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tv   [untitled]    February 8, 2013 7:00am-7:30am PST

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funds for other -- that is other portions of civic need. i want to just walk through the next steps here. would be if you would endorse and find the fiscal feasibility and move forward. we do a lot more refining of the project. further project review including c-e-q-a, weild be coming forward with a proposed lease and transaction. * we'd we could start with construction next year, with occupancy in 2014. i'd like to quickly introduce eddie orton, let him speak a little more to what their interest and how they see this project moving forward and then i'm available for questions. i'd also mention that the budget analyst's report raised some good issues and we agree with the recommendations of term to put in to address many of the questions you've raised, how do we control costs, how do we make sure this meets historic standards. >> thank you. and then one other question i do have that i hope that orton
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will be able to address as well, we have spoken to a number of proposals and some of them have actually left san francisco, especially ones that would utilize this kind of space. they left to go across the bay. not necessarily because it was cheaper there, but because they found out that the facilities were actually better suited to being flexible, being adaptable to what they needed and a lot of them were just newer facilities. and, so, i just wanted to understand what we're doing here is creating a shell and we're not really putting much else in there? i'm just wondering how competitive we would be across the bay. >> right, i'm going to let odi team answer that because how to meet the market needs and what the tenant needs is very much what we draw from our public-private partner. mr. eddie orton. >> good afternoon. answering that question, the --
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we deliver generation infrastructure so that industrial tenants can basically come in with their equipment and specific design, so they can manufacture efficiently. the design process is pretty simple. it's, you know, in/out in process. it's pretty much a very accepted way of approaching industrial space. and we have spent a lot of time looking at these buildings so that we can deliver that 20% [speaker not understood] infrastructure that will keep and attract users. does that answer your question? >> sure. >> i mean, specifically, i mean, we're talking about, you know, large quantities of power, large quantities of
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data, data moving capability, cleanliness, docks, driving doors. what attracts tenants is productivity. so, if somebody can come to a space and be productive, they'll obviously make more money. that's what attracts canxv. -- companies. that's what's driving the design, industrial productivity and that's what we do. >> the shell that is delivered would include the power sources, the electrical conduits, all the things that are necessary that large -- individuals or businesses who are looking for large space for production are also looking for, these are things that would be part of the shell that is delivered? >> exactly, the generic part we finish, lighting and things like that. and specific parts needed for individual businesses, then we'll come in the next level. >> thank you. >> just a follow-up question. if you could tell us orton's experience and history of doing
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-- looking at other properties and where you've done your work. >> sure. this project is sometimes charged as a 270,000 square foot project. in actuality, it really is seven separate projects, seven different types of building construction. so, going into that, one type would be similar to the office building. the first one we saw, the building 101, the l-shaped building at the corner of illinois and 20th, that's a concrete building. office building, rehab. probably the most really typical building that with just completed in oakland is a 10-story mid rise, 1440 broadway t. was well reported in the news because unfortunately right after we
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bought it, the [speaker not understood] destroyed the building and it's right there occupy oakland. and we've come back and built that. we had that building to its historic pinnacle and it's absolutely beautiful. our lead tenant in it is a company, well known company in the east bay called oaklandish. that is a design company. well known design company. so, the two office buildings, 101, 104, 114 broadway is very similar. we're right in the middle of a rehab in cincinnati, ohio, a brick building very similar to that one -- to -- this is also going office light industrial. i would say 1440 would be the best nearby example of the 101 and 104-type building. the two buildings that are subject to the advisory of imminent collapse which is 113
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and 114, that would probably be like the last slide, which was the 4-point project in richmond, california. that building won the national merit award, which is one of the highest architectural awards in the world. and that building was probably in slightly worse shape than 113, 114 is currently. very large space, high ceilings, state of near collapse. it will be a very similar project. totally, we've done about 73 projects, totaling about 20 million square feet. so, this one at 271,000 would be about, you know, 1 to 2% of our portfolio. >> thank you. >> we would obviously be thrilled if you had the time to tour and show you, really,
