ine street that the academy is vacating that building will remain an sro building and there's the addition of eight units the academy is creating by consolidating its sro units into the sutter building. in addition there are specific procedural requirements and moratorium that are implemented through the development agreement. there would be a moratorium on new development agreements by aau from one year of the development agreement to give the the city a pause on any development activity other than that's contemplated by this deal. there's a moratorium on signage proposals

for two years after the scheduled performance is completed so two years after the work is done, there would be a ban on proposing new signs to its properties that are subject to this development agreement. there's a 30-day development agreement. there are several system improvements. i'm almost done. there's a payment of $1.5 million fee to the sfmta. all this i think goes towards the academy's policy of not allowing students to park anywhere. or not to have parking spaces. so all students don't have parking

provided by the academy and the shuttle system is there for them to use. the academy's campus as andrew mentioned, we are consolidating the campus, reducing the number of buildings from 40 to 34. we are vacating nine academy sites. and there are three buildings that we'll be renovating. two are beautiful historic buildings. the concordia club and 1946 van ness. they will be used by the academy. the academy has to complete all this work per a scheduled performance that is identified in a development agreement. and finally we've read the comments received by the commission as well and we take them extremely seriously. we understand the concerns about the signage on the jackson street property. we note the signs proposed are about

a quarter of the size that's permitted so both on frontages per the code you can have a sign that's bigger than what is proposed. however, we understand that this is an issue the community will want to have neighbors that are happy with au. so we would like to work out an arrangement that would result in signage proposal that is more minimal to the neighbors. we understand that there's concerns about the lighting in particular and we can discuss the hours of operation of the lighting which we open could be a good way of reaching common ground. so i'm here and thank you very much. >> thank you very much. so with that we will take up public comment. do we have speaker cards? okay. we have chris schafer, chris martin,

peter clark and marlene morgans. hi. pull down your mic please. >> i will. hello commissioners. and i might need to introduce myself to those who don't know who i am for example commissioner diamond. i'm probably the only person in this room who is an expert at living in the midst of a university and understanding the impact that a universe has on its neighbors. i live right in the middle of usf. and the university terrace association is the only neighborhood in america that is totally surrounded on all four sides by a university. so that's one point to be made. and i've spoken here many times using

the university of san francisco as a model for being a good actor as a university. so for example right now they are building 606 student units right on their campus. they are not taking away housing from anybody else in the city. student housing is actually affordable housing. and if a university does not build their own housing, they are taking that housing stock away. and there's approximately 50,000 students who live in san francisco in some way. now, we know they try to pack them in. and there are two situations. as a matter of fact, last year the planning commission in one of the few times you ever had a supervisor speak to you, they were speaking about a building that had been converted near the college. and the supervisors actually came because the neighbors were so upset which leads to the issue of student behavior.

i realize that what we are here, we are doing a bunch of things about the building. but you are not attending to the people who are in about that building and what is a college student? we actually a freshman is a student -- a college freshman is a person who is learning how to drink. and you can understand all the socialization that's taking place as these people live next door to you. so first thing i'm going to say is the student is not a resident. a student bugs the residents. students come and every -- this is for example the move-in welcome day every august they move in, every january you have a new semester so you have a constant turnover in students learning how to behave which leads to another thing, on-campus students should have a code of conduct.

this is what u sf requires, that whether they live on or off campus, there is the same code of conduct. they are clear. it is a contract made with the student. and there are consequences when students don't behave. out at 10:00, et cetera. so you can understand that. so what i would request because we haven't gone far enough in dealing with the behavior of students is that you have the resident advisor living on-site. >> thank you ma'am. your time is up. >> and aau neighborhood contact and to expand the benefits they make to their community. thank you very much. >> thank you. next speaker, please. >> good evening commissioners. my name is chris martin. in written testimony submitted earlier

professor tom jones states the cannery located at 2801 leavenworth street is a considerable distance from any of the other core academy clusters. in fact, the cannery is the only parcel in the fisherman's wharf cluster. i agree with professor jones, the cannery is a not a convenient location for students for transportation and should not be converted to academy uses. i have first-hand knowledge of the cannery. my family originally developed and operated the cannery for 40 years. i managed the cannery for most of that time and filled it with businesses that attracted locals as well as tourists. we put in non-chain retail stories movie theaters, museums, comedy clubs, sidewalk cafes and restaurants. for years the cannery accommodated street

