Is euros mpt good afternoon for visor jz members of the public and wish a happy valentines day to everybody. Supervisors your chocolateerize on the way. But i am happy to be in the city that has all of our hearts compassion as strong as it is since there are no questions i wanted totalk about something on the minds of many of us and that is healthcare. Yesterday we signed the legislation and thank you again to the entire board supported legislation for theu csf red search building ground lease. This agreement which was passed by you and just proves well continue to be a city at Health Research qu medical achievements. Last year, we helped launchu c San FranciscoSf Initiative which is a city wide collaboration to prevent and reduce cancer in San Francisco and focuses obcountsing down helths inequities and another example of how we care for your resident. We also have the zuckerberg initiative, the bio hub that brings together the universities of the region that fight and cure diseases. We have world class hospital jz level one trauma sent squr a Great Network of clinics and providers dedicating to keeping all san franciscans helthsy. Now also have a Free College Tuition to insure the residents have the education and training for the jobs that are in it growing fields. We are a city dedicated to providing Compassionate Care in San Francisco and led inway again and again and showed this by launching healthy San Francisco, lead thg fight against hiv. Effort to increase Pedestrian Safety and insuring everyone who works and lives in San Francisco has access to healthcare. We must call upon these traits again as we move forward in a time of uncertainty and anxiety in the helths care world. We want people to be able to go to the doctors regardless of the immigration status and sexual orientation, gender identity or preexisting conditions. With womens helths, lgbt health, medicare and medicaid and american act are under attack alt the National Level we as San Francisco must lead the way. While it is too soon to go exactly what the changes will be we know well need partnership and trust deal wg the fall out. The aca and medicaid have real life impacts in the city and have 133,000 people insured under the Affordable Care act plus another 100 thousand under medicaid. I worked with mayors across the country to fight for the aca. The eliminating coverage expansions or reducing the protections has serious consequences for local government. We are all calling on congress to build up rathder than tear down the progress we made in recent years. Next week ill be joining the day of action on the Affordable Care act with mayors across the state and country to fight for the health of our communities. Well call on the state and federal law maker tooz do the right thing not only for the constituents but also for the sfait and country as a whole. Here in San Francisco we care about our residents and healthy city is a sit safer city and hope and can count on your support to Work Together as we face the challenges ahead. Thank you very much. Thank you mr. Mayor. [applause] thank you for being here today. Madam clerk lets get to the regular agenda. Item 1 and 2 consent agena are considered routinefelt if a member objects a item may be removed and considered separately. Seeing so name ozthen rostr. Kim aye. Peskin, aye. Ronen, aye. Saf yee aye. Sheehy, aye. Tang recollect aye. Yee, aye. Breed, aye. Cohen, aye. Farrell, aye. Fewer, aye. There are 11 ayes. The ordinance finally passes unanimously. Item 3 is resolution to authorize designated city officials to execute and file on behalf of the city actions necessary for the purpose of obtaining state and federal Financial Assistance under the various grant programs, the federal fiscal year 2017 urban Area Security initiative grant, the state home land security grant program, Emergency Management and local Government Oil spill contingency grant program. Supervisor cohen. Good afternoon ladies and gentlemen. Happy valentines day to each and every one of you. Colleagues i want to touch base on item 3. We had a long and robust conversation about the item in committee and in the spirfckly the Budget Committee and as you can see we made several amendments to begin to peal back and address many of the concerns that not only Committee Members share but also Community Members have shared with us through Public Comment. The main concern regarding San Franciscos abilityregarding San Franciscos ability to withhold funding from other counties particularly those employing a program called urban shield. Now, what i didnt know prior to this whole discussion was that San Francisco is the fiscal agent responsible for a hand full of other counties relating to the Funds Associated with urban shield and overall mount of funds. By definition, and for your etfiication, urban shield is a intensive Training Program and exposition that simulates and uses military grade equipment to prepare low enforcement official tooz responds to variety of emergency scenarios. This is a very popular event. Mostly around law enforcement, first respondsers and others. Urban shield you should know is Controversial Program with seeing it as a example of the increasing militarization of local police forces. As someone who is outspoken with regards to community and