San Francisco Redevelopment Agency

MINUTES OF A REGULAR MEETING OF THE

REDEVELOPMENT AGENCY OF THE CITY AND

COUNTY OF SAN FRANCISCO, HELD ON THE

15^TH DAY OF NOVEMBER 2005

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 15^th day of November 2005, 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 cell phones and pagers be turned off during the meeting.

President Peterson stated he knew that he was speaking on behalf of all Agency Commissioners and the entire staff in sending to their fellow Commissioner and friend, Francee Covington, their sincerest condolences for the passing of her husband Kenneth Graddick, on November 10, 2005.  Mr. Peterson stated that Ms. Covington was with family and friends and was being comforted during this incredibly difficult time.  Mr. Peterson stated that Francee was married to Ken for approximately 16 years and have a young son, Chandler.  Mr. Peterson stated that the Agency’s fondest wishes, prayers and thoughts were with Francee, Chandler and her entire family during this very difficult time.  Mr. Peterson stated that the November 15^th Commission meeting would be adjourned in memory of Mr. Kenneth Graddick.  Mr. Peterson stated that everyone on the Commission had an opportunity to get acquainted with Mr. Graddick when Francee was appointed to the Commission at the same time as he and Commissioner Breed, and it did not take long to see that Ken was a neat guy and a good man, and how important he was to Francee and Chandler.

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

Leroy King

Ramon E. Romero

Darshan Singh

Benny Y. Yee

And the following were absent:

Francee Covington

Marcia Rosen, 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:

CONSENT AGENDA

4 (a)     Approval of Minutes:  Meeting of November 1, 2005

4 (b)     Resolution No. 183-2005, Authorizing the publication of the San Francisco Redevelopment Agency’s official notices and advertisements in those newspapers designated, from time to time, as the official newspapers of the City and County of San Francisco

ADOPTION:  IT WAS MOVED BY MS. BREED, SECONDED BY MR. YEE, AND UNANIMOUSLY CARRIED (MS. COVINGTON ABSENT) THAT CONSENT AGENDA ITEMS 4 (a) APPROVAL OF MINUTES:  MEETING OF NOVEMBER 1, 2005, AND 4 (B) RESOLUTION NO. 183-2005, AUTHORIZING THE PUBLICATION OF THE SAN FRANCISCO REDEVELOPMENT AGENCY’S OFFICIAL NOTICES AND ADVERTISEMENTS IN THOSE NEWSPAPERS DESIGNATED, FROM TIME TO TIME, AS THE OFFICIAL NEWSPAPERS OF THE CITY AND COUNTY OF SAN FRANCISCO , BE ADOPTED.

REGULAR AGENDA

4 (c)     Resolution No.184-2005, Memorializing and commending the contributions of Cheryl Evonne Towns to the Redevelopment Agency of the City and County of San Francisco.

Executive Director Marcia Rosen read the resolution while staff showed a slide presentation of photographs of Ms. Cheryl Towns.

Speakers:  Belva Davis

Commissioner Romero stated that he had made remarks at the previous Commission meeting when Ms. Cheryl Towns’ death was announced and would like to expound on those remarks.  Mr. Romero stated that he had been on the Commission almost eight years and recalled that when he first came to the Commission, Ms. Cheryl Towns made quite an impression on him because of her zeal and energy in supporting not only the Commissioners, but also the Executive Director.  Ms. Towns went out of her way to get to know people and she did that with him.  Mr. Romero stated he had not seen or spoken with Ms. Towns for several months and was surprised to hear that she was retiring from the Agency, but later found out that she was going to take care of her mother who had taken ill.  Mr. Romero stated that was the kind of person Ms. Towns was, one who thought of others before herself, and she fit in very well with the Agency staff, who was generally a very nice group of people.  Mr. Romero stated that when Ms. Towns was cleaning her office, she found some old photographs that had been taken when he was first appointed to the Commission, and instead of throwing the photographs or keeping them, she made sure that copies were sent to him.  Although she did not have to do that, she was the kind of person that thought of others.  Mr. Romero stated that he was glad to see that the Agency was recognizing not only her service to the City, but also the person she was.  Mr. Romero put forth a motion to adopt item 4 (c).

