not just public, but private. we've had discussions with private operators. i wanted to mention the discussions with we'da, because we put in a ipr are arm 3 to get funding if we could, so we're trying all avenues. frankly, we've been reaching out to golden gate bridge district. so nothing is off the table. >> director lai: i heard loud and clear there needs to be more outreach. i didn't really see an outreach schedule moving forward. do you have anticipated plans for that? what the time line might be? >> i want to come back and advise you. i want to sit down with the public outreach team to look at when we can have meetings, but i would anticipate a meeting in the next 2-3 months so we can continue the discussion.

>> director lai: i think as we saw at the last on-island meeting, there is a high amount of interest from the businesses, the residents that are currently on the island, but i would just like to encourage us to also reach out to all potential future cohorts who might be impacted by these decisions, because this is a bay area issue. the toll is not just a san francisco issue. if there are known groups we should reach out to, please do so. >> okay. >> director richardson: thank you very much. i attended the timma meeting and i actually spoke. it doesn't do justice looking at your report on outreach. and it only indicated recent. i would like to see, because i

know that you spent now how many years coming here and you've gone to the residents on the island. i think when you come back, i would like to give you an assignment. i think you should include all the outreach you have done. people are asking and even the supervisors, people would appreciate all the hard work that you've done. because you not only coming before tida, you're infrastructure transportation committee and i know you've been on the island for several occasions. and we know you're engaging with the timma, the board of supervisors. so now is the time to demonstrate where would have been. it's no not the recent. even though it's asking you questions how aggressive you're going to be, we have seen the comprehensive report of the outreach, then we will have

confidence in you, that based on how you've gotten there, that you're going to be able to reach that. i would like to see that. i also think that history is very important. and this is the time to actually address the fundamental issues here. one is that every time you speak, you need to allude to the fact that in 2008, loud and clear, that state legislature created this toll. and that timma was created as part of that. our state legislature brought about this toll because treasure island is not unlike any -- like any other san francisco neighborhood. and you hear that all the time, from residents, from supervisors and us here. people talking about why treasure island. we need to educate the public that treasure island is a part of san francisco, but the only

one accessible, that is surrounded water, an island. right? and also is the one heavily impacted by the breach, which is a meltdown. you cannot come here, even with subsidized toll or whatever, you're not going to make it to the island right now, so let's be realistic about that. i think that kind of education, the preamble, that everyone must be in line today, the san francisco "examiner" and the media are taking up the issues here. and they're just reporting what on their standpoint. but we need to pull everybody back so they understand the comprehensive messages here that we are trying to do. that you, san francisco transportation, were the one, the legislature in the city of san francisco has designated. and you've gone beyond the call

of duty to make sense of this toll. we're trying to make sense of this. we also need authority that all of us here, have expressed concerns and again we wanted to make sure they are addressing the fact. we understand what the legislature says and we have to comply with those -- the legislature unless they change everything. we don't have that power. but the power that we do have is to help the public understand what is going on here to conduct hearings. to hear. and we've done that. the constituents that i'm most concerned about are the seniors, the disabled and the low-income. so even after the subsidy for five years, then what? we hear members from the commission, we know that amtrak

is subsidized. and just about ever mass transportation. and the fact that you are one of the fine agencies that know how to get grants. i specifically want further discussion on the alternate funding mechanisms that you mentioned. that we really wanted to see that. that is going to be very important. because then as we carry along this discussion, we can be telling people what else we're doing. that we have all these other areas that we're talking about. one of the discussions that came out from the board of supervisor timma hearing was the mentioning about the mtc. i would like the mtc and all the agencies to come on board and put out their stance on this. we're talking about region transportation. this is it.

and for decades we have, that we're going to integrate, but we still have muni doing its own thing and transit and then we now have we'da and all of that. this is a great opportunity, because treasure island is reflective of the regional transportation, because we have all the players aboard. you have sfta, which is beyond san francisco county. you have mtc. and if you look at the propositions, transportation for the region that we have, we're supposed to benefit from that, right? we all voted for that. and now is the time to really be thinking about how can we integrate the region? and one of the discussions we've had, is why can we have this here where people choose to take ferry on their way to oakland. stop at treasure island, okay?

