Sure, motion to approve the amendment and approve the underlying ordinance and thank the dp w4 keeping dpw for keeping this project going. Mr. Chair, i would like to request dpw provide us with the amended legislation before 9 00 tomorrow morning. Item 11, resolution approving modification 1 to a operating agreement between Signature Flight support corporation and the city to extend a lease by 5 years for an estimated minimum guarantee of approximately 71 million during the extension of the term. Okay, back to miss widener. Kathy widener with the San Francisco airport. The item before you seeks your approval for modification no. 1 to the airports existing lease and operating agreement with Signature Flight support for the operation and management of the airports executive terminal. Signature currently provides currently to sfos general aviation customers which includes retail fuel sales, Aircraft Maintenance as well as all management aspects of the Executive Air terminal building as well as two hangers. Modification no. 1 would extend the term of the existing agreement by 5 years beyond its current expiration in 2017 and require signature to further renovate the terminal building as well as two hangers. The existing agreement is the ruplt of a 2007 competitive request for proposals process and this extension will allow San Francisco airport to lock in our current minimum annual guarantee of 2. 5 million. That is adjusted annually by the Consumer Price index and this currently is one of the highest mags in the country. By way of comparison laguardia and San Francisco airport recently put theirs out to bit. The airport is interested in locking in our higher mag at this time. The extension of the term will also allow signature to amortize the costs they have associated with the terminal renovations as well as the construction of a new hanger that was completed just last month. The budget analyst recommends approval but i would be happy to answer any questions you might have. Thank you, why dont we move on to our budget Analyst Report first. Mr. Chairman, supervisor avalos, on page 62 of our report we have table 1 which shows signature has paid rent to the airport totaling 83,127,104 to september 30, 2014 and we also estimate that the total minimum annual guaranteed rent to be paid by signature to the airport from october 1st, 2014 through september 30, 2022, would be 109,586,378. We recommend you approve the resolution. Thank you, mr. Rose. Seeing no questions well open up to Public Comment. Anybody wish to comment on item 11 . Seeing none, Public Comment is closed. Motion to approve. Motion to approve the resolution, taken without objection. Item 12, resolution approving issuance of tax exempt exemptions by the California Statewide Community Development Authority in an aggregate in an amount not to exceed 26 million for property owned by California College of the arts or its affiliate. Id like to thank the committee for agreeing to hear the item today. We also have in attendance ken tanzer from the applicant California College of the arts if you have any questions. The city and county of San Francisco is a participating member of the California Statewide Community Development Authority, which is a joint powers authority. The authority is authorized to issue bonds, notes, certificates of participation or other forms of indebtedness including refunding previously issued debt. The federal tax law requires that the governing body of this jurisdiction in which the project is located approve the financing and the project after providing the opportunity for a duly noticed public hearing before the bonds can be issue order a tax exempt basis. Pursuant to tefra the city is required to conduct a public hearing and to approve the financing by the authority. This project is located in district 10 and legislation is being sponsored by supervisor cohen. The amount of the bonds is not to exceed 26 Million Dollars. There is a hearing notice published in the examiner on september 19th, 2014 and the hearing was held at the office of Public Finance on september 23rd. 2014. We did not receive any comments from members of the public through the public hearing process and the project itself is a refunding of series 2005 and 2007 california educational facilities authority, tefa, bonds to take advantage of substantially lower Interest Rates and keep debt savings. The proposed obligations will refund all the outstanding 18,295,000 of series 2005 bonds and a portion of the 2007 Revenue Bonds that are allocable to the college. The proceeds of those bond sales were used to finance or refinance improvement, capital maintenance located at 11 8th street in San Francisco and 5212 broadway in oakland and California College of the arts was founded in 1907 and has 21 undergraduate and graduate majors in fine arts, architecture and wrig. Writing. They have enrollment of 1,212 students and if you have any questions the applicant is here. Seeing no questions we will move on to public xhepbtd. Anybody wish to comment on this item . Seeing none, Public Comment is closed. Thank you for the presentation. We motion to approve, we can take that without objection. Item no. 14, ordinance appropriating approximately 8. 