error that prevented this from going to the planning commission on april 12. it was the same noticing error that prevented the industrial so some -- central soma plan from being here earlier. i would like the committee to consider a continuance until the planning commission hears the matter, on may 17, a week from thursday. so having said that, i am joined today by a star from my staff, sarah jones from the sf mta, and lisa chen who actually is responsible for that financial analysis. the one thing that i just wanted to mention and lisa can get more into the details of that financial analysis is that we are -- we do have a very serious concern about feasibility with central soma projects. i fully understand the goal of this lemgs latio-- legislation. i fully understand the need to finance our tran set systems, and we were doing the financial analysis for central soma, we

were trying to find the sweet spot between feasibility and maximizing public benefits. we did that feasibility i think three years ago in 2015. we redid that analysis this year, recognizing the very substantial increase in construction costs, i get -- i understand the goal, and i'm not arguing with the goal of funding transit, i'm just very concerned about that sweet spot being lost in this process. and i would also remind you just kind of the community facilities district that we are proposing in the central soma plan, the mello-roos, if you will, that we are generating half a billion dollars in the central soma plan over 25 years for transportation improvement. so there are certainly the large projects in that neighborhood are certainly on the hook to fund a lot of these transportation improvements even as currently proposed. but maybe with that, i'll let

sarah jones to come up and then lisa chen from the planning department to talk about feasibility or whatever you want to do. >> supervisor tang: supervisor peskin, did you have a question in the meantime? >> well, i was just going to go through this -- >> i think lisa is the author of that and can go into it in more detail. >> supervisor peskin: thank you so much. i'm not being argumentative, but this kind of reminds me about where a developer of a large project, whether it's mission bay or the shipyard or pier 70 or treasure island come forward, and they say here is our pro forma for a 30-year buildout time horizon, where in we acknowledge markets cycle up, and markets cycle down, and then they come back 24 or 48 or

36 months later, and they say oh, any god, the sky has fallen -- oh, my god, the sky has fallen. we need to renegotiate the deal. so in 2018, in one of the most robust economic environments, yes, with construction costs escalating, the transit feasibility nexus study was issued and actually showed a maximum just nexus fee of $23.65 a area foot, and what i am proposing is $24.50 a square foot, and we can still talk about central soma. it still seems to me there is somely way there, and to come back and say oh, three years later, this factoid has increased is not the long-term tore e horizon. we know that this current economic environment will cycle

the other way. i was on the board during the great recession. i was on the board during sars. the combination of sars, colleagues, combined with september 11th lead to a period of economic instability in san francisco and other municipalities on the western sea board of the united states, and i was on the board in 2002 when we had massive budget cuts the likes which i look forward to again. but at any rate, my point is it's problematic to me when we do a nexus study, spend a bunch of money on it, say the maximum square foot feasible fee is north of 25.5 bucks, and then come back and say three years later it's more expensive to build stuff now, and you're welcome to respond to it. >> no, i don't want to enter

into a debate, but i think we all know there's a difference between a nexus study and a feasibility study. a nexus will create something that's not feasible. i just want to reiterate, we are trying to find that sweet spot for central soma. i'm not arguing that developers should pay their fair share. it's only what's feasible. >> and quick question on that. i think supervisor peskin is referring to page four of that 2015 nexus study where it references the $23.65. does that take into account sort of any of the other -- or would that be in the feasibility study, where you would take into account all the other different fees that would be layered on as a result of -- >> that would be different. that would be the feasibility study. if i can, i'll ask lisa chen to come up and give you some of the finer detail on that. >> that would be great. thank you. >> good afternoon, supervisors.

lisa chen of department staff. if i could get the overhead. so i believe that a number of you have already seen this latest update that the department has created for our feasibility analysis specifically in central soma. i also have a handout describing kind of a quick analysis we did of the original tsf financial feasibility analysis that i can go over, as well. but just to reiterate what john rahaim said, you know, we're really striving to maximize the value capture in this area, so just to give a sense of how we often do this for area plans, we calculate what all of the needs are, what the public benefits are, and then we cal clalt how much we believe benefit can bear, and how much value we're creating through the upzoning, and we're trying to capture a certain amount. so in this case we're trying to capture between 50 and 75% of

