housing and infrastructure program that is part and parcel for mission bay and i would like to ask christian maher, a real estate specialist in our division to work you through the item. >> thank you, director bohee. the items for you for consideration are a memorandum of understanding a 5th amendment to the mission bay south owner participation agreement and release agreement. each of these documents relates to the planned acquisition of blocks 33 and 34 by ucsf for expansion of its reserve campus and necessitated by the university's exemption of a state agency for local land regulations and property taxes. before getting into the details of the transaction, i would like to give you a brief overview of the items that i will cover in the presentation this afternoon. i will start with background on the site,

ucsf and the documents that govern development of the site, followed by discussion of the main terms of the proposed agreements; the findings of benefits that we are required to make under redevelopment law, environmental review and conclusion and next steps. blocks 33 and 34 as director bohee mention ready currently owned by an affiliate of salesforce.com and comprise 3.8 acre sites. as you can see it here on the map bonded by 16th street to the north, illinois to the east, mariposa to the south and 3rd to the west. this allows for wide variety of uses including office, retail, laboratory and manufacturing. medical clinicks are permitted as a secondary use if certain

criteria are met. blocks 33 and 34 are subject to a pilot agreement, which was recorded against the property in 2010 by fockil. >> excuse me, christine can you make sure to speak into the microphone. >> sure. >> thanks. >> the purpose of the second opa amendment was to prohibit the transfer in mission bay south of property to a tax exempt entity without obtaining agreement from the entity in payment equal to the full amount of taxes that would have otherwise been assessed or obtain written consent of oci, if such an agreement was not going to be in place. the existing pilot agreement that is recorded against the property satisfies this prohibition by requiring any tax exempt entity such as uc to make certain payments in lieu

of property taxs to ccii. now some background on ucsf, which is a leading medical teaching and clinical institution and the second largest employer in san francisco. ucsf is exempt under the state constitution from local planning, zoning and redevelopment in furtherance of its educational purposes. it is is also exempt from paying local property taxes. as you also know ucsf already has a very strong presence in mission bay south. the city and master developer, donated 43 acres for its research campus and in 2005 ucsf acquired new property in the south for the new medical center. we'll refer to the map. on the map you can see the relationship of blocks 33 and 34, to the medical center, as

well as the campusing. ucsf is now in discussions to purchase blocks 33 and 34 to expand the campus site. this will allow uc to consolidate some of its operations by relocating from other remote areas located within the city. next uc has proposed development program and the purchases of blocks 33 and 34 will include the rights to construct up to 500,000 gross square feet and park spaces and one tower. ucsf has not identified the time use for blocks 33 and 34, but is generally proposing to develop with office and retail offices. ucsf will not construct secondary uses such as medical clinics without executive

director approval as required by the plan and additional ceqa review as necessary. now a summary of the documents or agreements governing the sites. i'm on page 7 of the presentation. blocks 33 and 34 as we mention ready subject to the south redevelopment plan, as well as the south opa and the pilot agreement and all of these documents are recorded against the property and would normally remain on title when the property transfers to a new owner. ucsf has requested the ocii's release under these agreements to reflect exemptions. these obligations primarily include annual payments in lieu of taxes, our standard design review and design approval procedures and contracting

local hire and workforce programs. the release has the potential to reduce the amount of tax increment generated in the south plan area, which would thereby negatively impact oci's ability to meet it's affordable housing and infrastructure obligations in the south area. so to avoid these potential impacts ocii has negotiated the memorandum of understanding, as well as related agreements as a condition to granting release from these obligations. now i will walk through the agreements that are before you for consideration this afternoon. the first of these is the mou between ocii and the uc regents. the mou contains the terms under which ocii would release uc from certain obligations under the south plan, the opa and the pilot agreement. some of the key terms of the

mou first, the affordable housing payment. this is a one-time lump-sum payment from ucsf to ocii of $10.2 million for the construction of affordable housing. ocii hired alh to conduct an independent analysis of the tax increment that would normally be generated by proposed development through 2023. alh's scope included a similar analysis and key assumptions used in the analysis and independent calculation of the estimated net present value or npv of the tax increment that would have been generated. the result of this analysis was an npv calculation of $39.8 million of total tax increment. the affordable housing payment

is 25.6% of that total amount which exceeds the 20% ocii would receive if the property were developed by a taxable entity. next is the infrastructure payment. ucsf has agreed to make a one-time lump sum payment to fockil. according to fockil, this payment is roughly equal to the il. according to focil, this payment is roughly equal to the value of the amount focil would have received if developed by a tax-paying entity. next the cfd payments, under the mou ucsf has agreed to pay the special taxes authorized by cfd no. 5, which funds the maintenance of parks and open space in mission bay south and

cfd no. 6, which helps fund infrastructure costs in mission bay south. ucsf has also agreed it will develop the sites with uses that are consistent with the land uses in the south redevelopment plan. in addition, ucsf has agreed to substantially is comply with the development development with streetscape plans and any variance will require approval by this commission. ucsf has agreed to make design presentations to this commission and ocii. finally, u ucsf has made a commitment to pay prevailing wages for all construction work.

