San Francisco Redevelopment Agency

RESOLUTION NO. 106-2008

AUTHORIZING A SECOND AMENDMENT TO THE OWNER PARTICIPATION AGREEMENT WITH 766 HARRISON, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, TO MODIFY THE TERMS OF THE AGREEMENT TO ALLOW THE OWNER TO SELL OR RENT THE UNITS AND TO MODIFY THE TERMS GOVERNING THE BELOW-MARKET RATE UNITS IN THE PROJECT, 766 HARRISON STREET; YERBA BUENA CENTER REDEVELOPMENT PROJECT AREA

BASIS FOR RESOLUTION

1.   The Development, which consists exclusively of mini-studios, including ten Below-Market-Rate units (“BMR”), has since been conveyed to 766 Harrison LLC, a California limited liability company (the “Owner”).

2.         The Owner has developed the new eight-story rental project with 98 mini-studios, 4,500 square feet of retail, a 581-square-foot side yard, 4,370 square feet of common resident open space on a roof deck, and required parking.  The mini-studios are small (the average size is 273 square feet), similar to a Single-Room-Occupancy (“SRO”) unit.  SRO units are permitted on this Site because it falls within the Yerba Buena Center Service/Secondary Office Use District ("SSO/YBC District") under the Yerba Buena Center Redevelopment Plan (the “Plan”).  In the SSO/YBC District, the Plan defers to the City Planning Code, which permits SRO units.  Under the City Planning Code, the maximum size of an SRO unit is 350 square feet.

3.         When the OPA was approved, the Owner was subject to the Agency’s Housing Participation Policy (“AHPP”) that was in place at that time.  Under the AHPP at that time, a minimum of 10% (or ten units) of the total number of rental units in the Development were to be affordable to households earning up to 60% of Area Median Income (“AMI”).  The ten BMR units were distributed throughout floors 2-8 of the Development.

1.   In May 2008, the Owner notified staff that, due to changing market conditions, it would like greater flexibility to initially offer the Development’s units as either for-sale or rental units.  After extensive discussions, Agency staff and the Owner proposed a Second Amendment to the OPA to allow this greater flexibility.

1.   Under the existing OPA, if a conversion to condominiums occurred, the renters in the ten affordable rental units would get first preference to purchase their units at the same affordability level (i.e., 60% of AMI).

6.         The Owner has agreed that the BMR units will be priced, as either for-sale or rental condominiums, at a much deeper level of affordability than previously agreed, consistent with the Agency’s recently revised AHPP.  In exchange, the number of BMR units will be reduced from ten to seven and will be located on floors 2-4 of the Development.  Additionally, the BMR and Market-Rate units will have the same finishes.

7.         The proposed Second Amendment provides for the following:

• The Owner agrees that it will determine whether to open the Development on a for-sale or rental basis, including the BMR units, within three (3) months of the date of the adoption of the Second Amendment by the Agency Commission;

• If the Owner initially elects to sell the market rate dwelling units, the Owner will offer the BMR units as first-time homeownership condominiums, to households earning up to 60% of AMI (priced at 55% of AMI or approximately $100,000);

• Any BMR units remaining unsold after a minimum of a six-month good faith effort from Owner following the lottery and selection process may be offered for sale to households earning up to 80% of AMI without an increase in pricing, or may be rented to eligible households at the 40% AMI level;

• If the Owner initially elects to rent the BMR units, the BMR units will be offered to households earning up to 40% of AMI (currently $26,400 for a single person household) and a BMR unit’s monthly affordable rent will be 1/12^th of 30% of, 40% of AMI which for a  Household Size of one person is currently $660;

• In the future, the Owner has the option to convert the for-rent BMR units to for-sale BMR units.

• If the Owner initially elects to rent the BMR units and later convert them to for-sale units, the Affordable Purchase Price for the tenant-occupied BMR units shall be the price which is affordable to a purchaser earning up to 40% of AMI, (priced at 35% AMI).  Any unoccupied BMR unit may be offered to households earning up to 60% of AMI (priced at 55%).

• Pursuant to a Right of First Refusal, an existing tenant may purchase  their occupied unit, and the Owner shall provide the existing tenant with a credit in the amount of five percent (5%) of the entire purchase price for the unit, which shall be in the form of a credit against the purchase price down payment; and,

• For any existing tenant that does not elect to purchase the occupied unit, Owner shall reimburse such existing tenant for moving expenses in the amount of five percent (5%) of the purchase price set by Owner for such existing tenant’s unit.

1. for-sale mini-studios and the terms governing the BMR units would be modified.  Staff finds the proposed changes would not result in physical changes to the building, and therefore, would not change the scope of the project analyzed in the Negative Declaration.

RESOLUTION

ACCORDINGLY, IT IS RESOLVED by the Redevelopment Agency of the City and County of San Francisco that the Executive Director is authorized to execute a Second Amendment to the Owner Participation Agreement and related documents with 766 Harrison LLC, a California limited liability company, to modify the terms of the Agreement to allow the Owner to sell or rent the units and to modify the terms governing the below market-rate units in a 98-unit, residential project at 766 Harrison Street, in the Yerba Buena Center Redevelopment Project Area, substantially in the form lodged with the Agency General Counsel.

APPROVED AS TO FORM:

_________________________

James B. Morales

Agency General Counsel

118-69908-002                                                            Agenda Item No. 4 ( b )

                                                                                    Meeting of October 21, 2008

MEMORANDUM

TO:                 Agency Commissioners

FROM:           Fred Blackwell, Executive Director

SUBJECT:    Authorizing a First Amendment to the Predevelopment Loan Agreement with Michael Simmons Property Development, Inc., a California corporation, to amend the project budget and to allow the Executive Director to approve future project budget line-item transfers, in conjunction with the predevelopment of approximately 32 units for low-and moderate-income, first-time homebuyers at1345 Turk Street; Western Addition Redevelopment Project Area A-2

DISCUSSION

On April 17, 2007, the Agency Commission authorized the Executive Director to negotiate and execute an Exclusive Negotiations Agreement (“ENA”) with the Michael Simmons Property Development, Inc. (“MSPDI” or “Developer”) to develop 32 units of low and moderate income first-time ownership units on the vacant lot adjacent to the historic Muni Substation building (the “Site” or “1345 Turk Street”).  These units will be developed and sold to qualified first time buyers with priority consideration for Certificate of Preference holders (“Certificate Holders”). 

