i want to appreciate again the work they have done and getting us to this point. thank you so much. mr. kelly and your staff and the fire department. i've been pushing hard for the best emergency water system possible for my neighborhood and the west side of san francisco, and the san francisco p.u.c. and the fire department have been incredibly responsive and open during this process. i do want to say assuming we move forward with the system that looks close to what we discussed today, i hope it can be completed before the big one hits. we are now on borrowed time and a major earthquake is not an if, but a when. i look forward to continuing to work with the p.u.c. and the fire department as well as my colleagues on the board to finalizing this plan and identifying funding to make it a reality. any additional comments from my colleagues? seeing none, i would like to make a motion to file this hearing. >> so, we have motion to file this hearing, and we can do that

without opposition. you have the gavel, sandy, you are welcome to gavel down. [gavel] >> and thank you for being here today, and mr. clerk, please call the next item. >> number two, ordinance approving development agreement for the proposed mission rock project, seawall, 337 located east of 3rd street between basin channel and china basin park and attributing the park, pier 48, marginal wharf between pier 48 and 50, and p20. >> thank you so much, mr. clerk. and thank you to supervisor sandra fewer for chairing the committee until i got here.

i know that this is the second hearing before the board of supervisors, just heard mission rock at the land use committee earlier on monday, and so i want to thank our project sponsor and our multiple city departments for coming back to present on the budgetary aspects, or the d.a. aspects of this deal. as i have mentioned on monday, this project has been ten years in the making. and something our office has been working very closely with the project sponsor, since 2015, and what makes me most proud of this project is that it is the first project and the first developer that committed to building 40% affordable and middle income housing, and you have set the bar for the developers who walk through the doors of city hall in terms of what is appropriate to build in the city. we know we have a housing crisis, but it's not just a housing crisis, it's affordability crises. so many of our residents cannot

live in san francisco and what is particularly sad is that households that make very good income can't afford to live in san francisco. and so i really appreciate the giants, our home team as i said before, hitting it out of the ballpark and making sure it's a development that will last so many residents. nurse, teachers, middle class workers, entry level tech workers are not allowed to live in san francisco and the city they love and the city they work in. so this is one of our largest surplus public properties in san francisco, 28 acres, and there are many other amenities that will be included in this project, including eight acres of open space, which is sorely needed and in my district and a commitment to small retail and other amenities that our residents in mission bay would like to see more of as this neighborhood builds out. and so without further ado, i want to go straight into presentation. >> i had --

>> ok. >> announce presentations and then allow comments from members of the committee. so, i do want to recognize that we will have rebecca benacini, executive director of the port, along with project sponsor fran weld, senior vice president of the giants, and controller will present, and we do also have an attendance and adam vanwater, phil williamson from the port, jack bare, general counsel for the giants, and other members of the project sponsor. the only thing i would ask, if the, for the portions of the presentation that took place at land use, if we go through that a little quicker today and just really focus on the financial aspects of the deal for the community that would be great. president breed.

>> thank you, supervisor kim. i just wanted to say a few words. colleagues, today we are hearing these particular items. i along with supervisor kim introduced the items with the mission rock development, i believe it is a significant opportunity to transform an underyut liedzed portion of our waterfront into a vibrant community and we are excited to get to this point. it's critical for accommodating the city's need for more housing and more affordable housing. more than 1,000 new homes. 40% of which will be affordable, and i know supervisor kim was instrumental in helping to lead that charge. one of the things i am most excited about in this project that middle income housing units are a part of the equation. this project is building a true

affordable housing ladder, including affordable housing opportunities for those making anywhere between 45 and 100%. projects of the scale offer the opportunity to expand the housing opportunities for middle income residents and families who don't necessarily qualify for our traditional affordable housing levels, but cannot compete in the housing market for market rate units. this project will also generate key public benefits, including eight acres of new public parks, investment in securing our shoreline against sea level rise, and facilitate the rehabilitation of the historic pier 48. 74% of our city's voters approved this project, and i look forward to our discussion today where we will get an in-depth understanding of how this all will work. thank you all for being here. >> thank you so much, president

breed. and mr. clerk, actually i apologize, i meant to call items, not just the next item, but 2, 3, 4 and 5. >> two called. three, a resolution approving disposition and development agreement for the proposed mission rock project between the port and seawall lot 337, same acres identified for 2. 4, approving memorandum of understanding between the port and other city agencies regarding enter agency cooperation for the mission rock project. and 5, resolution memorandum of understanding related to and apointing the port commission for the proposed mission rock project and making appropriate findings. >> thank you so much, mr. clerk. and so why don't we bring up the port.