now the 5th amendment to the south opa. in order to effectuate certain provisions of this mou, ocii and focil need to enter into this 5th amendment, consenting the transfer of blocks 33 and 34 by the current owner to ucsf subject to the requirements being met. ocii and focil will release the current owner pertaining to blocks 33 and 34 conditions upon receipt of the affordable housing payment and the infrastructure payment and execution of the mou and focil's separate infrastructure agreement. and finally the release agreement. ocii, the current owner and uc must enter in into the propose

adgreement, agreeing supposed the effects of the south redevelopment plan, south opa and related development. providing all of these documents will actually spring back into place if block 33 and 34 are no longer used for the educational purposes. under redevelopment dissolution lou amendments to enforcible obligations in this case the south opa are permitted only if the amendments would be in the best interest of the taxing entities. the acquisition and development of blocks 33 and 34 will provide significant public benefits to ocii, the city and the other taxing agencies. including the affordable housing payment that we just

discussed, the payment actually exceeds the amount of tax increment that otherwise would have been generated and this in turn reduces the need for tax increment funds for the production of affordable housing in mission bay south. it also provides immediately available funds for the production of affordable housing and infrastructure as opposed to payments over time. this will accelerate the completion of development and the related enforceable obligations and likely result in consolidation from remote locations in the city. these properties could potentially return to the city's tax rolls and generate new general fund revenue for the city and other taxing entities. these agreements do not propose any new capital expenditures by ocii or any change in ocii's method in financing the redevelopment of mission bay south.

>> excuse me? can you talk up a little bit closer to the speaker? >> next, the citizens advisory committee. a presentation was made to the cac on march 13th. the cac was in support of the acquisition. and asked it be involved with the diagnose of design of the project as it moves forward. now on to ceqa findings 1998 a final environmental impact report. staff has reviewed all of the agreements and therefore, no additional environmental review is needed that the time.

the commission's approval of all of these agreements will be conditioned on subsequent approval by both the board of supervisors, the over sight board and ultimately the department of finance. the city's consent to transfer to uc f without a pilot agreement in place will be considered tomorrow by the budget and finance committee followed by the board of supervisors in may, the mou, the 5th amendment and release agreement will be considered by the board of supervisors acting as a legislative body of ocii since the affordable housing provisions of these agreements are considered a material change to the mission bay affordable housing program. the 5th amendment will then be presented to the oversight board for approval in may, after which it will be referred to the department of finance for approval. once all of these approvals will have taken place, the regents have until october, 2014 to close escrow and make

the affordable housing and infrastructure payments and after that from our perspective is the review of the exterior design and overall site plan by ocii, as well as the community. that concludes the presentation. there is a number of people in the audience who have representatives from ucsf, representatives from focil and amy herman from alh, as well as others to answer any questions that you have about the transaction. >> thank you very much, public comment on this item? first speaker. >> there seems to be a kind of coming together here. karyn woods, chair of the mission bay cac and also a member of the ucsf community

advisory group. so i can't get away from this stuff. [laughter ] the mission bay cac is very supportive of this proposal. we feel that the in-lieu payments are very good for mission bay they will jump-start some of our affordable housing, and infrastructure development. i'm sure that both the mission bay cac and the ucsf citizens advisory committee will be involved in looking at design as this moves forward and i'm sure that ucsf will be involved in our transportation planning as we move forward and things really start coming together in mission bay. again, the cac welcomes your commission's involvement in this community outreach process and hope to see you at our

meetings. >> ace washington. >> ladies and gentlemen i'm here clearly to show a parallel of the mission bay compared to the western edition. in your forward agenda, i will speak about the leasing situation with yoshi coming up here. let me talk about this mission bay situation, just to give you a little historical. the cacs in this city were created by willie brown, okay? i am going to tell you when it started to take place the most powerful organization by the federal government to fight against the redevelopment agency, waapac and i'm on the straight and narrow road to show how we have been divided and how there is disparity in

race in our community. now mission bay, you have all of these other communities that come up with the cacs that were put together by willie brown. now me and another brother that i know, randal edwards were fighting hard to get some recognition for the wapac that we reinvented, but the city and county didn't want that organization involved. so the clever willie brown put together the cacks that are basically in my opinion, just basically rubber-stamped -- excuse me, rubber stamped for these developers and their intention was to look out for the community. i was at a ribbon-cutting when pelosi the definition of community is "unity." there has

been disparity and cronyism and conspiracy. you say ace, why are you showing the parallel? the parallel is to show there was something put together by somebody who controls this city, which i feel is willie brown that put something together to be in touch with each and every development in the city and county and san francisco and somebody has put the cap on the western edition and say don't worry about that. the western edition is mine and when i want it to be revealed, i will. that is what my assumptions and beliefs and studies show that mr. willie brown jr., the man has a bridge named after him is controlling the western edition. that is why we don't have any cac and we don't have cbd or merchant's association and that is why we don't have jack frost in the western edition. i'm just going tell you, because in my story, i am

going to name the names and show the cases that ace has been doing. >> roscoe james >> good afternoon, my name is oscar james. ucsf. to me it's one of the best medical facilities in california. i was born there 67 years ago and i wasn't supposed to live. i support them 100%. things i'm asking for, i know you can't force them to do, but i would like them to come up with a scholarship for some of the young people in our community, who want to go into the medical field.