1 million from reserve to the department of building inspection for Site Development and conditional loan and also the project on van ness avenue. Thank you, madam clerk. inaudible thank you for being here. Yes, were queuing it up now. Chair, supervisor avalos, thank you for hearing this item this morning. The tiegts of this project as it has progressed over this year, we have used the term project chess and i want you to understand why. Its a lot more than this particular item before you. The potential acquisition of 1500 Mission Street really involves 13 Different Properties the city either owns or leases and 12 different departments and beyond that another half dozen more divisions affected by the space realignment that project chess delivers to the city. First id like to talk a little bit about the location of this property at issue before you today, so as you can see, its the corner of mission and van ness, currently occupied by goodwill industries. The property has now changed hands, it is in the hands of our developer partner as we move forward with this from whom we would be acquiring the asset. Its a little over two acres in size and ive given you previously in this past summer some background on this site so i wont spend a lot of time on that. We wanted to note some of the Civic Center Area locations that are impacted by this. This is a sense of those locations. Our assets in the Mission Corridor and our assets on Market Street used by the department of public works all consolidating to this location. So some brief history before we get into the particular item. As i mentioned, we were before you back in july with the specific negotiating agreement and letter of intent which was approved by the board. That committed the city to 1. 25 Million Dollars in initial costs related to the project. Related development then has acquired the site, as i mentioned, on october 21st and we are now engaged in ceqa with our environmental evaluation application submitted. So what does this project deliver . The main element it delivers is consolidation of services and most importantly constituent services in one location, the one stop permitting center is everything for this project and we have really focused our efforts on making sure that one stop permitting center is robust and covers the waterfront of potential permitting needs a constituent could have so they really do have just one place to go for their permitting needs. I want to take a quick look at what all that means. Right now we tend to take a constituent who might drop into the Mission Corridor for a permit, they might also have to be sent over to Market Street for some surveying needs or dpw input. They might have to go to 30 van ness to consult with architecture engineers. They might have to go to city hall if their paperwork is not in order or there may be a receivable issue that we have to address. They might have to go to fox plaza if there is a dph element of permitting required so you get a sense of what were doing to our constituents right now with our current process. Project chess is intended to solve that. It also looks at our own processes for servicing our own employees from a department of Human Resources standpoint. So right now we have dhr located at 1 south van ness immediately adjacent to the subject site. We have a training facility, two training facilities, actually, one at the corporate yard for dpw and another one a few blocks away on see sar chavez and we have retirement at the Market Street corridor at 1145 Market Street. This consolidates those services on to one block so it not only creates efficiencies for delivering services to the public but also to our own staff so we should see tremendous efficiencies as a result. It improves the portfolio. This is about creating a resilient asset, a sustainable asset, and frankly disposing of those assets that are not resilient nor sustainable. It results in new investment in the civic center, particularly were excited about the Transit Oriented Development opportunity at market and van ness, 30 van ness which with this project can be disposed of and redeveloped. That is subject to further board review and approval. It continues our migration from leasing to ownership. At the end of the day we would anticipate 4 leases being terminated and 100,000 square feet of leasehold interest being my greated to ownership. So while there is a substantial increase in the envelope from the Mission Corridor assets and 30 van ness, if you add all those up, this is another hundred thousand square feet in our own portfolio, concurrently we are exiting approximately 100,000 square feet from our leased portfolio and we believe thats a smart move for us. It stabilizes our costs, gives us greater control over our destiny into the next generation. Lastly it was important to us that we establish a Developer Partnership that could work for the city and of course work for the developer and in related we have that. Strong experience, great local knowledge and a national presence, frankly, so its a terrific resource for us to partner with. Quick overview of the project itself. On 1500 Mission Street were now at 463,300 gross square feet. We have done some planning since we were before you this summer and have now refined our presence there with the one stop permitting center being about threequarters of an acre of space, boardrooms so we get those out of the towers of the individual spaces into common areas. I think its fair to say that is a theme we have heard in every lease hold issue we have brought before you, where can we create common uses so were not duplicating those spaces that are often vacant during the day. So weve taken great pains to create a pretty robust Conference Center on the first level. Ill have a vision of that later in the slides here, then the more Traditional Office uses, 