MINUTES OF A REGULAR MEETING OF THE
REDEVELOPMENT AGENCY OF THE CITY AND
2ND DAY OF MARCH 2004
The Commissioners of the Redevelopment Agency of the City and
President Ramon E. Romero called the meeting to order at 4:00 p.m. Mr. Romero welcomed members of the public and asked that cell phones and pagers be turned off during the meeting.
1. RECOGNITION OF A QUORUM
The Commission Secretary announced the presence of a quorum with the following Commissioners present:
Ramon E. Romero, President
Mark Dunlop, Vice-President
Kathryn C. Palamountain
Michelle W. Sexton
Darshan Singh
Benny Y. Yee
and the following were absent:
Leroy King
Marcia Rosen, Executive Director and staff members were also present.
2. REPORT ON ACTIONS TAKEN AT PREVIOUS CLOSED SESSION MEETING, IF ANY.
Closed Session meeting held on February 17, 2004
(a) Pursuant to Government Code § 54956.9(a): Conference with Legal Counsel regarding litigation: Song, et al. v. Jin Construction and Electric Co., et al., U.S. District Court Case Number: C 03 2580 SI
Executive Director Marcia Rosen reported that on February 17, 2004, the Commission met in closed session on Agenda Item No. 10(a) and by a vote of four to zero (Commissioners Mark Dunlop, Leroy King and Michelle W. Sexton being absent), the Commission authorized a settlement of the existing case: Song, et al. v. Jin Construction and Electric Co., et al., U.S. District Court Case No. C 03 2580 SI. Defendant Jin Construction was an electrical subcontractor working on several public and private projects in the City including the Delta Hotel project that was sponsored by the Agency. Plaintiffs were five former employees for defendant who filed stop notices against the Delta Hotel project claiming they were owed back wages from Jin Construction. At the time of the stop notices, the Agency was holding $72,300 in retention. Plaintiffs brought suit seeking, amongst other things, a court order that the $72,3000 held by the Agency be paid to plaintiffs in satisfaction of their wage claims. The Agency was named as a stakeholder and no allegations of misconduct were alleged against the Agency. The Commission authorized the Executive director to execute a Settlement and Release Agreement on the following terms and conditions: (1) Agency to pay plaintiffs $72,300 in full and final settlement of all claims, (2) all parties to execute mutual releases of all claims against the other, (3) each side to dismiss with prejudice all pending lawsuits, and (4) each side to bear its own attorneys fees and costs.
3. MATTERS OF UNFINISHED BUSINESS: None.
4. MATTERS OF NEW BUSINESS:
CONSENT AGENDA
4 (a) Approval of Minutes: Meeting of February 17, 2004
4 (b) Resolution No. 26-2004, Authorizing a First Amendment to the ground lease with AR Preservation, L.P., a California limited partnership, to revise the schedule of performance for the rehabilitation of 179 units of very low-income housing at the Alexander Residence, 230 Eddy Street as part of the Agency’s Housing Preservation Program; Citywide Tax Increment Affordable Housing Program
Two members of the public filled out speaker cards to address the Commission on item 4 (b). President Romero ruled that consent agenda item 4 (b) be withdrawn from the consent agenda and the Commission vote first on consent agenda item 4 (a) followed by a staff presentation for item 4 (b) so that the Commission could hear public testimony on the matter.
ADOPTION: IT WAS MOVED BY MS. SEXTON, SECONDED BY MR. DUNLOP, AND UNANIMOUSLY CARRIED (MR. KING AND MR. YEE ABSENT) THAT CONSENT AGENDA ITEM 4 (a) APPROVAL OF MINUTES: MEETING OF FEBRUARY 17, 2004, BE ADOPTED.
Presenters: Kate Hartley (Agency staff)
Speakers: John Nulty, Michael Nulty
Commissioner Palamountain put forth a motion to adopt item 4 (b).
Commissioner Dunlop seconded Commissioner Palamountain’s motion to adopt item 4 (b). Mr. Dunlop requested clarification that the extension would not cause disruption to the tenants’ lives and asked staff to respond to the public comment.
