so looking ahead to now, i guess, from the state we get unemployment numbers the latest figures are that unemployment is at 4.3% in the city and then some other data that we have is the tidf revenues, which are sort of can be used to gage the amount of development activity in the city are up to $12.6 million, a three-fold increase from the previous fiscal year. so the report, as well as the data tables within are available on our website sf-planning.org and with that, i am available for any questions or comments. thank you. >> thank you. we'll take public comment first. is there any public comment on this item? okay, seeing none,

public comment is closed. commissioner richards. >> just a few questions, please. the taxable retail sales do they include online sales of city businesses that ship somewhere else? >> online sales for city businesses that ship somewhere else? >> buy someone online from the company based in san francisco. physical sales at a physical location. >> i believe it's based on -- it's sales tax that is collected in san francisco. >> so it could be online sales too. >> i don't know if it's delivered to somewhere that is not within san francisco, i'm not sure, but i can get back to you. >> the reason i'm asking you is we have businesses that come before us. they are requesting conditional use authorizations if they are formula retail and we talk about the tipping points between food and beverage and retail. i think this is really really good starting point, but really trying to understand, the revenue is way up; right? but what i am hearing out in the

neighborhoods are costs are way up too, and vacancy rates. it's hard to stay in business if you are doing retail. i take food and beverage out of retail, is that correct? >> that number includes food and beverage, but i think it's separated in the report. >> i think that is a really good point to make, because we're seing more food and beverage than transactional traditional retail and i think the other things, how are rents behaving? rates for zoning district and what is going on with the other cost-benefits and wages? i'm hearing that it's hard to stay in the business in the city, and retail sales are up u and maybe that is good if i own a bar or restaurant, but not a retail store. thank you. >> commissioner antonini. >> thank you. for the report.

interesting as always. one thing that was a bit confusing on page no. 10, you talk about the total office space for 2013 and you have 75.6 million. and then you go to page 106, and it shows for 2013 a total of 73.9 million square feet. so it seems like you have got two different figures going on. in fact, looking at the table only 106, you actually had a decline in the amount of office space citywide from 2012-2013. so i'm not sure which of these figures is the correct figure. >> that may be a copy and paste error; i'm sorry to say. the reason for the decline, it is a little counterintuitive, is that we get this information

from cushman and wakefield and they track leased space. so if a bunch of office spaces goes offline for renovations or whatever and it's not being actively leased, it doesn't get counted. so that is why it went down. the 73,000 on page 106 is the correct figure that should be on. >> the 106 is correct. the 75.6 is -- >> was it was last year's. >> this is interesting, because as we look at the whole prop m issue it may be counterintuitivive, there is much office n construction that will come online and probably next year we'll see a big jump in the amount of office space

that is actually in use. think we have to be aware. there has been a lot of conversions and a significant amount of office has been taken off within the last year or two reflective in your report. so it's a good thing to analyze as we go through discussion of prop m issues. and then everything is very good and, in fact i was surprised that the average wage was as high as it was $85,600 and we realize it's an average and there are people below and people above, but it's probably petty good. i wonder how that compares with other cities of similar size of san francisco? because i think it would be better than probably most of them. thank you. it's a very interesting report. i haven't read it in total detail, but i have enjoyed what i have read so far and i will study it a little bit more.

>> thank you >> thank you. i also want to thank you for the presentation. these reports are great and there is always a lot of information in them. i'm really looking forward to the discussion that we'd have with citywide, i believe it's in january, because i think that helps us create a policy framework in which to talk about this. the numbers are really informative, but how can we talk about what the commission should be doing and what issues we should be looking at? thank you. >> thank you >> thank you. >> commissioners it will place you on item 11 for the public sites development framework. this also is an informational presentation.

>> good afternoon, commissioners. claudia flores department staff. i'm here joined by mike martin from the office of economic and workforce development to give you an update on the public sites initiative that we presented back in january. as you might recall this is an interagency effort and joined by kate from the mayor's office of housing and jason and others to answer any questions that you might have for them. this is an overview of the presentation. first i will give some context on the programs a reminder and for the benefit of the public and then i will give you the highlights of what we heard at two community meetings that we held in october, as well as from individual stakeholder

meetings. then mike martin will talk about how we have refined the program based on community meetings, as well as other discussions and then we'll talk about some next steps. this is a reminder of what the components are. first we have a set of guiding principles that will guide the development of each of these sites that go through this process. we want to have a comprehensive menu of potential public benefit has it all of these sites can provide collectively and the two meetings in october gave us an initial sense of the public benefits this are a high-priority for the public. we also want to have a set of tools and innovative strategies to achieve the greatest level of benefits that could be demonstrated to the private sector and a review of underutilized sites to establish a portfolio, as this is not intended to be a kind of one-time effort. these are the draft principles that we presented to you in january. and we got generally positive feedback from them at the

