>> supervisor fewe >> supervisor fewer: our clerk is miss wong, and i would like to thank sfgovtv for broadcasting this meeting. madam clerk, do you have any announcements? >> clerk: yes. [agenda item read]. >> supervisor fewer: thank you very much. let's see...madam clerk, we will hear items one through six last on today's agenda. can you please call item number seven. >> clerk: resolution approving an emergency declaration of the san francisco public utilities commission to repair the

southeast treatment plan final force main for a total estimated cost not to exceed 5 million. >> supervisor fewer: thank you very much. i believe michael chan will present on this item. >> my name is michael tran. i'm a project manager for the san francisco public utilities commission. i'm overseeing this emergency project, and the objective of today's presentation is to provide an overview of booster pump station and an emergency declaration. the first picture on the slide shows the booster pump station. i'd like to give a broad overview. booster pump station is located several blocks northeast of the treatment plant.

it's located several miles south of the at&t neighborhood. it was built in the 1960's and last upgraded in 2002. the final effluent is the product of the southeast plant's treatment. booster pump station pumped approximately 50 to 60 million gallons a day and approximately 110 to 100 million gallons a day per peak. it pressures it through a pair of forced mains, both of which combine into a single pipeline on the northern shore of yslais

creek. on october 28, 2018, sfpuc staff discovered a leak from yslais creek crossing. the 46-inch main was confirmed to be the leaking. what are the risks of the leaking pipe? the continuing operation of the leaking 36-inch pipe represents a noncompliance under the southeast water pollution control plant's national pollutant discharge commitmented. in addition, [inaudible] >> on october 22, sfpuc

declared an emergency under san francisco administrative code 6.60. sfpuc manager revised the emergency declaration on september 26, 2018 to include authorization under both chapter 6.60 and chapter 21.15 with an increased anticipated not to exceed value of $5 million. giving -- i'd like to give a brought overview of the emergency bypass project. the p.u.c. anticipated design of the emergency bypass line with a specialty engineering consultant. staff confirmed that there are potential safety concerns with further internal pipeline repairs. after several specialized inspections to confirm assumptions, staff recommended to readvise the emergency

declaration. and i'd like to point to the pictures on the slide just to describe what is going on on the pictures. so the blue lanes indicate the existing pipelines that cross yslais creek. on the top view is an aerial photograph that gives a better perspective. the blue line is the cross section that crosses yslais from a cross section point of view. as you can see, the bypass is intended to float immediately on the mud line at yslais creek. the project is identified to be statutorily exempt. the current status of the

project, p.u.c. is establishing separate emergency contracts for design and construction. the current designer is identified kennedy jencks. they are currently finalizing design with feedback from power engineering for constructability, in essence to fine-tune the design so that it can be constructed in an expeditious manner. power engineering is also beginning long lead material procurement and also securing staging area and providing constructability review. and i'd like to give a little description as far as the permanent replacement of the pipeline. so in the previous picture, the blue lines illustrate the existing pipelines, and the yellow line also indicated what is being proposed to be constructed as the new alignment for the forced mains.

they're currently identified as a pair of 54-inch h.d.p. pipelines. construction target is expected to complete in 2023 with an engineer's estimate for construction at $38 million. currently, ceqa is classifying it as a mitigated declaration. what we're asking for is the board of supervisors support of the approval of the emergency declaration by san francisco public utilities commission pursuant to san francisco ad stiff code chapter 6.60 and chapter 21.15 with a not-to-exceed value of $5 million. and the photo shows the existing main as it dives cross yslais creek. thank you.