>> thank you. to respond to your remarks, i am going to flip through the presentation and go on the financials. others can respond to any questions of interest to the supervisors. the actions or sorry, the request for making from g.a.o. is request a recommendation to the full board on several of the key transaction documents for mission rock, development agreement, disposition and development agreement, interagency cooperation between the port and other city agencies and the m.o.u. approved the port for the financing districts. you are aware of the site, here it is on the central waterfront south of mission creek channel, across from the ballpark. noted the timeline. began in 2007 when the report went to the state for senate

bill for unallowable uses on port land, apartments, office, and we are excited about the benefits and believe it will be found consistent with the state lands, and a long time coming and we are very proud of the community planning process we have gone through to date. today the uses on the site are surface parking, we also have tenants in pier 48, primarily used for storage, special events, maritime berthing. transformation in the next 10 to 15 years i won't say breathtaking, but very notable one, completing a neighborhood very proud of all the community benefits anticipated through this project. implementing a new neighborhood delivered in phases. phase one, just want to focus on a couple key points on this slide. phase one includes what has been one of the most highly desired

aspects of the project. the landmark park, chinese basin park, the north side of the property in phase one. it's also the most costly phase, support the entitlement expenditures, it has the beautiful park, and it has some of the key backbone infrastructure, gets the public and the infrastructure out to the water. so, phase one has four parcels to support those level of costs. and point out pier 48 is shown in phase four but the lease document before the board is for a ten-year interim lease to support sort of implementation of the project. it will serve as an outlet for parking needs and special event needs. but during the ten-year term, the port and giants have mechanism to terminate that lease early if there is a long-term development opportunity, found to be financially feasible. it's shown in phase four but we

have the ability to bring a project forward if we can get together the uses and the financing sources to make that project come earlier in the process. the development program includes 2.7 million square feet of residential office and retail and active uses. 40% inclusionary housing, income levels between 45 and 150% of median income, eight acres of park, and also want to note a key infrastructure feature, we are on the water, we know what's coming so the site is resilient to sea level rise, planning for 6 to 6 inches, and a funding mechanism to protect this site and other sites along the port we know will have to face, or have to come up with some armoring and other types of improvements to make sure they are resilient to sea level rise.

i want to focus a moment on the funding structure and the funding sources. starting at the bottom of the slide, the way this project will be funded, first developer capital port will also have the ability to put in capital at the election, to fund some of the project needs. land value in the form of prepaid leases. port will be signing 12 to 13 leases at the site, some prepaid using qualified project costs and i.f.d. is before the board, next week, c.f.d. later once we completed some of the mapping requirements you need in order to form the c.f.d. those already the key ways we are funding the qualified project costs. also have to fund the developer return, the port return if we put in money ourselves. and then we'll be sharing it on the back end to the extent there is value created beyond those project needs. the real strategies of the

funding structure that we are seeking to implement is limiting developer capital, more high cost than other types of debt, maximize public financing, that's the lower way that we can pay, lower cost way to pay for thshgs and use port capital and tax exempt that we are able to do so. and just to highlight a couple of attributes of the funding sources. the i.f.d. is the tax increment revenue source capturing future growth and property taxes. c.f.d., i want to point out, not only public improvements or infrastructure costs, also ongoing services. so, the city's general fund will not be hit by these things. c.f.d. will be funding parks and streets and those key maintenance items the project will need going forward. another key item is a developer return. miss campbell may point this out, but developer return of 20%. through this, through the last five years we have been negotiating the documents, drop

it down to 18% for the developers up front investments for back turn sharing for dollars out of annual lease revenues we expect to sign. the project anticipates a new i.f.d. project area, i, which is part of the existing port wide i.f.d., i.f.d. number two. will encompass the entire site. this slide slows the anticipated costs in $2,017. not including inflation growth, not including return to the develop error interest payments on debt service. phases 1 through 4 looking down at the first bolded number in the sheet on the right side are anticipated to cost about $191 million.

