small businesses and equiti equitium -- equity applicants while putting controls in place. we appreciate the feedback that we received from city and department staff, industry shake holders and event producers. we -- stakeholders and event producers. we look forward to hearing more comments and information. eugene, can you come up and let us know what the roll out for cannabis permits will look like for the cannabis office?

>> yes. one of the things that i'd just like to 'em ifemphasize briefls is a pilot, and it is a known number of opportunities and events. what we are trying to do is minimize the impacts for public health and public safety, but the negative impacts of unregulated sales and consumption. this is an opportunity to move these events from an unregulated space into a regulated space. we emphasize collaborative relationships with city departments. that's something that we've done previously. for example, for temporary permit holders, the san francisco police department reviews city plans. in coming up with the consumption regulations for cannabis retailers, it's a process that we work with the department of public health doing that. so it's something we planning on working with various

agencies. our regulation is posted for public comment. if you go to the office of cannabis website, there are a list of regulations you can see. you can add your e-mail to a distribution list aour website in which information would be shared. we plan to work closely with city departments around this issue and also if there's strong desire from the public. we would be willing to have a public convening for people to share their opinions, and i'd be happy to answer any additional questions that you might have. >> supervisor mandelman: if there aren't, i do have one more. >> chair fewer: yes. >> supervisor mandelman: i think we might be done with this, eugene, so you can sit down. >> chair fewer: yes. >> supervisor mandelman: i do

have one more. the amendment before you is one that we've worked on with the rec and park and the department of public health to allow funding agencies to temporarily waive these laws in connection with a temporary event. >> chair fewer: thank you very much. there was not a b.l.a. report on this item. any comments? questions? okay. so let's open this up for public comment. if you would like to speak on this item, please come forward. i have some cards on this. fernando, and alex. >> i wanted to speak today in fully support of this measure. as last year in 2018, the guidelines were that you could only have these events at a county fair ground or district alri cultural center. i was more interested in watching ab 2020.

obviously was signed by governor brown late september, became law january 1. so although we do have done events at the county fairgrounds last year, i was interested in doing smaller, b boutique events. as an event organizer, as a minority business owner, i just wanted to give my public comment that i'm fully in support of this. i wanted to offer my full help to whoever would like, you know, my input to make sure that we do these responsibly, that we do them safe. again, my name is fernando alvarez, and i'm the director of vape lounges. >> we as an organization support this moving forward. supervisor mandelman, you made some outstanding points, but one thing that i want to add is

so many of our outdoor events are perused by nonprofit -- produced by nonprofit organizations, and this will open up a stream of revenue that many of us need right now. we're seeing our city expenses going up and up with no end in sight, so we need this revenue source. additionally, we as an organization have been actively working on these scenarios, how we're going to make these work at folsom street fair and up your alley as soon as possible. so thank you very much. full c folsom street events supports this very much. >> we are speaking in support of the legislation introduced by supervisor mandelman. our members feel this is a step in the right direction regarding consumption practices in san francisco and that tourism is going to ab strong and profitable element of the

larger san francisco cannabis landscape. echoing supervisor fewer's comments earlier, we feel that equity must be an important part of that conversation and it must be a criteria for evaluating these licenses as it has been, so the equity group would like to say we are in strong support of this motion and we make ourselves available for any questions, comments, information we can provide on that issue. thank you. >> chair fewer: thank you. next speaker. >> good morning, supervisors. conor johnston. i am one of the owners of a soon-to-open cannabis retailers in san francisco. california -- you may have seen in the news recently, when it legalized adult use cannabis sales in 2018, the year for year sales actually went down. we sold less legal cannabis in