the value that's being created by the central soma upzoning. so that's what these numbers are showing in kind of the pass tepass -- pastel. the pink is the more marginal, 75 to 100% body capture, and then the green is showing the prototypes that are no longer feasible after we apply the exactions. so the first line that i want to point out in green, this is referring to kind of the level that we had set back in 2015. this was when we believed that the adoption of the central soma plan was imminent, and so the 2015 development assumptions were still more or less valid, at that point. the next line shows in yellow what happens when we add 2017 assumptions. so we basically have escalated

our costs as well as our revenues by two years from 2015 to 2017. we were unable to escalate it all the way to 2018 because we can't look into the future to understand what 2018 average rents will be? but just to kind of orient you to this, this first column is showing the tier a's -- tier a and tier b properties. so these are referring to the central soma fee tiers, and this next column is tier c, which is properties that are getting the highest level of upzoning. so we see when we go to the 2017 assumptions, both of the projects that were shown to be feasible in 2015 are now kind of in that marginal feasibility. and then, the next two lines show when we add first the $5 fee increase that was introduced by supervisor peskin, and then, second, the $2 more moderate increase that

has been proposed. so when we look at the $5 increase, we see that the tier a and tier b property becomes infeasible whereas the tier c property kind of remains in that marginal level. and then, the same is still true for the $2 increase. >> supervisor tang: supervisor peskin, did you have a question? >>. >> supervisor peskin: i did. i appreciate the focus on central soma, but let me ask you this as a threshold question, given the history and the nexus study and the feasibility study. outside of the central soma, what is your analysis, conclusion and recommendation relative to my proposal for a $5 increase? >> sure. so with the -- the tsf, our financial analysis looked at two prototypes. one in what we were calling east soma, but it's essentially similar to the central soma type, and then central transit, which was a much higher rise

building about 400 feet high, and we were using a different methodology, so that's why it's hard to compare. it's apples to oranges, because in that case we weren't looking at an upzoning, we were looking at what's the land value if we add higher levels of the fee. so in that case, we were hoping to add a certain amount of tsf's and not change the land value by more than 10%. so we have done a very preliminary analysis that looks at what would happen if we added the $5 as was proposed, and i can pull that up. so when we first escalate the -- the assumptions to 2017 and then add the fee, we see that in eastern soma, the land values change by 9%, and then in the transit center it's changed by 12% which does exceed that 10% hethreshold th

we had set. >> supervisor peskin: thank you. any comment about my observations relative to jones lang lasalle's projections for different city agencies. >> thank you for that. i'm not sure on that, but i can look at it and get it back to you. we weren't able to escalate it to present day because we don't know the full rent to the 2018. >> supervisor peskin: yeah. no, it's a backwards looking business. >> can we go to the next page because to the central soma projects, because i do have some questions here. >> this page right here? >> okay. going through the project. and actually, i'd just start with my questions because i think that they're somewhat self-explanatory. so it was good to get a sense

of the -- which buildings are in tier c versus a and b, where you say that it may not be feasible for a and b. i notice that a number of those projects are hotel projects. this is, of course, anecdotal, and it's not based on any type of data crunching that i have done, with you we're hearing a little bit more from the developer community that they're moving to hotels because they feel that is a more profitable project partially because of the affordable housing and affordable fees. however you said this was something that would not be able to absorb an increase in transportation fees. i've been looking at our housing and job linkage fee because i am concerneds that developers are going to move to hotels and not residential. so i'm curious as to how you -- you know, in the calculations

you've determined that this increase in transit impact fees would not be feasible for hotel projects. >> okay. so -- >> given, on balance with all of the fees. >> sure. sure. so i think i should make a major caveat, which is the way that we run our financial feasibility analysis which is that we choose a number of prototypes that we say kind of represent the typical range of development that we expect in an area, and so in this case, we had one office prototype, and then two residential prototypes for central soma. we didn't actually look at hotel, and so i can't make any comment on thousand this fee proposal would impact the phasible of hotel. and then, kind of another assumption embedded into that is that, you know, with our prototypes we're looking at kind of reasonable averages for everything, whether that's rents or construction costs, etcetera. so every project is going to be different, and so on this list of projects that we've

presented to the board, even though we're showing that some of those prototypes are on a and b and some are on tier c, we're actually not making any comment on the feasibility of those individual projects as those are, you know, subject to all of the particular agreements that those developers have with their contractors. >> so when you state in the previous page that it is not feasible for tier a and b projects to absorb either a $2 or $5 increase, it's an imperfect science in many ways. >> mm-hmm. it's definitely an art and a science. >> okay. i think that's helpful in helping us examine the tsf proposal before us. thank you. >> thank you. >> okay. and i also want to jump to i think another spreadsheet that was sent over. i do want to applaud supervisor peskin. i know he was trying to lead a