Commissioner Breed stated that she spoke with Mr. Cheryl Towns the day before she was leaving for Texas when she saw her coming out of a store buying cigarettes and recalled telling her that she would get her the nicotine patch to help her quit smoking.  Ms. Breed stated she recalled telling Ms. Towns that she would be back in San Francisco in no time.  Ms. Breed stated that Ms. Towns was a great person and a good friend, who went out of her way to spend time with her and recalled that Ms. Towns took her to her first baseball game with her mother and the late Gloria R. Davis, and they had a wonderful time.  Ms. Breed stated that Ms. Towns had a wonderful spirited personality, and as the years went by, she got to know a good-hearted person who loved her City, her people, especially young people, and loved to help them.  Ms. Breed stated that Ms. Towns was a low-profile person who just took care of business and did her job, and she would be truly missed by her and everyone who knew her.  Ms. Breed stated that she really missed Ms. Towns and her passing was a huge loss not only to the Agency, but the entire San Francisco community.  Ms. Breed seconded Commissioner Romero’s motion to adopt item 4 (c).

President Peterson stated that he was sure that the Commissioners would vote in favor of the commendation resolution and asked if it would be sent to Ms. Towns’ family.

Executive Director Rosen stated that Commission Secretary Erwin R. Tanjuaquio had prepared a presentation version of the resolution, which would be sent to Cheryl’s father, Mr. Joe Towns, in Texas.

ADOPTION:  IT WAS MOVED BY MR. ROMERO, SECONDED BY MS. BREED, AND UNANIMOUSLY CARRIED (MS. COVINGTON ABSENT) THAT ITEM 4 (c) RESOLUTION NO.184-2005, MEMORIALIZING AND COMMENDING THE CONTRIBUTIONS OF CHERYL EVONNE TOWNS TO THE REDEVELOPMENT AGENCY OF THE CITY AND COUNTY OF SAN FRANCISCO , BE ADOPTED.

4 (d)     Workshop on the Draft Redevelopment Plan Amendments for the Hunters Point, India Basin Industrial Park and Bayview Industrial Triangle Redevelopment Projects; Hunters Point, India Basin Industrial Park and Bayview Industrial Triangle Redevelopment Project Areas and the Bayview Hunters Point Redevelopment Survey Area

Presenters:  Stan Muraoka, Tom Evans (Agency staff), Michael Cohen (MOEWD)

Speakers:  Charlie Walker, Angelo King, Ace Washington

Commissioner Yee requested staff to respond to Mr. Charlie Walker’s comments.

Executive Director Rosen stated that the planning for the Bayview had been going on in partnership with the Bayview Project Area Committee (PAC), which was a board of community representatives that was elected in 1997.  The plan before the Commission was the plan recommended by the Bayview PAC.  Ms. Rosen stated that Mr. Walker made reference to the Western Addition, which as the Commission knew, was historically a different form of redevelopment in which the Agency took over a lot of property and reconfigured the development in a very different way than what was proposed for the Bayview.  The Bayview plan, like the Mid-Market and South of Market plans, would be premised on using existing zoning controls with private property to continue to be owned by private owners, and a land use affordable housing, economic development and community improvements program recommended by the community members.  Ms. Rosen stated she did not think that the parallels were there and the Bayview plan had evolved through a very elaborate and thoughtful process, the vision for which was contained in what was called the Concept Plan, which was published by the PAC and endorsed by the Commission in 2000, when Supervisor Sophie Maxwell was the then chair of the PAC.  That Concept Plan continued to be the guiding principle for which the technical redevelopment planning work continued.

Commissioner Yee thanked Ms. Rosen for the explanation and asked about Mr. Walker’s comments about his golf driving range proposal.

