[gavel] he >> move approval. >> so moved. [gavel] >> madam clerk, would you call item 15? >> item 15, resolution retroactively approving a lease agreement with san francisco unified school district of real property at 1235 mission street for the human services agency, at an initial rate of $216,014.33 per month for a term of 11 years and 10 months from july 1, 2014, through april 30, 2026. >> great. welcome back, mr. updike. >> thank you, chair farrell. director updike, director of real estate. this particular project was in city scape by john king this spring and i thought i'd take the opportunity to use that visual for you. it's a very cool building. and the architecture has been described by mr. king as moorish make believe. so, i figured how many times will i get the opportunity to say that at this committee? so i had to bring that to your attention. [laughter]

>> we're very excited to bring you what really is a partnership agreement between the city and the san francisco unified school district. this is actually the largest single leased premises by the city as tenant in the general fund family. county adult assistance program and the cal fresh food stamps is located here. we've been in this location since 1993. it was a creative financing agreement between a third-party ownership, a lease to sfusd and a sublease to the city. then in the end of august 2013, after the dee feesance of the debt, the school district became the owner of the property ~. so, now we are here for a direct lease between the school district, its owner and the city as tenant. and the terms i think work very well for both organizations. so, let me outline those briefly for you. this is an 11-year 10-month term taking us to april 30th, 2026.

the lease rate starts at $22 per square foot. it rises to 28.50 per square foot in the last two years of the term. the city will provide a capital infusion of approximately $2.5 million. that will be matched by a capital infusion from the school district of $3.5 million, used to refresh this now 20 some year old asset in terms of our occupancy in the building. much of the school district's contribution goes toward energy efficiency and sustainability of the asset. that's going to lower operating and utility costs, and the structure of the lease has the city responsible for those costs. so, that's why we see this as really a partnership agreement, each benefiting from the improvements made to the facility. there are two five-year extensions of term. those would be at 95% of fair market rent, which is described in the lease agreement, and there's also an early

termination provision. after a period of 10 years six months in occupancy, just in case there is some other opportunity we desire to explore. while we don't suggest this is a class a asset, i do want to note that those rates ranging from $22 a foot to start and 28.50, you've seen me here before. you know what the rate structure is, particularly in the civic center area and the soma area. the cheapest thing we can find tends to be in the high 30s, low 40s, upper 40s, low 50s per square foot. so, we're in the 20s. so, city is certainly happy with this agreement. i want to thank the school district for their efforts. cfo is here. if you have questions from their point of view, they really worked hard with us to put this together. it took a good year to negotiate these terms and we're pleased to have a 12-year agreement to bring before you. >> congratulations, mr. updike.

okay, no questions for mr. rose, we'll move to your report on item 15. >> yes, mr. chairman, supervisor mar. on page 58 we know the total rent over the ten-year lease term is 35,256,045. that's shown on table 2 of page 59 of our report. we also report, supervisors, on page 60 that in the first three years of the lease the sfusd and hsa will also spend up to $6 million on capital improvements. sfusd will contribute up to 3.5 million and hsa will contribute up to 2.5 million and that's described on page 60 of our report. we recommend that you approve this resolution. >> okay, thank you, mr. rose. no other question, we'll open this up to public comment. anybody wish to comment on item 15? seeing none, public comment is closed. [gavel] >> supervisor mar? >> yeah, i just wanted to thank mr. grasielli, the chief operating officer for the school district.

i know the ten years i was on the school board, the cleaning up of the fiscal health of the school district really it's like night and day compared to 10, 15 years ago in the school district. but i think this is a great way be -- approving this is a great way to continue that amazing partnership between the city and the school district. >> thank you, supervisor mar. could i have a motion to send this item forward? >> so moved. >> we can take it without objection. [gavel] >> madam clerk, can you call item 16, please? >> item 16, resolution authorizing the department of public health to submit an application to the metropolitan transportation commission for up to $990,000 in the active transportation program. >> good morning, supervisors. patricia irwin with department of public health and as noted, i'm here requesting your approval of a resolution to submit a grant application on behalf of the san francisco safe routes to school program to the active transportation program of the metropolitan transportation committee -- commission. as you ma recall, this program

safe routes to school promotes safer, healthier and more fun ways to get to school such as walking, biking, car pooling, and active transportation. mtc is requiring local agencies to submit a resolution as part of the grant application package. if funded, department of public health will provide leadership and evaluation to implement an innovative pilot proposal for school years 15, 16 and 16-17 for a total of $990,000. the proposal includes partnering with san francisco unified school district, sf environment and sfpd on education, encouragement, enforcement and policy. i'm happy to answer any questions you may have. >> thanks very much. okay, seeing no questions or comments, we don't have a budget analyst report so we'll move on to public comment. anybody wish to comment on item 16? seeing none, public comment is closed. [gavel] >> yeah, i move approval. i'd like to be added as a co-sponsor of this as well.