The Agency Commission approved the Developer’s request for predevelopment funding on December 18, 2007.  These predevelopment funds cover essential pre-construction costs such as architectural, geotechnical, engineering, surveying consultant services, building permit fees, and insurance expenses.  As the predevelopment phase has progressed, the Developer has identified budget line-items that were under- and over-estimated in its original predevelopment budget.  To bring the predevelopment budget in line with the actual needs of the project, the Commission is requested to authorize an amended predevelopment budget and to authorize the Executive Director to make future line-item adjustments so long as they are within the Commission’s overall budget authorization.

Agency approval of the First Amendment to the Predevelopment Loan Agreement is exempt from the California Environmental Quality Act (“CEQA”), pursuant to CEQA Guidelines Sections 15262 and 15061(b)(3).  The First Amendment funds the completion of technical services for feasibility and planning studies that will not directly have a significant effect on the environment, and developer carrying and financing costs, which are funding activities that will not cause a change of the physical environment.  Subsequent actions of the Agency are required for development to proceed.

Staff recommends authorizing a First Amendment to Predevelopment Loan Agreement to amend the project budget and authorize the Executive Director to approve future project budget line-item transfers in conjunction with the predevelopment of approximately 32 units for low-and moderate-income, first-time homebuyers at1345 Turk Street; Western Addition Redevelopment Project Area A-2; Citywide Tax Increment Housing.

(Originated by Michele Davis, Development Specialist)

Fred Blackwell

Executive Director

Attachment: December 18, 2007 Commission Memorandum

RESOLUTION NO. 121-2008

AUTHORIZING A FIRST AMENDMENT TO THE PREDEVELOPMENT LOAN AGREEMENT WITH MICHAEL SIMMONS PROPERTY DEVELOPMENT, INC., A CALIFORNIA CORPORATION, TO AMEND THE PROJECT BUDGET AND TO ALLOW THE EXECUTIVE DIRECTOR TO APPROVE FUTURE PROJECT BUDGET LINE-ITEM TRANSFERS, IN CONJUNCTION WITH THE PREDEVELOPMENT OF APPROXIMATELY 32 UNITS FOR LOW- AND MODERATE-INCOME, FIRST-TIME HOMEBUYERS AT 1345 TURK STREET; WESTERN ADDITION REDEVELOPMENT PROJECT AREA A-2;

BASIS FOR RESOLUTION

1. On February 11, 2003, the Agency Commission authorized an agreement with the City and County of San Francisco (“City”), a municipal corporation, for the acquisition and disposition of the real property located on a portion of Block 756, Lot 001 at 1345 Turk Street, San Francisco, California in the Western Addition Redevelopment Project Area A-2 (“Site”).

1. On April 22, 2003, the City’s Board of Supervisors approved the sale of the Site (and adjoining MUNI Substation) to the Redevelopment Agency of the City and County of San Francisco (“Agency”); approved the interdepartmental transfer of jurisdiction over 1345 Turk Street from the Municipal Agency to the City’s Arts Commission; and authorized the Director of Property to enter into an agreement for the sale of such real property for the development of affordable housing, arts and community uses, and other public beneficial uses.

1. On May 2, 2003, an Agreement for Sale of Real Estate was executed by and between the City as Seller and the Agency as Buyer for the sale and purchase of the Site.  Escrow on the Site closed on June 9, 2003.

1. On September 1, 2006, the Agency issued a Request for Proposals (“RFP”) for the development of affordable first-time homebuyer units for low- and moderate-income households.  The RFP sought high-quality proposals from experienced developers capable of building approximately 32 units on the Site.

1. Three proposals were received by the October 31, 2006 submission deadline.

1. On November 9, 2006, the Western Addition Citizens Advisory Committee (“WACAC”) approved the RFP selection process.

1. On January 12, 2007, the evaluation panel determined that the team of Michael Simmons Property Development, Inc. (“Developer”) earned the highest cumulative score.
2. At its meeting on April 17, 2007, the Agency Commission authorized the Agency Executive Director to negotiate and execute an exclusive negotiations agreement (“ENA”) with the Developer to pursue predevelopment of the project.

1. The ENA established a series of milestones during an exclusive negotiations period as a precursor to the Agency Commission’s consideration of a predevelopment loan agreement (“Predevelopment Loan Agreement”) and a subsequent disposition and development agreement.

1. At its meeting on November 8, 2007, the WACAC raised no objections to the Developer’s plan to seek $1,621,351 in predevelopment loan funds from the Agency.

1. At its meeting on November 16, 2007, the Citywide Affordable Housing Loan Committee reviewed and approved the Developer’s predevelopment loan request and recommended the Agency Commission’s authorization.

1. The requested funds in the amount of $1,621,351 are needed for site preparation, consultant costs, building permit fees and insurance costs critical to the construction and development of the Site.

1. On December 18, 2007, the Agency Commission authorized a predevelopment loan agreement in an amount not to exceed $1,621,351 to cover site preparation costs associated with development of the Site.

1. The Developer has requested a line-item modification to bring the estimated budget in line with the actual predevelopment needs of the project.

1. Agency staff requests that the Agency Commission authorize a first amendment to the Predevelopment Loan Agreement to allow the Executive Director to approve future project line-item adjustments as long as they are within the approved total budget amount.

1. Agency approval of the First Amendment to the Predevelopment Loan Agreement is exempt from the California Environmental Quality Act (“CEQA”), pursuant to CEQA Guidelines Sections 15262 and 15061(b)(3).  The First Amendment funds the completion of technical services for feasibility and planning studies that will not directly have a significant effect on the environment, and developer carrying and financing costs, which are funding activities that will not cause a change of the physical environment.  Subsequent actions of the Agency are required for development to proceed.

RESOLUTION

ACCORDINGLY, IT IS RESOLVED by the Redevelopment Agency of the City and County of San Francisco that the Executive Director is authorized to approve project budget line-item transfers under the Predevelopment Loan Agreement with Michael Simmons Property Development, Inc., a California corporation for the development of approximately 32 units for low- and moderate-income, first-time homebuyers at 1345 Turk Street substantially in the form lodged with the Agency General Counsel.