drop them there. or they continue and we have the ferries. this is where we are right now. if san francisco treasure island is that place in the middle of the bay, it can go everywhere. we need to talk to them and get them on board. what it is, the collaboration we can have to offload the traffic. because we already have ferry going to the north bay, right? and weda i suggest we need to bring to this commission, so they can tell us about their overall plan, because we know even within san francisco the shipyard is going to have ferry. we know that mission bay is slated around pier 70 also. why can we all now be talking about the regional transportation and see what kind of tradeup here or collaboration we can have?

to mitigate what we have. i'm highly interested in that. and i hear the commission here saying they're interested in that. the board of supervisors are highly interested in that. they can definitely take the leadership for the region in helping mtc and all the other agencies come up with the truly regional transportation. so this is the suggestions i have. but again, everybody read in the "examiner" today, and we should help the media outreach. reach out to them so they understand what it is we're doing here. it is not always good at a point when residents concerned are, that we hear about this. education on their part, so they can help us to convey what it is we're doing here. and then we need to think about

our own public relations also. i think we should be educating the residents, educating the public. i think we should be, so that we carry everybody along. i think this is what we're going to be doing in 2019. i want to commend the efforts that you, rachel, eric and the executive director, for your leadership, as a fine agency. this is yours to deliver, but we all are working alongside with you here. and we're going to be working with the board of supervisors because they have a responsibility to make sure that there is accessible mode of transportation to treasure island. that's their mandate and we'll do our best here to help them make the right decisions. thank you. >> director samaha: thank you. good work. i know this is a very complicated issue and has a lot

of different facets to it and a lot of different people, their needs, need to be met. affordability, there is the businesses, a lot of different people. one thing that came to mind for me, and i realize that treasure island is also a destination for a lot of day activities, such as sports, games. a lot of athletic fields host games such as rugby, daily football, a lot of different types of activities where children are involved. and they're residents of the city, probably even from the region. and it just struck me as it would be perhaps onerous for somebody going to a ball game, their kids are playing in the ball game, to have to pay tolls to get on the island.

i don't know if that's been discussed or considered, but it has come to mind. i thought i would put it out there as an issue because it's a fairness issue. and certainly it would be onerous on that community perhaps. so -- >> we had heard that comment before, so appreciate you reinforcing that. and also, commissioner richardson, appreciate everything you just stated in that regard. i do have one request frankly, that it is going to take us working together, because i think there is -- i think there are opportunities here for us to improve the messaging. you made very good statements there. so we can work together toward understanding, you know, and educating the public as a whole related to the development project, some of that history. i think some of the folks didn't really understand it. and so we want to get better at messaging that.

and then moving forward here how we can move together. because the two are intertwined. the development is intertwined with the transportation system. so anything that we can do together in that regard, i look forward to that. and 2019 will be a very busy year in that regard. so look forward to working with this board. i appreciate your support. >> thank you, sir. >> thank you. you sort of mentioned it earlier, but years back, they used to have the jitnys in san francisco and something like that could be possible. could pay a $1 and they'd take you on their route. their steady route. i think that would be something to possibly look into. and then just another comment. i live on the island. and many of the neighbors, it's not like just a couple. it's a couple and their two

children, or because people have been there so long, it might be a couple and their grown children. a neighbor in particular. she works, the husband works, the older child works and the younger child goes to a private school. that is like four people times what is going to be the toll. possibly. so just want to keep that in mind. i'm sure you've got the records on what the families look like on the island. and just keep in mind, you know, that just don't travel together in little packs. >> understood. we did hear yesterday in the public record concerns with parent taking their children to and from school. that was part of the equation we tried to putting to for the

stipend, $300 a month, in calculation, that it would take two round trips. i hear you loud and clear on the jitnys, i remember riding those as a kid. that kind of type of transportation is something that is not off the table. something we need to look at here. my thoughts in terms of the shuttle system. we'll explore that. >> thank you very much. okay. item 8. >> item 8, san francisco oakland bay bridge west span bike path planning. >> november 19, they provided a public update on the status of the planning. and invited peter to provide update to the board today. >> my name is peter lee, i'm the

project manager for the west span bike project. i am with mtc, too, all part of one happy agency. we have been working with rachel and eric on the project as well as other projects on the island. please stand by. please stand

