City and County of San Francisco Wednesday, February 05, 2020
What is the income range?
I think that is being worked out. That will involve further discussion with future developer.
>> what is the time line we're
thinking so we'll know when the range?
>> I'll let dan speak on that.
>> Supervisor Walton: thank you.
>> thank you, dan adams, acting director.
So as mentioned, we just
acquired the site and ensure that we're able to pull it off the open market and then we would start to do programming in
more detail. The case for senior development.
And so that will be our inclination, but it will come post acquisition and be part of
the programming process prior to issuance.
When we get on board, they can run economic models.
Some of the refinement will happen after the procurement process.
>> so guesstimated time line?
>> you know, we've got a queue
now of R.F.Q.S, so I would say
ideally summer or fall, we're
issuing an R.F.Q. For this property.
>> let's hear about the B.L.A.,
please.
>> good afternoon, chair fewer,
members of the committee. The proposed resolution would
allow the city to purchase 1939
market street for $12 million, place the property under the jurisdiction of the mayor's office of housing and community development, find that the acquisition is consistent with the city's general plan and priority policies of the
planning code, authorize the director of real estate to
execute documents related to the property acquisition, including
leaseback agreement with the seller.
And affirm the planning
department's determination that
the purchase is exempt from review under the california environmental quality act. The property at 1939 market
street is a two-story office
building of approximately 12,050
square feet.
The mayor's office intends to
purchase the property and
convert it to affordable
housing.
The affordable housing project get financing and ground lease will be suggest to board of supervisors' approval. Under the proposed purchase and sale agreement, the city would pay $12 million to acquire the property. The purchase price is consistent with the appraisal and review that were completed by an independent third party appraisers contracted by the real estate division as required by code 23.3. Under the proposed purchase and
sale agreement, the city would
enter into a leaseback agreement
with the sheet metal workers association.
For $5,000 per month for 24 months as shown in exhibit one
on page 3 of the report.
The leaseback period would allow
the mayor's office of housing of
community development to find a developer to convert the property from office space to affordable housing and no material changes to the property
would occur until after the 24-month leaseback period. The city will assume
responsibility for the existing leases with the current tenants and enter into a leaseback
agreement with the owner.
The estimated annual rent is
$308,000 as shown in exhibit 2 of the report. The lease is would terminate the end of the lease by 2022, resulting in lease rent to the
city of over the two year leaseback period.
The source of the $12 million of
purchase is excess education funds, or eraf.
The leaseback is $221,876 as
shown in exhibit 3 on page 5 of the report. And we recommend approving the
proposed resolution.
>> Supervisor Fewer: thank you very much. Supervisor mandelman?
>> Supervisor Mandelman: I just
wanted to take a moment to thank the mayor's office of housing and community development, the division of real estate and the mayor herself for their
commitment and work on the project.
District 8 has the dubious
distinction of having the second
highest rate of no fault evictions.
We have a lot of displacement happening second only to
district 9 and yet there is a
real challenge in trying to get affordable housing built in
district 8 because we have a
scarcity of vacant lots and
pretty high land values. I want to thank you for your
creativity and swiftness in responding to this opportunity.
There is a model for this just
across street, open house, 55
and 95 laguna has developed two
buildings along with mercy
housing that are senior housing.
Between those two buildings have
opened 119 units.
They have a 3,000-person waiting list for units. So there is tremendous need.
And just to say a word on the
need for lgbt affirming senior housing, I think one of the
things we've learned from data
in the early stages is that if
for the lgbt community, and
other minority communities, if
we do not focus on getting
resources to particular communities, they will be left out. And so I think for low-income, lgbt seniors in particular,
folks who May have H.I.V., are
often in rent-controlled units now. Trying to have resources available so when those folks
are displaced, if they are, they
do not at the age of 70 have to
find a new home, probably not in san francisco. That's pretty important.
I want to thank you all for sharing that conviction and looking forward to bringing on lots more units of affordable
housing in upper market.
So thank you.
>> can you -- do you know how many units do you think we'll build on that site?
>> I'll let dan answer that.
>> we haven't yet done a
detailed yield analysis, but we
estimate 80-100 units based on the current zoning. That will vary depending on the
actual unit mix we arrive at.
Again, once we do our rfq we'll
bring on architects do a more refined yield analysis.
>> Supervisor Fewer: when you
are doing the rfq, are you going
to also list projected levels of affordability?
>> we would generally -- yes, we
would give a prospective applicants the range we anticipate and we always have
discretion then to look at creative models to do something
other than prescribed.
We would have a range of incomes
included in the R.F.Q. Would be typical for us. >> so then piggy backing on supervisor walton's question, what is that range that you would put in the rfq? >> again, I don't have that range today and we want to work, obviously, with the mayor, the
board of supervisors, certainly
supervisor mandelman, on really crafting the target population. I just want to affirm what I said earlier, that when it comes
to senior housing, the acuity of need for very low and low-income seniors is paramount for us.
What can be challenging with
that population is having rent subsidy necessary outside of our program.
So what we want to do is pair extremely low-income units with
a source of rent subsidy to get
the income levels as low as possible.
>> Supervisor Fewer: that's our
desire too, and we're hoping for racial diversity also in this development. And so basically, what we're
doing here is land banking a
piece of property, the opportunity to obtain -- to attain.
I'm wondering, how does this factor into the queue for affordable housing.
We know there are projects in the queue. Does this take precedence?