2018 than 2017, and a big reason for that is, we as a state have legalized the growing and the sale of cannabis but haven't done a very good job of legalizing the use of it or normalizing the use of it. you can walk into a store in san francisco and buy cannabis, but you can't use it in -- on the bus, in a park, you can't use it in your car, and if you're a tourist, you can't use it in your hotel. so we've created a system, like they say in pulp fiction, it's legal, but it ain't 100% legal. there are obstacles to the consumption and the normalization of consumption. so thank you for bringing this forward to the district aid

office, and it is great to be here ad what -- at what i think is the second most interesting government hearing right now. if you're not watching michael cohen right now, you should be. >> hello. my name is justin wiener. i'm one of the producers of the howard street fair in san francisco. we feel there's a need for safe and regulated environments for legal cannabis, and we think that san francisco should be leading the way in cannabis events. thank you. >> good morning, supervisors. my name is terrence allen, and i've had the pleasure of serving for the last three years as the chair of the san francisco cannabis legalization task force, which just recently completed the third year report which is on the screen, and i will make sure if your office

does not have a copy, you will get one right away. the consumption issue is troubling as someone who likes to make good recommendations for public policy and develop public consent around those policies because if we don't create consumption areas, those consumption areas will happen automatically by the normalized use of cannabis that people are so used to doing, and we want to make sure that we regulate it in conformance with the guiding principles of our task force, which is keep use access strong so that youth cannot access, either visually or through the sale and consumption of cannabis, and so in that way, let's move this forward, let's create the income stream and provide opportunities for all of our

community. thank you very much. >> chair fewer: next speaker, please. >> hello. i'm alex kino, community partner and promoter for 420 community event. as you know, this is a free event and it's open to the public. i'm totally in support of this. this will offer clean, tested legal product to our consumers and our patrons in the park. so we're definitely supportive of this. thank you. >> chair fewer: next speaker. >> good morning. my name is nina parks. i used to run a cannabis yoga program for the past two years, and since we don't necessarily have regulation around events, how i can actually execute in the most transparent way is kind of difficult for me to be able to navigate. these spaces that we created

are for people to be in community while they're consuming. so push people in isolation while they're under the influence of any substance is actually kind of counterproductive to the magic that these plants can actually give, so i really do support this legislation in order for us to continue to build community. thank you. >> my name is terry jones. i'm an equity applicant, verified. i'm also the c.e.o. of joe r.s. but i'm also speaking on behalf of the community and on behalf of the equity program in its general. i would like to know that we're talking about is the war on consumption, but i'm also paying attention to the war on drugs and also the impact that was dealt on our communities. i also want to honor our city because the district attorney just passed a law in order to give some type of restorative

justice for those who were just released back into the community. we've still got a lot of work to do when it comes to healing our community, and the benefits. thank you. >> chair fewer: any other speakers? seeing none, public comment is now closed. supervisor stefani? >> supervisor stefani: thank you, chair fewer. i just have one question for clarity's sake. who -- is it the office of cannabis that is enforcing on-site regulations and permit rules? >> supervisor mandelman: i'm going to welcome yeugene to coe back up. as this, say, on park property, it might involve some combination of rangers or

police that get hired, but if you want to address enforcement. >> sure, thank you supervisor. particularly around enforcement with regard to cannabis sales, so we have the ability to revoke permits, the process of making sure that there's a process for stopping sales of product. for example, that's a place in which the office of cannabis will be able to essentially exert its regulatory authority. for general enforcement, we wouldn't be in a situation where we would usurp the authority for other regulations. specifically, if your question is around sales, then, the office of cannabis will be responsible for that enforcement. >> supervisor mandelman: and then permitting a particular event, the office of cannabis would impose requirements on operators in terms of the kinds of security that they hire, that they're adequately staffing it, and then work with

the relevant departments to ensure that there's appropriate city staff there, as well. >> also. we have the ability to design permits with diagrams. if we had additional stewart personnel -- security personnel requirements, that's a condition we could kboimpose o the applicant. >> chair fewer: thank you. i am a coauthor of this item, but i actually think a report back and an evaluation would be very helpful on things we can improve on, the measures that supervisor stefani just spoke about, enforcement, also secure, those type of things i think we -- since we are learning from this whether or not it's adequate security that we are requesting or requiring.