performers including robin williams and held lively free events including film festivals and music festivals and a farmers' market. in 2007 we sold the cannery to a real estate entity that had a san francisco partner 2011 that entity forfeited the cannery to their lender thus allowing the stevens family to buy the property despite instruction from the department of planning not to purchase any additional properties. today under academy management the cannery is a dead zone. no trespass sewn signs greet you when you enter. access to the building is limited. public restrooms are closed. nearly all retail and restaurant spaces are vacant. even the academy galleries have closed most of the time. it is tragic. a once vibrant complex that was designed for people to enjoy is bleak and empty.

it's clear to me the academy is not capable of running the cannery as it was intended to operate. inactive storefronts along jefferson and beach street create a dead zone. reducing foot traffic and hurting businesses in the area. further academy uses on the first and second levels of the cannery are contrary to the department of planning's fisherman's wharf public realm plan and the architect's vision to invigorate fisher march's wharf with inviting acttivity. i spent years working to maintain the fishing industry and instill a sense of planning and authenticity in the wharf area. your staff recommended it not as a academy use property. preserve it in its intended use as

a lively retail restaurant and entertainment landmark. thank you. >> thank you mr. martin. next speaker, please. >> hello. marlene morgans, neighborhood coalition. yes. we are a neighborhood that is basically a good location for an educational institution. the proposal to concentrate a lot of the institutional uses onto van ness is a good idea. we believe that most of the activities of the academy can be conducted in the t zone going from new montgomery through sutter up to van ness. that's the core. and it's a good core. it's because it's a major transportation corridor as well as being a good housing mix and

major institutional uses. the problem with the academy of art if you look at what they have done over the last decade is they've ended up instead of creating as the previous speaker has said a vibrant connection with the community, they just warehouse buildings particularly at the ground level. so there's no interaction with the community. when you look at van ness, right now we have three proposed uses for storing automobiles on van ness. no museum license no plan for any way for the community to go in and view the collection like you can at stanford and uc berkeley or other places that have university museums. but simply to warehouse them. so our first request is there should only be one licensed museum. and it doesn't even have a license. there should be a program students should be

trained, community members should be trained. they should be open to the community. this can create a vibrant street for use. this other two proposals for the existing bakery it doesn't need to be additional car storage and another paint shop. i don't know how many students can be painting automobiles. two automobile paint shops on van ness is ridiculous. that should be classrooms. it is a historic building. 950 van ness does not need to remain car storage. and when you consider 950 van ness is across the street from a hospital that has 2200 employees has no staff parking none. they have a vibrant -- for the academy to say they have to have a private parking garage for their faculty when we have 2200 hospital

workers expected to get to work on transit is a slap in the face. that's unacceptable. the plan for the development of 2550 van ness into 306 student housing units is a good plan. in general, some of the small outlying, small buildings like 1900 jackson. >> okay. thank you. next speaker, please. >> commissioners. my name is peter clark. i'm a resident of 1880 jackson in pacific heights and have been for over 30

years. i live across the street from 1900 jackson. we pretty much found out about their plans by accident. they certainly took no steps to advise us of what they intended to do. we heard about the planning commission about this meeting. i and i couple others did you go through the documents and you have to go down three or four levels to find hidden in the fine print the proposal by the au to put signage on this building 6-foot by 2-foot illuminated signs on the jackson street faces. as andrew indicated over 50 of us have written in registering our complaint and our opposition to this move by the au.

it is completely inconsistent with the character of the neighborhood. and i don't think there should be any reason why pacific heights can't be a neighborhood which will retain its character in the same way the mission must retain its character or the castro wants to retain its character. it is true that the aau has put forth an argument that they are operating a business at 1900 jackson, renting rooms to students they view to be a business. as such, if you read without interpretation the planning code, it would be compliance to have a 2-foot by 6-foot sign. i think in reality, though, what that planning code means is if you have a small business like small store or small dry cleaning business in the neighborhood providing services to the neighborhood such a sign would be

appropriate. this sign is not. this is blatant commercial advertising, nothing more nothing less. and that sign should not be allowed to go up. we would be happy to meet with you. you should have met with us before. this is more evidence that the aau is not a good neighbor to the city. thank you very much. >> thank you. next speaker please. >> hello, my name is terry maguire. i'm with the pacific heights resident association board, but i'm speaking on my own behalf. >> microphone please. >> my name is terry maguire. i'm on the pacific heights resident association board, but i'm speaking on behalf of myself today, mainly because i really just -- something occurred to me that i think is very important. and maybe it's been addressed already.

