of today. >> and we're adding 2 million. >> upward of $2 million. >> so it exceeds the existing tax increment based on the entire figure. >> if. >> putting those numbers today yes as of today. it's worth noting as a legal matter the board of supervisors and mayor can't decade property

taxation any use so this is an estimation your drawing from the general reserve >> i got that i was trying to thinks since it was brought up those calculations were made in order to determine a specific amount to allocate. this is what supervisor tang and supervisor wiener both said in their comments earlier but i know as a former commission of the san francisco redevelopment agency when we look at the at the time of the accident increment we're not doing this from a legal prospective the tax increments how is works for the city is was never dedicated to one purpose to job growth and so forth. i realize we anticipate that there's expected growth and

expected tax growth in the booming areas so the city will generate specific tax revenue but at the end of the day there's more thanks than that there's transportation needs and support around police presence and there's also personal affordable housing and other issues. i'm not suggesting that we put one issue against the other but i just, you know, have a concern with moving forward in a direction without clear understanding of exactly, you know, what's actually going on in the area the data there's a resolution, there's a budget analyst report increase nothing i have in terms of data or information it demonstrates to me there is a clear concrete

need. there's her, her say and i'm familiar with the organizations in the mid-market area. many of the arts organizations and some in particular are in city building where significant dollars are need and we've not investment the appropriate amount in selma its fatally apart it's a art center and it supports the mid-market area yet we are choosing to focus on rent stabilization rather than taking care of the facilities that need support of this nature. i do understand what's being proposed i have a lot of concern with the fact that there's no data to support this. there's no clear plan to support

this. i don't feel comfortable supporting an stem without knowing what's it is going to be used for. i've seen abuse additional a lot of organizations get funding because they write great proposals and this is not giving me the satisfaction because of the listed organizations that have received funding in the past they have a clear organizational structure to receive the funding but what about the small organizations and the organizations we're trying to help hallway u how can they get access to the dollars. i'm not seeing the connections i think what's being prospered is admiral but it doesn't have enough concrete information that

gives me is comfort level to assure me the people because of the rise in rent in the mid-market area that they're actually going to be the ones that benefit from the support. so at this point, i can't support it but i want to in the future with a more detailed plan >> president chiu had a response. >> just a couple of quick responses there is significant data around the nonprofits i'll point to the budget analyst report on page 4 it says that commercial vacancy rates have decreased by 25 percent over the last 2 years. and at the same time, we know that the average city commercial rate has increased by 33 percent that's a sense of what the pressure is >> with respect where's the

information where's that data i know what the rents are you know what's happening in the mid-market but what about the artists. >> before you cut me off the draft of the report is in the file. the other thing this is not the first time that that a program like this has been implement admiring admiring the first.com area we have several things that implicated this program and we put things in place to help nonprofit organizations and specifically arts organizations. we got the idea looking back from the 2000, 1 and 2 timeframe to see where this is coming from. the third thing i understand colleagues that folks are

wondering what's going to happen once the report come out and supervisor yee and having i have had the conversations right now this is draft this will go to the budget committee for their review. i want to hear in supervisor yee about a different process that will give you more comfort so with that i'd like to defer to supervisor yee >> supervisor yee and just for the record he knows that mr. bryan chiu from the mayor's office of housing is here. >> supervisor yee. >> thank you first of all, like other supervisors i want to commend the effort like supervisor breed has run a nonprofit i did 18 years of running a nonprofit with 7 sites

i was around when the.com hit us with the rent. so the panic that people have running nonprofits especially, when their lease it up it's a real feeling that dramatically impacted other organizations that were around at the time they went under. in the nonprofit world for those who are not from that world most of the expenses you have are pretty much going to remain standard you might have increases in saliva you build it into our budget. two things in the nonprofit world that are inbe predicable one of them is insurance. when we got hit with an insurance hike about 20 years

ago it was doibl and tripling we didn't have the money and another one how much you're paying for rent if your paying 2 thousand for a space and they want to raise it to 35 hundred a month for certain nonprofits it's a big chunk of changes. i appreciate the effort we're moving down and i'm glad also that when we talk about the 2.5 million or the 4.5 million it is not the total increase of going 0 into the coverer of the city and we'll have opportunities to look at the rest of the funding. for me i think i'm echoing some of the comfortable level i trial building there is an issue with rents for nonprofits.

so that's not a problem. there's no argument there. we want to help them out they're the backbone of many communities. the issue for me is well, i feel like i have a lot of expertise in you running nonprofits and understanding the rent if it goes to the budget committee i'm not on i feel i'll be left out which the decision. i want to feel comfortable about the plan. there's something that's allowable in this chamber but hadn't been done rather than having the reserve go to the budget committee i want to recommend that the reserve go to the full board of supervisors for release. i believe the process wouldn't be a long-drawn-out process but

maybe the city attorney can explain that better >> mr. gibner to the chair. deputy city attorney jonas the board mention they've placed the reserve on is reading from and hadn't been done in many years the process for realizing that the supervisor would introduce another motion to schedule a reserve as a whole and at following boards meeting the boards sits to take public comment and adapt a motion to release the reserve >> i'm comfortable with that process. if we were to go that route and end up being a long drown u

