looking more particularly at the submarket that is affected western so soem a. here you see a calculation for western soma $50.33 a square foot. this transaction is now at $38.50. for class a. all spaces at 45. so no matter what metric you choose, this is a favorable transaction in terms of the dollars per square foot that the city has negotiated at this location. in case you did not catch that on the chat. -- chart. sometimes they are small. overall rate is $59.01 citywide. we have an allowance provided by ownership here. in the amount of $24 million coming directly from the landlord. the actual cost to prepare the space for retirements needs will likely require another $1.1 million. that is addressed in the lease. we do have options on how we want to deal with that at the time that the final true up numbers of cost of tenant improvements are before us later this year, the next fiscal year in 14-15. we can pay that amount at once. we can choose to roll that into other debt services items that we may have before us at that time or we can have the landlord act essentially as a bank for us. the cost of money is a little bit more expensive and the agreement is negotiated at 8 percent but we at least have the ability to amortize that $1.1 million over the initial term. also provided back fill plans for the space that retirement would vacate from 30 van ness as we have additional space pressures at the department of public works and recs park and where they have also staffing increases and frankly no where to put them. this affords us the opportunity to put additional training space within the vacated third floor of van ness, it's a portion of the third floor. it's pretty well articulated in the budget analyst report. i'm pleased to be joined by the director as well as director maker. if you have any questions about the programs, we are here to answer any questions. >> thank you. why don't we go to mr. rose's report. can we go to your report, please? >> yes. mr. chairman and members of the committee. i would note on page 20 as mentioned and he's absolutely correct that there has been a significant increase in staffing. as a matter of fact on page 20 we point out that the staff has gone up 59.8 percent or 36.46 from 61.97. i would point out to the committee that the staff is there. there is not a question of more staff, of course the department will get additional staff in each year, but i do want to know that the staff, the big increase in staff has been in this space. and we are not questioning in fact, we are making a recommendation to approve this lease based on the recommendation that it's over crowded. i simply want to mention to the committee that the staff is there and have been operating this space. >> just on the staffing, do you have the staff that came on over the years that was between 1999 and the present that we gone from 62 to over a hundred. i see in your report to 7 staff. did the majority come on in the last couple of years or over the last 10 years and maybe 5 years ago we saw the highest level of staff. >> we have not made that analysis supervisors. i think the department can respond to that. on page 21 we point out that currently the employee's retirement system, $524,000 of annual rent at the city owned building at 30 van ness. in cable two, on page 21 of our report, the department will in accrues the s -- increase the office space by 60 percent. if you look at that table too, the annual rent is going up from $524, 317 to $1 million. finally the square footage is going from 24,000 to 79,000 square feet or a 60 percent increase. on page 22, regarding the tenant improvements as stated, there is about $3 million involved. about $2 million to be paid by the landlord and to be reimbursed by the city to the landlord. the landlord will do the work. it is our understanding in discussions with the department and the department at least has tentatively made a decision that they will pay that $1 million over 10 years at $162,000 a year which includes and 8 percent -- annual interest rate. if that resolution on how that's paid will result in a $1 million $620,000 which is five plus interest when you add the 8 percent -- annual interest rate. finally supervisors i would conclude that based on the recommendation of the real estate division we are recommending approval of this resolution. supervisor mark farrell: thank you mr. rose. supervisor avalos? >> supervisor john avalos: yes. regarding staffing changes when we see the rising increase, what year did that take place and i really want to hear justification for this expansion in square footage for office space. it seems like a very significant increase and one i don't think i'm quite ready to approve. >> good afternoon, supervisors, first i would like to change chair farrell and the committee for accommodating our schedule. we have a retirement board meeting at 2:00. we appreciate the opportunity for being here. first the increase in staffing in the area has been in the investment area, when we moved there in 1999 we were managing roughly over $10 billion, now we are managing over $18 billion. we had a management consultant come in and recommend a new structure for investment division which basically doubled and that was probably the single year where we had the highest increase in staff. and it was i think 6 fte specifically in the investment division. other than that it's been gradual as the city has, the voters have adopted programs, early retirement programs, those types of things. we have had to expand our capacity to serve the public during periods where there were layoffs. we had to increase the customer service because as lay off notices were mailed out to nearly or all employees, those employees were called to us. i think it's been, i don't recall, i have been with the retirement system since 1999. i don't recall a year where specifically there was a specific or unusual increase in staffing except for the division that i reference. >> if you come back you can provide for us how staffing has gradually changed by division since 1999 when these numbers were first seemed to have the start of the change we are talking about. that will be worthwhile having and you mentioned your investment division as being where you had the largest single growth by year, 6 fte's. it's interesting because this past year we have been working with retirement board or divestment from fossil fuels and the board of supervisors passed divestment and the entire board had given direction to the entire retirement board staff to