Ms. Kate Hartley, Development Specialist, stated it was expected that there would be difficulty with the major rehabilitation of a 12-story building with 179 units as well as disruption on the residents. Ms. Hartley stated that the Tenderloin Neighborhood Development Corporation (TNDC) worked very hard and continued to work closely with the residents throughout the construction period and Agency staff was very sympathetic to the tenants’ concerns and wished that the construction would be finished by now. Ms. Hartley explained that there was an initial delay of the construction and the requested extension was to help wrap-up the construction work. Ms. Hartley added that the tenants association was very active from the outset during the acquisition process, but staff had not received any request for additional tenants assistance and urged representatives of the tenants association to contact her so that appropriate assistance could be provided.
Commissioner Dunlop requested verification about residents reportedly dying due to construction activities and asked staff to provide a report on TNDC’s efforts to assist the tenants at the Alexander Residence, and acknowledged the good work and reputation of TNDC in all of its projects.
Ms. Hartley stated staff was certain that there were no deaths related to accidents due to construction activities and added that great care was taken to accommodate the tenants needs during the construction, which involve major work on all of the units, the common areas and replacement of major structural systems.
Commissioner Singh asked when the construction was estimated to be completed.
Ms. Hartley responded that the construction work was scheduled to be significantly completed in June 2004 with all of the tenants moved back in.
President Romero requested verification that the delay in the completion of the project was due more to delays that occurred prior to the start of the rehabilitation work, but once the construction work started, the renovation had been on schedule. Mr. Romero stated he had not heard anything during the discussion that there were delays in the construction work or that TNDC had done anything improper in assisting the tenants. Mr. Romero lent his support for the extension.
Ms. Hartley affirmed that there was a delay in the start of construction, but that the construction work was on schedule and added that typical of major rehabilitation projects, the Alexander encountered unforeseen problems that were handled successfully.
ADOPTION: IT WAS MOVED BY MS. PALAMOUNTAIN, SECONDED BY MR. DUNLOP, AND UNANIMOUSLY CARRIED (MR. KING AND MR. YEE ABSENT) THAT CONSENT AGENDA ITEM 4 (b) RESOLUTION NO. 26-2004, AUTHORIZING A FIRST AMENDMENT TO THE GROUND LEASE WITH AR PRESERVATION, L.P., A CALIFORNIA LIMITED PARTNERSHIP, TO REVISE THE SCHEDULE OF PERFORMANCE FOR THE REHABILITATION OF 179 UNITS OF VERY LOW-INCOME HOUSING AT THE ALEXANDER RESIDENCE, 230 EDDY STREET AS PART OF THE AGENCY’S HOUSING PRESERVATION PROGRAM; CITYWIDE TAX INCREMENT AFFORDABLE HOUSING PROGRAM, BE ADOPTED.
REGULAR AGENDA
4 (c) Workshop on the Agency’s fiscal year 2004/05 Budget
Presenters: Mario Menchini, Amy Neches, Don Capobres, Stan Muraoka,
William Carney, Shirley Wysinger, Jose Campos, Olson Lee (Agency staff)
Speakers: Juan Monsanto
Commissioner Palamountain stated that one of the contingencies for the Agency’s 2004/2005 budget was the passage of SB2113 plan amendments, which would require the City to approve a Housing Element, and asked if the budget contingencies did not come to pass, what the budget process was and would the Commission have an opportunity to take a second look at the Agency’s spending priorities.
