MINUTES OF A REGULAR MEETING OF THE
REDEVELOPMENT AGENCY OF THE CITY AND
COUNTY OF SAN FRANCISCO, HELD ON THE
16TH DAY OF MAY 2006
The Commissioners of the Redevelopment Agency of the City and County of San Francisco met in a regular meeting at City Hall, 1 Dr. Carlton B. Goodlett Place, Room 416, in the City of San Francisco, California, at 4:00 p.m. on the 16th day of May 2006, at the place and date duly established for holding of such a meeting.
President Richard H. Peterson Jr. called the meeting to order at 4:00 p.m. Mr. Peterson welcomed members of the public and radio listening audience, and asked that all electronic devices including pagers and cellular telephones be turned off during the meeting. Mr. Peterson asked members of the public who wish to address the Commission to fill out speaker cards, and to state their names for the record, and to limit their remarks to three minutes. Mr. Peterson stated that the appropriate time for members of the public to address the Commission on matters not on the current Agenda, but are related to general Agency business would be Item 6 on the agenda. This portion of the Agenda is not intended for debate or discussion with the Commission or staff, and members of the public should simply state their business or matter they wish the Commission or staff to be aware of, and if they had questions, to follow-up with staff or Commissioners during a break or after adjournment. It is not appropriate for Commissioners to engage in a debate or respond, on issues not properly set in a publicly-noticed meeting agenda.
1. RECOGNITION OF A QUORUM
The Commission Secretary announced the presence of a quorum with the following Commissioners present:
Richard H. Peterson Jr., President
London Breed, Vice-President
Ramon E. Romero
Benny Y. Yee
And the following were absent:
Commission Secretary Erwin Tanjuaquio announced that Ms. Joanne Sakai, Deputy Executive Director would be acting Executive Director, and Ms. Penny Nakatsu, Deputy General Counsel would be acting Agency General Counsel for the meeting.
Joanne Sakai, Deputy Executive Director, was Acting Executive Director and staff members were also present.
2. REPORT ON ACTIONS TAKEN AT PREVIOUS CLOSED SESSION MEETING, IF ANY. None.
3. MATTERS OF UNFINISHED BUSINESS: None.
4. MATTERS OF NEW BUSINESS:
4 (a) Approval of Minutes: Meeting of May 2, 2006
4 (b) Resolution No. 64-2006, Authorizing a Third Amendment to a Personal Services Contract with the Market Street Association, a California nonprofit public benefit corporation, to extend the term for 6 months in an amount not to exceed $40,000, for an aggregate amount not to exceed $280,000 for administrative, coordination, and outreach services to the Mid-Market Project Area Committee; Mid-Market Redevelopment Survey Area
ADOPTION: IT WAS MOVED BY MR. ROMERO, SECONDED BY MR. BREED, AND UNANIMOUSLY CARRIED (MR. KING AND MR. YEE ABSENT) THAT CONSENT AGENDA ITEMS 4 (a) APPROVAL OF MINUTES: MEETING OF MAY 2, 2006, AND 4 (b) RESOLUTION NO. 64-2006, AUTHORIZING A THIRD AMENDMENT TO A PERSONAL SERVICES CONTRACT WITH THE MARKET STREET ASSOCIATION, A CALIFORNIA NONPROFIT PUBLIC BENEFIT CORPORATION, TO EXTEND THE TERM FOR 6 MONTHS IN AN AMOUNT NOT TO EXCEED $40,000, FOR AN AGGREGATE AMOUNT NOT TO EXCEED $280,000 FOR ADMINISTRATIVE, COORDINATION, AND OUTREACH SERVICES TO THE MID-MARKET PROJECT AREA COMMITTEE; MID-MARKET REDEVELOPMENT SURVEY AREA, BE ADOPTED.
4 (c) Resolution No. 65-2006, Commending and expressing appreciation to Monterey Morrissey for his 19 years of dedicated public service upon the occasion of his retirement from the Redevelopment Agency of the City and County of San Francisco
Presenters: James Nybakken (Agency staff)
Commissioner Romero stated it seemed like destiny to have someone named Monterey working at the South Beach Harbor, and thanked Mr. Morrissey for his 19 years of dedicated public service. Mr. Romero congratulated Mr. Morrissey on his retirement and put forth a motion to adopt item 4 (c).
Commissioner Singh seconded Commissioner Romero’s motion to adopt item 4 (c).
ADOPTION: IT WAS MOVED BY MR. ROMERO, SECONDED BY MR. SINGH, AND UNANIMOUSLY CARRIED (MR. KING AND MR. YEE ABSENT) THAT ITEM 4 (c) RESOLUTION NO. 65-2006, COMMENDING AND EXPRESSING APPRECIATION TO MONTEREY MORRISSEY FOR HIS 19 YEARS OF DEDICATED PUBLIC SERVICE UPON THE OCCASION OF HIS RETIREMENT FROM THE REDEVELOPMENT AGENCY OF THE CITY AND COUNTY OF SAN FRANCISCO, BE ADOPTED.
4 (d) Resolution No. 66-2006, Authorizing a Personal Services Contract with Image Access West, Inc., a California corporation, to provide the Agency with electronic document management and imaging system services for a term of one year in an amount not to exceed $60,000.00
Presenters: Kim Pan (Agency staff)
ADOPTION: IT WAS MOVED BY MR. ROMERO, SECONDED BY MR. SINGH, AND UNANIMOUSLY CARRIED (MR. KING AND MR. YEE ABSENT) THAT ITEM 4 (d) RESOLUTION NO. 66-2006, AUTHORIZING A PERSONAL SERVICES CONTRACT WITH IMAGE ACCESS WEST, INC., A CALIFORNIA CORPORATION, TO PROVIDE THE AGENCY WITH ELECTRONIC DOCUMENT MANAGEMENT AND IMAGING SYSTEM SERVICES FOR A TERM OF ONE YEAR IN AN AMOUNT NOT TO EXCEED $60,000.00, BE ADOPTED
At this time, approximately 4:18 p.m., Commissioner Yee arrived at the meeting.
4 (e) Resolution No. 67-2006, Authorizing the engagement of UBS Securities LLC, a Delaware limited liability company, and Backstrom McCarley Berry & Co, LLC, a California limited liability company, as the underwriters for the anticipated issuance of the 2006 tax allocation bonds by the Redevelopment Agency of the City and County of San Francisco
Presenters: Mario Menchini (Agency staff)
Speakers: Calvin Grigsby
Commissioner Romero stated he had read the memorandum thoroughly and it seemed that staff had done a very careful review of the matter, and put forth a motion to adopt item 4 (e).
Commissioner Covington asked how often capital appreciation bonds were issued by the Agency.
Mr. Mario Menchini, Senior Financial Analyst, stated that the Agency issued tax allocation bonds annually, and a portion of the annual issuance were capital appreciation bonds. Mr. Menchini stated historically, the Agency issued bonds competitively where underwriters were not utilized, but because of the scarcity of capital appreciation bonds in the municipal market, staff felt it was important to work with underwriters to find buyers for that portion of the Agency bonds.