also estimate for pier 48, $90 million. that will be depended on what use comes forward for that project and what their weight loads will be and that is an estimate we believe will be the eligible costs we can use i.f.d. to pay for. >> quick question about that, sorry. $90 million in superstructure, what is assumed that will get built on pier 48 with those dollars? what could get built with that? >> s.u.d. allows for, mission rock production distribution and repair, similar to the city's production distribution and repair, and so the estimate there is consistent with what we anticipated when we were working with anchor steam, who later was not able to come forward with the project, but that estimate is consistent with their kind of use. they required a little more for the weight loads they had. >> thank you. >> sure. >> i also wanted to point out

that out year i.f.d. revenue may be used for seawall and sea level improvements. we did not attempt to estimate these costs, they could be located anywhere along the port and we don't anticipate them to come to fruition for 30 to 35 years. so, we'll be coming forward with those projects and they have to go through, but we wanted to acknowledge the i.f.d., anticipate the i.f.d. used for shoreline improvements along the port, the port side of the waterfront. i included very -- we want to talk about financials. ports revenue are an important component of senate bill 815. passed in 2007, we would have the revenue or the port with get revenue to use for historic rehabilitation and shoreline

improvements. revenue streams here, they look very typical until you get to the funny wave around 2050. that wave indicates the out year i.f.d. that has converted from paying off bonds that the project needed to going to other port needs, open spaces, work rehab and shoreline. and we would anticipate using those items for whatever the needs of the day are. 30 to 40 years from now. >> i.f.d. before the full board next week, but the city has the policy for the port, and passed in 2016, and in conducting and completing the infrastructure financing plan we made sure that all of the uses in the plan and we worked with our consultant to ensure that all the policies that those eligible uses need to comply with are being complied with. we are here today, we have been to land use earlier this week as

supervisor kim noted. we'll be at the full board hopefully next week and going forward from there to state lands commission, and then back to the c.f.d. formation and then you'll see some shovels in the ground shortly thereafter. i would like to ask fran weld to come up to provide a little bit more color on the project, focussing on the financial aspects. i made a major presentation very short by saying that. >> before you go, i did have a few questions and then we can move on to fran and controller and b.l.a. report. you know, two big issues i think a lot about, having worked on these large developments projects, but also representing mission bay, one is the immense costs of infrastructure and how that delays the large projects. this is not as large as shipyards and treasure island, but it's incredibly disappointing to entitle wonderful projects reaching high levels of affordable and they

are not getting built. and so what are we thinking about in terms of mission rock. you spent quite a bit of time talking about funding for infrastructure and the affordable ways to finance it, have we started thinking in advance to make sure the project does happen and the infrastructure is not what is going to hold it behind? >> i appreciate that question, we have been at this a number of years and they are wondering when it's going to ham. what i can say is we are trying to learn from what led to those delays. i can't answer what might delay our project, but i can say that the development and disposition agreement includes milestones that must be reached for each phase. for example, three years after project approval, the giants team, or the developer team must put in an application for phase one. if they don't do that, they are in default of the d.d.a. the way we try to ensure that we can at least have a moment to, a moment, if you will, during the process, to have the interim

milestones, they must do an application. must complete infrastructure plan. all the things that need to be lined up in order to spend the real dollars, to get the project going. so, i think that's the way we tried to ensure we are not, the whole term is 30 years, we are not waiting 30 years to say we we did not get there. >> that's one of the ways that we kind of put some triggers in to ensure there is some stop gap so what happens to other large projects, a little larger than this one, it requires a lot of infrastructure to be put in place before we can even build the first unit of housing. my second question is actually more on the back end, which is once the infrastructure does get built and we saw this time and time again in mission bay, so frustrating, the city does not accept the streets and the parks and so our residents sit around and they look at these beautiful new streets and one case, a beautiful new playground and stared at it for six months

before we allowed anyone to use it. i hope we also put in, do advance work so that we don't have trouble accepting and i know you know, legitimate concerns for public works and p.u.c. on what they were approving and sometimes the plans were a little different from what they initially approved. can we do stuff in advance of the approval process so we don't have delays where streets are sitting for six months at a time, not being utilized or at worse, playgrounds are teasing our children. >> literally, that happened in mission bay, and i just -- whatever you can do during the process now today to start these advance meetings with sfmta, public works and the ports, so we don't have problem using the streets when they are doing. >> this is a concern for us and the developer as well, we don't