huge undertaking in terms of finding mortransportation dollars, so i definitely do not fault him for that. we all do support him in that endeavor, but i wanted to know how much money we are going to be generating from whether it's a $5 increase, a $2 increase, whether it's all the projects in a particular pitier would n be reasonable, how much would that result in. i just want to -- i want the public to know kind of what we're talking about here in terms of the revenue we're expecting. >> sure. if i could get the overhead again. so what we projected -- so we took, basically, all of the projects that we know of for nonresidential, offer 100,000 square feet in our pipeline,

and then also through your planning and land use allocation looked at properties that are zoned for large nonresidential projects and then leave that to calculate how much we project a $5 increase would raise. so that's in this orange box that you see. so we believe in today district attorneys doll attorneys -- today's dollars be $26.5 million. when you break that down in terms of area. we see about 88% of that or 23 million is in central soma, and then, the remainder, which is about 3.2 million, would be other areas or plans in the city. so that's the $5 increase. so if the $2 increase were substituted for central soma, essentially, it would mean that the central soma value would be 40% of what you see here. so i think it's about $12 million. whereas my understanding is to keep the $5 for the rest of the area, so it would keep it at 3.2 million.

>> okay. thank you very much. colleagues, any other questions, comments, any other staff you wanted to hear from? no? supervisor peskin? >> supervisor peskin: i would only say that central soma has been in the pipeline for a long, long time. so i think it's important for all of us to note that in 2015, when the fiscal feasibility and nexus studies were completed, while central soma was not fully baked and still is not fully baked, it was something that was being contemplated, so i think we should be cognizant of that, as was the child care that. the board passed it. the mayor chose to veto it, and the board was not successful in overriding the mayor's veto. i think anyone who's involved

in central soma, 23 million to be released. and colleagues, when we're dealing with central soma, let us be clear of the financial impacts, which are three times the amount of residential development will be felt all over the city. so the nut that i'm trying to crack -- i mean, this is not about trying to make developments infeasible, it's not trying to address the impacts that these developments cause. so in the last item, when we're trying to hold the mta accountable, why is it? because we're frustrated, and we're frustrates because our constituents are frustrated. if we captured enough value to mitigate the impact of this project, and that will make developers unhappy because they will realize less profits. yes, i do believe at a certain point, you make projects fiscally unfeasible. but as i said, our job is not

to leave any money on the table so that we actually have a city that has equitiable transportation, financial transportation for all of its citizens. why should we vote for a central soma plan that only makes the situation worse when we're not recapturing enough value, and with that, i will yield the floor. >> all right. well seeing no other comments at this moment, we will go to public comment on item 2. any members of the public who wish to speak, please come on up. >> you probably already know this, but i'll just point it out that originally, the muni was originally privately owned by the developers, and they literally paid for the entire system at one time. >> thank you. next speaker, please. >> good afternoon, supervisors. my name is josie aarons, and i'm the senior community organizer as walk san francisco.

on behalf of walk sf and our members, i would like to express our strong support for increasing the transportation sustainability fee. walk sf supported establishing the tsf in 2016 because it was expected to capture funds to support our transportation needs to not only maintain by also expand our system as the city grows. at the time we advocated for a higher tsf rate because we wanted to make sure that new development paid the true cost of its impact on our transportation system. fast forward two years, and the current tsf, which was already too low to start, has not generated as much funding as we thought it would, and we still have billions of dollars of unmet needs. an increase of tsf will be used to support san francisco's vision zero goals by providing significant safety improvements to street does, sidewalks, and intersections. an increase in tsf would also allow us to invest in a public mass transit system that will be the backbone of our city. mass transit should be

supplemented by emerging mobilities like tnc's and scooters and not the other way around. and the way to ensure that that happens is by funding mass transit. transit riders are pedestrians, and vice versa. we can't keep missing opportunities to fund our billions of dollars of unmet transportation needs. walk sf is pleased to support this item to help the city achieve its vision zero transit first mode shift public health and sustainability goals. thank you. >> thank you very much. next speaker, please. >> hello, chair tang and committee members. i'm karen babbitt. i volunteer with the sierra club. i will say that preparing for this, i want to make sure that sierra club is on record as supporting this, and sure enough, there is a letter from us in september of 2015, so this has been going on for a while. dear chair cohen at the time.