Commissioner Covington asked if there was any requirement in the Request for Proposals (RFP) that respondents to the RFP have headquarters in San Francisco.
Mr. Menchini stated there was no requirement for respondents to the RFP to have headquarters in San Francisco, but that would be a tie-breaker if two competing firms had the same scores. Mr. Menchini stated that was not a factor as there was no tie in the scoring, but staff was still recommending a co-manager that was headquartered in San Francisco, the firm of Backstrom, McCarley, Berry LLC. Mr. Menchini stated that most, with very few exceptions, investment banking firms would be headquartered in New York City, with some regional firms headquartered outside of New York, some in Chicago, Los Angeles and one in San Francisco. Mr. Menchini stated that if the hiring of bond underwriters was limited to San Francisco firms, the Agency would be limited to hiring one firm.
Commissioner Covington asked which firm headquartered in San Francisco was Mr. Menchini speaking of, and if the Agency would be limited to hiring that firm.
Mr. Menchini stated he was referring to the firm of Stone and Youngberg, and if the Agency was going to limit itself to selecting a senior underwriter that was headquartered in San Francisco, the Agency would be limited to the firm of Stone and Youngberg.
Commissioner Covington stated she heard Mr. Calvin Grigsby state that his firm was headquartered in San Francisco.
Mr. Menchini stated that for senior manager positions of the firms considered, the only one headquartered in San Francisco is the firm of Stone and Youngberg. Mr. Menchini stated that Grigsby and Associates and Backstrom McCarley Berry and Company were also headquartered in San Francisco, but unfortunately, he did not believe they had the capacity to undertake the type of financing proposed by the Agency, given the limited size of their retail institutional workforce, as well as the size of their capital.
Commissioner Covington stated she thought that some organizations staffed-up when they obtained large projects, and requested verification that was a typical business model.
Mr. Menchini stated he did not know if some organizations staffed-up when they obtained large projects. Mr. Menchini stated that a firm with a half a dozen employees seeking to find buyers of the Agency’s bonds, could not be compared to a firm like UBS Securities, who had a huge retail network already in place nationwide and in California, and also had a capital base to price the Agency’s bonds aggressively and to achieve a low-cost of financing.
Commissioner Covington stated that Grigsby and Associates had served as senior manager on a number of national projects, and perhaps in the past, had served as senior manager on some of the Agency’s projects.
Mr. Menchini stated he believed that since 1996, there had been very few transactions that the Grigsby firm had undertaken, and that the comparisons made between Grigsby and Associates and Backstrom, McCarley, Berry LLC was invalid. Mr. Menchini stated that the Backstrom, McCarley, Berry firm started operations in 2002 and since then, had done quite a bit of work, whereas the numbers presented by Grigsby and Associates extended all the way back to 1984, and the RFP specifically requested that firms provide transactions from the year 2002. Mr. Menchini stated that transactions from 15 years ago may not necessarily be reflective of a firm’s ability to sell the Agency’s bonds today.
Commissioner Covington asked if there was a reason why Grigsby and Associates did not provide more recent information.
Mr. Menchini stated that Grigsby and Associates did provide the requested information, but of the figures provided, staff counted four, possibly six, financings since 1996.
Commissioner Covington stated at the last Commission meeting, Commissioner King who was away at a conference, took great pains to champion the firm of Grigsby and Associates, and that the head of the firm was unjustly prosecuted and was ultimately exonerated of all charges, and should be considered for work with the Redevelopment Agency. Ms. Covington asked if that factor was taken into consideration at all.
Mr. Menchini stated that Grigsby and Associates’ litigation history was taken into consideration, and the new selection panel was very sensitive to the litigation claims history of each firm that was evaluated. Mr. Menchini stated that as a panel, some of the firms were given very low scores on their litigation claims history, including the firm being recommended, UBS Securities. Mr. Menchini stated he thought the fact that UBS scored number one under the first and the new panel, and that UBS was given a very low score in their litigation claims history, was an indication of the firm’s strength and their ability to actually undertake a great financing for the Agency, to sell the Agency’s bonds, and price the bonds aggressively. Mr. Menchini stated that the bonds would be outstanding for 30 years, and the capital appreciation bonds very like would not have an early-call provision where the bonds could be called before their final maturity.
Commissioner Covington referred to a memorandum from UBS Securities addressed to Mr. Menchini that was attached to the Commission memorandum, which was in direct response to Mr. Grigsby’s comments that were made at the March 21st Commission meeting. Mr. Grigsby alleged in his comments that in 2000, UBS paid a major part of $1.2 billion fine for taking gold and assets from Holocaust Jews, and admitted to using Jewish Holocaust victims as slaves. Ms. Covington read the responses from UBS: bullet number one, “In a widely publicized settlement in 1998, Swiss banks, including UBS AG, agreed to pay $1.25 billion in settlement of all claims of Holocaust victims and their heirs against Swiss banks and government. The final installment was paid in 2000. An independent commission is responsible for the processing of the claims. The banks have no influence on the process, and the disbursement of the fund is ongoing.” Bullet number two, “The Independent Committee of Eminent Persons under the supervision of former Fed Chairman Paul Volker found there was no evidence of organized discrimination by the banks against clients on the basis of their origins, nor of the systematic appropriation of the assets of Holocaust victims nor of the manipulation or unlawful destruction of records.” Bullet number three, “There is no claim against UBS alleging victims of the Holocaust were being used as slaves. At no point has UBS ever used Jewish holocaust victims as slaves as stated by Mr. Grigsby.” Ms. Covington asked if the Agency did an independent research to confirm or deny either Mr. Grigsby’s allegations or the refutations from UBS.
Mr. Menchini stated that the matter of litigation claims was the responsibility of the Agency’s legal staff, and that he knew that additional information was provided to the selection panel. Mr. Menchini stated that the ability to determine one way or the other, was beyond the capacity of the selection panel, and all the panel could go on were the accusations made as well as the responses provided by UBS.
Commissioner Covington asked rhetorically, if the ability to confirm the allegations and responses was beyond the capacity of very bright staff members to find out the truth.
Acting Executive Director Joanne Sakai stated that as Mr. Menchini stated, the Agency’s legal staff was involved, and Acting General Counsel Penny Nakatsu could provide a response.
Ms. Penny Nakatsu, Acting General Counsel, stated that the Agency did an independent inquiry of the allegations made by Mr. Grigsby as well as the responses provided by UBS. Ms. Nakatsu stated that the allegations regarding the Holocaust victims were in fact claims that were asserted not against UBS Securities LLC, which was the responding party to the RFP, but these were all claims raised against UBS AG, the corporate parent of UBS Securities LLC. Ms. Nakatsu stated that there was no involvement as far as the Agency could determine, of UBS LLC in the claims asserted regarding involvement in Holocaust money-laundering by UBS AG.
Commissioner Covington asked how old an entity was UBS Securities LLC, the responding party to the RFP, because obviously, the parent company, UBS AG had been around since before World War II.
Ms. Nakatsu stated she did not have the information at hand, and perhaps representatives from UBS could respond.
