Transcripts For SFGTV BOS Budget And Finance Committee 20240

Transcripts For SFGTV BOS Budget And Finance Committee 20240712

Supervisor fewer good morning, everyone. The meeting will come to order. This is the july 29, 2020 regular board and finance Committee Meeting. I am sandra lee fewer, chair. And i am joined by supervisors mandelman and walton. Our clerk is ms. Linda wong. I would like to thank sfgovtv for broadcasting this meeting. Madame clerk, any announcements . Clerk yes, madame chair. Due to the covid19 Health Emergency and to protect board members, the board of supervisors legislative chamber and Committee Room are closed, however members will be participating in the meeting remotely. This precaution is taken pursuant to the various local, state orders. Committee members will attend the meeting through video conference. Public comment will be available on each item on this agenda, both channel 26 and sfgovtv are streaming the number across the screen. Each speaker will be allowed two minutes to speak. You can call 14156550001, meeting i. D. , 146 812 0226. Again, 146 812 0226 then press pound twice. When connected, youll hear the meeting discussion, but you will be muted and in listening mode only. When the item of interest comes up, dial star 3 to be added to the speaker line. Best practices are to call from a quiet location, speak clearly and slowly and turn down your television or radio. You can submit Public Comment in any of the following ways. Extre email myself, the committee clerk. It will be forwarded to the supervisors and included as part of the official file. Finally, items acted upon today are expected to appear on the board of supervisors agenda on august 11, unless otherwise stated. Supervisor fewer thank you very much. Madame clerk, can you call item number 1. Item 1, resolution approving and authorizing the director of the Mayors Office of housing to execute documents relating to loans for the acquisition, rehabilitation or permanent financing of 270 turk street pursuant to the Small Site Program, preservation and seismic safety, the Downtown Neighborhood Preservation Fund and the Educational Revenue Augmentation Fund not to exceed 31. 7 million. Members of the public who wish to provide Public Comment on this item should call 14156550001, 146 812 0226, and then press pound twice. If you have not done so, press star 3 to line up to speak. Please wait until the system indicates you have been unmuted and you may begin your comments. Supervisor fewer thank you very much. Today we have with us m. O. C. D. And amy chan is here available for questions. Caroline, the floor is yours. Great. Good morning, chair fewer and supervisors. Im from the Mayors Office of Housing Community development and i work specifically on our acquisition and preservation team. Before you is a request to authorize m. O. C. D. To provide up to 31. 8 million in permanent financing for 270 turk street. The project involved preservation of an 86unit building in the tenderloin that houses primarily lowincome individuals. 276 turk street comes to us through the Housing Accelerator Fund which provided the bridge financing required to take the building off the market quickly and prevent the displacement of the lowincome residents. The building was previously owned and operated by veritas and we consider a significant win that the project will now be permanent Affordable Housing, given that the majority of residents are folks who work in the Service Industry downtown, who are feeling the negative impacts of covid, which is even more important now than ever that this building be stabilized. Mocd financing will pay off the acquisition and rehabilitation loan provided by the fund and cover other permanent financing costs. As described in detail in the b. L. A. Report, were requesting amounts that allow the project to close financing under two possible scenarios. The scenario described as scenario a in the b. L. A. Report assumes to the project centers into enters into a 20year contract so fund 24 stepup housing units. Stepup housing is for folks transitioning from a permanent housing scenario to more independent living. And then the remaining units in the building, so the remaining units other than those 24 units, will be leased. In that scenario, the building wide average is 53 ami. In scenario a, the per unit subsidy is 196,000, which is well below our average acquisition and preservation project. Scenario b under this all units will be leased up through dahlia, similar to our standard acquisition and preservation execution small sites. And in this scenario, the project achieves a building wide average of approximately 65 ami. The city subsidy in this scenario is 231,000 per unit which is also below our average for acquisition and preservation projects and below term sheet. We are working toward the preservation of the project as described in scenario a, so assuming 24 units in contract with h. S. H. , but weve included scenario b in the unlikely scenario that the h. S. H. Contract will not be executed. It has not been executed yet. It really is a timing issue, because the existing bridge financing carries significant interest, we want to make sure that we can convert this project into permanent financing as quickly as possible. And right now the schedule for the anticipated closing is early october of this year. We are requesting two changes to the resolution before you. First, mocd is in support of the b. L. A. Recommendation to correct the upto amount from 3. 31. 78 million to 31. 87 million, which was an unfortunate error in the resolution. The project financing and loan documents are reflective of that 3. 