want that sort of p.r. disaster and we don't want something built that people can't use. thank you for noting that and we will circle up and make sure we continue to have answers for that. >> miss weld. >> thank you for answering the questions. >> you are rewelcome. >> thank you, becca. my name is fran weld, senior vice president development for the san francisco giants. happy to be here today with my team, jack, john, jillian, roscoe. and a particular, you know, thank you supervisor kim for all of your hard work since the beginning, sponsoring with the late mayor lee, and seeing this through a long road. and president breed for your energies in keeping this project really moving forward. during a time of transition and we are thrilled to be here today. i wanted to just touch on today

some of the key financial aspects of mission rock that we have worked hard to structure our deal with the port around. and i think there is an overarching theme around self-sufficiency and sustainability in the financial structure that we have -- that we have negotiated with the port. becca mentioned the phasing aspect of the project where the park is delivered up front, and there's a combination of residential and office buildings brought into each phase. this mix of uses i think also helps to address potentially some of the delay concerns supervisor kim was raising, each phase has a mix of land uses. within the overall project site,

there are 12 development parcels, and each of these will pay into a master association with dues, to help support the ongoing operation of the project itself, and a lot of the commitments that we have made around transportation and sustainability and community development at the master association level. that is in addition to c.f.d., special taxes and maintenance district, so we have multiple layers and levels of financial structure where the province is supporting the site wide goals and commitments. this allows us to have a neighborhood wide focus and we have spent a fair amount of time talking at land use and transportation earlier this week, and it's something that all the supervisors are focussed on, in particular around retail and community serving spaces,

and we have planned and programmed for that within the mission rock project. again where the mix of uses and value off the office buildings helps us achieve these locally serving oriented small scale, small business retail and along the entire ground floor. with the design, our streets are very unique. interdisciplinary, enter agency dialogue that's so important for getting the infrastructure not only built, but then accepted and open to the public. so, we have been working with m.t.a., the planning department, d.p.w. and p.u.c. about the last five years in a group of cross agency design teams, and i.c.a.

agreement that will be before the board as well documents sort of how that cooperation will occur so that there are timelines that are well established up front for design review and overall acceptance of the streets and infrastructure. >> can i just ask what the response has been from both the p.u.c., public works and m.t.a., on the different types of streets that you are proposing? i know they typically don't like that. and i get complaints about it. and they, we have a hard time approving them because they have trouble fitting their normal infrastructure within the new designs. how has the response been so far? >> yeah, yeah. it's a great question. all of our streets fit the subdivision regulations and the better streets goals. we do have that shared public way street, a curbless street, i think all the agencies

understand and appreciate the design vision around this street being a central gathering place and almost a main street with really robust retail and smaller shops, so they have been open to that dialogue. and the c.f.d. mechanism that we have of the special taxes actually funds some of the unique aspects of that design. for example, you'll see here, site pavers. not atypical, but important enough to create that design feel in a unique space that we are supporting through the project itself. >> ok. and this is also to the departments to be open minded, but i'm just glad that you are already having those discussions. i know some of the issues that come up is, you know, the street sweeping machines don't work on different type of sidewalks, sometimes the sewage

infrastructure does not fit. i'm not an engine sneer, i'm not saying one way or another. i like this design. purely layperson perspective, i want to make sure we work ahead of time. so i appreciate you are meeting with the departments. and like let's really get an agreement early on so we can move the projects forward. >> absolutely, and on a personal level, i think the level of engagement that we have had at the staff level of those departments has been very strong and committed to finding the solution early on. and we have used it with sustainability, the energy and load sharing on-site, we spoke about at length on monday, i will go quickly. and with respect to sea level rise, and the raising of the site 56 inches, the streets will

all be pile supported so up front investment helps the city have a long-term sustainable asset. we are trying to learn, particularly mission bay, some of the geo technical responses of the soils to what's been built, and plan for that from the beginning. sea level rise design solution supported through different outcomes, and china basin park, one thing the shoreline special taxes used for on-site, the sea level rise and king tide management area on the map of mission creek, and it will be -- similar projects to help the