Executive Director Rosen stated that the Commission was provided an informational memorandum about a month ago on Mr. Walker’s golf driving range proposal.  Ms. Rosen stated that as the Commission was aware, the Agency was in an exclusive negotiation agreement with Lennar for the entire development of the Shipyard, and the Agency had no authority under the exclusive negotiations agreement to negotiate with any other developer.  Upon further staff investigation of Mr. Walker’s proposal, it was determined that part of the land was land that was already under Lennar’s control, and in fact, was a site for housing development to be built by a community builder, and the other portion of the land for Mr. Walker’s proposal was owned by the U.S. Navy and was undergoing environmental remediation and not available for temporary use or development by anyone for any purpose until the U.S. Navy completed the remediation and made it available to the Agency.  Ms. Rosen stated that while at first blush, the proposal looked very interesting and creative, for which she commended Mr. Walker, the proposal was not feasible, and it was not under the Agency’s control.

Commissioner Yee asked if Mr. Walker had been made aware of the situation.

Executive Director Rosen stated that a letter was sent to Mr. Walker informing him of the situation and she believed that he was also provided a copy of the informational memorandum.  Ms. Rosen stated that Mr. Walker had also spoken with Agency Project Manager Nicole Franklin and she believed, Mr. Michael Cohen from the Mayor’s Office of Base Reuse and Development.

Commissioner King stated he was glad to see the process moving forward and that the Bayview plan should have been prepared at least five years ago, and the only reason why it was moving forward was because members of the Bayview PAC showed up at the last Commission meeting to raise the issues before the Commission, and he hoped that the Agency could expedite the approval of the Bayview plan.  Mr. King stated that a lot of what Mr. Walker stated was true because other areas like Mid-Market moved a lot faster than Bayview, and while the work in the Western Addition was finally being completed, there was still a lot of work to be done with the community.  Mr. King stated that the most affected areas by redevelopment were the Hunters Point and Western Addition areas that resulted in the removal of African-Americans from those communities.  Mr. King stated that there was a nucleus of African-Americans in the City and the reason why they were no longer here was because of redevelopment that displaced them and sent them to places like Pittsburg, Antioch and the Peninsula.  Mr. King stated that he himself had to move to East Palo Alto for eight years because of redevelopment, and the only reason he was able to move back to the City was because the labor union built the housing he could afford.  Mr. King stated he recalled that Justin Herman and redevelopment literally wiped out the African-American community and only four or five percent now lived in San Francisco where it used to be 20 to 22% African-Americans.  Mr. King stated he was glad to see the process moving, but would keep an eye to make sure that the Bayview plan was adopted as soon as possible.

Commissioner Breed asked staff to verify the plan adoption schedule.

Mr. Tom Evans, Lead Planner, stated that the goal was to have the Environmental Impact Report and the proposed Redevelopment Plan Amendment before the Commission in February 2006, which would be followed by the Board of Supervisors’ consideration and approval.

Executive Director Rosen stated that there was a schedule attached to the memorandum, which showed plan adoption by spring of 2006.

Commissioner Yee stated he recalled comments from the public that the Agency was doing business as usual as it did many years ago, and guaranteed that as long as he was an Agency Commissioner, he would never rubber stamp anything.  Mr. Yee stated that he was glad to hear the public input and that he would guarantee the public that the Agency would not conduct business as it used to, because he would stand up to protect the people and would continue doing the job he was supposed to do.

President Peterson stated that he would echo the sentiments of his fellow Commissioners that it was good to see the progress on the Bayview plan, and it was also good to hear the public input, especially the fact that the Agency was being responsive to the concerns raised.  Mr. Peterson stated that he had called the Executive Director right after the Commission meeting where members of the PAC addressed the Commission and wanted the public to know that the Commission and staff took the matter seriously, and he was glad to hear that there was progress being made.

4 (e)     Resolution No. 185-2005, Authorizing a Fifth Amendment to the Personal Services Contract with EIP Associates, a California corporation, in an amount not to exceed $39,000 for a total aggregate amount not to exceed $992,000 for consulting services related to the completion of the Environmental Impact Report on the Bayview Hunters Point Redevelopment Plan Amendments; Hunters Point, India Basin Industrial Park and Bayview Industrial Triangle Redevelopment Project Areas, Bayview Hunters Point Redevelopment Survey Area

Executive Director Rosen stated that the matter was a follow-up to the workshop on the Bayview plan amendment that would allow staff to proceed with the environmental documentation in order to meet the proposed plan adoption schedule, and the Commission could just vote on the matter, unless it wanted to hear a staff presentation.