i also would like for them to recognize the certificate of preference when they do build these houses that the certificate of preference from the redevelopment agency be honored. and that is about it. i think they are doing a tremendous job. i like what they are doing. but we need to have more people from bayview-hunters point, as well as mission bay, as well as potrero hill being hired more. i know the city has a new memorandum of understanding. we have a memorandum of understanding; that is a grandfather clause from 1970. which guarantees 50% community, 35% contractors, and we want that memorandum of understanding upheld with mission bay and any other project on the side of 280 to 101. thank you very much. >> thank you very much.

okay so i would like to open up for questions for fellow commissioners? i know i have a couple. okay, i will start. so i guess generally speaking i want to start with a couple of things about ucsf's mission and how they interplay with development. i think in theory i get it, when we talk about the spring-back provisions, and the sort of maintenance of the property for the mission of ucsf. but it starts to get a little bit fuzzy for me, when i was reading when would be the line over which we would determine

that a use for the property wasn't part of ucsf's educational mission? they are such a large institution and do so many things that there are many potential educational uses that someone from the outside could look and say that is actually a business, or some other type of entity. and so i guess i know that the plan hasn't been hatched yet for what the space will be used for, but i was wondering if someone could talk you alittle bit about what are the bounds on what an educational mission use look like. >> christian maher development specialist. if you don't mind, i would like lara yamyoshi would be better able to answer that question.

>> thank you. commissioners lara yamyoshi vice chancellor. the state constitution defines the university's as teaching and public service and the clinical care that it provides as part of its public service mission. as you know, we teach students and trainees in our professional schools and our educational programs are part of our mission. we also train residents and post graduates in our post-professional degree programs. in addition, we perform research, and our activities both in the laboratory environment, as well as in an office desktop environment are

part of our mission. and then further that involves partnerships with other organizations and entities with whom we do research. but we are limited by how much of our space we can make available to those other entities. particularly if they are for-profit entities. in addition, we provide patient care both in the inpatient setting and outpatient setting. and at mission bay, we would be providing such patient care both on our medical center site and we have outpatient clinics on the land north of 16th street where we'll be continuing to see patients and a possibility that we may have a clinic on the blocks 33-34

site as christian maher indicated that use would not be allowed without a secondary use finding by your executive director. so that is generally the parameters of our mission as we anticipate performing it on this site. >> thank you very much. so i guess then my next question is about the space itself and then i have a couple more, but i will make sure anyone else wants to speak. about the office space itself, i understand there was one tower that is zoned in our documents for 160'. the podium building. in the analysis of tax increments it was split in two

spaces, 275,000, 225,000 square feet and i was wondering does that still translate to their being only one tower? it was just a little confusing to me. >> the analysis was done by alh urban economics and we didn't take into account building types in that analysis. we just looked at the amount, the 500,000 gross square feet that was being purchased from sales force and that was plugged into the analysis. there are obviously many different ways it could have been broken up, but the phasing that you see is what was provided by ucsf as expected what they could do on that site. >> i guess it does make a difference.

one just for thinking about what the design will look like? that is later. and second, in the analysis the phasing is sort of -- they use the numbers that they came up with their analysis per square foot on the analysis for the phasing and they put it out across like five or six years in their present value calculation for increment. so it kind of does make a difference. it's kind of material. it's millions of dollars. so i guess my question is then maybe it's for alh what were their assumptions there or maybe it's for ucsf, why was that the assumption that was passed to

them? maybe ucsf. i will make it easy for people. >> commissioners, so we don't know exactly how we're planning to develop this site. but what we purchased from sales force was the right to develop one tower up to 160' limited to a 20,000 square feet floor plate above the podium level. so it is our intent to develop the site with that in mind -- under those parameters. with respect to the phasing, we developed assumptions about development on the site with the intent of locate ing some of our activities that for example are now in leases that are expiring in the 2018ish

timeframe, 2017-2018 timeframe and that it would accommodate some of those leases. that is where we kind of identified a timetable for the first building. we did not anticipate that we would have the resources to develop the entire site at once. so we also looked at the major phase application that was filed by alexandria real estate equitis that anticipated two buildings on the site with a parking garage in the middle. now that with like a 300,000 square feet building on one end and 200,000 building on the other end. so we reviewed that design or at least that site plan to see if that might be something that would work