>> it has been studied a number of times since the two thousands on the bike, and at this current iteration, our board asked us to roll back and look at any fatal flaws to the concept, as well as to refine some engineering and refine some of the cost estimates so we can make a more informed decision when the time came. we have been working diligently over the last several years, looking more into the technical aspects of the bridge, how we would make physical connections, also dealing with the changes in traffic pattern that have been happening in and around the bay

area. it has taken some time, but i'm here to show -- i don't want to say preferred, because we're not there yet an environmental tag but what would be our design team's recommended alternative that we would pursue. it is not the preferred alternative because we are not there environmentally. so i am just going to walk through part of the presentation that we did back in thanksgiving i will watch from the island, into downtown oakland -- sorry, into downtown san francisco. we will start from the orange circle here and you can see here , it is the new band. you have an open a few years. but the red line is the current path on the east span period is a 15-foot pathway that takes you down into a landing area at the southgate road area where you are jointly funding an error change project and will improve

our connections there. the orange line is hillcrest road and we looked at a number of alternatives to get from the east band to the west band. that is a primary focus. it was not so much to focus going on to treasure island, it wasn't at the time. our project was from bridge to bridge. we are coordinating to get down to the treasure island area. we did look at a number of options along hillcrest. we had options that went through the tunnel, utilize mccullough and whatnot. we ended up settling primarily because it is the most logical along hillcrest. we do have challenges in the area. they have a steep rate. and the landing area on the right-hand side. it will be of a challenge. as well as the greats on hillcrest road. i think to note is we have an active co- spot -- coast guard you are aware of. we need to make sure those names are happening because they have residences that are along hillcrest road and the active base.

the orange line follows along hillcrest and drops down a little bit. we still need to stay high to get over the bay bridge portal. we realize that we chose the north side of the bridge for better reviews. it seems like the public outreach we had earlier. people -- it would not preclude you from going to the south side but we think most people would like to be on the north side of the bridge. we would span over the tunnel and then we would not be on the same level as a current hillcrest road. this is below the portal that you see now that has a fence over it." be slight -- sloped slightly below its." tee off here and go over the bus ramp or the ramp that you have here and tie in -- were still working on. on the west side maps and have a tie in. it is as successful as it can be and let it had down into treasure island. and then i can answer more questions. i noticed treasure island focused, but on the main span

itself, which is the bulk of the project, and the cost, we looked at a number of different structural solutions, as well as size. this is looking at the reviews of the north side, southside, we looked off the bridge with the outboard. we looked at what an on deck option would be to take a look at traffic or try not to take a look at traffic. it would not be good for traffic i would say. we were asked to look at all of those options and then we did a lot of variations on structural options for the bridge. it is nearly a 100-year-old bridge at this point. it is -- it would be a challenge to retrofit. that is where a lot of our focus was put. we are looking at putting in a new cable, suspending the deck like the brooklyn bridge, the brooklyn bridge is slightly different because it already had that bridge -- project -- bridge deck there. we looked at every option out there and what we ended up

settling on is what the structural engineers called the connection off each one of the trust his members here. would line up to an existing vertical member and this yellow piece is the new piece that we built onto the bridge. we can't weld to the bridge because of the age of the steel. carbon content makes it better if we could bolt on versus having a welder connection. then we would follow on what the steel decks that are right up on the top and sit on each one of these l-shaped brackets. that is a shot. the width of the path mimics the east band bike path. it is about 15 feet. there's a lot of comments from the public that they felt is if we had a lot of ridership, it would be very challenging and tight still. this is probably the most with you can build without running into additional engineering

problems. we are planning to widen the vista point areas around the towers and places where we could logically widen the path and make better connections. there are connections there. and then as we drop down into downtown san francisco, we look at a number of options. the one on the upper left was one that was noted in the chronicle back with a number of loops coming on down. there was eight loops coming down from the top deck of the bridge. we have an elevator scheme, what we are choosing on the north side, their options to drop down on the southside, but are preferred on the north side. it would drop down along essex street. we can see it follows the yellow line and it makes -- it comes around the buildings, the new buildings we have their -- we have there and follow fremont because the grade does not necessarily allow for that. but then it would have a switchback right here.

