torres for his work around this issue, and i appreciate that. the eligible uses of these additional funds has been expanded to meet the actual needs of these chinatown merchants, which include basic things like rent, utility, and wages. the additional 225,000 is not before this body today for approval, but i'm informed that eowd is soliciting applications and determining the extent of direct and indirect impacts to adjacent businesses in furtherance of distributing these funds by the end of this calendar year. i'm also looking forward to identifying funds within the larger central subway mitigation package for the installation of security cameras along this part of stockton street which has been plagued by graffiti and crime since the outset of construction. in the meantime, colleagues, i respectfully request your support for the release of the 225,000 that is before you today, which i'm informed will

fund additional corridor management staff, as well as a pilot program, to substanceidize parking fees at the port square garage by will also be helpful to the economic vitality of chinatown, and thank you mr. torres. >> thank you very much, supervisor peskin. to the chair, if i may, i believe supervisor addressed both the issues that are before us today as well as the comprehensive challenges that we've been addresses quite closely on the ground with a variety of community groups and business stakeholders. we are moving forward with that, and in addition to what supervisor peskin mentioned here, there will be additional marketing both for the marking validation program, in addition for stockton street merchants who have been impacting by that construction, so we'll be looking forward to aligning those resources against each other for the benefit of stockton street as well as the greater chinatown area. >>supervisor cohen: thank you.

is that it. >>supervisor peskin: that's it. >>supervisor cohen: wow, short and sweet and to the point. supervisor tang, i see your name on the roster. >>supervisor tang: thank you very much, and i policyize if i missed your comments as you were talking over there, but you mentioned there was 100,000 going to parking. i was just wondering what the details of that were. >> they're going to be dwand in the partnership with the mta in the weeks ahead. we wanted to wait until the funds were formally released so we could get working with the mta. what we wanted to do was both promote additional activity for customers to be further attracted to stockton street in particular, but then, also enhance additional activity for additional hours of operation and customer activity and attraction during other hours in chinatown to facilitate greater vitality in the neighborhood, so we'll be working with the mta in regards to those pieces, who gets enos

enhanced and how. essentially, it allows them a validation sticker as a reduced value, so for example, that they would pay $1 for two hours of parking, which a customer would receive upon purchase of a certain minimum amount during a time in chinatown at their business, and the next step for us would be to determine, well, what next step makes that better for the mta. >>supervisor tang: and then, how will you measure this effectiveness of this pilot. >> certainly. one of the pieces that we'll be looking at, supervisor, is the amount of utilization, what businesses are benefiting from the utilization of that, and then, we will be reviewing that about eight to ten weeks after its implementation, to see if we need to tweak it, who any further we should open it up to, in addition to the

merchants on stockton and the chinatown areas. >>supervisor cohen: excuse me. let's go to the b 34rd a report, before we go to mr. torres. >> yes, the purpose of the reserve and the use of the funds has been discussed by supervisor peskin and the representative from oewd. we do show the use of funds on page # 13. $100,000 would go to the chinatown resources, another 125,000 would go towards parking and promotion of businesses in chinatown, and we recommend the release of these reserves. >>supervisor cohen: all right. i appreciate that recommendation, and we will take it under advisement. all right. ladies and gentlemen is there any one that would like to comment on item number 8. seeing none, public comment is closed. supervisor yee? >>supervisor yee: yes. i make a motion to.

>> clerk: i believe the motion is to release 225,000. >>supervisor cohen: supervisor, would you... >>supervisor yee: i make a motion that we... >>supervisor cohen: that we release $225,000. >>supervisor yee: yes. >>supervisor cohen: all right. we'll take that without objection. mr. clerk, item 9, please. >> clerk: item number 9 ordinary naens amending the business and tax regulations and heath codes to require the director of the office of khanna disso collect permit applications fees of $2,000 and annual license fees of $5,000 for the cannabis business permits, authorize the department of public health to impose fees relating to the inspection of cannabis businesses, and establish annual license fees for cannabis construction permits. >>supervisor cohen: ladies and gentlemen, i'm introducing a simple amendment that waives application and first year fees