>> supervisor fewer: thank you very much. colleagues, any questions? at the. hearing none, let's hear from the b.l.a. >> good morning, supervisors. severin campbell from the budget and finance office. there is a budget that we were provided. it's on page 17. table one, page 17 of our report. the budget's for a little more than $9.4 million. the emergency declaration is for up to $5 million. we are actually recommending a reduction in the emergency amount, to reduce it by $ $88,000, otherwise, we do recommend approval as recommended. >> supervisor fewer: thank you. colleagues, any questions or comments?

let's open it up to the public. are there any members of the public who would like to comment on item number seven? seeing none, public comment is now closed. [gavel]. >> supervisor fewer: i have a question. this is the third emergency declaration that sfpuc has brought before us, and i'm wondering if there is any kind of prevention plan moving forward or are we just going to be seeing a lot of emergency declarations? >> specifically for this pipeline, we are planning for a permanent relachlt project to hopefully mitigate the future needs for emergency declarations. historically, we have been inspecting them as soon as there is a notice of deficiency for each one of these pipelines, but at this point, it doesn't appear that it is possible to further repair without alleviating potential safety -- health and safety concerns. >> supervisor fewer: so it's

just that these emerging declarations are specific projects, and it's kind of not related to an overall maintenance problem? >> correct. i believe so. >> supervisor fewer: correct. i'd like to make a motion to approve this. i'd like to make a motion to approve the amendment that the b.l.a. has presented. thank you, and we can take that without objection. [gavel]. >> supervisor fewer: and then, i'd like to move this to the full board with a positive recommendation as amended. [gavel]. >> supervisor fewer: madam clerk, can you please call item eight. [agenda item read]. >> supervisor fewer: thank you very much. i understand that the department needs more time on this item, so i'd like to continue this to the call of the chair and bring this back when they're ready, but let's open this up for public comment first, are there any members of the public that would like to speak on this item? seeing none, public comment is

now closed. colleagues, is there a motion to continue this item? yes, made by supervisor mandelman, and we can take that without objection. thank you very much [gavel]. >> supervisor fewer: madam clerk, can you please call item number nine? [agenda item read] few. >> supervisor fewer: thank you very much. we have derek chu, ad stror of compliance peculi compliance -- director of administration and finance rec and parks. >> good morning, supervisors.

i am derek chu, director of administration and finance rec and parks. in 2018, the clubhouse was destroyed in a fire. the department is in the process of replacing the clubhouse, and the projected cost is $4 million. the department has identified a funding source for this project, and it is through the refunding of outstanding bond issues in 2006 and 2007 that were secured by the open space fund. the debt service reserve for the refunded lease revenue bonds was no longer necessary once 2006 and 2007 bonds were refunded. the department proposes to use $4 million of these funds for investment in the park system. the $4 million in leased revenue bonds savings are tax exempt and there are must be used for a public purpose. the golden gate park golf course clubhouse, although used

as a public recreational facility is operated by a private lessee. on the advice of bond counsel, the department has identified the rossi pool project eligible to receive these fund does. as such, the department is requesting board approval of this ordinance that would schiff $4 million of open space moneys from the rossi pool project to the golden gate park clubhouse project and reserve $4 million of debt savings for the rossi pool project. the department thanks the work of everyone. >> supervisor fewer: thank you very much, mr. chu. colleagues, any questions? let's hear from the b.l.a. >> this legislation, what the

board is being asked to use is funds from the rossi pool project. the recreation and park project actually approved these funds for the clubhouse project. as mr. chu said, this is because it is being operated by a private nonprofit entity and probably is not eligible for tax exempt bonds. so the funds are being used for the clubhouse project. it's $4 million. we do show the funds of the clubhouse project on page 31 of our report. this is expected to fund the project, and then in order to make the rossi pool whole, money services for the 2006-2007 revenue bonds are no longer needed because those bonds were refunded within the use of the rossi pool, so it's basically both funds would be made whole. therefore, we recommend approval. >> supervisor fewer: thank you very much. let's open it up for public

comment. are there any members of the public that would like to comment on this item? seeing none, public comment is now closed. [gavel]. >> supervisor fewer: mr. chu, i have a question. i am completely supportive of the rebuild of the golf course. it's in my district. and also rossi pool. it's in my district, too. as we're switching funds, i find it a little shocking that you have $4 million left in this 2006-2007 revenue fund. why is that and is there more funds available there? >> the city refunded those 2006-2007 bonds, and in the process of one saving money for the city, the debt service reserve that was placed for those bonds was no longer needed because those bonds have