police relations, i asked many questions as has my colleagues on the Committee Really to put myself in a better position to understand the role and the responsibility of a fiscal agent and most importantly what is the soapscope of our power as fiscal agent to impact programming that other counties use for this funding. And we were advised by the deputy City Attorney john gibbener that it is not in the city scope of authority to tell any county to use their funds. We accept that. While it isnt our legal role to tell counties thew use the grant dollars, it is our responsibility to as a regional partner and frankly a National Leader on Police Reform to begin to address this concern we heard loud and clear. And to this end we introduce a series of amendments last week that recognizes these concerns and more importantly urges the counties that use the bulk of the Grant Funding to prioritize preventative Emergency Management services to begin to focus on the things such as planning and Risk Management or medical or Public Health. We also included language to require that the department of Emergency Management come back to the board of supervisors when we do receive the funds for a more formal process so we can have another opportunity to review these very important dollars rchlt im fully supportive of many programs the grant funds including nert training as well as many the resiliency programs in the neighborhoods. There are several additional issues about the grant i believe still need to be addressed so this specifically includes our ability to amend it mou with awausau which lows San Francisco to be the fiscal agent for the grant. Additionally, it was brought to my attention in committee that we have members of our own San Francisco city family who participate in the urban shield activities. What is most important is since the Committee Appearance i have been trying to do Due Diligence reaching out to legislative stakeholders who receive awausy Grant Funding and think it is important to be mindsful we are regional partners in this discussion and asking for a continuance orphone week to continue this Due Diligence. I have not thank you supervisor peskin. I have not been able to fully contact everyone specifically i will reach out to to the sheriff of Alameda County so houp hope you can support the continuance. It is modest and only asking for one week and hear the item again february 28 and thank you for the consideration. Thank you madam president. Supervisor cohen, you are asking to continue this item for two weeks . Sorry, i think i said one week but the date is february 28 which is two weeks supervisor cohen made a motion to continue to february 28, 2017. Seconded by supervisor kim. Colleagues take the continuance without objection . Without objection continued to the meeting of february 28, 2017. Next item. Item 4, resolution to authorize sublease through september 2025 with harrison llc for 3. 6 million which increase annually each jm 1 beginning in 2018 by 20 percent and three options to extend for use of Human Service agencies. Take this item . Supervisor tang. I thought since this came out of Budget Committee without recommendation i would speak to it. Some of the concerns in committee is the fact while we understand this is a very important function for Human Services agency, what gave pause in knhit committee was rart rarding the fact the School District is the landlord and there is actually a subor someone else that we went through for this. The last we left at Budget Committee we heard there want flexibility with the School District on this so today i am comfortable with moving forward on the item but i also want to give a chance with other members of the sporedboard to address the item. Thank you. Supervisor peskin. Thank you. Colleagues, i was startled bide the expense of the item but have to say as the recent author of the chapter 23 amendments this was done pursuant to appraisal and appraisal was independently reviewed and the market data appears to be there to support it. It is painful to enter into such a lease. I spents a significant amount of time looking at it and decide while it is quite expensive, it is market rate and that was verified by a independent appraisal and subsquents independent review of said appraisal. Thank you. Supervisor cohen. Thank you very much. I too along with the colleagues raised concerns about the lease renewal. Supervisor peskin thank you for honoring my request and taking a look at it. I had concern business that department of real estate negotiation process for the lease renewal and it is my hope we can get clarity on the issues today. I had some of the questions answered but like for the real estate to go on the record today. I think there is a representative here from real estate. Thank you for being here and mr. Updikes absence. The real issue for me, it is interesting who we are negotiating with. We arethis is School District property but negotiating with the tenant that is a long term tenant. I agree that the appraisal are accurate and that thei think it is process question that leads me to be incredibly just uncomfortable. I got about 4 questions i believe for you. What we are seeing is a 194 percent increase in rent for this lease renewal. 