the sierra club urges the board of supervisors to adopt a transportation sustainability fee matrix that makes large commercial projects and market housing project pay for their full share of transit and transportation-related impact fees. so because we don't -- we didn't have a meeting about this recently, i can't weigh in on some of the details that have gone on today, but i would say that we've been on record saying we need more money for sustainable transit since 2015, last time this was going around. we would appreciate the help getting some more money getting sent that way. thank you. >> thank you. next speaker, please. >> hi. good afternoon. bob allen, urban habitat, one of the members of the san francisco transportation coalition and mayor's task force. i think speakers have made the case for the need. the task force made the case for that need, $100 million annually. we've got the shadow of sb 1 repeal, and we've got the opportunity to get some down payment on that need.

looking at the study and the nexus seed, $30,000 over the assumed growth. even with the increase of $5, we're still only about 25% of what the study shows from -- in terms of the additional growth. and i think it's a little bit perplexing for those of us who understand our many needs in the city. whenever we come in terms of transportation, either they're around things the task force identified that this body doesn't have control over. this is something you actually do have control over. and the idea and the kind of political bogeyman that we're going to stop development, i don't see any analytical basis for that, and i don't see how this fee is going to do anything but capture the lejt latrice impacts of this intense downtown commercial development that are being felt throughout the city. i think walk sf spoke really clearly about the alternative we could have a if we start to

fund things. if this body can't take action on revenue that you can control and can intersect with the impacts of the attempted development that we're facing through commercial development in the city, i'm not really sure when we're going to do that. other cities, seattle, los angeles, even other places, are starting to take a little bit more control over raising revenue, but also over surface control. i think ultimately what will stop development is that the city grinds to a headligalt. it's one of the issues that makes the city functional, equitiable, and makes the city work. if we miss this opportunity, we don't have another chance. thank you. [please stand by for captioner switch]

and what isn't drawn from there is citywide resources for what is a citywide transportation network. i had the pleasure of serving on the task force. what we identified was the need for a mix of funding sources for transportation over the next couple days. and this, while it is not a silver bullet, it is a down payment to address the most pressing transportation needs. thank you. >> any others, please line on app. >> thank you, good afternoon. i am on the board of the san francisco transit riders. as mostly a transportation guy, i hear a lot that the city's top priorities are homelessness and housing. but transportation needs to be a

priority too. this is not a matter of what is number 1 and what is number 2 and what is number 3 or number 4. we need to pursue transportation equally along at the same time. and housing and transportation are hopelessly interconnected. that is why our transportation justice coalition includes housing advocates as well as transportation advocates and others. this is a very holistic. we all participated in good faith in the city's transportation task force. and as you have heard, as you know, we recommended a funded program for hundred million dollars a year based on the prop jay plan. but our preferred funding source as supervisor peskin explained, it is now, you know, being used as a source for two other measures going on the june ballot. as such, we need to look at the

other funding sources that are available to us. some of what may end up on the ballot and under control of the board. this is one of those that is under the control of the board. we urge you to support this very strongly, you know, as a down payment on hitting our overall transportation needs. the transportation impact development fee was mentioned at the beginning. when that was originally imposed, it corrected 50 % of the cds. athe next this cost as part of that fee. even with the increase this is within 25 %. we strongly urge you to support this program. thank you. >> supervisor tang: thank you very much. next speaker. >> both of whom were members of the task force 2045. we are both speaking in support of the increase in fees.

i want to try to make a couple of points. can i have the... this is from the original 2015 transit sustainability fee nexus. it assumed 5320 jobs created in the nonresidential sector every year for the period that they looked at sustainability fee is. the planning department, however in 2015, points out that we are doing really well. we are producing, in the period of 2010 to 2014, 30,000 jobs a year and it basically, downtown san francisco. we want to talk about sustainability. the sustainability of the city requires a massive public

investment in public transit. the answer in the original study was a see. the next this study justified nonresidential costs for nonresidential costs not counting pdr was $80.16 ohms -- 68 cents a square foot. we are talking about may be raising it to 22. what is unsustainable is not funding a transit system that works for all san franciscans. it is not sustainable for this political body to say that the only way we can pay for transit is a sales tax. thank you. >> supervisor tang: thank you. next speaker, please. >> good afternoon again chairs and supervisors. i am here today to speak in

