City and County of San Francisco Thursday, October 26, 2017
>> sfgov.
>> okay good morning, ladies and
gentlemen welcome back to the regularly scheduled meeting
schedule budget and finance this
meeting will come to order I'm
supervisor cohen and to my left
is commissioner tang and joining
us is commissioner yee chong and
recognize our friends tom and
jennifer lowe that are unsought
us with today's broadcast us with today's broadcast electronic devices. Completed speaker cards and documents to be included should
be submitted to the clerk. Items acted upon today will
appear on the November 14th board of supervisors agenda unless otherwise stated.
>> all right. Call item >> all right. Call item one. >> item no. 9-executive. A. Executive director's report overview of the city's amendment to the revenue agreement between san francisco public works and jc decaux san francisco, llc, for the and public service kiosk program extending the contract term by 120 days, changing the termination date from October 17, 2017, to February 14, 2018.
>> okay. So the city entered
into a contract with jc decaux
we find ourselves in the middle
of a negotiate for a new
contract public works we issued
that and jc decaux was the only
bidder do we have a presentation welcome committee julia from public works I'm
hoping the third time is the charm we're working on the
agreement and plan of a bring it
forward asking for a 120 extension we believe the new
agreement will be of interest to the board and doing everything
we can to move it long.
>> thank you very much and go
to public comment anyone wish to
comment on item on item one all
right. Public comment is closed. Colleagues send it to the full
board as a committee report. >> so moved. >> this is not scheduled is to
be as a committee report.
>> we'll. >> send it to the full board with a positive recommendation.
>> without objection call it
through 4 2018.
>>
approving a development county of san francisco and fc pier 70, llc, for 28 acres of real property located in
area known as seawall pier 70; and bounded generally by illinois street on the west, 22nd street on the south, and san francisco bay on the north
and east; waiving certain and east; waiving certain. >> item no. 4-resolution approving the memorandum regarding interagency cooperation; and adopting
findings under the california environmental quality act.
>> >> >> item no. 4-resolution approving the memorandum regarding interagency cooperation; and adopting findings under the california environmental quality act. >> all right. Thank you colleagues thanks for hearing
this item again, today is brings us one step forward to the
completion I'll not repeat my
remarks as I mentioned last
week, we were planning on coming
back with several
non-substantive amendments I've
characterized those following clarifies the project sponsor in
the dda and I c a and corrects references to the administrative
code it adds excuse me-
language about waiving seconds
1348 we negotiated a better alternative in the dda and
finally adds language to
implement the b l a annual reporting and in addition
several supporting documents substituted you'll find in the
staff memo the staff is here to
address those with any questions
and with that, well, I guess
I'll wait to make my motion
supervisor yee any remarks or questions.
>> I have a question in in
regards to the waiver of section
1348 populated to be some
language that is referred to the
dda er the remedy I couldn't
find it where is that the
language that sort of recommend that.
>> we've got phil can speak.
>> supervisors sorry with the documents that come with this
we're trying to find the section
the content to that we standard
way of assessing damages in the
code to cover our basis we're not able to negotiator a
contract what we have done a better alternative we I believe
we're treeing to fourth which
section that is so- >> sorry supervisors? Brad
benson a complicated be issue so
what is wavered here is a
demonstration agreement
requirement for liquidated
damages under the administrative
code in the dda we're securing
this developers obligation to perform the horizontal
improvement in a number of ways
they'll have bonds under the
subdivision code the city can
call on and a guarantee for
their performances we believe the approximates in the dda and
the security there the dda will
be stronger protections for the
city than the liquidity damages
I did get that part but was not sure.
>> you want to know the section number. >> through the chair on one of
the ordinances we have one 70 on
page 7 starting line 24.
>> page 7 at the bottom?
>> in the dda not the d da in
the da. >> supervisor yee wanted to
read the language?
Yeah. I want to make sure we
have it in here
>> sure brad
I believe supervisor is correct
on page 7 and 8 of the ordinance pointing back to the
requirements under the public
improvement agreement that will
follow related to the
interagency coordination in the public agreement the city will
access the bond of the infrastructure and we'll be able
to call on the bonds if this is
a failure to would streets or
related infrastructure under the timelines in the dda. >> so basically this section
to another section in the agreement?
I'm sorry can you repeat that
>> I guess this section I'm
looking for one 7063 page 7 starting line 24 refers to
another document that May have
the wording that's why I didn't find it and your guaranteeing another document that has the word thank you very much.
>> thank you
all right. Thank you for your question supervisor yee supervisor tang any questions.
>> go do public comment on
items 2 through 4 any member
want to come up to the podium
seeing none, thank you.
>> okay I'd like to make a
motion to adopt the easements
for 2, 3, 4 and then send those to the full board with a a positive recommendation and like
to send >> so moved. >> we'll take that without objection.
Moving on could you please call
item 5
retroactively authorizing expend a donation from the " comfort women" justice coalition of $208,000 for the purpose of maintaining the artwork titled the "
comfort women's" column of strength for a period not less than 20 years.
>> okay. Thank you very much
let's see a representative here
to present on item 5 on the presenting accept and expend. >> yes. Good morning,
supervisors this is a request to accept and expend the
maintenance endowment for the
comfort women memorial momentum
on st. Mary's square that was approved by the board of
supervisors and approved by the
mayor and the requirement and
the acceptance of the maintenance endo you mind to
properly care for it.
>> it allows the arts commission to accept and expend
a donates in the amount of 200
and 8 thousand for the comfort
women memorial plaque. >> I understand the japanese
call for this on the plaques
that was approved by the arts commission.
>> that was a clerical error
on my part we're replacing that. For the record the word quote
largely is remove we've been
told this clerical error has been corrected thank you very much colleagues any questions
>> if not we'll move to public
comment I have two comments.
>> yelp come on up.
>> thank you, supervisors I
understand that there is a need
for several amendments to the
resolution in other words, to
insure we're also accepting the gift of the artwork the city
attorney is here and aware of
the situation and language was distributed to your offices
earlier my apologies for the
late notice we tried to draft
the amendments also known as we
were aware passivity it.
>> and appreciate you speaking into the record for the
amendment now go to public comment.
>> no other questions from the
colleagues all right. A card
from I necessary and
nez and quinn.