workshops. these are some of the benefits of having an coordinate approach rather than look at each site in isolation, so we can ultimately different more public benefits and more effectively as a city family. at the last commission hearing, you asked us to have a little bit more information about the surplus property ordinance. and so under the ordinance, it's property which is deemed that is not needed to fulfill city agencies' missions and functions. under the city charter, there are certain departments and commissions that are exemption from the surplus property ordinances that include enterprise departments those who do not receive general fund, the airport, the portion the puc and matt and school district property as with as something that i forget to put putt on the slide -- rec and park. there are currently 30 sites on

the surplus property report that have not been transferred to any other agency. however, on this lyric almost half of those are unused street portions and some of those -- some of the other sites that are not street portions are small. so a lot or most of these sites are actually not good for development. of the 15 sites that were transferred to the mayor's office of housing in 2004 two have been developed into affordable housing. one is reserved as a community garden and five are not developable, but if sold could provide funding for affordable housing. there are seven of those sites that are in infeasible for sale or development because the propertis were transferred too quickly to the mayor's office on housing. so under this initiative, we're starting with properties that are owned by enterprise departments particularly the puc and mta. and the reason for this, they have significant land holdings and as i mentioned they are not

subject to the surplus city property ordinance. so there isn't any restriction around using these properties for one-use only. you however- >> hold on one second, if you could take your conversation outside, thank you. >> thank you. however, since these are public resource these public assets are also intended to benefit the public. it's important to note there is a fair market value constraint, but there is also -- this also provides an opportunity to demonstrate strategies that apply affordability while also benefiting the landowner to meet that fair market constraint. lastly, just in terms of how it relates to the surplus property ordinance, this effort is not intended to replace the super plus property ordinance. we're starting with enterprise departments, other departments could come through the process, subject to the rules and regulations that govern their properties. as far as what we heard from the public and other

stakeholders, at the public meetings we highlighted three key areas that would define what goes into the portfolio. we stated we would prioritize sites that no. 1 would advance housing affordability by finding sites that are good confidents for 100% traditional affordable housing, that is housing at or below 80% of area median income. those sites that wouldn't be appropriate or wouldn't be what we would consider good sites for mayor's office on housing because maybe they are too large or too small, that we could then look at them and as mixed use housing. and near transit and walkable and bikeable sidewalks, et cetera. and thirdly, that would advance neighborhood sustainability and resiliency through modeling green infrastructure and sustainability strategis through the development.

in general we heard support for all of these priorities, but parts of feedback that we received from these criteria was that the program was a little bit confusinging to the public, for example, green infrastructure and tdm can be seen more as an add-on to a development suchs a housing development and not as a use itself tonight for the side. so we heard that they wanted more clarity on the program and stated if housing is the prime use to make it very clear and to be transparent and inform the public at every step of the process. there should be meaningful engagement to uphold existing priorities established under community planning processes, but it should be augmented with continuing community processes as shows that sites develop. other key priorities that we heard in addition to housing, transportation and green infrastructure was open spacious particularly in really dense areas of the city. as

well as affordable space for community uses non-profits and businesses, which as you know are also struggling with finding affordable space. and also we heard that any projects should just exhibit really good sign and be consistent with neighborhood character. now i'm going to turn it over to mike martin, who is going to talk about the program refinements and implementation. >> thank you. >> good afternoon commissioners mike martzinger office of economic and worse force development. i guessly move directly into sort of what we have incorporated from that community engagement that was just described by miss flores. so i think to address the transparency point, what we would like to see the new program title so i public land or housing."ly refine that statement so people understand it's not just housing, but we wanted to be clear that was really the primarily focus after getting the feedback from the community and other

stakeholders. i think the table that we put at the bottom of slide sort of highlights the two ways that focus plays out on how we're approaching the program. as you can see, i think you have seen these statistics many times. low-income and moderate-income housing has fallen well short of production targets under abag over the last seven years. not only in the low-income area, but in the moderate income area. i think that plays out from a number of different issues. part of which is that there aren't as many or as sort of effective subsidy sources to actually provide the low market rate between 80-120% of area median income. we think that is a critical part of moving forward and getting through this housing affordability challenge, that the city is now in. so we are trying to set up an approach to these sites that is not only transparent to the public, but allows to us analyze and bring forward new opportunities to demonstrate strategies especially in this income level. but obviously we do want to