for equity operator applicants. as you may recall, we had a very long discussion tuesday evening with several amendments that were ultimately accepted. of the amendments that were made, includes an equity program that we've created and now has been voted on, and the ordinance before us today supports the typical and necessary infrastructure for evaluating the legal permitting requirements for the cannabis relates updates to the planning code. this also enables us to cost recovery to the office of cannabis and the department of public health for this regulatory investigations. so my amendment simply waives those foes in the first year, so they include a couple of things. i'll read them into the record. first, the up front any objection flee of $2,000, second, the hourly consulting fee of $110 perhour for processing. the department of public health

inspection fees, which vary from $750,000 to $3,700 based on the type and the size of the business. the first year operational license of $3,000, and -- and so that concludes the -- the suggested fee waivers. as the equity program is designed to give a competitive equity to those who are disproportionately harmed by the war on drugs, we must also take every step to ensure that the program is not ham strung by errors that attacks broader entrepreneurship in low income communities. the equity report published by the san francisco human rights commission found significant barriers to the cannabis industry along with a few well worn lines: access to real

estate, access to capital, and access to affordable legal guidance and business acumen. so we encouraged, on tuesday evening, community and industry wide support of the equity program through businessmen orring, through incubation, and economic and workforce development, we've ended the traditional businessmen operators until we've established and permitted our pipeline of qualified equity operators, and a -- and through these amendments that we as a city are doing our part to support entrepreneurs that have a limited access to capital and specifically those who find themselves with limited resources for various -- for various reasons. all ongoing permitting fees

will be reinstated after the first year of operation, and with that, i'd like to turn to miss nicole elliott for the second portion of the presentation on item 9. >> chair cohen, supervisors, nicole el jot, director of the office of cannabis. thank you for having me here today. as you remember, in september, when you created this office, you directed us to deliver to you three things. the first, the fee schedule is what you have before you today. what it includes is a couple of things. it sets a one-time nonrefundable application fee in year one of $2,000 with a $3,000 permit fee. it sets a cannabis business license fee at $5,000 every year therefore, it sets a legal fee of $115 perhour with a minimum of two hours, and it

sets a new fee schedule for the department of public health, their costs of initial and ongoing inspections, which the department is here to speak to today. all other departments will assess their fees separately, depending on the inspections and permits required for the specific circumstances of those businesses, and these fees will be subject to each department's existing fee schedule. so the amount of the fee was set by considering the overall expenditure budget of the office of cannabis. it adds additional overhead at the rate of approximately 7% for services provided by gsa's administrative human resources, i.t. and accounting divisions, and it divides that by the approximate number of permits that may be sought in year one, and for permit amendments, the $110 perhour amount was calculated, setting an hourly rate for review based on the staff compensation in the

office, and again, it sets a minimum charge of approximately two hours to review. that is my presentation. i'm happy to answer questions, and i would invite the department of public health to come up and share more about their component. >>supervisor cohen: all right. we've got a representative from the department of public health. come on up. share with us your comments and ideas around this fee structure proposal. >> good morning, supervisors. drew morell, finance manager, public health. the fee schedule in front of you is largely mirrored on our existing fees. the new one is the plan check for cannabis cultivation facilities and manufacturing facilities and microbusinesses, and it's based on estimated number of hours for environmental review programs

to review the plans of a manufacturing or new business. there's provisions in the fee, reevaluate after the first year, to reset the fees if the law provides. excess revenue or under collects revenue. that -- that's all. >>supervisor cohen: okay. all right. thank you. supervisor tang, and then, supervisor yee. >>supervisor tang: thank you very much. i wanted to ask some questions about what happens with the fee situation or the fee waiver if, for example, there's an equity applicant that partners with an existing cannabis dispensary, one that's already been in operation. does the fee get waived for all of them. how does that work with the ownership structure, so if you could go into a little bit more detail about that. >> supervisor, i could defer to supervisor cohen to explain the impact of that. >>supervisor cohen: sure.