but i'd like to make sure that it is. and that is these nine vacated properties. were they adequately reviewed and included in this process or were they vacated and they are going to go to the benefit of the stevens totally market-rate possibly housing? this is an opportunity. those vacated properties need to be focused on. hopefully they are looked at looked upon as opportunities for the highest and best use for low-income housing possibly within the city. as that occurred, maybe it has? maybe it hasn't. but i would like to make sure it does occur. so i encourage you to make sure that it does occur. thank you. >> thank you mr. maguire. next speaker, please. >> good afternoon, commissioners.

still afternoon isn't it? the board of supervisors i served on the land use committee for seven years. i was the chair for most of those years. 12, 13 14, 15 years ago we got this list of violations. a decade and a half ago here we are. years later. how long did this operation continue? did it start before getting the list which we asked the department to deal with. and by the way welcome back former administrator scott schafer. i know you are stuck with this. thank you to all the members of the city who have tried to work with this issue and with these criminal activities. these are criminal activities. white collar criminals, budgetary things you have to consider but it's criminal activity. mrs. stevens and her operation have

been allowed to continue for all this time. and i'm not -- enough money because this is really all about money. it's about property it's about the fact that this educational institution is a real estate operation. it's a visa-issuing operation. schools and colleges, aaccredittation acredation could pull the accreditation. i know plenty of people who have taught there. i know they resisted unionization. i was the president for the union at usf. i know what it's like to fight for decent quality kind of people to come in and decent quality benefits for faculty. you know what usf, what we've done up there at usf and what we are doing through a real campus.

this phony idea of a campus where you spread out and buy property and draw different shapes and say that's a campus, again i go back to your resume, mit i visited the harvard campus. i could barely walk, it was such a big campus. i know what mit looks like. those are campuses. usf is a campus. even the property during that had to be sold during the depression because usf almost closed. they sold that land in between the lone mountain campus and the main campus. please put 20 million more dollars. to me jones who was the former head of the housing some years ago has given you the document here showing you what the current calculation should be for recovering money for the 1843 beds being lost in 15 buildings.

the calculation could be done. ten buildings. they were low income apartments. sro hotels and we already suffered 40 years ago with the loss of sro hotels that hurt the working class people. we know about that history going back. >> thank you,. >> bucks more is what we need to get. you received tom jones documents. please go for the $20 million. get it. thank you very much. i appreciate it. >> thank you. next speaker, please. >> hi i'm bobby coalman. it is an honor to follow the testimony of the former supervisor jake. and i was also struck by the direct observations of chris martin of the cannery. i am a graduate of columbia and stanford. and i've been active on land use issues since

1987 here in san francisco. and i sympathize with the planning commission as you are asked to play a part in the approval process of a settlement agreement and development agreement under these circumstances. for those of us who have had experience of decades and look at the long view if you try to take a restorative justice approach to the academy of art and situations like this, it is unfortunate when you are asked to approve a piece of it when in the larger context you are actually in a way reinforcing some of the past transaggressive behavior that underlines how we get to this point. so these positions that have been articulated about the underutilizeation of these properties and the inadequacy of the financial settlements, these are in our face. these are actually two experiences that those of us who have been dealing with the issue for

years are now looking at and saying really, is that all you've got? you've got the piece in front of you but it's in the context of serious objections to the settlement agreement that are going to persist. so my apologies to you as you face that aspect of it. the remedies that have to do with housing and the missed opportunity of the city are kind of a shame for those of us who look at it decade afterdeck aid and see we've -- after decade and see we've only gotten this far. thank you. >> thank you. next speaker, please. >> president melgar members of the commission, kathleen cortney, russian hill community association. and welcome, commissioner diamond. this has been going on too long. as the supervisor said, some of us have been looking at this situation for a decade