87 million amount. Second, we are requesting clarifying language on the sources of funding where the resolution refers to Small Site Program funding, we request replacing with acquisition Preservation Funding. Since this funding is not a traditional small site, its 86 units, its a big site, were not going to be utilizing fiscal year 1819 eraf funding that the supervisor advocated for. We wanted to clarify that turk is using acquisition and Preservation Funding that is not restricted to small sites only and we appreciate supervisor fewer requesting this distinction. Lastly, we are in support of the recommendation from the b. L. A. That mocd enter into an option to purchase for this project. It is a significant investment in city financing and we agree with their assessment that we should execute loan documents that provide an option for the city to purchase should the building be sold in the future. We have shared a red line of the amendments with the city and clerk and im happy to answer any questions about the project. So are the tenderloin development corporation, the project sponsors. Thank you. Supervisor fewer thank you very much. Could we have the b. L. A. Report, please. Good morning, chair fewer, members of the committee, Severin Campbell from the b. L. A. Repeat of what the presentation said, this resolution approves the loan of 31. 9 million to the 270 turk llc which is affiliate of the tenderloin development corporation. It would be used to repay a loan from the Housing Accelerator Fund and other project costs. Page 5 of our report summarizes the loan sources. That 12 million would come from the preservation safety fund. With a balance of 20 million that comes from either the acquisition and Preservation Fund or the Downtown Neighborhood Preservation Fund. Page 6 of our report, sort of again gives a little more detail of the two different options for the loan. Approximately 29 million, depending on whether subsidy is available for from the department of homelessness and Supportive Housing. We consider approval of the proposed resolution to be a policy matter for the board of supervisors because the use of the acquisition and preservation or Neighborhood Preservation Program fund have not been determined and because the subsidy from the department of homelessness and Supportive Housing are not yet finalized. Our recommendation is to state the correct amount of the loan, 31. 87 million and to amend the resolution to request the Mayors Office of housing and Community Development executive director to provide for the action of the city to purchase 270 turk street at a future date. We consider approval to be a policy matter for the board of supervisors and im available for questions. Supervisor fewer thank you very much. Any comments or questions from my colleagues . Seeing none, madame clerk oh, supervisor mandelman. Supervisor mandelman i want to understand a little bit better the change that has been made around using eraf small sites to the acquisition and Preservation Fund. What is the acquisition and Preservation Fund that is not small site . It encompasses our anything that doesnt fit that 25 25 and below unit count. So it mirrors the same Program Guidelines as the small sites, but we were making the distinction and changing because we want it clear that the funding for 270 turk is not examining from a pot of coming from a pot of funds that is specific to small site. 1819 eraf fund which were intended for sort of the more traditional small sites which are 5 to 25 units. Supervisor mandelman are we establishing a distinction that not exist before . Supervisor fewer if i may step in. In the resolution, we do call out for specific sources that are would be used for acquisition preservation. And that is pass program, the downtown Preservation Fund and eraf fund. What caroline wants to make a distinction of today is that eraf, 1819 funds were specifically intended for the small sites in a traditional sense. That was with advocacy from supervisor fewer, so we want to make sure if were talking about eraf, were talking about fiscal year 1920. And when were talking about this project, its acquisition preservation and these sources would be three sources called out in the resolution. Hopefully that answers your question. Supervisor mandelman this is an 86unit. I appreciate i appreciate making that distinction. I think there are a lot of there are several districts, supervisor fewers is certainly one, a little bit my district as well, where opportunities for doing Affordable Housing are very limited and so we have been hoping that more focus on some of the smaller buildings might be one path to creating more Affordable Housing or preserving more housing that has functioned as Affordable Housing but hasnt been regulated. And so im grateful for that. I also think that there is tremendous need for funding to acquire larger buildings that are at risk, you know, not at risk, but are on the private market and could be brought into public or nonprofit ownership and so i think we i guess not at this moment, given where we are with the budget, but we need more of both. So anyway, i do want to thank supervisor fewer or chair fewer for ensuring that this pot of money, that i think we all intended to be used for these smaller projects remains. And i think we need to rededicate ourselves to ensuring that we have funding for larger projects that might be in the 50 building that probably on a perdoor basis actually make more sense financially, but dont necessarily achieve our equity goals. Okay. Thanks, everybody. Ill get of the way. Supervisor fewer thank you, supervisor mandelman. I had the same questions when i first saw in the legislation that one of the sources was the small site funding. But also with the preservation and acquisition fund, we could use that money to purchase traditional small sites also. So it doesnt prohibit us from small sites, however, the original