Commissioner Covington stated that was not necessary, but that her main point was, these were very serious allegations to misappropriate the assets of millions of families, many of whom subsequently perished, and to use the survivors of Auschwitz and Birkenau, those horrible places, to use them as slaves, these were very serious charges and she would not want any connection whatsoever with the Agency of these very serious charges. Ms. Covington stated that a junior company to a parent company accused of such charges was how slavery worked in the United States, and that she wanted to make it clear that she was not accusing anyone at UBS. Ms. Covington stated she was speaking historically that for hundreds of years, African-Americans worked in this country for nothing, not pennies on the dollar, not cents per year, but nothing, and at the same time, people who were being paid, made lots and lots of money. Generations went by, the descendants of Black people who did not make any money, were still impoverished, and that was the truth. Ms. Covington stated it was not a mistake that so many African-Americans live marginally day-to-day, and it was not because African-Americans were inherently lazy, in fact, they were among the hardest-working people on the planet, but they had not been paid for their labor. Ms. Covington stated she was bringing up the issue to show that this was a very sensitive issue to her. Ms. Covington stated the same applied to companies, where the parent company was accused of corporate wrongdoing, but the firms that come out of such parent companies, would be successors to the money that was made. Ms. Covington stated this was a very difficult issue for her and she was struggling because there were so many things that were making her very uneasy. Ms. Covington stated in no way, that she was saying that the individuals who work for UBS were not fine, upstanding and wonderful people. Ms. Covington stated she was also not saying that the Agency staff did not do the best they could, and thought that the RFP was flawed when it was issued, and that may be part of the problem.
Ms. Nakatsu added that the Agency did not have an explicit preference for San Francisco-based companies, but that would be a factor in the award of contracts.
Commissioner Covington stated she noticed that Mr. Bob Gamble, the Agency’s former Deputy Executive Director for Finance and Administration, was on the second panel, but not the current Deputy Executive Director for Finance and Administration, who would seem to be one of the people on staff that would have the greatest knowledge about these things.
Mr. Menchini stated that the current Deputy Executive Director for Finance and Administration was on vacation when the selection panel was being formed and that was why she was not on the panel.
Commissioner Yee asked if staff had read the materials handed-out by Mr. Grigsby at the meeting. Mr. Yee stated the information in Mr. Grigsby’s hand-outs was important in considering the matter. Mr. Yee stated he wholeheartedly supported Commissioner Covington’s statements and because the matter was an important issue for Commissioner King, who was unable to attend the meeting due to an important obligation, he would put forth a motion to continue the matter until the next Commission meeting.
Commissioner Covington seconded Commissioner Yee’s motion to continue the matter until the next Commission meeting.
President Peterson stated he would not support the motion to continue the matter because the matter had been before the Agency for over two months, and although he appreciated Commissioner Covington’s comments, he did not think it was worthy to continue the item. Mr. Peterson stated the financing and timing of the bond issuance was very critical to the Agency’s programs, and that if it was an important issue for Commissioner King, he could have called him about the calendared item. Mr. Peterson stated he thought there were politics at work and that he would not support the motion to continue.
Commissioner Romero stated he read the staff report thoroughly and that he knew that staff had carefully considered its recommendation, and he saw the horrible allegations, and it was not that he was indifferent to them, but he thought they had to be considered within the context in which they were being made. Mr. Grigsby was an interested party in the Commission’s decision, and Mr. Grigsby would like to be selected as the underwriter for the Agency bonds. Therefore, there was a reason to question his motives in making the allegations, and they were allegations, not proven facts. Mr. Romero asked if the Agency was now to convene its own war crimes tribunal and determine if the allegations were true. Mr. Romero stated he would not think so, certainly not in the next two weeks, and that he did not know if the allegations were true or not about the parent company or actions taken almost 70 years ago, and he was not sure how Agency staff or anyone else, would go about trying to prove or disprove the allegations. Mr. Romero stated he could not imagine Mr. Grigsby doing his own investigation and that he must have heard about the allegations from somewhere. Mr. Romero stated that again, he did know if the allegations were true or not, and what was important to the Commission was the process undertaken by staff of twice putting out to bid in an even-handed and fair manner the RFP for the bond underwriting work. Mr. Romero stated that Mr. Grigsby was not selected on both occasions, and he was the only one to speak against the staff recommendation, and as the Commission heard, Mr. Grigsby would like a piece of the action. Mr. Romero stated that Mr. Grigsby did not tell the Commission that it should not select the recommended company because they were not qualified, instead, Mr. Grigsby asked the Commission to not select UBS solely because of the allegations of wrongdoings in the past and that he could prove it. Mr. Romero stated that Mr. Grigsby asked the Commission to select or include him as one of the underwriters, and that was a very different matter altogether. Mr. Romero stated he was not indifferent to the enslavement of any people including Holocaust victims, but this seemed to be like McCarthyism, that if you make allegations and scare enough people, that perhaps one could change the process. Mr. Romero stated he was sorry that the matter had escalated to such a level, but that the Commission must remember its role in the matter, and that the Agency staff was very experienced in these matters, and the reasons they had expressed on the selection of UBS were very clear. Mr. Romero stated he heard Mr. Menchini state that UBS had many many offices around the State to market the bonds, and that Mr. Grigsby did not have that many, and that he (Mr. Romero) was not going to second-guess the staff who was used to dealing with the Agency’s bond issuance because they were much more experienced than he was. Mr. Romero stated he hoped that the Commission would vote on the matter today, and put a little faith on the Agency staff, unless the Commission could prove that the alleged war crimes were committed.
Commissioner Breed asked if the Agency was obligated to select the firm that received the highest scores in the ranking of the selection panel.
Mr. Menchini stated that the selection criteria were detailed in the RFP and that it would be difficult to justify the selection of a firm that was not ranked the highest. Mr. Menchini stated he believed that it would call into question why there was an RFP process that led to two selection panels ranking each firm and not selecting the firm that came in first.
Commissioner Breed stated that she was not completely clear, and requested verification that the firm of Stone and Youngberg was the only local San Francisco firm.
Mr. Menchini stated that the firm of Stone and Youngberg was the only local San Francisco firm that was a senior manager, but the firms of Grigsby and Associates and Backstrom, McCarley, Berry were also local San Francisco firms.
Commissioner Breed stated that based upon the information provided to the Commission, she was not completely comfortable as well, because she did not feel that a response letter from UBS was sufficient information for her to be comfortable moving the matter forward. Ms. Breed stated she was not comfortable primarily because of the concerns raised by Commissioner Covington, and that she would need more information about the very serious allegations. Ms. Breed stated she thought the Agency had options because the Commission was well within its discretion to make decisions as to whether or not to choose to go with the staff or panel’s recommendation, or determine its own recommendation based on information provided to the Commission. Ms. Breed stated that the second group ranked only a couple of points below the highest-ranked firm, so that second group would definitely be qualified. Ms. Breed stated she specifically asked not only for UBS to respond to the allegations, but for staff to provide the Commission with details of whether or not the allegations were true. Ms. Breed stated as much as she did not want to prolong the matter, and she understood that there would be financial consequences for the Agency, she would like to be considerate towards Commissioner Covington’s concerns, and she did not have all of the information she needed to feel comfortable moving forward.