since been made off by the refunding. so it wasn't that we were not spending the money fully. those moneys were in a reserve for those bonds self- >> supervisor fewer: -- specifically. >> supervisor fewer: and it was 4 million. >> yes. >> supervisor fewer: okay. thank you. i look forward to those projects being done soon. >> we're working on them. thank you. >> supervisor fewer: okay. do we have a motion for this? yes, from supervisor mandelman. so i think we can move this with a positive recommendation to the board. thank you very much. [gavel]. >> supervisor fewer: madam clerk, can you please call item number 10. [agenda item read].

>> supervisor fewer: thank you very much. i believe we have sarah nester here from the mayor's office of housing to present on this. hello, sarah. >> hello. good morning, chair fewer and supervisors stefani and mandelman. i'm here to present on item ten, a bond issuance resolution to fund the construction of 143 affordable housing units at 16th and folsom in the mission. the project is known by its address, 1990 folsom. the project is being developed by a joint venture partnership. representatives from both partners are here in the room with us today. the transaction's fundamentals have not changed since mohcd presented to this committee in november 2017. the issuance is still conduit financing with no recourse to the city's general fund. the development consists of a mix of studios, one, two, and

three consisting of 30% and 70% a.m.i. since we brought this resolution to you in 2017, the developer has secured all financing for the project, including tax credits, mortgage, and 34 ohcd gap financing, and they expect to close financing and begin construction by the end of next month. the project is expected to be complete by the end of 2020. so behalf of the development team and mohcd, i'd like to thank you for your consideration of this resolution and your continued support of this project. and i'm here joined by members of my development team and amy chan, and we're happy to answer any questions you might have. >> supervisor fewer: thank you. colleagues, any question?

none at all. okay. and i don't believe we have a b.l.a. report, is that right? okay. let's open it up to for public comment. i have one card, and i believe this is feliciano rivera. for give me if i mispronounce your name. >> you actually had it spot on. i am here speaking on behalf of the development team. we're grateful for the partnership and support that we have received from the city. as you may be aware, we've been facing a significant affordable housing crisis obviously citywide but in the mission in particular, meta, our partners, tmdc, and our peers would not be in this a position where we're able to stablize a large number of existing affordable housing and build new affordable housing and projects

like this 1990 folsom project which we're excited to bring to the community a year ahead of the schedule we had originally proposed to the city when we were awarded proposition a funding in 2016, and were also very, very pleased that our partnership with the city has resulted in our ability to deliver these -- this project with a construction budget that is below the recent median point, so we're trying -- we've really worked well in tandem with our partners to be fiscally prudent with the development of this project. so we're grateful, and we encourage support of this item before you. thank you very much. >> supervisor fewer: thank you very much, sir. any other members of the public that would like to speak on this item? seeing none, public comment is now closed. [gavel]. >> supervisor fewer: colleagues, do we have a motion? >> supervisor stefani: yes. i'd like to move this forward

to the full board with a positive recommendation. >> supervisor fewer: thank you, supervisor stefani. [gavel]. >> supervisor fewer: madam clerk, would you please call item number 11. [agenda item read]. >> supervisor fewer: thank you very much. i believe we have jim stillwell from the department of public health, behavioral health division to present on this item. >> yes. good morning, supervisors. some form of this contract has been enforced between the state and the county for about 45 years, and about 35 years ago, it became mandatory for all 56 or 57 counties, depending how you count them. the purpose of the contract is

primarily to subvene federal funds to the county, but also some degree of state funds go along with that. along with that, it has all the regulations that are required to be followed. so this contract, first issue about this is it always says retroactive. all of these. they change the contract about twice a year. the contract itself is a three-year framework. they've been two years and to you years in the past, but they always go multiyears to smooth their financing, i think and reduce paperwork somewhat, but it's he revised a couple times a year. and every time there's an amendment, it gets categorized as retroactive. the current amendment is one of the easiest i've ever seen because it doesn't provide any

