What has happened is storefronts have been left vacant longer and longer as Property Owners have held the property off market for unknown reasons or are holding out for higher rents. The circumstances that have left a situation where every block has at least one and usually multiple vacancies, and that has led to blight, trash, graffiti and has pressed foot traffic. At one point had five vacant storefronts including two which would remain vacant since 2015 and have not been actively marketed in that time. Before i listen i listen to ted egans report on the amazon effect. It is important to explain one of the industries to be impacted by amazon, we have not seen sales decline since i assumed ownership in 2007. Our sales are up even 20 . Jessica many other retailers, we have made up the sale. Internet has allowed us to increase our reaches and technology to increase our reach and seep employee our second week tap automated. The minimum wage and benefits have gone up over 60 and more to the point of this legislation , rent has increased over 80 . Since i went through the process of renegotiating the rent, i looked at every vacancy on haight street and it is clear they are asking way above. Thank you. Thank you very much. Next speaker, please. Given that they are approaching 80 pages of rent control regulations on the upper floor residential units, and nearly 200 permits required to open a momandpop diner, if i heard that correctly, the market is already approaching death by 1,000 paper cuts, absent further impediments. Main street has never quite recovered from the great recession. Small businesses and in the community have been rising for flailing and going under in waves as a matter of common occurrence over no less in the last couple of decades. There has been a great deal of competition for relatively few prospective tenants. The permitting process has been an ongoing deterrence. I think the Small Business community would be better off if you provided uptodate markets on a neighborhood by neighborhood base including the Crime Statistics such as vehicular vandalism and theft some vehicles and businesses. Small businesses have been experiencing a mandated increase in wages, potentially rising rents owing to the bay areas higher than state and national right of infant rate of inflation and constraint of Profit Margins owing to the uppermost limits and internet competition affecting the common products. The foot traffic going to the collective debt load that is carried by residents and regional tourists and discretionary spending. While we are not in unofficial period of small bubbles are being discreetly ruptured. It is thank you very much. Any other Public Comment . Seeing none, Public Comment is closed. Colleagues, before us we have amendments to approve. I would like to make a motion to approve the amendments that have been presented before us today and to continue this to, as amended, to our special meeting on monday of the budget finance committee. Thank you, chair fewer for making that motion. I just wanted to say a couple of things. I wanted to thank the members of the public for their testimony and associate myself and my experiences as a District Supervisor with the comments of mr. Evans. I was actually telling supervisor mandelman a story. Tomorrow morning at 11, i am joining my friends and neighbours in front of a cafe that has been there for 24 years he recently renegotiated his lease and is paying significantly more money, but that lease that he was forced to sign, because he wanted to stay, had a termination provision and the Property Owner for, no reason then i could ascertain, has chosen to invoke that. On december 31st, it is a beloved community space. He is going to have to vacate it after 24 years and that is how he supports his two kids and employees with benefits, so i said to him, there is any number of empty spaces in north beach. You can go up the street and find another spot. It is not that he is undercapitalized. It is exactly what mr. Evans said. Every single one of them were beyond the person where foot price point that he can afford while selling sandwiches and coffee and what have you. So and i want to take exception to this motion that somehow or another, this tax will be passed through to future tenants. A landlord is in the business to get as much money as they can out of the tenant, but if a landlord has been paying 25,000 on this tax and is trying to pass that on in a lease to a future, tenant, do you think any tenant will sign that lease . No, this will stay vacant and they will pay another 25,000 the next year. So what this tax does, which is completely avoidable, that we do not want to collect, is give Small Business lessees leverage in lease negotiations, and that is the fundamental underpinning. I am more than happy to work with you, supervisors, to explore the issues that you are talking about, whether it requires trailing legislation or special meeting of the board. [please stand by] and ground lease for 1064 mission lb in an amount not to exceed 74. 