375,000 square feet, but high density use of those spaces. So we are anticipating approximately 1300 employees will reside in that 375,000 square feet. Thats more dense than 1 south van ness, for example, which is probably one of our denser portfolios as it is. The other part of this project is by related itself, the residential project, that remains similar to what was presented to you recently, 110 below market rate units on site. We have about an acre of first floor retail and restaurant space including im excited to say that our new vision shows a retention and preservation of portions of the cocacola building and the clock tower on mution street which we think affords a terrific restaurant opportunity that related well move forward on. Lead goal is leed gold is our requirement. We will meet and exceed the child care requirements, this will be the first public project brought to you that will not seek an exemption from the child care requirements, im proud to say that that is our intent here and we will hold to that. And as i mentioned we dispose of 3 assets. We will begin that process, assuming the board approves moving forward with the conditional agreement, in the First Quarter of 15 and then come back to the board for approval of disposal of those assets with lease backs and appropriate conditions in case there are delays so that were not in any kind of a difficult relative to the destination from which those employees will go. So to speak briefly about the muxed use development and related, i am pleased to introduce bill liddy of related. Thank you and chairman, supervisor avalos, im bill liddy, ceo of related california. Were particularly excited about the potential of this develop. Because, among other things, it brings together a lot of components that our company specializes in. D. Public private partnerships, mixed Income Housing and a mix of uses. Over the years weve developed a number of significant projects in the city including at 3rd and mission 13 years ago the paramount which is the largest mixed use project as well as affordable projects in mission bay. Were working on a mixed income apartment project on portrero hill, and we have 6 affordable projects in the city. Four are with the San Francisco Housing Authority acquisition rehabilitation of two sites in the Western Addition with tab err knack he will Community Development corporation, two sites in Hunters Point with John Stewart Company and San Francisco housing corporation, a 200 unit affordable project on third street in china bay that we hope to Start Construction on next march, and the largest of all, the redevelopment of the sunnydale housing site in vezation valley. Were very vested in San Francisco, were very accustomed to working with public agencies and on a personal note, which is of particular interest to me, i worked for the city in the 1980s with the Mayors Office of Public Housing under mayor feinstein and then under mayor avalos so i appreciate the potential this offers as a city office building. I see harvey rose that i worked with 25, 30 years ago and im pleased to see he is still here advising you. Thank you and we look forward to the opportunity to work with you further. Thank you. We all hope mr. Rose is here in 25 more years too. Mr. Rose, you have a standing invitation for the Ribbon Cutting when we open this up. So very briefly take you through what the project is beginning to look like as we move from massing to architecture and design. This is a sense of the project looking from mission and van ness, 1 south van ness in the background of this picture. You see this form that we are creating so we have connectivity between van ness and 11th, we also have a midblock space created to bring pedestrians into the property from mission. You can see the retention of the clock tower, thats the future restaurant site, and the permit center and Conference Areas which will hopefully enliven that street presence on van ness which is a bit dead right now. We want to do all the things that relateds residential project will do to enliven van ness, we want to play off that with adjoining access to the retail as well. So it really is a true mixed use development. This is a brief look at just a section through that form area and how it relates to the 18 story tower and the 6 story podium space. So we have created a building that provides us large footprint spaces which some departments have indicated they need and other areas in the tower that are smaller footprint spaces which other departments have indicated that they need. So whats before you today . Before you today is a conditional land disposition and acquisition agreement, a cldaa, because we love acronyms, or a conditional psa, purchase and sale agreement. Initially there is a fiscal commitment, an obligation, if you will, capped at 8,372,000. Thats our share of predevelopment as this moves forward from ceqa through 2016 when the ceqa project would be over. That is not an extension, it expense, it is an obligation. If there is some reason we either cant mitigate ceqa or some other event that leads to the termination of the agreement, then we would have an obligation to pay accrued expenses. Otherwise the project will move forward and i will outline that in some next steps in a moment. Total cost of the project is 327 million. When we were before you in july it was around 253 million. I will review with you some of those cost increases. The key here is this agreement before you caps our expense. If theres an increase in that amount, it requires