Commissioner Singh stated he also agreed that the allegations were very serious, and asked what impact it would have if the matter was delayed for a couple of weeks.
Mr. Menchini stated that the Agency projects proposed to be financed with the anticipated bond proceeds would be delayed, and the Agency would not be able to enter into contracts for instance, to undertake improvements to Pier 40 until the Agency knew the funds were available, and the Agency would not know if the funds would be available until the bonds were sold. Mr. Menchini stated that the Agency’s affordable housing program would not be able to move forward without approximately $45 million ion anticipated bond proceeds. Mr. Menchini stated in addition, the further the matter was delayed, he thought there would be more questions raised by outside bond counsel because the Agency was moving beyond the fiscal year in which the authorization to sell the bonds was given. Mr. Menchini stated that ideally, the Agency should sell the bonds in the same year as the authorization was given, and it may be necessary to go back to the Board of Supervisors for additional authority, if the sale of the bonds was further delayed.
Commissioner Singh asked if the Board of Supervisors gave the Agency a time limit to sell the bonds. Mr. Singh requested verification that the Agency would have to pay higher interest if the bond issuance was delayed.
Mr. Menchini stated it was more of a legal issue with the Agency’s bond counsel as they advised the Agency because they become uncomfortable when bonds that were authorized to be sold in one year and were not sold until the following year. Mr. Menchini affirmed that the Agency would have to pay higher interest if the bond issuance was delayed. Mr. Menchini stated that typically, the bond financing would take about 10 or 12 weeks before the bonds could be sold, and the longer the Agency waited, the greater the possibility of bond counsel raising concerns with the authorization.
President Peterson stated he had concerns that echo Commissioner Covington and Yee’s, however he was also thinking about the Agency’s fiduciary responsibility on behalf of the City and County of San Francisco. Mr. Peterson asked if the Commission was to select the second ranked firm, Citigroup, instead of the highest-ranked firm UBS Securities, would that remove the shadow of the horrible allegations against UBS, but still allow the Agency to move forward with its financing and still work with a capable senior manager.
Mr. Menchini stated he believed that the Commission would have the discretion to select the second-rank firm as President Peterson suggested.
President Peterson stated he would hope that the matter would not be continued and the Commission could come to an agreement. Mr. Peterson stated that after the Commission votes on the motion to continue the item, he would put forth a motion to remove UBS Securities as senior manager for the issuance of the Agency bonds.
Commissioner Covington stated that according to Mr. Menchini, the bond issuance would take between 10 to 12 weeks and if the Commission acted to proceed, the issuance would go beyond the new fiscal year, and asked for verification.
Mr. Menchini stated that was correct, but the longer the issuance was delayed, he thought there would be concerns voiced by outside bond counsel if the bonds were sold say, in September or October, instead of in July.
Commissioner Covington stated her original comment was that Commissioner King was absent and presumably, he would be at the next Commission meeting, when the matter was proposed to be continued. Ms. Covington asked if UBS Securities came in first with both selection panels.
Mr. Menchini stated that UBS Securities came in first with both selection panels.
Commissioner Yee stated that staff was incorrect when they stated that recommendations from staff to the Commission should be followed. Mr. Yee stated he would remind everyone that the Commission did not follow staff’s recommendation on the master developer for the Hunters Point Shipyard, and the Commission awarded it to Lennar/BVHP. Likewise, the Commission did not follow staff’s recommendation for the Plaza Hotel project. Mr. Yee stated he wanted to point out that many times in the past, the Commission had not always followed staff’s recommendations. Mr. Yee stated the Commission was faced with serious issues with the tax allocation bonds, and he did not see anything wrong with delaying the matter until the next Commission meeting, in order to show respect the Agency’s senior Commissioner, Mr. King, who was absent. Mr. Yee stated that Commissioner Covington raised legitimate concerns, and the Commission should continue the matter until the next meeting.
Commissioner Romero asked if the Agency had done business with UBS Securities before.
Mr. Menchini stated that the Agency had not done business with UBS Securities before, but the Agency had done business with Paine Webber before, which was subsequently purchased by UBS Securities.
Commissioner Romero stated he noted that the proposed bond issuance was approximately $70 million, and asked if Paine Webber was the last underwriter to handle an Agency bond issuance of this size.
Mr. Menchini stated that Paine Webber was not the last underwriter to handle an Agency bond issuance of that size, but the Agency did use Paine Webber as a senior manager for a 1994 transaction, and had not utilized Paine Webber or its successor, UBS Securities since then.
Commissioner Romero asked if the Agency had done business with Grigsby and Associates before and for what quantity.
Mr. Menchini stated that the Agency had worked with Grigsby and Associates, in the early 1990s, and believed that Grigsby and Associates served as co-manager on a couple of mortgage revenue transactions.
Commissioner Romero asked what would be the potential loss of income to the Agency if the Commission did not approve staff’s recommendation, either with a delay or the selection of an underwriter that was not ranked first.
Mr. Menchini stated the projects proposed to be funded with the $70 million bond proceeds would not move forward, including affordable housing projects, support for the Museum of the African Diaspora, about $4 million for the Pier 40 improvements, and if contracts were not let out, and there could potentially be increases in construction costs. Mr. Menchini stated that obviously, the Agency would not know how quickly interest rates would rise, and by the time the bonds were sold in about 10 to 12 weeks, the interest rates would be uncertain and may result in a higher cost of financing. Mr. Menchini stated that if the bond issuance is further delayed, there would be the possibility that bond counsel may not accept the authorization granted to the Agency in July 2005 by the Board of Supervisors, and would ask the Agency to go back to the Board of Supervisors for a new authorization.
Commissioner Romero requested verification that any further delay would give more opportunity for interest rates to go higher. Mr. Romero asked what a one point change in interest rate would mean for the proposed $70 million bond issuance.
Mr. Menchini stated that additional delays would certainly have the potential for higher interest rates because the expectation was for interest rates to go higher. Mr. Menchini stated that the five-basis point increase cited in the Commission memorandum led to a $1.2 million increase in interest costs, a 10-basis point increase would lead to a $2.9 million increase.
Commissioner Singh referred to the informational memorandum regarding the Agency’s tax allocation debt in the amount of $533 million, and asked if there was any additional outstanding debt.
Mr. Menchini stated that the $533 million was the total outstanding tax allocation bonds as of today, and the figure had not changed.
Commissioner Singh stated that in addition, the Agency would be paying about $50 million in debt service, and if there was further delay in the bond issuance, there may be the potential for higher interest rate costs, and the issues were proving to be very difficult for him. Mr. Singh stated that on one hand, he agreed with Commissioners Covington and Yee, but on the other hand, he believed the Agency should move forward with the proposed bond issuance in order to finance the Agency’s important projects.
Commissioner Breed asked if representatives from UBS Securities and Backstrom, McCarley, Berry were in attendance, and if so, to introduce them.
Mr. Menchini introduced representatives from UBS Securities and Backstrom, McCarley, Berry.