shift in policy, it just provides funding for administrative activities, utilization review and quality management activities. these are all activities we've been required to provide, you know, since before i started. and i'd say starting about five years ago, the newer contract, so it was an increase in administrative and quality activities required. certain parts of this were funded before, but as -- i don't know, it became a more fundamental change in a more simplified or unified way of claiming the federal portion of this. so that's the primary item here. if you look at the budget part of it, first of all, it's composed entirely of federal and state funds. there's no county liability, no

county financial liability involved here. there's no match, no leverage. it's just funding, eventually a state and federal mandate. there's no particular policy change involved in this item. it had been announced long ago, i mean, five years ago, that some level of this type of activity was going to be required and be paid for. so looking back at the budget, it's just the addition of federal funds with a percentage of state general funds matched to that, and the change really goes from -- the contract was worth about $46 million. they moved it up by 7 million. it's about 2 -- $2.25 million a year change, and it's all accounted for just in those

quality and utilization activities. i think that's probably the core of what i need to say about this contract, but i would expect you have questions. >> supervisor fewer: let's ask colleagues if you have any questions. yes, supervisor stefani? >> supervisor stefani: yes. thank you, chair fewer. i just have a question, what is the 7 million going to? >> just quickly to say utilization review involves visiting clients in treatment during the course of treatment toy assure ourselves that they're in the appropriate treatment, that they're making reasonable progress, that there's a coherniate plan for their -- coherent plan for their future in there. all of our services are also indeed contracted out, so this is sort of a standard routine

measurable way of keeping track of the efficiency of our system and the fairness and many of those other items. quality management is a little bit more open-ended in some ways, but i mean, it involves standardized reporting on compliant measures and quality measures. the program is shifting to be more and more a medicaid -- state optional medicaid fund, and the bulk of the funding now comes from the feds, so it is a little bit upping the standards to be a little bit more consistent across the boards. if you step back one step further, this is a broad shift of turning substance abuse services from sort of mom and mom and grassroots organizations into accountable medical organizations and ultimately into a substance abuse or substance use disorder

managed care plan, to get differences between substance abuse treatment, mental health treatment. also composes certain parts of parity that in medical treatment, well, we've see you twice this year. we can't cover this. so there's a shift in that. it's also been opening up a vast number of procedures, particularly medications, to broader use and adequate funding to provide those. >> supervisor stefani: okay. thank you. >> supervisor fewer: yes, supervisor mandelman. >> supervisor mandelman: i suppose i'll learn this over the next few months, but i'm wondering how this relates to our overall funding budget?

>> no, it's a big piece. san francisco provides more for substance abuse pretty much more than any other country, at least in california and possibly the country. that chunk is about 30 million, so this is 48 million, and then, there's grants. some of them are substantial, but this represents more than 50% of our activity. >> supervisor mandelman: great. thank you. >> and -- we're always open to questions, too. >> supervisor fewer: thank you. let's open this up for public comment now. are there any members of the public that would like to speak on this item? seeing none, public comment is now closed. [gavel]. >> supervisor fewer: colleagues, can we have a motion, please? yes. >> supervisor mandelman: i will move to forward this to the full board with a positive recommendation. >> supervisor fewer: thank you, supervisor mandelman. i think we can take this without objection. thank you very much. [gavel].

>> supervisor fewer: madam clerk, can you please call items one and two together? i see kathy widener from the san francisco airport is here to present today. [agenda item read] [agenda item read]. >> supervisor fewer: thank you very much. we have kathy widener from the san francisco airport. >> thank you. good morning, supervisors, kathy widener from the san francisco international airport. the items before you seek new concessions in two terminals.

