the resolution before you. i handed them out. the first amendment is on page 1 line 4, i think that's 4 or 5, in the amount of 4.5 million which expires on june 30th, 2014. there is also an additional amendment to line 9 through 13 which is underlined and highlighted, and a few other clerical changes. and i wanted you to take a look at those and make a motion to accept the amendment to the resolution, which are mostly clerical and mostly inserted in order to meet the requirements of the grant application. >> okay, thank you very much. colleagues, these recommendations. mr. rose, why don't we go to your budget analyst report, please.

>> mr. chairman, members of the committee, supervisor breed, on the bottom of page 29 we state that the estimated project cost to rehabilitate 1500 page street, [speaker not understood] mercy housing is available funding sources total 10,341,519, which is 16,639 more than the estimated project costs. and table 5 on page 30 of our report shows the various funding sources [speaker not understood] for mercy housing 1500 page street project. on page 30, bottom of page 30, we report that the average cost per unit for constructing the 1500 page street affordable housing project for developmentally disabled adults is 6 07,346, which is 49% higher than mohcd's average of 408,98 4 per unit. on page -- the bottom of page

32, we he report that if the city purchases 1500 page street, pays the balance of the private loan by east/west bank, [speaker not understood] gives the city's outstanding loans to [speaker not understood], the net loss to the city is 3,0 58,269. however, this loss is 5,1 94,[speaker not understood] 38% less than the 4,65 3,0 90 that the city would incur by not purchasing 1500 page street and this is shown in table 7 on page 33 of our report. we have a recommendation on page 33, mr. chairman. i'm not sure if the department is stating that they don't want to report back to the board of supervisors. our recommendation, and i'll read it, we he recommend that you amend the resolution to request the moch -- mochd to report back to the board of supervisors during the june 2004 budget process on the reliability of financing sources for the 1500 page

street project, alternative financing that will be available if the project is not awarded to low-income housing tax credits or other major source of financing and the impact of the 1500 page street and other pipeline projects on the city's access to future low-income housing tax credits and mochd's procedures to manage project costs once the project receives the funding and proceeds to net the accuracy of the appraisal and purchase of the property and further mitigate the risk to mohcd the gap in affordable housing such as requiring identifies i believe back up financing plan, we recommend that you approve the pro prosed resolution as amended. i don't see any [speaker not understood] i say only good in the department reporting back to the board to let the board know about this project which has had problem after problem over the years. >> okay, thank you, mr. rose. supervisor breed. >> yeah, i wanted to add this project has been vetted by the community and is widely

supported by a number of groups in the haight/ashbury area that are traditional at odds with one another. it is an incredible project. this were mistakes made in the past and i've been working with the mayor's office of housing to make sure that we put safeguards in place to ensure that we don't run into those situations in the future. sadly, more money would pay for the properties than the property appraisal should have -- from the mayor's office of housing should have caught that the property value was appraised higher and the loan that was given was a lot more than what it should have been. but at this time it's better that we move forward with the project and not walk away because we he stand the ability to not only lose a significant loan because we have no way to recoup it, but more importantly the opportunity for this

particular housing for developmentally disabled individuals, we have a great partner with the arc. we have a great plan for this property with mercy housing and i think we can really make this work. and unfortunately a higher dollar value than anticipated. so, i'm not very happy about where we are and the mistakes that have been made and the dollars that are going to be lost as a result of this, but it's better to move forward with this project than not. >> okay, thank you, supervisor breed. any comments on the budget analyst recommendations for [speaker not understood]? mr. lee, maybe i could ask your perspective. >> clearly we will keep the board informed. in term of the progress of our project, and we'll be happy to do that as part of our budget presentation for our office. i think the question was just whether we would have to have

another hearing or would written communication to the board be sufficient. but if the board would like additional information as we present our budget as part of the mayor's office, we'd be happy to do that. >> so long as it's part of it i think your overall presentation we're fine. >> okay. >> if that's already going to be part of the plan anyways. >> we can make it part of the plan. >> okay. colleagues, if no further questions we'll open this one up to public comment. anybody wishing to comment on item 8? larry juicy edmonds. [speaker not understood]. i know that mercy house is very great. they are better than tndc. and i know this by true, by experience. mercy housing knows how to work with people or help people with aids, people that are gay, people who are not racism.

mercy house has a history -- i don't know anyone in this city who complains about living in all the mercy housing buildings whether it's the one on 10th and mission or the one that they built at the ballpark in the mission valley. great. so, i think this is a good thing for the [speaker not understood] because, remember, there was a time when the walgreens wanted to move up to haight street. they burned it down. [speaker not understood] the people come together to feel good about this. i think this is something that needs to go ahead. and like you say, most of mercy [speaker not understood] marvin gay would say, mercy house does not do bad things for habitat for humanity and people's lives. this has to be a good 37 or 17, probably 1500 page. that sounds good. i think it's a good thing. and you can bet that people will have some type of [speaker

not understood] humanitarian habitat and humanity if they're living there. not the way we survive at tndc ambassador. thank you very much. >> thank you. anybody else wish to comment on this item? yes, good afternoon, supervisors. my name is ken dunn. i'm from mercy housing. so, i just wanted to say that mercy is really excited about this development. mercy, as many of you already know, is a nonprofit housing organization that builds -- manages affordable housing, about 30 properties in san francisco. mercy is really excited to be working with the arc of san francisco. as you know, this property will serve a population that is low-income and developmentally disabled. the arc approached mercy in 2011 about this huge need for this particular population. [speaker not understood] has no

other options in san francisco. mercy went to the mayor's office of housing in search of sites to fill this need. they referred us to the owners of the property at 1500 page. as the previous proposal had not been able to be financed. the arc and mercy found that the site was really well suited for the needs of the arc tenants -- residents and the neighborhood, as you know, has been very rich in resources, amenities, transit rich, et cetera. since that time, mercy has succeeded in securing that $2.3 million grant for capital from hud and this fund will allow us to also be eligible for the $6.6 million worth of tax credits.