Commissioner Breed stated that her issues were a reflection of Commissioner Covington’s concerns, but regarding the RFP process, she wanted to have respect for the RFP process and respect for the firms who did the work to submit responses to the RFP. Ms. Breed stated as far as she was concerned, based upon the information provided to the Commission, she was prepared to move forward with staff’s recommendation. Ms. Breed stated the other concern was with an African-American group that was qualified to take on the work and the Commission’s desire to see more African-American and minority firms involved in the Agency’s work, and how to balance this with the Commission’s fiduciary responsibility. Ms. Breed stated she understood the time urgency of the matter, and although she did not feel personally offended with the allegations asserted, because of the information provided to the Commission, she would still like to support her fellow Commissioners and if the Commission wanted to move forward with the item, she would support that. Ms. Breed stated that if more information was needed to allow the Commission to make an informed decision, she would also support that, but that this was one of the toughest decisions she had to face because of the issues involved. Ms. Breed stated she recalled President Peterson suggested removing UBS Securities, but that would be easier said than done, because they also participated in the RFP process as did everyone else, and if that would put some of the Commissioners at ease, she would be happy to support that, however, she did not know if that would be fair. Ms. Breed stated she did not think that the Commission should delay the matter because the Commission would be financially irresponsible. Ms. Breed asked if the Commission could approve the matter contingent upon the Commission receiving additional information about the allegations asserted against UBS.
Ms. Nakatsu stated that in theory, the Commission could approve the matter contingent upon the Commission receiving additional information about the allegations asserted against UBS, but if the Commission had significant questions, it should first receive responses to the questions rather than putting a condition on the resolution.
Commissioner Breed stated that the Commission would have the option to include contingencies to the resolution, like asking staff to do additional research on the allegations asserted.
Commissioner Yee stated this was a very important issue for the Agency, and he wanted to make clear that his motion was to continue the matter until the next Commission meeting, and that his purpose was not to kill the item. Mr. Yee stated he did not want the same thing to happen with a previous matter that resulted in a tie vote of the Commission. Mr. Yee called for the question on his motion to continue the item.
Commissioner Covington stated she did not know what further information the Commission could get beyond the memo from UBS, which stated that they paid a major part of $1.2 billion fine and that they paid a penalty of $100 million to the United States for sending dollars to Cuba, Libya, Iran and Yugoslavia in violation of US sanctions. Ms. Covington stated the information was right there in the UBS memo, and that she agreed with Commissioner Yee that the continuance did not mean killing the item.
MOTION: IT WAS MOVED BY MR. YEE, SECONDED BY MS. COVINGTON, TO CONTINUE ITEM 4 (e) RESOLUTION NO. 67-2006, AUTHORIZING THE ENGAGEMENT OF UBS SECURITIES LLC, A DELAWARE LIMITED LIABILITY COMPANY, AND BACKSTROM MCCARLEY BERRY & CO, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, AS THE UNDERWRITERS FOR THE ANTICIPATED ISSUANCE OF THE 2006 TAX ALLOCATION BONDS BY THE REDEVELOPMENT AGENCY OF THE CITY AND COUNTY OF SAN FRANCISCO, TO THE COMMISSION MEETING OF JUNE 6, 2006, AND ON ROLL CALL, THE FOLLOWING VOTED “AYE”:
AND THE FOLLOWING VOTED “NAY”:
AND THE FOLLOWING WERE ABSENT:
THE SECRETARY DECLARED THE RESULTS OF THE ROLL CALL VOTE, THREE (3) AYES, THREE (3) NAYS, AND ONE (1) ABSENT.
THE PRESIDENT THEREUPON DECLARED THAT THE MOTION TO CONTINUE ITEM 4 (e) FAILED.
Commissioner Breed put forth a motion to select the second-ranked firm, Citigroup, as the senior manager for the Agency’s bonds, to address Commissioner Covington’s concerns, and since the motion to continue failed.
Commissioner Romero put forth a point of order, and stated that he had earlier made a motion to adopt item 4 (e), and that he would like to comment on the motion to adopt.
President Peterson stated that the Commission could do what it would like to do, and although Commissioner Covington had concerns about the highest-ranked senior manager, he would support staff’s recommendation, however, he felt it was more important for the people of San Francisco and the Agency to have the funding they required, and that he would be in favor if the other Commissioners would support him, and he would apologize to UBS in this regard, he would suggest for the Commission’s consideration that the Commission select Citigroup as the senior manager to underwrite issuance of the Agency’s bonds.
Commissioner Romero stated as he looked at the memorandum from UBS, it was not clear to him that they made the admissions that Commissioner Covington mentioned in her last comments. Mr. Romero stated he was not trying to get into a debate, but that none of the Commissioners had the information necessary to determine if the allegations were true or not, and that was why he had taken the position he had, because if one looked at the memorandum from UBS carefully, the items in bold were the allegations made by Mr. Grigsby, and the bulleted, italicized items below were the responses from UBS. Mr. Romero stated as an example, where the memorandum stated “In 2004 paid penalty of $100 million, etc.,” that was the allegation and not the admission, and the response from UBS had somewhat of an admission that something happened, but it did not clearly admit that they paid the $100 million penalty. Mr. Romero stated the problem he had with the whole scenario was the seriousness of the allegations asserted, and if there was a non-governmental organization like Amnesty International or somebody that he thought had a neutral credibility with some evidence that perhaps pursued the allegations before the appropriate forums, he would have a much different reaction and would be the first to throw out UBS Securities. Mr. Romero stated what the Commission had instead, were allegations that nobody knew if they were true or not, and if the allegations were proven to be true, then he would readily admit he was wrong, but he would like the Commission to prevent from falling into a way of proceeding in which somebody could come to the microphone and make extreme allegations and ignore all of the work of staff and perhaps, a company that could do a great job for the Agency that was innocent or at least, far enough removed from the allegations, that it should not be held against them. Mr. Romero stated he was not sure about including contingencies on the approval of the resolution, and that in the past the Commission had gone ahead and awarded a contract in spite of public testimony that was proven to be true, and the Commission had to reverse its action, and perhaps that would be the case with the bond underwriters, but at this point, he did not think the Commission had the grounds to overstep the staff’s recommendation. Mr. Romero stated he was glad that the motion to continue failed, as the Commission could have a worse case scenario, because Grigsby and Associates was ranked 10th on the score sheets, and the suggestion was not to remove UBS and select Grigsby and Associates, but to give the underwriting to Citigroup, who was not even in attendance. Mr. Romero stated it did not make sense to him, and that he would not support selecting Citigroup. Mr. Romero stated this was a scenario where the Commission was tested to either put its faith on the Agency staff or not, and if the Commission was going to second-guess staff’s recommendation or lobbied individually on a matter of great significance, Commissioners better be sure they knew what they were doing. Mr. Romero stated at this point, he would rather put his faith on staff’s recommendation.
President Peterson stated that he would be in favor, if the Commission were, to adopt the item in its present form, which he would support, and if the allegations were substantiated or if additional evidence came forward over the course of the next year, the Commission could certainly decide not to use UBS Securities on any further Agency bond offerings.
Commissioner Yee stated he was against Commissioner Romero’s motion to adopt item 4 (e) because it did not show respect to Commissioner King and ignored the concerns brought up by Commissioner Covington and echoed by Commissioner Breed.
