sustainable modes of transportation but no space to store the bike or scooters. tenderloin has the lowest rate of car ownership. the majority rely on muni or walk. bike share would be suitable. it is not considered due to the miss true of for profit companies, lack of education and barriers of accessibility. the decision to move towards the municipal system is a few years away. we have supported bike share since day one. it is accessible, affordable and al luring for all in san francisco and complimentary to public transit. we look forward to working for a model that is supported by the most vulnerable communities because they are most impacted by climate change.

if it doesn't work for them it needs restructured. thank you so much for your time. >> thank you for bringing your comments to the committee. next caller, please. >> i am tyler. i am looking forward to a public bike share system. i hope the cost would be lower so more people would ride it and get cars off the road. it could believe muni ridership. i want to call attention the car trips are for deliveries, door dash. they can be done on bikes. people order food on door dash from a place a couple miles away. i think you could get more cars off the roads specially during the peak dinnertimes by having

some kind of system that is designed where you pay one fee and check out a bike for three or four hours and work through the dinner hour. if you go especially on valencia and a lot of people you see people stopping in the bike lane for a minute or two to grab meals to get back in their car to deliver. there are so many people doing it over and over that it makes it really difficult to bike. a lot of people right now are renting bikes which last i checked cost $200 per month. if you are only doing delivery a few hours a week it doesn't make sense. having a public bike share system would be amazing. more cars would be off the road.

thanks. >> next caller, please. >> is there a caller? we will come back. we have 23 members of the public listening through the public comment call in line. at this time 13 caller in the queue. if you hear a prompt that your line is unmuted provide your comments. next caller, please. are there callers in the queue?

>> i am lisa church. i support municipal bike share. talking five years out from now. i have mobility and bikes are easier than walking for a lot of people. having a robust accessible affordable bike share network is much safer bike infrastructure could help bridge the gap where muni is not serving neighborhood. we need docks everywhere. i believe it was adrian that said while the supervisors voted in bike share they helped slow the rollout of docks. i am in d3. i have no doubt this is true in my district. i think we should replace parking spots all over the city with small docks. every street on many blocks

should have these accessible. i rarely ride bike share in san francisco because it is difficult. i am out of town and i have been here less than 24 hours and taken two short bike share trips because there are docks that i can walk down the street and find one and be high pressure on it. on -- and hop on it. it could help with muni. i ride muni regularly. i believe we have control. we could coordinate to include some small amount of free bike share time with each muni fare. the people could use bike share and make up for the limitations. i often take muni. it isn't abic deal much of the time. if you have to walk five blocks or more, that is a lot for some people. having a bike for that transfer

or to go further to finish the trip would be helpful. >> your time is concluded. >> thank you for sharing your comments. next caller, please. >> hello. i am jessie fernandez coordinate the bicycle program bikes for the people. over eight years we recycled to low-income people of color communities and prioritized community education and support the people to incorporate bikes into their daily lives. thank you for the report and shining the light on the successes of municipal bike share systems that exist domestically and abroad. i want to express support for municipal control of bike share that should be in public

ownership, local control, public welfare and just principles of environmental justice. there is an incredible need for access to bikes and sustainable transportation. it is common that folks that we work with don't have the space to store and accept the bike even if it is free. it is important to recognize it is not enough to have a bike accessible. it is important to make sure showings have training and support and infrastructure to feel confident, capable and can ride a bike safely to where they need to get to. i want to urge an emphasis on the needs of lo income needs of color underserved. and i want to in our work

engaging with these partners. private operator have seen lack of community engagement that is competent and really absent genuine leadership and experiences working class communities. lack of transparency in terms of profit. >> your time is finished. >> for sharing comments with the government audit oversight committee. sorry to cut you off. you reached the two minute limit. next caller, please. >> good morning, supervisors. i am in support of public ownership of the bike share system. i am cofounder of.

[indiscernable] you heards about it from jessie. run volunteer excelsior bike club and east bay. bike liberation is my love language. i can claim together with my comrades we liberrated a thousand bikes in the last nine years throughout mission, excelsior bay and southeast neighborhoods. i am really happy for this report. thank you, supervisor preston for bringing this to this point. appreciate this. it resonated the line of dealing with half a deck. i think many of us in the equity bike spaces dealing with lyft and bike share that is how we feel. half a deck.

our hands are begging for concessions or community been fits. i think if lyft wants to offer neighborhood benefits that is their prerogative. you as policymakers aren't in business of creating the policies outside of the law. community ownership will get at equity, access, pricing, you know. there is a lack of genuine authentic community planning. we have been dealing with bike share from the mission to excelsior. it is the same thing. it is the same thing. there is crumbs no genuine partnership. we hope public ownership will give our communities a stronger say. >> thank you, oscar for sharing

with the committee. next caller, please. >> i am stan jones, secretary and treasure for twu. nationwide local representing bike share employees in the bay area as well as new york city, chicago, portland, boston, washington, d.c. and detrout and los angeles. we are in favor of fully municipal system or public private hybrid like in d.c. and boston. when peak ridership in december 2019 our staffing was 250 members. ridership almost matched what we were seeing in chicago. the numbers are declined.