a switchback here. this is a planned area. is currently the second street on ramp to the bridge where the buses are now. there's a plan to convert that into a bus boulevard and take you into the new transbay terminal. so you'd work with the city and we can be in contact with them about how we would land a bike path in that area with a switchback. and then we do see a strong demand for the project and to the advent of ebags and that mode is definitely been a rapid over the last several years. i think it does -- even though we have a fairly long structure coming from the west path, it is about 3 miles long. the existing east span is four or 5 miles long. so we have a line that from end

to end, is over 7 miles long. but with ebags, it gives you the -- it gives you an opportunity to cut your commute down if you are on a bike. it is not just for hard-core cyclists but almost anybody can do that. and some of our modelling that we did, it does open up more of the east bay to get into san francisco. this is if you are just on a regular bike is what our consultants felt, how reasonably you could get into san francisco , but that does expand quite a bit with the bike and getting higher speeds on your bike without having -- with the push of a bus in. and then i think there was a question earlier about the modelling. we did rely on the modelling that we used for the transportation plan. the last column we did see quite a bit of usage from treasure island that were developed with all the residents that we have. we are up to a per hour peak of about 750 from the island itself

, and 2700 in total. that is with the bike and that concept. we still have a lot of users commuting across, as well as tourists and others. to get to where we are today, we are in 2018. we just finalized our last outreach for this phase of the project. it got us between -- depending on what phase or area of the project we are, we are at different levels of design, but we are really only about ten and 30% design, and we just really looked at the pitfalls. there aren't exactly a lot of environmental fatal flaws, primarily the challenges will be historical properties and that sort of construction. it will be difficult particularly with traffic control and being able to take lanes in the middle of the night it will be quite difficult day today. funding is probably our number 1 driver. the estimate for the project, at

this point if we were to start today, is around $350 million. however, we don't have the funding for it. we are seeking other funds too, and the same pots of funds that. is looking for. we are trying to look for opportunities on -- there is a strong case to be made to seek funding jointly to build the connection along hillcrest. there will be independent utility for both projects and parts of the island. i don't control all those funds. that is a different side of m.t.c. at this point. but we are looking for funds there. regional measure three,. >> speaker-01: , as well as the city transportation agencies that would benefit from this project. but that said, if we were to start today, we are probably in 4-8 years before opening, including risk and delays -- delays that we would possibly

would be having. i am available to answer any questions if you have. >> okay. first, if there's anyone from the public would like to speak on this issue, i guess we could always raise the tolls. [laughter] >> just joking. >> not on cyclists on bicycles. that is currently an eligible toll. >> okay. anyway. director? >> too soon to joke about that. thank you so much for the presentation. this is so exciting. for comparison, i mean if we can get downtown on bike in 17 minutes from the island, that is just so amazing. i mean the inner city traffic on the mainland is so horrible that it can take you easily 45 minutes to get downtown if you live in the richmond or something. for me i live in the caster and

it takes me easily 30 or 40 minutes. so i think that would be really amazing. you mentioned environmental review. what is the environmental review that is currently underway? >> we would have to do a document. we haven't proceeded. we just did a screening of what would be red flags for the project in areas that we are concerned. or wes or any that would stop us cold from implementing the project. i would say one other thing, aside from historic elements, we will have challenges with the shipping clearances in the area. we are adding weight mac to the bridge. in the jurisdiction there is the coast guard, as well as the navy , and lowering the bridge, we didn't have the ability of bringing the larger ships that they were bringing in. that is something that we would have to deal with. funding continues to be a challenge. and we have other work that has to go on the bridge. that's why we can't simply just

fund one project. >> i see. you have perhaps done initial scoping, with it hasn't been funding identified for the actual study yet. >> no, we haven't. >> we just initiated looking at what we have and we haven't got that far because we had limited funding in this phase. we are pretty -- at this point in time, we are settling down to try and identify additional funds and decide how far we want to go. we are meeting with various stakeholders and coalitions as well as others to continue to have conversations of where we want to go with the next steps for the project. >> on the preferred -- i don't know what we are calling it, but the current scheme that exits over excess street, is there an existing bike lane there, or how does it connect with the bike network? >> it would be on the bite can network. it is a bike boulevard designated to go in along that stretch all the way into the transbay terminal.