thank you for the great work to make our streets safer for kids and families as they go to school. >> okay. and we can take that without objection. [gavel] >> madam clerk, can you call item 17, please? >> item number 17, resolution retroactively authorizing the lease of real property for five years, for approximately 1,800 square feet of space at 258a laguna honda boulevard, with choo laguna, llc, for use by the office of the public defender at the initial monthly rent of $3,500 from estimated commencement date of july 1, 2014, through june 30, 2019. >> okay, thank you. mr. updike, you're getting quite a workout here. >> thank you, chair farrell. john updike, director real estate still. this item is 258a laguna honda boulevard, [speaker not understood]. under prior ownership, ownership [speaker not understood] simply

self-renewing leases. i have the ability to execute those within certain parameters and so within the administrative code we have taken care of that until now when we have a new owner who desired a longer term agreement, we thought that was also beneficial to the city. and, so, we have now before you this five-year lease with a renewal option for another five years and as a result of negotiations we're actually decreasing the rent of office space, which i find startling. and i'm very pleased to bring you a deal that has the rent rising from $3500 a month to about $39 50 a month in year five ~. that's 23 28 square foot a year ~ and i mentioned what the rates are currently so you know where we stand from a market perspective. the increaseses are set at 3% per year, so, this gives some fiscal stability to the public defenders office's budget and

certainly going forward five years from now. and then the market reset is at 95% of fair market rent upon renewal. this is to allow them to serve the juvenile justice facility just down the street on woodside. so, happy to answer any questions you might have about this. >> thank you, mr. updike. seeing no questions, mr. rose, can we go to your report, please? >> yes, mr. chairman and supervisor mar. on page 63 we report that the rent will increase by 3% per year for the last four lease years under the proposed five-year lease. and janitorial serve is ~ services will increase 5% per year. it's shown on table 3. the public defender will pay a total [speaker not understood] over the five years for the 1800 square feet of office space. we recommend that you approve the resolution. >> okay, thank you, mr. rose. we'll open this up to public comment. anybody wish to comment on item 17?

seeing none, public comment is closed. [gavel] >> so move approval. congratulations at reducing rent for the first time i've ever seen. >> thank you. we can take that without objection. [gavel] >> madam clerk, can you call item 18? >> item number 18, ordinance amending the police code to require the director of cultural affairs, or his or her designee, to waive street artist certificate fees for honorably discharged veterans and to grant refunds to honorably discharged veterans who file a refund claim on or before july 1, 2015, for any fees collected between january 1, 2009, and july 1, 2014. >> good morning, supervisors. i am howard lazard, street arts commission. we are the ones who license free artists on locations designated by the board of supervisors. the street artists pay fees for the examination of their fares

-- of their wares [speaker not understood]. the police code specifically article 24 regulating street artists does not expressly exempt honorably discharged veterans from these fees. now, this proposed ordinance, as you just heard, would require the arts commission's director of cultural affairs or his or her designee to waive the street artist fees for honorably discharged veterans upon proof of honorable discharge. and in addition, it would require the granting of refund to discharge veterans who file a refund claim on or before [speaker not understood] for any street artist fees they paid between january 1st, 2009, and july 1, 2014. the whole point of this ordinance is that it would be

consistent with california state law, specifically california business and professions code section 16 001.7, effective january 1st, 2009, which prohibits government entities from charging certain business license fees to honorably discharged veterans ~. you should know that the arts commission has already issued refunds to honorably discharged veterans for fiscal year 2013-14 so this proposed ordinance before you would allow refunds for fees paid earlier to january 1st, 2009. and, again, i can't overemphasize the fact that it would be consistent with state law. >> okay, thank you very much. no questions, there's no budget analyst report here. so, we'll move on to public comment. anybody wish to comment on item