and a half. we are all aware of the adverse impacts of aau on the city. we are all aware of the illegality. and now i think we are pretty aware that the attorneys of aau have really outmatched our own city attorneys and our own planning department. the question is: is this settlement that is before you the optimal settlement that you as professionals and as caretakers of the planning process of this city, is this the optimal settlement for this city? or is this just the best settlement that the guys could pull together? i really think we've raised issues about the stability, we've raised issues about housing. we've raised issues about sros being

taken over. when you vote on this, i really ask you to say to yourself do i feel in good conscience that this settlement is the best settlement that i as a commissioner, on the planning commission of san francisco in 2019, can bring to the citizens of this city. thank you very much. >> thank you ms. cortney. next speaker, please. >> hi. sorenson. i think i was one of the first hearing last year, one of the first recent hearings, about the academy of art. and i remember thinking to myself, holy crap, they are getting away with murder.

we did a improvement on our carriage house where we accidentally took down too much of the wall, and the city stopped the construction. we had to stop. and then we had to come before the board to file to be able to continue. the academy of art, as i recall, has had buildings out of compliance for almost 30 years. and yet here we are, we are just trying to rebuild a carriage house and we are getting slapped down. let me bring you back to when we were remodeling my unit. and we had the electrical inspector come in who didn't like us. nonetheless i shouldn't say that because he's probably watching. we'll get stung again. [laughter] but he came in and he said -- he didn't speak. and then i said what's up.

i don't like where the conduit is running through the wall. and our electrician who was doing the work there said yes but it's legal. it's within the zone. it's specific. it's right. well i just don't like the way it looks. and he turned around and walked out. so we had have spent -- i think we have spent my brother figured out close to $10,000 in reinspections because we've had people come in and make arbitrary comments about work that's been legally done and is correct, but they have just arbitrarily said i don't like it. and of course they reinspect and we get it and nonetheless we are spending a lot more money than we have. and then you come to the academy of art which has how many buildings that are illegal?

it's absolutely maddening that the city lets them get away with that. of course now our former illustrious mayor brown is on their board, so of course everything is going to go smooth and we are going to get screwed. but i really would -- i wish the city would hold them to the fire and make them pay for. they have been out of compliance for so many years. and now they've decided that they are going to pay? oh give me a break. beside, they are not a real school. they are just -- they're fleecing kids. it's unfortunate but they are fleecing kids. anyway, we have a lot of impact in the mission because of this. thank you. >> thank you ms. sorenson. next speaker, please. >> hi, good afternoon again i run an art center. and i know the art community and the business of

doing art. and there's just not enough art jobs that these students could possibly find. and to call it just a mill for either immigration purposes or just a fundraiser for aau to just be a real estate rental agency which fakes classes on the side it's infuriates me in the art. i'm also like marie a homeowner and i go through the process and pay my permits and do everything legally. and as i said last time this came up, if you let them get away if it, it's a signal to me i should be able to get off scot-free as well. it's a bad message. and it's fine they are going to pay, it should be the decades of illegal rents that they've won and use that as a mathematical exercise to figure out how much they actually owe the city in homelessness that they've caused.

there's aau students all over the mission also taking up housing because they are everywhere. everywhere you go bike riding, the vans open their doors whenever they feel like it. dangerous economically and environmentally for the city, horrible place. so i think as the supervisor said as well, it should be way more. it should be at least commensurate to the rent they've been illegally been getting for all these years that is way -- what ten times, a hundred times what the settlement would be. so i would urge you not to agree to a settlement. if i were on the jury i would be issuing huge rewards to the city. so why do we need to get the best out of the settlement. take it to the court, get a jury of san francisco residents to make a vote on this and issue a penalty to them that would be far more than this.

i don't think we need to settle. >> thank you next speaker, please. >> good evening, commissioners. i'm with san francisco land use coalition. when i talk to fellow san franciscans, the ones that are plugged in and know what's going on, one thing that keeps coming up is academy of arts university's pension for gobbling up real estate. for me and most people i talk to, they view it as a real estate holding company. now, all the other things that my fellow activists brought before you and talked about, that, of course, i absolutely second that. but one other thing that i would like you to keep in mind is all the vulnerable people that actually got displaced as a result of gobbling up these buildings.

