that's - (laughter) >> we're san franciscans. >> yeah. thank you. the project is located on fremont street north even if howard street adjacent to the transbay transit center as well as assembly bill requires that 35 percent of the residential unit in the transbay area be made affordable to low to moderate homeowners and with the stand alone unit and 15 on site 14 percent affordable housing on all resident projects in the zoned area. the redevelopment plan gives the commission the permission to meet the affordable housing requirement if it results in practical hardship enforcement

will constitute an unreasonable plan and their unique restraint applicable to the property it gives the commission the authority to approve a variation to secure the goals and the related documents. one 91 fremont street is a mixed neighborhood high i rise project in zone two of the project area designed by the j paul company it's currently under construction and was approved in 2014 it's a 52 story seven hundred foot tall building containing 4 hundred thousand square feet of office and for sale the highest 15 floors of the tower and have 15 thousand feet of retail and 16 thousand

square feet of sub terrain parking spaces and in compliance with the on-site requirement the project requires that 11 of the 74 unit be available for low income families. the project developer estimates that hoa fees will exceed 2 hundred $0.34 thousand dollars per month are the are developer has requested the 11 on site variance from the demonstration the 11 on site be converted to market rate and $15.85 million for the project area. this project is unique in that it's the only mixed neighborhood office and housing development within 9 project and it has the

smallest units and the residential units are located on the upper 15 floors. given those unique characteristics the creation of the practical difficulties will be there because of the hoa fees are already high will increase over time such as the original resident will not be able to afford those and it will have an hardship on the resident. hoa fees could not be adjusted and no help for the residents when the monthly increases occur as initial occupancy they can be increased without the owners and

constitute a small minority and this will make owners sell their units. the con cared group talking about the market rate unit they've analyzed the demographic and supply and demand and comparable to develop the revenue estimates for the 11 proposed b m r unit. they concluded $13.8 million is the net revenue that will accrue to the developer. the $13.85 million is 2 1/2 times the fleeing fee under the dollar housing it will affect e effect the units within the project area ocii will use the

money on transbay block 8 just two blocks from the site. ocii is on track to meet the transbay affordable obligations of 35 percent to date ocii has completed one hundred and thirty units on block 11 and provided funding for other units under construction on block 6 we have 85 affordable units on block 7 and construction will commence in 2015 other 2 hundred and 86 in block eight and nine they've facilitate 6 hundred affordable housing on block 2, 4, and 12.

custom 86 the affordable units will achieve the transbay obligations. the payment of the $13.85 million as a condition of the granting the veterinarians requests insures that will not be detrimental to the public welfare ocii will use the payment to complete the obligation specifically ocii will use the $13.85 million to fund the units on a ocii evaluated site but fund 24 more units. again staff is programming the majority of the fund for transbay block 8. as required the commission

approval of the variance request will be subject to approval by the board of supervisors and in capacities as the protective body for ocii because it constitutes a material changed in the ocii programming and additionally because the project is in zone two the planning commission and board of supervisors will consider approving the development agreement with the developer consistent with the action i'm here along with the property owners to answer question and madam secretary do we have speaker cards >> we have one and (calling names) >> good afternoon, commissioners thank you i'm with the council of community housing organizations here to express our support for the change there are clearly significant issues

raised business owner around the hoa dues this addresses that problem we want to say in general we don't want to see this effect the mixed neighborhood to the rental building but clearly this is the out liar in the types of building we want to commend the methodology using a third party consultant to look at the opportunity cost and come up with a number will probably become a significant point of reference in our work to be able to point to a project that can contribute one $.5 million per unit that will go to building affordable housing in the area so thank you very much. >> thank you. any other speaker cards >> no more speaker cards.