with pricing changes and the pandemic. i also heard comments about expansion. i have internal information. over the course of the last year we expanded to four stations compared to new york 355 new stations, chicago 144. with that being said for the ability to sustain strong union jobs we absolutely support municipalization or public private hybrid. thank you, supervisor preston for pushing through the excellent report. i have spoken with the task before. we want to voice our appreciation for everyone's efforts working to make the

system better not only for the union employees but for the community. thank you. >> next caller, please. >> i am emily houston. i am a person who investigated bike share in the past. i fully support public bike share in san francisco. it is a long time coming. i have written articles how lyft has had a monopoly on bike share and how the city has given control over our bike share system. it is important we have people biking and make it easy to bike. that means safe infrastructure. that means having bikes that are

accessible to everyone in the community in all neighborhoods. i just want to end by saying that when i wrote an article in 2020 i talked to courtney free bow. he was killed in a drive-by shooting. he said that san francisco was the first city in if u.s. to create public transit. we have done that before. private mobility and transportation to the public. i would love to see that again. i want to echo his words. we can be leaders and create a bike share system like other cities fully owned by the city and for the people to create a place where people get around by bike instead of by car. thank you. >> thank you for sharing. next caller, please. >> hello. i am emily.

i am a former co-chair of san francisco socialist committee speaking in my capacity to offer a little radical hot take. the contract that was due to turn over in 2027. the climate change is here. we need to act fas. much faster than 2027. just this one thing is a bullet. climate change doesn't have a silver bullet. it requires action. lyft is dragging their feet as the comments are making clear. we need radical bike implementation in the city and all over the world. i believe the city of san francisco can and should do better than lyft. maybe we should exit the contract with lyft now. that is the end of my comment. thank you all.

>> next caller, please. >> good morning. robert frock man in district five. in support of municipal bike share. i use lyft e-bikes. i would prefer not to give them my money. e-bikes are a lifesaver. every one should have access. i ask the city partner with east bay and south bay to ensure these communities would not be harmed if we end the contract with lyft. last time i went to east bay a few months ago there were no e-bikes available via bike share. i think when they increase prices that caused lyft to refocus e-bikes to san francisco.

not to make light of san san francisco inequality. the least wealthiest census tract in san francisco is twice as wealthy as west oakland. every community deserves municipal bike share not-for-profit. i would ask the city partner with other jurisdictions to share that advantage around the bay area so they can have the same access to high-quality bike share we are talking about creating for ourselves. thank you. >> next caller, please. >> good morning. i am hernandez gill. thank you for organizing this hearing and requesting this report. i am district 6 resident and bike share for all former staffer and elected director of

bicycle coalition. for the past decade i have spoken in favor of bike share to this committee. i believe it has the potential to address did barriers to biking particularly for low income which are over burdened by transportation costs or living where it is not possible. when this current bike share program was approved. we were told many short comings would be addressed. we were told cash payment options would be extended. current eligible threshold 200% federal poverty would be exceeded. work force development would be a priority. despite the concerns of the model i was willing to give this initial system the benefit of the doubt. since then we have not seen any

improvements. only further compromises to create barriers to using bike share for low income san francisco. this model failed. a publicly funded and operated bike share fully incorporated with the existing municipal bike share network is the only be way to have a bike share system that achieves full potential. it will ensure all in san francisco regardless of income or living can access a healthy form of transportation. the municipal system would create union jobs to provide a living wage to make those not biking supporters of bike share. work with the stakeholders to move forward where a public bike share system. >> your time is up. there is a two minute limit.

next caller, please. >> good morning. thank you for being here. thank you, supervisors for bringing this up. there seems to be a hole in the whole bicycle access for everyone in the city. let's look at the empty bike racks in the city that have been over taken by scooter companies. if you have your own bike at home and you want to ride somewhere that is fine. there are some bike racks that are open. on the other hand, there is no enforcement on someone's bike getting stolen. you can't keep your bikes in your garage at home because people are breaking into garages. without any penalty for bikes being skoal lenyou are forced to

use the bike share, which is good. i understand that. look at the other empty bike racks throughout the city that aren't being used or used by scooter companies that are sitting there. there is a missing piece. do we all convert to bike shares or do we let the bike coalition encourage you to ride your bike to work. you ride your bike to work and it is stolen. i think there is a bigger missing piece here that should be studied as a whole not just bike share. thank you so much for listening to me. >> thank you. next caller, please. >> good morning. thank you supervisor preston for

calling this very important report and thank you bla. i am lisa aubrey d5 resident. i cycle, ride muni, i drive and i am a gardiner and use my truck. that is my work vehicle. i have to say that i think the elephant in the room here is when you look at the private corporation like lyft and look how lyft is exclusively contracted for this bike share which isn't a bike share. you look at that and then look at lyft auto presence and then look at valencia street and all of the ubers and lyft for food or pick up delivery blocking the bike lanes. that is an insane

contradiction. lyft is on both sends of that. lyft is the problem. as someone engaged in my local community for years with the bike and lifts and iterations of this bike share, they are not transparent. they are not accountability. they don't engage with the community and don't want to hear from us. i wholly support a truly publicly owned bike share. i would like it to be regional. i think we can do this. there are so many excellent comments on this call at this hearing. thank you very much, we can do this. >> next caller, please.