what about the sros? i mean these people are the most vulnerable segment of the community. and they have to basically vacate because the academy of arts university has to buy these buildings. and now so many years later, we are looking at this situation, and we are coming up with penalties. and i doubt if these penalties are going to actually give any shelter to the people that got displaced and it's not going to do justice. so either keep in mind what has happened and i've just ask you if you can rectify this situation. thank you. >> thank you. next speaker, please. she gets 15 minutes. almost one for every year she's worked

on this issue. [laughter] >> i need to get my stuff organized. i have handouts. i've been working on this for 15 years. and what you've heard today is academy of art hasn't been a good neighbor to the individual buildings that people have talked about. and that's only the tip of the iceberg. i got involved with this in november -- pardon me december of 2005. can i have the overhead, please? could you adjust that?

i need help with the adjustment. okay. it's hard to show those things. in 2005, the academy bought, and the commissioners were upset and came to me. and i had a meeting in supervisor peskin's office. he was the president of the board then in 2005. and up here also was in her district, it was in her district. and out of that, there became conversations. i told the attorney as did aaron peskin, you have to file an institutional master

plan. an institutional master plan is required when you buy up enough property that you own more than an acre of land. this is exhibit 2 in my thing. they acquired three buildings -- pardon me. they had three buildings the law took effect. in 1991 which is when ms. stevens took over inherited her property from her grandparents, she took over the academy of art. the first building they acquired was 2340 stockton, which was ironically one of the nine buildings that deacquisitioning. so the academy kept buying property and kept buying residential properties. and this is a list of their property acquisitions that i compiled, the

planning department didn't compile it. i compiled it. they went through and kept acquiring buildings even while they were doing their ier and even after they were told to stop by the planning department. so their major institution. and this is exhibit 2 in what you have before you. exhibit 1 you will find out on the list that very few of the planning commissioners on this planning commission have been involved in this project. it's mostly been other planning commissioners. because they put the list of every time the academy of art went to the planning commission and all the planning commissioners. and you look down there, and kathrin came on in 2007. she was the first person and the only person for the longest time. they've gone through nine attorneys

since i've been dealing with them -- pardon me, nine attorney groups. the current one -- the attorney group number nine. and that's counting attorney group number one being the 2005 appointment where they were told they had to comply with the institutional master plan. we kept going we kept going. and eventually commissioner richards who is not here appeared on the list. when they were doing the eir in 2015. and he was with kathrin moore until you joined after their eir was certified in 2016. and up until then, we got koppel and melgar. and we've had a bunch of -- milicent johnson

joined us. there's been two lees, a fung and a fung and two johnsons since we've been dealing with this. so as you go through this list, the volume of planning commissioners that have been dealing with this project, it's kind of -- it's like over 20. and sanchez was thanked for all the work he did. i'm extending my thanks too. because once we had a list -- once we forced them to do the first rudimentary and the commission had a list of what properties they owned the planning department started doing enforcement. and there were hearings not at the planning commission that were administered hearings on enforcement. and i came to them, and other people came to them. all these hearings listed on exhibit

1 were attended by the public. some people have died in the process. some of us have had setbacks physically. most of us have really gray hair now. but whatever the community has been diligent on this, totally. we have been here every time we were in need and even when we weren't needed, we did pushing, because it was a big thing. the only time the academy took it on the ear was they tried to take over the far mart and they couldn't, because there was push-back from the residents, the tenants of the market. and their attorney as well helping them. and they have given eviction notices to everyone. they had cut a deal with the owners of the

flower mart. but they had to withdraw them. so they are not on that corner. they are on the other side of sixth. what we have here is you have in your kit in your -- what is shown by the acquisitions and what is shown by the history of the planning commission dealing with this. this is not really visible on the overhead. but it is an analysis by tom jones. he's a real architect. and he's a real planner. and he's the head of cal poly architectural planning school. his analysis when he started going through the housing plans. and he said they're not a meeting the requirements. and he knows because he's the head of the school the department of architecture