110-3208-002                                                                                        Agenda Item No. 4 ( c )

                                                                                                      Meeting of October 21, 2008

MEMORANDUM

TO:                 Agency Commissioners

FROM:           Fred Blackwell, Executive Director

SUBJECT:    Authorizing a third amendment to the Personal Services Contract with Seifel Consulting, a California Corporation, to extend the contract term for three months to March 20, 2009 and to increase the contract amount by $15,000 for a total aggregate amount not to exceed $290,000 to prepare revised tax increment projections and redevelopment plan documents in connection with the adoption of the proposed Visitacion Valley Redevelopment Plan; Visitacion Valley Redevelopment Survey Area

EXECUTIVE SUMMARY

To assist staff in the development of documents and reports associated with the preparation of a redevelopment plan for the Visitacion Valley Survey Area (“Survey Area”) and required Survey Area documentation under the California Community Redevelopment Law (“CRL”), the Agency engaged the services of Seifel Consulting Incorporated (“SCI”) on December 06, 2005.  The Personnel Services Contract (“Contract”) scope of work includes an analysis of existing conditions in the Survey Area, a description of redevelopment programs, financial feasibility analysis including tax increment projections for the Survey Area, a Neighborhood Impact Report, a Draft Implementation Plan, and documentation of all other plan adoption procedures required under the CRL.  This analysis culminated in the production of the Visitacion Valley Preliminary Report, published and distributed to the Commission in January of 2008 and a Draft Report to the Board of Supervisors (“Report to the Board”).  While most of the plan adoption survey work conducted by SCI has proceeded according to the Contract’s schedule of performance, delays in the community planning process and in the California Environmental Quality Act (‘CEQA”) analysis have resulted in an extension of original plan adoption schedule.  These delays have necessitated that the Redevelopment Plan revise the base year from Fiscal Year 2007-08 to Fiscal Year 2008-09, for purposes of tax increment generation.  This therefore requires that SCI revise the tax increment projections conducted for the Preliminary Report, and generate a CRL-required Supplemental Report as part of the final Report to the Board.  The cost of this additional consulting work is estimated at $15,000. 

Staff recommends execution of the Contract Amendment with SCI to extend the schedule of performance by 4 months and provide an additional $15,000 to revise tax increment projections, for a total amount not to exceed $290,000 to provide redevelopment plan adoption services in the Visitacion Valley Survey Area.

DISCUSSION

On June 7, 2005, the San Francisco Board of Supervisors (the “Board”) passed a resolution designating the Visitacion Valley Survey Area (“Survey Area”) and urging the Agency to carry out the studies and other actions required under CRL to determine the appropriateness of adopting a redevelopment plan within the Survey Area.  The Survey Area is a 46-acre area including approximately 120 parcels, centered on Bayshore Boulevard and Leland Avenue.  The focal point of the redevelopment survey area is the vacant, former Schlage Lock site off Bayshore Boulevard and the surrounding properties. 

This panel consists of two firms with expertise in redevelopment plan adoption and plan amendments.  A prominent need identified for the panel included consulting services for the Visitacion Valley.  One of the two firms placed on the panel is Seifel Consulting Incorporated (“SCI”).  Staff reviewed and selected SCI based on its expertise and the availability of staff to take lead responsibility for conducting the Visitacion Valley survey work, generating tax increment projections for the Survey Area and writing the needed documentations for plan adoption.  The Agency entered into a Contract for redevelopment plan adoption services in the Survey Area on

Visitacion Valley Scope of Work

To assist staff in the development of documents and reports associated with the adoption of a Redevelopment Plan for the Survey Area, the Agency engaged in a Contract with SCI on December 06, 2005 for an amount not to exceed $275,000 (Res. No. 202-2005).  The Contract scope of work included an analysis of existing conditions in the Survey Area, a description of redevelopment programs, and financial feasibility analysis including tax increment projections for the Survey Area.  This analysis culminated in the development of the Visitacion Valley Preliminary Report, published in January of 2008.  Additionally SCI has prepared a Draft Report to the Board of Supervisors (“Report to the Board”), which includes in addition to the elements of the Preliminary Report described above, a Neighborhood Impact Report, a Draft Implementation Plan, and documentation of all other plan adoption procedures required under the CRL. 

While most of the plan adoption survey work conducted by SCI has proceeded according to the Contract’s schedule of performance, other delays in the community planning process and CEQA analysis have resulted in an extension of the proposed plan adoption schedule.  These delays have included additional work required for the Draft Environmental Impact Report and Response to Comments required under CEQA, ongoing discussions with the CAC regarding policies in the draft Visitacion Valley Redevelopment Plan, and delays producing revised drafts of the proposed Visitacion Valley/Schlage Lock Design for Development.  All of these documents will be brought forward by staff for consideration by the Commission in the upcoming months. 

These delays have necessitated that the Redevelopment Plan revise the base year from Fiscal Year 2007-08 to Fiscal Year 2008-09, for purposes of tax increment generation.  This therefore requires that SCI revise the tax increment projections conducted for the Preliminary Report, and generate a CRL-required Supplemental Report as part of the final Report to the Board.  The cost of this additional consulting work is estimated at $15,000.  The delayed plan adoption process also required that the Contract be extended for a period of three mouths so SCI is available for future public hearings regarding the adoption of the Redevelopment Plan.

Seifel Consulting, Inc.

SCI is an economic consulting firm that provides strategic real estate and urban economic advisory services to public and private sector clients.  SCI advises on developments involving a variety of land uses and provides research and analysis associated with redevelopment plan adoptions and amendments.  SCI has provided redevelopment consulting services to the Agency for a number of project areas including Mission Bay, Hunters Point Shipyard, Transbay, and Bayview Hunters Point.  SCI is a certified a small business enterprise with Agency and a certified woman-owned small business with the State of California and the City and County of San Francisco.

Agency staff finds that this additional tax increment analysis as necessary for the completion of the redevelopment plan adoption process for the Survey Area.  Staff believes that SCI can continue to provide the Agency with the requisite professional redevelopment plan assistance.  The Budget for Fiscal Year 2008-2009, included $15,000 for Visitacion Valley to conduct additional analysis in anticipation of potential plan adoption delays. 

The proposed Contract Amendment is statutorily exempt from CEQA pursuit to CEQA Guidelines Section 15262.

Staff recommends execution of the Contract Amendment with SCI to extend the schedule of performance and provide an additional $15,000 to revise tax increment projections, for a total amount not to exceed $290,000 to provide redevelopment plan adoption services in the Visitacion Valley Survey Area.

Originated by Tom Evans, Lead Planner

Fred Blackwell

Executive Director

Attachment: Proposed Third Contract Amendment for PSC with Seifel Consulting Inc.