also, we'd like to hear from the providers, people who are permitted to actually sell this. and also just from event organizers and how did it work, and how we can always work together to make this better with the community, also. i think a report back would be really helpful. so i'm going to make a motion actually to accept these amendments, and can we take that without objection? [gavel]. >> chair fewer: thank you. and because these events are subt sub-stantive, substantive, to continue this to march 6 meeting as amended. >> supervisor mandelman: just to be clear, i introduced this amendment. were you speaking about the report back as an amendment or is that a suggestion? >> chair fewer: that is a

suggestion. >> supervisor mandelman: we can work with you thinking about how we want that to come. there are other reports coming from the office of cannabis, any way, and we'll work with your office and office of cannabis in figuring that out. >> chair fewer: that would be great. so can we take that without objection? [gavel]. >> chair fewer: thank you very much. madam clerk, can you please call item number six. >> clerk: yes. [agenda item read]. >> chair fewer: thank you very much. i believe we have juan ibarra, vocational services manager for the department of public health, behavioral health services. >> thank you, supervisors. my name is juan ibarra, and i'm the vocational programs manager

in the department of public health. there are two actions included in this proposed legislation with the state department of rehabilitation, otherwise known as the d.o.r. the first action is to accept and expend the d.o.r. grant funds in the amount of $90,000 annually or $207,290 over the three year agreement to support a civil service position that would assist in coordinating and developing the work for the agreement. the second is to provide d.o.r. with the board of supervisors approval to enter into an agreement with d.o.r. whereby the county provides d.o.r. with a 21.3% catch match for the total program cost. the department of public health has had the same relationship with d.o.r. for the past 27 years. in this relationship, the department of public health has entered into an agreement with

d.o.r. to provide matching funds to support the extension expansion of vocational services through this grant. d.o.c. contracts directly with community based organizations for the deliverly of row -- delivery of vocational services. it's paid for by two main sources. the first is federal funds that the d.o.r. draws from, which is about 78.7% of the total program cost. the second source is the 21.3% cash match from the department of public health. the state needs a county match in order to drawdown a match from the federal government. d. ph supports this agreement because it allows for the expansion of row indicational services in san francisco with only a 21.3% county investment.

d. ph supports d.o.r.s infrastructure as it supports san francisco residents and mental health clients. in short, the department pays only 21.3% of the total program budget, however, 100% of the clients are within behavioral health services. the state contracts directly with four vendors, including richmond rare multiservices, ucsf citywide, caminar, and occupational training program. the vendors providing vocational and specialized employment training services to b.h.s. services, all of whom have severe behavioral health -- need severe behavioral health services. overall, these programs have

proven to be very successful. over the past several years, there have been a consistent improvement in productivity year over year. the success has resulted in approximate an increase of behavioral health clients securing and retaining employment within the competitive workforce. our clients continually express these services are powerful and crucially important to their lives. the program always invites client graduates to large provider and community gatherings so that they can share their stories and inspire others. some of the clients who suffer from severe mental illness are interested or express an interest in these vocational services after not having worked for many, many years, and they need all the support they can get in order to build their confidence, skills, and job readiness. these vocational services are essential to the client's

overall wellness and recovery, and thank you very much for your time, and i can answer any questions that you may have. >> chair fewer: colleagues, any questions or comments? there is a b.l.a. report. let's hear from miss campbell. >> yes. as mr. ibarra talks about, this is a long-standing grant. the board of supervisors previously approved the same grant in 2016. the current funding extends through june of this year, and the new grant will start july 1 of this year. on table one in our report, summarizes all the department of rehabilitation grant funding. some of its direct funding to nonprofit organizations for this, as well as the grand funds to d. ph. -- grant funds to d. ph. we recommend approval. >> chair fewer: thank you very much. let's open this up for public comment. any members of the public like