supervisor tang. give me a minute. i will get the answer to you. do you have other questions we can get to. >>supervisor tang: no. >>supervisor cohen: okay. we'll get back to that question. supervisor yee? >>supervisor yee: i guess you're also looking up some information on what i'm going to be saying, which is generally speaking, when businesses start-up, they have a rough time during the first year. it's not just the initial fees, and we appreciate know that in the business model that nobody really expects to make a profit in their first year, and sometimes, it takes several years before you can recoup your costs, so i'm -- i'd like to entertain a -- a notion to maybe amend supervisor cohen's

amendment to expand the fee waiver that may include the first year, so my question is, then, what impact that would have? >> supervisors, i could defer to the controller and budget office to respond to that. >>supervisor cohen: so i'm going to pivot back to supervisor tang's question as the controller's office ponders supervisor yee's thoughtful question. so your question is, what happens if you have an equity partner partnered with a person who's not an equity partner. well, it depends on the qualifier. the applicant must have either

40% and be the ceo or they must have 51% ownership and have no ceo status, so that will determine how fees would be assessed. and so that's really up to the discretion of the individual business. does that answer your question fully? okay. all right. i want to go to the controller's office and hear their thoughts on supervisor yee's question. >> supervisors, michelle ehlers, controller's office. the current year budget assumes approximately $700,000 in cost for the office of cannabis, and it assumes that fees will be effective that support the operation january 1, 2018, so that the first half of the year is funded through general fund support of approximately $300,000, so its fees are waived and we would be needing general funds savings from other parts of the department to fund the expense.

>>supervisor yee: i guess, let me clarify. the fees that would be waived would be for the -- for the equity piece, so it's not just for everybody. >> okay. then that would -- the amount of general fund support needed to pay for the fee waivers is just whatever proportional amount would be of the pay base. >>supervisor yee: i guess in your analysis, did you take into consideration that there would be a certain number of new applicants that's going to be under the -- utilizing the equity piece? and by the way, i -- i'm talking about the -- most of them will be new. that's going to take them a year or two, so this wouldn't even impact, i assume, next year's budget on the office because i think, in the earlier meeting in this chamber, miss

elliott mentioned that -- that anybody applying would take almost -- over a year, so i -- if you're assuming that people are applying, they would immediately be up and running and you'll be collecting an annual fee. i don't understand that. that seems to be a conflict. >> i think that the budget that was established and proposed by the mayor's office in may... [ inaudible ] >> i'm sorry. i think it just made that assumption on a broad level that fees would be effective halfway through the year, therefore, half of the funds would be borne by the general fund and half would be by fee payers. i would defer to the general department upon which time fees are payable, whether they're payable upon application or

approval of the application. >>supervisor cohen: let me interject here. we just created regulations on tuesday, so would you be fair and give us a pass if we don't have answers on the fly. what i'm looking for supervisor yee, he's looking to give help to the -- to the businesses that are going to be starting up, and one of the key barriers to any business concession success are access to capital. the next issue he's bringing up is we want to make sure that the fees are not overburdensome, and if i'm putting words in your mouth, let me know, so he's asking is there some kind of a financial impact of the office of cannabis being able to do their business, because remember this is a cost recovery department, so the fees that you recover is

going to pay you and kind of keep this operation. if we were to allow businesses not to pay fees, is that correct, you said for the first year? >>supervisor yee: for the first year. >>supervisor cohen: not to pay fees for the first year, we want to know how will that impact your office's ability to conduct its business. >> thank you, supervisors. to your point, there is a lot of unknowns about what lies ahead of us, so when it comes to the number of equity permits that will be sought and that will be issued, that number is unknown, and so i can't answer what that fiscal -- what the real fiscal impact would be. it would be 5,000. >> commissioner perez: -- per permit, so whatever sort of permits are having -- what are sort of fees we're having

per permit, we just need to shift from the general fees of my office additional funds to support that endeavor. we do not know how many total permits will be issued in the first half of 2018, the second half of 2018 and beyond. that is something that we can only assess later in the year. >>supervisor cohen: thank you. and again, just for the record we're not talking about waiving fees for all businesses applying, we're specifically talking about equity businesses. >> right. >>supervisor cohen: supervisor yee, do you have anymore remarks? >>supervisor yee: i mean, considering the answer i'm getting, which is, obviously, none of us know how many are going to apply, which means that it's hard to even say that you could include anything in the budget, probably, what you do know are the existing operators, they're probably going to get their permits at

