good morning everyone to my right is supervisor david chiu and i'd like to acknowledge staff today and i guess first before we begin colleagues is there a motion to excuse

supervisor breed from the meeting today. all right without objection and madam clerk lisa miller are there any announcements you would like to make? >> items acted upon today will appear on the agenda unless otherwise stated. >> thank you and madam clerk can you please call item number one please. the schlage lock project. >> what we have before us today has been informed by an extensive community process the participation and feedback began over 13 years ago and we've had exactly 18 public meetings about this project everything from design principals and design controls

as well as community public benefit. after the closure of the schlage lock factory -- to develop a plan for the reuse and revital ization and concluded with the adoption of a redevelopment plan zoning changes that detailed a master plan to help guide change on this particular site however with the demise of the redevelopment agency in early 2012 it's required us to reassess and give a fresh look at the communities goal for this particular site. it's been challenge to move this forward but the community and

especially the board members have been flexible and rolled up their sleeves to work with us to reenvision to make this project a reality. what you have before you today includes a grocery store, new infrastructure and transportation improvements new public parks and open space affordable housing restoration of the historic office building payment of development impact fees and a special transportation fee and most importantly a significant investment in the community. this project has had true community support from the

beginning and there's only not a day that goes by that i don't hear from neighbors about development projects that have been going on in the district. i've never seen a project in a neighborhood like this one that's come together to shape a project that has not only good for the neighborhood but really good for the entire city. countless hours working with staff on every component of this project and while the disillusion has resulted in many changes and compromises the community and developer has been with us every step of the way so colleagues i hope you will begin to join me and we have a couple of folks that are going to be presenting here today. first from the mayors office and then we'll hear from

the budget and legislative analysts and finally we'll hear from the city economist our representative from the office so first let's bring up ken rich and emily who have dedicated countless hours. >> good morning supervisors. how happy we are to be at this point and how proud we are of the community for hanging with us and being so supportive so if i could go to the slides. supervisor cohen very kindly did my first slide for me so i won't dwell on it we are really faced with a dilemma how to get this project moving when it clearly did need some kind of subsubsidy so this is the first

project that was supposed to be a redevelopment project but didn't quite make it so we're happy and proud that we found another way to move forward with this project. so in working through kind of rescuing the project our strategy was to achieve a market rate of return so the develop or had incentive for the project and giving us the community benefits we needed and as you can see on the slide we accomplished this we revisited and tight ened the public benefits package and prioritized it and made sure we were getting the most important

benefits and de emphasizing the lessor ones and approximately the $50 million that we lost from redevelopment and you will hear more about how we did this further on in the presentation. you see up on the slide the basic diagram of the project. it's 12 blocks on 20 acres it started out with the remediation of the entire site and the san francisco department of public health this has been underway over the last several years and is nearly complete and the develop or will be required to put in all the new roads and other infrastructure. 15 percent of which must be permanently affordable to low income households and the other 85 which will be market rate but given the prevailing prices

those market rates will be affordable within the reach of households in the city and we're very very happy to meet that middle income goal. project overview a couple more statistics primarily a grocery store 2 new parks and the rehabilitation of the historic schlage lock office building and i'm going to call up my colleague to take you through just a few more slides on the details of the development agreement one thing i forgot to mention this project is in front of this committee for approval of the development agreement and in front of the planning department on monday. >> before you go i have a quick question and i'm not sure if

emily is going to discuss in her remarks but i'm curious to know what portion of the projects does prevailing wage apply to? >> prevailing wage applies in the development agreement to the infrastructure part of the project so all the roads sewers and landscaping those kinds of things the reason that prevailing wage applies to those parts of the project because we're a city subsubsidy helping to make that work. >> could it be applied to the vertical. >> so the answer to that is through a development agreement we can apply a prevailing wage to the vertical. we have the ability in the development agreement to require that we can not do it purely as a