Executive Director Marcia Rosen stated that of course, the Commission could revisit the budget at its discretion. The Commission would be asked to review and authorize submittal of the Agency’s proposed budget to the Mayor’s Budget Office at its next meeting, but the budget would not be submitted to the Board of Supervisors until June. Ms. Rosen stated that Mr. Olson Lee’s presentation was to demonstrate staff’s attempt to prioritize the Agency’s spending with the anticipated additional $15 million, which would be citywide tax increment funds, and without the $15 million, the priorities would be focused on the Agency’s obligations to purchase parcels on Octavia Boulevard for affordable housing development that would meet citywide needs for new affordable housing. Ms. Rosen stated the Agency would be able to initiate the SB2113 plan amendment process, but would be prohibited from creating indebtedness pursuant to the amendments until the State Department of Housing and Community Development had found that
Commissioner Palamountain stated she would want to revisit budget priorities should the SB2113 plan amendments not occur and would look at anticipated State budget reductions affecting
Executive Director Rosen responded that the CALPERS expenditure was part of the personnel budget, which was not included in the budget materials provided to the Commission as that was a matter to be discussed at the Closed Session later in the meeting. Ms. Rosen pointed out that because of the long-term nature of the Agency’s work program activities, some of the time spent by staff was on funds previously allocated in other budget years, so the proposed allocations for fiscal year 2004/2005 would not be the only program dollars that staff would be administering and the actual scope of staff’s work activities included a larger dollar amount than what was proposed in the 2004/2005 budget because staff was administering program funds from prior budget years.
Commissioner Palamountain shared her preliminary concerns about the proposed budget as follows:
- Hunters Point Shipyard: Believed this was the time to invest in planning for the area and community outreach and supported the $50,000 funding request for community participation.
- South of Market: Supported cutting of proposed $700,000 for the SRO rehabilitation program.
- Would like a more specific description of proposed capital improvements for the proposed $6 million request.
- A report on the Agency’s legal obligations to fund museums at the budgeted level for ’04-’05.
- Asked if there was any chance of deferring funding commitments to two of the YBC museums (Jewish & Mexican) that have been reported to have financing difficulties and may not be built in the near future.
- Mid-Market Survey Area: Asked if there would be Mello-Roos funds available for the Special Use District streetscape project? Would like more information about the streetscape project and an evaluation of how streetscape improvements have been effective in bringing economic development/revitalization to an area.
Executive Director Rosen stated that the proposed economic development program for
Commissioner Dunlop thanked staff for the hard work on the budget during the difficult economic times and asked what would happen if there was a legal challenge to the State-required Housing Element as part of the SB2113 plan amendments.
Executive Director Rosen stated she believed that the City’s Housing Element had to be free of legal challenges for it to be submitted to the State.
General Counsel James B. Morales added that any legal challenge would have to request an injunction in order to stop the Housing Element from taking effect.
Commissioner Dunlop asked if the $700,000 Single Room Occupancy (SRO) funding was for ground leases.
Executive Director Rosen stated that the $700,000 was for the SRO Rehabilitation Program previously adopted by the Commission to make funds available for private owners to address quality of life issues for the SRO hotels.
Commissioner Dunlop suggested the following ideas:
- Merging of project areas
- Slowing the pace of costly projects
- Project Area Committees (PAC) to take commensurate budget cuts as the Agency
- Insure leveraging of Agency funds with other City departments, developers and property owners.
Commissioner Dunlop inquired if property/business owners paid for Agency-sponsored services such as street cleaning and asked staff to look at such ideas to help defray public costs.
Commissioner Sexton thanked and complimented staff for the excellent presentations on the budget. Ms. Sexton stated she had similar questions as Commissioner Palamountain with regard to Yerba Buena Center in particular, the Center for the Arts and the Gardens proposed capital repairs of $5.6 million and property maintenance costs, both of which seemed very high and requested specific descriptions of the capital repairs. Ms. Sexton recalled reading newspaper articles about the status of two of the
Executive Director Rosen stated that the Agency’s housing program with the exception of the HOPWA program, was funded by bond proceeds, with some specific to project areas and others citywide. Ms. Rosen stated that the $43.9 million in housing production were all bond proceeds, except for the Rincon Point –
President Romero thanked staff for its hard work on the budget and commended them for the concise presentations. Mr. Romero informed the public that the Commission would be considering approval of the 2004/2005 budget at its March 16th meeting.
4 (d) Resolution No. 27-2004, Conditionally Approving the Amended Combined Basic Concept and Schematic Design for Parcel 2 of Block N3a, a 98-unit residential project in the Mission Bay North Redevelopment Project Area, pursuant to an Owner Participation Agreement with Catellus Development Corporation; Mission Bay North Redevelopment Project Area
Presenters: Tiffany Bohee (Agency staff), Richard Stacy (Architect), Ingrid
Leibald (Landscape Architect)
Commissioner Dunlop put forth a motion to adopt item 4 (d) and remarked that the design was very attractive and the bamboo trees were a nice touch. Mr. Dunlop stated it seemed that the affordable housing production in Mission Bay was slightly behind with the current production at 306 units compared to the 384-unit or 20% goal and recognized that housing production was a catch-up game of sorts, but that it was not right for the affordable housing component to always lag behind.