one point or another, and they'll pay their fees, so given the nature that you don't really know, and i hope you don't make assumptions that there might be 20 in 2019 that are new, so any new one would be almost additional funding that you probably wouldn't assume. and so if you -- if there were new operators, and they're under the equity lens, you wouldn't actually miss it because you didn't assume how many were going to come in. again, maybe my assumptions were wrong. what i understand of business and what people tell me is they struggle more in the first few years because as they're wrapping up their business, they're still spending money and the businesses aren't fully operational, where they're making enough money, so that's my thought process, the logic. if we're going to waive -- and i'm going to support the $2,000

initial fees, waiving. if we're going to do that, then there might be some logical conclusion that we should also support the first year where they don't pay the fees, so that's where i'm coming from, and i'm willing to make that amendment to supervisor cohen's amendment if there's support for that. >>supervisor cohen: thank you, supervisor yee. i appreciate your enthusiasm in support of the equity program, and ladies and gentlemen for clarification of what we're talking about, because we're almost talking about two different things. first of all, miss elliott has proposed business fees for all businesses. the amendmented that i proposed are fee structure, but for equity businesses, so i just want to make that clear, and supervisor yee, i think i'm going to hold off on supporting the ideas that we've skisdiscu

here today. i think we've got to wait and see how businesses are going before we start reducing and assessing fees. is that fair, miss elliott? okay. so thank you for the discussion. is there anything else, miss elliott, that you want to contribute? you're done? >> yep. >>supervisor cohen: okay. thank you. supervisor, i see other names on the rosters that's leftover. okay. let's go to public comment and see if the public has any ideas or comments that they'd like to share on item 9. none? okay. seeing none, public comment is closed. thank you. okay. so this matter is in the hands of the board of this committee. so i'd like to make an amendment and wem ae make a motion to accept the amendments, if we could take that without objection. >>supervisor yee: yep. >>supervisor tang: so moved. >>supervisor cohen: thank you. i appreciate that. and then, i'd like to send this item to the full board with a positive recommendation as a committee report and as amended tang tangs so moved. >>supervisor cohen: all right.

thank you very much colleagues, and thank you mr. clerk. now, friends, we are moving on. let's go to item 10. >> clerk: next on the agenda, item number 10, resolution authorizing the extension of an existing lease for approximately 79,000 square feet of office feet at 1390 hourt street for the department of public health's community behavioral health services division with the vera cort as trustee of the robert j.cort marital trust and as trustee of the vera cort survivor's trust as landlord. >> you're back. >> this is seblly a lease are you new al, but it's a new lease because we've renewed is

-- it so many times, we wanted to clean it up and present a new one. it is a new lease, effective january 1, 2018, with numerous renewals. this is approximately an 80,000 square foot plg. it has been used for over 20 years by the department of public health at 1390 howard. it is substantially above the current market rate. knowing where we were headed on this lease, our staff did a pretty exhaustive analysises on two fronts. one, was there a suitable replacement facility at comparable or better pricing, not surprising given the advantageous lease we've

negotiated here, we could not find a similar sized property meeting the needs of the department of public health that was competitive financially. secondly, we looked at although the ownership has made it clear they do not desire to sell the property, they really desire to have a consistent income stream, modest income stream, so that's why we negotiated a better rate than we might have here at other locations, the permanent nens of that income stream was probably more important than the amount, what i will say is we did the lease versus buy analysis over 30 years. we considered the reversionary value of the property at the end of that 30 year term, and what we are presenting to you, assuming substantial renewals, renewal increases as five year intervals over that 30 year period, leasing is advantageous to the city. not slightly, but by over $30

million over term, so we feel strongly that a lease is the appropriate mechanism here to continue our occupancy. lastly, there is a modest tenant improvement allowance, 479,700, just a refreshing of the space. there is an ability to exceed that amount if budget availability is within the department of public health's capacity, so we do have dph staff who can address both program use and the intention of the improvements to 1380 howard to improve our experience there. i think that pretty well covers the details of this lease before you today. >>supervisor cohen: all right. let's see, colleagues any questions from mr. updike? all right. seeing none, we're going to go to miss severin campbell and hear her thoughts. >> yes. this is a five year less as mr. updike said, three five year