condition of entitling the project but because we have the development agreement we can legal ly do that, yes. >> great thank you very much. all right miss emily. >> hi good morning supervisors so the documents we handed out include the development agreement and the more detailed summary than i'm going to give so feel free to ask questions about those documents as well as this higher level of review. as you know the development agreement is a legal ly binding contract locks in the develop or's right to build the housing units so long as the developer follows a pre-determined set of design controls and provides a public benefits package above and beyond what would be required under regular zoning so infrastructure parks

streetscapes and historic preservation so as long as the develop ors do conform to the development controls and agreement the approval is going to occur on the administrative level. our goal was to maximize the public benefits but to do so without over burdening it. so as ken described if his overview includes a number of public benefits. he mentioned that the develop or is required to put in new roads and sidewalks which must be designed to city standards and dedicated to the city once they are complete. .

current visitation visitacion. the grocery store which must be a full service grocery store and must occur during the first phase of development and must be located at the corner of bayshore and develop or is also required to build 2 parks once the parks are complete the recreation and park department will acquire them at a below market price which is locked in in the development agreement and operation and maintenance costs for the for the first 22 years of operation and rehabilitate the historic building at the northern edge of the site and finally the develop or will pay impact fees

water and wastewater charges. the transportation consists of the development fee as well as a special impact fee which supervisor cohen mentioned so for the latter fee the develop or will be obligated to pay the fee rate which is justified and has been completed but that fee has not been instituted citywide but it will be required for this project. the development agreement also commits the city to provide support for the project without which the project could never get off the ground and so the city's contributions will consist of funds from the

transportation authority to offset the costs and an additional 1.5 million to fund the pedestrian connection as well as off sight infrastructure projects and the project will receive 4 and a half million dollars and this price is substantially below the appraised land value and especially advantageous deal for the city the develop or will cover the cost of park development and the first 22 years of maintenance and credit back a portion of the projects in consideration for the many community benefits that will be provided so specifically the in kind community benefits that are justifying the impact fee credits the transportation fee and community space being provided within the historic building as proposed these fee

credits will total $8 million reducing the total amount of these fees to around $10 million. the development agreement has a term of 15 years after which the develop or's entitlements will no longer apply. these documents are the design for the development and master plan which will be heard on monday in land use. and hiring for all construction and use commercial jobs as well as prevailing wage including roads utilities and historic rehabilitation and there's a phasing plan to ensure the parks and other public benefits is delivered at a pace which

includes mandatory meetings as well as meetings for each proposed development phase and building. amendments to the development agreement will require approval by the planning commission and board of supervisors and finally all of the rights of the development agreement are attached to the land so if the develop or transfers any portion to another part it will still be subject to the development agreement. the development agreement has undergone minor revisions but you do have in front of you now a memo describing those changes as well as print outs of the updated exhibits and clarified

that any affordable housing project would not be subject to our special transportation fee on residential development and section 6.4 to increase the frequency of community meetings from a minimum of one meeting annually to 2 meetings annually and added language to section 6.1 stating that the develop or note that we are still in negotiations about when that payment will be due and clarified in a proposed amendment we've added language to exhibit f. in the unlikely event that this type of delay occurs. if the develop or

chose not to issue this perform bond the completion of housing units and finally we added the subordinatation agreement says that any lenders to the project would be required to first sign which states the lender would still be subject to the development agreement with that i'll turn it back to ken. thank you. >> that's the conclusion of the presentation. if you want to do questions for us now or hand it over to the next presenter. it's up to the committee. >> do you have any questions? no. >> okay let's bring up the next presenter from bl a. >> good morning supervisor tang

and cohen and we submitted our report on monday on this proposed development agreement and i believe that the office of economic and workforce development has adequately described the agreement. one of the things about the ordinance before you approving the agreement is that it does in fact have a finding that the board by approving the agreement that they are determining this project is in the best interest of the city. and that's consistent with chapter 56 of the administrative code. in terms of our report if you look on page 10, table 3 of our report this project will generate revenues to the city. there are various fees it will be

generated, $24 million and the transit impact development fee in addition to code requirements but there are some offsets in terms of certain fees providing transportation and transit services but overall we estimate 24 million in one time revenues and in terms of ongoing revenues these are basically tax revenues generated not only to the city and that's 7.6 million. the city itself will be putting in one time as well as ongoing expenditures table five on page 11 the cities one time expenditures are 8 million. and then part of this would be