Commissioner Singh stated it was a very difficult decision for him, but because of the time urgency, he thought that the Commission should move forward. Mr. Singh seconded Commissioner Romero’s motion to adopt item 4 (e). Mr. Singh stated that Grigsby and Associates should be considered for future work with the Agency.
President Peterson stated he thought he might be in favor of voting against the motion or to continue the matter as was earlier suggested by Commissioner Yee, if Grigsby and Associates was even close in the rankings, which he was not. Mr. Peterson stated he thought that there was some politics going on, and thought there were a few Commissioners that had been professionally lobbied, by former Supervisor Doris Ward, and thought that this had more to do with Mr. Grigsby getting a piece of the action, than it did with everything else that had been discussed. Mr. Peterson stated he thought that the idea of continuing the matter or voting it down in order to allow Commissioner King to get involved, was really a result of the lobbying, and that was politics. Mr. Peterson stated that was not what the Commissioners should be doing on the Agency Commission, and Commissioners should not be overly influenced by lobbyists to the extent that the Commission was not getting the people’s business done, and that he was afraid that politics were at work. Mr. Peterson stated that if the issue was about slavery and Holocaust victims, then he would say that the Agency need not use UBS Securities, but if the issue was to continue or vote the item down so as to facilitate for Commission King to somehow resuscitate Mr. Grigsby’s fortunes before the Agency Commission, it would certainly not get his support. Mr. Peterson stated that there had been allegations made against Mr. Grigsby by the Federal Government, and although he may not have been convicted, but the allegations may well be supported. Mr. Peterson stated he did not think he could ever support, from what he had learned since Mr. Grigsby’s trail of disparaging remarks at the last Commission meeting in which he (Mr. Grigsby) testified, and did not think that he could ever support Mr. Grigsby. Mr. Peterson stated he was sorry about that, and he was not sure if the City had done much business with Mr. Grigsby lately.
Commissioner Covington stated that if Commissioners were going to talk about lobbying, what President Peterson stated to the people in attendance at the meeting and to the people listening on the radio, was essentially lobbying the staff, because Mr. Peterson just told staff that he could never support Mr. Grigsby. Ms. Covington stated she never said anything about Mr. Grigsby moving up the ranks, and since she was the person who brought the issues up, she took issue with Mr. Peterson’s remarks. Ms. Covington stated she had been heavily lobbied by history, and she would always continue to be lobbied by history, because reading of history and analysis of history would help people stay out of trouble, because history does repeat itself. Ms. Covington stated no one had lobbied her, and people talked with her and she listened and that was why they were Commissioners, to listen to the people of the City and County of San Francisco, and to read the agenda packets. Ms. Covington stated she thought it was a problem when the President of the Commission stated that he would never, under any circumstances, support a particular person who had business before the Agency Commission, especially a person who was accused of something and was found to be innocent of those accusations.
President Peterson stated he did not believe the matter ever went to trial, so he did not believe Mr. Grigsby was found innocent, but that he believed that the case was dropped, and there was a difference. Mr. Peterson stated that on the item regarding the Holocaust, it was his proposal that if it was such a serious question for Commissioner Covington and the Commission, that the Commission could simply remove UBS from consideration.
Commissioner Romero stated this was the problem with the kind of allegations that had been asserted, and although Commissioners were rational people, everyone had things they felt strongly about. Mr. Romero stated he thought the Commission was a lot closer than it seemed in its views about such issues than what appeared to be emerging in the debate. Mr. Romero stated that extreme allegations bred extreme reactions and emotions, and that was why he found in those moments, it was most important for Commissioners to focus on the process that they knew, and that led him to making the motion to adopt the item. Mr. Romero stated he would urge his fellow Commissioners to have cool heads and to think about the process, and what the Commissioners were there for specifically, because the Commission was not there to prosecute Mr. Grigsby or UBS. Mr. Romero stated the Agency did not start the allegations and the Agency was just responding to them because Commissioners were also human beings like everyone else, but the Commissioners did know the economic reasons that led to the staff recommendation, including the process that staff went through for the selection and recommendation to the Commission. Mr. Romero stated the bottom line for him was, did he have enough reliable evidence or enough of a question about the evidence that was available, to make him not support the staff recommendation, because a lot of money was involved and the Agency had a lot of bond issuances in the past, and unless there was a really good reason to not support the staff recommendation, the Commission should vote for it.
ADOPTION: IT WAS MOVED BY MR. ROMERO, SECONDED BY MR. SINGH, THAT ITEM 4 (e) RESOLUTION NO. 67-2006, AUTHORIZING THE ENGAGEMENT OF UBS SECURITIES LLC, A DELAWARE LIMITED LIABILITY COMPANY, AND BACKSTROM MCCARLEY BERRY & CO, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, AS THE UNDERWRITERS FOR THE ANTICIPATED ISSUANCE OF THE 2006 TAX ALLOCATION BONDS BY THE REDEVELOPMENT AGENCY OF THE CITY AND COUNTY OF SAN FRANCISCO, BE ADOPTED, AND ON ROLL CALL, THE FOLLOWING VOTED “AYE”:
AND THE FOLLOWING VOTED “NAY”:
AND THE FOLLOWING WERE ABSENT:
THE SECRETARY DECLARED THE RESULTS OF THE ROLL CALL VOTE, FOUR (4) AYES, TWO (2) NAYS, AND ONE (1) ABSENT.
THE PRESIDENT THEREUPON DECLARED THAT THE MOTION CARRIED AND RESOLUTION NO. 67-2006 WAS ADOPTED.
At this time, approximately 5:49 p.m., Executive Director Marcia Rosen arrived at the meeting
4 (f) Resolution No. 68-2006, Authorizing a regulatory and grant agreement in an amount not to exceed $2,035,691; a tax increment loan agreement in an amount not to exceed $1,922,162; and a lease option agreement with West Bay Housing Corporation, a California nonprofit public benefit corporation, and Satellite Housing, Inc., a California nonprofit public benefit corporation, for the development of very low-income rental housing on Central Freeway Parcel Q, southwest corner of Octavia Boulevard and Oak Street; Citywide Tax Increment Housing Program
Executive Director Rosen, before introducing the staff presentation, reported that the Board of Supervisors with a vote of six to three, adopted on first reading, the ordinance approving the Bayview Hunters Point Redevelopment Plan Amendment.
Presenters: Pam Sims (Agency staff)
Speakers: Paula Cook, Todd (no last name given)
Commissioner Breed stated it was wonderful to see all of the people who came to the meeting on the proposed project. Ms. Breed stated the project looked great and that she was excited about the beautiful building. Ms. Breed put forth a motion to adopt item 4 (f).
Commissioner Singh seconded Commissioner Breed’s motion to adopt item 4 (f). Mr. Singh asked if West Bay Housing had done other projects with the Agency or elsewhere in the City.
Ms. Pamela Sims, Development Specialist, stated that West Bay Housing had not done other projects with the Agency and Central Freeway Parcel Q would be their first project with the Agency.