>> i am district 5 resident. i walk, bike, drive. i am in favor of making the bike share system municipal system we should be doing what we can to get people out of cars. what we have now is a bike share system of e-bikes they are nice but in the right places and too expensive. what we should want is people to take the bikes. competitive financially with the bus. instead they are much, much more expensive with the bus especially e-bike. that is not with the goals. municipal system solves these problems. i reiterate we should maintain a regional system.

making the system municipal contract causes dissolution of the system in the east bay. it is a problem. we should do this regionally as part of m.t.c. it has a responsibility to oakland and berkeley. that is where i took advantage of bike share there. i just want to say we should make this system municipal. and make it serve all in san francisco. climate and traffic goals. >> thank you. next caller, please. >> good afternoon. district five resident. i support municipal bike share. the direction the city should be going. we have seen how private companies don't have communities best interest at heart, don't

listen to marginalized communities and benefit people with higher income. a lot of bike lanes are dangerous. little plastic things. i went to new york the lanes are metal bill yards a car could not penetrate. that is an important part of the discussion. it would encourage more bikes and people to be safe and not get killed or injured. i just dig municipal everything. thank you. >> do we have further callers in the queue? >> that was the last caller. >> thank you. i have some final comments.

colleagues feel free to jump in with additional questions. let me close public comment. we have heard from everyone. public comment is now closed. i really do just want to appreciate all of the calls. it is helpful and thoughtful public comment that raised a lot of issues. i think they are important. i do want to highlight in particular i want to thank the caller who called around the cargo and add adaptive bike share and looking forward to batherring more information about the pilots that were referenced there in cities other than the ones studied. also appreciate the callers focused on equity, regional success and ensuring we are not

just talking about success of bike share locally in san francisco but across the region. also, the point that i think is really a big one around how we as a city have an incentive for vehicle drivers to e bikes. i think it is important for us as policymakers. you know i do want to recognize a couple folks from labor called in and i appreciate that comments from twu and their members work and his engagement and also personal comments. it is echoing sentiment from a lot of folks in labor around the

real potential here purely public ownership, a proud model to really be expanding and unionizing the work force and having the growth of bike share also be linked to union increase in jobs which is one of the exciting possibilities here. just a couple comments in thinking about the things in public comment. one is timeframe. it is frustration we have. with transportation generally but this climate emergency and need to do things yesterday. overlap with the existing concontractual environment and what we can do. 2027 is when this whole package

of relationships is up for renewal. that is a logical point to look at. it is five years out. obviously it requires quite a bit of planning in advance. including determining if there is a will to finance it, figuring out how to get that in place as well as full engagement with the region and m.t.c. it is not going to happen overnight. i am not sure that it all needs to wait until 2027. i want to be clear on that. the bike coalition wanted to move this forward last year because of reports around this not being profitable business model. media and others for lyft. it is not a done deal and a given that lyft or any future private operator is going to want to operate this and that the mpc and everything just

stays the same until 2027. we don't know the future owner-operator to want to stay to the end of the contract. they probably could but again the profitability of this is not necessarily a given. i think things have been shifted dramatically through the pandemic. i don't know. we don't know is the short answer if there would be interest in an earlier municipalization or if it would be more targeted to 2027. what we know and the bla report makes clear is that in order for municipal bike share to succeed there needs to be a commitment locally around building out infrastructure, making streets

more friendly to people cycling. not just acquiring the assets for them to it is unused in docking stations. part of that is what we do advance work happens immediately. that is the ongoing work of being honest about where we are as a city when it comes to transit first charter mandates and when it comes to vision zero and safety and up take for cyclists. we remain a city where 70% of our city owns a car and drives. that is certainly a lot higher than new york. more on par with other cities. streets are first and foremost

geared to cars for the most part with notable exceptions. meanwhile we have bike share prices that and this i would say since this hearing the most common contact i have gotten from the public is people showing how much they pay for short trips. what strikes me is it seems to be pretty much the same as if they jumped in an uber or lyft. two to three to four times what public transportation costs and pretty much the same costs. you can sketch it out based on the minutes and what plan they are on. at the end of the day it is a short trip and paying 10 bucks. they could have jumped in the tnc for the same thing. that is a structural problem we have got. we have got to make it clearer

that it is beneficial and preferable in every possible way for people if they are able to ride public transit and use bikes and bike share is a key part of that. we are making many positive steps along the way. i think we need to do more to really dramatically expand this in the city. there is a key part of that. municipal bike share could be a key part of that as well. promoting we talked about the benefits. also just cycling on its own the strong positive effects not just on emissions, traffic, overall physical and mental health for people using bikes more regularly. it is something that we should not overlook.

we have the chance to engage with the stakeholders. we have to tackle the funning issues. i -- funding issues. what we want to do and not always done in the san francisco plans is have this conversation early enough that things aren't a done deal with the decision where we are headed and that in terms how to raise the funding, in terms of what this would look like in terms of the engagement with labor, regional conversation that we made space to have that conversation. we hope to start that here today. thank you to the bla and m.t.a. for presenting and bla for work on the report. thank you to everyone who called in. unless there are additional comments from colleagues, thank you both for your engagement.

i would like to move that we continue this hearing to the call of the chair so that we can revisit this as we move forward. >> motion offered by chair preston to continue to the call of the chair. vice chair chan. >> aye. >> member mandelman. >> aye. >> chair preston. >> aye. >> mr. chair, no opposition. >> thank you. motion passes. mr. clerk please call the next item. >> hearing to receive update from developer payments and funding streets by the 706 mission purchase and sale agreement and present on legal use of funds, r.f.p. timelines and fund balances. if this is your item on the agenda and you wish to comment dial 415-655-0001. meeting id24910382305 to reach

us. as you enter the id press pound twice and star 3 to enter the queue to speak. please wait until the system indicates you are unmuted to begin your comments. mr. chair. >> chair preston: thank you, mr. welcome supervisor peskin who called for this hearing. he will be taking the lead on this item before i turn it over to you. i want to welcome presenters and departments that we have here today. i understand we have city attorney, office of city administrator and rec and park departments. as well as otii and the mayor's office of community development present for questions. welcome everyone. reminder that presenter time is limited to 10 minutes each.

i will turn it over to you. welcome, supervisor peskin. >> supervisor peskin: good afternoon, chair preston, colleagues and thank you for agendizing this. i want to start out by letting you know while this hearing involves millennium partners it is not about that ever tilting tower four blocks away at 301 mission. that is not why we are here today. by way of background and this goes back almost a decade in 2013, supervisor jane kim presided over and helped craft

the final community benefits agreement for the south of market neighborhood in the final deal with millennium partners purchase and sale agreement under the jurisdiction of the redevelopment agency for the 706 mission street project. i think many of us remember it as the mexican museum site which is yet to come to fruition. we will touch on that a little bit. i believe that deputy city attorney heidi gurwurtz helped draft that agreement. that agreement included a number of community benefits for open space. mexican museum and affordable housing. the purpose is not only to go into the specifics of this case which are long and tortured. i want to thank my chief of

staff going after it since 2017 for half a decade. the answers have been long coming and frustrating. that is why we are having the hearing. i want to use this to get a better understanding how the city through multiple agencies executes and carries out the provisions of these types of community benefit agreements. what the timeframes are. one of the unfortunate realizations i made over the last half of decade i have been involved and in further looking into the specifics of this case is how long it has taken to spend some of the community benefit funds that have been been force coming from the 706 mission street project. intent of the provisions in the agreement that we are concerned with today were to ensure the former redevelopment area of the

urbabanena gardens enjoyed the benefits to mitigate the impacts of the development to the youth and families in western o mathat includes bes see carmichael, the rec center and the multi-use park south of market. i have been on e-mail threats with various department heads, many of whom have come and gone dating back to a half a decade to get clearances as to the fees that were required under the purchase and sale agreement, how much has been collected. what we mains to be collected. i thought this was all ripe for a hearing at the government audit and oversight community. community stakeholders have reached out to our office repeatedly since supervisor kim

left the board asking for updates. it has been quite difficult to get clearances as to the process for expending the funds and who in city is accounting for them and how they are being spent and with what amount of community consultation if any. i thought this would be a good time to bring all of these departments who are involved in this together and try to get a clear picture on the next steps how to take and apply some longer term lessons from this particular experience. in addition, as you said, chair preston to city attorney we have the city administrators office as well as aaron fox worthy from ocii and elizabeth from ocii, the successor agency to redevelopment as well as folk from rec and park.

maybe deputy city attorney if you can give us the background of the purchase and sale agreement in 2013. i know the redevelopment agency had their own counsel but the city helped draft it and there were provisions in there that were for the benefit of the community through the city as opposed to the former redevelopment agency. maybe you can give us a high level quick summary of the psa. >> i would be happy to do that. heidi quarts from the city attorney office. i was represented ocii during the negotiations i came to the city attorney's office from the former redevelopment agency.

it indicates supervisor peskin noted the psa was executed in july 2013. there is in the psa a community benefits package in the form of fees to be paid by the developer. i know that other people in the departments at the city and oci will be talking about the fees. i have been in conversations. i don't know if you want me to go through each fee. there are various open space fees and i think one thing to be significant for how to look at this today is that each fee is identified and talks about permitted uses. permitted uses are defined as both uses in the yerba buena

gardens. there are fees to be used minimum of 50% in the gardens. permitted uses for other fees only within the south of market areas. >> deputy city attorney it might be helpful. i don't know how to share my screen. various people on this call have the chart that ocii provided as to just what you were speaking to. i think it would be helpful to go through those as to the amounts whether they have been paid or not and where they ultimately reside and if they expended. not all of that is in your wheelhouse. maybe that would be a good way to get to the meet of the

matter. most of the fees have been paid. some have not. we will touch on those not paid. i think through them and permitted uses would be very helpful. >> i will do that in a learning fashion. i do know according to the chart what is paid and not paid. i can run through it. first you have got affordable housing fee for the production of existing affordable housing obligations that was to go to ocii. they can speak about receipt of those funds and whether or not those funds are being transferred or being used by ocii. the next bucket, if you will, is the gmos open space payments.

this is the one where we identified that at least 50% of that annual payment should go to permitted uses in the gardens. the other 50% for permitted uses within the soma open spaces. i wanted to read the definition under permitted uses to support general operations and maintenance, cultural operations and capital expenditures in the gardens and it is a pretty broad definition. the other fee, next fee there is an interesting fee. we have been working a lot with that. continuing to work with it related to the calltural component. there was an obligation to build the shell of the cultural component. that was the mexican museum. that is an endowment for the

mexican museum or cultural component of the project. you can see in the timing of payments that is paid one-third, one-third, one-third at different intervals. i know on this one that and as noted the initial payment of one-third of the $5 million for the endowment was paid and that is transferred to escrow account as noted the chart. we have the agreement ocii and the city is a party of to that also escrow agreement in place related to those funds. next bucket here is the transfer payments which are payments that are made as percentage of the

total same amount for each residential unit. i believe at least real estate or ocii could speak to this. there have been some receipts for those funds. this fee has a different definition of use. it is broad for public benefits in the south of market area. this is the broadest one to cover broad and specific affordable housing rent subsidies to prevent homelessness, small business and nonprofit rental assistance and services to youth and seniors specifically in the south of market area. it goes beyond that initial definition of permitted uses. the rest of these i am not as familiar with. i would defer if you don't mind to ovii to run through -- ocii to run to those. >> to the next page to see the rest of them.

open space fee payment, one of the payments we have been discussing. i should perhaps reference that. that was a one-time payment that i believe was received by ocii and transferred to the city at the time of the transfer of yerba buena gardens. it is part of much discussion based on being earmarked for permitted uses only within the soma open spaces. we went back to the definition of permitted uses for the yerba buena gardens. it says within the soma open spaces for that one time payment. >> then there is the $11 million in affordable housing fees which

have been collected and what is missing from the chart. we will get in a minute to the city administrator's office where they went and how they were expended and where they are now. we can supplement the chart after this hearing. thank you for your work on this project. i assume as the solution occurred is when the successor agency to redevelopment ocii turned the funds over initially to the city and the city in that form was the city administrator's office. does that sound about right? >> that sounds correct, yes. >> supervisor peskin: i will try to be as quick as possible, colleagues. i know you have had a long hearing. why don't we go to mr. bukowski

from city administrator's office. >> department city administrator. in terms of timing technically mostly funds weren't available at the timing of dissolution itself. the decision was made as part of the property management discussions. there is a column behind in payments. several payments weren't made until permits issued or certificate of occupancy was done. those items have been in 2017. then i think the tco temporary certificate of occupancy was in 2020. some payments did end up initiating at a later date.

as part of the earlier discussions how the payments would no longer be made to ocii and would be made to successor organization, the city decided for payments that were ongoing nature it would be easier if they all went to one recipient through the real estate department of the city administrator's office. i will walk through a few payment streams to give you update what we received to date. if they are transferred or the plan to transfer. >> would the chart be helpful. >> please put the chart back up.

>> start with page 1. >> thank you. i will not address the fester tt item. second row there. the city administrator's office recently received $440,000 for the soma open space portion of this payment. that represented fee payments for fiscal year 21 and current yes fiscal year 22. we received double that amount. the way we are allocating it according to the agreement is 50% of that will go to yerba buena gardens who now operates the gardens and 50% to soma open space. recreation and parks department. the dollar amount we received to

date that is to be transferred through the rec and park department is $440,782. we have currently budgeted as operating transfer out for next fiscal year through rec and park in addition to the regular ongoing amount for each year which we are seeing ongoing will be approximately 287,000 starting next year going forward. current year amount was partial for 21 and full year for fiscal year 22.

to the amount in the budget to rec and park. >> got it. is that $287,000 from the transfer payments? >> no, that is from under the psa. there is a specific payment amount due to support yerba buena and soma open space payments. that is based on calculation that is done. it has cpi factored into it. we just in january, i believe it was, updated the real estate development and developer updated the cpi came to agreement what that amount needed to be for this year and assumptions for next year. >> when did you receive the first gmos payments? initial year? >> i believe it was within

fiscal year we received both amounts. i don't have exact date. >> what does the agreement provide as to when they would be forthcoming? timing of payments 30-days after tco. the tco was issued in 2020 at some point. when was the tco was issued? do you know? >> i don't know. it looks like it says annual leo july 1. i don't know. >> if my recollection is that we did 10 months of 2021 then a full year of 21-22. likely what i imagine doing that is somewhere in the fall of 2020

is when tco was done. that payment would not have been due until july 1st of 2021. >> mr. fox, were the i c.u. do you know when the tempore tco was issued. >> approximately mid november 2020. >> it sounds like relative to when the funds were received by real estate/city administrator's office and the allocation in the budget that was all in relatively reasonable timeframes. anything else that has hit your department in this list of stuff? >> moving on to the transfer payment line item. as indicated those payments are

done at the close of escrow from each unit. real estate, demand letter, wiring instructions. we have received $404,000 from the payments as of today. this amount is lower than expected at this point. we have not transferred. we can transfer within the fiscal year if desired $404,000 of fees tomoacd or transfer as part of the fiscal year 23 budget. as noted, originally even though the discharge has the phrase soma equalization fund, originally this was the soma fund in the psa. there was some confusion what it was. more recent conversations we

understand there is specific fund referenced as part of that agreement. these funds would go tomoacd to decide who the community or which of these public benefits they want to support through each of these funds. in addition to $404,000 in fees we received to date, in this fiscal year we are budgeting an estimated fees from sales for next fiscal year $750,000. then we are budgeting annual amount starting fiscal year 24 of $250,000 per year. higher for next year would represent we will continue seeing the kind of sales complete so there will be a bump during the initial sales period.