President Peterson asked the Commissioners if they wanted to hear a staff presentation or simply vote on the matter.

There was no public comment on item 4 (e).

The Commission gave its unanimous consent to forego the staff presentation and vote on the matter.

Commissioner King put forth a motion to adopt item 4 (e), and Commissioner Romero seconded the motion.

ADOPTION:  IT WAS MOVED BY MR. KING, SECONDED BY MR. ROMERO, AND UNANIMOUSLY CARRIED (MS. COVINGTON ABSENT) THAT ITEM 4 (e) RESOLUTION NO. 185-2005, AUTHORIZING A FIFTH AMENDMENT TO THE PERSONAL SERVICES CONTRACT WITH EIP ASSOCIATES, A CALIFORNIA CORPORATION, IN AN AMOUNT NOT TO EXCEED $39,000 FOR A TOTAL AGGREGATE AMOUNT NOT TO EXCEED $992,000 FOR CONSULTING SERVICES RELATED TO THE COMPLETION OF THE ENVIRONMENTAL IMPACT REPORT ON THE BAYVIEW HUNTERS POINT REDEVELOPMENT PLAN AMENDMENTS; HUNTERS POINT, INDIA BASIN INDUSTRIAL PARK AND BAYVIEW INDUSTRIAL TRIANGLE REDEVELOPMENT PROJECT AREAS, BAYVIEW HUNTERS POINT REDEVELOPMENT SURVEY AREA, BE ADOPTED.

4 (f)     Resolution No. 186-2005, Authorizing a First Amendment to the Amended and Restated Tenant Improvement Construction Grant Agreement with the Museum of the African Diaspora, a California nonprofit public benefit corporation, to increase the grant by an amount not to exceed $150,000 to a total amount not to exceed $5,150,000 for the museum facility located at 685 Mission Street, on a portion of Parcel EB-2A, on the south side of Mission Street between New Montgomery and Third Streets; Yerba Buena Center Redevelopment Project Area.

Presenters:  Amy Neches (Agency staff)

Speakers:  Belva Davis, Denise Bradley

Commissioner King put forth a motion to adopt item 4 (f) and congratulated Ms. Belva Davis and Museum of the African Diaspora board members for their hard work.  Mr. King asked if the board of directors would still be open to representatives of labor and others to be involved, because he would like to see working class people be represented.

Ms. Belva Davis, President of the Museum of the African Diaspora (MoAD), stated that the MoAD did have working class people including teachers and social workers, and the board of directors would be open as four original members who had worked throughout the project, would be leaving the board.  Ms. Davis stated that the museum now had a government committee that would look for the talent needed to be successful in the future, and the fundraising would continue.  Ms. Davis stated that the board would be open to anyone who would like to apply.

Commissioner Singh seconded Commissioner King’s motion to adopt item 4 (f).

Commissioner Breed asked where the initial $5 million funding as well as the additional $150,000 for the museum would come from.

Ms. Amy Neches, Senior Project Manager, stated that the funds were tax increment funds available in the Yerba Buena Center budget.

ADOPTION:  IT WAS MOVED BY MR. KING, SECONDED BY MR. SINGH, AND UNANIMOUSLY CARRIED (MS. COVINGTON ABSENT) THAT ITEM 4 (f) RESOLUTION NO. 186-2005, AUTHORIZING A FIRST AMENDMENT TO THE AMENDED AND RESTATED TENANT IMPROVEMENT CONSTRUCTION GRANT AGREEMENT WITH THE MUSEUM OF THE AFRICAN DIASPORA, A CALIFORNIA NONPROFIT PUBLIC BENEFIT CORPORATION, TO INCREASE THE GRANT BY AN AMOUNT NOT TO EXCEED $150,000 TO A TOTAL AMOUNT NOT TO EXCEED $5,150,000 FOR THE MUSEUM FACILITY LOCATED AT 685 MISSION STREET, ON A PORTION OF PARCEL EB-2A, ON THE SOUTH SIDE OF MISSION STREET BETWEEN NEW MONTGOMERY AND THIRD STREETS; YERBA BUENA CENTER REDEVELOPMENT PROJECT AREA, BE ADOPTED.