>> no other. we'll close public comment questions from commissioners >> i just want to know what is the expeditecy in the past the j p company has in building - >> yeah. >> you want to speak to that. >> please go to the mike. >> state your name for the record. >> jeanette ceo j paul company we've been in business 35 years and own 35 thousand square feet of office space in the bay area and throughout california we're an experienced developer we hire topnotch architects and although this is our first building in

san francisco we come with significant experience. >> but you never had anything in san francisco before. >> no, but we've been based in san francisco for the last 20 years our offices are here in embarcadero and what else do you have in san francisco. >> say that again. >> what else. >> we have subsequential 40e8dz in susanville and mother-in-lawville and own property in san diego. >> okay. thank you. >> yeah. what is the total price of the project? that is the cost of the project. >> no, no you know the project. >> the total development costs is there an estimate and again,

i'm going to turn it over to it's that a little bit different in zone two a privately held parcel so i believe that jay paul bought it from a private developer we don't have the same information for the project that we have for other projects. >> i still, you know, you know that. >> perhaps janet if you want to give an approximate estimate of the project costs development costs. >> so i a ball park? probably between i'm trying to think do the mental math quickly >> so you don't know.

>> not offhand it's probably in the 6 to seven hundred. >> joe i don't have a calculator. >> i wasn't prepared to answer that question i apologize. commissioner mondejar >> courtney having i have a question several questions actually. so i'm concerned that this building it's not going to have affordable unit i understand that the hoa fees is an issue. but at the same time, i just feel like we're getting $13.85 million in view and giving up b m r unit that's over one million dollars per unit in the market rate later is going

to cost more when their solid considering the market >> the b m r markets will still generate some revenue in the $200,000 range a difference of the unit sold for market rate. >> is that how the 13 passenger seat point - >> yeah. >> seems like the issue is we're assuming the b m r owners wouldn't afford the hoa dues and yes. >> why. >> the hoa dues are front yard both into the purchase price but it increases over time the hoa dues can create a hardship the

association can vote to increase others dues another my amount so considerably the b m r units the hoa can increase the fees and that will create additionally, a burns on the b m r owners it could be so beg your pardon to have to sell their units because of the fees. >> isn't that their decision not our b m r owners will be buying into the building knowing that hoa dues can increase. seems like we're making decision for the future owners they can't afford it they're not able to negotiate their hoa dues if at all it increases >> through the chair commissioner mondejar. historically when you look at market trends hoa dues are never

stateic buildings age over time this is a unique building it's seven hundred feet tall with the top 15 floors of that building it's going to be one of the taut tallest building west of the mississippi bargaining the transit center this is an xoifld building with a unique circumstances and the policy decisions the commission knowing that those hoa dues you can't predict the future those hoa dues are $2,000 a month we know they'll rise that will have an effect on the ability to pay and certainly upon resale it take

into account those hoa payments estimated at the time as well as the ami price so down the line people can go in you're right they without their consent the hoa dues can rise there's no ceiling to which the hoa rise the state law doesn't stop short of foreclosure where 13 there's an negotiation an equality program record on the property so the city has the burden of proof to step in and make the payments on the ongoing hoa payments in fact as the hoa dues rise over time we believe they will the resale price will go

down further it's more than likely that b m r holder will not recuperate their investment and the city will be kicking in more money for the 11 unit at the top of the high-rise building we need the dollars for the project two blocks away >> i understand that. i understand that but my concern is this is a that precedent we're taking as was indicated i'm concerned this unique building is not going to have a b m r component and we're contributing to creating a very elite building with no affordable units that's two of my concerns >> he hear you i know it's a unique situation in that the building is 25 percent

residential in not a full residential those are required to have the one site affordable requirements. >> yeah. i had similar concerns when i read the memo i think one follows the unreasonable well except i read the memo this is not the impression that staff intend the commissioners to get my initial reaction when did this high hoa fee be equivalent to a burden on future owners when was that discovered when was that known in the front of the project is that frankly an excuse. >> i think it's also think been

an issue for unit those are super high ends unit that are different from projects in the city really. but you know the hoa has it a factor in for sale inclusion >> is this the first time we've experienced those fees and in transbay yes, in other parts of the city their loudly to fee out that's one of the examples for the fees for other areas in the city, you know, when a would have been about $500 million vs.