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there is another building, 14, the metal building, we just completed a project in berkeley that's virtually identical to that building. so, we do have the experience. and each building type. i would repeat this is a very difficult project. i mean, that's the bad news. good news is what we do is difficult projects. but i agree, endorse what you said at the beginning, which was this is a tremendous asset to the city and we're very appreciative of the opportunity to develop it. >> thank you. >> thank you. why don't we go to the budget analyst report. >> madam chair and supervisor avalos, we have our conclusions shown on page 18 of our report. and we state that based on the term sheet provisions, the budget and legislative analyst estimates that the port would receive revenues over the
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66-year term future ground lease or an estimated value of $15.7 million. we also report that the estimated net present value of rent revenues in the port would be less than 15.7 million if project costs are higher or tenant rents are lower than estimated in the preliminary pro forma financial analysis. orton is currently conducting a detailed evaluation of the 20th street historic building site and developing a more refined sign plan and cost estimate of the project. the proposed term sheet requires orton to submit a complete underwriting package with detailed estimates of the total project cost, financing costs and expected lease rates to the port to be used for negotiated a lease disposition and development agreement. we also report that the pro posetioned 20th street historic building project would yield annual estimated tax and fee
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revenues to the city of an estimated $9 19,000, generate an estimated 500 new permanent jobs, provide an estimated 58.5 million in construction expenditures. be financed by $14 million in [speaker not understood] developer equity by orton with a 14% return in investor equity. 1.5 million in available port funds and 43 million in federal historic preservation tax credits and loans to be obtained by the developer. would incur no [speaker not understood] maintenance and operating costs to the port or the city and would incur no debt load to the port or to the city. we do find that hadth proposed development to be fiscally feasible under chapter 29 of the city's administrative code. we do have some recommendations on page 19 of our report. as i understand t madam chair and supervisor avalos, these recommendations are included in an amended piece of legislation
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that you have received. our recommendations are to amend the proposed resolution to require that the 20th street historic building project meet [speaker not understood] interior standards. [speaker not understood], that you amend the proposed resolution to require that the port report to the board of supervisors when the board considers the project's ground lease. on the revised cost estimates, project financing and pro forma financial analysis as well as the port's procedures to control and verify costs. would also recommend that you amend the proposed resolution requesting any reopeners to the proposed ground lease, [speaker not understood] changes the financial terms of the agreement subject to board of supervisors approval and we recommend that you approve the resolution as amended. >> thank you very much, mr. rose. and just to further elaborate on the recommendations, the three that are recommended by the budget analyst, looks like the department is in agreement with that and actually has
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provided language to that effect. and i do want to read those items or that language into the record. what it looks like is an amendment on page 4 beginning on line 16 would read, further resolve that any ground lease negotiated between port and [speaker not understood] 20th street buildings require comply with the interior standard, [speaker not understood] rehabilitation of the 20th street historic buildings. and be it further resolved that at the time the board of supervisors considers whether to approve a ground lease for the project pursuant to charter section 9.1 18c, port report back to the board of supervisors on the project's one, revised cost estimates, project financing and pro forma financial analysis, and two, port's procedures to control and verify project costs and be it further resolved that if the board of supervisors approves a ground lease for the project, any change to the financial terms of such ground lease after such approval, that materially decrease the benefits or otherwise materially increase obligations or liabilities of the city or
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port is subject to prior approval of the board of supervisors. so, that would be the amendment that is proposed. that dozen corporate the budget analyst's recommendations. so, just one final question from me before we do take public comment. in terms of the financial liabilities from the port's perspective, what we're seeing potentially is only, if i can itemize t the $1.5 million that is currently already in the port budget. that is one piece of it. two is a grant that might be coming in the future of about 250,000. this is a grant that you mentioned that may be coming, right? >> [speaker not understood] if we do this project. >> so, potentially the grant funding of 250, not port funding. finally the other financial component that the port would contribute is basically a rent c. looks like probably is it a 66-year lease on that site where the rent credit would help pay for the expenses. and is that sort of the totality of all of the financial liabilities from the