support the mayor's office on housing moh pipeline of housing projects because of subsidies that allow these project those move forward, to find the sites that hit that sweet-spot and can be feasible and move forward and develop housing for people who really need it. so we're sitting up overall portfolio goals today. we would like to identify buildable sites totaling -- total housing units 4,000 by 2020 and say "buildable sites because some vagaries may push that out past 2020, but ultimately we want to identify those sites and be in construction with as many as possible. in addition, we would like to see 50% of the units under this program be affordable to low and moderate income as defined by the way i just did. so low-income is below 60% moderate many income below 120% one we think that ultimately even though this exceeds the targets that we saw in

proposition k, we think it's a valuable use of the asset of the city to try to sort of engineer change in the boder market, demonstrate opportunities and really figure out what he can do to sort of super housing construction in the areas that hasn't been as robust as the market rated sector. i wanted to reiterate the point earlier, through this analytical process, our work determines that a site is not a good fit for housing and the exampling that was brought up to us in a per pdr district, i think we see beneficial reuse opportunities as benefiting the city at-large and the city could coordinate with the owner agency to make that happen obviously through community en[tkpwa-euplts/] and engagement with the policymakers. so we're not leaving aside everything that isn't housing, but at same time we want to be clear that sour focus and our driving energy towards how we pull together projects under this program.

i want to move on to the review rite raw for sites. i think the housing working group that the mayor convene had had a lot of interesting ideas about how other cities have limited levels of success addressed this moderate income sector. one model that has been demonstrated in some cases and in particular in new york city a model that looks to create a mix of incomes all of low, moderate and market rate. and using the market rate to basically cross-subsidize the other below market rate units. obviously and new york city demonstrated that you need other the tools coming out of process would be really prime

tested on the level of control that include the new amendments to state law and infrastructure financing districts that allow some of the property tax revenues generated by the site to go back to the site to subsidize affordable housing. we think had a is an exciting opportunity and would like to think how we could actually implement that. similarly there was discussion about other public financing opportunities like a bond on a ballot. obviously we want to be in those conversations and using those public sites it is a good place to test those out. in addition, i think there is a movement to try to find what to me is the holy grail of the effort and that is a private financing source, what people call "patient capital." right now it's not out there, because i think the way that would help finance moderate incomes would require repayment timelines and interest rates that frankly the market isn't funding now. so i think if we can find ways to stipulate that part of the market and sort of grow that muscle in our development community, we think that would be a great way for this public

sites program to really show the way forward on how with my can sort of export these models to private developments. last thing i just wanted to highlight was because these public agency in many instances want to retain ownership of the property and ground-lease it for development that. is another way to avoid first costs in terms of land acquisition, perhaps push those costs out over time. again by lowering that first hurdle to get the housing produced. perhaps we can oasis additional affordability to these sites. so we're excited about having these levers, but we obviously need to get into the gritty gritty of what each site needs to be built and how the funding strategis can come forward and be implemented? for low-income housing, as i said, the existing work that moh and the affordable housing developers and the city has done with the federal and state subsidies has shown the way to sort of what is the sweet spot, let's say for that type of development? the range ever site sizes ranges from 50-200

units of capacity, 45-85' in height to take advantage of lower construction costs and so sites that sort of fit that sweet spot we want to definitely prioritize for analysis with help of mohcd to understand if they are feasible and that the feasibility takes into account, the missions of these enterprise agencies require them to get the market or the market value/fair value for their assets. so that presents a challenge, but it's one that we hope we can surmount in a number of different places. the last bullet on this slide is important to us because of the importance we have laid on that sort of deep deficit in moderate income housing. upper end of this 200-unit capacity could potentially lend itself or make feasible a model of that mixed income approach. so we want to take an analytical approach and don't want to be anything, but transparent in saying that we could pilot that and create that lesson-learned for the private market,

especially. we would like to be able to do that in the near-term. realizing that we don't want that to compromise the site that maybe doesn't work for that, but does work for low-income housing. so that is going to be a balancing act that we're going to be very transparent about, but at this point in the left of information that we have, we want to be clear, those two priorities are sort of at the forefront of our program and how we select sites. a quick few word about the process we plan to go through. for each site we'll have a level of staff and consultants and we would really benefit everyone from knowing what it is this that we think the site can be? but we also need to get into the community meetings and stakeholders feedback before getting into any specification proposal. a lot of people heard "public site," and thought we would have a big supply of land. that is not what we're communicating today of we really want to have -- what we really see as a successful neighborhood engagement in san

francisco. because these early projects are going to really determine the success of the program. and we don't want to have a thing -- a situation where there is conflicts about what we're really trying to achieve citywide. in addition, once we solicited a developer partner, we'll move together with that partner and using the priorities developed for the community engagement, go through a site programming and sign process that would then feed into entitlement, hopefully approval and hopefully construction. so i'm not trying to point a bleak picture this. is the process that we think will be successful, but it's not going to be an immediate units on the street in six months, but we think because of the inez tenenbaumsites we identify as tier 1 and rolling aprov to bringing more sites into the program as they seem to address these goals, we think we can grow the program quickly and build on early success as soon as we have them. i wanted to take an initial step towards identifying the first four sites under analysis.