to comment on item number six, please come forward. >> my name is liselle? i'm from california department of rehabilitation? i'm here to support the continued support of d. ph contract and how important the california department of rehabilitation. this contract is helping our -- to coordinate and organize and making sure that the services that we provided to our consumer is being served. the primary -- of course, with the primary notice of mental health who are seeking employment. i hope you guys also see the importance of this contract be continued and be a proved . that's all. >> chair fewer: thank you very

much. seeing no further comments, public comment is closed. colleagues, any questions? seeing none, i'd like to thank mr. ibarra for the thorough presentation. i'd like to move this to the full board with a positive recommendation. can we take this without objection? thank you very much. [gavel]. >> chair fewer: madam clerk, can you please read the next item. [agenda item read]. >> chair fewer: thank you very much. i believe we have john melichar, population health division, department of public

health. >> that's correct. >> it's popular, too. >> it's very popular. we got some questions on this grant last night, particularly about the timing of this grant. since this grant is slated -- well, the notification says that it should start july 1, 2018. i can tell you that d. ph has met every deadline that was made -- put forth by the state. i can give you a long list of what eventuated, but i can tell you that we're accustomed to this kind of grant. there are no client services in here so no client would be put at risk. so what we have in the grant, the lion's share is $200,000 to go to an existing social media

campaign expansion, to promote notifications among avenue can american men who have sex with other men. we also have some money in here for training phlebotomists. much of our services is now moving to be mobile and on the street, so we need to train our organizations to draw blood in that situation, and then, there's a small amount of money for training and conferences, so all of that can easily be accomplished by the end of the grant date, so happy to answer any questions you have. >> chair fewer: thank you. colleagues, any questions or comments? there is no b.l.a. report, so let's open it up to public comment. is there any public comment on item number seven? seeing no public comment, public comment is closed.

>> chair fewer: colleagues, any comments or questions? we are joined by supervisor peskin. supervisor peskin, this event is retroactive. supervisor mandelman? >> supervisor mandelman: yeah, just to add a little meat to those bones, the award didn't come in until august 14 for the contract, which is the period you could cover expensed would be july. >> correct. august is when we learned of the funding opportunity, and our -- the grant application was due in august, and we didn't receive the notice of approval until november. there was discussion between the state and the city attorney's office on who signs office, and we were slated to come here in january, but we

were rescheduled, and we still have to go to the board, so this thing is still not available to us. >> supervisor mandelman: great. thank you. >> chair fewer: okay. thank you very much. seeing no other comments, then, i'd like to make a motion to move this to the board with a positive recommendation. can we take that without objection? taken. thank you very much. >> thank you for your support. >> chair fewer: thank you. madam clerk, can you please call items number eight, nine, ten and 11 together. >> clerk: yes. [agenda item read] [agenda item read] [agenda item read] [agenda item read].

>> chair fewer: thank you very much. i believe we have faith kirk patrick from the mayor's office of housing and community development. >> yes. i'm a senior project manager at the mayor's office of housing and community development. i'm here today to request your approval for the four items before you relating to two adjacent affordable housing projects known as 88 broadway and 735 davis. both are being developed by joint venture between bridge housing and the john stewart company. both projects are requesting bond issuance approval for conduit financing which will not require the city to pledge any of its funds for the repayment of the bonds. for 88 broadway, the bond is not to exceed $55,280,000. for 735 davis, the bond amount is not to exceed $21,885,000. both projects are seeking approval from mohcd to enter

into 55 year loans from the developer. repayment of mohcd loans is due annually to the extent there is cash flow from operations available. for 88 broadway, the loan amount is not to exceed $31,209,735, and for 735 davis, the loan is not to said $19,583,557. i'd like to describe the project to you briefly. both sites are currently surface parking lots, located in one large city block on separate land parcels located in the northeast waterfront landmark district. 88 broadway is roughly half of the city block. 88 broadway parcel is owned by the port. 735 davis is a smaller parcel. it's midblock along davis

