were no power after an earthquake there would be loses. the direct losses would be up to $3 billion. you will see here the downtown area lined in red the embarcadero substation north of mission creek including south beach and south of market. this is the route for the proposed facility. this would run and enter the bay at that location. traps it south about three 1/2 miles and come back on shore around 23rd street. at the foot of portrero hill. the cables would connect to a new 230 kv bus station right jace enter to the embarcadero substation and in the portrero area, to a new 230 kv gis

enclosed substation. as part of this agreement, we've been talking a lot with pg & e about their properties at the foot of portrero. there are a lot of uses that got a switch yard that aligns in red with an open switch yard and they have an industrial use for dirt recycling near the ports property. we have done something about those uses that would house mixed use development on the east shoreline. this is an open to the east bay station is what you have in the industrial areas. you will note in mixed use neighborhoods these types of facilities are enclosed. in terms of the license terms between the port and pg & e

they will be licensing for submerging property for a 26 -year option. they will be paying the port $23 million between now and january 2015 the system would have the right to relocate the line subject to certain conditions. i showed you that switch yard, the open air switch yard, the city would have the right to prefer to be screened or encloseded in the building. we'll work with the planning department. this is a major investment. you will see from the left here some examples of the utility streeng and on the right you see what a station

looks like. much better for development. in terms of the option agreement, the dirt recycling facility on three 3 acres north of 22nd street is going to be an entrance to the mixed use development. you are going to hear about that in the next item. we have negotiated for the city to buy that property for $23 million or a little over $63 per square foot. the pg & e will have to find a new location to support the utility operations in the city. we talked last time about some environmental conditions on the property. we've negotiated a plan to clean up the property and make sure that uses are appropriate to that type of background contamination. the goal into purchasing the property is to

rezone it. planning department would work with the port on that rezoning effort. it would be subject to the boards approval. department of real estate will have a transferable option and it would go through a competitive process after it's rezoned and we have net estimated the proceeds from that work to be greater than $20 million which will go to the portrero an nex housing project. ceqa is complete, ports recommended the license to the board of supervisors. if the board approves the agreement, it will go to bcdd the water engineers for in water construction. pg & e is getting ready to go. they want to start construction in august of this year and the cable would be in service by april of 2016. thank you very much for your attention. i'm

available to answer any questions. >> thank you, mr. benson, let's go to the budget and legislative analyst for the report. mr. rhodes? >> yes, members of the committee on page 32 we report that the proposed ln to be issued by the port pg & e, pg & e will prepay rent for the initial 30 -year tim $2, 275,000. on page 33, we report that under the proposed agreement the real estate division would have the option to purchase the yard for $63.67 per square foot for a total cost. based on the prior decisions we do recommend that you approve both of these resolutions. >> thank you. mr. rhodes. we have no questions from colleagues. is there any

public comment? seeing none, public comment is closed: colleagues we have items 4 and 5 before us. can we do that without objection for items for and 5. thank you. next item. we should call items 6 and 7 and 8 together. city clerk: item no. 6 is authorizing a resolution and directing the sale of not to exceed $24 million aggregate principal amount of city and county taxable again obligation bonds. item no. 7. ordinance appropriating $24

million of city and county of san francisco taxable again obligation bonds. item 8. lease agreement historic buildings at 400-600, 20th street. for a term of 66 years following board approval. thank you. supervisors again. i'm taking items 6, 7, 8 together. city staff and office of public financing and housing and community development. we'll try to be brief. this is related to pier 70 which is a project that we've been working on for many years. we have done a master process for including parks including industrial and ship repair, new development and in this case historic

preservation, amazing buildings through pier 70, there are some of these buildings in question. they have been involved in ship repair in the 80s. these particular buildings especially in world war i and two era. they have fallen into disrepair and the port was struggling with what to do with this area and also given their age. there is serious conditions that need to be addressed in each of these buildings. we ran a solicitation project and development a work and development. and since then have been working on a project with development. they are proposing a project that would return for office uses to modern industrial uses and adding a powerhouse that would be a restaurant and public

plaza that would be an industrial staging area, the industrial character of this area but invite the dog patch and the residented into the navenltd -- neighborhood. it's this leasehold area of the premises. i have ln gone through the project's description. a project that i would characterize as heavy repair but given the age and size of these buildings estimated cost of $76 million. the port is putting money for direct capital funds put in and the city has supported this project. $21 million seismic loan which i will talk about more and the developer has secured over $41 million of capital to make this happen. talking about the seismic safety program established by the voters in