>> anyone here please come on up.
>> please come to the platform
let's keep on moving.
>> my name is quinn cook I'm a
member of the women's general
security and here to speak in
the 200 thousand documents
donation by the coalition to
insure the maintenance of the
memorial has occurred thank you
to the city for considering this
issue it has been going on for a
what kind I was here in July 2016 to speak in favor of
the memorial I do again, today I want to thank the board and
this committee for the morale
and political leadership on this
question and you know thank you
for moving this through the various city processes thank you
for the support from the city
offers and agencies to bring this to fruition as you May know
the huge port in the city 5
hundred people came to the un
veiling a couple of weeks ago
and it has generated a huge
amount of interest to thank you
for your support I heard you accept this.
>> thank you. >> thank you. Next speaker, please.
>> hi I'm a member of the " comfort women" justice coalition skim I
have a cold what I wanted to
share and submit with the city
is with about the letters from
the residents and parts of japan they express their thanks and
appreciation to the city for the
President To establish the
comfort women memorial and they
think that is a very important contradiction that is being made
by the city
and that they celebrate along
with us and with that, to they
wanted to express their concern
and kind of shock and intimation
about the statements that were
made by mayor from osaka in an
open letter we issued to the mayor ed lee
of san francisco calling for the
rejection of memorial and
threatening for the interpretation of thecy city
relationship they wanted us to
presented to you this letter
signed by one and 80 residents of the japantown. >> thank you for the record my
other members of the public want
to speak on this item come on up. >> yeah.
On behalf of the enter project a
nonprofit out of boston I want
to state we applaud the " comfort women" justice coalition have
been attached by the japanese
fraction as chinese-american
spent 20 years with dianne
feinstein had a newspaper
article of the japanese government comfort women issue
enhance as early as the 19 the
japan government spent a lot of
money to the japanese campaign
the majority of people are not
aware their confused about the
japanese government
the recent action by the mirror
osaka if of the comfort women
story the largest operation in
history by a single national government san francisco has
been a beacon of freedom and
social justice this memorial f a
large western city shows that the san francisco's compassion
with women worldwide in the past
and present and future thank you
>> tuff any other members of
the public thank you very much public comment is closed.
>> I'd like to accept this all the time.
>> my name add it on there. >> okay
like to speak. >> yes. >> please. >> I want to make a quick
statement I want to thank the " comfort women" justice coalition for being priest on
this issue an issue I grew up
with and people think that was
not real that was real I want to
thank them for not only donating
the statute and raising money
but urban like many other
efforts raising money to provide
to the city to make sure this
will be maintained
properly so I want to thank the coalition for that.
>> thank you any other remarks?
Okay I'd like to make a motion
to accept the amendment so moved.
>> all right. Thank you and
I'd like to. >> send it to the full board with a positive recommendation.
>> as a question deputy city attorney. >> john gibner, deputy city attorney. Because the amendments changed
the amount that the board is
accepting in the gift the amended resolution will require
a one week continuance for the committee.
>> okay. Thank you through the chair make a motion
to amend and to continue the amended item to the next budget
committee commissioner melgar e meeting. >> we'll take that without objection.
Thank you
Madam Clerk call item
authorizing a lease for up to 125,122 square feet consisting of a portion of the first floor
and entire second, third, and fourth floors at partnership, for 15 years, to be occupied in phases, for the period of July 1, 2018, through June 30, 2033, with one five-year option to extend, at an initial monthly base $359,953.75 for a total annual maximum base rent of $4,319,445 in the initial year with increases as set forth in the
schedule of the lease; and finding the proposed lease is in
conformance with the general plan, and the eight priority policies of planning code, section 101.1. All right. Thank
you we have the city
administrator Ms. Northern california. >> naomi kelly city administrator I thought I'll start with a bit of history
about the 3 lazy know we called
one lease before you now but 3
leases and want to have the whole package the hall of
justice has been an ongoing problem.
>> skim forgive me I'll ask
the clerk to call all 3 items
together to talk about them in
the will package. >> authorizing the director of property to negotiate a lease for up to 27,154 square feet consisting of the entire three floors of 777 brannan
department, with lcl global- 777 brannan street, llc, a limited liability corporation, for a term of ten years from
July 1, 2018, 2028, with two five-year options for renewal, at an initial monthly base rent not to exceed $83,724.83 for a total annual
base rent of $1,004,698 in base rent of $1,004,698 in set forth in the conformance with the general plan, and the eight priority policies of planning code, section 101.1. >>
authorizing the director. For up to 41,744 square feet consisting of the entire three floors of 945 bryant street, for the san francisco adult probation office, with liability corporation, for twenty years, to be occupied in
phases, for the period of
July 1, 2018, through June 30, 2038, at an initial monthly base rent not to exceed $146,997.33 for a total maximum base rent of $1,763,968 in the initial year with increases as set forth in
the schedule of the conformance with the general plan, and the eight priority policies of planning code, section 101.1. >> thank you, Madam Clerk I
appreciate that and want the director to reflect that supervisor safai has joined us in the chasm please continue. >> thank you, supervisor 3
years we've struggled with the
hall of justice about the
seismic safety and the sloo sleetness of the system the
final straw it came on
January 3rd a caused by the
inmates in the top floors of
hall of justice so overflow pen
straight ceiling and walls and
carpeted floors those inspected
areas we had to evacuate and our
staff cleaned up because of
presence of raw sewage we were
required to have additional
inspector we found bacteria in
the area had to slayer declaring
an emergency and hire
professional restoration vendor
to perform the cleaning part of
the the required opening up the
wall were asbestos so the
gravity of that situation really
motivated me in January to set a
target date exit of hall of justice by 2019
the this as we know as you all
know has seismic issues and sub system continues to fail more
than 8 hundred staff that work
there a probation the city
attorney's office the police the department of public health and
real estate and most of effected unit have filed complaints some
are here and you know there are approximately three hundred prisoners that are incarcerated
on the 7 floor
since January 2017 the hall of justice has two more major lower
level floors in the office one
elevator is down at all the time
and waterproof and 10
neighborhoods in the jail and
approximately two weeks cal osha
sent a complaint regarding the
sewage are questions we're
leasing versus buying the 10
year capita plan for the hall of