>> that sounds great. >> even on the south side, on beale street, beale street is a designated bike paths do not call. honestly, six years doesn't sound that bad. six years is may be three years beyond when we first start having residents on the islands. this could potentially work very well with our timeline, i think. please keep us posted. thank you so much. >> thank you, mr lee. we finally got a chance to meet you and see you. what a wonderful presentation. i also want to echo what our director said. this is a very exciting thing. it really demonstrates that we have the right people trying to make decisions. i raised some fundamental issues earlier, and you heard me loud and clear. about the fact that your agency is taxed with the region.

and you just mentioned -- i think that looking at the treasure island project, especially with what you just presented, it really underscored and it would be good to hear that if we are able to implement and collaborate -- can collaborate and work together, we have something here for the region. this is the way that this project should proceed, and i think that with that kind of approach, i know that the funding will come easier for you , and i think one of the things that we will be doing here, we are all up -- also have representatives like scott weiner and debbie to, they are outstanding legislators in this state. they need to see this presentation. they need to see what you just presented to us today, and they all need to do that. this is a way, on the board of

supervisors. i think when you take that road, people are going to believe and see the potential that we are talking about here. so suddenly, the emphasis has been on the toll, now they need to look at all the alternative modes of transportation that was written on the treasure island transportation plan that we are trying to implement, and with those kinds of balances people. people will be able to see what we're doing here. it is not a standalone. you're not just putting a toll, but this area has significance and semblance to the region as a whole. because from what you are doing here, we are also looking at how you can get to hunter's point, we have the south and waterfront and along central soma and all that. all of this for san francisco is connected and if you are walking

, we know 17 minutes, my god, you can walk that span 455 minutes. a lot of people coming to san francisco for the weekends, rather than take anything, they know they will be able to take the ferry. and then they will be also able to walk here. this is something we believe in. that this plan will be implemented. we want to try and help you so we can work alongside each other and also all the goodies from the m.t.c. i would like to bring you back for the, is that correct, so we can have a comprehensive discussion again, for years, i read your transportation plan. and just also i just concluded chairing the transportation subcommittee for the port of san francisco in their master plan. all of this transportation for san francisco is really within your jurisdiction.

if you look at munimobile, they have jurisdiction for what goes on inside, but to your plans, it is actually helping. now to facilitate and alleviate the congestion that we are having here -- the way i look at things, the solution to the region is actually you, m.t.c. and the sfcta. because their boundaries and what is feeding from the east bay, the north bay, from treasure island, is basically what is complicating the transportation gridlock. and you are the ones that have the mandate and jurisdiction to alleviate that. why are we now talking about that? i would like for you to look at what i said earlier. maybe we can alleviate a lot of the gridlock going to alameda or oakland as they are passing through treasure island by ferry , by all of this.

why not? so we are doing that all now with m.t.c. it is time to be thinking about that. you might be able to collaborate with alameda and all of that and what you are trying to do and foster the solution. i am highly excited, and again, we have the people that can do the work on the grounds. we just need to move the plan forwarded to you sfcta. thank you for this presentation, and in january, if possible, i will ask bob back to try and bring you back. i think we need to bring you back so we can see. we also wanted to see how you are communicating with the sfcta thank you. >> i just wanted to thank you click on the first thought we would see this pic i thought it was pretty impossible, but that's also. thank you so much for your time and for looking into this great thing thank you.

>> thank you. >> okay. next. >> item number 9, opportunity zones. >> treasure island, as we have discussed previously, has been designated as an opportunity is zone by the federal government, n.t.i. c.d. has been exploring what this might mean for bringing additional investment to their programs on the island, also the city is forming an opportunity zone working group to look at opportunities across the city and that has yet to be convened, but it will be convened in january, and we are also absorbing and digesting information and discussing that with treasure island. i will bring you future updates an opportunity zones coming out of the conversations with the

city and one treasure island. for today's presentation, dan fetter from the treasure island community development will give an overview of what opportunity zones are, and some of the things that they're looking at. dan? >> thank you. i appreciate it. i am sure many of you have seen opportunity zones in the news. they have been very hot topics. in fact trump, in the wall street journal today, there was an article about how the government is focusing on committing spending and allocating budgets to opportunity zones in the future as part of the budgeting initiative for 2019. i just want to give a broad overview of what opportunity zones are, why they were created in the first place, and how treasure island can benefit from them in addition to the rest of the city his opportunity zones were come just completed as part

