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tv   [untitled]    January 17, 2015 11:00am-11:31am PST

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that we're looking at, investigating with the mayor's office of housing community development and other departments that we think will yield some of the funds necessary for the basic tenant improvements needed to bring this space up probably around a half million dollars is necessary. and then once a nonprofit is selected for a subtenancy, then there are some costs that will accrue but those will all be passed through to the nonprofit. the idea here is that that will be the only cost that will be passed through to the new nonprofit, so we believe this space will be significantly under market and attractive in that respect. we're probably looking at something on the order of about $65,000 a year total occupancy costs. we have had a mayor's office of disability review of the space, we are confident the space will pass muster relative to ada requirements and you have the general plan referral in the
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file. happy to answer questions here, i'm also joined by colleagues in my office and ocii if you have questions. . anybody wish to comment on item 1? seeing none, we can move this forward without objection. item no. 2, resolution establishing the appropriations limit for fiscal year 2014 to 2015 pursuant to california constitution article 13b good morning, supervisors, i am alex toskani ni.: following presentation is on the fiscal year 2014-15 city and county of
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san francisco appropriations limit, otherwise known as the gam limit. california proposition 4, the gam limit, was passed by the voters is 1969. this created article 13b, the california constitution, section 7900 of the california government code. it limits growth in government appropriations funded by the proceeds of taxes to by an inflation measure which is set forth by the state as the cost of living and increase in population. it also requires governments to return any funds in excess of the limit. this is either done by a direct refund to taxpayers or by an adjustment of tax rates. for the 14-15 limit we take the
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prior year limit of approximately 2.8 billion, increase it by the inflation factor resulting in approximately 2.84 billion. the next part of the analysis is to determine the city appropriation subject to the limit. we first estimated the total tax proceeds ftd city at approximately 3.2 billion. the state sets forth certain exclusions in article 13b these include debt service, federally mandated services, qualified capital outlays and certain hazardous waste programs. with these exclusions removed, the total appropriation subject to the limit are 2.7 billion. this leaves us approximately 81 million dollars below the limit for fiscal year 14-15. the
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last slide is historical list of amounts, how far the city was under the limit. you will notice that it appears we are approaching -- our appropriations are approaching the limit. as the san francisco economy continues to do well and outpace state inflation we creep closer and closer to the limit, so in the future it may be necessary to more closely scrutinize appropriations. i'd be happy to answer any questions. i have other copies of this presentation for any members of the public who would like one. thanks for your presentation. colleagues? mr. rose, can we move to your report, please? mr. chairman, members of the committee, we do recommend approval of this legislation. anybody wish to comment on item 2? seeing none, public comment
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is closed. colleagues, can we have a motion to send this item forward? we can also take that without objection. thanks very much. madam clerk, call item 3, please. item 3, resolution approving an early termination and buy out of bay subway airptd food and beverage in an amount not to exceed 1.2 million between subway and city. good morning, chair farrell, kathy widener, san francisco airport. the item before you for approval seeks an early termination and buy out for bay subway sirpt currently doing business at the airport as subway sandwiches in an amount not to xheed 1.2 million dollars. the airport originally entered into a lease, the boarding area e location has since been closed an the airport now requires the closure of subway's presecured
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mez neepb location as part of our renovation project. as you've seen with other lease agreements originally the airport would usually offer a lease agreement with subway but due to plans for a new expanded airline club adjacent to the originally proposed replacement location, the airport and subway were not able to find another comparable location to serve as replacement premises in this case. based on a third party analysis of subway's potential lost earnings over the remaining term of their lease, the airport is proposing an early lease termination and buy out in the apltd of 1.2 million dollars for subway to permanently close both of its locations in terminal 3 and waive any further claims associated with their lease. any loss in potential revenue to the airport by closing these locations will be made up for by the additional revenue we will receive from united over
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the term of their lease for their expanded club. so we will still end up ahead in terms of rent. the budget analyst recommends approval but i would also be happy to answer any questions that you might have. colleagues, any questions? this includes the subway that's on top where you get to bart and so forth? exactly, it's over the bridge, as you come over the bridge to the road way into the airport there is peace coffee and a subway. and that's the remaining location that we are seeking to close permanently. i'm sorry, if i could add one other thing, there was some confusion in the last -- on page 2 of the resolution, lines 18 and 19, about what document was actually on file with the clerk. there is not -- we capitalized termination buy out agreement and that made it look like there was actually a document, an agreement. there is not, it's just a lease