sport response to shoreline improvement. our shoreline response on the east side is a little bit different, a hard scape on the industrial front, and that allows us to have the production uses on the ground floor of several of our buildings. a lot around the financial structure, we fully believe some of our work force commitments have just as much potential for creating economic impact and benefit to the city, 30% local hire commitment, 20% local business. we are contributing $1 million, split evenly between city build and community-based organizations. and we have first source commitments during the operations as well. so, we are really creating, i think, a pipeline for robust economic development, not just in mission rock, but the city as a whole. >> i have a question about the

retail space and the cost associated with those spaces. you mentioned local businesses and one of the challenges we have all over the city, the rising cost of rents for retail space in general, and so will it be affordable, number one, and affordable for years to come, because part of the challenges, there is no rent control, so for example, if someone comes into a space and they are renting that space for maybe a couple thousand dollars and then the next year when they are negotiating the lease or five years down the line, they get like a $10,000 rent increase. i mean, how are we going to deal with that so that there's not a high turnover in businesses and it's sustainable so there's a real balance of businesses that actually serve the area, especially because of the housing and the different income levels that we plan to have for

the housing developments in the area. >> yep. it's a great question, and certainly one that we have grappled with, deeply over the planning process, as we have all seen the landscape around retail changing. i feel very lucky to have a partner in the port who really understands the long-term neighborhood values, and community-based retail will actually help support and sustain more financial value of the project overall. how we think about retail is a site wide basis, and the rents and revenues that are coming off the ground floor, if you try and maximize those, you are just kind of creating a situation where you are thinning out who can afford to go in, what sorts of businesses can be there, so, we have taken a multi-pronged approach to this. one is that our retail spaces are much smaller than the spaces

that are often seen in newly built buildings. smaller spaces that just by definition are more affordable to smaller businesses. and the other is that when we have programmed the rents associated with those retail spaces, we have held them at a lower level than a lot of landlords are currently charging. we believe by holding the rents on the first floor lower, you can create a wonderful neighborhood feeling and potentially increase the rents that the office users are paying on floors 2 through 10. so, really the site wide economic approach instead of just maximizing the revenue off the one place. and the port has had wonderful experience in the ferry building, a similar model, smaller operating businesses and supporting a number of different businesses on the ground floor has driven overall asset value of that, i don't want to speak

for the port, but that we sort of talked about that as a model for the mission rock retail value mix. but i think it's -- it will be an ongoing, you know, conversation and challenge for the whole city and of course, as we are building out over the site. >> thank you. supervisor fewer. >> thank you very much, chair kim. so, i just held a hearing on commercial store fronts and i think what you said, though, does not really answer the question about continue the affordability. so i think that as we start out with the intention of it being affordable, it's a state of where retail is today and also nonprotections for them, from landlords. and actually, increasing, i have many businesses in my district that have been there 34 years and the rents are being raised

five times. and so they will have to go out of business and so i think we don't want to see this area as a revolving door of businesses, we wanted to see these businesses that actually serve the new residents since it is 40% affordable, below market rate housing so these residents can actually enjoy a continued operation of a business, and i think that president breed had a very good point. my question is, is that how have we collaborated with the san francisco unified school district to serve all the new residents, and i think this is a really important part of infrastructure. if you are looking at 40% below market rate, you are going to have people, hopefully, that will also participate in our public schools. there is no current -- currently, no public school in mission bay. the site that is already slotted for the school can hold a maximum of 500 children. we know now that with this development we are already over

the 500 student mark. and there is no middle school planned for the area. so, i am curious, and curious for a while, when i first heard about the development, how do we think that we are going to actually educate the children that live in that area, and we are looking at below market rent, probably looking at people that actually will use our public school system. and so what have you been doing around that, concerning this development? >> great question. thank you. just on your first point around the long-term rent around retail, i think one of the things that sets the giants in a different, and sets us apart and i think one of the aspects why the port partner with us, is the long-term hold of the buildings themselves. so, we are not going anywhere. we are making this investment in our front yard and so we will be long-term owners of the buildings and therefore, the commitments and the values that we are bringing to the project