extensions. the initial rent is $45 persquare foot, based on market praisals, it is fair market value. first year rent of 3.4 million, over 15 years, it would be about 17.1 million, and the landlord would be putting in tenant improvements. we did note that the city could incur costs for the tenant improvements, but we have been assured but the department of health that the tenant improvements would be paid by the landlord, and we recommend approval. >>supervisor cohen: thank you for making that recommendation. let's go to public comment. ladies and gentlemen, item 10 is open if you'd like to comment on item 10. all right. seeing none, public comment is closed. colleagues is there any motions? >>supervisor yee: sure. i'll make this to pass this out of the committee with positive recommendation to the full board with a committee report to the december 5th meeting. >>supervisor cohen: all right. we'll take that out wox. mr. clerk, could you call

items number 11 and 12 together. >> clerk: yes. item 11, resolution approving amendment number 2 to the domestic it term nat food and bench lease number 03-0200, and the annual promotional charge to $3,111. item number 12, resolution approving amendment number 1 to the international terminal food and beverage lease, between ssp america and the city and county of san francisco, acting by and through its airport commission, increasing the guaranteeing rent. >>supervisor cohen: all right. thank you very much. we've got our friend cathy

widener back representing the airport. >> thank you very much, supervisors. cathy widener, san francisco international airport. we propose to increase the square footage as well as the minimum annual guarantees between the airport and fillmore in the international terminal and the union street gastropub in terminal three. both are operated by ssp america and m approved by the board of supervisors in 2015 and 2016 respectively. the proposed modifications would increase the mag rent retroactively. in the case of 1300 on fillmore, the square foot age will go from 1694 square feet to 2,094 square feet, and the mag will be adjusted from

$224,000 $22 $224,000 to $279,000. based on the current gross sales for both locations, the restaurants are currently paying the airport on the higher of the percentage formula rate, but this modification would correctly increase the mag to reflect the correct square footage for each location. the budget department requests amending the reds lugs to accurately reflect the square footage and retroactively allow rent from march of 2017. i would be happy to answer any questions. >>supervisor cohen: thank you. i have a question for you. are you aware that the budget

legislative analysts have made some amendments to the suggestions that we should consider. >> yes. >>supervisor cohen: are you in agreement? >> yes. i am in agreement with all of them cone koeb all right. thank you. appreciate that. let's hear what the bla has to say. >> yes, as miss widener said, we are making an amendment to increase the resolutions. both of these would increase the minimum annual guarantee. our understanding is the two restaurants is paying percentage restaurant, but under the revised resolutions, the minimum annual guarantee for 1300 on fillmore in the international would result in rent of about 2.9 million over ten years to the airport. for the terminal 3 location, union street gastropub, it would result in 2.6 million to the airport. the amendment to file 170255 would be to correctly state

that the mag is 58 dlint $41 persquare foot, equal to 181,700 in the current area. otherwise, we would recommend approval. >>supervisor cohen: thank you, and i appreciate that. colleagues, any questions for either one of the ladies? all right. seeing none, let's go to public comment. public comments on items 11 and 12. seeing none, public comment is closed. all right. let's take some motions to accept -- or may i -- do we have a motion to accept the amendments? >>supervisor tang: so moved. >>supervisor cohen: and -- >>supervisor tang: as stated by our budget analyst's office. >>supervisor cohen: and overall. >>supervisor tang: overall send a recommendation to with a report to the full board with a positive recommendation. >>supervisor cohen: all right. cl clerk, item 13, please.

>> clerk: item number 13, resolution retroactively authorizing the airport director and his or her zigy to accept three gifts for the sfo museum collection. >>supervisor cohen: thank you. >> chair cohen, supervisors, cathy cohen, chair of the san francisco international airport. we are asking for your authorization to accept three gifts of 998 timetables from thomas g dragers, 73 model scale aircrafts from james lund, and 163 commercial aviation art facts from john simmons for use in the sfo museum collection. as you know, the san francisco airport aviation museum provides opportunities for learning about commercial flight. the museum's collection focuses on air transport with an emphasis on the west coast and

pacific region. it's located in the international terminal presecurity and is open to the public. each gift has been determined as desirable by the review committee as well as the airport commission and each gift squierz board of supervisors approval as they are all valued over $10,000. donations of commercial aviation related materials is an important way for the museum to help meet the goal of preserving and sharing the history of flight. there is not a budget analyst's report, but i would be happy to answer any questions you might have. >>supervisor cohen: thank you very much. colleagues, are there any questions? all right. seeing that there's no question, we'll go to public comment. seeing that there's no public comment, we'll close public comment. all right. item 13, in our hands. what shall we do with it? >>supervisor tang: i say we send to the full board with a positive recommendation. >>supervisor cohen: so moved. without objection, done.