justice for an admin but the
timing is not until 2021 which
means that we would move the 2021 to
build a project and have that
completed wouldn't be completed
until 2024 to get people out of holocaust because of the
deterioration and the seismic safety of that building we had
to come up with a plan to move
quickly expedite out of hall of
justice that is that plan is
presented for the admin for you
today once we exit out of the brilliant street hall of justice
and temporary locate the admin
offices and restake the ambulancey services on the
holocaust then we can dpoofsh
that once we remove everyone out
of the jail demolish the bryant
street I should remind you that
the city has a comprehensive
seismic survey users the hazmat
in a 7.9 earthquake should occur in san francisco the economic
loss will be 200 and $76 million
the operational low the three be
over $49 million the building will have more than would have
had casualties and 70 percent of
the building will be damaged not
to mention all in the admin
offices will flee and the prisoners will not flee and have a crisis to try to get them out of the jail and our criminal justice system will be shut down
until we have an alternative so
before you are the 350 rhode island street and 945 bryant
street to allow for the temporary location that
staggered started date is
July 0, 2018, I'm going to I'm going to turn
it over to Mr. Updyke the real
estate. >> good morning mrurpt. >> george updyke director of real estate an overall the hall of justice to expand on what was shared to in terms of the population we need to move out beyond those prisoners on the 7 floor we have roughly three hundred sfpd employees and 200 and thirty district attorney. >> from the probation the court will remain in the current location wing of the property we
see that on the screen now with
the harriet to remain on 945
bryant street would be
demolished again, a
long-standing priority of the capital plan the city administrator police department why to move forward with this
should mention not before you today for good reason is that we already executed some elements the dekantd of the holocaust so, please command staff to the public health department and to open very, very shortly in the next couple of weeks and, of
course, the crime lab and
traffic investigations which
breaks ground at evans and 80 land how did we entertainer this process of finding location for the 30 main groups on this page you see lots of blue dots additionally we had an exhaust search with assistance from cd r e, I.E., personally want to thank the gentlemen for their tireless assistance to have us what can block after block to look at the opportunity whether a sale as unusual as that might have been or a lease opportunity we chased everyone has a potential to meet our needs over 20 made the initial list we got that down the city administrator put our feet to the fire with weekly meeting to make sure we are making progress on the effort the actual locations before I the 3 locations the 3 are for non-operation on bridgeton 945 bryant fee llc on brannan and the district attorney for the police
investigations at 350 rhode island street shown on the map
here talk about the individual deals in front of you 1350 rhode island street the larger space out of 22 square feet and the basis renovated at 51 square feet and the base proposal is $52 a square foot along with consistent terms we couldn't begin the appraisal until we
know what the report is on so
this has been a very fast moving
fluid process as we provide all of the information necessary
under chapter 23 of
administrative code 3 percent
adjusts 3 and the estimates are on active uses and the biggest
thing to take away is
$10 million to improve by the
landlord to the city not amortized $10 million of the landlords money in this market
is still a landlord market not
tenant favored that is extraordinary as a city administrator
mentioned to enter the property
as existing leases naturally
termed in July of 2018 and that
facing runs have not spring of
2020 non-probation an 945 bryant
street 64 dollars a square foot
an appraisal of $66 important square feet also 3 percent annual
about $8 a square foot in
expense are anticipated we have
a tenant improvement allowances
could be amortized over the initial term not recommend
taking that 8 percent of
interest so we have budgeted according to anticipate paying cash that is a negotiated item
that is in the favor of the city
it is nice to have so we do
recommend it remain in the lease
agreement brought before you for
consideration we don't
anticipate 2010 that tool that
start date 3 tenants in the
building July 18th and next the
lease of the storage at brannan
about 27 square feet there have
37 we believe we provided the
adequate evidence this is a
compatible range 3 percent
annual there $14 and we have a significant tenant improvement
to get that asset we've budgeted
for if colby petersonly and a
start date of July one
date of July one.
>> we're building something and
retrofitting something I'm here to talk about the leases abdominal unusual before I talk
about how we can pay for this we
can-I want to point out to
the committee that was in no
small part to the processes that
brought us here the standard
practices to understand the
building needs and look at the
vuntd prioritize capital whenever possible if possible
and find sources to meet the
needs making sure that the
sources we have meet the cash
flow needs of project at hand and making sure the solutions
will meet the operational needs in a efficient way those brought
us to the set of options that
can be the most difficult
problems in the protocol a
problem effecting hundreds of
city employees we like to
proceed with the capital with exemptions that the licensee solution is the best solution
lawful heard how we can't afford
to wait but we can afford to
change our situation we can get
our staff out of the halls
numbers on the last slide when
the city administrator talks
about a target date of 2019 we
knew that that would take forces
to achieve that we knew that a
successful exit is the top
provided we acknowledged in the temple year capital plan
published this last spring and set aside $8 million in the capital budget and $8 million in
the upcoming budget to support that effort and make that
feasible up front costs to get
out of the building $8 million
the data improvement not covered
by the landlord the design
oversight with the phase that john described in the office
properties first year totally
about the same once the bryant
side is compete the city can see $5 million in the real estate
department and off safety net
costs in long-term liaison the
court remain in the halls there
be limited city functions in the
capital improvement to the hall will be funded to kifrts of
participation as called for in
the capital plan and we agree with the budget analyst
recommended to try to maximize
the spaces like bryant to minimize the scale the project
will be fitting within the
program spelled out in the capital plan in closing, I think
we might as a group action this
building brings with that a set
of complicated and emotional
issues not easy for me and not
for you either with that said,
we can't afford to delay the
risks are two great beyond the day to day operations of the building you've heard about
we're begging for a life and
health safety crisis when an
earthquake hits our city from
the after the fact to the golf
it would be far, far worse we
have an opportunity here to
avert a disaster and I hope
you'll advance this expedited effort for our staff thank you
thank you for the presentation I
know we've got several questions
up here I'd like to recognize
any member of the committee wants to ask questions.