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port? >> we're not explicitly calculating it as a rent credit, but we're foregoing any rent because there isn't any rental value for the initial term. >> right. so, it's basically the rent that they would not have to pay for the first few years to utilize the site. >> right. >> okay. thank you. why don't we go to public comment on this item. do we have members of the public who would like to speak on item number 7? [singing] oh, budget committee, i guess you're wondering how i knew to keep these buildings old and not make them new and you took me by surprise what i see from these feasibility ayes and then i heard it through the city grapevine
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* i know these tears i can't hold inside is but and then i do want the price to be right you could have told me your city selves that you had so much wealth instead, i heard it through the city grapevine. oh, and i wish i had a dime instead, i heard it through the city grapevine >> thank you very much. any other pers? good afternoon, members of the committee. my name is mike bueler, i'm executive director of san francisco architectural heritage. i'm also a member of the central waterfront advisory group and participated on the revie panel that selected orton as the developer for this project. i'll be brief in my comments. obviously the 20th street historic building are among the city's most significant
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historic buildings, particularly industrial buildings. they're also in equally urgent need of repairing stabilization. it is with tremendous excitement that the preservation community anticipates this project after so many years of self-starts trying to find a developer and a concept for this to move forward. heritage looks forward to working with the developer closely as more detailed plans are developed for the retrofit of these buildings. and today we just urge you to approve and endorse the term sheets so the work can proceed as expeditiously as possible. thank you. >> thank you. good afternoon, supervisors. my name is karin woods. i am co-chair of the port central waterfront advisory group which started out more
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than ten years ago as the pier 70 advisory group when we were struggling to figure out how to keep these fabulous buildings from falling down. it's been a long process. we're very excited about the proposal that orton's brought to the table. we urge you strongly to move this forward so that they can get to work. it's actually quite strange to see these guys here in suits because usually they've got their sleeves rolled up, they're wearing their hard hats. they really want to get started because these buildings are very, very vulnerable. and we urge you to move this forward as soon as possible so they can get to work. thank you. >> thank you. are there other speakers who wish to speak on item number 7? seeing none, public comment is closed. just a question to our city attorney with regards to the
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resolved clauses that would be added. would that require continuing this? >> it would not, those are nonsubstantive matters. >> thank you very much. on this item we do have those amendments to be made. just to the project itself. i have to say that this is actually a very exciting project, both myself and supervisor avalos have actually visited the site andstein what it looks like at the moment and can imagine what it can become in the future. and, so, it really is a very exciting project to see. in terms of the actual deal, i am very excited to see that we're going to be able to take $106 million off of the books in terms of the port's capital needs for a facility that we probably don't have another way to pay for at the moment. and that for that exchange, the port has to put in the $1 andth 5 million in addition to rent that we are foregoing. but we're actually not collecting any rent at all at the moment anyhow on that facility. this is a good start moving
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forward. i'm glad we're put thing space to use. i love we're going to see exciting changes at the park and be able to see that transform and see this space actually utilized by the businesses that want to stay in san francisco. so, i think this is a l really a wonderful project to see going forward. so, i will be supporting this item. in terms of the $58 million, i am a little bit weary about that number. and i guess i don't have very much to be weary about yet, but i'm hoping when it does come back yet with the lease approval we will have title numbers and be sure we've done our due diligence on it. at the same time, if it is that number, it sounds like a very good deal to move forward just because we're going to be able to put that space into use, something we're not able to do at the moment. and, so, i would be very happy to support that item. so, do we have a motion to accept the recommended changes that the budget analyst suggested and was read into the record and then to send the item forward with recommendation as amended? okay, we have that motion and we'll do that without objection. thank you.