4 million for a long term of 57 years to finance construction of 256 unit multifamily Housing Development for a lease term of 75 years and annual rent of 1. Item number 14. Not to exceed 87 million. Thank you. I believe we have ocd here to kickoff the presentation and department of Public Health and office of Public Finance. Good afternoon, committee members. I have copies of the presentation for the clerk. Good afternoon. I am a senior project manager at the Mayors Office of housing and Community Development. I am happy to present 1064 mission and we have representatives here from dp h h sh. Mere is a rendering of the proposed project. 25 units of 256 units of housing new Homeless Services center. Last time we were here you authorized us to apply to develop the site as critical resource for the citys homeless population. Today we are here to request approval of the last remaining financing and ground lease to move toward construction starts in january 2020. So before you today are four resolutions and one ordinance associated with this development. I will present a project overview and the resolutions. One for Supportive Housing ground lease and Loan Agreement, issuance of multifamily revenue grounds and third Grant Agreement to fund the Homeless Services center and staff from the office of Public Finance will present the resolution and ordinance with the 5 million in certificates of participation of financing to build the Homeless Services center. 1064 mission is an extraordinary opportunity to build permanent housing in the south of market. This site was listed as Surplus Property under the federal Property Assistance Program in january 2017. Title 5 of the federal act identifies homeless as the top priority. They applied to develop 250 units of the housing was conditionally awarded the site valued at 36 million for 1. The federal program has a hard completion requirement. The project must be operational by november 2021. They issued the r. F. Q. And developed Episcopal Community services. Modular construction is for the residential portion of the project to meet the aggressive schedule and reduce costs. Here is a site map of the project centrally located on a major transit corridor on seventh street. A large parking lot adjacent to the federal court of appeals. The project is five floors over a concrete podium surrounding two courtyards with a Public Open Space accessible oMission Street. There will be 153 units for adults 103 seniors, two resident managers. They will support the services longterm. They propose to house the culinary job program for those experiencing homelessness, chefs on the ground floor. It will be focused on wellness and build on the long experience with helping residents age in place. All units will be subsidized by the operating Subsidy Program. So the Homeless Services center came about because as they were selecting the developer it became clear it could house other Critical Services to fit the intent of the site. They have been searching for new locations for the Critical Services due to seismic conditions of the building. This is a unique opportunity for a colocation for a new Homeless Services center. Mercy housing is the turnkey developer to be financed separately. Homeless services will be owned by the city. The relocated programs of dp h h sh proposed to be there are the urgent care clinic. Street medicine, de dental servs and there will be an entrance separate from the residential building. First resolution before you requests approval of 74. 4 million loan for minimum term of 57 years to finance construction of the project as well as approval of longterm ground lease between the city and limited partnership with annual base rent of 1 per year. The total cost is 143. 6 million. The Residential Capital sources include the funding, low income taxing tax credits and Federal Home Loan Bank a regard. It is 74. 4 million of which 27. 7 million from the first allocation of no place like home funding targets to create the permanent housing for chronic homeless with serious Mental Illness. Second is Revenue Bonds not to exceed 87 million to provide Construction Financing for the residential project. The hearing was held in june of this year. The bond allocation was approved october 16th and to note this financing is conduit and does not require the city to pledge repayment of the bonds. Third resolution requests approval of amended restated grant to provide 13. 4 million to finance construction of the city owned and operated Homeless Services center to the mercy affiliate developing that project. Of the financing structure to maximize noncity resources to support the homeless center. It covers a portion of the funds needed to build and leveraging tax credit for its portion of the shell costs. To review the timeline. Today we are before you to request approvals. The construction contract will be final later this month. We requested h. H. S. Transfer in december and we would Close Construction and bond financing and Start Construction in january 2020. Once the board approves the project financing today it will be fully funded and should be able to proceed. Now, i would like to invite michelle from the office of Public Finance to describe the cop funding resolution and ordinance for the Homeless Services center. Thank you. Good morning. Office of Public Finance. As she mentioned in addition to the resolutions related to the ground lease and the 106468 Mission StreetAffordable Housing project. Before usa resolution and before you the resolution and the certificates. They will finance 5 million of the total project construction for the city owned and operated Homeless Services center, as ms. 8. 