RESOLUTION NO. 122-2008

Authorizing a third amendment to the Personal Services Contract with Seifel Consulting, a California Corporation, to extend the CONTRACT TERM FOR THREE MONTHS TO MARCH 20, 2009 and to increase the CONTRACT AMOUNT by $15,000 for a total aggregate amount not to exceed $290,000 to prepare revised tax increment pROJECTIONS AND REDEVELOPMENT PLAN DOCUMENTS IN CONNECTION WITH THE ADOPTION OF THE PROPOSED VISITACION VALLEY REDEVELOPMENT PLAN; VISITACION VALLEY REDEVELOPMENT SURVEY Area

BASIS FOR RESOLUTION

1. On June 7, 2005, the San Francisco Board of Supervisors (the “Board”) passed a resolution designating the Visitacion Valley Redevelopment Survey Area (the “Survey Area”) and urging the Redevelopment Agency of the City and County of San Francisco (the “Agency”) to carry out the studies and other actions required under California Community Redevelopment Law (“CRL”) to determine the appropriateness of adopting a redevelopment plan within the Survey Area.

1.   On September 20, 2005, by Resolution No. 141-2005, the Commission authorized the creation of a three-year panel to provide consulting services related to redevelopment plan adoptions and amendments, and authorized the execution of personal services contracts with the two consulting firms identified for placement on the panel.

1. California corporation (“SCI”) to conduct the Survey Area analysis for Visitacion Valley, based on its expertise and the availability of staff to take lead responsibility for this assignment.  Agency staff would now like to enter into a third amendment to the personal services contract with SCI for redevelopment plan adoption services in the Survey Area.

1. To assist staff in the development of documents and reports associated with the adoption of a Redevelopment Plan for the Survey Area, the Agency entered into a first amendment to the personal services contract with SCI on December 06, 2005 for an amount not to exceed $275,000 (Res. No. 202-2005).

1. In December of 2007, the Agency entered into a second amendment to the personal services contract with SCI to provide feasibility analysis and strategic advise regarding plan adoption procedures for the proposed Candlestick-Shipyard mixed-use project, including potential amendments to the Bayview Hunters Point and Hunters Point Shipyard Redevelopment Plans for an amount not to exceed $48,000.

1.   These delays have necessitated that the base year for the proposed Visitacion Valley Redevelopment Plan be revised from Fiscal Year 2007-08 to Fiscal Year 2008-09, for purposes of tax increment generation.  This will require SCI to revise the tax increment projections conducted for the Preliminary Report, and to generate a CRL-required Supplemental Report as part of the final Report to the Board.

1. Agency staff and SCI have determined that a third amendment to the personal services contract to extend the contract term by three months to March 20, 2009 and to increase the contract amount by $15,000, for a total aggregate amount not to exceed $290,000 is necessary to complete the plan adoption documents for the proposed Visitacion Valley Redevelopment Plan.

1. mendment to provide plan adoption services for the Survey Area is exempt from the CEQA pursuant to Section 15262 of the State CEQA Guidelines (Feasibility and Planning Studies), because the Contract is only for the provision of technical redevelopment planning and consulting services.

RESOLUTION

ACCORDINGLY, IT IS RESOLVEDby the Redevelopment Agency of the City and County of San Francisco that the Executive Director is authorized to enter into a third amendment to the personal services contract with Seifel Consulting, Inc., a California corporation to extend the contract term by three months to March 20, 2009 and to increase the contract amount by $15,000, for a total aggregate amount not to exceed $290,000, to prepare revised tax increment projections and redevelopment plan documents in connection with the adoption of the proposed Visitacion Valley Redevelopment Plan.

APPROVED AS TO FORM:

_______________________

James B. Morales

Agency General Counsel

THIRD AMENDMENT TO THE

PERSONAL SERVICES CONTRACT

(SEIFEL CONSULTING INC.)

RECITALS

1. The REDEVELOPMENT AGENCY OF THE CITY AND COUNTY OF SAN FRANCISCO, a public body, corporate and politic (the "Agency"), and Seifel Consulting, Inc., a California corporation (the “Contractor"), entered into a Personal Services Contract for redevelopment plan adoption and amendment services dated December 20, 2005 (“Contract”).

1. Visitacion Valley and to identify the amount of compensation not to exceed $275,000, on September 1, 2006.

1. The parties further amended the Contract to specify the scope of services for the advisement services related to the Bayview Waterfront Project and proposed amendments to the Bayview Hunters Point Redevelopment Plan and the Hunters Point Shipyard Redevelopment Plan and to identify the amount of compensation for this scope of work not to exceed $48,750, on March, 24, 2008.

1. The parties desire to further amend the Contract to include an additional $15,000 to the Contract, for revised tax increment projections as described as additional services, within the original Visitacion Valley scope of services, and a three month time extension toward the preparation of the final redevelopment plan adoption documents for Visitacion Valley, and to identify the amount of compensation not to exceed a total of $290,000, for Visitacion Valley; for total scope of services not to exceed $338,750.

NOW, THEREFORE, the Agency and the Contractor agree to modify the Contract as follows:

1. SCOPE OF SERVICES

Paragraph 1, Scope of Services is amended by inserting a new line within paragraph (a) as follows (added text is underlined):

“(a) The Contractor shall provide the Scope of Services for work to prepare a redevelopment plan for adoption in the Visitacion Valley Survey Area attached as Attachment A-1, including revised tax increment projects based on FY 2008-2009 adoption of the redevelopment plan and resetting the tax increment base year.”

2. TIME OF COMPLETION

Paragraph, Time of Completion is amended by inserting a new date as follows (revised text is underlined):

“The term of this Contract shall begin on December 20, 2005 and end on March 20, 2009 unless extended or terminated earlier by the Agency pursuant to Paragraph 19.”

3. COMPENSATION

Delete Paragraph 3 (A) in its’ entirety and substitute a new Paragraph 3 (A) as follows:

“Compensation.  All expenses of Contractor are included in the amounts payable pursuant to Attachment B “Budget”, and no expenses shall be reimbursed separately.  Contractor will submit monthly billing invoices to the Agency. The invoices shall include the billing amount, total hours invoiced, hourly billing rate, description of services rendered, supporting documentation and Contractor’s signature.  Agency staff will review and approve these invoices for payment.

(i) All expenses of Contractor are included in the amounts payable pursuant to Attachment “B-1” in an amount not to exceed $290,000 for redevelopment plan adoption services in the Visitacion Valley Survey Area, and no expenses shall be reimbursed separately.

(ii) All expenses of Contractor are included in the amounts payable pursuant to Section F of “Attachment A-2” in an amount not to exceed $48,750 for redevelopment plan amendment consultation services in for the Bayview Hunters Point and the Hunters Point Shipyard Redevelopment Project Areas.

(iii) All expenses related to general plan adoption consultant services shall total an aggregate amount not to exceed $338,750, and no expenses shall be reimbursed separately.”