favour of the transportation sustainability fee. as other speakers and supervisors have pointed out, our unfunded needs for transportation capital and operating currently grow into the billions. we do not have, at this moment, be clearly identified source of funding to address those needs. if not did this, than what? i look to members of this board to take our needs seriously. to act within their powers to address them and to come up with some reasonable proposals to help fund our many and growing transportation needs. to me and to our coalition, folks you have also heard from, a transportation sustainability fee seems like one piece of the puzzle to help address that. it is troubling to me that we, after going through a lengthy process, many others mentioned the transportation 2045 task force that we left that process

with a plan and we still have no identified task forward to find the needs that are contained within that plan. i would urge you to support this and i would furthermore urge this body to think very carefully about the impacts of a potential repeal of the gasoline task -- tax and senate bill one. it could be that in a year's time from now, we find ourselves sitting here talking about cuts rather than raising revenue. thank you. >> supervisor tang: -- >> supervisor safai: thank you very much. >> i'm speaking for myself. we have not had time to consider the details of this matter and we will likely like to weigh in later. as an individual living here for 25 years, i can, i thank you for bringing up this issue again. the initial transportation sustainability fee was way too little.

and now we are looking at too little and also too late. infrastructure is an impossibly difficult task. it is no wonder that the citizens are up in arms about mpa. i wish that you could join us monthly when our baseball transportation committee meets. just last week, we are looking at so many retrofitted improvement projects and not enough roads to reroute traffic, that there are simply no places to go. the effect is going to be that if you do nothing, development will stop anyway because you cannot get anywhere or do anything. if you do too much, too much is still too late. i hope that you find the high level of that sweet spot.

thank you. >> supervisor tang: thank you very much. are there any other members of the public would like to comment too? please come up. public comments closed. supervisor peskin? >> supervisor peskin: thank you madam chair. i hope with the committee will see fit to adopt the amendments that i have before you and then i want to afford to the representative from the sfmta the opportunity to address this item in the committee. >> supervisor tang: mr jones? -- miss jones? >> thank you very much. planning director s. at the mta. i am not going to cover all the points that i have, although i am here and some additional individuals here to ancillary -- answer detailed questions about funding. but i did want to add some details around what the funds

are for and how they are used and also the overall funding gap that we have around transportation. so the tee 23 task force which is a precursor to the other task force that we have been discussing, that group was convened in 2013 and recognize there are three sources of transportation system improvements needs. the core needs which are basically keeping what we already have in good shape and operating well, the enhanced needs, which are looking at better serving san francisco as it was in 2013, and expansion. which is growing the system to meet expected needs in the future. and that last piece, expand, that's what thiswhat the ts act. a lot of the gaps and the needs that we have our about dealing with what the current system entails, but the expand is a

very key piece of it. and so as was mentioned, that tool at the time was the transit and park development fee. the idea that really that was not capturing all of the impacts of development. so if you do not mind going to the overhead. this is a very hasty table i would have gotten an f. on and six grade because i did not identify sources or units, but basically, it did not capture residential development at all. and it had, you know, little over seven dollars a square foot on production distribution repair. and between, you know, 12 and some are short of 15 for commercial. that his office and retail development. there's a lot of categories in here, but this is collapse

pretty significantly. so in 2015, as has been mentioned and referred to a lot, multiagency work did a nexis study to assess the level of impact of new development on the transportation system, as well as feasibility studies. the nexus for residential developments, you can see in the middle column, and then that compares to what words adopted based on feasibility. the feasibility study primarily focused on how the fee would affect residential development and it seemed mindful of a view towards not increasing housing costs. so in terms of what has come to an ca and going to regional agency since that time, we have received six and a half million dollars in funds since the fee was established. there's a lot of grandfathering built in at the time and a lot

of development that has been subject to other agreements. so it has been six and a half million dollars which has been pretty much aligned with what was expected and we are budgeting for more over time and looking at pretty much doubling that next years. six and a half million dollars for the next fiscal year. and then four years beyond, around eight to $10 million based on the projections that we have been given from the planning department. these funds are at -- allocated according to a citywide memorandum of understanding and they go to transit service expansion and reliability, transit capital, regional improvement, and complete streets. so we have used the capital portion for efforts such as transit signal priority which allow buses to move through the streets faster, and i only raise this because it can't -- in contrast to the types of transportation improvements that get directly funded by development projects, which are

really about improvements that are clearly connected to and benefiting the project, it is something we can use on the system overall to make the whole system work better citywide it. it was a fee that is looking at citywide impacts. all of the parts of how transportation works in one location are very much connected to what is happening in another location. it gives us the ability to look at that. so what we are looking at her future uses of these funds are critical projects like the 16th street project. again more signal prioritization again more signal prioritization near-term implementation of efforts underway like the bayview community-based transportation plan. so we have talked about what the proposed increase would do which brings me to the need for transportation funding. as has been mentioned.