>> okay wait for the b l a report. >> good morning chair cohen
and supervisors from the budget
analyst office I want to respond
first to Ms. Kelly's statement about the questions about purchase rather than the
property we do talk in our
report about the city has not concerned the eminent domain I know that is a complicated issue
and reference when Ms. Kelly
said about the capacity in terms
of the participation beginning
in 2021 and the timeline that
will perhaps allow the city to
own the building by 24 if you look at the 3 pieces of
legislation one is actually a
lease before you for the I's have it. Rhode island does offer a
purpose opposite for the city to
terminate early but lease that
space through a private for
profit tenant in the city
relocated to property we
shouldn't close the door on the
long term to the solution of those 3 leases I'll talk about
each item I want to point out
that over the first 10 years we
estimate the cost for all 3 of
the intend leases is one and $35 million they are expensive
to kind of go to the specifics of the 350 rhode island street
that is the at least that is
before you for the legislation
the only actual lease agreement
our ask is 15 year with a option
to extend the cost over 15 years
is with which $150 million Mr. Updyke pointed out improvement
systems we'll be paying up to dollars a square foot we
considered this to be a policy
matter because if this is not
received the appraisal for the planning department
determination we've not received
those the appraisal this is
shows the market value and the
appraisal didn't require an
appraisal review because it is
$50 a square foot we'll change the recommendation to approve we
want to point out that the city
should consider ways to exit the
lease at an earlier date in
possible on the next item a
letter of intent for the police
property on 777 brannan street the real estate division will
have to come back for the actual lease agreement our estimate of
the costs to the city of this
lease and there is a typo on
page 33 close to $40 million
over 20 years we do make be
specific recommendations
regarding the letter of to the
one is the intent provides for
is 3 percent property management
this should be removed from the negotiations the next recommendation is the option for
the property we believe that we
will amend the resolution for
the director of real estate to
look at the option if feasible
this is not part of the lease
itself but in the letter of
intent the question of a text
amendment to grandfather the use of this space for storage we
believe that is a policy matter
for the board of supervisors we
have not yet received an appraisal I believe on this
property consider that a policy matter
actually, I take that back it
requires an appraisal because it
is below a threshold of an appraisal we consider approval
of this as a policy matter in negotiation with the actual
lease and then on the last piece
of legislation this is the
945945 bryant street for the adult probation we is
recommendations to this will be
a letter of intent the real estate division will have to
come back for approval for the lease we were calculated the
lease there is a market reset in
year 10 but the estimate is
$35 million and our
recommendations on this letter
of intent is first of all, we
believe that the state this has
been spoken to by Ms. Green that
is space allows for an additional $30,000 square feet
will not be necessary for the probation department and like a
resolution amended to provide
for the relocation of the other unit remaining they hall of justice space
and also the letter of intent
for the landlord to make tenant improvements and amortize the 8
percent over the term of lease
and think 24 provision should be
moved and city should pay for
the costs up front and provide
occupy to thirty parking spaces and recommend the amendment to
the resolution to reduce the
number of parking spaces to be included close to 18 additional
parking spaces are required that
is brought back to the justified
through the commission and
otherwise we received the
appraisal on this property but
it does require a review we've
not seen yet and consider this to be a policy matter.
>> thank you
I appreciate that full
presentation supervisor safai followed by supervisor tang and supervisor yee. >> thank you chair cohen I appreciate the opportunity to
ask some questions he had an
opportunity with Mr. Updyke if you could come forward so I can
ask a few questions for the general public comment living I
think so there is a slight difference between our cost over
15 years you say one and 412 and
the b l a-1 and $49 million the
different the credits that the
property owner is given or a
difference in the calculation?
Supervisor with respect to the
lease versus by the analysis
>> I mean, we had one and $42 million your overall
estimate and they have one and 49.
>> the cost of at large. >> yes. >> I believe this is because I
provided you a sheet that look
at versus and in order to make apples to apples comparison for
each property had to take out
the evaluation in this case the
parking costs will be cost regardless because the parking
garage underneath 350 rhode
island street is owned by a
third party requires a parking agreement even if we bought it
has a cost on the purchase side
we removed that it's the financial discretionary. >> on our presentation you
said not on the map but for the
purposes of of showing how in
depth I'll start by saying this
100 percent amity we respect and
understand the sidewalks that
the 1000 plus people in the
facility are enduring and no way
minimize that in terms of our responsibility I'm approaching
this as on behalf of the citizens of san francisco and
the tax collector one and $50 million over 15 years is a
big number when I look at the
dots 0 nothing that indicates
which ones were leases and purpose options so my general
reaction when I was presented
from the d l a and you it is
easier for me to make a decision and we're giving a short amount of time this is I heard about
this on monday and here on thursday asked to because of the urgency of this situation to
make a decision and all I can look at is the numbers I don't
feel I have a complete picture because I don't know which ones
of the dots were purchase opens
and leases to be able to compare
that and make an informed
decision can you shed light on this. >> I'll be happy to supervisor
two property were present at purchase options
and for different reasons we
elected not to pursue them one
purchase was 1098 harrison
determined to be too small to
address the issues we wanted to
address and the interior build
out was inappropriate and open
with an open mezzanine type of spaces that requires significant
improvements to put it in line
with what our clients need in
terms of office space the second
a purchase opportunity was 1275
harrison the size worked that
became a complicated matter a
nonprofit owned facility
is not on the marketplace we
don't want to go into detail in
open session again not but not a purpose opportunity with the
organization all of the other dots represent leases
opportunity of vaurnt from 10
thousand to over waterproof thousand square feet. >> sorry. >> supervisor
if I can just quickly to respond
to the other part of the your
comments on the sticker shock with the tax collector dollars. >> not just that but the term. >> the term.
>> 15 years on the height of the marketed.
>> let me as the planning correct we're at the height of
the cost the cost of building now is higher than it's ever
been for the first time in the
city's history and providing our
we're going above for calendar
2018 r 2018 all our contracting departments tells you the cost of building is extraordinary I
want to point out that the
expensiveness of a debt service
for a contradiction at the scale
to replace the builders one and 82 thousand square feet the especially estimate and the capital plan for the project is
one and $8 million like the city
administrator said it is excess
in that of one and $30 million one hundred and fifty in 5 years
not 15 and wouldn't get people
out of the hall to avert so the
option are perfect expensive all
of the options are expensive.
>> but I don't have all the options.