Items 4 (g) through 4 (m) are related to the approval of implementation plans

4 (g)                       Public hearing to hear all persons interested in the implementation plan for the Embarcadero Lower-Market (Golden Gateway) Redevelopment Project Area

Approving the implementation plan for the Embarcadero Lower-Market (Golden Gateway) Redevelopment Project Area  (Resolution No. 187-2005)

4 (h)                       Public hearing to hear all persons interested in the implementation plan for the Yerba Buena Center Redevelopment Project Area

Approving the implementation plan for the Yerba Buena Center Redevelopment Project Area  (Resolution No. 188-2005)

(i)                           Public hearing to hear all persons interested in the implementation plan for the Rincon Point – South Beach Redevelopment Project Area

Approving the implementation plan for the Rincon Point – South Beach Redevelopment Project Area  (Resolution No. 189-2005)

(j)                           Public hearing to hear all persons interested in the implementation plan for the Western Addition Redevelopment Project Area A-2

Approving the implementation plan for the Western Addition Redevelopment Project Area A-2  (Resolution No. 190-2005)

(k)                         Public hearing to hear all persons interested in the implementation plan for the Hunters Point Redevelopment Project Area

Approving the implementation plan for the Hunters Point Redevelopment Project Area  (Resolution No. 191-2005)

(l)                           Public hearing to hear all persons interested in the implementation plan for the India Basin Industrial Park Redevelopment Project Area

Approving the implementation plan for the India Basin Industrial Park Redevelopment Project Area (Resolution No. 192-2005)

(m)                         Public hearing to hear all persons interested in the implementation plan for the Mission Bay North and South Redevelopment Project Areas

Approving the implementation plan for the Mission Bay North and South Redevelopment Project Areas  (Resolution No. 193-2005)

Executive Director Rosen stated staff would ask that items 4 (i) and 4 (m) relating to the Rincon Point – South Beach and Mission Bay North and South Implementation Plans respectively, be continued to the December 6^th Commission meeting, and the remainder of the items, 4 (g), (h), (j), (k), and (l) be continued to the December 20^th Commission meeting.

Commissioner Singh put forth a motion to continue the items as staff had recommended.  Commissioner Romero seconded the motion.

MOTION:  IT WAS MOVED BY MR. SINGH, SECONDED BY MR. ROMERO, AND UNANIMOUSLY CARRIED (MS. COVINGTON ABSENT) THAT AGENDA ITEMS 4 (i) AND 4 (m) BE CONTINUED TO THE DECEMBER 6, 2005 COMMISSION MEETING, AND AGENDA ITEMS 4 (g), (h), (j), (k) AND (l) BE CONTINUED TO THE DECEMBER 20, 2005 COMMISSION MEETING.

5.      MATTERS NOT APPEARING ON THE AGENDA  None.

6.      PERSONS WISHING TO ADDRESS THE MEMBERS ON NON-AGENDA, BUT AGENCY RELATED MATTERS

• Steven Suzuki, Jon Osaki, Steve Nakajo, John Oda, Carl Williams, Paul Osaki, David Ishida, Netsanet Alemayehu, Charles Spencer, Ace Washington, Arnold Townsend, Agonafer Shiferaw

7.      REPORT OF THE PRESIDENT  None

8.      REPORT OF THE EXECUTIVE DIRECTOR

• Executive Director Rosen stated she would like to send greetings to Mrs. Mary Rogers who was not feeling well and was at home listening to the radio broadcast of the meeting.  Ms. Rosen stated that she had spoken to Mrs. Rogers earlier and sent her best wishes on behalf of the Commission and staff.

• Clean-up of Kimball Park sponsored by district Supervisor Ross Mirkarimi on Saturday, November 19^th from 9:00 a.m. to noon at the softball field, Geary Boulevard and Steiner Streets.  This would be a community cleanup event.