up front will continue. on the school district, we -- we have been supportive of the efforts to actually finance and build the site that's in the mission bay neighborhood. i'm, i can't speak for unified in terms of where that is right now, i might have colleagues who know kind of what the specifics of the timing of that are, but i believe that it will be delivered in the early 2020s, so before the entirety of mission rock is built out. and we are planning to have 2 and 3 bedroom units throughout the site in order to be able to support these families. we'll also have child care on-site, which is another thing that has been lacking in neighborhoods across the city, sort of the early -- early youth child care focus, we'll have that on-site. but certainly we have been in

conversations with the school district and continue to support their efforts around mission bay delivery of that school. >> that is a really expensive site to build a school on, because you have to dig so deep with the pilings, and the state of california has strict requirements. a private school, you can build one in garage, but the public school that serves the public school is more expensive. so, what have you been doing around the financing of it? because as far as i'm concerned, i was just off the board in 2016, plans have not been drawn, it is in the bond, they have not made a commitment that that school will be built. ground has not been broken, plans have not been developed yet. so, looking at a 2020 timeline, i think it takes five years to build the school as we know. we built one in the bayview district and took us five years. i would be interested to hearing about how the partnership is

working around the financing the new school. i think it is imperative there is a school there that can accommodate the new residents coming in, but even the existing residents because quite frankly right now, will -- there is not a school to serve them. what about the financing package, a private-public partnership to have a new school built, and possibly two? >> we have not had conversations around financing that school. i don't know if becca, you have additional -- >> i'm sorry, i thought you have been talking about financing. >> supervisor, what comes to mind as you have been asking the question, is our assessment of all the fees that the project will be paying and we do have a handout one of our packages about how much in school fees the new development will be providing for the school district financing and we -- >> above the required developer's fee they are doing now? >> no, it's not above.

>> that is actually pretty minimal. that goes into a separate pot of developing fears and does not actually go to rebeing of new schools. i think this is a really expensive project, i think it's going to be a beautiful project. as i mentioned to the project sponsors, when i met with them in 2016, is that my main concern is that, and it is a concern of all new developments that are happening in san francisco, that they have not been planning alongside the public school system. therefore, san francisco public schools are five schools behind in building and it takes five years to build a school, and one school with every bond. and so i think this is a huge consideration, i just want to put it on your radar. it is one of the things that actually makes me a little skeptical about this project. alongside that, this is a really ambitious financial, you know, plan for this whole project, but the infrastructure, the inability to actually build fast enough and big enough to

accommodate the new residents, and also even the people that are currently living in mission bay is really very concerning to me. because the city is also embarking on many new developments, park merced one of them, not a school there either. and this is a huge issue for the residents. i am looking to build a permanent residency of families here in san francisco. i am tired of the long-term people that come and don't invest in the city. if you are building 2 and 3 bedroom units, it should be foremost on your mind. they need a place to properly educate their children and you are qualifying for below market rate, frankly, this is who the public schools serve primarily. and so i would like to see more plans around that. and i would like to see some ambitious plans, frankly. and if it can be more than developer fees, developer fees don't cut it in this state of

construction, construction is much more expensive than it used to be also. this is a main concern around this project. i think it's a beautiful project when i look at the photos of it, and love it's 40% and i commend you on it, and also don't want to leave the residents high and dry when their students need to be educated. just wanted to bring up that concern. i would look for a more robust private-public partnership, looking forward to entertaining more and more as we are looking at the expenses of these buildings being much more expensive to build now. in this climate. thanks. >> thank you. excellent points. >> thank you, supervisor fewer, great to have former school board members and it is true, we focus so much on building, build build build, incredibly important but we have to make sure we have the infrastructure and support for the new

residents that are coming into san francisco and that we have schools and child care centers in place. so the families have somewhere to go and don't leave, not just because there is not enough housing, but not enough schools in child care centers as well. thank you for those comments and look forward to working, and ok, so we will move to the controller and b.l.a. report. from azim. i'm sorry, mr. khan, sorry. >> good morning, hassan khan, controllers office. and i will be briefly talking about, i won't go through the