1992 and can be used for the reinforced masonry program in machine shop. it's structured, secured by the leasehold as the second loan. the developer has secured and gone through the moa cd loan process approved in may and also approved by cpc. it needs to be supported by $24 million by geo bonds. the two items in front of you. the lease is a fully participating lease. for 20 years will receive no, and the port equity will payback each with the return that we'll split the proceeds 50/50. on the current pro

form, the city will start receiving payment in 2024 to $300,000 a year ramping to almost $700,000 a year over 10 years. the net present value is about $17 million. here is our projection of events that would flow to the port over that timeframe. i have covered the important lease terms already. another things i want to point out there is infrastructure needs for this area and it's currently a closed area. there are important things to need to happen which include sidewalk improvement and removal of transformers and electricity to the shipyard next door and

park amenities. there are a number of park benefits that i will in the interest of time i will give if you acquire and a number of us are available for questions if the supervisors so choose. >> thank you. colleagues. do we have any questions? >> great. mr. rhodes, can we go ahead -- get your report. >> yes, mr. chairman, on page 38, regarding items 6 and 7. we report that the office of public finances estimates the annual debt service in the bonds is approximately 1, million, $791 and $13, 34,000 on the bonds estimate at 5.1 percent. the combined debt of interest over 20 years of the

bond is $828,000. on page 8 of the report for the property tax would be maintained below the 2005, 2006 rate. so that is the estimate. and on page 40, we do recommend that you approve this legislation. regarding item 8 on page 56 of our report, we note that in 2012. the budget and legislative analyst made a finding of fiscal fees ability for the proposed historic buildings project to rehabilitate the building to 20th street as pier 70 and we

did at the time the board of supervisors endorse the project. since that time the total estimated the cost of the project has increased by $18 million, from $58.5 million to $76.5 million. it's due to the port over the 66 -year lease term has also increased to $17 million. an increase of $1.3 million. we also report that other changes made to the term sheets since the board of supervisors endorsement 2012 include that the port will contribute $1, 750,000 to the project which is an increase of $250,000 due to the california cultural equity endowment granted. -- grant. we do recommend you approve the resolution. we have made a recommendation of fiscal feasible. we recommend

you approve this legislation. >> okay. thank you. any questions, for mr. rhodes. if not, we'll open this up for public comment. anyone want to comment on items 6, 7 or 8? please step forward. >> good afternoon supervisors. i'm a chair of the port of the advisory group. i have sent you a letter. i'm not going to repeat anything. we've worked with the port on more than 70 years of the master plan. we are very excited that that they are able to take on this challenge hopefully before these buildings fall down completely. we think it's a great use of the program. we are very excited about that

we want this approved. thank you. >> thank you very much for all of your leadership. are there anymore public comments? okay. seeing none, public comment is closed. colleagues we have a recommendation from our budget analyst to send these items forward. can i have a motion to send these items forward without ovenlgs we are going to skip to item 16. city clerk: item 16. an ordinance regarding sugar sweetened beverage. >> thank you very much for

hearing this item again. colleagues this is the third hearing we have held at the budget and finance committee on our proposed soda tax. i want to thank supervisors mar, avalos, chiu and campos for this measure. we held three hearings at the budget meeting and several hearings in different subject matters in other committees. this is a significant public health measure. we want to make sure that it is fully vetted in all of it's complexity and all the different policies that implicated before sending it to the voters. i appreciate the time and resources this committee has invested in this measure. colleagues as you recall from previous hearings, this public health measure will make san francisco hopefully berkeley

as well as they are also going to the ballot on this issue and first in the country to adopt this measure which will help us to reduce couples of soda -- consumption and other soda as that are contributing to diabetes and other health risks caused by this product. this will generate 10s of millions of dollars that will be legally dedicated because it's a special tax, legally dedicated to nutrition programs with 26 percent of the funds goes to the san francisco unified school district to support the lunch school program, physical ed and the like, 25 percent will go to our parks and recreation department for the sole purpose of expanding active physical recreation in the parks, expanding rec's

center hours and 25 percent to our department of public health for programs such as oral health programs, food access programs and so forth and 10 percent of the funds into a grant making program for community based organizations that are doing work around nutrition, physical activity and health. the measure has language providing that communities that have been disproportionately 2018 paktd by the health effects of soda and other sugary benefits particularly communities of color will receive priority and funding decisions around the measure and in addition the measure has very specific language indicating that these funds could not be replacement funds, the department cannot sweep out funds already being used for purposes for replacement of these funds

and these funds are intended and required for purposes of the measure to find additional and fund programs. this measure has received very broad and deep support in our health care community, our education community and our parks community and among various labor unions. i want to know that -- note that we have received a report from our economist. hopefully we can provide mr. yeeg ann opportunity to make comments. i do note a few of the conclusions of the other economic impact report, we had estimated that the tax would generate approximately $31 million a year. the city economist has determined that the likely range of annual

revenue from this measure will be to $32 million which is more than we had anticipated. in addition the city economist estimates that this tax will result in a decline of consumption by up to 31 percent which is a very significant in terms of improving the health of our city and when people are not drinking sodas or drinking less, they will make healthier choices whether it tea or water whatever the case maybe. the argue of the argument that the soda industry has put forward, the beverage industry has asserted that the tax won't be passed through for sugary sodas and will be spread to all products sold. we know that's not how

