Agenda. Thank you, item number one . Resolution of amended for the java house restaurant and increasing the Monthly Base Rent to 4,000 and no change to the initial term through august 31st, 2023. I believe we have mark to present today. Madam chair, chair members and board members, im the assistant Deputy Director of real estate and development for the port of San Francisco. The item before you today regards java house restaurant, a small restaurant at pier 40 1 2 located next to south beach harbor. The java house restaurant is a long standing port restaurant which has been operated by the family for over 33 years. In 2006, by their daughter. The java house currently operates under a 15 year lease with the port that expires august 31st, 2023. The original lease covers approximately 14,090 square feet. The original lease provides for the port to receive the greater of guaranteed monthly based rent or percentage rent. The current base rent is 3,314. The percentage rent is set at 7. 5 of gross sales for food and beverage. For the period ending 12 months, the 12 month period ending may 2019, the java house reported average monthly gross sales over 17,000, which did not result in percentage rent being paid to the board. Percentage rate has not been paid to the board for quite some time under the lease. Also, pursuant to the current lease, java house was required to make Capital Improvements of at least 346,000 to the facility. Due to personal, family issues and difficulty in raising financing, the java house has not been able to complete the Capital Improvements currently under the lease. These are the signs of a struggling operation which is having a hard time making ends meet basically. In the latest phase of ongoing dialogue with the port regarding coming into compliance for Capital Improvements and overall desire to improve the Operational Performance of the restaurant, the tenant has approached the board with a proposal to restructure ownership and bring in a new investor. Under this proposal, the entity would complete the previously required Capital Improvements and construct an addition to allow outdoor seating and alcohol sales and to make amendments to the lease which improve the financial metrics to the port and provide the tenant with an initial lease term. To that end, the owners of the java house have engaged in negotiations to sell the original lease to a new entity which the current owners retain 15 ownership stake. The new entity would be called frankies java house, llc with the owner being a well known business Man Associated with the insurance industry. The frankies proposal seeks to resolve the Current Issues related to the completion of Capital Improvements and reposition the restaurant into a viable business enterprise. The proposed amendment would require them to make a Capital Investment of no less than 737,000 into the facility and includes the previously not completed improvements of 346,000. He is willing to condition the extension of the lease on the successful completion of the Capital Improvements first and to provide a personal guarantee for the cost of all the construction. Upon 100 of construction and completion of Capital Improvements, which must be completed in one year of commercement date of the amended lease, frankies has the right to extend the lease term for 10 years. The direct benefits to the port are the base rent increased to 4,000. The increase Capital Investment from the original 346,000 into the facility to 737,000 into the facility that also includes an expansion which doubles the Seating Capacity of the restaurant. So now that 737,000 is put toward an improvement that actually grows the business, creates more sales and hence brings more back to the port. The port will receive a 12 of the proceedings of the sale, which is approximately 63,000. The 12 was negotiated up from 10 originally in the lease. That was negotiated up from 10 to 12. And finally the port will receive 51,000 as a penalty from the original tenent for not completing the tenant improvements in a timely manner on time. The port is 100 in accord with the budget Analyst Report and supportive of it. If theres nothing else, i have ill be here for questions and i have a representative from the tenant to answer questions also. Thank you very much. Colleagues, any questions or comments, if not, lets hear from the ble please. Good morning chair fewer and members of the committee. This resolution approved amended and restated lease between the board and a new buyer frankies java house, llc for the java house location on pier 40 as the representative from the port stated, this would set rent at 4,000 a month in the first year increasing subsequent years and provide 7. 5 rent on gross sales. The new buyer would be required to put in about 737,000 in tenant improvements. If they put them in within the first year, they do have the option to extend the lease by an additional 10 years from 2023 to 2033. We summarized the rent component on table 2 page 4 of the report, it would be about 1. 