whole report, page by page, but briefly talking about some of the key things which affects our analysis, and i won't go belabor especially the zoning changes but just want to give an overview so we have some people who have not seen that before so they have a better understanding here and how the impact of the report and analysis. so, basically this project site is, consists of two parts. lot 337, seawall lot 337 and pier 48. 337 is about 23 acres, and pier 48 is five acres. pier, on the seawall lot, 337 is currently as a mission bay open space. currently zoned as that. and whereas, pier 48 is having

to still enter zoning. under the proposed zoning, changed to mission rock s.u.d., and the back, 23 acres seawall lot, height limit will increase. and i'll go through -- just put this general map of the proposed s.u.d. areas, where you have a better understanding how that is changing. and you can see that the height changes from 90 feet from mission bay open space, from 90 feet to up to 240 feet height. one thing to keep in mind is the height changes after 28 acres, only changing on the ten acres of the parcels, not all 28. pier 48 height limit remains the same, at 40 feet height. and other things to keep in mind, some of these parcels like parcel a, d1, f, i and k, residential uses.

b, e, g, h and j are dedicated to commercial development mostly. and another thing to keep in mind, and some of these parcels, the height limit is, for example, on a, b and f, 240 feet, but only increase above 190 feet you have to build residential. you can go up to 240 feet above 190 but have to build residential on there, and similarly on parcel, that a -- ok. so let me briefly talk about some of the project description as proposed, and as the proebt is proposed, the following thing will happen.

housing unit as proposed under the development agreement, 1,327 housing units will be built. and of those, 526 units, 40% will be affordable to the household making less than 150 a.m.i. 200 square feet of p.d.r. space created, and 1 million square foot of structured parking also built, and this project will increase about eight acres of parks and open space. so, this is how actually the map, how the site looks like

today. parking today, and this is how the -- the rendering of the project as proposed. that's how it's going to look in the future, if everything is built the way it is. so, our major thrust of the whole report is about some of the economic factor, how the project impact the city's economy. one of the key thing is that this proposed zoning and the development agreement as the project is proposed will greatly expand their capacity of the site, will lead to increase in the housing retail and office space. and this will put a downward pressure on the price for rent and residential and commercial real estate across the city, more attractive for residents and businesses. when you clear more supply, that puts the downward pressure on those things. and another thing which makes

economic factor, investment which is flowing from the free zoning in the investment agreement, which will generate additional construction spending. and that's, we estimate to the tune of about 2 billion value, $2 billion value of the total residents -- residential and commercial development, $2 billion of the value. another key factor which will affect project, the city's economy is the direct value of the subsidy associated with the affordable housing, can alleviate the housing pressure by the people burdened by the low income household, and that also will stimulate additional spending for the people to spend into the local economy. so, the way our office looked at

this, development is to, because there is some level of flexibility or uncertainty how you can develop, you know, in the constraint of s.u.d., proposed s.u.d., and how it will be, you can construct, so we looked at the three different scenarios. one is under the -- a high residential scenario and the high commercial. given the constraints of the s.u.d. zoning, there are certain parcels dedicated to mixed residential uses, and some are mixed commercial. and there you have to have a minimum of 60% either residential on those, if they are mixed, the mixed residential and if they are mixed commercial, they have to have at least 60% dedicated to the nonresidential uses. some, there is some flexibility.

so, we view this as a pre -- and whether it's a high residential scenario or high commercial scenario, and as the project is currently being proposed and a lot of these financials, you have heard about, based on this, what we are calling it a mid -- midpoint scenario, in between these two, and gives you the best in some way, best of the both worlds, you know. so, i'm going to -- so, these as mentioned, these baseline scenarios will be, three things we'll be looking at, high residential, high commercial or midpoint. and i'm going to go through, and one thing i want to mention is all these, all this analysis hinges on the difference in the development potential capacity, what under the existing zoning,

unthe baseline, if nothing has happened. if there was no s.u.d. zoning, what could you have developed. and under now the existing, under the proposed zoning, what you can now build. so, this is all this analysis looking at, for example, you can look at this table on page 12, all different land uses and existing zoning, you can only create a p.d.r., only 345,000 square feet. but proposed high residential scenario, create up to 1.6 million gross square feet and you can go up to 1600 residential units. and 18% b.m.r., that would generate about 288 b.m.r. units, and similarly under this high residential scenario, you can still build 972 square feet of commercial office space and so the total is roughly about 3