retailing pricing works. from 80 percent to 100 percent of the tax will be passed for the soda and other sugary benefits and also wanted to note that our economist has indicated that lower income communities will benefit from this tax in terms of improvements in health, improvements of economic productivity as well as benefitting from the specific programs that this measure will fund. so colleagues, after this, what i hope will be our final hearing at the budget committee, i along with supervisor mar will be asking the committee to forward this item to the full board with a positive recommendation. supervisor mar? >>supervisor eric mar: thank you supervisor wiener for your leadership on this issue and i want to thank supervisor john

avalos, malia cohen and david chiu for working with the six of us on this measure together. i wanted to also acknowledge that we have fred russo, our policy analyst from our budget legislative analyst that will help supplement from teddy and his staff as they show us the economic analysis that they have done. i want to acknowledge the grass roots community base coalition our soda tax in san francisco is here in force. it's an example of parent and youth power that has been built over many years of work. there has been a lot of decades of work for some in our lowest income communities that have been working on this issue for many years as well. i wanted to also say that this grass roots community coalition is not only fighting for public health, but it's also addressing the disparity

of obesity, diabetes and other health issues that are hurting so many city of san francisco san franciscans. our goal is not only improving education for key strategy for reducing consumption of sugary beverages but also looking at common sense policies like this to make our communities healthier. on the education front, many advocates and coalitions like shape up sf and centers for vulnerable populations, many groups have been working hard on education, but education alone as we have seen from research can't counter the huge amounts of billions of dollars of money spent by the soda industry in marketing especially to younger children and their predatory tactics they have used for generalization -- generations

in our neighborhoods and corner stores and different food access work that's been done over the years is also important, but common sense measures like this also add to our overall strategy in our city. as has been said before in our several other hearings, children born in 2000 or around that time, that's my daughter's generation, if we do nothing, 1/3 of those children will grow up to have diabetes and to be obese. it's like 1/3 of the population that we are talking about. i think common sense measures like this are addressing a crisis that's on going and existing in our neighborhoods. this is also local problem that impacts all of san francisco, but there are some neighborhoods that are impacted even more heavily. as more people know whether it's a walker from the bayview hunters point area or

folks from chinatown and admission that diabetes is exploding in san francisco. an it's an on going problem of health that is expanding and increasing over the last 30-40 years. i wanted to point out that map of diabetes hospitalizations quickly. this has been shown from vargas and ucsf that it's the communities of color and low income that are the ones hospitalized for diabetes. you can see the eastern part of the city most heavily impacted. when you look at poverty and low income populations, even more closely to the census tract, you will see it's not just in these areas but where you have low income populations and people of color as well. i wanted to

also say that other issues of liver damage as presented by christina and other department of public health folks and other types of health problems are also somewhat hidden. i have another example of health disparity. this is using cavity and oral health which shows that higher rates of cavities and oral and dental problems occur in many similar areas but also very different than diabetes. the data from this one comes from our department of public health. we have color coded this one so you can see there are key neighborhoods not on the in the key part of the city but particularly where there is areas of large immigrants and like chinatown and polk and large number of chinese and immigrants live as well. i think the keypoints i'm

trying to make that this soda tax campaign is about equity and addressing the needs of our communities. the $30-50 million that supervisor wiener said that this soda tax would generate would go to the schools and programs for help in the schools and lunches and healthy nutrition, 25 to parks and 25 percent to department of public health in our city and with an a competent approach to raise awareness and reduce the harmful beverages and foods as well. the last point i want to make before we hear the analysis from teddy and his staff, i wanted to say that the issues of public health are an epidemic in our city and our country. the financial impacts are critical as well on our

city. earlier, fred bruso, the analyst from the office gave us an estimate of how much it cost san francisco city government with the crisis of diabetes and obesity only, it's not even talking about liver, metabolic syndrome and oral and dental health problems but even estimating the couple of diseases and health problems that diabetes and obesity, the estimate was between 48 and $61 million for the cost to the city for those problems. the city is on the hook for another $28 million for other related impacts from obesity and diabetes. i think the impacts are pretty clear. the money generated will go in an equitable way to help with public health issues in our city. i think there is a lot of the young people that are here who have been working in our neighborhoods. i think we are putting forward a

historic measure in san francisco that we hope voters will pass in on and off. -- in november and it's a reasonable. the economic analysis presented will show the decrease in consumption is even larger than what we had anticipated. there are estimated about 30-40 percent reduction of consumption. i think that's a really good sign. also the revenue generated is significantly higher than what we initially estimated as well. the last point i will make this impact of reducing sugary consumption, benefits the city which is our goal for our true health sf coalition. i want to thank supervisor wiener and his staff for the work they have