Except as expressly amended and modified by this Third Amendment, the Contract shall remain in full force and effect in accordance with its terms.

IN WITNESS WHEREOF, the Agency and the Contractor have caused this Third Amendment to be duly executed as of date first above written.

RESOLUTION NO. 123-2008

 Authorizing submittal of an application to the Center for Creative Land Recycling for funding under the State of California Pollution Control Financing Authority’s “California Recycle Underutilized Sites (CALReUSE)” Brownfield Remediation Program; the execution of a standard agreement if selected for such funding and any amendments thereto; and any related documents necessary to participate in the Program for up to $14,980,000; Hunters Point Shipyard Redevelopment Project Area.

BASIS FOR RESOLUTION

1. County of San Francisco (the “Board”) adopted, per Ordinance No. 285-97, a Redevelopment Plan for the Hunters Point Shipyard Redevelopment Project Area (the “Redevelopment Plan”) on July 14, 1997.

1. County of San Francisco for development.  

1. County of San Francisco (the “Agency”) to “demolish and clear buildings, structures, and other improvements from real property owned by the Agency in the Project Area as necessary to carry out the purposes of this Plan.”

1. On March 31, 2004, the Navy and the Agency executed a conveyance agreement (the “Conveyance Agreement”), which establishes the regulatory and conceptual framework for the Navy’s conveyance of the Hunters Point Naval Shipyard (“Shipyard”) to the Agency, with provisions specific to each of Parcels A through F.

1.   The Conveyance Agreement also requires the Navy to obtain assurances from the Regulators in the form of written confirmation of both Federal EPA and Cal/EPA that a parcel is safe for its intended uses prior to offering each parcel to the Agency.

1. At its meeting of May 1, 2007, the Agency Commission (the “Commission”) unanimously adopted a resolution (no. 42-2007), authorizing the Agency’s Executive Director to execute an amended and restated Exclusive Negotiations and Planning Agreement with Lennar/BVHP, LLC for Hunters Point Shipyard Phase 2 and Candlestick Point.

1. At its meeting of August 19, 2008, the Agency Commission authorized the Agency’s Executive Director to accept HPS Development Co., L.P. and CP Development Co., L.P., as successors to Lennar – BVHP, LLC and Lennar Communities, Inc. (collectively, the "Developer").

1. San Francisco voters in June 2008 (Board of Supervisors of the City and County of San Francisco Resolution 312-08), requires that the Shipyard Property and Candlestick Point development “to the extent possible, use state and federal funds to pay for environmental remediation on the Project Site.”

1. The California Pollution Control Financing Authority (“CPCFA”) through its strategic partner Center for Creative Land Recycling (“CCLR”) has issued a Notice of Funding Availability (“NOFA”) for the CALReUSE Remediation Program established under the Housing and Emergency Shelter Trust Fund Act of 2006 (Proposition 1C), California Code of Regulations, Title 4. Business Regulations, Division11.California Pollution Control Authority, Article 9. CALReUSE Remediation Program Sections 8090-8101 (“CALReUSE Program”);

1. Hunters Point Shipyard Phase 2 is eligible for up to $14,980,000 in CALReUSE Program funds for cleanup, mitigation, and remediation.

1. Therefore, the Agency is submitting an application for cleanup, mitigation, and remediation of Parcels B, C, D1, D-1, D2, UC-1 and G, which are parcels within Hunters Point Shipyard Phase 2 (collectively, the “Project”). 

1.   If funds are awarded to the Project, the Agency will enter into an agreement with the Developer to perform the remediation activities described in this application.

1. Remediation of buildings as described in this application is not a substitute for the Navy's clean-up obligations.

1.   The proposed action will authorize the seeking and use of additional funding for remediation of hazardous materials in the Hunters Point Shipyard Redevelopment Project Area and is a normal administrative activity of the Agency.  The proposed action will not independently result in a physical change in the environment.

RESOLUTION

ACCORDINGLY, IT IS RESOLVED by the Redevelopment Agency of the City and County of San Francisco that:

1.         The Executive Director is authorized to submit an application to CCLR for funding under the CALReUSE Brownfield Remediation Program, for removal and abatement of contaminants contained on and within built structure on Parcels B, C, D-1, D-2, UC-1 and G of the Hunters Point Shipyard; and,

2.         If the application for funding is approved, the Agency hereby agrees to use the CALReUSE Funds for eligible activities in the manner presented in the application as approved by CCLR and in accordance with program guidelines cited above.  It also may execute any and all other instruments necessary or required by CCLR for participation in the CALReUSE Program; and,

3.         The Executive Director is authorized to execute in the name of the Agency the application, Standard Agreement, and all other documents required by CCLR for participation in the CALReUSE Program, and any amendments thereto.

APPROVED AS TO FORM:

_________________________

James B. Morales

Agency General Counsel

MEMORANDUM

TO:                 Agency Commissioners

FROM:           Fred Blackwell

                        Executive Director

SUBJECT:    Workshop on Potential Impacts of Current Economic Conditions on Agency Activities

PURPOSE OF WORKSHOP

The purpose of the workshop is to provide the Commission with information on the potential impacts of current economic conditions, including State budget challenges, credit market pressures, and the general downturn in the economy, on Agency activities.  This informational memorandum discusses the affect of these issues on the Agency’s finances, affordable housing program, and market rate development projects.

DISCUSSION

Agency Financial Matters

The impacts of the recently-adopted California State budget on the Agency’s current budget and potential impacts of the current banking and credit market dislocations on the Agency’s investments and bonding program are described in the sections below.

State Budget Mandate

The California budget adopted in September 2008 required Educational Revenue Augmentation Fund (ERAF) payments from all redevelopment agencies for the current 2008-2009 fiscal year.  As a result, the Agency is mandated to transfer $5.94 million in tax increment funds to the State in the current year.  This payment must be made by May, 2009.  The Agency finance staff is presently working with the Mayor’s Budget Office to explore possible sources within the Agency’s existing funds, and to identify “unallocated” tax increment that may be available from project areas but that has not been budgeted to the Agency.  Staff is also working with the Mayor’s Office to identify ways to offset the potential City general fund impact of allocating this additional tax increment.  Staff expects to the return to the Commission before the end of 2008 for consideration of an amendment to the Agency budget to fund this mandatory payment. The Agency’s budget amendment recommendation will then be forwarded to the Board of Supervisors for final consideration.