then flatten out around $250,000 each year from ongoing sales. >> mr. fox worthy, i assume but don't want to assume anything. the chart before us was a guess. initial sales $1 million in 21-22 was based on your assumption of absorption of condo sales after the temporary certificate of occupancy not realized, absorption not as fast. is that correct? >> yes, that's correct. >> got it. okay. why don't we scroll down on page 2. we will see if there is anything else in the land of the city administrator/real estate division. >> the final item i can address today is one-time open space heat payment. a topic of much discussion over the past few years.

that is the $1.8 million amount this developer did pay to otii. that was trap ferred to real estate. we held those funds for a period of time to determine a decision about the permitted uses language. then back and forth to what extent yerba buena gardens versus open space related to rec and park. the last time version of that discussion resulted in a more narrow interpretation would indicate the funds transferred to rec and park to determine what to be used in the soma area. that $1.8 million has now been transferred through midyear process to rec and park. rec and park currently has full control and authority to spend

that $1.8 million. >> when were those funds transferred? >> midyear? >> it was just technically completed in the past week. >> got it. not to put too fine a point on it, did that conversation take five years? >> the conversation did not take five years. there had been a different deputy city attorney as part of this conversation as well. your office was part of the conversation. there were different interpretations at different points in time. once the decision was made the fundswere not appropriated. we had to appropriate them this year to pass to rec and park.

>> ms.ger gurwitz can you explain the conversation of the permitted uses and who or how that decision was ultimately made. >> sure. i went back and looked at the discussion prior to this hearing. i saw that and i guess it was in january 2021 there was back and forth and i did send an e-mail at that time that recognized that the language owning the open spaces. the best interpretation in the language was it only be used in open spaces. confusion was based on the language that i read earlier where the initial definition talks about permitted uses. within permitted uses that includes the gardens.

there was some discussion about how to interpret that. as supervisor peskin noted earlier this is probably in a very complex document this section was probably one of the most negotiated sections. we had a definition that could be read different ways. ultimately it was january 2021 where we all were on the same page and noted that it should only be used in soma open spaces. i would say i know that my understanding and i can speak more to this. the funds were transferred to the city at the time that the garden transfer occurred. i don't know that the funds were sitting at the city all of the time. i am not sure. that is when the funds transferred to the city. >> relative to the permitted uses it is my understanding that

those are relatively broad in so far as they can be used for programmatic uses, they could be used for capital uses but they don't have to be used for capital uses. can you speak to that, please. >> sure. i was pointing that out earlier. they are broad. the language says basically for general operations and maintenance, cultural operations and capital expenditures in the gardens and soma open spaces. that is rather broad.

>> in open spaces that concern is reflected in the payment that says no less than 50%. >> do you remember. i know there are community

members who believe that $1.8 million was really for at least there is a perception that community organizations in western soma would be involved in the expenditure of that money. do you have a recollection or feeling about that? >> my recollection there was not much discussion for that pot of money as related to that type of discussion that i recall. there was more discussion about that as related to the transfer payment. an idea that because the uses there were more specific and called out south of the market area there would be involvement. we didn't include that in the agreement.

>> okay. i don't know if you have any questions as you start to see where i am going here. if not, why don't we bounce over to ocii. thank you. one other thing, your realization about some of the stabilization fund. when did you realize that? i mean as recently as yesterday or the day before the mayor's office of housing and community development were like this has nothing to do with the stabilization funds. 10 years into this we are unclear on the city side as to whether or not when did you come to this realization? >> i will say the rec center memo at cd was in contact with me about a month ago asking about the funds. i said i hadn't received direction if they went to them

or some other department. i needed clarity to define that. it wasn't until the recent conversations where they specifically said it is stabilization to soma funds. it seems like there was a clear understanding. i return to deputy city attorney if there is a different understanding. based on that interpretation it is specifically civilization fund rather than soma fund. that is the reason we made the decision to go directly. that happened this week. >> i am at disadvantage i don't have the psa in front of me. >> i can e-mail it to you. >> substitute soma fund in

there. that is the cause of confusion. >> it was there in 2013 and remembers. >> i would like to get back and fully opine on that. i want to look at it. it says for that fee. developer payments shall be used for permanent uses only within soma open spaces. i do say the stabilization fund. it does say open spaces. for transfer payment it says the excerpt i took directly is public benefits within the south of market area. >> i think the psa didn't call

out. >> it is the only soma fund. >> it is game figured out now. nothing like calling a hearing to get everybody to start getting their ducks in a row. why don't we bounce over to ocii. mr. fox worthy are you speaking for ocii this afternoon? >> yes. good afternoon, chair preston and committee members. for the record aaron fox worthy deputy council and acting development services at ocii office of community investment and infrastructure. i am providing a brief summary of fees that ocii tips to be

owed under the agreement for the 706 mission project. as previous participant noted several fees and many have been paid or continue to be owed to the city. in particular, one fee that continues to be owed to the ocii is terms of the condition 8% affordable housing or in short agency fee in the agreement $4.3 million total fee that is to be used for additional affordable housing by ocii. it is paid in three installments. 20% at site permit issuance. 40% for first residential unit and the remaining 40% the year after that second 40% payment. under the agreement ocii is to use the fee, not to be transferred and it is to be used to essentially fund ocii's