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do we have any other items before us? >> that completes the agenda. >> thank you. we are adjourned. [adjourned]
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>> thank you. good afternoon and welcome to the friday january 25, 2013 meeting of the san francisco local agency formation commission. my name is david employ campos and i am chair of the commission. we welcome everyone to the meeting and wish everyone who is watching a very happy new year. madam clerk if you would call roll. >> president campos. >> present. >> commissioner avalos. >> commissioner schmeltzer. absent. >> commissioner mar. commissioner pimentel. >> if i may i know with
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commissioner pimentel there is an illness and if we could excuse here. >> okay. mr. chair, we have a quorum. >> before we start we would like to thank the clerk linda wong and acknowledge the sfgtv staff for covering the meeting today. madam clerk if you can please call item two. >> item two is election of the chairperson and the vice-chairperson for 2013. >> okay colleagues this is something that we do every year at the local agency formation commission, and i've had the honor of serving in the capacity of chair of lafco for the last two years following the tenure of then commissioner that was before me and it has been an
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exciting time for me, a fruitful two years, and the most important thing of course that happened in the last two years is the fact that we got approval of the community choice aggregation program by the board of supervisors, and i want to thank the interim executive officer as well as lafco staff, ms. miller and mr. fried for the great work that they have done but i do believe in the positions, in these rules that it's important for other members of the commission to play a leadership role and one of the great things about this body is that we have a lot of talent and i've had the honor of working with vice chair avalos in the last two years and it's been an honor and pleasure to serve with him, and i think that
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he has all of the qualities, expertise, temperament, ability to do a great job as chair of this body, so with that in mind it is my pleasure and honor to nominate commissioner john avalos to be the next chairperson. >> and i second that. >> all right. are there any other nominations? commissioner avalos. >> thank you. and thank you for your confidence and i will accept the nomination and i would like to acknowledge your great work on the committee, on lafco and the commission, especially the approve of cleanpower sf which i see is one of the most landmark pieces of work, legislation that we have done in recent years at the board and at lafco together, and i would want to count on your work and expertise and
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your knowledge and serving as vice chair of this commission will be very helpful for me and the commission overall to make sure we have good continuity of your work so i would like to nominate you for vice chair. >> great. so we have a nomination -- >>i will second that one too. >> seconded by commissioner mar and i am proud to accept the nomination commissioner avalos, and it would be my pleasure and honor to serve with you as vice chair of this commission, and i am certainly committed to helping in any capacity as you as the chair if elected believe is appropriate, so i want to say they am honored to serve. so we have colleagues a nomination of commissioner john avalos to be the next chairperson of local
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agency formation commission, and a nomination of myself to serve as vice chair, so unless there is any comment why don't we before we take the action open it up to public comment. if there any member of the approximately that would like to speak. >> good afternoon. you have to pardon my voice. i am getting back over the nasty cold that has been going around so i won't speak long but thanks to all three of you and lafco for the work you have done over the years to get cleanpower sf moving forward because it's now getting to the stage where it is going to more and more become a green jobs and a local jobs program. it's really fitting supervisor avalos is being made the chair of the commission.
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thanks. >> thank you. any other member of the public who would like to speak? seeing none public comment is closed. so colleagues can we take those two nominations without objection? >> without objection. congratulations to chairperson avalos and the gavel is yours. >> thank you very much and it's an honor to have your support and look forward to our work together over the next year at least and beyond. let's call the next item please. >> item three is approval of the lafco minutes from the december seven, 2012 welfare regular meeting. >> colleagues we have attachment with our lafco minutes. those are up for approval and before we make any comments on this item we will open it up for
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public comment on our lafco minutes. seeing no one come forward we will close public comment, and colleagues can we have a motion. >> i move approval of the minutes. >> okay. >> second. >> and we can take that without objection. minutes approved. item three -- four please. >> item four community choice aggregation activities report and update on cleanpower sf and proceeding at the california public utilities commission. >> very good. we have two presenters for this item. first is barbara hale. >> thank you mr. chairman. barbara hale assistant general manager for power at sfpuc so i wanted to update you on three items, our overall clean timeline, our recent activities at the public utilities commission and activities at the california public utilities
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commission so with respect to the time line. at this point we're on track. by this date we should have completed presentations at our commission on the presentation by local power on their proposed business case and financial deliverables, and have presented before the commission materials to start to get them familiar with the not to exceed rate proposal which we have been discussing with the board. those activities went forward on tuesday and i will talk about that and we might see slippage with individual elements but even with they am seeing cleanpower sf given to the customers as our published calendar projected the slippage
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is in part because we're still getting the rate fairness board comfortable with the not to exceed rates with how the mix of resources we rely on for our cleanpower sf program influences the overall all cost of the services and their the rates. with the impact of fully recovering the 13 million of hetch hetchy revenues that we're dedicating to this program and providing the security necessary for this program consistent with the board of supervisors' action. the pace of that recovery also has an impact on rates so we have been spending time with the board on those issues, so our adoption of the not to exceed rates at our commission may slip a little bit. we're also working -- what


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