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modification so our office has worked with the clerk's office to amend that to just approve the action that we're seeking to terminate the lease early and to approve the buy out. so i will provide a copy of that to the clerk this afternoon. thank you very much. you know the routine. mr. rose. mr. chairman, on page 7 of our report we note the buy out amount of 1,200,000 was based on an analysis of subway's earnings performed by an independent consulting firm retained by the airport and this analysis estimated net present value of the lease to be 1,565,000 and as miss widener has indicated the airport staff negotiated with subway and reached an amount of
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1,200,000 or 365,000, which is 23 percent less than the net present value of the 1,565,000. the buy out will proside compensation for the lost earnings during the 10 year term of the lease and funding for the 1.2 mill wrupb buy out was included in the airport's fiscal year 14-15 budget and we recommend you approve this resolution. thank you very much. anybody wish a comment on item 3? seeing none, public comment is closed. may i have a motion to move this item forward? mr. chair, there is an amendment proposed by miss widener regarding the final resolved clause. would you like to adopt those amendments? okay, motion to accept the amendment and then the item as amended? we will take that without objection. thank you, madam clerk, for that. madam clerk, colleagues, we are going to,
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i'm going to entertain a motion to continue items 4 and 5 to the call of the chair,. item 4, resolution retroactively approving amendment 1 to the food and bef rage lease and the city with a minimum annual guarantee of mroxly 120,000 for the lease term through november 18, 2018. item no. 5, resolution approving amendment no. 1 to the rental car center cafe lease center, marina's cafe and the city with a minimum annual guarantee of approximately 11,000 plus one option to extend the term by two years. colleague, again we're going to open this up to public comment but for procedural reasons we will continue this to the call of the clerk. at this point we will open up for public comment on items 4 and 5. anybody wish to comment on those items?
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seeing none, public comment is closed. colleagues, can i have a motion to continue both these items to the call of the chair? we can take that without objection. madam clerk, call item 6. item 6, ordinance amending the public works to modify certain. this item was introduced by supervisor avalos, i will turn it over to him. colleagues, since 2007 the city has required a permit to install a wireless facility on city or street light poles in the public right of way. in 2011 i sponsored legislation to move these requirements into article 25 of the public works code and set certain aesthetic guidelines as well as public noticing requirements. shortly after this legislation passed, a number of wireless carriers sued the city and challenged
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our authority to require such permits as well as claims based on new federal law passed in 2012. that law limited local government authority to regulate modifications of permitted wireless facilities. at trial the city prevailed on the claim that the city could use aesthetics to regulation telecommunications carriers in its public right of way. unfortunately the court also ruled in favor of the wireless carriers on the modification provisions. as a result i am introducing today an amendment to try to preserve the aesthetics review and public noticing requirements of article 25. the amendment would simplify the current permitting process and ensure that the modification provisions comply with federal law. it does so by, 1, repealing the tier system in light of federal law on modifications there is no reason for the city to fast
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track permitting for small facilities that could easily be enlarged. now all permit applications would require public notice and be subject to protest. this simplifies the process for everyone. step 2, changing the modification provisions to be consistent with federal law as construed by the fcc the amendments would require the city to grant modification permits when the proposed modifications met federal requirements. and step 3, requiring applicants to disclose in their applications whether they intend to modify the proposed wireless facilities. this disclosure would be part of the public notice so local residents could understand the potential that the size of the proposed wireless facilities could be increased. the amendment also makes some changes to the term of the permit and certain permitting requirements related to the technology used in order to address other aspects of a trial court's decision against
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the city. the amendment also makes clear that the permitting requirement applies to the mta since they recently entered into an agreement with certain telecommunications carriers allowing the use of its poles for wireless facilities. finally, we are including increases in dpw fees for cost recovery. i hope to have your support for this item, colleagues. we have staff from dpw and bill sanders from the city attorney's office should you have any questions. we also have omar masry from the city planning department for any questions. with that we can hear from the city attorney if they want to give additional comment. otherwise -- prepared remarks or just here for questions? all right. any more questions at this time? okay, no questions on my end. we do not have a budget analyst report for this item so we will open this up for public comment. i have one speaker