please call items 14, 15, and 16 together. >> clerk: item number 14, resolution declaring the intent of the city and county of san francisco to reimburse certain expenditures from pros of future bonded indebtedness, authorizing the director of the mayor's office of housing and community development to commit 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 $150 million for 909 and 921 howard streets and 414 tehama street. resolution declaring the intent of the city and county of san

francisco to reimburse certain expenditures from pros 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 bond in an ago regate principal amount not to exceed $200 million for 2065th street. and item 16, resolution declaring the intent of the city and county of san francisco to reimburse certain expenditures from pros of future bonded indebtedness authorizing the director of the mayor's office of housing and community development to commit 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 $90 million for 1990 folsom street. >> 920 howard will be an all affordable housing unit. upon project completion half of the units will serve households earning no more than 50% meeting area median income. no residents will be displaced by construction as the site is currently a vacant lot. 206 5th street will be a 226 mixed income building. upon completion, 20% of the project's units will serve households earning no more than 50% of the ami while the balance will be running at market rates. again, no residents will be displatesed. finally, the unit on folsom will be an all affordable building located at 1990 folsom street in the mission.

approximately 20 units will be set aside for residents moved from potrero hill. 25% will serve households earning no more than 50% of the ami. again, no resident displacement with this project either. all of these projects will be submitted to the california debt limit allocation committee in the next two weeks and if awarded an allocation i'll return with an approval to the board therefore. i'd like to thank you for your consideration today and i look forward to your support on those projects, and with that, i'll be happy to answer any questions that you may have. >>supervisor yee: all right. any questions? seeing none, let's go to public comments. any public comments on these items? seeing none, then public comment is now closed.

can i enter main a motion on these three items? >>supervisor tang: all right. i'll make a motion on items 14 through 16, to send them through to the full board with a positive recommendation. >>supervisor yee: seeing no objection, these items pass. >> clerk: next on the agenda, item 17, resolution approving and authorizing the execution and performance of an agreement of purchase and sale of real estate in connection with the acquisition of the parcel located at 1491 sunny daily avenue street and a long-term 75 year with a 24-year extension option. >>supervisor cohen: all right. thank you. we've got sarah amoral -- just by way for the ladies and gentlemen that are here, parcel cue is the first parcel of the sunny daily housing rebuild, and it's slated for 55 units,

and the purchase price is $3 million, which is less than the appraised value. you can go into the details in your presentation. i think that this is an important piece of -- small piece of an agreement that helps us get to the larger project, and that is overall vision to tear down the dilapidated public housing that is home to many -- several thousands of people, quite frankly, it's the largest public housing that's in the city and county of san francisco, so miss sarah, the floor is yours. >> thank you, chair cohen, supervisors. i'm with the mayor office of housing and community development. today i'm pleased to present a resolution for the purchase and sale and subsequent ground lease for the first new construction at the sunny daily hope sf site, located at 1491 sunny daily avenue. the property starts a new chapter as supervisor cohen had mentioned in the revitalization

of sunny daily publdale public that has been coming on for a lo sunnydale. >> -- and approximately 600 market rate home ownership units will also go on sale. the streets include all new utility spaces and infrastructure, and 60,000 feet of new neighborhood spaces including retail and services. parcel q, while adjacent to sunnydale housing site has included in the master plan entitlement package it was

chosen as the first site because it plays an important role in relocation. parcel q allows residents to move to new safe spreer housup housing sooner. the parcel is located on the southeast corner of sunnydale and hahn. the sponsor acquired the property from the previous owner in early 2016 after being in contact for almost a year. when construction is ready to tart, the sponsor will transfer the property to city in consideration of payment of the loan, and boekt parties will enter into a long-term grount