million square feet of total residential and nonresidential space, you can build under high residential. and similarly under high commercial scenario, you can still build residential because it's a mixed use development and you can build up to 1.1 million square feet of residential, and that would generate about 1,000 total units, and still afford or at least development has commitment up to 40% of those units will be b.m.r., and affordable to people under 1150 a.m.i. or less. 1.4 million office space. total roughly again, close to 3 million, small difference because how these parcels will be divided. and midpoint scenario, scenario

three as proposes, 1.2 million gross square feet of residential space, 1327 total residential units, 531 will be b.m.r. so, again, that generates about 2.9 million gross square feet of office, total residential and residential space. and the last three columns are basically the difference between high residential and existing zoning potential. so, difference basically, and that's total p.d.r. differences down there, and you can see, and that's what we are analyzing, and that's how we, most of our report based on that kind of analysis. so, i'm not going to belabor all this -- >> mr. khan, i'm sorry if i missed it in the presentation, but when you looked at calculating rent and revenue generated shared between the

port and the project sponsor, what was the baseline that you were using for the market rate runs? what were the assumptions? >> assumptions under the rent reduction, where you were looking at how much space is being created, given what is the total citywide spaces. so, we look at the percentage of the space increase, and then we have our calculations about our -- our assumptions, based on that we get the combination of those two, who is the percentage increase in the office space or the residential space, and then we, using the estimate, we come up with what is the percentage decline in the rent. once we have the percentage decline in the rent, we multiply that to the total rent value, what we estimate, given the

data, vendor which we used there to look at all the parcels around the city. and figure out what is the total -- >> what was the assumed per square footage for residential office retail and p.d.r.? >> i believe about, total citywide was i believe 107 million, office space -- >> not how many square foot, what did you value it per square foot for rent. >> yeah, rent is, i believe, if my memory serves me right, about -- 67, 63 to $64 for the office space per square feet, and if i believe it's for retail, about 30. and for p.d.r., around $10. so, i can get you those numbers exact, that's the range we are talking about. >> and what was the assumed

value for the market rate residential? >> market rate, using an average of these based on the 700, average 749 square foot area, 800,000 per unit market unit. >> 800,000 -- >> rent, total across the city and the percentage decline in the rents. so -- >> what was your assumed rent? in -- in calculating the numbers. for office, you are assuming between 64 to 67 per square foot, right? so for the market rent, for the residential units, what was your

assumption? >> for that, we are using a rent, not rent -- for the unit, residential units, we don't use the rent, but we use the price if that makes -- >> price of what? >> price of the unit. >> the price to build or -- >> none of these are home ownership. so -- they are 100% rental. so -- what is your assumption? if we are doing economic analysis of what it will generate, what is it going to generate? what will the project generate for the city and the project sponsor, your assumptions? >> we are not taking into account what the project is generating for the project sponsor. what we are talking about, economy, citywide, all these analysis not based on just this project, but these are citywide economic impact. what is the citywide decline in the price for either rent, for the office, for the retail, or

for those, for the p.d.r., and the home -- the residential prices, and then we applied those things to the citywide analysis and that's why all this, and turns out into a citywide analysis, that's how the analysis is performed. i can explain it maybe -- >> that's ok. i see behind you, maybe the port can talk about some of the assumed revenue. thank you, mr. khan did not require that input for the study he had to do, our projections and our current modelling and the market rate price will be whatever it is. 4.50 to $five per square foot for the market rate apartment units and i did not catch what the assumption was on office, but the rental rate we are using in the low 60s, up to $65 per square foot for office rental rates. >> yeah. mr. khan said 64 to 67.

yeah. >> ok. >> does that answer? >> yes. >> thank you very much. >> at this time we'll move on to miss campbell at the budget legislative analysis. >> thank you very much. >> good afternoon, chair kim, we reported specifically on the development and disposition agreement with the developer for today and we also in our report, i won't go into detail, covered the infrastructure financing plan and issuance of bonds which will be considered by the board sitting as a committee of the whole on tuesday. terms of the disposition and development agreement or d.d.a., board did endorse the initial terms of that agreement in 2013, as miss menicini said, the term is the return to the developer for their capital contribution to the project. under the