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card, martin fineman and if there's anyone else who wishes to speak on this item publicly please line up against the far wall. everyone will have two minutes. thanks for being here. thank you, did you say two minutes? my name is martin fineman and i'm with the davis wright law firm here in san francisco. i'm here speaking on behalf of crown castle ng west as well. i provided written comments which i believe your honor has received. if not, i certainly brought additional copies with me. the proposed amendments, frankly, are too many and too varied to go through all of my written comments here so i would like to just sort of provide an overview. t mobile, as you know, is a mobile telecommunications carrier and data service carrier. crown
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castle and extra net are infrastructure companies that enable telephone and data services to be provided through very small antenna that are placed on street light and telephone poles and facilitate these kind of communications. good telecommunications and data services are vital for communication purposes, emergency purposes, and for the economic vitality of the city. this is probably true throughout the country but no more true than here in san francisco where technology based economy is so important to our city. the federal government has passed several laws that are designed to set kind of a balance here between the needs of the telecommunication companies, the infrastructure companies, consumers and cities. and generally speaking those laws encourage the building of a vibrant and robust
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telecommunications and data network. one of those laws which was referenced is section 6409 of the middle class tax relief act which is now codified into federal law. it's two minutes so why don't you wrap up? i believe thest this these amendments is to try to bring this law, which has now been invalidated by the court in san francisco, into line with the federal law and federal telecommunications. i would ask you to look at the comments. the proposed amendments fall well short of actually accomplishing that goal. the law as amended would still be in violation of federal law and of recent, very
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recent, interpretation by the fcc and i think none of us want to see further obstacle to what is a very important part of the economy here in san francisco. thanks very much, anyone else wish to comment on this item? good morning, paul albrittton, outside council, i did submit a speaker card. i'd like to echo the comments of davis, wright and tremain. verizon wireless was not a litigant in this case. i understand the litigants were made aware of this new legislation but frankly we did not become aware of this new legislation until this week and i understand at&t the other large wireless providers here in san francisco also did not become aware of this legislation until the last couple days. we believe this legislation is a mistake since not filing suit against the city, verizon wireless has worked hard to develop tier 1 and tier 2 facilities, you saw pictures of them that are going
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to go on the poles. after 3 years of development we feel that the rug is being pulled out from under us and putting us through the tier 3 process. we might as well have built enormous and you can gli facilities. all i'm asking is to be allowed to meet with bill sanders and talk to come up with a workable system and not rush into this legislation. we have been working with other cities, the city of los angeles for their bureau of street lighting for putting facilities on street lights is exempting local facilities from these permits, that's because the bureau of street lights, just like the public utilities commission, will have full authority as a landlord to do whatever they want in terms of what goes on those poles including any modifications you may be concerned about under 6409. if you exclude city-owned properties you don't have to worry about 6409, you don't have to worry about the telecommunications act. we encourage you to step back,
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look at this legislation, don't create more legislation that's going to create more litigation. do it right this time. you need to know every one of these poles can come before you on appeal under ceqa already because of noticing. send this back and allow us to meet with the city attorney. thank you very much, any questions? i think that's the last commenter. this legislation has been crafted knowing what federal law is, which gives us very little latitude to do a lot here at the local level. we've taken just a small part of that latitude to be able to create some standards around aesthetics for putting wireless facilities up in san francisco. so i do believe that we are, as i'm told, we are within federal guidelines and i
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appreciate that verizon has been working with our current system, but with the litigation we've seen and with the actual practice of installing wireless facilities we saw that the past legislation wasn't actually meeting what was the reality of how wireless facilities were being installed here in san francisco. and i think even with the new one tier system that we're putting forward, the work that verizon has done will fall within that system and the work that you've done in creating, you know, aesthetic guidelines that meet what the city has put forward is going to work with what we're putting forward today. so i don't think that has all been in vain. i'm not sure with the city attorney or any of our staff have any comments in relation to what was just stated, but i really feel we are ready to go forward and would like to motion that we move this item to the full
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board with recommendation. puc, if you or your staff wish to comment you are welcome to come up. okay, i have no specific questions, that's fine. by the way, i want to make sure there's nobody else in public comment. all right, public comment is closed. okay, supervisor avalos made a motion. yeah, i will move we support this ordinance. motion by supervisor avalos, we will send it forward without objection. item 7, resolution authorizing the acquisition of real property from claire a spencer for the purchase price of approximately 15 million and adopting various findings. okay, mr. updike, you are back. welcome. i am back. john updike, director of real estate. so this is the item