street. it's on the same block, surrounded by vallejo to the north, broadway to the south, and 735 davis parcel is owned by the city. 88 broadway is 125 units, mixed use and mixed income for families. the project will serve a mix of incomes ranging from 30% a.m.i. to 80% a.m.i. with majority of the households receiving no more than 6 -- earning no more than 60% a.m.i. approximately 4,000 square feet of surface for a child care facility and another 7,000 square feet of open space for residential use. 735 davis is 73 units. it's also mixed use and mixed income. it's for seniors. the project will serve a mix of incomes, ranging from 40%

a.m.i. to 70% a.m.i. with 80% of the project's units serving households that are no more than 60% a.m.i. the property amenities include approximately 1,000 square feet of commercial space, which is anticipated to be a local serving cafe and approximately 2,000 square feet of open space serving for residential use. there will be a publicly open space available in the midblock passage available between the two projects for the public to enjoy. in july of 2018, the board of supervisors approved items related to this project. the items were options to ground lease, bond inducement, and a jurisdictional transfer. additionally, transaction documents were approved by the board of supervisors and port commission in july and august of 2018. since then, the developer has

secured tax exemption bond allocation and low-income bond allocation. the developer has secured a lender for the project and they're working diligently to close on the financing, obtain the building permits in anticipation of breaking ground to start construction in april or may of this year. this is a critical milestone of final approvals after almost three years of design development, land use and environmental traction document approvals -- transaction document approvals during our development period. this will be a welcome addition to the neighborhood and on behalf of the project sponsors and mohcd, we're very pleased to be here today seeking your approval. we're here for questions if you have anything, and i think the b.l.a. has a report. >> chair fewer: thank you very much. any comments, questions? i believe we have a b.l.a.

report on this. >> yes. we reported specifically on the two loans to bridge housing and john stewart company, one for 88 broadway and the other for 735 davis. i also want to point out that these two resolutions are also asking the board of supervisors to approve the general plan, the planning code findings and the mitigation reporting program. we sum vise board actions on this on page 17 of our report. the board has also previously approved the options to lease these two properties to john stewart company bridge housing. so what the board is asking us to approve today is the loan amount for 88 broadway of $31 million out of the $97.2 million budget for this project. of that loan amount, 27.9 million is actual a direct loan to the developer that would be paid back only if the

project generates sufficient net revenues to payback the loan. the balance of $3 million is a bridge loan to cover for an affordable housing program loan and a potential commercial space loan that is not yet received, and we rum size the project sources and uses on page able -- we summarize the project sources and uses aon page 18, table five on the report. and the balance of it, a little more than $1 million would be a bridge loan to cover an affordable housing program loan and a potential commercial space loan if those loans are received. this -- because the project itself and the financing is

consistent with prior board actions, we do recommend approval. >> chair fewer: thank you very much. let's open this up to public comment. are there any members of the public that would like to comment on items eight, nine, ten, or 11? seeing none, public comment is now closed. [gavel]. >> chair fewer: supervisor peskin? >> supervisor peskin: thank you, madam chair. colleagues, as you know, this is one of a series of affordable housing projects in the northeast area of the city, dating back to the days of the loma prieta earthquake. i think this represents the last ones to be developed. battery and broadway was the first, broadway and sansome slated for a police station we ended up getting turned into affordable housing, and this project, which as the budget analyst stated, the board has

approved in concept in the options and what-have-you before us. i wanted to use this as an opportunity to shed light on a couple of public policy issues. i want to start out with a historic pattern and practice, and i did ask the budget analyst to inquire of the mayor's office of housing and community development with regard to the practice or lack there of as required by section 918, subsection b of the charter that loans be brought to the board of supervisors for approval. and i think -- and maybe madam budget analyst, you can regale

me with the facts. i think that historically, those loans in contravention of the charter have not been brought to the board of supervisors. what i wanted from miss hartley was a recitation of how many of these projects were not brought properly before the board of supervisors for loan approvals through the chair. >> through the chair, supervisor peskin. we don't have those exact numbers. i believe the response was there has been a -- the practice over the last many years has been to approve these loans through the citywide affordable housing loan committee, but they have not