4 million to the port over the 10 years. We want to call out, this is a sold force lease. There was not a competitive process to select the tenant. There is a port retail policying that allows for sole source if its a tenant in Good Standing and financially reasonable to do so. We summarize that on page 5 of the report. The current tenant couldnt be considered a good tenant in standing, but the assumption if they make the improvements and get the additional 10 years, it will be a benefit to the port, because its consistent with the ports retail policy, we recommend it. Lets open this up for Public Comment . Seeing none, closed. I have one question. Just for clarification, so it looks as though there are 12 years left on the current lease. This started in 2007, is that correct . Yeah, it expires in 2023. So, they would do improvements and if they do it within a year, they have the option to actually extend it for another 10 years. Correct. Would that extend it not to 2023 but to 2033. At that time when they renegotiate have the option to extend it for another 10 years, a rerenegotiating then, another rental fee . You mean after the 2033 . So if in a year, they decide to we offer them the 10 year extension and then are we then negotiating at another rate for the additional what happens when they exercise the if and when they exercise the option, the base rent would rachet up to basically 85 of the percentage rent experience for the past three years. So theres a racheting up and that also happens in year well, year five of the option. So half way through the option, theres a market its a market to market adjustment. So the lease constantly goes up with the market. I think you mentioned, i could be wrong, 15 of ownership will be with the original owners or leasees, is that correct in. Yes. If they extend it for 10 more years after the 2023 date, would 15 of the ownership still be would we still see the 15 of ownership is with the existing tenant now . Thats probably no guarantee, if the person may sell out at some point. Its a partnership ownership. So its hard to predict what would happen. Theres no requirement. Correct. This has been in the family hands for so long. This is the kind of thing that we actually this handoff, of a struggling business, that is an institution in San Francisco. I think it has been recognized as very much beloved institution along our waterfront and the family has invested so much into the building of this, the name and also i think some of the great affection that San Francisco has for the java house, right . So my question is just about the 15 ownership because it would be really nice if they could continue to be part still of what they originally developed. We are losing so many of these institutions in our neighborhoods and it would be nice to see that the original owners would still have 15 ownership. Thats the only reason i ask. And i think they they have experienced personal family difficulties, you know, the spirit has gone away a little bit but they still want to hold on and be a part of it. Kind of nice. Thank you very much. No more Public Comment. No questions or comments from colleagues, i would like to move it with a positive recommendation to the board and we can take that without objection. Thank you colleagues. Madam clerk. Resolution approving bond or loan for California Municipal Authority not to exceed 65 million to refinance outstanding debt and refinance the acquisition construction and improvement located within the city owned and managed by healthright 360. And we have michelle from the office of Public Finance. Thank you very much. Good morning. From the Controllers Office of Public Finance. Thank you for considering the item today. And in attendance, representing the healthright 360. He can speak in more detail about the project if theres specific questions about that. Just as a reminder for you and the public, the tax and financial act allows the Tax Exemption on interest of certain types of debts. In this case, proposed financing through the California Municipal Authority through which San Francisco is a participating member. Notes and bonds and certificate of depreciation. This resolution is before you because federal tax law requires that the governor body in which the project is locating approve the finances after providing opportunity for a public hearing before bonds can be issued on tax exempt basis. The city and county of San Francisco is not obligated for payment on the bonds. Hearing notice was published on september 6th. The public hearing held at the office of Public Finance on september 16th and no comments from members of the public were heard or received. Ill give you background on the borrower. Healthright 360 arose out of a merger between two clinics. They started in the 60s to serve adolescences and young adults and opened in 1967 as the first Free Medical Clinic in the country. They were an innovator to giving Healthcare Services to those who could least afford it under the guiding principle that healthcare is a right and not a privilege. It was to help homeless and runaway adolescences. Today it treats people with Mental Health and Substance Abuse problems at various centers throughout california, including prison treatment programs and providing drug and alcohol treatment and Mental Health services for people transitioning back into their communities. Like the free clinics, they have served people who are underserved, homeless and those with h. I. V. And aids. They merged in 2012 and have subsequently added additional clinics and programs that serve San Francisco to its portfolio, including Asian American recovery services, lion martin Health Services and Womens Community clinic. So the project, proceeds from the sale of the bonds will be loaned for the following purposes, to refinance all or portions of outstanding debt obligations financed and refinanced, furnishing of clinics and Treatment Facilities at