of the tax act and the 2017 trump administration. this is a bipartisan effort on both sides of the aisle. it was spurred by silicon valley tech money. a lot of c.e.o.s have a lot of capital gains from all of their wildly successful businesses and there's a lot of tax they have to pay if they cash in on those gains. they also want to help invest in the country and they wanted to find a way to bridge the gap. shawn parker from napster and facebook created the economic immigration group which is a group in d.c. to help spur this bill. it has s.f. roots and silicon valley routes and a lot of the money will come and invest in all these opportunity zones across the country. it is based on silicon valley. it is an opportunity for treasure island to take advantage of that and also be a really shining example.

so what are opportunity zones because they are distressed opportunities across the company does country that suffer from poverty and our minority base and have average median income well below the poverty line and national average, and also in areas where rent or ship is actually very high compared to the national average. these are areas that need investment. they need people to come in who previously wouldn't have looked at these opportunities for investment from real estate, or from businesses. it is a way to bring money into areas that really need it. twenty-five% of the census tract qualifies and about 10% of the u.s. population lives in an opportunity zone across the country and there almost 9,000 in the u.s. key benefits to the program and why they are relevant, it is not competitive process for other tax credit programs. it takes years of competition and application and money for an

opportunity zone. if you can own the land, you can invest in it pretty quickly. it only takes one filing. so it's a very easy process. the government wants to incentivize investment in these opportunity zones. any eligible taxpayer can participate. there's no caps on investment. if you have $100 million or $100 billion of capital gains, you can invest. there is no tiered structure. and the two benefits to the program, first if you have other q. -- capital gains, you don't have to -- to get a temporary deferral of the actual tax. if you hold your investment in one of these opportunity zones for more than ten years, any capital gain on that investment is written off. so the benefit is if you want to bring money into this community, you want to also keep the money in the community for a long time that is why they are trying to incentivize the long-term hold.

the total ways to apply opportunity zones in treasure island and in san francisco and across the country, the two main forms are through commercial real estate investments, and through operating businesses. commercial real estate could apply to a few simple interests are long-term leases which is relevant for retail in building one. rental office, mixed-use a theory a theory. you really have to substantially a theory substantial late the land. the bill does not want a slumlord come -- to come into the community and invest and not do anything. the purpose is to substantially improve the areas. the operating businesses can be any existing business and build new office space. it is to enhance the businesses.

you can continue -- create a new businesses well. for a lot of places on treasure island his that are currently in existence, or people who want to invest in treasure island today, they can still do that and benefit from the program. a few other items is that you have to also substantially invest in the business and you have to do a lot of the work and the opportunity zoning, which you operate. you can't buy a 1,000 square-foot office, college opportunity zone headquarters, and conduct business anywhere else in the country. they want to make sure the businesses are operating in the zones. a very high level, there are 900 opportunity zones in california. 4.1 million people live in these zones. there are 2 million jobs in the zones, and about 170,000 businesses operating in the opportunity zones. on the chart on the upper right shows that 90 5% of these tracks are in urban areas.

and so it is also meant to build density in these communities. california has a housing crisis and compared to the rest of the country where it is just 75% urban, it is a big statement by everyone that designated the zones that they want to build density in urban areas. the bottom of the page you can see the california demographics, and the california opportunity zone demographics. in almost every category, there is a very clear message being sent that these are people who need help, you need investment and in community development. eighty-eight% are minorities in the communities. thirty-four% live at the poverty right mac versus 16% in the country. and so on. it is very clear that these opportunity zones need investment. next page covers some of the very key criteria numbers. for an opportunity zone to exist , you have to have 90% of

your assets invested into the opportunity zone, and there are tests every six months to make sure that that is happening. one concern for developers early on is that if a development project takes 30 months to complete, how can i pass this test and what i be penalized because the treasury issue guidance said you have 30 months to develop the property before you fail any of these tests. across the country, there are 2 million businesses operating in opportunity zones. 31 million people are living in the zones and so it's about 10% of the population that is being affected across the country. on the right-hand side, there are a few dates and a nice big number to show the potential of the program. in 2026, that is when the initial gains are due. and so the faster you invest today, you stand to benefit more in the future.