Ms. Paula Cook of West Bay Housing stated that West Bay Housing was a co-developer on the feasibility of the addition to the Rosa Parks Senior Housing, which would include units for 5 or 10 clients with developmental disabilities. Ms. Cook stated that they were also working with the Golden Gate Regional Center to identify and analyze opportunities for placing clients who were currently in Laguna Honda Hospital. Ms. Cook stated that they also had other projects in Redwood City.
Mr. Ryan Chao of Satellite Housing, stated that West Bay had a lot of experience in working with the population they were seeking to serve, and Satellite Housing had over 40 years of experience in housing development, having built 17 projects throughout the Bay Area, serving 1,350 people. Mr. Chao stated that 16 of those projects used Department of Housing and Urban Development (HUD) financing.
Commissioner Covington stated that the architectural renderings were good and building design was gorgeous, but the rendering left out a lot of traffic on that corner. Ms. Covington stated that the traffic on that corner was horrendous and that was her only concern about the project, which she had mentioned several times. Ms. Covington asked what kind of mitigation measures would be taken to make sure that people would be safe as they crossed the very busy street.
Ms. Sims stated as a result of Commissioner Covington’s concerns at the previous Commission meeting, the co-developers had entered into an agreement with a traffic engineer, and they had begun the process of conducting a traffic study to determine the traffic patterns on the corner. Ms. Sims stated that in addition, the co-developers would incorporate a traffic training program for the prospective residents to ensure safety when crossing the street.
Commissioner Covington stated she was glad to hear that because she wanted people not only to be happy, but also safe. Ms. Covington inquired about the street trees that were planted as part of the Octavia Boulevard project, and asked if the street trees would remain during construction.
Ms. Sims stated that the street trees may have to be removed during construction and replanted after.
ADOPTION: IT WAS MOVED BY MS. BREED, SECONDED BY MR. SINGH, AND UNANIMOUSLY CARRIED (MR. KING ABSENT) THAT ITEM 4 (f) RESOLUTION NO. 68-2006, AUTHORIZING A REGULATORY AND GRANT AGREEMENT IN AN AMOUNT NOT TO EXCEED $2,035,691; A TAX INCREMENT LOAN AGREEMENT IN AN AMOUNT NOT TO EXCEED $1,922,162; AND A LEASE OPTION AGREEMENT WITH WEST BAY HOUSING CORPORATION, A CALIFORNIA NONPROFIT PUBLIC BENEFIT CORPORATION, AND SATELLITE HOUSING, INC., A CALIFORNIA NONPROFIT PUBLIC BENEFIT CORPORATION, FOR THE DEVELOPMENT OF VERY LOW-INCOME RENTAL HOUSING ON CENTRAL FREEWAY PARCEL Q, SOUTHWEST CORNER OF OCTAVIA BOULEVARD AND OAK STREET; CITYWIDE TAX INCREMENT HOUSING PROGRAM, BE ADOPTED.
4 (g) Resolution no. 69-2006, Authorizing a purchase and sale agreement with the City and County of San Francisco, a municipal corporation, for the acquisition of real property located at the southwest corner of Broadway at Battery, for an amount not to exceed $1,500,000, for disposition and development as affordable housing; Citywide Tax Increment Housing Program
Presenters: Lucia Tall Chief Mele (Agency staff)
ADOPTION: IT WAS MOVED BY MS. BREED, SECONDED BY MR. ROMERO, AND UNANIMOUSLY CARRIED (MR. KING ABSENT) THAT ITEM 4 (g) RESOLUTION NO. 69-2006, AUTHORIZING A PURCHASE AND SALE AGREEMENT WITH THE CITY AND COUNTY OF SAN FRANCISCO, A MUNICIPAL CORPORATION, FOR THE ACQUISITION OF REAL PROPERTY LOCATED AT THE SOUTHWEST CORNER OF BROADWAY AT BATTERY, FOR AN AMOUNT NOT TO EXCEED $1,500,000, FOR DISPOSITION AND DEVELOPMENT AS AFFORDABLE HOUSING; CITYWIDE TAX INCREMENT HOUSING PROGRAM, BE ADOPTED.
4 (h) Public Hearing on the Draft Environmental Impact Report for the 74-unit residential project located at 64-72 Townsend Street, Assessor’s Block 3789, Lot 3, located at the northwest corner of Townsend and Colin P. Kelly Jr. Streets; Rincon Point-South Beach Redevelopment Project Area
Presenters: Tiffany Bohee (Agency staff)
4 (i) Resolution No. 70-2006, Authorizing a Third Amendment to (1) the Memorandum of Understanding and the Grant Agreement with Bindlestiff Studio, a California nonprofit public benefit corporation, and (2) the fiscal agent contract with Tenants and Owners Development Corporation, a California nonprofit public benefit corporation, as the fiscal agent for Bindlestiff Studio, to extend their terms from December 31, 2005 to May 31, 2007, to enable additional predevelopment activities for a new community theater at the Plaza Apartments, 988-992 Howard Street; South of Market Redevelopment Project Area
Presenters: Mike Grisso (Agency staff)
Speakers: June Parina, Chris Durazo, Jamie Mancini
Commissioner Singh asked what the main source of income was for Bindlestiff Studio, and what the average attendance at the performances was.
Mr. Mike Grisso, Project Manager, stated that the primary source of income for Bindlestiff Studio was ticket sales for their shows.
Mr. Bryan Pangilinan, Managing Director of Bindlestiff Studio, affirmed that their primary source of income was from ticket sales, and in 2005, they produced 80 shows and had revenues of about $30,000. Mr. Pangilinan stated that their shows had great attendance even while performing at the interim space on Natoma Street and the average attendance was about 70 people per show.
Commissioner Singh stated he recalled there was a young lady name Olivia that used work with Bindlestiff Studio, and asked if she was still involved.
Mr. Pangilinan stated that Commissioner Singh was speaking of Ms. Olivia Malabuyo who now works for a non-profit organization in the East Bay, but still serves in an advisory capacity to Bindlestiff Studio.
Commissioner Singh put forth a motion to adopt item 4 (i). Commissioner Covington seconded the motion.
Commissioner Breed asked if Bindlestiff Studio had a lease with the Plaza Hotel before they left the hotel.
Executive Director Rosen stated that Bindlestiff Studio had a month-to-month lease. They were a tenant in place at the time the Agency acquired the property, and the Agency continued their tenancy until the building had to be demolished to construct the newly completed Plaza Apartments. Ms. Rosen stated the Agency provided relocation assistance as well as provided the grant and had been planning with them.
Commissioner Breed stated the impression she was getting was Bindlestiff Studio had some entitlement to the space, and she wanted to make sure that it was because the Agency had made the decision to work with the organization in order to make sure that they could return to the new space. Ms. Breed asked if there was an agreement.
Executive Director Rosen stated when the Commission adopted the resolution that assigned the Plaza Apartments development to the Public Initiatives Development Corporation (PIDC), the resolution also included a provision that the Agency work with Bindlestiff Studio, hoping that they could relocated to the newly constructed Plaza Apartments, and the Agency had been working with Bindlestiff Studio towards that end. Ms. Rosen stated beyond that, the Agency had not taken any additional action with respect to Bindlestiff Studio. Ms. Rosen stated the staff was contemplating bringing a lease for the Commission’s consideration as the partnership with Bindlestiff Studio evolved. Ms. Rosen stated that the Agency was working and cooperating with the Mayor’s Office of Community Development (MOCD) to assist Bindlestiff Studio to diversify its sources of funding and access the Community Development Block Grant (CDBG) funds.