5 million comes from general Obligation Bonds from Public Health and safety bonds and general fund sources dedicated to finance the project previously approved by the committee and board of supervisors. The certificates and paper notes are to be executed and delivered in an amount not to exceed 7. 25 million as well as 64,000 for the Service Reserve and 900,000 in commercial paper and interest and fees 450,000 for other costs with certificates for authorization. The appropriate amount includes 245,000 contingency amount which allows flexibility for fluctuating Market Conditions before the final sale of certificates. The plan anticipates using the Paper Program established in 2010 to finance initial project costs. Controllers office uses the commercial paper as interim tool to be paid by longterm debt such assertive cats of participation. To issue commercial paper the board of supervisors must authorize the longterm repayment which would be the certificates. Based on estimate of 6. 5 for all in interest cost on 7 million in certificates, the office of Public Finance estimates possibly incur up to about the 12. 945 or 13 million in debt service over 20 year term annually 635,000. The incremental Debt Services are assumed in the adopted 10 year capital plan. This is part of an overall 108 million allocated in the plan for 101 grove project. This complies with the capital plan policy of limiting the funds at at discretionary revenues. I will remind Committee Office of Public Finance will return prior to the sale of the certificates of participation to seek approval of the documents and the final forms to include lease agreements, notice of sale, continuing disclosure certificate, preliminary official stated to disclose to investors. At that time we present on current market rate conditions the anticipated structure of certificates and discuss the cityowned assets. I am available to answer questions related to financing. We have representatives from the Mayors Office and Development Team to answer projectrelated questions. Does that conclude your presentation . Could we hear from the bla report on item 10, 11, 12 and 13. Items 10 and 11 are approving the certificates of participation and appropriationing for the Homeless Service center at 106468 Mission Street 7. 2 million for the appropriation. The issuance and appropriation. Item 13 is a Grant Agreement to the developer of the Homeless Service center. If you look at page 28 of our report, this is the actual choices and uses of the certificate of participation of the 7. 2 million, 5 million would be for project cost did balance is reserves and other financings costs. Table one on page 25 of the report this is the total budget for the development of the Homeless Service center 16. 1 million. City sources of that are 15 million. If you look at the sources it includes some bond money 5 million and 5 million in the proceeds from the certificate of participation for the project. Then some other general fund moneys added to this. The total grant amount to the nonprofit is 13. 4 million. We again have the entire project cost and Funding Sources here. We recommend approval of those threepieces of legislation. Item 14 is a Loan Agreement between the Mayors Office of housing and 10464 mission for 74 million to provide vinancin towards the support of housing component of the project at 10641068 mission. Again, we have a project budget on table 1, page 32, of the report showing the entire project cost of 143 million, which includes alone from the Mayors Office of 74 million and 69 million in other noncity sources. The issuance of the certificate of participation are within city policy and we recommend approval. Thank you very much. We open it up for Public Comment. Any members of the public want to comment on items 10 through 14 . I was curious what each unit is selling for the you include the value of the lamped which each unit would be selling for, also i think typically in San Francisco buildings of 20 units are greater for 300,000 per unit. The greater the scale of the project, the lower the price of units typically. Thank you very much. Doug schumacher i will answer that question. They are not for sale, they are for rent. Priced at 30 of the residents income which ti typically is between zero and 300. I came up to make a different comment. I want to thank the board and department for the work on this and our partner. Two things to draw your attention that are important as you start to see more much these projects. One is this is one of the first modular projects in San Francisco. It is an emerging technology. It is an industry going through its growing pains. It is going to be increasingly important to develop Affordable Housing in San Francisco. The second piece i want to draw your attention to sb35. This is an exemption for the site. It is important to have this tool in front of us. There is a lot of debate about the potential exemptions. A project of this size with Affordable Housing and clinics. I think it would have been more consult with out that e