18? seeing none, public comment is closed. [gavel] >> i move approval. >> okay. we can take it without objection. [gavel] >> madam clerk, can you call item 20 to 24 together, please? >> item number 20, ordinance appropriating $106,095,000 of the 2014 series earthquake safety and emergency response general obligation bond proceeds to the department of public works in fiscal year 2014-2015 for necessary repairs and sigh mike improvements in order to better prepare san francisco for a major earthquake or natural disaster. item number 21, ordinance appropriating $57,840,000 of the 2014 series earthquake safety and emergency response general obligation bond proceeds to the department of public works in fiscal year 2014-2015 for me repair and seismic improvements in order to better prepare san francisco for a major earthquake or natural disaster. item number 22, resolution authorizing and directing the sale of not to exceed $106,095,000 aggregate principal amount of city and county of san francisco general obligation bonds, series 2014d; prescribing the form and term of said bonds; authorizing the execution, authentication, and registration of said bonds; providing for the appointment of depositories and other

agents for said bonds; providing for the appointment of depositories and other agents for said bonds; providing for the establishment of accounts related to said bonds; providing for the manner of sale of said bonds by competitive sale; approving the forms of official notice of sale and notice of intention to sell bonds; directing the publication of the notice of intention to sell bonds; approving the form of the preliminary official statement and the form and execution of the official statement relating to the sale of said bonds; approving the form of the continuing diskale you're certificate; authorizing and approving modifications to documents; declaring the city's intent to reimburse certain expenditures; ratifying certain actions previously taken; and granting general authority to city officials to take necessary actions in connection with the authorization, issuance, sale, and delivery of said bonds. ~ 2014 d. item number 23, resolution authorizing and directing the sale of not to exceed $57,840,000 aggregate principal amount of city and county of san francisco general obligation bonds, series 2014c; prescribing the form and terms of said bonds; authorizing the execution, authentication, and registration of said bonds; providing for the appointment of depositories and other agents for said bonds; providing for the establish ~ 2014 fees. item number 24, resolution providing for the issuance of not to exceed $400,000,000 aggregate principal amount of city and county of san francisco general obligation bonds; authorizing the execution, authentication, and registration of said bonds; providing for the levy of a tax to pay the principal and interest thereof; providing for the appointment of depositories and other agents for said bonds; providing for the establishment of accounts related thereto; adopting findings under the california environmental quality act, the ceqa guidelines and san francisco administrative code, chapter 31; finding that the proposed project is in conformity with the eight priority policies of planning code, section 101.1(8), and with the general plan consistency requirement of charter, section 4.105, and administrative code, section 2a.53; ratifying certain actions good morning, nya. >> thank you for having me here today. i'd like to thank devin for getting this done in such short time. i am nadia [speaker not understood] from public finance. you have before you four

legislationses. the first one is ~ with regard to the esa 2010. the board is approved $112.3 million in 2010. this will be the fifth issuance an amount not to exceed $57.8 million. we are proposing to sell only $55.17 million. the need for that higher amount is to be able to address any change in market conditions. the proceeds will fund various projects under the access safety emergency bond program. it includes the number of emergency fire water station system, neighborhood fire stations, public safety buildings as well as cost of issuance. we have [speaker not understood] from the department of public works who can give specifics on the project. there is also a 2.6 million that will be reserve spending from the sale of the bond. we expect the annual did the service to be approximately $4.4 million.

we also anticipate that interest rates if we were to go to market today would be about 3.45%, even though what was recently proposed the document you have before you shows 5.02%. that said, this will be amortized over 20-year. the federal debt service for the 2010 will be $87.6 million. there is also an appropriation for the present amount. the other piece of legislation is in regards to the [speaker not understood] emergency response bond for 2014. the board just approved that june 2014. this will be the first sale from that bond authorization. it's $406.1 million and an amount not to exceed, [speaker not understood] 101 million and would also fund similar projects. it would include the district filling stations, traffic [speaker not understood] and forensic services division as well as a component for the

medical examiner facility. it would also [speaker not understood] and we are also proposing that we put 5 million aside on the [speaker not understood]. the annual debt service for that would be $8.1 million. [speaker not understood] over 20 years. the impact of the home ener, 5,000 homeowner [speaker not understood] 12.5 million and for esa [speaker not understood] is 22.96 million. both transactionses, as you know, the [speaker not understood] imposes a limit of 3% of the assessed valuation ~. this issuance would bring it to 1.21% which is way below that capacity that is allowed under the charter. additionally, as you know, the capital plan also imposes a limitation of not exceeding the 2006 tax rate level, and this

maintains that policy. in addition to that we've also included various documents that include the official notice of [speaker not understood], notice of intention to sell, the official statement as well as an appendix a, which is included in the official statement. the official statement is updated through march of this year. we still need to update to reflect the information that's been recently released including the mayor's proposed budget, the controller's revenue letter as well as the most recent election results. by approving this you're delegating the authority to the controller and staff to update to reflect that. due diligence is scheduled for appendix a next week and we have meetings with all three rating agent if. we hope [speaker not understood] lehman market sometime in august. thank you.