been brought forward to the board. i don't have any data on how many those are. i know that the city attorney recently determined that those loans should be coming to the board and the future loans will be presented to the board. >> supervisor peskin: and through the chair, to deputy city attorney jon givner, the history of loans from m.o.h. without board of supervisors approval and is, indeed, that is what section 9.118 of the charter requires? >> mr. givner: yes. yes, the -- these loans should be coming to the board if they're ten years or $10 million, and as miss campbell said, we have recently looked back as past loans of mohcd, that 9.118 requires them to

come to the board. >> supervisor peskin: thank you for rendering that advice, even if it's a fru decades late -- few decades late, but i would still like to know how many loans were authorized without approval of the legislative branch as required under the charter, so i do want that. the second policy issue -- and by the way -- >> chair fewer: actually, i think it would be helpful for the mayor's office of housing to respond to that question. >> i don't know the exact number of loans that have not come to the board for approval. all of our new construction projects do come through the

board for approval. the board has seen all of our new construction process -- projects and have approved those. however as the supervisor has pointed out, mohcd loans have not come to the board, and we have reviewed our procedures for approving these loans with the city attorney's office and the budget analyst's office and have been talking and discussing with board members about this potential legislation. >> chair fewer: why haven't they been brought before the board? if we hear from the city attorney the guidelines on loan that should be brought before the board, why were they not brought before the board? >> so as the budget and legislative analyst have referenced to, we have brought

them to our citywide loan committee, and it's through further clarification from the city attorney's office that we should be bringing them to the board of supervisors office. i'll defer to the city attorney to add any information to that question. >> supervisor peskin: and if i may, madam chair, i agree that in some form or fashion, the board sees some aspects of these projects. it's actually the second public policy piece that i would like to bring up relative to why it is important that these agreements -- these loan agreements come to the board, and i'll -- i'm happy to elucidate on that after we get

guidance from the mayor's council and deputy city attorney. >> we have been looking at practices of the mayor's office of housing and community development for the last 30 to 35 years. it's been long practice for mohcd to have their loans approved through the loan committee, and we are looking into, you know, the overall practice. it's been a mixture, a history in terms of mohcd approvals. i would just add that in the beginning of the affordable housing funding, many of the loans were funded through federal state sources, and mohcd was acting through those sources, and you know, there's been authorizations by the board when we received funding from federal, state sources. over time rkts the city of san

francisco has containingentake lead in funding affordable housing directly, and we're looking into the practices of mohcd and how things should be approved. >> supervisor peskin: and counselor, through the chair, miss chan says legislation was being contemplated and apparently shared with members of this board. what does that legislation contemplate because i will say for the record we will delegate or 9.118 authority to no one. >> i think miss chan referenced that kate hartley had talked to supervisors about drafting legislation and mohcd is currently drafting legislation to that effect.

>> supervisor peskin: to delegate the 9.118 authority? >> certain aspects, yes. i would say there is a proposal that has been shared with the supervisors about how all of mohcd's loans and granted are well over -- are over ten years, and the purpose of that is to ensure affordability for the longest possible time period and to the extent that, you know, the effective 9.118, there's two thresholds, ten years or -- ten years or $10 million. so i think to the effect that, you know -- >> supervisor peskin: there's actually another provision in 9.118 which is whether or not it makes any revenue. >> well, i think that's in section a if there's revenue of over $1 million. in terms of expenditures, if it's over 10 million or 10 years, it does need to come to the board. so in terms of these agreements that we enter into, they're all

over the ten-year time limit. >> supervisor peskin: 57 years is longer than ten. that is a true fact. >> mr. givner: can i jump in? i would just suggest that the supervisors talk directly with mohcd about their legislative proposal. i don't think we're in a position to present it. but our office probably isn't the right off. >> supervisor peskin: i don't disagree with you and i would respectfully request that mohcd talk to me. i am not going to delegate 9.118 authority to any government. it's not going to happen, at least not with my vote. >> chair fewer: supervisor stefani? >> supervisor stefani: yes, thank you, chair fewer.