lease for 99 years to ensure affordability. construction is ready to begin in january of 2018. once constructed, as supervisor cohen mentioned, the property will be five stories and 55 units, with three studios, 19 one bedrooms, 19 two bedrooms, and 14 three bedrooms. one two bedroom unit will be reserved for an on-site manager's unit. 75% of the units will be set aside for current sunnydale residents living on-site and that are substanceidized by a voucher authority. it will include 33 parking spot, a management office and office for services. we're here to ask you, subsequently, the grount lease before you today has annual

base and residual rent, which shows a value of $5,950,000. the property will become income restricted to families making no more than 60% ami. most city will collect $60 million annual in rent. most city -- had requested a third party review perthe city's administrative code, the third party reviewer had issues with the collier's international praisal methodology and rejected the praisal. however this is restricted land and it will be permanently affordable through the long-term ground lease, the praisal issues are a little mer academic, based upon the data

that we have collected on the southeast neighborhoods, entitled parcels have sold on average about $213,000 a door. in comparison, that would compute $11,700,000 for personal cue. parcel q's previous praisal would be at 4,00,054,000. we request this committee move to approve the purchase and sale agreement and subsequent ground lease. at this time, the sponsor, john updike, director of property and myself are all available to answer any questions that you may have. >>supervisor cohen: thank you for that thorough presentation. colleagues, dow have any questions?

all right. let's go to the budget legislative analyst and hear her thoughts. >> yes, this purchase of parcel q was contemplated by the mayor's office at the time that mercy housing purchased the property. the purchase price would be basically forgiveness of the loan. there would be a 99 year ground lease set at $59 persquare foot peryear, plus residual value. we made this a policy matter because there had not been a policy review on the original praisal, and the original praisal review rejected the initial appraisal by.9 million. we did final reference to an appraisal in 2018 that set the

value at 3.9 million, which would be more than the purchase price, but we did consider this to be a policy matter. >>supervisor cohen: thank you. colleagues, let's go to public comment. any members of the public that would like to speak on item 17? we've got a room full of public commenters. all right. seeing none, public comment is closed. supervisor yee? >>supervisor yee: yeah. let me get some clarification with the appraisal piece again. are you still going out to do another appraisal or are we done or since there's really no appraisal on this that's been approved? >> john updike, director of real estate. supervisor, given that there was a prior appraisal in may of 2017, which is on the cusp of getting a little stale, we chose to get a new appraisal. in behind sight, we probably should have simply gone with the appraisal in may which

exceeds the purchase price which as the budget analyst noted was $3.96 million. i suspect had we done a review of that, that may have been acceptable. the methodologies used in the new appraisal not commissioned by the city, so collier's provided a report to the development side, when we do a review appraisal, it is usually a collaborative process between the appraiser and the reviewer, and if there's a differing approach, we ask the two to work together to do that. it's much more difficult to orchestrate that when we're not the client. so in this case, we chose to look at the appraisal volumes that we had in this area to be sure to give us comfort that there's no question that this value is no greater than fair market value, and in fact, it

is not, so as sarah eloquently outlined, we have a lot of data surrounding this property that we feel very comfortable with on a per-achievable unit basis validates this transaction as being under the fair market value. so we have an older appraisal, we have a new appraisal rejected, but we do have a review that suggests what the issues were, and based on that, we took a look at some different comparables, really following the review appraiser's recommendations, and it led us to the conclusion that we're still in very safe territorial value, hope that helps. >>supervisor yee: yes. so the assumption is here we're done with appraising? >> yes. >>supervisor yee: got it. >>supervisor cohen: all right. are we ready to go for a vote? all right. i'd like to make a motion to send to the full board with a recommendation and i'd like to

send it with a committee report, and we can do that without objection. thank you very much. let's call item 18 and 19 together as we finish this agenda. >> clerk: item 18, resolution retroactively authorizing the department of emergency management on behalf of the city and county of san francisco as the primary grantee of urban areas security initiative funds for the bay area urban area and as the fiscal agent for the you uasi approval authority to accept and expend a fiscal year 2017 urban areas security initiative program grant in the amount of $22,428,800 from the u.s. department of homeland security through the california office of emergency services. item 19, resolution approving a memorandum of understanding with the cities of oakland and