Agency Investments

In compliance with our investment policy and consistent with prudent fiscal practices, the Agency’s investments are reasonably well protected from the current dislocations in the banking and credit markets.  The Agency has approximately $255 million in investments, excluding bond proceeds held in trust accounts.  Agency investments are currently very short term and concentrated at the highest quality credits.  Generally, Agency funds are invested as follows:

Although the Agency had some funds held in escrow and investment accounts with AIG, those accounts have been terminated with all funds transferred into other instruments.

Agency Bonds

The Agency has approximately $550 million in outstanding fixed rate tax allocation bonds supported by project area tax increment funds. These bonds are backed by the credit rating of the Agency (A-) and in some cases, by credit enhancement agreements with third parties.  For these outstanding bonds, the risk of any credit downgrade, either to the Agency’s underlying rating or the rating of any bond insurer, which could affect the price at which the bonds trade in the secondary market, is borne by the current bond investors.  The Agency is obligated to make only the fixed rate debt service payments originally described in the bonds.

The Agency has one outstanding issue of variable rate bonds, which were issued in 1986 to fund the construction of South Beach Harbor.  These bonds are backed by a letter of credit from Dexia Bank.  Only $6.3 million of these bonds remains outstanding.  The interest rate on these bonds has increased recently, but harbor revenues are sufficient to cover the increased debt service at this time.  The bonds are presently held by the remarketing agent (i.e., the previous investor has “put” the bonds back).  Agency staff is monitoring the status of the bonds, and may explore opportunities to restructure or retire the bonds if the higher rates continue.  The Agency has also issued variable rate debt for the Mission Bay and Hunters Point Shipyard Mello-Roos Community Facilities Districts, but these bonds are backed by special taxes paid by property owners and by letters of credit, and are not a liability of the Agency.

The current dislocations in the credit market, including higher rates and scarcity of bond insurance, are clearly challenging the ability of public agencies around the country to successfully complete new public financings at this time. The Agency’s next tax allocation bond issue, of approximately $200 million, is scheduled for January 2009, by which time it is hoped that the credit markets will have stabilized.  Agency staff has started preliminary discussions with financial advisors and underwriters, and is monitoring the markets closely.  Staff will report to the Commission on any changes in the bond issuance schedule as the year progresses.

Affordable Housing Program

The Agency has a portfolio over 14,000 housing units, with the majority of these units in non-profit managed affordable rental housing projects.  The construction of many of these projects was financed in part with tax-exempt mortgage revenue bonds (“MRB’s”).  These bonds are issued by the Agency but are backed wholly by the affordable housing projects, with debt service paid by cash flow from the housing.  These bonds are not a direct liability of the Agency.  There are approximately $670 million in MRB’s outstanding on Agency-sponsored projects.  While some of these bonds were issued at fixed interest rates, many of the bonds were issued as variable rate bonds to take advantage of lower interest rates on these instruments.  Because of the tightening of the credit markets, the interest rate on the variable rate bonds has increased dramatically over the past month, in some cases increasing from under 2% to nearly 8% on an annualized basis, though these rates are now starting to decline as the federal government works to ease credit market concerns.  The bonds on these projects were underwritten with conservative assumptions about interest rates (i.e., rates were projected to be significantly higher than the actual interest rate at the time), so that they have sufficient cash flow to pay the higher current interest rates for a reasonable period.  In many cases, the initial financing included “swaps” with third-parties so that the interest rate paid by the affordable housing projects is fixed, regardless of changes in the underlying variable rate bonds, and these projects are protected against variable interest rate adjustments.  All of these third-party agreements are performing as contracted.  To date, all of the projects in the Agency’s portfolio appear sound.  Staff will continue to monitor the portfolio closely. 

The turmoil in the financial markets and lack of availability of credit has potential impacts on the financing of new Agency affordable housing projects.  While all existing commitments for financing have been honored (as evidenced by the recent successful private placement of MRB’s with Wells Fargo Bank for the construction of 5600 Third Street), new lending commitments would be difficult to secure at the present time.  However, the Agency does not plan any new project financings until mid-2009, and credit markets will hopefully have stabilized by that time. 

Financial market issues are also affecting Agency housing projects through the decreased value of low income housing tax credits.  The sale of these federal tax credits generates construction and permanent equity funds for affordable housing projects.  The amount that investors are willing to pay for these credits has declined about 20%, because of both fewer investors seeking the credits (Fannie Mae and Freddie Mac have been large tax credit investors but are presently inactive) and remaining investors seeking higher returns on their funds.  This decline in tax credit equity increases the requirement for Agency subsidy funds for projects to move forward.  It should be noted, however, that because of the very great spread between affordable and market rate rents, which ensures demand for the housing, the tax credit market for San Francisco projects is still relatively robust compared to that in many parts of the state and country, where developers have become unable to sell tax credits at any price.

The Agency’s first-time homeownership program remains stable, with no significant increase in foreclosures.  Homebuyers in the program are required to secure fixed rate mortgages, and therefore have not been affected by increased rates on variable rate loans.  New buyers have still been able to obtain mortgages, though at higher interest rates.  The price of the units is adjusted to reflect the higher rates, so that the units remain affordable to new buyers.

Market Rate Development Projects

The continued downtown in the nation’s economy, combined with the immediate pressures on the banking industry and availability of credit, are clearly having an effect on near-term market-rate development projects in San Francisco. 

While the city has not been nearly as affected as outlying areas by the drop in housing sales and prices, there has been a clear decrease in the velocity of residential sales in new condominium developments, and steady levels in published pricing are often supported by substantial developer “concessions” which lower the effective price of new units.  Uncertainty about the future, difficulty obtaining mortgage financing (especially jumbo loans), and the sense that prices may drop further are contributing to buyer reluctance for many projects.  For residential rental projects, increases in occupancy and rental rates have clearly slowed as well.  The rental market in particular shows great sensitivity to employment levels, and the recent increases in the San Francisco unemployment rate, which may be exacerbated by layoffs in the financial and banking industries, may lead to declines in apartment rental rates in the coming months.

On the commercial side, the San Francisco office market is now facing significant “negative absorption” (increases in vacancies through direct leasing and subleasing), which is expected to continue at least through the rest of the year as financial institutions retrench.  As a result, office rental rates, which had been increasing rapidly in 2006 and early 2007, are now starting to decline.  The decline in economic activity is also apparent in declining average daily rates for hotels (though occupancy remains high), and decreasing traffic at public and private parking facilities.  Biotechnology research space demand remains less affected at this time, as private venture capital continues to be invested in this sector, though growth prospects for larger life science and technology companies which are active in the capital markets are of course affected by the stock and credit markets dislocations.