it was working from a starting point of $22 billion in need. the transportation and sustainability team was recognized across the process of not necessarily a source of a large amount of revenue, but it was a valued or policy reasons and for reasons of equity. so the task force process focus was on the higher revenue generating forces. but a strong coalition of task force members, many of whom you have heard from today, supported the increase as part of an overall package for those reasons. and again, as i mentioned, we are in a place where a lot of the revenue sources are under debate or uncertain. we do have regional managers on the ballot which is great, but the other thing that is coming up on the ballot is a repeal of senate bill will -- one. we cannot emphasize how big of an issue that is.

that $22 billion in need was identified, assumed that the bill was in place. so we would be further in the hole if that is successful. and we are definitely hoping i'm going to be working toward it not to being a successful repeal. and then, again, the gross receipt tax. there's a lot of competing consideration around that revenue. so we are fighting a fight and want to keep the discussion open on all aspects of transportation funding. i just want to close with a reminder and a message of urgency. the reminder is that in order to keep the city running, it has been recognized at all levels that we now need to have a goal of 80 % of all trips being in sustainable modes by the year 2030. reaching that goal will take a lot of investment and a lot of hard to trade off. and then the urgency, i just want to close with, is about the need for transportation funding. i cannot emphasize enough that

we cannot have an equitable or economically healthy city without dealing with our transportation needs. and land use planning needs to be supported by transportation. the city that we are all envisioning together, it's going to need a far more robust system to support it and what we are able to provide for now. >> thank you. >> supervisor tang: thank you mr jones for that run through. supervisor peskin? >> supervisor peskin: thank you madam chair. colleagues, and thank you to miss jones for that, i think, startling -- starting startlingly important testimony. i realize that i submitted an amendment which i asked previously that a committee member make. but i would respectfully like to ask you to consider changing that amendment a little bit. which is, if a member of this committee would like to duplicate the file, and accept

the centrosome in it's entiret, which we can then trail until after the commission hears this and i realize that that is where the bulk of the value is, and move forward with the five-dollar fee, particularly in light of which miss jones showed relative to nexus and described thi describedthe history, if wee central soma, i would ask that one of you, if you see fit, to duplicate the file and i guess i cannot duplicate the file, because i'm not on the committee anymore. and, so, take out of the title, be long title at line five, where the fee for such projects would be, increased by two dollars. so just accept in the central soma plan area, and then we

would make the corresponding change, presumably, in the tab table, at page 3 and remove the central soma and take that up subsequently, so at least we can show the people of san francisco that while we have been, while they said no to a sales tax, while we decide to not move forward with an office rent tax, which would have had an absolute nexus to downtown office building owners and their tenants because virtually two thirds of our transportation, public transportation infrastructure goes to or from

the dead -- the downtown core, that at least we can get something done here today. so i will leave you with that. but at some point, we have got to find a dedicated source of revenue, and that point was several years ago. >> supervisor tang: thank you supervisor peskin. before we act on your suggestion, you know, it is really not lost on me how much money will always continue to need for transportation and how we really need to link land use with transportation funding as well. however, you know, one question that i have, you know, and the points all made them back to our 2016 conversation on this very topic, and some of the point that were made at the meeting were being considered a two-dollar increase back then, was that, you know, through transects it was the first time we expanded the fees to residential projects. through their we increase the fees for commercial development. and so when i look at the

analysis i was presented to us to shows that, with a five-dollar increase, we would generate potentially about 26 $.4 million of additional revenue, but if you take out all the central -- the central soma projects, it means i would only be about 3.2 million. correct me if i am wrong, but is this -- this is just based on this project in our conversation earlier. i just don't want us to, you know, think that bypassing this we are actually generating hundreds of millions of dollars. it might just be $3 million. so, again, i hear the principles and i agree with them but the additional amount of revenue might just be three-point to. supervisor kim? >> supervisor peskin: i do not want to disagree with our experts who have deposited those respective numbers of $26 million in change and $3 million in change. but i do want to put it in, and