san jose and the counties of alameda, contra costa, marin, monterey, smant, santa clara, and sonoma that provides governance structures and procedures for application, allocation and distribution of federal urban areas security initiative grant funds to the bay area urban area, as well as for other federal grant funds to the bay area urban area. >>supervisor cohen: thank you. before i recognize the presenter, i would like to recognize my colleague, supervisor. >>supervisor yee: -- supervisor yee. >>supervisor yee: we would like to see that being used in a way that's not to militarize

our police departments and so forth, and there was even discussions that maybe san francisco would like to pull out of that altogether, and at the time, around that time, we let it go, in terms of the grant application, and said that we would revisit this, and i was joined by supervisor cohen at the time to introduce some legislation to look at the other issues piece. we haven't moved forward with that yet because there's been a lot of things that we were able to participate in and so forth to see what was really going on. one of thing -- i think both supervisor cohen and myself went up and participated in the urban hs urban shoes exercise -- at least i did, and i think i saw supervisor cohen there, too. there were things that i saw in

the exercise in san francisco that were, to me, somewhat positive, but then, when i asked for more information, what about the other sites, not every other sites had similar programs, so i think what i'm seeing is that there were probably some possibilities to improve the urban shoes piece. certainly, what i liked about what you saw in san francisco, the one that i saw in san francisco was the fact that even though it was not fully exercised, but they did have some activities in there that valued the deescalation techniques, and the team that i saw that was going through that had four people that were trained in it, which was a real positive thing to me. and i think we've had meetings, i've had meetings with different people surrounding this particular grant, and i

have to say that i'm kind of disappointed that given what we articulated, given the fact that we said we'd like to reflect our culture in this, that the mou in particularly, was an opportunity to do something with, and of course, what we've got today in front of us is basically the same mou that comes up every year with no modification, and at -- and to me, i -- i think the last, i guess county or whatever entity that's going to look at this mou, which -- but we had an opportunity to do some modification to this mou to include some language that could have expressed, at least from our county's point of view, what we'd like to see

better in the -- in the uasi activities, so i -- at the end of your presentation, i would like to introduce some amendments to the mou, as well as the other item, number 18. and -- and at this point, i still believe that we can help urge some improvements in their urban shoes piece. alameda county already has pastored 12 principles and guidelines that they'd like to move forward on that. i'm hoping that as we talk about these amendments, people will understand why it's so important that we don't just

accept anything that comes before this budget committee with the comment that this is -- it's kind of too late and this is last minute and so forth, when everybody knew -- except for me -- that the mou was going to be -- was moving forward and this was at the end of the process. so we have several months, if not more than that, where you could have -- the department could have come to the board of supervisors saying hey, guess what? you know, we're going to do an mou, it's going to be due in december. what would you like to see, since you -- there was so much discussion around this issue earlier this year, so those are my comments. >>supervisor cohen: thank you, and with that, the floor is yours. >> all right. well, thank you, madam chair, and thank you for your comments, supervisor yee, and supervisor yee, we look forward

to the dialogue that we've had with you and your staff, and we look forward to continuing that. we have two items before you today. the first is resolution allowing the department of emergency management to accept and expand fy 2017 thorough homeland security and federal preparedness grants. these are critical to our preparedness both across the city and the region. they help us meet the national preparedness goal of ensuring our city and residents are prepared for both national and internal disasters. the grants that we receive are used to prevent acts of terrorism, mitigate the impact of future disasters on life and property, respond quickly to save lives and meet basic human needs after a catastrophic event.

our investments are spread across these five missionaries, including community resilience, mass care, and critical emergency services. in san francisco, we have invested heavily in people. we know preparedness are a people driven business, and these aren't boureau kratters, they're people involved in their community, and local and regional partners. for example, members of our team ensure the basic needs of people displaced by fires and other incidents are immediately

met. in during the wine country fires, the department was able to deploy 13 emergency management professionals to help our neighbors to the north respond and cover from these deadly fires. overall, san francisco was able to deploy over 200 of our city and county family to help fight fires, assist with law enforcement activities, work in the eoc's, local assistance centers, inspect buildings, manage shelters, and assist in the economic recovery activities, so in all, these grants support 39 individuals from five departments: 14 at the general management team at the uasi, 13 at the department of emergency management, five at the police department, three at the fire department, three at the general services agency, and one at the sheriff's department. finally, i would like to express my appreciation fto the