these two leases were part of a request for proposals processed for retail concessions in terminal one. each lease will pay either the greater of a minimum annual guarantee rent or a percentage rent and have lease terms of seven years with two one-year options to extend. terminal one is currently under going renovation and will be opened in phases. the mag rent proposed with these two leases are the marshall group, $440,000 a year, and paradies lagardere, $700,000 a year. based on previous sales, airport staff estimates that both outlets will pay on the

higher percentage rent formula. the budget analyst has reviewed the -- both leases and recommends approval, and i would be happy to answer any questions. >> supervisor fewer: i think there's a b.l.a. report on this, is this correct? thank you very much. >> yes. these leases -- these two leases are part of a package that the airport is presents. there were seven leases all together in terms of the original request for proposals. two are pending and will come before the board for approval. so the lease with marshall and the lease with paradies and marshall, they were the two highest as part of the competitive process. the rent is set at the minimum annual guarantee or a percentage rent. the airport expects to get

percentage rent, but if you look at the percentage rent minimum annual guarantee on page five of our report, the leases, they're being phased in due to the construction in the terminal, so they won't reach initially the total minimum amount guarantee, but our estimate is about 4.3 million over the seven-year term of the paradies lease and 3.8 million over the term of the marshall lease. we do recommend approval. >> supervisor fewer: thank you very much. let's open this up to public comment. are there any members of the public that would like to speak on this item? seeing none, public comment is now closed. [gavel]. >> supervisor fewer: colleagues, do we have a motion? >> supervisor stefani: i'd like to forward this to the full board with a positive recommendation, items one and two. >> supervisor fewer: thank you very much, supervisor stefani. can take that without objection. thank you very much. [gavel] madam clerk, can you please call items number three, four, and five together. [agenda item read] [agenda item read]

[agenda item read]. >> supervisor fewer: thank you very much. i believe kathy widener from the san francisco international airport is here to present on this. >> yes. thank you, chair fewer and members of the committee. kathy widener from the airport. this seeks approval for

electronic concessions in terminal through, two, and 1. all three locations have a ten-year term with varying mags depending on their locations and square footage. the terminal one location has an annual guarantee of $405,000, $500,000, and the international terminal location has a minimum annual guarantee of $340,000. as with the other leases that you've seen, the tenant pays on the greater of either the minimum annual guarantee or a percentage rent based on their gross sales. also in this case, airport staff estimates based on previous sales from these locations that the tenant will pay on the higher of the percentage rent formula. the budget analyst has reviewed and recommends approval and i can answer any questions that you might have. >> supervisor fewer: thank you, colleagues, any question are

for miz -- miss widener? citying none -- seeing none, let's go to to the b.l.a. [inaudible] >> -- and other activities, but they did consider in motion to be responsive to the r.f.p. the minimum annual guarantee for each -- for these three total leases is 2.2 mil -- 1.2 million or 12.4 million over the five-year term. the airport is expecting to receive the percentage rent which is higher than the minimum guarantee, and we recommend approval. >> supervisor fewer: thank you very much. let's open this up for public comment. any members of the public wish to speak on this?

i see none, so public comment is closed. colleagues, do we have a motion? yes, supervisor mandelman? >> supervisor mandelman: i'll move we forward these agreements to the full board with a positive recommendation. >> supervisor fewer: yes. thank you, [gavel]. >> supervisor fewer: madam clerk, would you call item number six? [agenda item read]. >> supervisor fewer: thank you. miss kathy widener of the san francisco international airport to present on this one. >> thank you, chair fewer, members of the committee. kathy widener for the airport. in -- one in terminal three and one in the international terminal with a ten-year term.

each less again will pay either of the greater proposed minimum annual guarantee rent or the percentage rent, whichever is higher. the mag rent associated with these three locations with terminal three -- oh, i'm sorry. that's not right. i'm going to let -- this is not accurate, so i'm going to let the budget analyst give you the minimum guarantee, but as the other leases, we do expect the tenants to be paying on a percentage rent based on previous sales. these leases were all part of a request for proposals process with spa b.r. s.f.o. ranked as the highest bidder. this concludes my presentation and i'm happy to answer any questions. >> supervisor fewer: thank you. any questions for miss widener? seeing none, let's go to the b.l.a.