i do want to acknowledge that when we change the transit impact development fee into the t.s.f., that we did something that was pretty amazing which was that we captured residential development. i think that is very, very important, and as miss jones said, and made a very conscious decision to not burden residential development with additional use. i am not actually arguing any of that here. had we raised the t.s.f. for office whether it was by two dollars or five dollars with central soma or without central soma, back in the day, we would have captured projects like the salesforce power. which would have still been built, which would still be occupied, and we'd have actually mitigated some of the impacts that it had, but we didn't do that. so i am not arguing that $3 million is less than $26 million, but i am arguing

that sending a message or willing -- where we are willing to put our laws where needs and our mouth is its very important. i asked the divided question. i do not want to send any message to the people of san francisco that we have solved our transportation woes with an amine make 3 million bucks but i want to send a message we are totally serious about this and we will tackle central soma and a appropriately fiscal weight in the meek -- weeks and months ahead. >> supervisor tang: thank you for that response and i think that my other point is that a majority of the projects that, you know, were analysed and potentially would be impacted by these increases are in the central soma. i understand where it potentially trying to carve it out however what we are left with is just such a small amount of projects. again, only bringing three-point to an additional funds, you know, i do not know what kind of a message we are really sending because if we do want to send a

message, it would probably be to incorporate all of the projects, even central soma. and i also do think it is really important that we make that clear distinction between what was in the nexus study versus what is in a feasibility study, because i think sometimes we tend to conflate them and so, we think that just because a nexus study justifies a certain dollar amount, that is what projects should be able to do. supervisor kim? spee for just a couple of things that i will note, while -- spee four, while i think the numbers maybe disappointing, it is still $3 million. i think it is important that we look at the impact transit fees regardless of what it generates. because i do not know if the message is a great way to frame this, but it is important that developers do you pay their fair share of the impact of what they're having with building and construction and we want to make sure they are contributing to our transit infrastructure.

so i have always thought that this was the right knee. it was what i had supported two years ago. just because it does not generate, you know, millions and millions of dollars, more than 3 million, i do not think it is a reason we should not move forward with this. i feel comfortable with that. i do appreciate supervisor peskin duplicating the file and letting us discuss the appropriate fee for the central soma plan because it is not just about transit within the central soma plan. we have higher expectations for a developer contribution to affordable housing and also maintenance of many of the infrastructure is that we plan on building within the central soma plan. so for me, it is not about, should be raised it? of course we should raise t.s.f. but in balance with the other acts that we are asking developers. i want to make sure we have a

right balance in terms of what we are asking them to contribu contribute, and housing or transportation, because i think we are asking for a lot and it is a good thing. i want to make sure that we examine the need to increase in balance with our other developers of the central soma plan. so i would support supervisor peskin. i will make the motion to duplicate the file and make the amendments to move forward. it is tremendously important that we do this. you know, i just want to say, there are times that i will negotiate and fight over one or two or three additional affordable housing units and sometimes the criticism that i will get is that it is only one or two or three more units. is that really meaningful? i have to say, when you meet that family or show that resistance, it is very meaningful to the lives of the individuals. these units are not always the same thing, but i do think that we should be doing what we can to be -- to more greatly

contribute because we are just not. >> supervisor tang: thank you. just to confirm with supervisor peskin, you are still proposing a five-dollar increase for all the noncentral soma projects? >> supervisor peskin: that is correct and well well below the nexus and still significantly below the 2015 feasibility. >> supervisor tang: thank you. and i know that supervisor kim mentioned earlier that she supported the previously fee but i think the previous one that was recommended was actually just a dollar. so i just want to make that clear that that is what was voted on in 2016. supervisor safai? >> supervisor safai: thank you i appreciate it. there is a lot of good things and i am glad we decided to have further analysis of central soma since 88 % of the proposed to be that would be impacted by this proposal. i do think that what i heard from the planning department is that they had not done a full

analysis of what five dollars would be outside of central soma. they looked at it and it they said it was not apples to oranges. i appreciate the spirit with which supervisor peskin is trying to move forward something that makes a strong statement. i do think development projects absolutely should be the value that they are imposing on the overall city and the impact that they are making is tremendous. i think that when you talk about, i mean we had this conversation with the transportation authority this morning, a lot of the projects and central soma, for example still allow for a certain number of parking. people do drive in from all over the bay area to those offices and offices downtown and have a significant impact on san francisco in a way that is different from residential projects where people have multiple -- multiple forms of choice to access their jobs. i think there is a lot more conversation that needs to be had before we would split the file and move a conversation forward in terms of what would