This weakness in the “demand” (and thus pricing) for housing and commercial space is having a clear effect on new development in the city.  While increases in construction costs have slowed, development costs in San Francisco remain extremely high, and many new projects may not be financially feasible under current market conditions.  With this imbalance, potential equity investors and construction and permanent lenders have been taking an extremely cautious approach to committing to new projects.  The current near-freeze in the credit markets is only exacerbating this problem, and even developers with strong balance sheets and track records are reporting greater difficulty in securing construction financing.  As a result of these factors, projects that are well underway are likely to be finished, but there is little sign of new construction activity at this time in either residential or office projects.  As examples, several sites in the Rincon Hill area that are slated for high-rise residential development are on the market or on hold, and market rate housing developers in Mission Bay are holding off on starting new construction until the market becomes more positive.  Likewise, no new office buildings are expected to start work in downtown San Francisco in the near term.  The Agency recently approved an extension to the start of construction for 72 Townsend Street, and may see additional requests for extensions or other renegotiations of existing agreements.

In the longer term, however, there is still a great deal of optimism about the San Francisco economy and real estate market.  As noted above, the city’s housing market has not been nearly as affected by sales volume and pricing decreases as much of the Bay Area or other parts of the country, and San Francisco is viewed as a long-term desirable place to live (as demonstrated by still relatively very-high prices).  Likewise, despite the current increase in office vacancies, the long-term prospects for the city, with its important position in the high-technology and web-based economy, are considered fundamentally strong.  This confidence in San Francisco is evidenced by the continued willingness of developers to expend considerable financial resources to entitle new projects and to compete for major new development opportunities.  Such projects entail extended pre-development time for design, environmental clearance, entitlements, and financing, and developers are clearly working on the expectation (and hope) that by the time these “pipeline” projects are ready, market fundamental and credit availability will have improved.  By positioning new development to move forward as soon as the marketplace allows, this ongoing work on entitling projects will be a significant factor in San Francisco’s economic recovery from the current downturn.

Agency redevelopment efforts are long-term undertakings, with work in blighted areas often extending over decades.  The Agency’s work goes forward through changes in economic and real estate cycles, and is often crucial to providing the catalyst for new development and economic growth in otherwise difficult markets.  The Agency’s ability to be creative and flexible in structuring development agreements is particularly critical in difficult periods.

(Originated by Amy Lee, Olson Lee, and Amy Neches)

Fred Blackwell

Executive Director

118-70408-002                                                                                 Agenda Item No.4 ( f )

                                                                                                         Meeting of October 21, 2008

MEMORANDUM

TO:                 Agency Commissioners

FROM:           Fred Blackwell, Executive Director

SUBJECT:    Authorizing a Ground Lease with 365 Fulton, L.P., a California limited partnership, for the development and operation of 120 very low income supportive housing rental units at 365 Fulton Street; Western Addition Redevelopment Project Area A-2

EXECUTIVE SUMMARY

On August 31, 2006, the Agency issued a Request for Proposals (“RFP”) for the construction, ownership, and operation of affordable housing for 115-120 supportive housing units for formerly homeless individuals on Central Freeway Parcel G, Assessor’s Block 792, Lot 32, at the southeast corner of Fulton and Gough Streets; Western Addition Redevelopment Project Area A-2 (the “Project”).

On January 16, 2007, the Agency Commission authorized execution of an Exclusive Negotiation Agreement with the Project Team of Community Housing Partnership, Inc. and Mercy Housing Corporation (the “Project Team” or “Sponsor”), for the development of the Project.  Subsequently, the Project Team presented initial concept design followed by schematic drawings which are responsive to the RFP, the Western Addition A-2 Plan (the “Redevelopment Plan”), and the Market Octavia Neighborhood Plan and community input.

The mixed-use project will consist of 120 studio units above retail, support and health service areas and common spaces surrounding a landscaped courtyard. An existing mural on the parking garage at the south end of the lot has been preserved and views maintained where possible.  The Project was designed by David Baker FAIA + Partners in association with Baker + Vilar architects.

On July 15, 2008, the Commission adopted Resolution No. 49-2008 and granted conditional approval of the schematic design, variances for parking, parking loading and density to complete the entitlements for the Project. 

In Resolution No. 49-2008, the Commission also adopted the revised Preliminary Mitigated Negative Declaration, finding that it reflected the independent judgment and analysis of the Agency, was adequate and had been prepared in accordance with the California Environmental Quality Act (“CEQA”), and the Mitigation Monitoring and Reporting Program for the Project.

The Sponsor now seeks authorization of a ground lease for the property, known as Parcel G, located at 365 Fulton Street, in order to establish site control required for future financing applications of the Project.  The initial term of the ground lease will be for 60 years with one option for 39 additional years.  The ground rent shall consist of a base rent of $15,000 per year. 

Staff recommends authorization of a Ground Lease with 365 Fulton, L.P.

DISCUSSION

The Site

The site is located on Central Freeway Parcel G, Assessor’s Block 792, Lot 32, at the southeast corner of Fulton and Gough Streets in the Western Addition Redevelopment Project Area A-2.  The Site contains approximately 18,906 square feet of land (the “Site”).

In 1989, the City’s Central Freeway sustained significant damage due to the Loma Prieta Earthquake.  In 1998 and 1999, San Francisco voters approved Propositions E and I respectively and authorized construction of Octavia Boulevard as a replacement for portions of the Central Freeway.  These Propositions also encouraged the development of housing on parcels not needed for the new thoroughfare.  The Agency’s acquisition of seven of the twenty two parcels left by the demolition of the freeway presented an opportunity to further the City’s affordable housing goals while also meeting the changing needs and goals of the Western Addition and Hayes Valley neighborhoods.

The Project is a key component of the Central Freeway Housing Plan, which includes an array of affordable housing types within the Western Addition A-2 Project Area (the “Project Area”) and the Market Octavia Neighborhood Plan.  Additionally, the Project responds to the goals of the Mayor’s 10 Year Plan to End Homelessness with the provision of supportive housing for formerly homeless residents in a service-enriched environment.  The development program calls for approximately 120 studio apartments, support and health services areas, common and open spaces, in an architecturally distinctive and attractive five story building.  The Project is centrally located, easily accessible to mass transportation, neighborhood amenities and health services, and incorporates an on-site retail job training component along Gough Street’s vibrant retail corridor.