• Executive Director Rosen stated that because of the public testimony on the Sheba Lounge, she wanted to provide the Commission with some background information.  Ms. Rosen stated she would like to send her condolences to Mr. Carl Williams who lost his father recently and was out of town, and prior to that was also out of town on a trial in Stockton.  The Agency had paid very, very close attention in an effort to work out the prevailing wage issue.  The memorandum for the Commission action in April mentioned the prevailing wage requirement, but it was true that the prevailing wage attachment was not included in the loan documents.  Ms. Rosen stated that she did not see the loan documents and was not made aware that the prevailing wage attachment was not included until there was public testimony about the wages paid.  However, as the Commission was aware, the matter of prevailing wage was not solely a contractual obligation of any party, rather it was a State law requirement with enforcement power by a State agency.  Ms. Rosen stated that it was not within the power of the Redevelopment Agency, the Commission, staff or anyone else, to waive a State law provision under which prevailing wages apply to public works projects.  In an effort to remedy the situation, staff did meet with the principals of Sheba Lounge and Mr. Williams.  Under State law, it became a public works project when the public agency approved the public funds, so as of April 19, 2005, all of the work on the tenant improvements was subject to the prevailing wage.  Ms. Rosen stated that staff proposed to loan Sheba Lounge the additional $50,000 necessary to comply with the prevailing wage, which amount was provided by the contractor.  Further, staff proposed to waive all interest on that loan for five years in order to support the operations of Sheba Lounge, so that they would have enough revenue for their other operating expenses, and to only start the interest payments in 2010 and have it paid back over a ten-year period, which was what Sheba Lounge requested.  Ms. Rosen stated that this would keep Sheba Lounge’s payments level and decreasing from the amount they currently owed, and would keep their cash flow the same, and would actually give them a longer period of time to pay back the loans.  Ms. Rosen stated staff thought numerous times throughout the negotiations, that they had reached agreement and tried desperately to calendar the matter at today’s meeting so that the Commission could approve the additional loan.  Ms. Rosen stated that the day before, Mr. Williams sent an e-mail to Deputy General Counsel requesting that the Agency acknowledge in the loan agreements that work done prior to the provision of Agency funds, not be considered subject to prevailing wages.  Ms. Rosen stated that the Agency could not do that because State law defined what a public works was, and any work done from the time the Commission approved the loan, would be subject to prevailing wages.  The amount offered to lend Sheba Lounge was sufficient to cover the entire prevailing wage controversy.  Ms. Rosen stated she had been told that the loan would be signed and that everything was fine, and then another issue would come up.  The only issue presented before the Commission meeting, was to exempt some of the work from prevailing wage, and the only way that could happen under State law, was if that work was done outside of the tenant improvements, done separately by the owner of the Fillmore Center and not part of the tenant improvements where the Agency’s public funds were being expended.  Staff had indicated that if Sheba Lounge could demonstrate that, the Agency would be happy to put that provision in the loan agreement, but the Agency cannot put any provision in the loan agreement that would be in conflict with State law.  Ms. Rosen stated she believed that staff had worked in good faith under her direction, to find a remedy that would not be harmful, and to get the funds to Sheba Lounge as quickly as possible, and up until the agenda packet was being prepared the previous Thursday, staff was trying to get the matter on the agenda so that the Commission could consider it.  Ms. Rosen stated it had taken her by surprise that the matter was brought before the Commission during public comment, when staff was actively negotiating an equitable remedy to resolve the issue.

9.      COMMISSIONERS’ QUESTIONS AND MATTERS

• Commissioner Yee stated that he heard the Executive Director’s explanation and although the proposed remedy sounded good, he disagreed because as a long-time small real estate broker in the City, if he made a mistake that affected his clients, he would be responsible, and in the case of Sheba Lounge, they followed staff’s direction.  Mr. Yee stated that Sheba Lounge should not be held responsible for not knowing the State law because they were not lawyers, and since they were simply following staff’s instructions, they should not bear the costs for the mistake.  Mr. Yee stated that Sheba Lounge should remember the specific staff person, date of the discussion and other particulars, just in case they wanted to sue the Agency, although he would not encourage them to sue, because the Agency would work with them to try and resolve the issues.  Mr. Yee stated he wanted to address the issue about the 1881 Bush Street matter, to simply state that the Commission heard the Japanese-American community’s concerns, and the Agency would do its best to assist not only the Japanese-American community, but also all ethnic communities in San Francisco.  Mr. Yee stated that the Japanese-American community could count on his support.