be done outside of central soma. i'm glad that we are slowing down the conversation because central soma is imminent. there will be a lot of discussion and land-use and in multiple committees and in the planning department. i think i heard the planning department say thadepartment sat fault for not scheduling and having this conversation sooner than we are now. we are where we are and these conversations are going to move forward. i would probably hold off on doing anything outside of central soma or in central soma until we have further analysis from the planning department and have them say to us what the actual impact of what a five-dollar fee or two-dollar fee, whatever the feet might be outside of central soma. so i probably would not support that motion today. >> supervisor tang: supervisor peskin? >> supervisor peskin: i do respectfully say that i want to posit and say that if you believe that all of these projects should pay for their impacts, we should not be having

a conversation over five dollars but we should be having conversation set forth in the nexus as displayed by admits jones upwards of like $80. so and i am happy, do you want to speak? >> i do want to say that when you raise a fee that becomes the conversation that inevitably, and five or ten years later, becomes the baseline to the next conversation about raising fees. i mean when i was first on the board and we experienced that post- 911 economic downturn, we reevaluated, literally, scores, dozens and dozens of fees that not had not been raised from you name it. marriage fees to parking fees, et cetera, that was back before we gave mr jones the ability or the commissioner to raise parking fees or what have you, fines.

and that became the baseline for another decade. and so i mean having these conversations are never easy and i get it. developers are in business presumably to make money and return money to their investors and that is all well and fine. you provide jobs and in some cases housing that some of us can afford. but it is time to bite the bullet, brothers and sisters on the board, and supervisors. or, you know, let's stop playing the games of, you know, this other tax and that other tax, if you want the city to function, it has to have a transportation system that works. if you do not want to be -- if you do not want me to be your chair, that is fine, that is our collective responsibility to crack that 100 million-dollar not. >> supervisor tang: thank you supervisor peskin. i do not disagree with you. again, i applaud you for how you were trying to rein us all in and make sure we are addressing

our transportation needs. again i want to be super realistic that it is $320 million that we're talking about with this particular legislation. especially if we do duplicate and separate out the file. >> supervisor peskin: not to be argumentative, that $3.2 million which presumably, if the numbers are right, represents a tenth of the projects, is not going to kill any developments outside of central soma. so why not -- >> supervisor tang: you do we know that for a fact? >> thank you for letting me commenting. at the metrical use is a little different. as the effect on landfill you -- value which is a standard procedure. think that it pushes the limit pretty closely, you know, i think that you can make an argument that outside of central soma it maybe more feasible. i think we can say that much. i wanted to remind the committee that you central soma tier a and b. projects, the ones that are the lesser in the intensive seat -- intensity, in addition to

t.s.f. will play -- pate $21 and a fee and other pieces of the total that they would pay is just shy of $60 a square foot. the tear see projects will participate where the half a billion dollars in transit funds will come from. just remind you, we forgot to mention that earlier. we are actually a little bit closer to the nexus than what we have been talking up heart and centrosome a. >> supervisor peskin: i'm not arguing that. hats off. how to meet had value recapture outside of centrosome over the last many decades, we would be having a entirely different conversation, which is why initially the chair offered the five dollars down to two dollars for central soma. we can easily capture outside of central soma five bucks. i thought it was anemic for a first ask. [ laughter ] >> supervisor tang: supervisor tim?

>> supervisor kim: i also have to state that supervisor peskin introduced this in the beginning of february and over the course of three and a half months, i have not heard from a single developer complaining about this proposal. and not to say that is indicative of weather this pencil out, i certainly imagine that, if that is not the case, that we will hear from them in due course. certainly during the project approval, and as someone who wants to make sure that projects get approved, i think that we can re-examine the fee or work with the project sponsor and specific instances if they feel that this is the reason why their project will not pencil out. that we will be able to work with them on it. so what i will do is i will make a motion to duplicate the file. and to then read into the record the amendment that supervisor peskin has put in. so one file, i guess, excluding

any changes to the central soma plan. i imagine we would have to put it in an affirmative language. city attorney, to ensure the five-dollar increase excludes projects within the central soma plan to one file and then to continue the existing amended file through the call of the chair. >> yes, supervisor peskin's amendment but he distributed basically have two different categories. there is all nonresidential except for areas in the central soma plans that are set at five dollars and central soma is that a two-dollar increase, that we would be wiping out the two-dollar increase and leaving the language that says we are going up to five dollars for all nonresidential, except in the central soma plan area