>> the b.l.o. is being asked to approve these leases. they're for massage and other services at the airport. spa brsfo was the highest scorer to an r.f.p. process. we show that on page 12 of our report. the less is for 12 years. the minimum annual guarantee is 250,000 per year or 2.5 million over ten years. the assumption by the airport is that they will be paying the higher percentage rent rather than minimum annual guarantee, and we recommend approval. >> supervisor fewer: thank you very much. are there any members of the public that would like to speak on this item? seeing none, public comment is now closed. colleagues, do we have a motion for this? yes, supervisor stefani? >> supervisor stefani: yes, i'd like to forward this to the if you mean -- full board with a positive recommendation.

>> supervisor fewer: thank you. at this time, i'd like to call . >> supervisor fewer: we'll combacome back into session. we'll start with our last item on the agenda today, which is item 12. madam clerk, can you call item 12. >> clerk: yes. resolution approving a vertical disposition and development agreement between the port and a joint venture between tmg partners and presidio bay ventures for the sale of parcel k north, located at 20th street and illinois street, by the port and adopting various findings. >> supervisor fewer: thank you. i believe we have christine maher from the port of san francisco to present on this item. thank you. >> my name is christine maher, and i'm here representing the port on behalf of director forbes to present on pier 70,

which is parcel k north. before getting into the details of the parcel k north transaction, i'll start off with just a brief overview of the larger pier 70 project. in the fall of 2017, the board approved several pieces of legislation authorizing the pier 70 mixed use district project, including approval of the 35 acre pier 70 special use district and a disposition and development agreement with four city covering 28 out of the 35 acres in the special use district. last fall, the board also authorized a financing district for pier 70. just a reminder, the pier 70 s.u.d. covers 35 acres adjacent to the dogpatch neighborhood. it provides for approximately 1600 to 3,000 residential units of which 30% must be

affordable, up to 1.5 million square feet of office space, and nine acres of open space. the project also has a robust public benefits package. it includes more than 470 affordable housing units, sea level rise protections, nine acres of new parks and open space, the historic rehabilitation of buildings 2, 12, and 21, and a new arts building just to name a few. now i will turn to specifics of parcel k north. parcel k north or p.k.n. is a parcel at the corner of illinois and 20th street. it is subject to the s.u.d. which provides us to 260,000 gross square feet of residential and 13,000 gross square feet of commercial and residential, 240 to 270

residential units ranging from studios to three-bedroom units and.6 parking spaces per housing units. p.k.n. is not one of the options however, the d.d.a. does require the port to sell parcel k for condo development by february 19, 2019 and then to use the proceeds from the sale to pay down entitlement costs for the larger pier 70 project. consistent with all market rate condo projects in the pier 70 s.u.d., the project will be required to a pay 28% in lieu fee rather than provide on-site inclusionary housing units. i'll now turn to the buyer selection process. in 2017, the port approved the broker approved sale at or

behalf fair market value. five buyers ultimately responded to the solicitation, and the port in consultation with the real estate division and collier's selected a join venture of t.m.g. partners and presidio ventures along with westbrook as the highest qualified bidder. now onto the terms of the sale. over the last four months, the port and the buyer have been negotiating the terms of a vertical disposition and development agreement for the sale and development of parcel k north. some of the major terms include paying a total consideration to the port of 25.35 million, constructing a public plaza at the corner of 20th and illinois, and the one-block stretch of michigan street and the future 21st street, subject to reimbursement from public financing sources. complying with certain sound proofing measures to minimize

conflicts with the american industrial center located across the street from the project. payment of a 1.5% transfer fee due upon the sale of every condo unit after the initial sale, compliance with the city's first source hiring program, local and minority hiring requirements, and completion of the close of escrow by the end of 2019. finally, this last slide summarizes the financial benefits of the transaction. as previously mentioned, the port will receive one-time revenues of 24.35 million in sale proceeds and estimated annual revenues of 474,000 from the 1.5% transfer fees from the resale of condo units. as required, the port will use the fees to pay down the cost of the project. the city will receive one time tax revenues of 720,000 and one time estimated development fees