• President Peterson stated that he agreed with Commissioner Yee’s statements in general, that the Agency had to stand behind what it says to people with whom it did business, and it sounded like the parties were close to an agreement.  Mr. Peterson stated that he applauded the Executive Director and staff’s efforts to work with Sheba Lounge to try and come to an agreement, but the process should keep moving forward.  Mr. Peterson stated that the matter should not have gone this far and urged staff to resolve the matter.

• Commissioner Breed asked if the money from the original loan could be released before an agreement could be reached on the prevailing wage issue.

Executive Director Rosen stated the concern was that the original loan amount did not include the prevailing wage amount and without the proposed agreement, the Agency would be making a payment towards a wage that did not meet the State law requirement.  Whatever the Agency did or not, the project was still subject prevailing wage, and the labor commissioner could enforce prevailing wage potentially with penalties.  Ms. Rosen stated that the Agency was really trying to help Sheba Lounge, both to pay the wages that were due under State law and to avoid adverse action by the labor commissioner, and to cure the deficiencies.  Staff believed that the agreement was necessary to move the project forward.

• Commissioner Breed asked had the amounts not been amended to reflect the prevailing wage.

Executive Director Rosen stated that the amounts would only be amended if Sheba Lounge would agree to accept the additional $50,000 loan with the favorable terms, and without that, they would not have the funds necessary to pay for the prevailing wage, so staff was trying to help them comply with the State law.  Ms. Rosen stated that the Agency could not put a provision that would exempt certain work from the prevailing wage unless it was consistent with State law.

• Commissioner Breed stated she was not looking for an exemption, but it sounded like what they wanted in the interim, while the agreement was being finalized, was to have money released in order to continue with the project and have the business open.

Executive Director Rosen stated that they could not continue the project with prevailing wages unless they have the additional funds, and that was the problem, and the Agency was trying to get them the additional funds so that they could complete the project.

• Commissioner Breed stated that Sheba Lounge was a woman-owned business that she looked forward to seeing in the Western Addition, and encouraged staff to move aggressively towards resolving the matter, because as a resident of the Western Addition, it was important that the community knew that she was supporting the project.  Ms. Breed stated it was also important to recognize that a mistake was made and if the Agency moved as quickly as possible to negotiate an agreement, it would help repair the continual frustration between the Agency and the community.  Ms. Breed stated she really wanted to see the matter resolved as quickly as possible and that the Agency recognize, which the Executive Director already did, that mistakes happened, but also understand that the Agency was just giving them a loan, and as Commissioner Yee stated earlier, the Agency should do a lot more than just give them an additional loan with favorable terms, because so much more should be done, but in the interest of time, she would like to see the matter move forward.

• Commissioner King stated it was true that State law required the prevailing wage and the Agency could not do anything about that, but Sheba Lounge invested all of its money on the project and came to the Agency to obtain a loan, which the Agency granted, and they cannot afford the additional costs, so why could the Agency not give them the funds necessary.

Executive Director Rosen stated that if it was the Commission’s decision to give Sheba Lounge a grant, it was at the Commission’s discretion to do so..  Ms. Rosen pointed out that the prevailing wage was an obligation under the original loan amount that was given, but if it was the Commission’s direction to provide a grant, staff could bring that matter at the next Commission meeting.

• Commissioner King stated that the Agency had been trying to revive the Western Addition community and to bring businesses in the area and there was an opportunity to do that with Sheba Lounge.  Mr. King stated he would like to see the matter at the next Commission meeting.

• Commissioner Romero stated that he supported the loan for Sheba Lounge and was disappointed that the conflict had grown, but Sheba Lounge had the right to come to the meeting and lodge their views to the Commission.  Mr. Romero stated he was glad to hear that staff had been negotiating to resolve the issue, and he did not know if mistakes were made or not, but would like to see the matter calendared on the next agenda so that the public is notified and an informed discussion decision could take place.  Mr. Romero stated he was not comfortable discussing the merits of the dispute without having all of the facts.