they don't necessarily make these deals. the way i would describe it is that if there were only one or two people who would look at the still before, there are now 10- 20. it brings competition to the table and it brings creativity. on treasure island, there are a number of ways where we can make this work with people who previously would not have considered this. there two main benefits. the first is through the original capital gains tax deferral and the treasury has created incentives to invest earlier on to take the most benefit and make the most of the program. if you invest in 2019 and hold your investment for five years in an opportunity zone, you don't have to pay taxes until your exit date and you also get a 10% discount on that tax. you get to do for your talks for five years, and you also get 10% off. for seven year hold, he would get 15% off instead of 10% off.

there are benefits to investing now see you can hold your investment until 2026 when the cut off really ends. part two is a capital gains tax on the opportunity itself apple stock, which i don't own, and made a lot of money, which i haven't, i would probably want to invest through a long period of time. the benefit of this investment is if i invest $100 million into a building on treasure island and hold it for a long period of time, and i make $300 million, i/o no taxes on that gain. that is really the incentive that is making people focus on this program. for a lot of high net worth individuals and tech c.e.o.s, they care the most about part two. part one is great but part two is a most important parts because you can shield your taxes for a long period of time. when we think about treasure island investment, people have come up to us and a number of investors that are in treasure island, and they want to find

ways to invest as long as possible in these programs. we believe that these incentives make sense on both sides and we are particularly excited about part two of these benefits. the next slide goes through a very high level example. if i were to realize $100 worth of gains in 2019, the traditional treatment, assuming a 20% tax right mac is i would pay 20 bucks immediately. for opportunity zones, i don't pay anything so i have to invest $100, which represents $100 of gains in 2019. if you hold it for three years, you get the benefit of not having to pay taxes for three years but you still owe $20. if you hold it for five years, you see the benefits accrue. you get 10% off of that capital gains tax. at seven years, you continue on and get 15% off. and the real benefit is if you hold it for ten years, you will

have had to pay, in 2026, the $17, but you pay nothing. just a high level example, once again. this is a map of san francisco and the opportunity zones contained in the bay area. for some reason, water is a census tract. you will see a lot of orange but it really means nothing. the highlight is that treasure island and other islands are contained in that circle and there are a few census tracts in the south city. this is also a broader map of the bay area that shows concentrated areas for opportunity zones pick vallejo and richmond in particular are key areas. if you were to zoom out in this map and look at california, the three largest areas are l.a., san diego, and fresno. so the bay area has not received as much interest, if that's okay

, but we want to make sure we take advantage of the opportunity zones we have been given from the city. so with that, i have provided links and helpful sources if you want to dive into it more. i'm happy to discuss and answer any questions. >> thank you for that. >> i would first like to hear if anyone from the public would like to speak on this. okay. >> thank you. nationally there was a debate against a senator from south carolina. i see how it could benefits a lot of communities, but i'm curious how specifically to treasure island this will be held. i have a few questions for you basically. in the normal world, currently, if you want to defer an

investment, you probably do it through a 1031 exchange. that will live forever until you sell and then you can redefer it and this has an expiration date, which is sort of interesting. it brings up a couple of questions for me. one, given that a lot of the real estate in treasure island is going to be residential, i don't know how applicable this will be for an investor coming in who is deferring tax from capital gains sales somewhere else. but i guess we also have businesses where we will have some commercial enterprises that could benefit from this. basically it expires in 2026 specifically. there is no extension beyond 2026. >> correct. there are a few items impacted.

the first being the 1031 versus an opportunity zone. 1031 exchange is great for people who have capital gains in real estate already, and who want to roll those gains into real estate investments. and for opportunity zones. you can come from anywhere in the stock market or in the real estate. it allows people to participate in the real estate capital gains program. on the back end, you can elect not to recognize that game and -- gain and roll that gain into 1031 in the future as well. so if you want to continue to benefit from real estate capital gains deferrals -- >> it is a good thing you just said that. basically, when you're given an expiration date, are we going to suffer from a d. investment in 2026 club people -- of people will start paying taxes, they are getting it deferred for five years and they get a tax on aggregates.