$13 million that's true citywide and hey fees and for sale inclobbery projects are challenging in the fulsom the jazz center a mixed neighborhood project they were cases unfortunately of at the former. that handled by the form commission the b m r holder was unable to pay the hoa are the mortgage and a removal suit taking place to take back the property it's not just in the the downtown transbay district or other districts that's a challenge overall that the city must face with for sale products. >> those units are being offered

to one hundred percent ami and that's standard the example was one hundred percent ami everyone is paying the same amount south of market the difference is the hoa fees will rise more than likely we know that hoa rise over time in condominium projects but to the baseline for this mixed neighborhood office residential project the floor starts at 2 hundred thousand that was lower but under construction now and as they refine their documents to submit to the draels we are exploring to see if in home

ownership buildings a way to create separate hoa's for the inclusionary it's not possible in this case. >> why not. >> the inclusionary will be swartd not possible to only include the hoa not physically and impractical possible. so that particular solution i described is not applicable but maybe applicable too on the that have inclusionary we're actively looking at. you other questions is essentially the $13.85 million that's a better number than better number perhaps under a

different story scenario we would have seen my question because the conquered groups report is dates october 2013 we're almost a year later are we not leaving money on the table essentially because the market has champed it's certainly gone up is there someone who can explain >> yeah. i was going to introduce tim for the conquer group talking about himself he method documenting. >> good afternoon, commissioners i'm with the conquer group courtney was clear about the numbers it was done on a unit by unit uncertain heights

the study was november last year to look at comparable properties with those kinds of views and those kinds of things it's hard to understand the unique and a half what was looked at the limited set it's a unique building on top a class offices that don't have many buildings we see a lot of transactions there's been significant uptick it in real estate but evidence in building that are be transacting it's the high-end that are sticky throughout the rest of the city you see 12 or $1,300 a square foot there's not

much but it's hard to see from then to now the variance, and, secondly, of course, the b m r numbers can change we're seeing right now as you look at the affluence in the city of san francisco the medium number is moving as it relates to the hoa and the calculations we did, you know, there's real movement on the b m r. and thirdly, you know this is a situation we're looking at a up to this point in time that's not billed yet the crystal ball methodology to try to understand the dynamics videos the market potentially there's room but a

$13.85 million and pricing it, it's a valid assumption if you have any questions, i'll be happy to answer them >> i don't have any questions i appreciate the explanation thank you. >> do you or anyone have questions. >> i'd like to continue. >> okay continue to another meeting and yeah. >> study is some more. >> i agree. i'm not ready to vote >> well, we can either make a motion to continue. so i have a motion to continue do you want to - >> i'll second that. >> okay motion to continue. made and second call roll >> commissioners. >> commissioner mondejar.

commissioner singh. commissioner chairperson rosales. >> yes. i agree with my commissioners. madam chair the vote is 3 i's. it will be properly noticed so the commissioners can study this further. thank you. next item >> next order of business approving a ground lease lease for a promisey note with the lincoln pool for a 59 unit affordable housing serving the low income families at block 49 with the phase hunters point shipyard redevelopment area discussion and action 2014 madam director. >> thank you madam secretary commissioners you've previously taken action on block 49 the

partnership within young community developers that was a macarthur site that lamar has donated and provided along with the fees lamar is paying the full cost and you've previously taking taken action and the low agreement this is the last step this is we're pleased with that 30th the shipyard project manager no pam will present this item. thank you >> we're having a bit of a technical glitch but i'll precede and i'll catch with the power point presentation. good afternoon as follows: i'm pam the development specialist

here to present open item h the ground lease with the development 350 block in the former hunters point shipyard in the project area. specifically the request to approve a ground lease to respect the option i previously approved the ground lease it necessary for the fidel street with the rental housing unit and one manager unit for 50 percent medium income or ami the unit bedroom is 26 two bedroom units and one and two bedroom units also. the approval for that peeped

project began with the approval of the sixth amendment in defenseless 2012 then in october 2013, the occ commission approved the schematic design and you approved the option to ground lease quickly you approved so the developer so apply for variances so they can apply for various funding for the development and the developer did secure both it's bond and tax credit requests and are preceding ready to proceed with the construction. quickly he wanted to show you the map how the development fits it is borrowed by kicking