the city to purchase park land in that development 4.5 million. the recreation and park department represents to us this is in fact below market value. in terms of the parks themselves the develop or will be responsible for developing the parks and maintenancing them for 22 years so if you look at the summary on table 7 page 12 we actually see one time net revenues 16.4 million and we see ongoing annual revenues about 5.5 million what we perceive to be the city's cost and we recommend approval. if you have any questions. >> seeing no questions i just want to acknowledge you and the work you have done on this

report during the budget cycle thank you i know it wasn't easy but on behalf of the neighbors i appreciate it. thank you. >> okay. our next presentation and final presentation will be from the city. ted egan please. thank you. >> good morning supervisors. ted egan controllers office of economic analysis. what i'd like to do here is walk you

through just some of highlights of the report. essentially it effects the economy in 3 main ways a great deal of construction as a result of the project and additional spending and in the long-term there's also downward pressure on housing prices in the city which will expand personal income and employment in the city. in terms of residential construction we're talking about the construction of up to 1679 projects as i believe ken eluded to the prices of these projects even market rate projects are considerable ly less than than elsewhere in the city. overall the residential

construction component of the development, we estimate in working with an outside consultant to be to be $573 million and that will be phased in by 2026 when construction is expected to end. this we estimate will be around $65 million worth of construction. in terms of the new housing units there's projected to be 1268 for sale a point 2 percent increase in the supply of rental units in the city and that level of construction would make housing prices in the city drop by point 8 percent and market

rents point 2 percent in the city. just to put those numbers into context today point 8 percent of the average housing price in san francisco is about 73 hundred $7,350 and so these benefits of lower housing prices would be across the city and raises income directly for the households benefitting from that subsubsidy and benefits the broader economy. 57 million in community benefits and affordable housing subsubsidy effectively $53 million of personal income and a decrease in market rents across the city of point 2 percent phased in over the construction period

and decrease in-housing prices of point 8 percent by the end of our projection period the city's economy will have a gdp increase for the city and the city's economy is expected to expand about 985 jobs an average annual number. including an average of 340 construction jobs during the construction period and post construction employment gains are associated with the higher personal income in the city and also the employment needed in the non residential part of the project to support the new population and that's a summary of our report. be happy to take any questions that you have. >> seeing no questions thank

you mr. egan for your work on this project. >> so madam chair i'd like to go ahead and move into public comment if possible. >> all right so public comment is open just want to remind you you have 2 minutes. first we have nelson please come up to the podium nice to see you. >> thank you good morning. glad to be the first one here just to kind of get it moving because it's been a long time took us a long time to get here and to get to the end of this but that's a good thing because we know there's some consistent cy and today hopefully get to the next step of the approval process. i do support the project. that's 10 to 15 years ago back when i was a little

kid i won't age myself. but the community has been involved from the very beginning. even the developer. we've seen a lot of changes with the mayors and supervisors and one thing that's been consistent is the community. the community has always been at the table asking for more pushing for more and we do want to be involved as it goes forward. it's a long time but the community is going to be there i don't have any plans of moving out of the visitacion valley so i do recommend approval for today. >> okay so chris bennett and nelson and mat and marlene

jonathan and fran martin. okay go ahead. >> good morning supervisors and president chiu. time moves quickly as we get older and it's easy it's really not been that long since 1849 when san francisco really got going so really live in a very young city and the 15 years since my husband and i bought our home in visitacion valley have flown by and i'm grateful to know a part a part of the city that i might not otherwise have known. my name is chris ba r.n. ett and participated in the planning fight and served as an advisor under the redevelopment agency and advice or to the

project after and became a booster for a lessor known neighborhood but a wonderful one doing my part and san francisco's borders extend further than they think and we must act collectively. transportation infrastructure changes -- cut me off but i do speak in support of this project thank you very much. >> thank you very much. next speaker. jim. >> good morning committee. my name is jim growdin i'm affiliated with the visitacion valley planning alli