if they don't sell, if they still hold it, they would still -- they would start to pay taxes beginning in 2027. >> rates. that is a really good question. the 2026 deadline is really meant to incentivize investment as soon as possible today. it does not mean that the benefits of the program are gone after 2026. so the first part of that deferral, of the two benefits is highly relevant for 2026. you could invest in an opportunity zone in 2027, and still benefit from the second part by holding the investment for more than ten years. as far as we can tell right now, the designation of an opportunity zone ends in 2028, but if you have invested in the opportunity zone area before 2028, you can still hold it until 2047 and benefit from the major benefit which is the

long-term hold. so we think we will have a ton of investment in the next year or so because in order to take advantage of the seven year deferral, you have to invest before the end of 2019 because 19 to 2026 would be the longest you can hold it for. we don't anticipate a drop off, but we are interested to see how the market treats opportunity zone investments after the 2026 .-period-paragraph is also so they are excited to see if the program takes off. if it takes off, it doesn't mean that 2026 is the end date, and they may extend that. >> okay. >> i have one more question. so this is not meant to buy a hold or substantially invest. how do you quantify that quota. >> there are a few ways to quantify that. for current operating businesses , you need to invest 70% of your money on top of what

you have acquired your interest for. this means that if you buy the business for $100, you need to put $70 into it as well. if you buy real estate and it is a hundred dollar building, you need to substantially improve it well beyond that. you need to put double the money in. this is really measured at a substantial improvement, which is why you real estate developed is so relevant. of course, you will have to put in the money to make it a better deal. i want to comment the investment we are looking at opportunity zones in two different ways. one is as it applies to rental buildings that we are considering developing, there are a number -- it has been very difficult to build in this environment right now with costs extremely high. we believe that opportunity zones bring a larger pool of

investors to the table who could be interested in a rental product, and that would bring more people to the island sooner and activate the island as soon as possible. the other area for investment is in the retail side, and for the administration building character there are ways to work around leasehold agreements and master leases and ground leases. that could bring new capital to the table faster and help accelerate the islands improvements and make it a great place even faster. there are a number of ways to apply this to the island and we are continuing to look into finding a way to make that enticing for anyone who would be looking to invest capital gains. >> great. thank you. >> ms. miss richardson class. >> thank you. this is very exciting. as you are making the presentation, i was going through san francisco to identify some of the economic opportunity zones. i know that the hunter's point shipyard in the southeast sector

will qualify. they are in treasure island, on the development of the south and waterfront, which is also around the bay view falls under the jurisdiction of port san francisco. i think you'll be talking to them also about of the opportunity zones. the question i have here is that this is very exciting. treasure island is a mixed-use development, and we not only have substantial real estate involved, we also have retail, and a whole combination. and even the itinerary where we went to new york, we also saw signature projects that we can model into treasure island. the question for us would not be when, but how do we leap to taking advantage of this tremendous opportunity, because

like you said, the government is a bipartisan deal. we create this in 2026. that really means now that in 2019, we must -- treasure island to begin to map out development mechanisms around opportunity zones. that is basically the messages that you are trying to give us here. now some fundamental questions here. in every zone again, i guess it depends on eventual capitals from the investors, so there are no competitions. for example, if we were to tell you right now we need to begin to market treasure island to all the investors, whether you talk about stockbridge, or other adventures, we have to do that on a standalone. we need to begin to do that because we know the other parts of san francisco are competing for the same amount of investors

these are the messages you are trying to convey here. i will presume and assume that all of the economic opportunity zones in san francisco,, once a city's presentation they would get on board. it is a tremendous opportunity that we have in this region. and even nationally. they can come in and help us here. who, in san francisco, were a city agency, have you made any presentations? how are they going about this? >> how are they going about that >> i think that's more a question for myself than for jen but the controller's office is convening a working group to coordinate activities at treasure island and the other

opportunity zones within the city. we have a lot of work to do and as obviously as it has been highlighted over the next three years, that is the peak opportunity to be able to appreciate maximum leverage from the opportunity zones. there is a rapid timeline to try and make the most of these opportunities and attract the most investment. >> i think we need to come out of the gate. it is very important to know that this opportunity zone is highly applicable to treasure island. i know you -- i know we have projects that we do not have financing for. and so earlier on, i think this commission was engaged in trying to find out different kinds of financing. we have the i.f.t. and many tax increments.