>> no, we incorporated into our pipeline.
One, we were blessed to have
money in the eraf of this scale.
And we were fortunate to pass a $600 million housing bond which
includes $150 million for seniors.
So we see this as a potential --
as a future senior development
being able to access that $150
million trench of senior funds. I would hasten to add that we just closed a notice of funding availability for acquisitions primarily on the west side.
We're excited to have a property come in your district also
proposed to be a senior, which would be also be part of the pipeline. We're underwriting and looking at that proposal now.
But the proposed development at 1939 market street would just be
a part of a cohort of properties that we're moving forward as part of the pipeline. Ideally, we're able to -- our
preference and it's true for the
nova, our perch
reference is to acquire sites and move those into affordable housing.
We intend do that with both the properties, as we're intending to do with 1939 market street.
There is no property that is
being bumped because of this acquisition.
>> Supervisor Fewer: hmm.
Let's open up for public comment. >> could I?
>> Supervisor Fewer: supervisor ronen.
>> Supervisor Ronen: thank you so much. I had a general question, not about this specific item, but related to this item.
When does mohcd decide to issue
rfq for the purchase of a property as opposed to waiting for a nonprofit developer to purchase the property and then issuing an rfq for its development?
>> so in many ways it depends on
the way in which funds come to our office.
So I'll use -- I think these are two good examples.
One is this proposed acquisition at 1939 market street. Through the eraf allocation,
there was a line item that was intentional for an acquisition.
As part of the conversation about diversifying our affordable housing across the
city. And so we had money in hand and
there was a property that met
our qualifications, namely, in
quote, unquote, underserved district as supervisor mandelman
mentioned, a place with high displacement rates, and one
which fit within that budget allocation. And a situation in which if we did not move quickly, the property would be sold on the open market.
So we used our discretion to act
directly in the acquisition of that property in order to meet
the policy goals that aligned with funding that we had already been allocated.
In the case of the notice of
funding availability that we just issued, that was also
prescribed in the bond.
We had the time then to prepare
a formal notice for execution
and for promulgation.
That's our preferred mode of
working.
We would prefer to work with our nonprofit partners who are out in the community scoping sites, working with brokers. We don't have a lot of infrastructure for that in our office.
So it's something that we do opportunistically, and generally, rarely, to do a
direct purchase.
But in this case, because of the allocations of the funds we had in hand and the alignment with
stated policy priorities, and
the coincidence of scale of funding and price, we thought it was very important to stretch ourselves and make this direct acquisition.
>> Supervisor Ronen: and who is -- who gets to make those decisions? Is it you? The mayor?
I mean, certainly board doesn't
get to weigh in on the decisions
other than approving what is presented to us.
>> it's a combination of those.
Our office typically has had
some amount of discretion to where there is funds available
to make that acquisition.
A similar case is in your
district of 1515 south van ness,
for instance, we had an
allocation from mtc that had a
gee graphic requirement.
Because the deadline for the expenditure, we acted quickly to
acquire a site on the market.
And it's helpful for us to have
that discretion to be able to be opportunistic in a market that
doesn't always work for a nofa
to be issued or rfq to be issued. It is obviously always in
conversation with the mayor.
And always in conversation with
the supervisor in whose district
we're looking at making an
acquisition.
But there is discretion that our
office exerts in order to take advantage of those opportunities.
>> Supervisor Fewer: supervisor walton.
>> Supervisor Walton: real quick. Did I hear you say that our request for the R.F.Q. Are going to come from nonprofit developers? >> I'm not sure I said that, but our R.F.Q. Process requires the participation of nonprofit developers with a local office here in san francisco. That will be part of the R.F.Q. Process.
>> Supervisor Fewer: okay. Thank you very much. Seeing no other comments or questions, I'd like to make a motion to move this -- excuse me, I'm sorry. >> Madame Chair, would you like to have public comment?
>> Supervisor Fewer: I thought I did already. Public comment on item number 1? >> supervisors, nobody has the time to come to your budget meeting most of the time. And if they did and were given an opportunity, they would have come. So we have to look when we get a property like, to listen to the mayor's office of housing development workforce, because they're not very reliable. That's putting it mildly. We need to look at a model where those who are adversely impacted first are housed and then look at the future where similar people who are impacted are not -- do not leave the city, but accommodate it. And what is happening all over the city is, they use taxpayer money to buy the land, high density housing. They have a program called dahlia which God knows how that works. It has to be audited and this has to be audited too. There is a lot of corruption in the city and we need to put an end to that.
And we need some of the supervisors who have their heart
in the right place to do a needs assessment on the condition of
our people. There are too many middle class people dying on the streets of san francisco. No consideration is given to that. Talking in generalities, they're going to build this. It's not going to come under rent control, so that means we don't know what.
And no timelines.
No good model and they don't consult those experts who already doing but on a smaller scale. Thank you very much.
>> Supervisor Fewer: any other public comment? Seeing none, public comment is now closed.
I would like to move this to the board with a positive recommendation. I can take that without objection? Thank you, colleagues.
Madame Clerk, any more business
before us today? >> no there isn't.
>> Supervisor Fewer: thank you. Do I have to adjourn this meeting to enter into a new meeting or can I just transition
into the budget and appropriations committee? >> it would be more appropriate to adjourn this meeting and then
open the budget and appropriate meeting. >> this meeting is now adjourned. Colleagues, I'd like to open the