hayes street, buena vista west, haight street, coleridge all within the city of San Francisco managed and owned by healthright 360, a California Public non benefit corporation with Residential Treatment Services in the city and equipping and maintaining such facilities may capitalize interest on the bonds and pay certain expenses incurred with the issuance of the bonds. They would issue the bonds to not exceed 69 million. Bond council on the transaction, the bonds do not con constitute a debt of the city. If there are questions, ill be happy to answer and the borrower is here as well. That was very thorough. Thank you. There is no b l. A. Required on this. Opening up for Public Comment. Any Public Comment on item number two . Seeing none, Public Comment is closed. Colleagues, any questions or comments . Seeing none, i would like to move it to the board with a positive recommendation. Thank you good to see you. Thank you madam clerk. Call item number three. Resolution retroactively approving the contract for electric Monitoring Program for term of three years from august 1st, 2019, through 2022 with two one year options to approve. We have the Sheriffs Department here. Good morning supervisors. Im here requesting retroactive approval of a contract we have with sentinel. We were here in july and this body approved the Program Scope and legislation today approves the contract as a whole, not simply the scope. Otherwise it is unchanged. But still ill give program history. Electric Monitoring Program to provide alternatives to incarceration. Fee structure was originally based on ability to pay. In february of 2018, the sheriff waived fees for sentenced participants and in february 2018 an apellet court ruling required courts to consider ability to pay and non monetary alternatives when setting bail or release conditions. This resulted in a significant increase in the number of people who came on to and into electric monitoring as ordered by the courts. Monthly participation increased from about 100 before the ruling to roughly about 400 per month now. And as i said, we were here in july, this body approved the Program Scope for the contract to begin august 1st and were here today simply to approve the contract as a whole, which we should have done back then. I have two other slides that before you that show the growth and monthly participation that resulted from the Appellate Court ruling. Fees went up, we struggled with this for the budget last year but have budgeted for it in the current year. The mayors office, mayors Budget Office was generous in their funding of this, thank you. And finally this last slide before you, just shows the increase in releases on alternatives. Back in september, late september 2016 we had total justice involved population of about 2150 of which 1350 were in jail and about 800 were out on some sort of alternative. In september 2019, the total number of justice involved people is up to over 2700, the jail population has gone down by about 75, but the individuals out of custody on pretrial release or sentenced to alternatives has gone up. That means that our the percentage of people on alternatives has increased from 37 to 53 which is higher than youll find in other counties in the bay area. Thank you. Yes . Supervisor stefani. Thank you chair fewer and thank you for the presentation. Can you talk about the success rates of electric monitoring . Have you noticed anything obviously we know why the number of people on electric monitoring have gone up, but im just wondering if theres been problems and if you could briefly touch on the success rates . Well, theres been quite a bit of there have been news reports about some of issues that have come up, but overall, for people who are put on some form of pretrial release, over 90 show up to court. I think overall the program has been successful. Continues to be successful. And what happens i know it says something about the Sheriffs Department staff will respond and enforce compliance of the programs rules. If in that 10 situation, what happens then . Then we have a warrant Services Group and the warrant Services Group responds as needed. Okay. To people who are not responding in the way they should. Thank you. Any other comments or questions. Bla please . Yes, the proposed resolution retroactively approves the program as stated excuse me. As was stated, the board did previously approve the terms and conditions of the program but not the contract itself. It is below the charter threshold for board approval but the california penal code does require approval. It would be for three years with a maximum amount of 3. 4 million. There are two, one year extensions subject to board approval if they exceed the 3. 4 million maximum. We recommend approval. Im sorry. Thank you very much. Supervisor mandelman. Thank you chair fewer. This is a little outside the scope of the contract, but im curious if the Sheriffs Department has thoughts on what accounts for this pretty significant increase in the estimated job population without alternatives to incarceration. You dont have to answer that. Its not related to the contract. I think actually if i were the one answering asking the question, it would be why is the justice involved population going up so much. I think the fact that alternatives to incarceration have gone up speaks to the citys commitment to alternatives to incarceration. But the increase in the total justice involved population . Id speak to any number of issues but