yes. i just wanted to follow up through the chair with miss chan. when you say you're drafting legislation, i'm just curious to the need for legislation if it's pretty clear in the charter what you need to do. i'm kind of perplexed on what that legislation would look like if it's clear in the charter? so i haven't seen any legislation yet, but when you're talking about drafting legislation, i hesitate to pass laws that we don't need if it's very clear in the charter you have to come before this board. >> thank you for that comment. we have been -- our office has been speaking, and the director has been speaking to the board members about potentially for some dedicated authority. i'm happy to follow up with all of your offices and speak to you about the specific proposals. if there isn't specifically a need for the policy changes, we can have a discussion about that, but we would like to discuss this with you individually.

>> chair fewer: okay. i just also want to say that -- thank you, supervisor peskin, for bringing this to our attention. i also have not been approached by mohcd, nor have my colleagues. we are the budget committee, so i would like to know what supervisors have you been speaking to? >> i believe our director has met with a number of the supervisors, and i can follow up on which offices we'll discussed this with. >> chair fewer: i am the chair right now, and we have not discussed this with us right now. if you could give us the name of the supervisors that she has met with, and also, i think supervisor peskin has an asked for a request of the exact number of loans, and i think that is a very fair question to ask, actually, in light of this

because it is actually in violation of our charter amendment, which is a little shocking here. so i think what i would like to do is make a motion to continue this -- oh, supervisor mandelman, so sorry, my apologies. >> supervisor mandelman: yeah. this is clearly a conversation i am arriving to late and just curious about some of the parameters. so loans -- the loans before us today are limited obligations of the city, so they're not potentially threatening the general fund. would -- but there is this long history of making loans without coming to this board. does that include, to your knowledge, making loans that impacted the general fund or would have been secured by the general fund? you may not know, but i would imagine you would have come to the board.

[inaudible] >> supervisor mandelman: yeah. okay. >> we can get back to you on that question, yeah. i don't know the answer to that. >> supervisor mandelman: okay. thank you. >> thank you. >> chair fewer: so do you think you'd be able to get that information on the number of lobes f loans for supervisor peskin? >> we can most certainly look into it, just keeping in mind it is 35 years worth of loans, so we'll hopefully be afforded t the patience to go back and look at that, but hopefully, the city's records are good enough that we can go back and find that number. >> supervisor fewer: thank you so much. so i'd like to continue this item. >> if i may, question for you about the matters in front of you specifically related to 88 broadway and 735 davis. is it possible to separate the conversation that we're having related to the process from the

matters specifically in front of this committee on the project? >> chair fewer: in light of the conversation we have been having right now, i don't think so. so i would like to make a motion to continue this item -- >> supervisor peskin: madam chair, i'm not a member of this committee. i did want to get to the second area of public policy because like i said, i want to have this project built. it is part of a legacy of building affordable housing in the northeast area of the city where there's very little land to do it, but i do want to get to the issue of the difference between a grant and a loan. i do want to have a very transparent, open conversation about loans that are forgiven in whole or in part, which we all know, although we never really talk about it, is a

common practice of m.o.h. and the city and county of san francisco. so i would like to -- i don't know if this is a question for the budget analyst, but in many of these instances, we characterize these things as loans, knowing that they will never be paid back. so then, maybe why don't we just call it what it is and say that it's a grant and get rid of the fiction of it being a loan? and then, i'll get to my specifics about this one, which is there's a sea difference between when we do that with a nonprofit like the tenderloin neighborhood development clinic or c.c.d.c. than when we do it with the john stewart company, which is a for-profit company. so if we're giving a loan to a for-profit corporation, shouldn't we call it a loan and say it's not forgivable?

those are my thoughts. >> so if i may address the first part of the question, i think it's a good one, and we can policy wonk out on this for quite a bit. in short, you'll probably notice over time when we do look back over those 35 years that the method of sending out the funds has changed over time. we probably made more grants in the past and now we make more loans and we do that because we're trying to maximize the amount of noncity funds that are coming to the project. and since 1987, this has been the predominant source of funds for housing. instead of the cdbg and housing programs that were created around that time and were funding a lot of our public housing, those programs have

shrunk considerably. we're relying on equity that's coming to the project developer through the local housing tax credit program. so we have adjusted the times with respect to what other sources of funds go into the projects and there are significant financial considerations if the city's funds are put into the project as a grant rather than a loan. so we -- we do that actually to protect the project in order to bring in more money and it helps us adjust also to the rising costs that we -- that we have. and that is independent of whether the sponsor is a nonprofit or a for-profit established corporation. to receive a m.o.h. housing tax credit, you must be an established -- >> supervisor peskin: and that

would be bridge's case. >> 88 broadway, yes. >> supervisor peskin: i guess as more instruments come before this committee, assuming we don't delegate our 9.118 authority, i think it would be interested in knowing how many of these were forgiven over time. i think that would be a nice data set for us and the public to have as we create more transparency as it relates to our building and delivery of affordable housing. >> that is also information that we could provide, keeping in mind it will take quite sometime to establish that portfolio. if you take a look back on who's paying on loans, it's almost exclusively the sections that have large section eight contracts going back 30 years.

on those projects, we do see some repayment and we put that back into the next new project on a typical tax credit deal. so the last 30 years -- 25 years, let's say, a little bit less, though -- a lot less, though. >> supervisor peskin: on 4% deals as opposed to 9% deals. >> on most of those because it's dependent on cash flows. >> supervisor peskin: got it. with regards to commercial space, does the loan treat that differently because the commercial space is lucrative. if you have a 4,000 square feet restaurant space, does the loan treat that differently? >> we do look at commercial space differently, and we have -- correct me if i am wrong, in the last two years, have created a special space policy on how to develop smeshl

space, keeping in mind, in some locations where we build, we have no market. and then in other communities there is more commercial value, and you might have a tenant who is paying rent that could support commercial debt. our focus with respect to commercial lending is reducing the city's contribution to the project, so that would mean we have slightly different policies with respect to the terms on the commercial loan. because they've taken more risk, they can negotiate to take a higher percentage of the residual receipts on the loan. we don't have that many, i would say, in our portfolio that actually we do expect to generate revenue. we are often in the opposition situation where we are putting in a tremendous amount of money to support a really valuable

community service use that cannot pay much rent at all. >> supervisor peskin: understood. thank you for that explanation. and couple -- i guess, questions, and then, i'll yield the floor. what is the standard developer percentage in a project like this? >> that's such a complicated question, so for give me if i take the question in a broad direction. the standard is about 4% or a little bit more depending on the size of the project and cash fee. there might be different amounts paid out in a project, and if you remember before i was talking about the tax credits and how we rely on the tax credits to generate equity for the projects. so we structure our deals in

order to maximize the amount of revenue that we receive. having a high fee of a specific type can actually be beneficial to the city and to the project by generating equity. so two other kinds of fees that you might have besides a cash fee, you might see what's called a general parter equity contribution, g.p. equity. it is essentially a paper transaction in order to generate sort of the 35% of that value can come in as equity. and then, you can also -- counsel over the years has had opinions whether that's acceptable to themselves on the investor side. right now, counsel is quite comfortable with that approach,

so we're seeing relatively large g.p. equity contributions on our deals, so the numbers look a little bit better athan the aggregate. a third kind of fee is a developing fee that would be earned over time out of the cash flow of the first 15 years of the project. if the project has a section eight contract that is throwing or money that may be advantageous for the city to agree to a deferred fee, as well. but it is capped per our policy on the cash side. but sometimes when you see our budgets, our fee might look large principlely because either of the general equity or the deferred fee. >> supervisor peskin: and then last question, followed by one last comment. when do you