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continued to call of the chair, 1995, evan street. the committee asked us to go back to ownership, seek further price reductions if at all possible. we did that, had a discussion with ownership. actually we're working with the son of the widow in ownership as trustee. there was not a lot of movement, to put it mildly. it's reflected in the documents before you today so we did, however, secure a waiver of the amount of rent that would be due for the month of january, that's $70,000. that is not recoverable through the go bond so real pure general fund savings that we did exact. what we all did was took another look at the market place because i think there's just some grave concerns about the disparity between our
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amount of the transaction at now an effective price of 15,405,000, and the appraised value. so let me speak to that briefly if i can. the property's a little over two acres of land but more importantly, and i think we may have lost this in our discussion last week, the property has 44,000 square feet of improvements. that's by right entitlement of improvements in a community where we just don't have a lot of volume of industrial sales. that has tremendous value. and in looking at this purchase price at a little over 15 million dollars, that equates to 348 dollars a foot for improved space. on that trick that is used in the industrial market place in comparing properties. so we are at $348 a foot. i'd like to show you a chart of the current san
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francisco market place, which i had right in front of me until i walked up to the podium, my apologies. here we are. industrial data is difficult to find in san francisco. there's lots of data on office, there's lots of data on residential. there's not a lot of industrial and again that's because we just don't have a lot of volume of industrial. so this chart that i have up on the board shows san francisco highlighted. you can see we're very low on the list, this is by volume of transactions. this is from the first quarter of activity in 2014 so this is almost 9 months old. at that point the average sale price of industrial properties in san francisco per that chart was $337 a square foot. we are at $348 a square foot. i think that overall metric helps
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validate this price as being fair and reasonable, not withstanding one appraiser's opinion of the value. secondly i'd call your attention to a particular sale we think is very comparable which was not in the appraiser's report and thus was not a driver of price and it may have been because the transaction was still not quite closed at the time the appraiser was doing their work. again, that's a backwards look. appraisers have to look at closed transactions. it's now closed, 268 alabama, a 38,000 square foot former printing location. this is a 44,000 former printing location. very comparable. sales price, $579 per square foot for the improvements. has less land. we have excess land. so, if anything, this shows we're within a range of price. i'm trying to reiterate the fact that we do believe we are at a fair price. ownership has given everything that they believe they can rightfully
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give so we exacted what we could from them. they also made it clear that if we don't acquire at this point then we are on a month to month basis for our current occupancy so we would need to find a location much more immediately than anticipated for our storage needs so that's certainly problematic. we are using the property currently and do not have new destinations for that use queued up until spring of 2016, transactions that will be coming before you soon later this year. lastly, from a budget standpoint, this transaction is under the proposed budget, under the amount allocated in the general obligation bond, under the amount shown on the web page from day one of this project before the electorate voted on the bond, under the $16 million allocated. so it is actually a savings. then also want to
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note that the ownership does desire to still close the transaction if we can this month and we would be on a path to do that with the committee's recommendation to move it forward. we can still effect a closing before february 1 and we are prepared to do that if we have the green light from you. thanks, mr. updike. colleagues, any questions right now? okay, mr. rose, could we go to your report, please? mr. chairman, members of the committee, based on the latest information that mr. updike has provided and we have not analyzed this latest information so we could consider it to be a policy matter. we would emphasize, though, that going forward our recommendation, which is shown on page 23 of our report, is to request the director of real estate to include language in
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future purchase option agreements to require appraisals and other due diligence procedures prior to negotiating specified purchase prices for the city. okay, thank you very much. colleagues, any questions? okay, at this point we'll open up for public comment. seeing no public comment, no members of the public at all, public comment is closed. supervisor avalos? i think it's great we got something a little better, $70,000. it's actually, you know, a very small amount of money and i guess given an amendment from the budget analyst looking at prospectively at what we can do to have appraisals done before we get to this point, which i'd like to accept. so i'm going
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to hold my nose and go forward with this. i don't think that it will be, we've done probably a lot of work already looking at other sites and, you know, this is approved by the voters to erect these facilities and they are a big part of our public safety effort. i'm going to go forward with motioning that we approve. okay, thank you, supervisor mar. this is a hard one, i was expecting we would have more of a chance to sit down and come closer to that gap of $4 million, not just $70,000. i don't know if there are options of continuing this further for more time but if colleagues want to move this forward i will be voting no