of 1.29 million. finally, itthat:concludeds the presentation. myself as well as elaine forbes and brad benson from the port, claudia gorham from real estate, amy and carlos from t.m.g., kabir and miles from presidio bay are all available to answer any questions. thank you. >> supervisor mandelman: through the chair, might i ask

you a question? thank you for the presentation. i do have a few questions about this -- just some of the underlying thinking around some of the business terms and wants to have a -- wanted to have a conversation about a couple of things. the first is this is a for-sale transaction, and one of the things that's somewhat unique about the port compared to public agencies is almost everything the port has done i think has been on ground leases. and i know some of that is because of public trust, but there's also a principle, which is that it is good to have land in public ownership, and it is going to give it back at some point to the public new future even if it's being developed now for some private use. so i wanted to ask the port to talk a little bit about the thinking on why this particular parcel should be sold rather than transferred pursuant to a

long-term ground lease. >> supervisor mandelman, through the chair, brad benson, director of special projects for the port representing the port team and director forbes. happy to answer your question. you're right. the port has land granted that it holds in trust for the people of california, and typically, the port does not sell that land. it's the 7.5 mile band from fisherman's wharf to heron's head park. the only times that the port can tell the property is when it has the authorization of the state legislature or where it's done a trust exchange, and this is the case with pier 70. pier 70 had some lands in it that were never subject to the trust, uplands, not tidelands,

or were being required prior to the birdland act. the port commission could have sold all of the parcels freed from the public trust but for the very reasons that you're indicating, the port commission decided to lease most of the property in pier 70 for nontrust mixed-use development. it's a mixture of ownership housing and rental housing, including the affordable housing that christine mentioned. for condo sites, you really cannot do condos on a ground

lease. port staff researched that option. the problem is there's risk for both the port and for those future condo owners at the end of that groundless term. what happens to their property when the lease expires? so we didn't think that was possible, but the port commission did want to see ongoing revenues and benefit to the trust even after the sale. so you'll notice on christine slides here, if i could put that summary of financial benefits up, line two shows annual transfer fees. this -- this site is going to generate perpetual revenues to

the port that we estimate starting out at $464,000, so there is an ongoing benefit. also, the c.f.d. annual revenues of $4.5 million. we expect those to go on for 120 years, and that's only true for the for-sale sites in the projects. so that's a very long winded answer, but we hope that there's an ongoing financial benefit to the port. we know that there will be. >> supervisor mandelman: thank you. i'm torn. i suppose i think if i were on the port commission, i would have pushed all of it to be rental and to keep that in the public trust, but i know we're not exactly there in the conversation. the other -- the other questions i wants to ask relate

to the fact that this property is going to be sold it looks like without the typical conditions precedent to a sale. typically, on d.d.a.s, it wants to make sure that all the conditions that are going to need to be met have been met prior to transferring that property to a developer so you know you're going to get the thing you want there. my understanding is the sale is going to happen. it's a market rate sale. the developer is paying what the market will bear, but there's no -- there isn't the certainty that we would have under an atritional d.d.a., that the development we're anticipating is going to get built there within a particular time frame or any time at all. am i getting that right? >> you're right. there's no -- we call this a schedule of performance to build, and we didn't think that there was one that was necessary in this case.

we're in a market that has some uncertainty compared to the past couple of years. construction costs are going up. we thought that we would gain moreland value if we did not have a schedule of performance, and there is -- there becomes a carrying cost to this land, so these annual c.f.d. revenues, they kick in whether or not a building has been built starting in the fiscal year that is three years after the vdda is signed, which would be in it a couple of weeks if the board acts. so we think there is a strong financial incentive for the developer to build on the site, to be able to have revenue on the project, to be able to pass on those future c.f.d. taxes to future condo buyers, so that's why we did not include a schedule of performance. >> supervisor mandelman: what are the risks to us if we go