drawn out process so i don't know which i could maybe ask for an amendment >> a motion and make a motion. >> i make a motion that we change the statement where we're putting the money in reserve for the budget committee to put in the reserve at the full board of supervisors. >> we have a motion any supervisor yee and second by supervisor cowen any comment. >> we obviously have a lot of comments so we do the public comment at the full board of supervisors for decision. that is something i will support i know there's been a level of discomfort and obviously we're going to have recommendations so i appreciate supervisor yee asking this question and our

city attorney suggesting a different ways to go about this >> okay supervisor kim on the motion. >> yes. on the motion i'm happy to support the motion i want to reiterate it doesn't mean we'll be hearing the public comment so we'll all be subject to listen to that. i'm happy for all the full board of supervisors to hear what our nonprofit organizations are going through and a lot of of the concerns to provide services on site many of geography dependent and still in oakland they provide the services for the community throughout san francisco so if the board will hear from them i'm happy to support the motion >> great. supervisor cowen >> thank you very much i wanted to acknowledge the city attorney and supervisor yee thank you for that suggestion. the motion that i am happy to

support. it brings more comfort as we begin deliberating. i have one concern to express to the sponsors of the legislation that the legislation felt as to it was inclusive. i represent a lot of neighborhoods in the southeast people want to move into we have space and it's one of the more affordable for nonprofits to make their homes in. that there- this was very mid-market specific and selma inclusive so this ability to hear the matter before the entire board is very, very attractive. i'm interested and you can begin to communicate i'm listening for

long term planning. this is a short term fix so a very, very large and systematic problem how do we assist or partner with nonprofits on long term planning to help them begin to realize their financial goals. i've worked with my nonprofits helping them with technical assistance to help them manage a better strategy around fundraising and diverse their funds. i got called upon how this money will be used i had questions about supervisor yee and other supervisors feeling shape geography specific. i'm satisfied with the comments

that supervisor kim made about the nexus of money to where the need is for this particular nonprofit. i'm happy we've got thoughtful resolution but to reiterate to the nonprofits for public comment i'm interested in hearing with the long term plan strategy will be. thank you >> supervisor campos >> thank you, mr. president it's been a very informative discussion but i want to sort of look at it from a different prospective. i certainly agree there is a need that nonprofits have and i'm inclined to support the item but i want to step back with context. as i see it we're talking about the impact that the tax break

the mid-market tax break is having in the neighborhood but the impact in other neighborhoods. i can tell you it's not just mid-market that's impacted clearly a that's a big focus of the impact. neighborhood like the mission for instance, that i represent have become ground zero for the displacement. i think that, you know, we have to be careful about how we try to address the impact of this tax break because one way of looking at it it and someone said this to me it's an interesting prospective is that we're talking about trying to encourage companies to come into this geography area by giving them a tax break that's funded by san francisco taxpayers that in return is impacting the taxpayers and we're asking to

address the issue by asking once again that taxpayers step in and help those nonprofits. and yet we're not doing anything in terms of asking the people the companies that receive the initial benefit. so i think as a matter of fairness we need to the even if we move forward with this item we need to revisit this idea of what's the impact of this tax break and not only that is there a modification or amendments that should be made to assure that's not just taxpayers footing the bill to the extent there's impacts but it's also accountabilities who have benefited from the tax breaks that are playing they're part. i don't know that simply asking taxpayers to foot the bill is enough. and the impact goes beyond the

nonprofits. the impact goes to the residents to the merchants and i'm glad that supervisor avalos added the arts related nonprofits but since we're talking about art what about the artists? the artists probably need more stabilization than anyone in san francisco certainly in my district artists are leaving in droves. and i appreciate the fact that we want to support the arts community and the organizations that i think are doing great work and deserve that support but if we're talking about impacts of a tax break impacts that go beyond this neighborhood i don't know we're doing enough to fully address the issue. i wasn't planning on doing this today but i'll be presenting a request to figure out what the

different ramifications have been in this geography areas but in surrounding areas to get a better response not only specific to nonprofits whether their art related or not but their response relative to merchant and communities like artists that are being forced out of san francisco >> supervisor kim. >> thank you shall we vote son the motion first. >> why don't we votes on the motion and mr. gibner clarify again what the language would be we'll be amending. >> deputy city attorney john gibner again. on page 2 of the ordinance line 21 provides that the funds shall be placed on budget and finance

reserve and rather than budget and finance committee reserve the ordinance will read board of supervisors reserve and the title of the ordinance will change according >> okay. so that's supervisor yee's amendment described by the city attorney and second by supervisor cowen once this is amended one of us will introduce a motion we sit as a committee as a wholesome weeks later and we'll make that decision collectively. any more discussion on that amendment without objection >> supervisor kim. >> i want to respond to some of the colleagues first of all, thank all for this robust

discussion. our office supported this nonprofit dismramentd work group this is only one piece of the fund and this is not the only thing they're looking at the planning code and pro bono services from realtor and rents throughout the city so there's a lot of avenues we're looking at point. we're looking at the funding and bryan shoe is here to address the process they've been go going through since october. this is the first non-profit piece during the discussion we'll have a long-term discussion how to continue to support the is cycles. this is not the only time back in