194 percent. That is significant. So, my question to the department of real estate is can you explain how this is justified and how this amount of increase was developed . Claudia gorem director assistant director. 194 percent is quite alarmer. In 2012 when the lease renewal came up back then, the same transaction agent did that lease renewal as did the negotiation for this one, however, the sublesser or tenant of the School District was different. In 2012, the tenant at that time wanted stability. They wanted one tenant and they wanted a long term tenant and get both those things with the city. At that time there was also negotiated of no percentage increases and it was a great deal. Unfochinately for us now we are in 2017, we have a new sublesser or tenant of the School District and they want money. Because it comes to the negotiation that was done in the original lease, which said in the particular time period we have to go back and look at fair market value and appraisal was done to determine that fair market value and where we are with 63 per square foot is 95 percent of that. That is where the market is. Thank you. So, why are we not negotiating with the School District who owns the property . Correct, the School District owns the property. They have a tenant they have a ground lease with. That tenant gets to do what it wants with the property. We did reach out to david golden at the School District to find where they are with negotiations with the current tenant and he basically indicated in 2015 the School District it self attempted to get out of the ground lease however the tenant did not want to do so and had to go arbitration and went against the scoom district to increase or actuallyit went for the tenants in that the tenant didnt have to pay as murch as they normally would have. It backfire frd the School Districts. We asked daichbed golden if he was interested talking about selling orrenegotiating the lease with the city and he basically states that if for some reason the School District ends up owning everything and doesnt have a a ground lease it is their inclination not student sell the property. Curious why we are not exercising the 8 year option to extend when we have a 5 year straibl to us . The 8 year option coinsides with the tenant option in 2025 so we are at the same 2025 relook at the lease, which we are hoping at that time depending on the market maybe the School District and tenant may want to renegotiate their agreement or we can slip in and do something with the school dishricates. Wouldnt this give the city a opportunities to renegotiate in 5 years under a different market . Not only did the real estate look at theerant modeling but had the Controllers Office economic ted eagan look at that under different assumptions and ran it out 5 and 8 years using the 5 year Square Footage amount that the currents sublesser would agree to, which is 75 so have to do it under a higher square foot amount and under both scenarios of the controllers aufs and ourselves looking at 5 and 8 year we would be paying more under the 5 year if we have gotten the 5 year. Okay, so perhaps you can explain the ez rooens why real estate didnt go through arbitration for the 5 year term . I think there are several. I think the first reez son we didnt want to take the risk having it be a even higher fair market value rate. If you go through the arbitration you can do several appraisals, which may or may not come oit in our favor and we were thinking perhaps rather than finding this part of soma the fringe they would find it in the highest rate in the city. And also we have a relationship with these long term landlords and both of those reasons we want to keep a Good Relationship and didnt want to take the risk having a higher fair market value found. Led us to come to it conclusion arbitration was not in our best interest. Thank you mrs. Claudia, i appreciate your time and answers. The clarification is very helpful. Colleagues when this deal was brought to us in the budget knhity the full picture wasnt present today the committee and grateful to have the answers student my questions today. Real estate was able to do a very good job answering them. I also think though that this highlights some of the underlying issues about the San Francisco unified School Districts properties and the cities relationship and leases on these particular properties. Now, i understand we are under a master Lease Agreement with this particular company and that ties our hands. I just really hope that through this discussion we can pursue reasonable opportunity when the lease is up to eliminate the currents lessee cutting out the middle man. So the city is deal wg the unified School District opposed to the middle person. It is a lukeative for that middle person to be in but counter intuitive to spend tax dollars in such a frivolous manner. Thank you. Thank you supervisor cohen. Supervisor yee. Thank you president breed. First of all, i want to thank the real estate folks for following up with my question in regards to the initial appraisal of the rents that were made as a comparison because i thought that maybe there was closer property to where this particular property was and many appraisals or examples were downtown which i thought would be more expensive. So, you did follow up and came to my office to te