hud also awarded us ongoing operating subsidies which will allow the tenants [speaker not understood] their income toward rent. and lastly, as supervisor breed mentioned, you know, we're really gratified by the support that we have received in the neighborhood from both the [speaker not understood], the neighborhood organizations as well as all the immediate neighbors. >> thank you very much. next speaker, please. hi, good afternoon. i'm jeff [speaker not understood], i'm the new director of housing services for the arc. i just wanted to talk a little bit why this project is so important to us. you know, in the last five years, our ability to place persons in independent living situations has dropped by about 80% and there are really not any other options in san francisco right now. when our clients need to leave where they're currently living, they basically get shipped out of the city into a group home pretty far away from here, away

from their friends and their families. so, also living situations are probably one of the biggest roadblocks to getting employment also for our clients. so, haight street is an opportunity not only to improve the lives of 17 people, but also to kind of help them with their -- thanks. to help them with their goal of becoming tax paying citizens which they pretty much all want. so, thank you. >> thank you very much. any other members of the public wish to comment on item number 8? seeing none, public comment is closed. [gavel] >> so, colleagues, we have the recommendationses from our budget analyst to report back during the budget process. motion to take those amendments. >> i move to take those amendments and supervisor breed's amendments, too. >> yes. so, we will take, first of all, the budget analyst recommendations. we can take those without objection. [gavel]

>> supervisor breed's amendments, can we also take those without objection? so moved. [gavel] >> [speaker not understood] those are not substantive? so the underlying amendment, we can take that? >> [inaudible]. >> we have a motion, we can take th without objection. [gavel] >> madam clerk, can you please call item number 10? >> mr. chair, i'd like to request that the department provide us with the amendment legislation before 9:00 a.m. tomorrow morning. >> okay. [speaker not understood], if we could get the amended legislation to our clerk's office by 9:00 a.m. tomorrow. thank you very much. can you call item 10? >> thank you. item number 10 is a resolution approving and authorizing the execution of a lease agreement for cargo building 900 and related areas on plot 50 no. l14-0054 between federal express corporation and the city and county of san francisco, acting by and through its airport commission, for a minimum rent of $6,817,955 for a term of five years commencing upon the first day of the month following full city approval but no earlier than july 1, 2014, with one option to extend the term for an additional five years. >> thank you. we have cathy wagoner here from sfo. welcome back. >> thank you, mr. chair.

cathy wagoner from the san francisco international airport. the airport is seeking your approval for a new lease with federal express corporation for approximately 58,000 square feet of office in the warehouse space as well as, skew me, .151 acres of ramp space at sfo. [speaker not understood] one term for an option to extend for an additional 5 years. it carries a base rent of approximately $1.3 million per year for a minimum rent amount of $6.8 million over the entire term of the lease. as the budget analyst report does point out, the lease before you has less square footage than federal express's current lease at the airport. we understand from the tenant that they are reevaluating some of their own business practices and incorporating technology that allows them to have the goods spend less time in the warehouse. so, that in addition to them consolidating some of their

region alpha sitsv explains why they are requesting less square footage than they currently have. that being said, airport is happy to keep federal express as a tenant at the airport and the budget analyst report does recommend approval. but i would be happy to answer any questions that you might have. >> okay, thank you. colleagues, any questions? seeing none, mr. rose, can we go to your report, please? >> mr. chairman, members of the committee, on page 37 we show a table 2 which shows that excluding annual [speaker not understood] increase he the minimum rent over the term of the proposed lease is $6,8 17,955. we recommend that you approve the proposed resolution. ~ >> thank you, mr. rose. colleagues, any questions for our budget analyst? seeing none we'll move on to public comment. anybody wishing to comment on item number 10? seeing none -- ray edmonds. you'd be surprised what i know about federal express. federal express was actually

small business started in little rock, arkansas where i lived. they didn't have an international airport so he they moved to memphis, tennessee. that's why the memphis [speaker not understood] federal express is there. so, i think this is a good idea that we give them some southern hospitality here so that it will give us a chance to. more people to deal with, the old south in the past. ~ to have federal express i'm altos happy to see them because i know it's a arkansas-tennessee connection. when there was no international airport to memphis tennessee coming to san francisco, sfo. thank you. >> thank you. anybody else wish to comment? seeing none, public comment is closed. [gavel] >> colleagues -- >> [speaker not understood]. >> motion move forward with recommendation, we can take without objection. [gavel] >> madam clerk do we have any other business in froth of us? >> no, mr. chair. >> thanks.

we'll have a 15-minute break until 2 o'clock. we are adjourned. [adjourned]

>> so what brought you out here for the bike ride today? >> i grew up in san francisco but i have been living in new york. i wanted to see what san francisco is doing with infrastructure. >> cities are where people are living these days. the bay area is doing a lot with construction and the way to change the world starts here. >> we are about to take a bike ride. we have 30 cyclist. i'm really excited to hit the road and see what the city has in store.

>> i definitely recommend it to people. it's a fun afternoon and you learn so many things. >> this is so much fun. i go to parts of the city that i don't come to. this will make the city a more susta