existing affordable housing production obligation and offsetting need to use tax increment. we have received under $900,000 to date in the agency fee. we used that to help fund 626 mission bay boulevard north family housing. active 146 unit affordable housing completed in july 2018. the first residential pco for this project was issued in the late fall of 2020. triggering the second installment of fee. at that time we were in discussions with the developer about that fee. we were in the throws of the first year of the covid pandemic and residential condo sales in

downtown san francisco. they were very affected by that. the executive director of ocii exercised authority to extend the deadline for payment of the second installment for one year to november 25 of 2021. currently we are in discussions with the developer over the second payment that is not paid yet. we received a request from the developer recently for application of what they believe to be continuing conditions of the pandemic. we are analyzing to determine whether that exists. if so for how much longer? we haven't made a determination on that yet. >> mr. fox worthy, relative to the 706 or ms. caramel low relative to 706 mission street condo sales. how many units in this building and how many purchased and sold?

>> we don't have the exact number on that. it is information that we will seek as part of this developer request. i believe we could probably work with the city administrator to come up with the rough number because they are receiving transfer payments for the stabilization fee for every unit that sells. we could reverse engineer how many units are sold based on the number of transfer payments received. >> is that based on unit or sale value? >> the transfer payment is -- i don't know if it is a percentage of sale or fixed per unit fee. i have to take a moment to refresh my recollection on that. >> it is based on a percentage of the sales amount. >> i don't remember the exact. in the demand letters specific to the sales amount. >> it sounds like the notion was

to be about $1 million. you got $400,000. you forecast the balance in the upcoming year, which means that at least your crystal ball says you will absorb the rest of the unit in the coming year which i am not an attorney and i am not on the ocii board, but and i am not ocii staff. that sounds bogus in so far as they asked for one delay. okay. it was middle of covid. second day lay. shamos. don't grant. millennium. you owe $4.3 million. pay it. that is my take on it. i will let you guys figure that out with the claims. out of curiosity does that go to your commission or staff level

decision? >> if we decide to grant a second extension? i believe that is a determination with the director. as i mentioned it is early in consideration whether conditions exist to even make that extension. >> long story short. it may be wise to involve the commission. we haven't made that determination yet. >> it may be very early. it is late in so far as the second payment was due november 25, 2021. second payment -- wait. >> they are both due and owing currently. they are both due and owing currently. >> it is -- don't wait too long to make your decision. i assume an interest clock is ticking on this?

>> we haven't discussed that yet. >> there is no provision for interest in the agreement itself, however. >> i am glad this came out in the public discourse. it was worth the price of spending my colleagues time to get the $4.3 million that we are owed. why don't we bounce over to rec and park. >> good afternoon, chair preston, vice chair and mandelman and peskin. i am antonio gara. director of administration and finance for rec and park joined with the acting director of capital and planning stacy bradley. this is illuminating. thank you for hear holding the hearing.

it is great to hear how the flows of funding works. i will share my screen. we have slides to share. >> how is rec and park involved in this purchase and sale agreement? i thought it would be easiest. i know we put other departments put together the two page document on all of the various pots of money. rec and park is involved specifically in 8.3 yerba buena gardens operations and capital expenditure support. we covered permitted uses definition and how soma open spaces is defined. where is the nexxus with rec and

park? sub set. 8.3. one-time open space payment within soma open spaces as well as regarding the annual open space payment. soma open spaces portion and remainder after funding the yerba buena gardens. they can receive no less than 50%. the other items on this last yerba buena as well as transper payment to soma stabilization fund rec park is not involved there. now as to open space fees as department responsible for open space in san francisco, we have received $1.8 million that has been transferred to the recreation center capital project. regarding the annual open space payment. >> how did you make that decision? >> the decision was made in consultation with various

agencies in the city. the city administrator's office. mayor's office and i believe there was a conversation with supervisor haney. >> what about with the community that photo get that for programming for other places including victoria park. were they consulted? >> i believe there was a consultation with members of the community regarding the recreation center throughout the light of the project. i can't say consultation with various members of the community you referred to. my understanding is the permitted uses involves capital execs expenditures and maintenance. >> it is funded by the bond we recently passed. is that true? >> i have stacy bradley here.

if you don't mind i can have stacy talk about the project. >> sure. it is mostly funded. it was split between developer impact fees and the bond. having this additional source of funds is really helpful to make sure we are able to deliver the project as we contemplated. here is a rendering of the space that we shared awhile ago. the space at the recreation center will serve the community that lacks large open spaces. it will deliver twice the size of the existing. two-story massing for double basketball court. >> i hate to cut you off. i have b cdc in three minutes. i will be late and my colleagues have been here for a long time. i got that. when you put together the budget for this gene friend capital

project, was this $1.8 million part of it? based on what we just heard it took five years until just recently for them to even decide that rec and park could have this money. it doesn't sound to me like it was ever part of the capital financing plans for gene friend. >> it wasn't part of the initial budget identification because we didn't realize these funds were coming to the department. through the conversations. >> in the interest of time why

don't i bounce over to deputy city attorney, former deputy attorney mr. givner. our normal city attorney is recovering from surgery. hope she is doing okay. mr. givner. are you there? >> can this board if it chooses to legislate some laws, rules around how that money is spent? when you are talking about different pot of money stabilization fund, very much speaks to community involvement. that is how that process was set up. i am chagrined this $1.8 million which finally after a conversation starting in 2017

was realized recently and funds transferred to rec and park in consultation with other departments but not community decided to put it in the capitol when there are folks who were thinking to use it for programs at the victoria trades. what are our options here? >> deputy city attorney john givner. nice to see you all. the board at first has appropriation authority. as long as you are appropriating funds for the uses that are allowed in the psa, you have that discretion. you could if you are asking whether -- i believe you are asking if the board could adopt an ordinance to require the department to spend money ontic projects or particular areas within the permitted uses. the board could adopt an ordinance that sets those

parameters. in general the board could adopt an ordinance saying rec park or whatever department shall execute this program with these parameters. >> thank you, deputy city attorney givner. in the interest of time, colleagues. i won't ask any more questions and turn it back to you for questions and to public comment. >> thank you, supervisor peskin. supervisor mandelman. >> i want to hear from her. >> she is in the roster as well. >> i didn't know that i would do

that. i will say i was just putting together an e-mail. i wanted to let you know and especially supervisor peskin. i did look at the psa on my computer. there is no reference to the soma stabilization fund in 8.3. it does talk about specifically uses south of market area. that language doesn't prescrewed input from the -- preclude part of the soma stabilization fund. >> got it. >> thank you. >> supervisor mandelman other comments or questions or lagging that. >> making sure we heard from our heart working city attorney. >> thank you. >> seeing no one else on the roster, supervisor peskin any questions before we open up for

public comment? >> no, sir. >> open up for public comment. >> thank you. we are checking for callers in the queue. we are working now with department of technology moderating the caller line. for those watching our meeting on cable channel 26 or via streaming or through sfgovtv or he wills where, if you wish to speak on this call in. reach us by dialing 415-655-0001. id for today 24910383205. pound twice and star followed by 3 to enter queue to speak. for those on hold i see there may be three of you. please continue to wait until you are prompted to begin.

first caller for two minutes, please. >> good afternoon, supervisors. i am allen low to speak only be on three payments. soma open space payment. one-time open space fee payment and transfer payment. [please stand by]

. >> -- i would really love to see a community process, because as supervisor mandelman said, this is a lot of money, and it's new money. it shouldn't just be absorbed into regular operations. and lastly, i want to say please adopt an ordinance around oversight, around developments and community benefit funds. there's a lot of money that comes into our communities, and it can get consumed. we want to see it go to the most vulnerable of our city, and there's times when organizations sign n.d.a.s, and that's not fair to the communities. we need to see how the money is spent. >> clerk: thank you for your comments. i'm sorry to cut you off. all speakers have to make their

comments within two minutes. could we hear from the next caller. >> good afternoon, supervisors. my name is heather phillips, and i'm a long time of the friends and [indiscernible] and victoria manolo drake park, and i just want to thank you for calling to the surface this issue. it's been a long time not only to crack down the development -- track down the development agreement but how the funds are coming to the community. particularly, i want to draw attention to the fact that these are intended to be additional funds to mitigate displacement, to mitigate the effects of these projects, and

they're meant to enhance what our open spaces have. we're already one of the neighborhoods with the fewest amount of open space, so for those funds to become substitutionary where our [indiscernible] budget uses these funds for what should be done any way is frustrating. the city should be paying for our parks throughout our community like they do throughout the city, and these private dollars should be enhancing that experience, and so we just really hope that we can take a look at how these funds can really make sure they go through a community process to be used not just in one narrow way but for all the uses it was intended for. thank you so much. >> chair peskin: thank you. >> clerk: thank you. do we have any further callers in the queue? >> operator: no more callers.

>> clerk: thank you. mr. chair, that's the end of public comment. >> chair preston: thank you, mr. clerk. and supervisor peskin, do you have any closing comments? >> supervisor peskin: thank you. i think mr. clerk would like to know if you've closed public comment. his hand is raised. >> chair preston: thank you, and we'll close public comment. >> supervisor peskin: i think we've learned what we needed to during this hearing. i think we can file this hearing. i'm going to work with the community that was not consulted, and my team of staff who has a foot both in my district and district 6, and deputy city attorney givner or the city attorney, city attorney of choice, to draft something that i'll be bringing back to this or whatever is the appropriate committee that

honors the intent of the agreement that represents the intent. rec and park, you're here by on notice that you probably don't want to spend that $1.8 million on gene friend just yet because i think we may have more ideas more consistent with the original intent of these dollars, so with that, you can certainly make a motion to file. >> chair preston: thank you, supervisor peskin, and thanks for your diligence and follow up on this item. i know it's been a long time, so thank you to you and your staff for making sure this money goes where it's promised. appreciate you bringing this to the committee, and i will go ahead and move to file this item. >> clerk: on the motion offered by chair preston that this hearing, now heard, be filed, on that motion -- [roll call]

>> clerk: mr. chair, there's no opposition. >> chair preston: thank you. motion passes, and are there any other items or further business before us, mr. clerk? >> clerk: mr. chair, there is no further business. >> chair preston: right. then we are adjourned. thank you, all.

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