Proposed Ground Lease Terms

Pursuant to its mission, the Agency typically retains ownership of the land under its affordable rental housing developments in order to maintain long-term affordability of the units.  Parcel G follows this model, with the Agency retaining its ownership of the land, while 365 Fulton, L.P. maintains ownership of the building or “improvements” on the land. 

Typically, the Ground Lease terms provide for two kinds of rent, a Base Rent (usually $15,000), which comes out of the project’s annual operating expenses, and a Residual Rent, which uses 10% of the value of the land as a standard.  Residual Rents are typically paid for only to the extent that there is surplus cash after a project pays all of its operating expenses.

Because 100% of the units in Parcel G will provide permanent supportive housing to formerly homeless individuals, the Project will receive operating subsidies from the City, through its Local Operating Subsidy Program (“LOSP”), to ensure that the Project is able to cover all its operating expenses.  The Base Rent, which will be the standard $15,000, will be covered by the LOSP. However, while the LOSP is in effect, there will be no surplus cash to speak of, as the program is designed to cover only the operating costs after tenant rents are collected and not to generate any surpluses for the Project.  Therefore, no Residual Rent will be collected as long as the City is providing the operating subsidy.  Staff is recommending that the terms of the Ground Lease allow the Agency to collect Residual Rent should the Project no longer receive LOSP and it is able to generate surplus cash. 

Community Outreach

In addition to the participation of the Western Addition Citizens Advisory Committee on the Parcel G development process, there have been a number of meetings with the Hayes Valley Neighborhood Association and local residents. 

The Project Team, along with staff, has attended meetings of the Western Addition Citizens Advisory Committee (WACAC), the Hayes Valley Neighborhood Association (HVNA) and local interested residents to discuss the project and update the community members on the Project’s status.  Staff and the development team have presented the schematic designs and response has been largely favorable.  The WACAC and HVNA have shown significant support of this project, attending the Commission Hearing of July 15 to voice this support in person. 

In response to the concerns raised by some neighbors of the Project, the Project Team has established an “Advisory Committee” to provide an opportunity for residents to remain actively involved in the Project implementation.

CHPC has proactively reached out to agencies such as Ella Hill Hutch and Bethel AME Church to ensure that local business participation, job placement, and housing benefits available to the residents and business owners of the Western Addition are maximized.

Compliance with Agency Purchasing Policy

Community Housing Partnership and Mercy Housing continue to comply with all phases of the Agency’s Equal Opportunity Program.  The Parcel G development will generate employment for both construction and permanent placement opportunities. The Project Team will work with local community-based organizations to identify candidates for these opportunities and assist in implementing the goals of the Project.

CaliforniaEnvironmental Quality Act

Pursuant to CEQA Guidelines Section 15074, the Commission adopted Resolution No. 49-2008 on July 15, 2008 that adopted the revised Preliminary Negative Declaration along with the Mitigation Monitoring and Reporting Program for the Project.  In adopting its resolution, the Commission found that the Project would not result in any significant environmental impacts not identified in the Negative Declaration.  The Mitigation Monitoring and Reporting Program includes the mitigation measures from the Negative Declaration and provides the basic framework through which the mitigation measures will be monitored to ensure implementation.  This Mitigation Monitoring and Reporting Program will be attached to the Ground Lease.  Agency staff finds the proposed Ground Lease to be within the scope of the Project analyzed in the Negative Declaration.

Timing and Next Steps

All financing commitments are now in place with the exception of an allocation of low income housing tax credits.  The Developer intends to apply for this allocation in the next round. The Commission authorization of the ground lease will provide evidence of site control needed for the tax credit application.  Subject to the Commission authorization and the tax credit allocation, the Project will start construction in Fall of 2009.  The much needed supportive housing units will open for residents in 2011.

Staff recommends authorization of a Ground Lease with 365 Fulton Street, L.P.

(Originated by Erin Carson, Development Specialist)

Fred Blackwell

Executive Director

RESOLUTION NO. 124-2008

AUTHORIZING A GROUND LEASE WITH 365 FULTON, L.P., A CALIFORNIA LIMITED PARTNERSHIP, FOR THE DEVELOPMENT AND OPERATION OF 120 VERY LOW-INCOME SUPPORTIVE HOUSING RENTAL UNITS AT 365 FULTON STREET; WESTERN ADDITION REDEVELOPMENT PROJECT AREA A-2

BASIS FOR RESOLUTION

1. et seq., the “Law”), the Redevelopment Agency of the City and County of San Francisco (the “Agency”) undertakes programs for the reconstruction and rehabilitation of slums and blighted areas in the City and County of San Francisco (the “City”).

1. County of San Francisco executed a Transfer of Real Estate Agreement, to transfer seven Central Freeway parcels to the Agency for the express purpose of developing affordable housing.  This transfer included certain real property consisting of parcels known as Parcels A, C, G, K, O, Q and U.

1.   The RFP sought high-quality proposals from experienced developers capable of building approximately 120 units of supportive housing on Parcel G (the “Project”).

1. On January 16, 2007, by authorization of Resolution No. 5-2007, based on the selection of a development team for the Project through the RFP process, the Agency entered into an Exclusive Negotiations Agreement (the “ENA”) for a term of 18 months, expiring July 16, 2008 with Community Housing Partnership, a California nonprofit public benefit corporation, and Mercy Housing California, a California nonprofit public benefit corporation (collectively, the “Development Team” or the “Borrower”).

1. $2,753,291 and including a Schedule of Performance, with the Development Team.

1. adopted the revised Preliminary Mitigated Negative Declaration along with the Mitigation Monitoring and Reporting Program for the Project.  In adopting its resolution, the Commission found that the Project would not result in any significant environmental impacts not identified in the Negative Declaration.

1.   The housing improvements will be owned by 365 Fulton, L.P., a California Limited Partnership (the “Partnership”), an affiliated entity of the Development Team, and the Agency will retain ownership of the land portion of the site.

1.   The Mitigation Monitoring and Reporting Program will be attached to the Ground Lease.  The Mitigation Monitoring and Reporting Program includes the mitigation measures from the Negative Declaration and provides the basic framework through which the mitigation measures will be monitored to ensure implementation.

RESOLUTION

ACCORDINGLY, IT IS RESOLVED by the Redevelopment Agency of the City and County of San Francisco that the Executive Director is authorized to enter into a Ground Lease with 365 Fulton, L.P., a California limited partnership, for the development and operation of 120 very low-income supportive housing rental units at 365 Fulton Street, in the Western Addition Redevelopment Project Area A-2, substantially in the form lodged with the Agency General Counsel.

APPROVED AS TO FORM:

_________________________

James B. Morales

Agency General Counsel