>> and leaves people in a bad circumstance. >> I don't have all the
options we was presented we can't go into further detail we've not been present with the
options and the other portion as
a clause that allows us to sub
lease that's not present in the extensive detail my reaction we
have a crisis situation we have
individuals and members of our
city workforce we care about
don't want to minimize but at
the same time asked to make a
decision we don't have the full
set of options ask you this we
have a in depth analysis regards
the profit do you see the
property values gone down
they've gone like this we have a desire in city government we're constantly trying to meet the needs of san francisco have a
need a constant need for space
even if we use this in the short-term hero for the hall of justice type of activities but
then had an asset we own that we needed for other departments
will it seems to me that would be something we should investigate. >> we have investigated that
that was part of the search by
it to identify the purchases- the detail adequate I I don't
have to speak in full I'll say
that the city is meeting all the capital needs for other
construction programs in the
capital plan so your easter program for example, addresses
the parks bond addresses the arresting traction and the waterfront parks we're planning for those as well and the solution. >> I'm speaking specifically
to the need of city staff and office space I mean this is
something for me that is a reflective response I had an
issue are thirty van ness that
was the most valuable assess we
sold that to reduce the debt and
sold-I understand and came into the end of that conversation I'm not at the end of this conversation where we
have to make a decision on
behalf of the tax paying I'm not having a complete presentation
that is not a complaint of the department of real estate but to
get people into a good situation
I respect that same this body is
responsible for making a decision with the tax paying
money we have to defend.
>> supervisor I hear you loud and clear within the option
didn't fit the needs he hear our
concern about buying we hear in the budget analyst about buying
those buildings to help with our
city workforce needs so what the
budget analyst pointed out we
don't have to stay there the
entire time if an option that
fits our needs we can buy an
opportunity to you know things
we can do going forward perspectively to address this real concern and totally I
understand and respect that concern.
>> can I ask or maybe director
updyke that speak to the exit
clause but provide more
information on that.
>> supervisor the concerns of
each of the 3 landlord are
varying let me speak to the larger piece 350 rhode island
street and the concerns of that landlord complained within the
lease is a clause that states
what can't go into the premise
those resolve around human
services usage so the landlord
is not separated to put in what
we might have an hsa mission.
>> I get it and human service.
>> those are excluded
the adult probation a excluded, certain police partitioned that
are different than we're putting in there this lease are excluded
a narrowing of the path for city
uses but traditional city uses
are fine have to give consent he
and not with healed.
>> we've clearing laid out
when is reasonable in terms of providing consent with respect
to a private use that's a
private nonprofit use I do not
building the language allows for
a private anniversary city related
used to be without their consent
can be withheld without their discretion.
>> say that again.
>> non-city nonprofit not. >> (Multiple voices.)
>> for profit or nonprofit but
not a city mandated city service
they having might have further
discretionary with consent have to be a reasonable negotiation
if indeed we desire to pursue a
different opportunity during the 15 year term.
>> I'll sass the appraisal report indicated the value to
have a longer than term lease the priorer appraisaler scrapes along
the top I've been here it is
scrapeing along the top the
certainty of a longer licensee
has value that is reflected I'll
take issue if the short term
lease is a better strategy we
believe we fought for a long term lease. >> I'll hand it over my
colleagues have other questions we want to add one more
clarification you said this we have one action item in front of
us the other two are letters of
intent we're not able to take action on letter of intent their
formation so we're not presented
with a complete package with the
exit strategy one in front of us.
>> yeah. The 777 brannan street those leases will have to come back.
>> only one lease that will present an immediate part of the
exit strategy is there I know we
had some conversation about the
director updyke did you want to
talk about 1000 people are part
of this who will be part of the immediate 350 rhode island
street and why are we not presented I understand you're
coming about the letter of
intent but in terms of the immediacy we're presented with
one piece of the puzzle at 350
rhode island street this deal
has to have a tremendous date it
is accepted or rejected that is
November 3rd no longer have a lease agreement have to start
over will they negotiate with us
probability do they have other opportunity before them most certainly
they have leases and sub leases
could be doing different things
with that affect the trermentsdz 350 rhode island street would
accommodate the don't in total
and the lease investigations in total. >> is it normal to be
presented to one of those for to
make a decision.
>> this is a typical process
for the budget and finance I
think the other departure is
seeking a committee report to
meet the deadlines we wish we
had more time to provide the budget analyst more time to
review them I apologize but the
time didn't allow us to do it
any faster than what we've done. >> thank you chair cohen. >> thank you very much I know there is a lot of talk
about and thank you for the
questions supervisor safai will
purchase versus lease we can
talk that in terms of plant we
have plans to construct
something at 850 bryant
$308 million for the capital
budget that is valued in
July 2021 so I mean, I hesitate
to purchase a building or several of them if our plan not
to be in the spaces we have
before us today and actually
move back to 850 brooibt I know this is important this is
something I did want to note
I'm wondering in director updyke
gave us the analysis summary in
you can walk us through the 3
different locations and what the
comparisons were.
>> sfgovtv?
>> maybe flip the pam is it
facing upwards. >> it's warming up. >> okay. >> there we go.
>> okay there we go.
>> okay supervisor start with 350 rhode island street at the
top of the page we had a 15 year
cost analysis now a total life
cycle is difficult we I don't
know what the lease will be in
the year that rate will change
can go below the rates in the
prior year a 15 total cost of
ownership versus the cost of
lease and in our estimation looking at be apples to apples
so slight departures from the
budget analyst a look at at cost of ownership certain ownership
that one takes on as landlord
not a tenant this rehabilitates
the cost and costs of ownership
is one and $45 million total
cost over 15 years is one and 41
relatively close that the delta
small percentage but shows you
it no the huge advantage it is not a surprisingly result given
the size of asset we look at smaller assets that number one,
will expect that to be different
in the ownership over a are
shorter term will be better financially at 777 brannan
street we ran the 10 and 20
years costs of assumption but
making speak rational soomgsz
$3 million delta over 10 years
about a $12 million delta over
20 years and that is in favor of
purchasing not surprising for a
small asset over a period of
time and lastly bridgeton 945 bryant fee llc a close analysis
there we have a 10 year lease
has a market to market in 10
year don't know what the years
will be in 339 force the total costs of at large and ownership
those are the numbers and again
not just the financial decision I think that you are clearing
articulated other things on the ways versus the analysis but those are the numbers.