and he's a planner and architect who cares about accessibility. and he kept saying, shoot, this is really not relevant housing for accessibility. so some of the documents that have come to you have been on accessibility. and he has a list of deficiencies. this is in your packet. and the planning staff has it as well. you are not supposed to have -- look for loop hopes on accessibility. if you do the right thing, you will be doing for equity. and there is a list here. this is what i did before. one of the obligations for public and private for dealing with students with disabilities. academy of art has compromised and

are not accessible. they have buildings you can't get into that are psei which is postsecondary educational institution, they have buildings that are institutional buildings. they have steps. they don't have an accessible path of travel in them. that is huge when you are in a wheelchair or you have mobility problems. and so if you are dealing with equity, which was three items back on your agenda, this is an equity issue for accessibility. i don't know that the planning staff has really got -- i know you don't have people that are really involved with dealing with rent control because it's not the planning code.

that is a housing you are dealing with, the academy of arts took away affordable apartments. they took away hotel units, which is really affordable housing. and additionally, you don't have a staff that i've seen someone really really, really dealing with accessibility issues. and it's not enough to kick it down the pike and say dbi will deal with this after we approve all the buildings. this is the wrong way of doing planning. accessibility should be built in. we have all kinds of institutions in the city that have gotten the face of god usf conservatory of music, san francisco

state every one, every real art institution california arts and crafts, have been before you building houses. why? because they see that they can't get students to come to san francisco because we have a housing crisis. and so they are building thousands of units of housing. usf, chris was talking about living surrounded by housing under construction at usf. usf has got the right idea. and ironically so has the conservatory of music. and the irony it was the conservatory of music is building houses at van ness. and what is on the other side of the property line? basically academy of arts site, which

they are being allowed to sell. and i have filed a dr an old-fashioned do on that project and been wiped out by the settlement. they should be forced to build housing at hayes and van ness. they have all these opportunity sites, all these educational sites on van ness avenue. 625 polk street is within walking distance of california hall. california hall is a nice building. i'm glad they are doing rehab of that. i don't object at all to california hall. but having an opportunity having a requirement they build housing in the future, if they don't have a site is ridiculous. if they have a site right now, it

needs to be part of the california automobile association. i got my car tested all the time. so it is a site that as they deal for housing there's so much housing being built right now built already right now because we have rezoned this as a city as a housing area. and it's a huge site right next to student housing that's being built by the conservatory of music, which is an art institution. so i would ask you to, one, figure out how the disability issues are dealt with at this point. don't kick it down the road to have dbi come with it and then oh, things have to be modified. if you are approving a cu, you are

approving the plans. if the plans don't comply with the law, they should be changed. two, don't let 150 hayes put conditions on the building that are real, that they can't just off load a building and strike it rich by selling a building. this has gone -- i want the overhead again -- from three sites that didn't have to have an institutional master plan to 43 sites. they were illegal. a institutional master plan in 1991 and they started building to beat the band. i would ask you to not go on automatic pilot here. i don't think -- maybe you have all

dealt with the 5,000 pages and read them all. the addendum to the eir all those things that are majorly important, i've had them for about two weeks. i was basically given a pile of documents. i had to pay for them. but i paid my money and i bought the documents. and it's really gross to read them. i am hoping you slow things down a little. thank you. >> thank you ms. hester. okay. any other public comment? with that, public comment is closed. thank you.

commissioner koppel. >> so those of you that have been here long enough like ms. sue, remember that i used to be on that side of the microphone. and at the time we had some issues with the academy of art as well. and i will admit that i'm pretty much responsible for having all of their buildings inspected by fire, electrical, plumbing, building, fire, electrical, building plumbing, all the inspectors had to walk through all of their buildings. [laughter] but i think they've come a long way. i couldn't tell you how many hours have been billed to lawyers for this one. and i think we've come a long way. and to all the staff and all the departments that put in the time and the effort, i want to say thank you. i'm satisfied with where we are at today and fully supportive of accepting the settlement. >> okay.