board approval. The intent is the construction contract and there is a contract Management Agreement thats an exhibit to the conditional land disposition and acquisition agreement is going to be structured in a way that provides a guaranteed maximum price so we will have price control throughout this project. We also have gone much further in design where we were in july and this spring so we have a much higher confidence level in this figure as well. I would say that although its 700 a square foot to deliver this brand new class a building, thats still darned close to the range of Current Trading of existing buildings, class a buildings. So we think we are still competitive in that respect. And then the pro forma, which is included in the budget analysts report, indicates we are no worse than break even on this. This was never intended to be a huge financial savings for the city. Theres many intangible savings for the city in this project but our goal has always been to try to create a breakeven scenario that improves our portfolio from a resiliency and sustainability standpoint. So briefly whats ahead next. If this Purchase Agreement is endorsed by the board we will complete our ceqa process. Once the regulatory process is behind us and assuming that ceqa process does not have mitigation measures which are unacceptable to the city, in other words impacting our ability to use the office tower as we intended it, we will then return to the board in late 2016 to ratify the conditional land disposition acquisition agreement. At that same time we will present to you the authority for the debt necessary to take on the project and then we would acquire the property prior to the commencing of construction. That way we can, to put it simply, use our money which is a little cheaper than private money, to move forward with the Construction Costs. Project delivery remains end of 18early 19. We have built into the agreement and worked very closely with contract management division, local hire requirements and lbe participation rates. Those are not mays, they are shalls, so we are expecting Construction Trade hours at 30 percent, disadvantaged Construction Trade hours 15 percent apprentice hours 20 percent and lbe rates predevelopment 20 percent, Construction Costs 15 percent. We do have some exemptions that are included in the legislation before you and thats simply to acknowledge the fact that our developer partner, who will act as our construction agent, is related and we have selected them through a noncompetitive process. We have selected our architect and thats xom and we have selected our general contractor and theres swearington. Thats it for the exemptions, though. Everything else plays by the existing rules so it will look a lot like a public works project but we believe weve got a delivery mechanism here that will deliver it a little more efficiently than we otherwise might see. Some of the changes in the Construction Costs were related to some corn shell upgrades. We have a more resilient structure. We have seismic stability made because it will be an operating center for dpi and dpw fees, taxes, permits, all the things we pay to ourselves now as a developer, so that comes right back to us, have gone up by 21 million from the original pro forma and then theres a contingency thats included, we did not have a very robust contingency in the first goround. A project like this does not go forward without a great team. I want to give thanks to josh king who worked very hard putting this deal together for me. Indira taylor, we would not be here without their help in the attorneys office. They will continue to be a part of this team, we will continue to vet needs versus wants for space. That will be a continued tension point as it should be as we move forward to design and Space Planning and youll see more of that when we come back to you. Happy to answer any questions and we do not have any concerns about the suggested amendment and will of course provide the amended docs in a timely fashion. Thank you, mr. Updike, i want to thank you for being so thorough in your briefings and well in advance, i appreciate that from you and your team. To everyone involved, i know this is a big deal for our city and i cannot tell you how many comments i get about having to go to so many different buildings for permits and what have you and the consolidation, aside from the other things happening with this project is very exciting i think for our city. If no other questions mr. Rose why dont we go to your report. Mr. Chairman, supervisor avalos, i am actually shocked because i thought we had eliminated mr. Liddys position so this is a surprise to me. You can do that 25 years later. As shown in table 3 on page 71 of our report if the city decides to terminate the agreement prior to the citys acquisition to the site, the city could be liable to pay the developer up to 8,322,000 in damages. On page 73 of our report we note that in addition to the 326. 7 million project costs, the office of Public Finance notes there will be additional if furniture fixture and equipment moving and department of Technology Costs to complete and occupy a cityowned building that would result in total project cost of 338 million. The sources of funding would be the 1,250,000 which was previously appropriated by the board of supervisors and authorized an 83,100,000. On page 77 of our report we state that because the future commitment of significant city funds, because of that
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