Ms. Amy Neches, Senior Project Manager, explained that the housing projects that were under construction or completed, the Agency was actually ahead of its affordable housing production goal in
Commissioner Palamountain seconded Commissioner Dunlop’s motion to adopt item 4 (d).
Commissioner Yee asked if Catellus was required to complete its housing production by a certain time period.
Ms. Tiffany Bohee, Assistant Project Manager, stated that the Agency had no control over the timing of Catellus’ construction and added that the Owner Participation Agreement between the Agency and Catellus was crafted to facilitate the housing production, subject to the market conditions.
ADOPTION: IT WAS MOVED BY MR. DUNLOP, SECONDED BY MS. PALAMOUNTAIN, AND UNANIMOUSLY CARRIED (MR. KING ABSENT) THAT ITEM 4 (d) RESOLUTION NO. 27-2004, CONDITIONALLY APPROVING THE AMENDED COMBINED BASIC CONCEPT AND SCHEMATIC DESIGN FOR PARCEL 2 OF BLOCK N3A, A 98-UNIT RESIDENTIAL PROJECT IN THE MISSION BAY NORTH REDEVELOPMENT PROJECT AREA, PURSUANT TO AN OWNER PARTICIPATION AGREEMENT WITH CATELLUS DEVELOPMENT CORPORATION; MISSION BAY NORTH REDEVELOPMENT PROJECT AREA, BE ADOPTED.
Items 4 (e) and 4 (f) were presented together and acted upon separately.
4 (e) Resolution No. 28-2004, Authorizing a Housing Opportunities for Persons With AIDS Capital Loan Agreement with Mercy Housing West, a California nonprofit corporation, in an amount not to exceed $631,214 for the rehabilitation of 68 very low-income rental units at the Derek Silva Community Residence, 1580-1598 Market Street
4 (f) Resolution No. 29-2004, Authorizing a First Amendment to the ground lease with Mercy Housing California XVII, a California limited partnership, to clarify the annual rental payments, for the Derek Silva Community, 1580-1598 Market Street
Presenters: Elizabeth Colomello (Agency staff)
Commissioner Dunlop thanked Ms. Elizabeth Colomello for her presentation and stated that the need for low-cost housing for people living with AIDS was obvious and thanked staff for its hard work on Derek Silva as he had not heard any complaints. Mr. Dunlop put forth a motion to adopt item 4 (e).
Commissioner Sexton seconded Commissioner Dunlop’s motion to adopt item 4 (e).
ADOPTION: IT WAS MOVED BY MR. DUNLOP, SECONDED BY MS. SEXTON, AND UNANIMOUSLY CARRIED (MR. KING AND MR. YEE ABSENT) THAT ITEM 4 (e) RESOLUTION NO. 28-2004, AUTHORIZING A HOUSING OPPORTUNITIES FOR PERSONS WITH AIDS CAPITAL LOAN AGREEMENT WITH MERCY HOUSING WEST, A CALIFORNIA NONPROFIT CORPORATION, IN AN AMOUNT NOT TO EXCEED $631,214 FOR THE REHABILITATION OF 68 VERY LOW-INCOME RENTAL UNITS AT THE DEREK SILVA COMMUNITY RESIDENCE, 1580-1598 MARKET STREET, BE ADOPTED.