ahead and sell the property to the developer and for whatever set of reasons, the developer doesn't begin the project, and the property isn't developed? >> we think we'll get the financial benefits of the c.f.d. revenues, which is the thing that we're really looking for from this site to be able to help payoff other 28-acre site costs, horizontal costs of streets and utilities and infrastructure whether or not a building gets built. so once those c.f.d. special taxes come into play, we're in a position to issue bonds if approved by the port commission and board of supervisors to pay those costs. so we don't see a harm to the site not being developed for a period of time. we think that it's very unlikely that we would go more than five years without seeing development on this site. and we're being patient with pier 70. it's a big site. it's a 35-acre special use

district. we expect it to be built out over 15 years or more, so we think that the risk of a particular parcel not moving within that period is not a big risk of the overall project. >> supervisor mandelman: but i assume we don't have any buy back options? >> this does not include a buy back option, no, it does not. >> supervisor mandelman: okay. thank you. >> supervisor fewer: colleagues, anymore questions? seeing none, let's turn it over to the b.l.a. >> the board is being asked to approve the vertical disposition and development agreement between the port and t.m.g. presidio bay. miss maher detailed the process. the port would sell the property to t.m.g. presidio bay for $24.35 million.

the actual purchase price is 24 million and then another 350,000 where the developer would assume the port costs -- the buyer would assume the port costs. this is consistent with the appraisal and the appraisal review of 24.3 million for the property. some of the other items, in table two page 37 of our report, some of other specific conditions or terms of this, mr. benson did talk about this transfer fee, so this is 1.5% participation fee that the port would receive for subsequent seals of the condominiums. it's not on the first sale, but on the subsequent sales. one of the other key provisions is about the community facilities district. this is actually subject to future board of supervisors

approval. it's not yet been approved by the board, but that it would be -- the port would be able to make the decision that there would be a c.f.d. formed on this site. the special assessment on the levies is already put into the vertical development agreement to account for that for the future. there's also some development impact fees that would be paid. the estimate on the affordable housing in lieu fee for this site would be about $14.6 million. i think the one other -- well, a couple of other key terms. the developer's expected to develop some of the public improvements to michigan street and a couple of public spaces. the estimated cost is 7.7 million. there is a bit of a risk to the port, to the city for this, to the extent that the developer puts the money up front and then gets paid back the moneys from the infrastuckture

district that was previously approved or the facilities district. at this point, there isn't revenue coming in from those, so if there's either delay either in the tax increment from the infrastructure financing commitment or the tax levy from the community district, the cost of those projects are going to increase by about 4.4% per year because that's the developer's return on their costs, so there is a risk there. and then, i think mr. benson has already talked about that there is not a specific schedule of performance in this d.d.a. and has already talked about that piece of it here. we actually are recommending approval of this because it's consistent with the documents from the board's prior approval of the pier 70 agreement. this is in the financing plan, but i'm available to answer any questions that you may have. >> supervisor fewer: transgender very much. colleagues, any questions from miss campbell? seeing none, let's open this up

for public comment. are there any members of the public that would like to comment on this item? seeing none, public comment is closed. [gavel]. >> supervisor fewer: colleagues, this is a huge project, and it's been in the works for a while. i gave you a copy of the amendments that i would like to propose. item six, striking lines 9 through 19, adding in on page nine, line one through four. and i will read aloud the amendment that i'm adding, further resolve that the board of supervisors urges to the executive director the mayor's office of housing and community development to return to the budget and finance committee with a proposed plan to extend

affordable housing fees generated by the development of parcel k north, and i am calling for that to come back in two weeks to this board. so i make a motion to approve those amendments. can we take that without objection? thank you. and then, i'm making a motion to send this out of committee without recommendation to the full board. can we accept that without -- i mean, without objection? thank you very much. [gavel]. >> supervisor fewer: thank you very much. madam clerk, do we have any other items before us today? >> clerk: there are no other items on this agenda today. >> supervisor fewer: thank you very much. this meetings adjourned. -- this meeting's adjourned.

>> good morning, please welcome san francisco gay men's chorus, performing "singing for our love ." [♪] ♪ we are peaceful loving people ♪ ♪ and we are singing,, singing for our love ♪ ♪ we are young and old together ♪ ♪ and we are singing