provide information about engagement with companies and investing companies as well as report on how divestment perhaps could happen. that was the part that was supposed to provide for 60 days from the vote whiches in october. we are well past that time. if you have investment staff that have increased, they don't seem to carry out a real directive that is come from the retirement board to provide that information. i think that's something that has to get done as soon as possible. i actually feel that when it's come to the retirement board responding to some policy direction that the board has offered, there has been a lot of foot dragging on what's going on with that, though it's a different matter, you overall talk about having an office space that will help you increase your capacity at the department and it doesn't seem like that capacity is being used as effectively as it could be given the directive that you have been given by your board and not following through on that. i find it inappropriate to provide this space given that information that your board has offered. what are your responses to that? >> i can assure you that the retirement department is work on the assignment in october. we are working to expedite -- >> it seems that everyone else is aware of that. >> i'm not aware of the 60-day that it was brought back to the board. we publically stated it would be brought back last year. we are participating in the seminar held by the 350.org group and we are prepared to bring that forward when the report that was requested is ready. i would suggest that i agree, it's sort of a separate issue. we have out grown the space. we are focusing on the public space and the ability to more effectively counsel and educate our members and clearly what you are referencing what follow up back to the board is in progress and part of the investment staff work product that they are working on and it will be brought forward as soon as it's ready. >> i recognize it's a separate issue but we are talking about a lease for your department. if we are to approve an expansion that you carry out the will of your board. >> supervisor avalos again, i say that the critical need for space at this point is in the public area whenever we would have the ability to more effectively counsel and educate our employees. we are going to double this space to over 8,000 square feet for not the investment side but to provide better service to our clients. >> could you also tell me more about now this is like as the budget analysts pointed out on page 21 of it's report that we are seeing 60 percent of expansion of space. i understand over all that that is what you are saying is necessary in order to have adequate counseling area, adequate space where people can work without being interrupted and more privately what they need to. but, i'm not sure if this space that you have that you are asking for is really what's really needed. i would like to see if you can come back with another estimate that's lower than this. the one that could actually achieve greater cost savings for the city. what are your thoughts? >> supervisor avalos, we have worked with the real estate division to come up with what we believe is an appropriate amount of space. i will give you an example. we have tried to expand our education and counseling services over the year and for an add sfrar ministrator program which is a cost to participants. under this new lease we would be able to offer them that space to rent out for the customers to be able to operate with the side by side with the plan side of staff. the other issue we have tried to expand service for kiosk, we have no space for that at that location. as much as we can look forward to a move, we want to move into a space that will accommodate our continued growth and focus on customer service and empowering our clients. i will leave that, the space. >> you are in a current building where there are other city departments located, is that correct? >> that's right. >> i'm wondering what work was done to look at the current building? >> we've asked over the last 6 years if there is additional space that are even if it's apart from our main office floor. we added some space when the department of ethics left the building because we needed to expand the space for our deferred comp program. we have non-adjacent space on the same floor but we have prior to becoming the executive director we have approached for any available space for that building to expand our operations. we have over the last 5 years been limited into what we can roll out and what we feel is appropriate to roll out for our customers. >> okay. if no other comments, i would like to say, i don't know where you want to go with this, i would like to understand more and speak and have time to have additional discussions about this. i'm open to understanding why this relatively dramatic amount of space increase is necessary and you are talking about the programs that you are going to offer. we haven't had a chance to understand that. i would like to understand that from greater detail. as far as finance, this is more than doubling of rent. i understand it's the current market rate, but a massive increase per employee and maybe it's all necessary and valid and so forth. but from my perspective i would like to have more time to evaluate that. i'm happy, we are going to have to take public comment. if my colleagues have different thoughts, that's fine. supervisor john avalos: i would like to come visit the retirement board site. i have been there since 2008. i would like to check it out especially in light of the decision that we have before us. prior to approval of a lease. >> be happy to arrange that or you can just show up and say that you are here to see the operations and the public area. supervisor john avalos: i will have the staff reach out. >> if it wasn't for the brown act we can do a field trip. i'm sure we'll be down there in the next few weeks. colleagues any questions? okay, at this point we'll open it up for public comment. anyone wish to comment on no. 5? >> hello committee. my name is jed hotels man, representing 350 san francisco. we have been involved in the fossil fuel divestment. as you are looking at space this is neither in support or opposition, just ask that you pay particular attention to the public meeting space. the meeting space currently for the retirement board meetings is very cramped. usually with all of the staff and contractors who are attending there is very little room for the public