ADOPTION: IT WAS MOVED BY MR. DUNLOP, SECONDED BY MS. SEXTON, AND UNANIMOUSLY CARRIED (MR. KING AND MR. YEE ABSENT) THAT ITEM 4 (f) RESOLUTION NO. 29-2004, AUTHORIZING A FIRST AMENDMENT TO THE GROUND LEASE WITH MERCY HOUSING
4 (g) Resolution No. 30-2004, Authorizing an Amended and Restated Disposition and Development Agreement and a First Amendment to the Regulatory and Grant Agreement with the Japanese American Religious Federation Assisted Living Facility, Inc., a California non-profit public benefit corporation, to increase the grant by an amount not to exceed $1,267,865 for a total aggregate amount of $4,026,151, in conjunction with the development of a 54-unit senior assisted living facility, 1881 Bush Street; Western Addition Redevelopment Project Area A-2
Presenters: Judy Eng (Agency staff), Steve Suzuki (Kokoro)
Speakers: Matthew Kamiya (read letter from Rev. Peter Yuichi Clark),
Sister Judy Rimbey, Dr. Patricia Shiono, Joseph Omachi, Diane Nagura, Judy Nakaso, Laura Takeuchi, Hiroshi Fukuda, Mrs. Sydney Nakamura, Vickie Ina, Sharon Kotabe, Rev. Richard Grange, Jeffrey Cheifetz, Teresa Ono, Emiko Tom
Commissioner Singh shared that he attended the Kokoro open house and stated that it was a lovely facility and that he was told that the word Kokoro stood for heart, mind and spirit. Mr. Singh remarked that was a beautiful name for a beautiful place. Mr. Singh put forth a motion to adopt item 4 (g).
Commissioner Dunlop thanked the public for the extremely moving testimony and stated that the internment of American citizens during World War II was a very unfortunate time in our country’s history. Mr. Dunlop stated he would support the grant request, but wanted assurance that this would be the last funding request for Kokoro. Mr. Dunlop inquired about the occupancy of the building and asked when it was expected to be fully occupied.
Mr. Steve Suzuki of Kokoro, stated he was confident that this would be the last funding request for Kokoro because the construction had been completed and the building’s operation was up and running and the units were being filled. Mr. Suzuki added that all of the construction obstacles had been addressed and with a one-year delay in the start of construction, they were very happy to have finally completed the construction. Mr. Suzuki thanked the Commission for its continuing support and assured that this was going to be the last funding request, which would help Kokoro close out its financing for the project. Mr. Suzuki explained that since Kokoro opened last fall, 50% of the units had been occupied, so they were slightly ahead of schedule. Mr. Suzuki added that unlike traditional housing, filling of assisted-care units required a lot more coordination with prospective residents and to insure that adequate staff was in place in order to provide the appropriate level of care and service.
Commissioner Dunlop recalled that one of his first tour as an Agency Commissioner was the old temple, which was in real bad structural shape and it was amazing to see the beautifully renovated space. Mr. Dunlop stated he would like to tour the renovated facility and seconded Commissioner Singh’s motion to adopt item 4 (g).
Commissioner Palamountain stated there was no question that Kokoro served an important need for the
Commissioner Sexton thanked Ms. Judy Eng for a great staff report and asked what the goals were for occupancy of the project and the timeline required under the Disposition and Development Agreement (DDA).
Ms. Judy Eng, Senior Development Specialist, stated that the project was to be stabilized at year three with a 95% occupancy pursuant to the DDA, and at present, 32 of the 61 units were occupied, which puts them at a 50.5% occupancy since Kokoro opened in October 2003. Ms. Eng stated that there was an 18-month “ramp-up” for the occupancy of the units in order to hire experienced staff to service all of the residents at full occupancy, and believed that Kokoro would meet its 18-month goal for 95% occupancy.
Commissioner Sexton asked if there was a waiting list and if so, how many people were on it. Ms. Sexton inquired about the occupancy of the restricted units and noted that there were four more individuals with incomes at 50% of Area Median Income (AMI) beyond the seven 50% AMI restricted units, which was good, but asked if the revenue stream was impacted, given that the individuals were occupying units restricted for people with incomes at 60% AMI.
Ms. Grace Komosaka, Kokoro’s Executive Director, stated that they had a contact list of about 300 people, but not a waiting list as that was premature at this time because the first priority for occupancy was the income requirements, which would have to be satisfied first in accordance with the DDA. Ms. Komosaka stated that the revenue stream was not impacted because a family gift subsidy was provided for each of the four individuals with incomes at 50% AMI, which were renting units designated at 60% AMI. Ms. Komosaka added that most of the seniors’ incomes were at 50% AMI and Kokoro offered them units at the next income level with family gift subsidies to make up the difference in the rents.