>> thank you and we haven't touched on this in order to
persian it don't we need cash
flow to do this May look like
potentially favorable to purchase.
>> yes. We need the cash to do
the purchase but a willingly
seller the owners on the I's have it. Rhode island they're a whole
organization held the asset and
lincoln property held the other part of the the I's have it.
Setting a twin building with a
exterior courtyard we don't
think a change that's how the
corporations behaves that's fine
they operate and on a longer
than, and, secondly, 945 bryant
street moved into the property
with antenna thirty exchange
don't continued to move out of
the problem this solves the
capital gains their motivation on the party with an translation
is not to sell we made the
requests we always make the
requests to purchase is a tight
or right of first offer if you offer the property have to give
us the first rights we have that
in the 777 brannan street and
the motivation gave us that for
the letter of intent.
>> so speaking of the
motivation thought or the
willingness to sell epic the budget analyst office mentioned
the potential of eminent domain
I was wondering if you can touch on that.
>> happy to with respect to eminent domain that becomes more
complicated in that one has to
prove up that a parcel you're seeking is the best possible
solution for your problem and with eminent domain is a typical tool by municipality for
things you as much as in the
says case of san francisco users for the terminal the terminal
was clear where it needs to go
and used for puc projects for
example, in the bayview we have
a cal to the owners and that
tool was necessary used to
thoughtfully and surgically and seldomly with respect to an office building it is challenging most municipalities
don't use that tool for an office building it requires to
show cause an ability to say ask
the building I must have that
building not the one next door
but that one solves my problem
that significant risks in the process, and, secondly, with eminent domain it triggers
relocation eligibility to as we
notice we've been thoughtful how
we phase into the properties as tenants naturally phased out
their leases are termed and no
new ones no displacement there
was no exception the will have
to make a move many are tech
tenants they jump from property to property.
>> so eminent domain triggers the eligibility for every single one of the property. >> all that building have existing tenants.
>> they do.
>> okay
in terms of of the city we have
a tone we don't like long term
leases but can you give us example. >> supervisor tang one of the
best examples 1155 market street
you May recall we brought to the
board 4 years ago as part of our
exit if stevenson street at the time I think the board
rightfully was concerned about the price of that longer than 10
year lease but we look at it and
say boy are we sure glad we got
the 10 year lease option been
advantageous from the market
stand point we don't our best
and listen to the experts to guide you guess no crystal ball
but it is a shining example of
one hundred thousand secret on
market street that has been an advantage and give us flexibility neglects out into
the new building with the board
has approved at goodwill site
and leases to come behind it to we'll use it intellectually until that lease is up.
>> is that the only one or do
we have other.
>> we have some hsa assets a school district lease in its
third year of a 12 year
renewable that is advantageous over the long term
that is got to be $20 a square
foot on the market today and
guaranteed with that price
through that term so, yes I'm
sure we can find other for you as well. >> that would be helpful or
great and last thing I directed
to the staff for the budget
analyst office on page 33 of
your report this is for the 777
brannan street I think the table
is off and again, this must be minor but I think that is
important to note the 20-year
total on the bottom says $9.7 million and that's correct
he give the presentation and
used that give them accurate for
doing this in a short time timeframe. >> understood.
>> maybe update the website in
case someone is reading that but
been informed by the department of real estate the property
taxes numbers included on the
same chart were included
elsewhere on the table so maybe
something the two departments
what work together I'm sure I
have other questions but let
supervisor yee go.
>> thank you for if there were
opportunity I'll be supportive I
think in our analysis of costs
of a lease property versus the
leased property one of the things take into consideration
is that at the end of the 15
years or the 10 year period have
an exit that can turn around and
sell so that offsets some offers
by lot and pay for the whole thing
in regards to the discussion
about eminent domain I not a big
fan of using that mechanism
unless totally totally necessary
and I don't see that at this point
the-I guess I'm going to
focus on some the
recommendations and I think some
of them are exact to support
in regards to the one of the recommendations was looking at
the zoning tax amendment in
which the owner wants to extend the long-term grandfathering
clause or bring it back
can you explain what if-I
thought we'll use that space as storage. >> that's a that's a good question supervisor when we
returned the intent to return
with the final lease and the resolution for your
consideration we'll see have a
champion item and try to keep those separate we don't like to
mix those with that said, the
point the ownership is making
but for the city's intervention
they'll continue tour self-storage use as long as they
didn't have a change of use the clerk of the board we're using
it for partial storage and
office used for the police
department staff that facilities
the operation technically public
use treat it differently and the
ownership is using a belt
suspenders approach they're not
negatively affected by the city
use we'll let the city department speaks for itself and
we said that is difficult to make that decision right now we
don't have to make that decision will come forward when the package come forward.
>> those two separate items are tied together in a sense
that you're going to negotiate
to the leases performing this will happen.
>> in the letter of intent a
document I signed has no authority unless ratified and approved by the board of supervisors a request for
ownership and so pursuant we've
asked that separately Mrs.
Tender this to us and let us
begin the process with the planning department we'll disconnect from the lease you'll
not find it it had will be
handled separate that will be
handled in a separate manner.
>> really nothing to approve on this.
>> in regards I mean, I'm looking at the recommendations b l a. >> and certainly from our perspective I think the most
appropriate way to handle the recommendation is to divorce that in the lease itself that
would be fine this is consistent
when I don't want to speak for you but.
>> also in regards to again,
the along the lines of supervisor ahsha safai can you
go back and have some language
in there with both 777 brannan
street and what's the third one?
945 bryant street to have a
clause in terms of purposed option
>> it is in the letter of
intent for 777 brannan street
we'll have a purchase 945 bryant
street we've made that request
I'm happy to make it clear with the board of supervisors I work
for you if this is the desire to secure a purpose item doing everything we can that is
ultimately their decision it is their property but we're doing
everything we can to secure that as well.
>> so explain I know you can explain the 3 percent of
property management fee and why it is done this way explain to
the public why we are offering 3
percent management fee. >> yes. Supervisor
we're offering that was a fee
that was brought to us by ownership has to do with with
how other property is structured
financially when a large lien on
a property the rent base rent
paid are pass there is to the
bank the bank gets the fund the
equity investor didn't have cash
froze to maintain their operation not unusual northbound
those instances thank you to
have-you have a property
management fee and technically
not getting the services through
the modified $27,000 a year that
flows to the equity investor to
cover the costs of an accountant
not unusual to see that split we
made the requests to get rid of of the fee this is a negotiated
fee the ask was higher than this
is the lowest fee with the
lowest base rental it is the
negotiated number before you we'll continue the discussion
but I think out of respect for
the ownership position a fair one and common in the real
estate industry to see a fee on
top of the rent when a lien
that's why only one of the 3 has that issue.
>> and then basically, the 3 percent is just that is paying for the lease.
>> right if you want to look at
it we had the discussion with
the budget analyst fine one and
$88 and square feet that is the effective rate not more selling
we're well within the comparable
set of leases in the area that
at that rate.
>> thank you well, thank you
skim sir, we're not done.
>> we're not done we're almost
done laughter so gosh my
colleagues asked a ton of
questions left me with few I
have a little bit of an insight I'd like to get from you a
question related to item 7 and 8
can you can you talk about that
the 850 brilliant e bryant but
what is 15 years down the line if you thinking about long term. >> the long term and the
reason there is before you and
the term is purposeful 15 to 20
years is director.
>> and how imperative they
help-we get to the point we
demolish the land on the side
there will be an opportunity for
the courts to rebuild we're
having conversations with the state.
>> this is an assumption we
have not engaged the state lobbyist on this issue basically
speaking to the court and the
funding of the court. >> just last week.
>> so similar we have not done that that's fine I want to
understand that is good to hear.
>> so director updyke I'm curious to know what other
departments are left after the 3
departments have moved again,
this is referring to item 7 and 8.
>> so the sandra will be
moving to-those police staff
alleviated with crime lab and
traffic investigations to evans
and 80 land when that facility is completed in 2020 there
about's and within the building
we'll restack or move relocation
temporarily, we have warrants a
bureaucracy of sheriff's department and police identification those two we believe we can accommodate within a court stack the
remaining portion of building
along harriet the court takes
certain floors we have to above and below we'll create what I
call our rework for the hall of justice space within that area
so there is flex space as we recognize a little bit of inefficiencies moving some of
the folks away from the court
that tanks a change of behavior and they're often delays in court processes we thought that
is important to land and do work
at the hearing they're here here
to attend and don't have to go
back to the office but pop
upstairs we'll create that this
is what is left in the harriet wing thank you
will there be other issues for
item 7 other uses in the building besides storage.
>> we'll look at the ether of
the warrant bureau or the
proposal id bureaucracy co-locating if indeed the space
can be made available after the controller's office does an
analysis or happy to work with them so welcome back recommendations with the budget analyst.
>> do you have an estimation
how many ftes will be at the site.
>> I don't know.
>> ftes for those two. >> departments yes. >> bureau. >> clarify for warrant and
records for the sheriff on the
26 and 19 to police ids and just
to note there are a small number
of additional fte and the
sheriff's department for the
transport units and the security
to work in the building locker
rooms and stuff so altogether 26
and 19 and a dozen in the building for those. >> and I was wondering in the real estate can talk about the 3
percent property management fees
increase I I know you spoken
about that a little bit earlier is this normal.
>> this board has approved prior transactions that had a
fee we don't see that all the
time but driven by the nature of the cash flows.
>> the equity investor. >> the property unique.
>> financing and non-financing
and the amount the financing.
>> this is for 777 brannan street. >> that's a situation a split of revenues and this is what this is to accomplish. >> all right.
Let's see-okay. So this is
for item 8 as you May know I
represent the eastern
neighborhood particularly
potrero hill this is an 945
bryant street not far from the
southwest neighborhood I want to talk about the that concludes my remarks you can talk about the
number of parishes how you
determined the spaces for the
proposed lease >> disproportionately we negotiated the right to the obligation to
lease all of the parking spaces
if we desire we recognize that
the current fleet for adult
probation is 18 they will have another vehicle needs sheriff
deputy needs a couple of private vehicles necessary but right now we can't
true up to 33 but a right we
have negotiated for up to 33 spaces >> okay.
>> and respectfully suggest in our best interest as we
negotiate to not give that away let's retain that follow the
direction relative how we use
those spaces senately and be
sure we're meeting the needs beyond that.
>> okay. So same question now
that I have east to roikdz r 350
rhode island street with the mixed-use environment and
industrial spaces and art it is nested in the foothill of a residential community park is a premium if you're concerned
about employees moving into and taking moving into the building
and doing their work and parking
on the street you're talking
about how you negotiated the parking.
>> so with respect to 350 rhode island street I mentioned
it is a complex ownership two boxes sit on top of a common
garage it is owned by a third
party each box owned by a third party we're doing one transaction with one box with
that, through the cc&rs on the the property management agreement for the garage it
setsd forgot the process to get
an entitlement to a parking
space and an allocation in the
lease of one spies space for
every 1000200 square feet that
is entitlements up to one and 4 parking spaces
we visited the site and saw the security concerns wanted to be sure the police department is
comfortable users the spaces and
indeed they're safe for their use
came to really good meeting the minds thank you to the deputy chief for the creativity on the spot with the landlord to work
through a way to carve out a portion of the garage striking
for our use we believe we have
addressed did security issues and assured the way that the police vehicles are parked in
the garage and not on the street. >> how many 17 spots.
>> one and 4 total spaces.
>> one and 4 total how many
have going to go to the
employees that will be there let me rephrase. Will we are
illustrating all one and 4 spaces. >> we have demand beyond that they have fleet vehicles that needed to be accommodated so I don't think there is any
question we'll need all the
parking spaces we could use more
and it is in our best interest
to put in in the garage not an
overflow I'll say that we
retained parking through a per
pellet easement around the hall
of justice we want to utilize that whenever possible we have parking through available as
well and gets into an efficiency issue we have work together and
have time to do that they don't more often until 2020 a I'll
level with you I'm concerned about that particular lease
because when you go to the hall of justice because of double
parking and illegal parking I'll
call is creative parking and
parking spaces and there is lots
there is meters and yet still
double parking and a lot of the
double parking comes from law
enforcement so I was wondering
if any k given our negotiating a
lease and other real estate but
perhaps someone from I see from law enforcement that can talk
about that because this will be
a major problem for well, the next supervisor in district 10. >> yes, ma'am.