intent of that pot of money in the 201819 eraf money was actually specifically for the traditional small site. So i think i think its brought up a lot of questions around how did this project which is 86 units get in on the small sites list. You know, we were provided a list of projects in the queue for small site funding and this project was in the queue for small site funding. And so and really small sites is defined between 5 and 25 units and im just wondering, how are the funds delineated within mohcd . I mean, i wouldnt think that there would be a huge pot of money, all the money is just mixed up together and we say im assuming that there are specific pots of money for specific projects. And so maybe amy chang can answer that and how are funds delineated with mohcd . Sure. And so i think maybe to the heart of the question, in terms of the two fiscal year eraf funding, 1819 which has called for traditional small sites. And then 1920 which came through, where you helped to create the Preservation Fund for future eraf. And that can go more broadly toward preservation. We do account for those funds separately. And so they sit in separate funds and theyre tracked separately and we Program Projects with specific sources of funds based on the restrictions of those funds. So we are tracking them that way. Supervisor fewer then why was i given a list of projects in the queue for smallsite funding and this was in the list with 86unit project was listed . So its confusing as you can see. They said these are the ones in the queue and then one of them was an 86unit building. How do we know the other ones in the queue arent 86unit buildings . I would say two things. One, i think as sort of offhand because small sites has been so popular, we talk about preservation work offhand, shorthand, small sites. Just any kind of preservation. So i think that was a delineation we needed now were clear we need to make that kind of distinction, whereas i think before, any kind of rentcontrolled site, regardless of the size of the project and typically weve been doing within the 5 to 25 units type of acquisition. Weve been calling it small site. We have a Small Site Program with small site guidelines. So i think that would probably just a matter of habit. Your statement about this being the only project on that list and all of the other projects. Continue to be in line with the Small Sites Program of 525 units. So that continues to be our focus and priority. Supervisor fewer great. Thanks. You know and going back to what supervisor mandelman said, i understand that when these opportunities come up, this is a great opportunity for us to purchase this building. I completely get it. However, we also just think in this economic downturn there is going to be great opportunities to purchase a lot of small sites, too. Just because, you know, renters and vacancies and people just kind of done with it. So ill okay. So lets open up for seeing no one else in the queue, lets open up for Public Comment. Madame clerk . Clerk operations is checking to see if there are callers in the queue. Operations, please let us know if there are callers ready. If you have not already done so, press star 3 to be added to the queue. For those on hold, continue to wait until the system indicates you have been unmuted. Are there any callers who wish to comment on item number 1 . Yes, i have one caller in the queue. Hello, actually im calling around the balboa project, so im not sure this is item number 1. Im sorry. Supervisor fewer that is item number 4 and 5. So wed love to hear from you later. Okay, i can come back. Supervisor fewer thank you very much. I will come back. Thank you. Supervisor fewer okay. Any other Public Comment . That completes the queue. Supervisor fewer okay. Thank you very much. Public comment is now closed. So, caroline, would you mind resending me the list of the number of units indicated the list resend the list to me of all the small sites in the queue and with the number of units indicated next to each project . Thank you very much. Yeah, will do. Supervisor fewer thank you very much. So before us, we have b. L. A. Recommendations that i would like to adopt. And so i think that and you have amendments also, is that correct, in the legislation that so are these b. L. A. Recommendations all in your amendments . Or are they the only the correction to the loan amount is in the amendments that we shared with the committee and the clerk today. The amendment to pursue an option to purchase is not. But we do have some recommended language from the City Attorney that we can read into the record. Supervisor fewer lets do this first. I think i would like to formally take a vote to adopt the recommendations from the b. L. A. Supervisor mandelman can staff just talk a little bit about how the option would work . Is the regulatory agreement like a 55year how long is the regulatory agreement . Its 75 years or the life of the project, is our standard acquisition and preservation restriction. Supervisor mandelman and then the option that entire time . It does. Essentially, another loan document that we enter into, if the owner were to sell in the future, we would have that first right to purchase. Supervisor mandelman and the price is fair market value . Exactly, yes. Supervisor fewer okay. Supervisor mandelman yep. Supervisor fewer okay. So the amendments that staff has brought forward will need to be continued, i think theyre substantive and well have to continue it until the september 2nd Committee Meeting. So first, madame clerk, should we adopt the recommendations from the b. L. A. And then approve the amendments . Clerk yes, madame chair. Supervisor fewer id like to make a motion to adopt the recommendations from

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