Commissioner Breed stated that Bindlestiff Studio could access the CDBG funds with a letter from the Redevelopment Agency stating that Bindlestiff Studio was in the process of returning to the new space at the Plaza Apartments.
Executive Director Rosen stated that staff had been in discussions with the MOCD staff as to what Bindlestiff Studio may need as well as the time frame for accessing the CDBG funds. Ms. Rosen stated the action that the Commission took at its previous meeting to authorize the Agency to enter into an agreement related to the South of Market Community Benefits District from the Rincon Hill Assessment District would qualify Bindlestiff Studio for that funding, and the Agency hoped to stimulate additional capital grants by structuring that portion of the Agency’s grant agreement as a matching grant. Ms. Rosen stated that staff was working very closely with Bindlestiff Studio, and staff was very heartened by their recent progress and recent additions to their staff and board of directors, and the seriousness of their purpose.
Commissioner Breed stated she was supportive of Bindlestiff Studio and what they had done in the past as well as what they were trying to do. Ms. Breed stated as a director of an arts organization, she understood the difficulties that arts organizations faced, and it was unfortunate that some agreements were made between Bindlestiff Studio and the Agency to develop the theater space, because as an arts organization, she did not think it was realistic to expect an organization of that nature to be a developer, but at the same time, she thought that because the Agency was not obligated due to the lease issues, it was a good partnership and a good team effort, and it seemed that everyone was putting their best foot forward to try and accommodate one another and to make things easier. Ms. Breed stated as she previously stated, as much as she hoped that Bindlestiff Studio could raise the funds, she did not know how realistic that was to expect of Bindlestiff Studio, and she wanted to make sure that Bindlestiff Studio knew that the Agency would not be completely responsible, and to the extent that the Agency had funds available to help, it would do so. Ms. Breed stated she definitely supported Bindlestiff Studio and hoped that they would continue to move forward, and from the Agency’s standpoint, she was really happy to see that staff had been really supportive and working with Bindlestiff Studio.
President Peterson stated there should be a diverse group of people that would be willing to contribute to Bindlestiff Studio’s worthy cause, and asked if they had identified wealthy Filipino-Americans in the Bay Area, because that would be the key to their fundraising efforts moving forward.
Mr. Alex Torres, a board member of Bindlestiff Studio, stated that they had been trying to identify wealthy Filipinos as well as others who are supportive of Filipinos. Mr. Torres stated they had been in communications with many people including the Philippine Consulate, but the only thing that was hindering them was that as of December 2005, they did not have an agreement with the Agency, but with the favorable consideration of the Commission to extend the grant agreement, they could approach potential donors with the support of the Agency and the City and County of San Francisco. Mr. Torres stated that the grant agreement would greatly improve their fundraising efforts moving forward.
President Peterson lent his support and asked Mr. Torres to get in touch with him when they were ready as he would have a couple of names as potential contributors.
Ms. June Parina of Bindlestiff Studio stated that they had already invited big Filipino families like the Banatao’s and Yuchengco’s to their shows, and although they were impressed with the performances, they felt a little concerned with safety of the interim location in the Natoma alleyway, and expressed their desire to see a new theater space, which could now be shown to potential donors.
ADOPTION: IT WAS MOVED BY MR. SINGH, SECONDED BY MS. COVINGTON, AND UNANIMOUSLY CARRIED (MR. KING ABSENT) THAT ITEM 4 (i) RESOLUTION NO. 70-2006, AUTHORIZING A THIRD AMENDMENT TO (1) THE MEMORANDUM OF UNDERSTANDING AND THE GRANT AGREEMENT WITH BINDLESTIFF STUDIO, A CALIFORNIA NONPROFIT PUBLIC BENEFIT CORPORATION, AND (2) THE FISCAL AGENT CONTRACT WITH TENANTS AND OWNERS DEVELOPMENT CORPORATION, A CALIFORNIA NONPROFIT PUBLIC BENEFIT CORPORATION, AS THE FISCAL AGENT FOR BINDLESTIFF STUDIO, TO EXTEND THEIR TERMS FROM DECEMBER 31, 2005 TO MAY 31, 2007, TO ENABLE ADDITIONAL PREDEVELOPMENT ACTIVITIES FOR A NEW COMMUNITY THEATER AT THE PLAZA APARTMENTS, 988-992 HOWARD STREET; SOUTH OF MARKET REDEVELOPMENT PROJECT AREA, BE ADOPTED.
5. MATTERS NOT APPEARING ON THE AGENDA None.
6. PERSONS WISHING TO ADDRESS THE MEMBERS ON NON-AGENDA, BUT AGENCY RELATED MATTERS None.
7. REPORT OF THE PRESIDENT
- President Peterson stated he wanted to address the bond underwriter matter, and that he wanted to communicate to Commissioner Covington that he was not suggesting that she did anything untoward or anything unethical. Mr. Peterson stated that in fact, he did not even know and did not suggest that he knew that she had been lobbied, but that he did believe there were some lobbying, and that he did not mean to point fingers at Commissioner Covington and he was just trying to provide some options for the Agency to address her concerns and still provide for the business of the City to move forward. Mr. Peterson stated that was the spirit his comments were meant and that he had a lot of respect for Commissioner Covington and he wanted to communicate that to her.
- Mr. Peterson stated he wanted to clarify his statements about Mr. Grigsby, and stated that he had nothing against Mr. Grigsby as he had never met him and he could be a fine man, and believed that if there were allegations, they could just be allegations and he was not found guilty of anything. Mr. Peterson stated he also felt that people should be given second chances that may have been found guilty. Mr. Peterson stated he wanted to restate that he did not have a predisposition against ever working with Mr. Grigsby, and although he thought that it would be an upward climb with the Agency Commission, if the staff came with a recommendation that Mr. Grigsby was the best person for a particular project, he would have an open mind.
8. REPORT OF THE EXECUTIVE DIRECTOR
- Executive Director Rosen reported that the Agency had been invited by the California Department of Toxics Substances to join with them and the City of Los Angeles in applying for an Environmental Protection Agency (EPA) Brownfields Revolving Loan Program, and she received a telephone call informing that the program was award by the U.S. EPA, and the Agency would look forward to having a revolving loan program to assist property owners in the Bayview who had toxic substances on their properties and help with clean-up and remediation. Ms. Rosen stated staff was expecting to receive the official letter and would inform the Commission with the start date of the program and eligible projects.
9. COMMISSIONERS’ QUESTIONS AND MATTERS None.
10. CLOSED SESSION
10 (a) Pursuant to Government Code § 54956.9(c): Conference with Legal Counsel regarding initiation of litigation: one potential case.
It was moved by Ms. Breed, seconded by Ms. Covington, and unanimously carried that the meeting be adjourned. The meeting adjourned at 8:06 p.m.
Erwin R. Tanjuaquio