>> I'm thinking about the future. >> while the deputy chief
comes that was a concern with the public safety building and
little neighbors and future
neighbors we worked well with
the neighborhood to iron out the
kinks and make sure we didn't
have the double parking and
triple parking we've gotten along well with the neighbors.
>> that might be a again example.
>> thank you, john updyke and
one of the things I'm concerned
about triple parking and I'm
concerned maybe you can help to
relax my concerns.
>> certainly a lot of double
parking on bryant a lot of it is
associated with the court and
officers coming and going into
court the building sees for
activity the the I's have it.
Rhode island will house the
investigations you does have a
lot of officers coming into to
an investigative unit we see typically with our
investigations is all kind of in
house don't have a lot of that eastbound and flow will have
more when it comes to the court and properties as well people
coming down to try to get
evidence out of property that's
why you see it don't anticipate
as much of that as on 350 rhode
island street and would do extensive outreach to the
community prior to moving into that facility. >> I'm satisfied with that answer thank you. >> seeing no other oh,
supervisor safai pop back on the roster.
>> really quick I didn't want
to leave the impression I didn't
think the other two leases were
in front of us we don't have the ability to take action I like
the direction we have a purpose
option in one and the utility in
another that is the r and want
to commend you didn't want to
leave the impression in general understand the mandate you've
been given not an easy situation
thank you
all right. I think we've exhausted our questions we've
heard from the b l a now time to
hear from the public two speaker
cards from local 1021 and
michael from ton to one and anyone else please come on.
>> good morning bob local 1021
and also chair the public
employees committee with the
labor council we hand delivered
a letter to your offices
yesterday outlining I hope you had an opportunity to look at
the reasons we hope you contact action on the proposal before
you giving a lengthy description
of the kind of problems and why we think this is urgent that on
action be taken thank you to the city administrator and the real
estate director for their quick
action after the recent incident in January they promised and
committed to get on this and get
to the bottom and try to move us
to a point we can relieve the risks of other associated
problems for employees and the
public everybody that fwos into
the building under discussion
here and I think they've done a
great job listening to them
today, I think they've covered
every angle and considered every
possibility but I will not want anyone to know think that goes
to a point we had to take action
in January this was a problem in
thirty years it is an embarrassment it is an
embarrassment for the city to
see this many employees and members of the public entering into the facility in this
condition this is the problem we
have to take care of we have to
take care of and really urge
you're positive reactions to
move forward. >> thank you Mr. We will reconvene as the building inspection. >> berg.
>> police organizer from local
1021 and speaking in support of the lease in front of you as well as the other items to move forward with the negotiations
and has been said an issue that
us long overdue for addressing
and even if as these God today and next tuesday and others come back for approval didn't solve the safety problem for the
public and the employees that
work they and those issues need to be address a flood could be
here tomorrow our members that work in the hall of justice they
received no training what to do in the event of a fire or flood on other other disaster so they're still work to do the
court needs to be moved out and while the city can't move out
the court but needs to get the court out of the building they've be suffering after the
employees are out of this so I
brought-we sent press
releases over the years and brought a copy of the most
recent letter to share with you
in February thank you.
>> thank you any public comment on item 6
through 8 come on to the platform seeing none, public comment is closed. All right. Colleagues what would
you like to do with those items okay supervisor tang. >> thank you very much I
certainly have heard concerns in the committee or outside that
really is not the preference of
the city to enter into long term leases and a preference to
purchase but we're at a
situation this is was not the
first somewhere we did reject an
$80 million grant from the state
for the lower than term with 850 bryant I understand but at the
same time that was our plan a
option and now we're at plan c
or d I can't keep track but not
the best thing as a city frankly
other options before us that were rejected so given the situation we're in I think that
is so important for us to get
the employees out of the
symmetrically unsafe building I can't believe the conditions
those employees work in and
don't enjoy go into the building
for jury duty I can't magic working with ceilings and
drippings and sewage out of that
and so forth I don't want to
describe it so I do appreciate
that we were brought for the
other items the ability to
authors an negotiation of two
other leases on a 777 brannan
street and 945 bryant street I
know that that is national not a
requirement but good to see the overall big picture with the
uses so again, I'm sure that the colleagues will have issues especially, when we got to the full board but given the situation we're no right now
that this is the best thing to
do for those employees and for
you know really the sack of when
a disaster occurs I wouldn't
want to be on the hook for the
lives that work there and the people that live there currently
I'm I I'll make a recommendation to. >> send it to the full board with a positive recommendation.
>> so this is item 6, 7 and 8. >> I believe >> for
classification out of 7 and 8 we made recommendation to those items be amended.
>> okay. He think there was
the one regarding with the adult
probation 945 bryant street I'll
be okay if I want to allow
consideration for the sheriff's
department having a joint space
in the building I'll be okay
with that and happy to listen to other colleagues. >> supervisor yee.
>> no, I concur with the
amendment on for item 8 although
the parking space of saying the
city will only release 18 spaces
I want to leave that off give the staffing through the flexibility if they want to
lease more up to 32?
32 not necessarily that they
would lease 32 I'd like to leave
it amendment off
>> through the chair also for
the 945 bryant street I know a recommendation regarding the
zoning separate piece of
legislation if we do nothing
like that things like that the
only amendment regarding the 945 bryant street looking at the sheriff's department sharing space with adult probation with
that facility and like to make a
motion then to adopt that
amendment for item- >> 8.
>> and then send formality 6 and 7. >> send it to the full board with a positive recommendation.
>> and as a committee report
and 8 as amended as a committee report a positive recommendation. >> we'll take we'll take that without objection.
I want to recognize chief from
the adult probation in the
xhafrm and the chief
representing the city attorney's
office supervisor yee any last
remarks audits a vote without objection.
>> we'll take the vote without
objection as amended thank you
very much Madam Clerk.
>> Madam Chair the motion to accept amendment on item 8.
>> that's correct and can we
make a motion to adopt item
number recommend number 6 and 7
and 8 as to the sobbing and 8
recommend to the full board as recommended. >> that's correct commissioner
paskin-jordan stated Madam Clerk, any other business before this committee? >> there's no further business. >> ladies and