• Commissioner Yee put forth a motion to have an agenda item about the Sheba Lounge at the next Commission meeting.  Mr. Yee stated that in the eyes of the law, there was no excuse for the ignorance of law, but staff made the mistake and not Sheba Lounge, and they should not be penalized for the mistake.  Mr. Yee stated that in his opinion, the Agency was supposed to guide them to the right direction, and not the wrong direction.  Mr. Yee stated that he appreciated the input from the public so that the Agency could do a better job in serving the public.

• Commissioner Singh asked if Sheba Lounge requested a loan or a grant from the Agency.

Executive Director Rosen stated that Sheba Lounge requested a loan with payment terms that would not be onerous and would not increase their monthly debt service, as well as a longer repayment period, and staff agreed to make that recommendation to the Commission.

• Commissioner Singh stated that he sympathized with Sheba Lounge and if it was appropriate to give them a grant, the Agency should do that because the Agency would like very much to help them with opening their business.  Mr. Singh seconded Commissioner Yee’s motion to have an agenda item about the Sheba Lounge at the next Commission meeting.

• Commissioner Breed stated she thought that the Agency needed to move forward and to work out a deal that worked for both parties, and she did not necessarily agree that the entire amount should be loan or a grant.  Ms. Breed stated that both parties made mistakes and there was a need to move forward.  Ms. Breed stated she agreed with Commissioner Yee’s statements that staff, who had knowledge of the law, should have communicated that to Sheba Lounge, because there may be other small business owners who may not be aware of all the policies and procedures on prevailing wage.  Ms. Breed stated she would urge staff to communicate clearly on issues such as prevailing wage to ensure that the community was well informed of all the requirements, and the community should be know that there may be requirements that they were not aware of, but should ask questions and to work together with the Agency.  Ms. Breed stated that both parties should step up to the plate, put aside the differences, and deal with the issues and move forward.

MOTION:  IT WAS MOVED BY MR. YEE, SECONDED BY MR. SINGH, TO HAVE AN AGENDA ITEM TO DISCUSS THE SHEBA LOUNGE MATTER AT THE NEXT COMMISSION MEETING, AND ON ROLL CALL THE FOLLOWING VOTED “AYE”:

Ms. Breed

Mr. King

Mr. Singh

Mr. Yee

AND THE FOLLOWING VOTED “NAY”:

Mr. Romero

Mr. Peterson

AND THE FOLLOWING WERE ABSENT:

Ms. Covington

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.

10.    CLOSED SESSION

(a)        Pursuant to Government Code §54956.8 to confer with the Agency's real property negotiators in connection with the Emeric-Goodman Building, 1109-1121 Geary Boulevard, Assessors Block 714, Lot 18; Western Addition Redevelopment Project Area A-2.  Agency negotiators:  Marcia Rosen, Olson Lee, James B. Morales, Gaynell Armstrong, and Sally Oerth.

(b)        Pursuant to Government Code §54956.8 to confer with the Agency's real property negotiators with respect to renegotiation of the Disposition and Development Agreement and related documents.  The property is located at 1881 Bush Street, San Francisco, California, 94109, Parcels 674 -C & F, Western Addition A-2 and the owner of the property with whom the Agency may negotiate with is Japanese American Religious Federation Assisted Living Facility, Inc. and its lender National Cooperative Bank Development Corporation.  Agency negotiators:  Olson Lee, Judy, Eng, David Sobel and Tracie Reynolds.

(c)        Pursuant to Government Code §54956.8 to confer with the Agency's real property negotiators with respect to price and terms of payment.  The property is the former Hunters Point Naval Shipyard in the Hunters Point Shipyard Redevelopment Project Area.  Agency Negotiators:  Marcia Rosen, Joanne Sakai, Olson Lee, Erinn Lopez and Nicole Franklin.

Item 10 (c) was continued to the next Commission meeting.

11.    ADJOURNMENT

It was moved by Mr. Yee, seconded by Ms. Breed, and unanimously carried that the meeting be adjourned.  The meeting adjourned at 7:34 p.m.  The November 15, 2005 Commission meeting was adjourned in memory of Mr. Kenneth Graddick.

                                                   Respectfully submitted,

                                                   Erwin R. Tanjuaquio

                                                   Agency Secretary

APPROVED: