deluxe burger. >> i remember that. you have another store. we have one on post. >> that is your second. what is the reason you are leaving? you know, we he -- it's very bitter sweet ~. i still believe in the revitalization of that area. i think our problem was that we were just a little bit too early with all the changes that are about to happen. we are more of a gourmet high-end burger restaurant and all we do are burgers and sandwiches. we don't serve breakfast. our menu is limited. and, so, we did a good lunch business, but the dinner business, because we didn't have a variety in the menu because we specialize in burgers, and then also the foot traffic right there at nighttime just wasn't enough to sustain the business. so, we have lost a lot of money every month and both my

personal finances and the other business was basically carrying market street. we have come to the crossroads at the beginning of this year, the end of last year, we were thinking of every way we could still stay there and try to, you know, change our business model, add breakfast, what have you, but we're so far in the weeds financially that the risk is just too high for us right now. but we still believe in the area. my heart's still in that area. as you know my story, i am from san francisco, born and bred, and sixth street is near and dear to my heart. so, we wanted this transfer to still keep the spirit of what the redevelopment agency and what the revitalization effort wanted to do, which is to put a vibrant business on a catalyst corner in a blight which was once a blighted building on sixth and market.

and, so, we worked very hard with the landlord and with this potential new operator that wants to come in to make sure that a business was going to go in that could continue being open and keeping that corner alive and continue business attraction and continue building up that neighborhood. >> i remember i was at the restaurant at the opening and [speaker not understood]. how what the 400,000 spent for? where did you spend the 400,000? it was 100% spent on the construction. we had to gut the place. it wasn't just a cosmetic fix. we actually put in walls, took down walls, added flooring to cover up -- there was a lot of structural things that we did as well as build out a new kitchen, build out a whole new dining floor, add two bathrooms. so, 100% of that plus other

funds were used for the construction. so, all the money that was intended to be used from redevelopment was used in the space towards construction. >> what is another 600,000 needed to fix it up, cnd? the new owner, why another 600,000 he's going to spend to fix it up? what does it need to fix if you already fixed? what they're going to use -- spend it now? [inaudible]. >> oh, i'm sorry. so, your question is -- >> you need 600 more thousand, there fixing, right? >> no, there is originally $600,000 granted a loan for this project which was the renovations that silvia was just talking about, but there's no new money at this point. >> in this transfer, was any government money involved? >> what was the question? >> corporate money, they have to pay to the operator some money?

>> private money. >> i think commissioner sing was asking if there was any private investment -- >> yes, they did invest some of their own [inaudible] as well. >> so, why should we forgive this 400,000? >> should we -- >> why should [speaker not understood]. >> why should we forgive the money? >> yes. >> well, we're not forgiving it now. what we're recommending is that we follow the program guidelines which states that if the business -- this business or another one that's operated by the property owner in the same manner, if it remains in operation for four years, [speaker not understood] is forgiven[speaker not understood]. that was the same for all -- any loan we would have done at the time. >> i don't know. you know, i think we should not forgive this money. is there -- >> through the chair,

commissioner singh, the sixth on sixth street, former guidelines the former redevelopment commission approved allowed for a forgivable loan structure provided the business stay in operation for a certain period of time. this particular loan agreement, because there was security against the property owner -- as security in the event of a default on that loan, allowed the property owner to step in and continue those retail operations. >> [speaker not understood]. >> just to clarify, we're not forgiving anything. it's transferring to the property owner. and if the business closes, then [speaker not understood] has to be repaid. >> i understand. >> okay. >> if it's transferred, the money is due. >> not under the provisions of the loan agreement. they're allowed to transfer the business to the property owner and that cancels the repayment provision. but the repayment provision will still apply if the new tenant closes or if the space

is closed at all before the loan is forgiven, which christine said take 4 or 5 years. they still have a couple years to go before the loan is forgiven. if you new business by the poet owner closes, they'd still have to repay the loan. so, we're not for giving anything. we're allowing them to transfer the business to the property owner, which is allowed by the loan agreement. ~ forgiving it's not ideal. i understand what you're saying. it's not ideal. >> it's not. that's what i said. >> a good way -- a good way that i've thought about this, i think which might help, what what the purpose of the investment of the redevelopment agency at the time in this space. it wasn't necessarily for pearl's. it was to take a space that was abandoned, useless, not contributing anything to the neighborhood, and return it into an actual marketable space that could be a retail space. now, pearl's was the initial tenant and pearl's is on the hook for the loan.

but the fact that now a different business other than pearl's is going to be there actually means that our loan was a success, right? we're still keeping the space occupied, which at the end of the day is the goal of the program. i would love for pearl's to still be there and pearl's is still on the hook if the space closes again. but pearl's can't continue. so, they're using the provision in their loan agreement that they're allowed to transfer the business to the property owner. >> is there any money involved by transferring [speaker not understood] got some money? >> no, in fact, the property owner is taking less rent from the new tenant than they were getting from pearl's. and that's a reinquiredthv of our program. the property owner is not allowed to raise the rent beyond the inflation adjustment during the first five years of the loan. so, we have controls in the program to make sure that the property owner doesn't benefit inordinately from the agency's investment. the purpose was to get a retail space there. now, it's not going to be pearl's any more. it's going to be this other

business, but hopefully they'll still -- hopefully they'll be more successful than pearl's was. that's why we're here because pearl's wasn't able to do it. >> can i ask a question? is the second business able to benefit from the improvements to the premises? >> yes. >> operational benefits? in other words, are they adding any more improvements, tenant improvements? >> my understanding is they are making some minor renovations to the space, but they're basically benefiting from the improvements that pearl's did. so, the pace is going to be essentially the same. ~ space they're changing the signage. they're using the equipment that pearl's put in with their own funds. they're using a lot of the things, almost everything that we paid for. some minor changes, but -- and that's why in the approval we're proposing to grant them a 30-daytime period to make those renovations. so, the business can be closed while they're sort of retrofitting for the new business.

>> is there a need -- what was kind of the rationale behind not adding the new business to the loan agreement starting now? >> yeah, that's a good question. pearl's is on the loan agreement. they're still the guarantor for the loan. the property owner, as director mentioned, has provided collateral for that loan. so, those two entities are still responsible ~. now, it's true there is a new tenant in there. right. but i don't think it would be feasible to get a tenant if that was sort of one of the requirements for signing a lease that you had to take on, be a guarantor for a $400,000 loan. >> but essentially it's saying the loan will be forgivenif they're in business for i think they have three more years? >> i think the way to interpret it is the loan will be forgivenassuming there's continuous operations in the space for that amount of time ~. the property owner and pearl's are still on the hook to make sure that happens. >> i guess the only reason i'm asking this question is if pearl's is out of business

and/or closing their location and the new restaurant comes in and for some reason in a year they find that they're not able to operate, will pearl's have kind of the financial wherewithal to repay the loan? >> we don't know that, but if they don't, the property owner has put the building up as collateral. so, that would be the next place we would go to try to recover the funds. >> that's what i was getting at. >> i have a question. >> commissioner mondejar. >> yes, so, this is a great deal for the new owner, the new restaurant, am i correct? >> the new he restaurant that's moving in ~? they're paying market rent. they're not getting discount on the rent. they're paying market rent for the space. >> market rent, but i thought you said the building owner cannot increase rent. is that the market -- is that the market rate rent? >> yeah, that's a good point. obviously pearl's wasn't making it at the rent they were charging before. so -- >> you said -- >> close to market.

>> they have reduced the rent to allow this new business to move in? >> they're collecting less total rent because the pearl's lease had a provision where there was a participation payment from the [speaker not understood]. i don't believe that's part of the new operating agreement. >> so, they're paying rent and they're benefiting from that -- from the improvements -- >> the new tenant? >> yeah, the new tenant. >> yeah, i mean, in a way. but also sixth street is benefiting from the fact there is a tenant willing to occupy the space even though the last business went out of business there. >> oh,there were other businesses that closed over there? >> no, just pearl as. >> just pearl's. that's what i'm saying. this new tenant is paying rent and benefiting from the improvements that pearl's ~ put in from the 400,000 and from the personal investments that they've made for their -- for that particular facility, right? >> yes, i think that's correct, yeah. >> okay. and is, so, pearl's really is at a loss here ~. so, they're leaving and just cutting their losses.

>> yeah, i don't think they would leave unless they didn't have any other choice. like you said, they have put a lot of time and money into the space. >> any more questions? >> no. >> i'm sorry, just really quickly. i'm amy cohn with the economic and work force development. [speaker not understood]. i just wanted to say that the transfer here, even though it's a little bit confusing, is the best possible outcome for everyone. and you can see that by the fact that the owners of pearl's, the landlord, and the new owners are all in the room and they all worked with mike and with director bohe and everyone else on this staff to ensure smooth transition. and that's really, you know, this is rocky stuff. central market is rocky. there's a lot of really great things happening, but it's also been hard from the retail perspective.

so, i really wanted to thank pearl's and thank you all for helping get them in, and thank everyone who is part of this for helping transition to the next operator. i think it will be really good for everyone involved. thank you. >> thank you. >> can i ask one more? are you saying that the gall family is here? the building owner? oh, okay. over there. so, they basically are in the hook here, right? pearl's has to make sure that the new owners make a profit, at least make a living so that the business continues and also for the tenant, the building owners to make sure that they don't end up -- their building doesn't get attached to the loan. >> right. as commissioner ellington pointed out, the building owner is on the hook here, too. their building is collateral for the loan. so, if the loan comes due and pearl's can't pay it, the building owner will be on the hook for it.

and that's the reason why we have the building on the loan, is because at the time we entered into the loan, we had concerns whether or not pearl's would be able to repay it if it came due. >> i think the staff's interpretation of the continuous business operations is correct and i move that we approve. >> thank you. there is a motion. is there a second? >> i'll second. >> commission members, please announce your vote when i call your name. commissioner ellington? >> yes. >> commissioner mondejar? >> yes. >> commissioner singh? >> yes. >> chair johnson is absent. acting chair rosales? >> yes. >> madam chair, the vote is 4 ayes, one absent. >> thank you. >> good luck, everyone. >> yes. >> madam secretary, please call the next item. but i'd like to announce that

i'm going to take a short break for about half an hour and i think the commission can elect to have an interim chair. >> i propose [speaker not understood] act like a chair in your absence. >> we have to vote on that? >> well, i support it. >> okay, i think that's fair. >> do we need to call the roll on that? >> commission members, please announce your vote when i call your name. commissioner mondejar? >> yes. >> commissioner singh? >> yes. >> vice-chair rosales? >> yes. >> and then commissioner ellington. >> yes. >> i will return shortly. thank you. >> so, the vote is 4 ayes one absent. >> perfect. madam chair, please call the next item.

>> item 5c, approving, consistent with the 2006 transbay streetscape and open space concept plan, and pursuant to the transbay implementation agreement, an addendum to the schematic design package for the folsom streetscape improvements project adding an east-bound separated bike lane, or cycle track, within the folsom street roadway; transbay redevelopment project area. [speaker not understood]. madam director. >> commissioners, member of the public, thank you for continuing to join us. this next item you heard, commissioners, you considered and approved the streetscape design for folsom street last summer and as was presented as part of that presentation, as part of our effort -- as part of the city family to incorporate the latest and greatest in pedestrian safety, good bicycle planning and good overall planning for the public realm, there was the possibility of including this separated bike lane or

so-called cycle track. what before you now is an addendum to that which was previously pre-viewed for you last summer. so, with that introduction, i'd like to ask courtney pash, the assistant manager for transbay to present this item. >> good afternoon, commissioners. i'm courtney pash, the assistant project manager for the transbay project area. as you know, the folsom streetscape improvements project is an enforceable obligation pursuant to the implementation agreement. ~ for transbay. so, i'm just going to give you a little bit of background, just to get you up to speed to where we are today. in 2006 after the approval of the redevelopment plan, the agency approved a streetscape and open space plan. the concept plan identified folsom street as the boulevard with two-way circulation, wider sidewalk, and eastbound bike lane and transit service. folsom street would be the main neighborhood retail street with

ground floors lining the north -- ground floor retail lining the north side of the street ~. the north sidewalk will be widened to 25 feet wide. that will allow the ground floor retail to spill out onto the sidewalk. it will also have granite band, perpendicular to the curb and a double row of trees on the north sidewalk and new trees in the same granite bounds on the south sidewalk. folsom street will be converted to two-way and will link transbay and rincon hill neighborhoods. in furtherance of the concept design for folsom street, the commission approved the schematic design in september of last year with the caveat that we would return to you with potential separated eastbound bike lane on the south side of the street. an analysis was completed by cmd landscape architecture

which concluded that an eastbound cycle track can be added to the south side of the street without affecting the curb location and sidewalk improvements that were previously approved as part of the schematic design. we worked very closely with mta and the planning department and dpw to come up with a scheme that both fit in with the greater transbay area and neighboring area bike plans. it will connect to the north, south cycle track on 2nd street, the future bike path through under ramp park up to the transbay transit center. it will be coupled with a westbound bike lane on howard street and other north-south bike path along the other streets going from second to the embarcadaro. as you can see here.

we looked at other cycle tracks that have been implemented throughout the city. as you can see here, here are some examples and things that we looked at. so, here's a sample, a sample block. the cycle track will run the entire length from second to the embarcadaro on the south side of the street, will be treated a little bit differently on essex street because that's a main bay bridge access point. at each of the intersections, though, there will be separate signals to try to limit, limit the bike, vehicle -- any potential bike-vehicle conflicts. the cycle track as it is developed and as you can see here will be at street with a buffer zone between the cycle track itself and the adjacent

parallel parked cars. the parked cars will act as a vertical barrier between the bicycles and the vehicle traffic. this cycle track differs from the approved schematic designs only in the elimination of a westbound vehicle lane. so, we took out one of the lanes, widened the remaining three lanes a little bit and added this cycle track on the south side of the street. so, you can see here that the cycle track, the green painted area will range from 5-1/2 to 8 feet. there will be a 2 to 5-foot buffer strip for the parked cars that open their doors and whatnot. and then there will be the three travel lanes and parking on the north side of the street. we also have looked at the

potential for adding a dedicated westbound cycle track. however, that has not gone through the full mta/dpw review process. so -- and it could result in some potential conflicts with the existing transit service from the temporary terminal. so, we're looking at the possibility that this project right now just approving the one way cycle track which will be coupled with the howard street bike lane. but it does allow for a bike by doing this at grade and how we've set up this one way cycle track, it allows for the future development of a two way of a westbound cycle track on the north side of the street. we are planning to submit the full design development documents to dpw, mta planning for all the other city agencies

to review in the summer of this year. we'll also be coming back to you with an amendment to the previously approved contract with dpw to continue managing this process from a design approval perspective and a construction administration perspective. it will take us about a year after that to develop the full set of construction drawings and then we anticipate beginning construction in the summer of 2015. and at that time we'll come back to you with authorization for funding and approval. as i leave this slide up here, i believe you got an info memo on the participation for this. this project also -- it couple together since it's one contract the folsom street improvements and under ramp park. so, i'm happy to answer any questions. thank you.

>> awesome. do we have any speaker cards? >> i have no speaker cards. >> commissioners, i'm going to open up to you guys. >> i saw everything. it looks very pretty. it looks very good. >> yeah. >> i like that. >> awesome. i have a couple questions, just a couple clarity questions here. we've seen this in the past and i guess i was wondering -- i think it we asked this last time. there was a lot of construction going on in this area ~. i know you just showed us the timeline, but are you guys working with kind of the other major construction projects that are going on in the area? it just seems like it's just a big mess down there sometimes, but if you can just talk -- speak on that for a bit. >> of course, of course. so, this project which will start next summer will redo the south sidewalk. so, aside from the lululemon na project which i believe is

between beale and spears, ~ those are mostly older buildings. >> gotcha. >> [speaker not understood]. the northern, the northern side of folsom street, what we're doing now is setting the curb line and we'll build the curb and temporary improvements. if it doesn't coincide with the construction of the major development on the north side of the street, the developers of each of those projects, those are our development blocks, block 6, 8, and 9 will build out those improvements. so, the double row of trees, et cetera. but this project is responsible for getting the curb lines and then the roadway, repaving the roadway, and this will be part of that project. >> got it. and is this consistent with the park that's under -- >> the underground park? >> yes. >> no, the underground park is going to follow about a year or two later because that has to be constructed at the same time or after the bus ramp that carries the buses from the bay

bridge to the transit center. it's going to run over the park. >> gotcha. and sorry, last question here. i'm kind of bouncing all over the place. you said that this starts on 2nd street and ends on the embarcadaro? >> yes. >> so, what -- how does this kind of fit in the overall scope of the rest of kind of market and the rest of folsom? are we just -- folks have to cut through there? i'm confused about where we start and finish. >> yeah, we've been working very closely with the planning department and their team who is working on the central soma e-i-r which is analyzing folsom street, basically including our project all the way out to 11th, i believe. so, it's, it's, you know, that's part of the reason why we're allowing for a -- we wanted to allow for a potential westbound cycle track in the future. if that portion of folsom street shifts to two-way, that would be kind of a great

connector. but as it is, they've redone the striping just within the last few months along folsom street -- second or fourth? to 11th. so, it would be a connection through this area all the way to embarcadaro. >> gotcha, okay. commissioner singh. >> it looks very, very good. >> thank you. >> yeah, but sidewalk is going to be 25 feet? >> on the north side of the street. >> yeah, but what about the traffic? >> so, so, the north sidewalk is going to be 25 feet. it's 10 feet is about what it is now, and then the extra 15 feet is from a setback that the developers are required as part of their development requirement. so, they setback their building 15 feet and that's how we get the 25 for the sidewalk on the north side of the street. >> the commute hours in the morning, it's going to be very covered there, you know. >> you know, we've been working with the traffic -- both the mta and the traffic planner at

the planning department. and actually this portion, once you get east of essex street, it's much less heavily traveled than west of essex street because people are getting onto the bay bridge from the other -- other side of the city. and from essex to the embarcadaro, it's much less traveled. it's mostly -- right now it's mostly the -- you know, it's heavily traveled by the buses going to the temporary terminal. as you know it will be relocated in 2018. >> sorry, last question. >> sure. >> so, the -- where will the bus stop, natural bus stops be in comparison to the sidewalk traffic? there will be no buses he? >> there are no bus stops on folsom street right now. >> got it. all right. >> i have a question. so, you've consulted obviously the neighborhood around that, because like i live around that area and i don't go to folsom in the rush hours because you can barely drive through. so, and yet at the same time

there are also buildings around there. and you've consulted all the neighbors and the community and all of these -- and they're signing off on this? >> yes, yes. i mean, the transit center, the [speaker not understood] plan, the transit district plan all went through the full community process. this was approved by our cac unanimously at its -- at the january 9th, 2014 meeting. so, you know, as far as the community goes and them representing -- >> 2009? >> '14. >> 2014. >> just a couple months ago they approved this, this cycle track. >> who is paying for all of this? >> we will be paying, we will be paying. >> you're paying for all of this? >> yes. >> the source of funds, ms. pash, correct me, is existing tax exempt bond proceeds, new requests of property tax through this process, the state has imposed on us the sixth

month ask for the property tax called the robser, recognize payment schedule, developer -- developer fees, other -- we have a zero call. there are agreements with the transbay joint powers authority where every single new propertied tax dollar in this district, in zone 1 which the commission has purview, all-new property tax goes to the joint powers authority for the transit center construction. all land sales, all these rfps that we're issuing, again, goes to the transit center for construction. but in the broader district, i think commissioner ellington and other commissioners point out, there is a lot of activity in construction existing in new buildings. there's new property tax that's generated from all those high-rises and cranes going on. so, we're able to, again, through our agreement with the tjpa draw on new property tax