i guess i also wanted to highlight another site that is in a similar phase and try to bring it in as well. the four sites -- i'm sorry, the slide is hard to read, going from the northeast towards the southwest, 4th and folsom street, over the central subway station owned by sfmta. the 1950 mission project has been transsphered from the district to moh or in the process of doing so. that will be 100 affordable project. upper yard project, similarly sfmta is transferring that to moh and nearby the balboa resviewer's voice the portion owned by the san francisco public utilities commission that is currently used as a surface parking lot. the additional site that i mentioned is seawall lot 22-1 and port and moh have been working together on that and would he like to bring that together in the same framework in materials of looking at the other portfolio criteria in

terms of creating a cohesive portfolio. it hasn't been directly in our conversations but we think that we can again having a more cohesive conversation. a brief few words on next steps, also in your staff report. we're updating the owner agencies commissions going forward as we have sort of brought forward these specific tier 1 projects and additional site analysis especially on the ones that are potentially candidates for the mixed income model. site-specific community meetings in the balboa reservoir area. we're targeting mid to late january for the first of those. additionally obviously updating the sfpuc commission on the process. during the summer we'll be refining the financial strategies and housing working groups and recommendation now that they are publish there had is a lost energy towards

bringing those to reality and piggy-back on those. drafting proposals for those sites ripe for that in terms of soliciting a developer partner and also that ongoing additional site review to try to bring on a rolling basis additional site opportunities. by the end of 2015 we with like developers selected for those that we have solicited developers. that is a challenging timeline under the solicitation process, but we feelnat urgency of moving towards that level of the transaction, once we had the community engagement and automobile accidently obviously we want to continue to be transparent with updates to this commission and owner agencies and board of supervisors as they request. so that is our general work plan going forward. the planning department has set up a weekend for this program and we'll continue to use that to push out information as well. so that concludes my comments today. i'm happy to answer any questions. >> thank you. we'll open for public comment

first. john eberling. >> thank you, commissioners, director of the taco group. good afternoon. just a note, we do of course support the choo-choo presentation you are about to get. i want to note on public property for affordable housing, the first time this came up was balboa reservoir could be a great site and we discussed that with the city in 1985. it's been 30 years, and balboa is still an empty reservoir used for parking. so you have to appreciate that i always take these efforts -- this is the third go around on public sites with some grain of salt. and i think this time you really have to do it. what we're presenting to you is just about south of market. and how we can -- there are two great sites in soma for affordable housing on public property. in order to achieve our prop k33% balance in soma, we're going to be to be

extraordinarily aggressive in finding future sites for new affordable housing. and these are two great sites. the 4th and folsom subway station site was just sited. as can you see when you see context that it's within a wonderful senior neighborhood with dramatic amenities and shopping and perfect transit, this is the perfect site for senior housing. it's a small site, but somewhere, depending on the height from 60-120 efficiency studio units would fit on this site. you may know that federal funding for senior housing has dried up and there is not much in the pipeline, even though we're all away there is a time bomb -- a population time bomb of all of us aging baby-boomers that need senior housing in the next 20 years. that is a real problem. south of the freeway the puc has a wonderful site as well. currently at downtown storage yard. the half of it, that is between the two alleys is an excellent

site for affordable housing for families. it's less than half a block away from 4th street. it's a transit station. it's shopping, the receiveway and all of that. it's a perfect site. it's 44,000' which is plenty for up to 200 units. it's an excellent size. and in change for, that knowing that the puc would need feeding to relocate that yard, we would completely support a major upzoning of the north half of that property that the puc owns, so thatte this generate revenue from its sale to pay the cost of relocating the yard probably somewhere south of army street. their 40,000 feet could certainly sell for $20 million or more if it were upzone in the manner to cover costs. soil really urge you to do this. we can't just do another 30 years of let's talk about. i trust the department is going to follow through in the zoning of south of market, but we

would be prepared to put this on a ballot, if we had to zone for affordability. so please get the job done. thank you. >> thank you. next speaker. i will call a couple more name and additional folks can line up on the screen side of the road. [ reading speakers' names ]. >> good afternoon, commissioners, peter cohen and neighbor of our oasisings attended both workshops. so we had quite a bit of input here and what we heard and what we have been expressing is a clear priority for affordable housing. these are precious public sites. if there is any one resource that the voy has that we have very, very little of is it's land. so using that to meet a critical public policy goal of affordable housing in our mind is a so-called no-brainer. i think the slide that you saw, the first slide from mike martin really tell it all and shows that we have met only 41 [p*-frs/] our