whether retirees, city workers or advocates to participate in the meeting. so their definitely is a need for increased public space. i'm not sure at the retirement board meetings, i'm not sure how that is addressed in the proposed lease. i would ask that you take a look at that and currently the retirement board meetings are not recorded for public consumption like this meaning is being. i understand that there is cost incurred in doing that but you are doing the business of the public and it's important that they a veil themselves of the work. >> thank you very much. anyone else wish to comment? seeing none, public comment is closed. supervisor john avalos: if i can get a response on the actual meeting space for the building. i didn't hear from mr. -- >> thank you. we are essentially doubling the size of the largest meeting room from it's current lotion and adding additional meeting rooms on the three separate floors that they will occupy. there is an opportunity for small group, medium size and much larger group up to 60 that they can accommodate in a room to about 30 today. >> the room that can accommodate 60 will be for the retirement board meetings? >> yes. the room will be specifically designed to accommodate today's needs for transparency and transmission of board meetings and to hold them in a manner that is appropriate. essentially they are in a converted conference room with nothing particularly different than any other meeting room. that will help them with just their proceedings. >> will it be recorded or televised? >> i don't believe we have gotten that are down the road in terms of design, but certainly we have the ability and the conduits within the building to connect to city fiber so lots of opportunities exist. supervisor john avalos: great, thank you. mr. uptike. i would like to visit the current site and have a discussion with the director of the retirement board and with chuck which will be helpful. i would like to continue this item to the 29th of january. i think it's the next meeting. supervisor mark farrell: okay, we have a motion to continue this item to january 29th. chair make well thank you for being here as well. i look forward to talking to you about that in further detail. we'll accept that without opposition. madam clerk please go to item 1. the clerk: item 131193:agenda[sale of transferable development rights - war memorial complex - 301 and 401 van ness avenue]1311931.sponsors: mayor; chiu and wienerresolution authorizing the director of property to sell up to 1,100,000 gross square feet of transferable development rights tdrr from the war memorial complex, 301 and 401 van ness avenue, at fair market value; and to execute and record certificates of transfer and to take such additional actions as may be necessary to effectuate one or more tdr transfers in accordance with planning code, section 128 the clerk: sf 11234 >> supervisor mark farrell: okay, they very much, i believe mr. up dike is the speaker also on this item. >> thank you, chair, farrell. so we are returning after a brief discussion of this item at the last meetings. we were asked to discuss with stake holders our concerns about historic preservation issues and just particulars of the legislation in front of you. so i'm here to give you a brief report on that and we have some staff on that to support me addressing other particular questions you might have. so, what occurred since the last meeting we had a very productive discussion with the representative of the sf heritage foundation, mr. bueller and the planning staff. just to go over some of the issues raised at the call for the audience last week. there i believe in your package should be a letter from sf heritage. i would like to address briefly that and then we can throw it open to questions and we have the technical staff to assist you through this. essentially three request were made in that letter. i will try to summarize as best i can and perhaps mr. bueller can better articulate this. i will give it my best shot. one was to further describe the regulatory role of the planning department in this office in the legislation. our initial thinking on that is the regulatory role of planning is fairly well already described in the code and so we are not sure there is a lot of benefit putting in additional issues relative to regulations in what's essentially a proprietary decision the city is trying to make here in terms of being a seller of tdr, we have to be careful of mixing regulatory and proprietary role as a challenge. i'm happy to talk about how we might incorporate that or better incorporate that. then on a coordination question, in terms of the reporting requirements in the legislation for me and the director of real estate reporting back to the capital planning committee and to this body during any quarter when there is a tdr transaction, the request was that we enhance our coordination on that with planning and we certainly have every intention to do that and in fact one of the reasons of capital planning was added to the list of reporting because the district court of planning sits on the voting member on that body and enforces the collaboration with the coordination of the planning department because he's right there taking in the information and providing us as staff guidance on these issues and of course that capital planning committee that is ability to forward recommendations your way for consideration. then the other major issue was relative to future authorization of t dr and again in this amended legislation now before you, we have pursuant to the recommendation of the legislative budget analyst added in a milestone of 550,000 square foot of tdr wherein reauthorization will be required. certainly that opens the door to discuss any policy issues that are related to authorizing sale of tdr. we invite and welcome those comments and we would anticipate that process running through capital planning committee before reaching this body so we can take their concerns and issues and think them through and bring forward some recommendations to you. i think we are actually on the same page with the concerns noted by sf heritage but happy to continue that discussion here if there are particular maendz you would like to consider. >> thank you, supervisor mar? mar mar thank you, chair farrell and up dike. i also see a third request and i want to emphasize the role. i think there is a recommendation that at minimum that any known new tdr that there will be through historic research. i think that is one suggestion and