commissioner diamond. [off mic] >> turn on your mic. >> now it is. >> okay. one of the more significant benefits to the city is the financial payment. and i would like to understand from you how we should have confidence that your client can actually make good on those payments. >> so i think the confidence should be provided by the financial guarantee that's provided by the academy to the city as part of the settlement agreement. there's also a requirement that the payments be made that the affordable housing payment must be made immediately upon the execution of the development agreement. so that needs to happen this spring, this winter as the development agreement is processed.

and then for the settlement payment, there is a series of payments that will happen over the next four years. but the guarantee that are being provided by the academy are important. in addition the development agreement provides a consent right for the city, for the academy to sell any of its properties. so the development agreement is reported against all the properties. and the city would need to consent to any transfer of the property so that it's ensured the academy continues to own the properties if it does need to sell one of them in order to pay the settlement amount which we don't expect. but that was an important component of the city's negotiation of the development agreement. >> and can you describe for all of us some of the details of the guarantee? >> that i would need to defer to our lil litigation counsel who have been dealing with that >> that would be fine.

>> richardson. >> good evening i'm one of the litigators working on this case. in putting together the guarantee there are multiple ways that the city is going to be guaranteed payment under the da and the settlement agreement. first of all, the da is going to be recording against all the properties. secondly the guarantee was personally guaranteed by the trust entities that own the llcs which own the individual properties as well as the individuals who are the beneficiaries of those trusts. so that if a default were to occur, there would be individuals at the end of the line that would have their personal assets at stake.

additionally, this past december, roughly a year ago, the city had themselves do an exhaustive financial review of all the entities involved here to make certain that they do have the financial ability to comply with all the terms of the settlement of the da. >> okay. can i speak to the city attorney for a second who drafted those provisions? maybe it's mr. smith. is there anything you want to elaborate on further that would allow us all confidence that we are going to get this money? >> yeah, thank you commissioner. there are multiple layers of security as they outline as jesse smith from the city attorney's office, the assistant to the attorney. one important point is the academy of art university itself is not responsible for the $58 million. it's the real estate piece that is. so the 37 limited liability companies jointly and separately together and individually

are responsible for those payments. and then as they mentioned there's -- the settlement doesn't become effective unless the lion's share of those payments are made up front. so roughly within the first six months when the affordable housing payment is payable and before that when the first installment settlement payment is payable. [please stand by]

>> he has indicated that on page two, you will see the amount ought to get calculated using current city policy requirements and the breakdown is here. and it says he has a b and c. i don't know if you need me to read it into the record. >> clerk: you can put it on the overhead where we can all see it. >> we've been working together for some time to try and take care of all this. is the principle there -- >> commissioner richards: can you push it up? >> what? >> commissioner richards: can you push it up? >> you see for residential hotels or housing payment equals one-third of the total

cost to replace the land or s.r.o. units to current standards. using the actual figures from the mayor's office of housing and urban development, the figure is $205,000 per one-room single occupancy unit and $250,000 for one single apartment family suite. >> you all have this in your packet. i don't want to bore you with these numbers, but if you look at them -- >> commissioner richards: they add up to $28 million more. >> i want to get to where the $78 million is calculated. hang on two seconds.

sue hester has said she's had to try to deal with about 500 pages. i've had to deal with 200. in any event you add up these figures and you get the $78 million. >> commissioner richards: okay. great. question for staff. have you looked at mr. jones' -- >> it's 26, 33 and 28 and change. >> commissioner richards: okay. i just wanted to reconcile. thank you very much. >> thank you. >> maybe i can address that to some extent. >> commissioner richards: please. >> i'm not a finance person but you may want to know how we got to the figure that we did. >> commissioner richards: great. >> for the housing component, actually given that at the time when they bought and converted the dwelling units to student housing, it wasn't a change of use at the planning code at that time. same thing for the lib work so

those are not part of legalization for the use. so what we're looking at legalization for the use with regards to housing are the group housing rooms. so for the group housing rooms, there are about five properties that total 160 rooms, and actually includes 1055 pine which they have been used illegally for many years. they will be moving out, and moving forward it's my understanding that it's to be used, the $235,000 cost or the gap that mohcd has for developing housing, times that by the 150 -- and that's how we got the number. >> commissioner richards: okay. i wondered. >> every single live work unit that was approved in san francisco has an n.s.r. on it and saying it's not housing it's commercial.