>> congratulations for getting to this point. no question right now. we'll move on to our budget analyst report. >> yes, mr. chairman and supervisor mar. on the bottom of page 69 of our report, we report that for the series 2014 c bonds owner with a residence of [speaker not understood] would pay average annual additional property taxes of $12.54 per year. for the series 2014 d bonds, this is on page 70, the owner of a residence were an assessed value of 500,000 assuming the owner exemption of 7,000 would pay average annual additional property tax to the city of $22. per year. we recommend you approve the proposed resolutions and ordinances. >> okay, thank you, mr. rose. supervisor mar? >> yeah, i wanted to thank deputy chief [speaker not understood] for being here, former police captain from the richmond. i think that the bond will really help with the upgrade

through the district police stations. also the relocation of the medical examiner facility and the upgrade to the traffic company and forensic services division. but i just thank you for being here and were appreciative of the voters impacting the bond. >> okay. we'll open this to public comment. anybody wishing to comment on items 20 through 24? seeing none, we'll close public comment. [gavel] >> i want to thank supervisor mar for his comments and [speaker not understood]. can i have a motion to approve these item? we can take that without objection. [gavel] >> madam clerk, can you call item 25, please? >> item 25, resolution declaring the intent of the city and county of san francisco to reimburse certain expenditures from proceeds of future bonded indebtedness; authorizing the director of the mayor's office of housing and community development to submit an application and related documents to the california debt limit allocation committee to permit the issuance of residential mortgage revenue bonds in an aggregate principal amount not to exceed $375,000,000 for 1500-1580 mission street; authorizing and directing the director to direct the controller's office to hold in trust an amount not to exceed $100,000 in accordance with cdlac procedures; authorizing the director to certify to cdlac that the city has on deposit the required amount; authorizing the director to pay an amount equal to such revenue bonds; approving, for purposes of the internal revenue code of 1986, as amended, the issuance

and sale of residential mortgage revenue bonds by the city in an aggregate principal amount not to exceed $375,000,000; authorizing and directing the execution of any documents necessary to implement this resolution; and ratifying and approving any action heretofore taken in connection with the project as defined herein, and the application as defined herein. ~ mission street. >> okay, thank you. >> good morning, supervisors. joan mcnamara, senior project manager, mayor's office of housing and community development. i just ran 30 blocks. [laughter] >> the resolution before you is a resolution regarding qualified mortgage rates new bonds for 1500 mission street. a residential housing development sponsored by related california. although the resolution authorizes the director of mocd to submit an application for the california debt limit allocation committee for permission to issue -- >> ma'am, why don't we give you one second to catch your breath. thanks for running over here. we don't want to do harm on a budget item, number 25. [laughter]

>> i think i'm fine. >> at your discretion here. >> although the resolution authorizes the director of mocd to submit an application to the california debt allocation committee to issue such bonds, the primary intent of securing the bond's approval now is to declare the intent of the city and county of san francisco to reimburse certain costs from proceeds of the future bond indebtedness. once the project has been fully approved by the city, we will need to return to the board of supervisors for permission to actually issue the bond. currently, related california is proposing approximately 565 housing units, 80% or 452 units will be market rate and 20% or 113, will be affordable.

as with all residential bond issuances, the city will need to comply with city contracting provisions as well as standard loan cd affordable housing guidelines for the affordable unit. and i'm not sure it's related -- not? okay. so, matt wood of related california is available to answer any questions you have as well as you can answer -- ask any questions of me. this concludes staff reports. and i'm so sorry i had to run. >> no worries. thank you for being here. much appreciated. we have no report on 25, right? okay. no questions at this time. we'll open this up to public comment. anybody wish to comment on item number 25? seeing none, public comment is closed. [gavel] >> so move approval of the resolution. >> okay. we can take it without objection. [gavel] >> madam clerk, can you call item 26, please? >> item number 26, resolution approving an exclusive negotiation agreement and letter of intent with related

california urban housing, llc, for the potential city purchase of an office building to be developed at 1500-1580 mission street at an estimated purchase price of $253,000,000 and authorizing non-refund amount payments of $1,000,000 toward land acquisition costs and up to $250,000 toward schematic design costs. ~ mission street. >> thank you. thanks for sticking around, mr. updike. >> it is my pleasure, chair farrell. >> we'll call your item next time. >> this item is well worth waiting for. so, greatly appreciate your time on this. we might be one of the longer presentations, but we are a couple of minutes before the lunch break. so, if you don't mind. so, quick overview here. this is a 2.5 acre site located at van ness and mission and, actually, i believe we need to tee up -- there we go, thank you. just currently owned by good will. our partner in this venture related to california would be the acquiring agent of the

property and there would be a subsequent transaction between related and the city. we'll get into the transaction details a bit later, but i want to give you the overall context of why the city wants to move forward with this and why this is an important project. it's a partnership. a public private partnership, not perhaps the most classic sense, but nonetheless it is a privately delivered project that fulfills the city's space needs well into this coming century. it also is a mixed use development. and mr. woody will speak to that if a moment as well and why this is important to related. out of this will will come an office building that suits the city's needs a we try to consolidate our presence in the civic center and try to stabilize our cost, but most importantly this provides efficiency of city operations and provides efficiency of service to our constituents. so, i'll speak to that briefly.

this is a consolidation of staff out of number of properties, 30 van ness, portions of 1650 mission, portions of 1660 mission, 1680 mission, and 1145-55 market street. this provides proximity to transit. so, it's great to have public services on this property. as you know, we have a strong foothold on the block at 1 south van ness at the corner of van ness and market that strengthens the foothold of city services. most importantly it provides a robust one-stop permit center that we have long sought in this organization. it's not just dbi and planning. if you can imagine a permit the city issues, it will be issued from this location. constituents will go to one address and not be shipped around the civic center trying to figure out which office they need to go to.

we will service them here. and service them quicker. additionally with dhr currently located at 1 south van ness, there is a training element as part of the space plan for this location, but also it's an opportunity to consolidate our other employee services, retirement and health services, creating a one-stop city employee location as well. so, that's the overall strategy that we have been looking to accomplish for many years. we think this is one of those last opportunity sites, so, we're excited to be able to present this to you. you know the city's presence in the civic center and where they are located. we do have a desire where possible to move into ownership. this accomplishes that. i'll speak briefly to the transaction after mr. woody. i want to note that because

it's a privately delivered project we have a very aggressive timeline. we feel confident we're going to be able to meet that timeline. we have a very aggressive pricing. i'll speak to that in a moment as well. it's really because it's a [speaker not understood] turnkey project [speaker not understood] upon completion. if i can ask mr. woody to come up and present you some other details and related perspective, and then i'll close. >> yes, good afternoon. i'm matt woody, partner with related california housing. i want to briefly walk you through the concept that we have developed working collaboratively with john updike's department and also with city planning. this site, as john indicated, is a unique site in the civic center, market octavia district, slightly over 2-1/2 acre site at least in our search for an opportunity to

develop multi-family housing, feel it's really one of the most unique or one of the best sites we've come across. also one to provide a true partnership between us as a private company and the city. we [speaker not understood] has a long track record of doing very important civic buildings as well as housing, to work with us. and mr. updike's department. and have come up with a ken except tail plan that has been reviewed with city planning. the site divides the [speaker not understood] in half. the northern and eastern portion of the site basically would become a build to suit for the city of approximately 4 62,000 square feet. i'm going to walk you through the initial massing concept for that in a second ~. importantly, this portion of the site is contiguous to a building that the city already owns.

it runs south van ness. so it really is literally and figuratively a consolidation of the city departments. one of the objective of the master plan we've been working on is to give the city a presence on van ness, and also to accommodate a programmatic requirement, very large well played -- something very hard to do. ~ anywhere in the city, but particularly this part of the town. and at the same time, create a project that would be a good partner or good neighbor to the 565 units of residential that we are building on the south and western portion of the site. as this slide shows, one of the fundamental pedestrian objectives of the property was to make it easily accessible for any member of the public or staff that were coming to the building either through mass transit on market and many muni lines that run there