Commissioner Sexton stated that Kokoro was a beautiful project and recalled many inquiries to the Commission about the need for assisted and congregate care senior housing and recognized the importance of Kokoro to the community. Ms. Sexton stated that the Agency should insure that such facilities were opened and available to everyone in the broader community of
Ms. Eng informed the Commission that the DDA required that all of the units in Kokoro be open and available to everyone, with priority to Agency certificate holders.
President Romero recalled when he toured the old temple building and thought at the time that it was in bad shape and very dangerous. Mr. Romero stated that Kokoro had accomplished two very significant things, one is the successful rehabilitation of a landmark historic building and Kokoro’s significant efforts to keep the rehabilitation costs as low as possible, and recalled many other Agency projects that required additional funding. Mr. Romero congratulated Kokoro for providing a facility that would provide great benefits to
ADOPTION: IT WAS MOVED BY MR. SINGH, SECONDED BY MR. DUNLOP, AND UNANIMOUSLY CARRIED (MR. KING AND MR. YEE ABSENT) THAT ITEM 4 (g) RESOLUTION NO. 30-2004, AUTHORIZING AN AMENDED AND RESTATED DISPOSITION AND DEVELOPMENT AGREEMENT AND A FIRST AMENDMENT TO THE REGULATORY AND GRANT AGREEMENT WITH THE JAPANESE AMERICAN RELIGIOUS FEDERATION ASSISTED LIVING FACILITY, INC., A CALIFORNIA NON-PROFIT PUBLIC BENEFIT CORPORATION, TO INCREASE THE GRANT BY AN AMOUNT NOT TO EXCEED $1,267,865 FOR A TOTAL AGGREGATE AMOUNT OF $4,026,151, IN CONJUNCTION WITH THE DEVELOPMENT OF A 54-UNIT SENIOR ASSISTED LIVING FACILITY, 1881 BUSH STREET; WESTERN ADDITION REDEVELOPMENT PROJECT AREA A-2, BE ADOPTED.
5. MATTERS NOT APPEARING ON THE AGENDA None.
6. PERSONS WISHING TO ADDRESS THE MEMBERS ON NON-AGENDA, BUT AGENCY RELATED MATTERS
- Manny Flores, Jr., Michael Johnson
7. REPORT OF THE PRESIDENT
- President Romero wished Commissioner Leroy King continued speedy recovery.
- President Romero reminded Commissioners to complete their Statements of Economic Interests, due by April 1st.
8. REPORT OF THE EXECUTIVE DIRECTOR
- Board of Supervisors Budget Committee approved the Agency’s current fiscal year budget amendment and the refunding of bonds that would yield $10 million of additional funding. The matter was scheduled to be heard by the full Board of Supervisors on March 9th.
- In response to public testimony from Mr. Manny Flores regarding
- Informational memorandum regarding U.S. Navy radiological surveys on Parcel A in the Hunters Point Shipyard.
9. COMMISSIONERS’ QUESTIONS AND MATTERS None.
10. CLOSED SESSION:
(a) Pursuant to Government Code § 54957.6 to instruct Agency designated representatives to negotiate with San Francisco Redevelopment Employee Association (Professional/ Technical Unit), Service Employees International Union (SEIU) Local 790, and International Federation of Professional and Technical Engineers (IFPTE) Local 21. Agency negotiators: Marcia Rosen, Ayisha Benham, James B. Morales, and Ora Meacham.
(b) Pursuant to Government Code § 54956.9(b): Conference with Legal Counsel regarding anticipated litigation: one potential case.
(c) Pursuant to Government Code § 54956.8 to instruct the Agency's real property negotiators with respect to price and terms of payment. The property is Agency parcel 732-A located on
11. ADJOURNMENT
It was moved by Mr. Dunlop, seconded by Ms. Palamountain, and unanimously carried that the meeting be adjourned. The meeting adjourned at 8:43 p.m.
Respectfully submitted,
Erwin R. Tanjuaquio
Agency Secretary
APPROVED: