San Francisco Redevelopment Agency


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RESOLUTION NO. 41-2004

 

 

 

AUTHORIZING A SECOND AMENDMENT TO AN EXCLUSIVE NEGOTIATIONS AGREEMENT WITH SAN FRANCISCO HOUSING DEVELOPMENT CORPORATION, A CALIFORNIA NONPROFIT PUBLIC BENEFIT CORPORATION, TO EXTEND THE EXPIRATION FROM MAY 30, 2004 TO SEPTEMBER 30, 2004, LEADING TO A LONG TERM GROUND LEASE OF 4800 THIRD STREET, WITHIN THE BAYVIEW HUNTERS POINT REDEVELOPMENT SURVEY AREA, FOR THE DEVELOPMENT OF VERY LOW INCOME RENTAL HOUSING AND GROUND FLOOR COMMERCIAL SPACE; CITYWIDE TAX INCREMENT HOUSING PROGRAM

 

BASIS FOR RESOLUTION

 

  • In furtherance of the objectives of the California Community Redevelopment Law (Health and Safety Code Section 33000 et seq., the “Law”), the Redevelopment Agency of the City and County of San Francisco (the “Agency”) undertakes programs for the reconstruction and rehabilitation of slums and blighted areas in the City and County of San Francisco (the “City”).
  • San Francisco Housing Development Corporation’s, a California nonprofit public benefit corporation (“SFHDC” or “Developer”), mission is to provide safe, decent and affordable housing primarily to households in the Bayview and Western Addition communities in San Francisco.
  • On June 11, 2001, the Developer entered into an agreement with Thomas E. Nix DBA Triway Investment Company (the “Seller”) to purchase a blighted property at 4800 Third Street in the Bayview Hunters Point Redevelopment Survey Area (the “Site” or “Property”) for the purpose of redeveloping it as a mixed use affordable housing development (the “Purchase and Sale Agreement”).
  • On November 27, 2001, by Resolution No. 207-2001, the Agency Commission authorized an Assignment and Assumption Agreement between SFHDC and the Agency for the Purchase and Sale Agreement (the “Assignment Agreement”), and on December 14, 2001, the Agency acquired the Property.
  • Also on November 27, 2001, by Resolution No. 208-2001, the Agency Commission authorized the Agency to enter into an Exclusive Negotiations Agreement (“ENA”) with SFHDC leading to a ground lease agreement providing for the redevelopment of the Site as a mixed-use affordable housing development (the “Project”).
  •  
    • The parties now desire to extend the expiration of the ENA from May 30, 2004 to September 30, 2004 to provide SFHDC sufficient time to secure the required entitlements and assemble the necessary financing to start the Project.

6.6.        On September 16, 2003, by Resolution No. 144-2003, the Agency Commission authorized a First Amendment to the ENA to:  (1) amend the Schedule of Performance, (2) amend Section 6 “Obligation of Agency” and, (3) extend the expiration of the ENA from September 14, 2003 to May 30,2004.

 

RESOLUTION

ACCORDINGLY, IT IS RESOLVED by the Redevelopment Agency of the City and County of San Francisco that the Executive Director is authorized to enter into a Second Amendment to the Exclusive Negotiations Agreement with San Francisco Housing Development Corporation, a California nonprofit public benefit corporation, to extend the expiration of the ENA from May 30, 2004 to September 30, 2004, leading to a long-term ground lease of 4800 Third Street, within the Bayview Hunters Point Redevelopment Survey Area, for the development of very low and low income rental housing and ground floor commercial space, as part of the Citywide Tax Increment Housing Program, substantially in the form lodged with the Agency General Counsel.

APPROVED AS TO FORM:

_________________________

James B. Morales

Agency General Counsel


 

118-17105-002                                                                        Agenda Item No.   4 ( b )

April 5, 2004                                                                            Meeting of April 20, 2004

 

MEMORANDUM

 

TO:                  Agency Commissioners

 

FROM:            Marcia Rosen, Executive Director

 

SUBJECT:      Authorizing a Second Amendment to an Exclusive Negotiations Agreement with San Francisco Housing Development Corporation, a California nonprofit public benefit corporation, to extend the expiration from May 30, 2004 to September 30, 2004, leading to a long term ground lease of 4800 Third Street, within the Bayview Hunters Point Redevelopment Survey Area, for the development of very low income rental housing and ground floor commercial space; Citywide Tax Increment Housing Program

 

EXECUTIVE SUMMARY

 

On November 30, 2001, the Agency entered into an Exclusive Negotiations Agreement (“ENA”) with San Francisco Housing Development Corporation (“SFHDC”) to develop a parcel located at 4800 Third Street (the “Site”) within the Bayview Hunters Point Redevelopment Survey Area as a potential mixed-use affordable housing site. The ENA expires on May 30, 2004 and staff is recommending a second amendment to the ENA, to incorporate extended performance milestones consistent with the project’s current development schedule. This proposed action extends performance milestones and the term of the ENA until September 30, 2004, which will be sufficient time to provide SFHDC an opportunity to secure an allocation of Low Income Housing Tax Credits.

 

Staff recommends approval of the Second Amendment to the ENA.

 

DISCUSSION

 

Since 1990, the Agency has contracted with SFHDC to provide housing counseling and development services in the Western Addition Project Area A-2 and the Bayview Hunters Point Redevelopment Survey Area (“Survey Area”).   In 1999, SFHDC identified an underdeveloped parcel located at the Site as a potential mixed-use affordable housing site.   

 

Site Background

The 8,687 square foot site, which presenting contains a vacated 1,584 square foot building, is located at the southwest corner of Third Street and Oakdale Avenue near the Bayview Opera House, the heart of the Town Center portion of the Survey Area.  Based upon the studies done to define the boundaries and priorities of the to-be-adopted project area, Agency staff identified the Site as blighted and a high priority for redevelopment.  Given the prominent location at the corner of Third Street and Oakdale Avenue, the Site is of great strategic importance to the revitalization of the Town Center portion of the Survey Area.

In June 2001, after several years of negotiations, SFHDC entered into a contract to purchase the Site (the “Purchase Agreement”).  SFHDC assigned its right to purchase the Site to the Agency in return for obtaining predevelopment financing in the form of a loan and exclusive negotiations rights leading to the execution of a long-term ground lease to develop the Site as very-low and low-income rental units along with ground floor commercial space (the “Development Concept”).  On December 14, 2001, the property was purchased by the Agency.  On November 30, 2001, the Agency entered into an ENA with SFHDC.

 

Development Concept

 

SFHDC initially proposed a four-story building consisting of 18 market rate and affordable rental units, some of which would serve households with disabled members and emancipated youth, and approximately 3,000 square feet of ground floor commercial space and parking.  After reviewing the economics of its proposal, SFHDC has re-structured the project to be eligible under the State of California’s Tax Credit Allocation Committee 9% low-income housing tax credit program.  The project will apply for the small project set-aside as family rental housing, with 30% of units being 3-bedroom units.  The project will consist of 15 units and 3,000 square feet of ground floor commercial space within a four-story building.  All units will be affordable to very low-income tenants.

 

The Basic Concept Design drawings (“BCD’s”) have the conditional approval of Agency staff and the approval of the Bayview Hunters Point Project Area Committee (“PAC”).  SFHDC has submitted the current drawings to the Department of City Planning (“DCP”) to secure the necessary DCP entitlements for the project.  Stevens and Associates, the project architect is in the process of making design changes that respond the DCP staff comments.

 

Exclusive Negotiations

 

The ENA provides SFHDC control of the Site in return for agreeing to abide by Agency policies and meeting various performance milestones.  The ENA currently expires on May 30,2004, prior to the next application deadline of July 22, 2004 for an allocation of 9% low-income housing tax credits. This proposed action extends performance milestones and the term of the ENA until September 30, 2004, which will be sufficient time to provide SFHDC an opportunity to secure an allocation of Low Income Housing Tax Credits.

 

Timing and Next Steps

 

Staff will return to the Commission for additional authorizations when SFHDC has achieved the performance milestones under the amended ENA necessary to apply for an allocation of 9% tax credits. These authorizations are required for a competitive tax credit application and include an amendment to the loan agreement to provide the additional funds necessary to make the project financially feasible and a lease option agreement demonstrating site control through the allocation process.  Once SFHDC has secured an allocation of tax credits, staff will return to the Commission for approval of a long-term ground lease. The amended ENA will terminate at the earlier of the Commission’s approval of a long-term ground lease allowing for the development of the Site, or SFHDC’s failure to meet the performance criteria or other terms or conditions of the amended ENA.

 

   (Originated By: Vanessa Dandridge, Development Specialist)

 

 

                                                             Marcia Rosen

                                                             Executive Director

 

RESOLUTION NO.   42-2004 

 

 

 

AUTHORIZING A FIRST AMENDMENT

TO THE 2003-2004 FISCAL AGENT AGREEMENT WITH

THE COUNTY OF MARIN IN AN AMOUNT NOT TO EXCEED $60,000,

FOR A TOTAL AGGREGATE AMOUNT OF $528,000; HOUSING

OPPORTUNITIES FOR PERSONS WITH AIDS PROGRAM

 

BASIS FOR RESOLUTION

 

  • The Redevelopment Agency of the City and County of San Francisco (“Agency”) administers the U.S. Department of Housing and Urban Development (“HUD”) program known as the Housing Opportunities for Persons with AIDS program (“HOPWA”) for the City and County of San Francisco.

 

  • The Agency serves as lead administrator of HOPWA funds allocated to the San Francisco Eligible Metropolitan Statistical Area (“EMSA”) that is comprised of Marin, San Francisco, and San Mateo counties.  As lead administrator, the Agency serves as a fiscal agent for the allocation of the HOPWA funds to the three counties.  The Agency is responsible to ensure maximum and appropriate use and timely disbursement of HOPWA funds for the EMSA.

 

  • Since HUD released HOPWA funds to the San Francisco EMSA in 1992, the Agency has based distribution of those funds to Marin and San Mateo counties on the formula allocation used for federal Ryan White CARE funds (the “Care Fund Allocation”), which is the state reported number of living persons with AIDS in each EMSA county.

 

  • On June 10, 2003, the Agency approved a 2003-2004 Fiscal Agent Agreement (“Agreement”) with the County of Marin for an aggregate total of $468,000.  Any remaining funds at the end of the contract term, June 30, 2004, are to be returned to the EMSA.

 

  • The County of Marin has requested additional HOPWA funds in an amount not to exceed $60,000 to maintain its rental assistance program through the end of the contract year, June 30, 2004.

 

  • The funds for this request will be taken from $300,000 designated as rental assistance reserve funds originally approved by the Agency on November 15, 2001 for each county’s program.

 

  • The Agency approves this request to increase the total aggregate Agreement amount to $528,000.   Any funds provided by this Amendment not spent by June 30, 2004, the term of the amended Agreement, will be returned to the County of Marin’s rental assistance reserve.

 

  • The HOPWA funds to be allocated to the County of Marin are for eligible expenses pursuant to the HOPWA program regulations at 24 CFR Part 574 et seq.

 

 

RESOLUTION

 

ACCORDINGLY, IT IS RESOLVED by the Redevelopment Agency of the City and County of San Francisco that the Executive Director is authorized to execute a First Amendment to the 2003-2004 Fiscal Agent Agreement with the County of Marin in an amount not to exceed $60,000, for a total aggregate amount not to exceed $528,000, as part of the Housing Opportunities for Persons with AIDS Program, substantially in the form lodged with the Agency General Counsel.

 

 

APPROVED AS TO FORM:

 

 

 

_________________________

James B. Morales

Agency General Counsel


 

MEMORANDUM

 

TO:                  Agency Commissioners

 

FROM:             Marcia Rosen

Executive Director

 

SUBJECT:       Authorizing a First Amendment to the 2003-2004 Fiscal Agent Agreement with the County of Marin in an amount not to exceed $60,000, for a total aggregate amount of $528,000; Housing Opportunities for Persons with AIDS Program

 

EXECUTIVE SUMMARY

The Agency administers the Housing Opportunities for Persons With AIDS (“HOPWA”) funds, on behalf of the City and County of San Francisco, for the San Francisco Eligible Metropolitan Statistical Area (“EMSA”), consisting of Marin, San Francisco and San Mateo counties.   The Agency is responsible to ensure maximum and appropriate use and timely disbursement of HOPWA funds for the EMSA.  On June 10, 2003, the Agency authorized the County of Marin’s (“Marin County”) 2003-2004 Fiscal Agent Agreement (the “Agreement”) that allocated HOPWA funds in the amount of $468,000 to Marin County to fund short- and long-term tenant-based rental assistance, supportive services such as in-home attendant care and case management, and administrative cost. Marin County is requesting additional HOPWA funds in an amount not to exceed $60,000 to fund cost increases within its rental assistance program for the remaining fiscal year, ending June 30, 2004. 

 

Staff recommends authorization of a First Amendment to the 2003-2004 Fiscal Agent Agreement with the County of Marin in an amount not to exceed $60,000, for a total aggregate amount not to exceed $528,000; Housing Opportunities for Persons with AIDS Program.

                                                                                               

DISCUSSION           

As administrator of the HOPWA funds for the San Francisco EMSA, the Agency must ensure that all three EMSA counties allocate HOPWA funds for eligible uses to meet the needs of persons with AIDS and to do so in a timely way.   Annually, the Agency allocates the HOPWA funds among the EMSA counties based on the percentage of living AIDS cases in each county.  On June 10, 2003, the Agency authorized an Agreement with Marin County in an amount not to exceed $468,000.  Marin County has used its current HOPWA funds for short- and long-term tenant-based rental assistance, supportive services such as in-home attendant care and case management, and administrative costs. 

Marin County has requested an additional $60,000 in HOPWA funds for its rental assistance program for the fiscal year, June 30, 2004.  This request is required due to increased rental subsidy amounts and low attrition from the rental assistance program.  The cost increase is projected to exceed the original program budget by at least $50,000.  The additional HOPWA funds will enable Marin County to reimburse its rental assistance administrator, the Marin Housing Authority, for May and June invoices.  These additional HOPWA funds will come from Marin County funds previously reserved by the Agency for Marin’s rental assistance program. Any funds remaining from this amendment remaining at the term of the Agreement will be returned to the Marin County’s rental assistance reserve. 

 

(Originated by:  Chris Harris, Senior Development Specialist)

 

 

 

Marcia Rosen

Executive Director

 

RESOLUTION NO. 43-2004

 

 

 

AUTHORIZING A FIRST AMENDMENT TO THE LETTER AGREEMENT WITH THE DEPARTMENT OF PUBLIC WORKS, BUREAU OF CONSTRUCTION MANAGEMENT, TO PROVIDE ENVIRONMENTAL, GEOTECHNICAL AND ENGINEERING SERVICES ON AN AS-NEEDED BASIS, WHICH EXTENDS THE TERM OF THE AGREEMENT BY 12 MONTHS; ALL REDEVELOPMENT PROJECT AND SURVEY AREAS AND OTHER DESIGNATED SITES

 

BASIS FOR RESOLUTION

 

  • The Redevelopment Agency of the City and County of San Francisco (“Agency”) requires Environmental, Geotechnical and Engineering Services on an as-needed basis for a number of Agency projects.

 

  • The San Francisco Department of Public Works, Bureau of Construction Management (“BCM”) has selected consultants through a Request for Qualifications, which is consistent with the Agency’s Purchasing Policy and Procedures.

 

  • The Agency and BCM entered into Letter Agreement No. 1019, which expired on January 10, 2004, with a not-to-exceed amount of $500,000.

 

  • Staff has determined that continued services from BCM would be cost-effective and time efficient.   No additional funds would be required, only an extension of the term of the letter agreement by 12 months from January 10, 2004 to January 10, 2005.

 

RESOLUTION

 

ACCORDINGLY, IT IS RESOLVED by the Redevelopment Agency of the City and County of San Francisco that the Executive Director is authorized to execute a first amendment to Letter Agreement No. 1019 with the Department of Public Works, Bureau of Construction Management to extend the term of the agreement by 12 months from January 10, 2004 to January 10, 2005.

 

APPROVED AS TO FORM:

 

 

 

________________________

James B. Morales

Agency General Counsel


 

106-01204-002                                                                        Agenda Item No. 4 ( d ) 

April 9, 2004                                                                            Meeting of April 20, 2004

 

 

MEMORANDUM

 

TO:              Agency Commissioners

 

FROM:         Marcia Rosen, Executive Director

 

SUBJECT:     Authorizing a first amendment to the Letter Agreement with the Department of Public Works, Bureau of Construction Management, to provide Environmental, Geotechnical and Engineering Services on an

as-needed basis, which extends the term of the Agreement by 12 months; all Redevelopment Project and Survey Areas and other Designated Sites

 

 

EXECUTIVE SUMMARY

 

This memorandum requests authorization to amend Letter Agreement No. 1019 with the Department of Public Works, Bureau of Construction Management (BCM), approved May 28, 2002, by Resolution No. 87-2002, which expired on January 10, 2004, to extend the term of the Agreement by 12 months, so that it would expire on January 10, 2005.  The Letter Agreement authorizes the Agency to contract with BCM to provide environmental, geotechnical and engineering services in an amount not to exceed $500,000 on an as-needed basis for all redevelopment project areas and other designated sites.  No additional funds are being requested.

 

The intent of the Letter Agreement with BCM was not only to enable the Agency to respond to requests in a timely manner but also to minimize the administrative process of securing access to professional services that could best be provided by City staff and consultants.  The services requested to date have been studies related to the proposed Mid-Market Redevelopment Area, the Hunters Point Shipyard Redevelopment Project, and the Western Addition A-2 Plan Amendment. 

 

Staff recommends approval of this first amendment to the first Letter Agreement.

 

DISCUSSION

 

The Agency occasionally requires outside environmental, geotechnical and other technical services. In the past, these services have been provided directly to the Agency by private consultants or through letter agreements with City departments.  The latter have been used particularly in situations where it is obvious that review and/or approval by various city departments will be required at some future date.  Two specific examples are the provision of services by a team of BCM staff and consultants for environmental toxics consultation, surveying, structural review, infrastructure and cost estimating for the Hunters Point Shipyard and preparation of the programmatic environmental impact report for the proposed Mid-Market Redevelopment Area.

 

Approval of the requested extension of the Letter Agreement would allow the continued use of the current BCM team to work on the Western Addition A-2 Plan Amendment.  Staff believes that it is of particular importance that the current professional team continue work if this project is to meet its established and very tight time schedule.  There are adequate funds in the Western Addition A-2 Project Area budget to pay for this work.

 

All consultants under contract with BCM are selected through the City’s Request for Qualifications (RFQ) process and approved by the Human Rights Commission, the Civil Service Commission and the Board of Supervisors.   Both the selection process for engaging the services of consultants and the approved consultant list was examined by Agency Contract Compliance staff and found to be consistent with the Agency’s Minority and Women Business Enterprises (M/WBE) goals and the principles contained in the Agency’s Purchasing Policy.

 

The Commission authorized the Letter Agreement on May 28, 2002, with an expiration date of January 10, 2004.  BCM and Agency staff have had numerous discussions and concluded that continuation of services initiated under the previous Letter Agreement would be cost effective and time efficient. BCM endorses the extension of the Letter Agreement.

 

New work orders will be authorized only after specific tasks are identified.   Agency staff will then approve the BCM staff and/or consultant designated to complete the task, the scope of work, and the budget.  If necessary, funds will then be transferred to the Letter Agreement account. 

 

Originated by:   Michael J. Grisso, Sr. Planner, and Su-Syin Chou, Senior Civil Engineer

 

 

 

Marcia Rosen

       Executive Director

 

 

RESOLUTION NO. 44-2004

 

 

 

AUTHORIZING AN EXTENSION FOR TIME OF COMPLETION FOR CONTRACT RPSB 002-03 WITH I.M.R. ROOFING CORPORATION, A CALIFORNIA CORPORATION, FROM MARCH 16, 2004 TO JUNE 30, 2004 FOR SOUTH BEACH HARBOR PIER 40 SHED IMPROVEMENTS; RINCON POINT - SOUTH BEACH REDEVELOPMENT PROJECT AREA

 

 

BASIS FOR RESOLUTION

 

  1. On September 16, 2003, the Redevelopment Agency of the City and County of San Francisco (“Agency”) awarded contract RPSB 002-03, South Beach Harbor Pier 40 Shed Improvements, to I.M.R. Roofing Corporation with a 90-calendar day time of completion.

 

  1. The roofing portion of the improvements is substantially complete, but the window replacement portion is delayed due to the window manufacturer’s backlog.

 

  1. There is no cost consideration due to the delay.

 

  1. A time extension is required in order to complete the work as required per the Agency’s construction change order policy.

 

 

RESOLUTION

 

ACCORDINGLY, IT IS RESOLVED by the Redevelopment Agency of the City and County of San Francisco that the Executive Director is authorized to extend the time of completion for contract RPSB 002-03 with I.M.R. Roofing Corporation, a California corporation, from March 16, 2004 to June 30, 2004, for the completion of the South Beach Harbor Pier 40 Shed Improvements, Rincon Point - South Beach Redevelopment Project Area.

 

 

APPROVED AS TO FORM:

 

 

 

________________________

James B. Morales

Agency General Counsel


 

April 12, 2004                                                                                               Agenda Item No. 4 ( e )  

106-01304-002                                                                                            Meeting of April 20, 2004

 

MEMORANDUM

 

TO:                  Agency Commissioners

 

FROM:            Marcia Rosen, Executive Director

 

SUBJECT:      Authorizing an extension for time of completion for contract RPSB 002-03 with I.M.R. Roofing Corporation, a California corporation, from March 16, 2004 to June 30, 2004 for South Beach Harbor Pier 40 shed improvements; Rincon Point - South Beach Redevelopment Project Area

 

EXECUTIVE SUMMARY

 

Contract RPSB 002-03 was awarded by the Commission on September 16, 2003.  The contract calls for removal of the existing roof, replacement of the windows, and replacement of metal copings and flashings on the 46,000 square foot Pier 40 shed building within 90-calendar days.  The roofing and metal work is substantially complete, however, the window replacement work is delayed due to the window manufacturer’s backlog.

 

A 105-calendar day time extension is required in order to complete the work.  There is no extra cost involved with the time extension.

 

Staff recommends authorizing a time extension for contract RPSB 002-03, I.M.R. Roofing Corporation, for a total of 105 days.

 

DISCUSSION

 

On September 16, 2003, the Commission awarded contract RPSB 002-03 in the amount of $615,570 to I.M.R. Roofing Corporation with a 90-calendar day completion schedule.   Following execution of the contract, a notice to proceed was given on November 6, 2003.  The contract called for removal of the existing roof, replacement of the windows, and replacement of metal copings and flashings on the 46,000 square foot Pier 40 shed building.  The roofing work has been substantially completed for the last month but the project is not yet fully completed due to production delays in manufacturing the new windows. 

 

Per the Agency policy on contract change orders, one extension of 60 days was previously granted by staff.  There are two reasons for requesting commission authority for a time extension for this contract beyond this period:

 

  1. The first reason is the discovery of an environmental hazard not known when the contract was executed.  During the building permit phase, the Port of San Francisco staff recommended that the roofing gravel be sampled and tested for the presence of lead, as Port staff has encountered elevated levels of this environmentally hazardous material at other Port properties along the waterfront.  Supplemental tests were done, and the roofing ground was found to have elevated levels of lead requiring I.M.R. Roofing to subcontract the clean up to a licensed contractor.  A contract change order within staff’s authority to was issued for an additional $33,517 and time extension of 30 calendar days for the extra work.

 

  1. The second item of work necessitating a time extension relates to the manufacture of the new windows.  Subsequent to contract authorization, the manufacturer specified for this project developed a 90-day backlog of orders for the specified windows.  Since the backlog delay is not controllable by I.M.R. Roofing, this delay is considered excusable.

 

The requested time extension does not result in any additional cost to the Agency.  In addition, there is no other adverse effect, as the more critical roofing work has been completed and the rainy season is at its end.  Therefore, staff recommends that the Commission authorize a contract change order extending the time of completion for an additional 105 days through June 30, 2004.

 

 

(Originated by:   Kevin Masuda, Civil Engineer)

 

 

 

                                                             Marcia Rosen

                                                             Executive Director

 

RESOLUTION NO. 45-2004

 

 

 

CERTIFYING A FINAL ENVIRONMENTAL IMPACT STATEMENT/FINAL ENVIRONMENTAL IMPACT REPORT FOR THE TRANSBAY TERMINAL/CALTRAIN DOWNTOWN EXTENSION REDEVELOPMENT PROJECT;

TRANSBAY REDEVELOPMENT SURVEY AREA

 

 

BASIS FOR RESOLUTION

 

1.         The City and County of San Francisco, acting through the Planning Department (the “Planning Department”) and the San Francisco Redevelopment Agency (the “Redevelopment Agency”), and the Peninsula Corridor Joint Powers Board (the “JPB”), acting as co-Lead Agencies, fulfilled all procedural requirements of the California Environmental Quality Act (Cal. Pub. Res. Code Section 21000 et seq., “CEQA”), the State CEQA Guidelines (Cal. Admin. Code Title 14, Section 15000 et. seq., (“CEQA Guidelines”), and Chapter 31 of the San Francisco Administrative Code (“Chapter 31”) for the Transbay Terminal/Caltrain Downtown Extension Redevelopment Project (the “Project” or “Proposed Project”).

 

2.   The co-Lead Agencies determined that an Environmental Impact Report (“EIR”) was required for the Proposed Project and provided public notice of that determination by publication in a newspaper of general circulation on March 17, 2001.  A Notice of Intent to prepare an Environmental Impact Statement was published in the Federal Register by the Federal Transit Administration on March 28, 2001.

 

3.         On October 5, 2002, the co-Lead Agencies published the Draft Environmental Impact Statement/Environmental Impact Report (“Draft EIS/EIR”) and provided public notice in a newspaper of general circulation of the availability of the document for public review and comment and of the date and time of the Planning Commission public hearing on the Draft EIS/EIR; this notice was mailed to the Planning Department’s list of persons requesting such notice.

 

  1. Notices of availability of the Draft EIS/EIR and of the date and time of the public hearings were posted near the Project site by Planning Department staff on October 4, 2002.

 

  1. On October 3, 2002, copies of the Draft EIS/EIR were mailed or otherwise delivered to a list of persons requesting it, to those noted on the distribution list in the Draft EIS/EIR, to adjacent property owners, and to government agencies, the latter both directly and through the State Clearinghouse.

 

  1. A Notice of Completion was filed with the State Secretary of Resources via the State Clearinghouse on October 7, 2002.

 

  1. The Redevelopment Agency Commission held a duly noticed public hearing on the Draft EIS/EIR on November 12, 2002 at which time opportunity for public comment was given, and public comment was received on the Draft EIS/EIR.   The period for acceptance of written comments ended on December 20, 2002.

 

  1. The co-Lead Agencies prepared responses to comments on environmental issues received at the public hearing and in writing during the 77‑day public review period for the Draft EIS/EIR, prepared revisions to the text of the Draft EIS/EIR in response to comments received or based on additional information that became available during the public review period, and corrected errors in the Draft EIS/EIR.

 

  1. A Final Environmental Impact Statement/Environmental Impact Report (“Final EIS/EIR”) has been prepared by the co-Lead Agencies, consisting of the Draft EIS/EIR, any consultations and comments received during the review process, any additional information that became available, and the Summary of Comments and Responses all as required by law.   This material was presented in Volumes I and II of the Final EIS/EIR document, published on March 18, 2004, and was distributed to the co-Lead Agencies and to all parties who commented on the Draft EIS/EIR, and was available to others upon request at Planning Department offices.

 

  1. In March 2003, the Transbay Joint Powers Authority (“TJPA”) adopted as its preferred alternative the Locally Preferred Alternative (“LPA”) as described in the Final EIS/EIR.   The LPA consists of the Transbay Terminal West Ramp Alternative, which includes associated bus ramps, circulation, and off-site storage; the Second Street to Main Street track alignment for the Caltrain downtown extension, which includes a “stacked drift” tunneling option for the segment between Townsend Street and Folsom Street; and the “Full Build” Redevelopment Plan.

 

  1. On April 20, 2004, the Redevelopment Agency Commission reviewed and considered the Final EIS/EIR and finds that the contents of the report and the procedures through which the Final EIS/EIR was prepared, publicized and reviewed comply with the provisions of CEQA, the CEQA Guidelines, and Chapter 31 of the San Francisco Administrative Code.

 

  1. The Redevelopment Agency Commission, in certifying the completion of the Final Environmental Impact Report, finds that the Proposed Project described in the Final EIS/EIR and as preferred by the TJPA would have the following significant unavoidable environmental impacts, which could not be mitigated to a level of non-significance:

 

  • A significant adverse effect on the environment to the following intersections under both the baseline plus project and 2020 cumulative conditions:  (1) First/Market, (2) First/Mission, (3) First/Howard, (4) Fremont/Howard, (5) Beale/Howard, (6) Second/Folsom, and (7) Second/Bryant.  As a result of the constraints at downstream intersections and the I-80/U.S. 101 on-ramps and mainline, mitigation measures for the seven intersections have not been proposed, and the impacts associated with the Project would be considered adverse and unmitigable.  Therefore, the Project would add vehicles to those movements that would represent a considerable contribution to the baseline and cumulative conditions and the Project would have an adverse impact on these intersections.

 

  • A significant effect on the environment resulting from demolition of historical resources.  The present Transbay Terminal and the associated bus ramps and approach structures, which are historic resources as components of a multi-component structure listed in the National Register of Historic Places, would be demolished to construct the new Transbay Terminal aspect of the Proposed Project.  In  addition, three historic properties located at 580 Howard Street (Block 3721, Lots 092 through 106), 165-173 Second Street (Block 3721, Lot 025), and 191 Second Street (Block 3721, Lot 022) would be demolished to construct the Caltrain Downtown Extension component of the Proposed Project.

 

 

RESOLUTION

 

ACCORDINGLY, IT IS RESOLVED by the Redevelopment Agency of the City and County of San Francisco (the “Agency”) as follows:

 

  • Based on its review of the Draft EIS/EIR and the Responses and Comments (the “Final EIS/EIR”) and the public comments submitted, the “Agency” finds that:

 

  • The Comments and Responses document contains no significant revisions to the Draft EIS/EIR.  In addition, since publication of the DEIS/DEIR there has been no significant new information that would require recirculation of the document pursuant to CEQA Guideline Section 15088.5;

 

  • The Final EIS/EIR was completed in compliance with CEQA and the CEQA Guidelines; and

 

  • The Final EIS/EIR reflects the independent judgment and analysis of the Redevelopment Agency of the City and County of San Francisco, and is adequate, accurate and objective.

 

  • Based on the above findings, the Agency certifies the Final EIS/EIR identified as Case File No. 95063004:  Transbay Redevelopment Plan, as having been completed in accordance with CEQA and the State CEQA Guidelines.

 

  • The Agency also determines that this resolution shall take effect concurrently with the San Francisco Planning Commission’s and the Peninsula Corridor Joint Power Board’s adoption of parallel resolutions certifying the Final EIS/EIR.

 

 

APPROVED AS TO FORM:

 

 

 

_________________________

James B. Morales

Agency General Counsel


 

110-43-04-001                                                                                                 Agenda Item No. 4 ( f )

April 9, 2004                                                                                                    Meeting of April 20, 2004

 

MEMORANDUM

 

 

TO:                 Agency Commissioners

 

FROM:           Marcia Rosen, Executive Director

 

SUBJECT:      Certifying a Final Environmental Impact Statement/Final Environmental Impact Report for the Transbay Terminal/Caltrain Downtown Extension Redevelopment Project; Transbay Redevelopment Survey Area.

 

 

EXECUTIVE SUMMARY

 

The action before you is certification of the Final Environmental Impact Statement/Environmental Impact Report (Final EIS/EIR) for the proposed Transbay Terminal/Caltrain Downtown Extension/Redevelopment Project (Project).  The Final EIS/EIR assesses potential environmental impacts of all components of the proposed Project and has been published in two parts:  Volume I is the Draft EIS/EIR published on October 4, 2002. Volume II, was published after the December 20, 2002 close of the public review period;  Volume II   describes the consultations and the comments received during the public review period on the Draft EIS/EIR, any additional information that became available since the publication of the Draft EIS/EIR, and also contains a Summary of Comments and Responses, all as required by law. The Final EIS/EIR has three local co-lead agencies: the City and County of San Francisco (City), the Redevelopment Agency of the City and County of San Francisco (Agency), and the Peninsula Corridor Joint Powers Board (JPB).  The Transbay Joint Powers Authority (TJPA) is the lead agency in designing, building, and operating the new Transbay Terminal and Caltrain Downtown Extension but is not a lead agency on the Final EIS/EIR

 

Staff recommends Agency certification of the Final EIS/EIR, which must occur before consideration of the merits of the proposed Transbay Redevelopment Plan (Plan).  However, EIS/EIR certification is a limited action, which does not constitute an approval or disapproval of the proposed Plan.  After tonight’s hearing, the Final EIS/EIR will also be scheduled for certification by the City and by JPB, which are also CEQA co-lead agencies.  After the Final EIS/EIR has been certified by all co-lead agencies, the proposed redevelopment plan will be scheduled for adoption by the Commission and by the City.

 

 

BACKGROUND

 

PROJECT ANALYZED IN THE FINAL EIS/EIR

 

The Final EIS/EIR analyzes the environmental impacts of the project, which includes: 1) a new Transbay Terminal on the site of the existing terminal, 2) the extension of Peninsula Corridor (Caltrain) commuter rail service from its existing station at Fourth and Townsend Streets to a new terminus underneath the Transbay Terminal, 3) a Redevelopment Project Area (Project Area) and Plan designed to revitalize the Transbay Terminal area and alleviate blight, and 4) support elements including a temporary Transbay Terminal and off-site bus storage.

 

The proposed Transbay Terminal/Caltrain Downtown Extension/Redevelopment Project, located in the heart of downtown San Francisco, consists of four elements:

 

  • A new multimodal transportation terminal at the site of the existing Transbay Terminal designed to provide convenient and efficient connections between Muni, Caltrain, BART, California’s high speed rail system, AC Transit, Golden Gate Transit, Samtrans, Greyhound, and other transit operators.
  • An extension of Caltrain commuter rail service from its current terminus at Fourth and Townsend Streets to a new underground terminal at the Transbay Terminal site.

 

  • A Plan designed to revitalize the Transbay Terminal area and alleviate blight through the construction of new transit-oriented development, new infrastructure, and rehabilitation of existing deteriorated buildings.

 

  • Support elements including a temporary bus terminal facility to be used during construction, a permanent off-site bus storage/layover facility, new bus ramps leading from the west end of the new Transbay Terminal to the Bay Bridge, and a redesigned Caltrain storage yard.

 

The proposed Project is required because the existing Transbay Terminal, built in 1939, does not meet current safety codes, cannot adequately serve future transit needs, and does not meet Americans with Disabilities Act (ADA) requirements.  The need to modernize the terminal provides the Bay Area with a tremendous opportunity to significantly improve regional public transit service while revitalizing a large area of downtown San Francisco.  The Project as defined and set forth in the Final EIS/EIR has been under development for more than ten years and is the result of extensive technical analysis and broad and continuing support from the public.

 

The proposed Project will significantly improve public transit into San Francisco by extending Caltrain from its current terminus outside the downtown area into the heart of the Financial District and by providing a convenient, efficient, and safe multimodal transit terminal.  The new terminal will be designed to be both attractive to passengers and efficient for public transit operators.  A primary design goal will be to enable passengers to quickly transfer between the various transit operators serving San Francisco.

 

The new Transbay Terminal will also become the San Francisco terminus of the California high speed rail system. When completed, this project will provide travelers with fast and convenient rail access from San Francisco to Southern California and the Central Valley.  The new terminal will incorporate shops, restaurants, and other activities designed to appeal to passengers and contribute to the area’s liveliness and excitement; as well as help pay for terminal construction and operations.

 

The redevelopment component of the proposed Project takes advantage of an unprecedented opportunity for the City and the Bay Area to create a vibrant mixed-use, transit-oriented neighborhood adjacent to a major new multi-modal transit terminal.  The proposed Project Area is approximately 40 acres in size and roughly bounded by Mission Street on the north, Main Street on the east, Folsom Street on the south, and Second Street on the west.  The area includes underutilized lots, the dilapidated existing terminal building and the seismically deficient bus ramps. When completed, the proposed Plan will encompass a new neighborhood consisting of nearly 3,400 new housing units, approximately 1,200 of which will be affordable to very-low, low- and moderate-income households, plus 750,000 square feet of new office space, a 450,000-square-foot hotel and 60,000 square feet of ground-level retail space, as well as two major new public parks, landscaped pedestrian-oriented alleys, widened sidewalks and other public improvements. 

The proposed Plan embodies a balanced approach to density. Tall residential towers are spaced widely apart to protect sunlight, open space and views within the new Transbay neighborhood and create a pleasant pedestrian environment.  The ground floors of new projects will be lined with individually accessible townhouses and retail space. The result is an urban form that will create a high-density, but nevertheless thoroughly livable, new neighborhood in downtown San Francisco that will be oriented to the new transit hub nearby. 

By clustering a substantial amount of new high-density residential development near the Transbay Terminal and the San Francisco Financial District, the proposed Plan will significantly improve access to transit, employment, retail, and entertainment activities.  By improving connectivity and bringing public transit services to more people, the proposed Project should help alleviate traffic congestion on the US 101 and I-280 corridors between San Jose – San Francisco and on the Bay Bridge, as well as improve regional air quality by reducing auto emissions.

 

EIS/EIR PROCESS

 

In December 1998, the Metropolitan Transportation Commission (MTC), acting as the Bay Area Toll Authority (BATA), began the “Transbay Terminal Improvement Plan” study.  The study was guided by a large working group consisting of public agencies, organizations, and individuals affected by the Project.  An Executive Committee was also formed, consisting of executive staff and policy board members from AC Transit, the City, the JPB, Caltrans, and MTC.  The first phase of this study identified terminal components and functional requirements to guide the development of design concepts for the new facility.

 

Following completion of the Transbay Terminal Improvement Plan study, work started on the Draft EIS/EIR based on the new plans for replacing the Transbay Terminal, extending Caltrain into downtown San Francisco, and creating a high density, transit oriented residential community in the adjacent redevelopment area.  The Draft EIS/EIR was prepared under the direction of the Federal Transit Administration (FTA), with the City, the JPB, and the Agency as co-lead agencies.  Public meetings on the scope of the project to be studied were held in San Francisco and San Carlos (Caltrain Headquarters) during April 2001.  The Final EIS/EIR now under consideration is the result of this planning effort.

 

Following a series of public meetings, a Draft EIS/EIR was distributed to the public on October 4, 2002.  The document was mailed to numerous agencies, organizations, and groups.  It was made available in electronic format on the TJPA’s website.  Printed copies were distributed in local libraries in San Francisco, the East Bay, and the Peninsula.  Printed copies were made available to citizens through the San Francisco Planning Department, the Agency, the TJPA, and the JPB.  A project newsletter was mailed to a 550-person mailing list and letters were mailed to impacted property owners.  In November 2002, three public meetings were held to take comments on the Draft EIS/EIR.  Written comments were accepted until December 20, 2002.  As a result of the public comments, several refinements to the Draft EIS/EIR alternatives were studied, which in turn lead to the identification of certain improvements to the alternatives, especially in the design and alignment of the Caltrain track, station, and storage facilities.

 

In March 2003, the TJPA issued a Locally Preferred Alternative (LPA) Report that set forth a recommended LPA and the reasons for selecting the LPA.  Following a public hearing, the TJPA selected the LPA pursuant to federal requirements and directed staff to prepare the Final EIS/EIR.  The LPA consists of the following elements: the Second Street-to-Main Street track alignment for the Caltrain downtown extension, which includes a “stacked drift” tunneling option for the segment between Townsend Street and Folsom Street; the Transbay Terminal West Ramp Alternative, which includes associated bus ramps, circulation, and off-site storage; and the “full build” Redevelopment Plan. 

 

The Final EIS/EIR was published and distributed starting on March 18, 2004.  The full document was mailed to over 220 agencies, organizations, and individuals, including those who commented on the Draft EIS/EIR and affected property owners. The Final EIS/EIR was also made available electronically on the TJPA’s website.  Printed versions were distributed to the San Francisco Main Library and Berkeley Library.  Notices of document availability were mailed to over 330 agencies, organizations, and individuals.

 

Every effort was made during the various Project studies and the subsequent EIS/EIR process to ensure extensive public outreach and provide ample opportunities for public participation in the Project.  The public outreach efforts exceeded legal requirements for public notices of Project impacts as set forth in California Environmental Quality Act (CEQA) and National Environment Policy Act (NEPA) guidelines.

 

The next step in the process is certification of the Final EIS/EIR by the Agency, the San Francisco Planning Commission, and the JPB.  Following certification, the Project can be adopted by the TJPA, the FTA can issue a Record of Decision (ROD) for the Project, thus allowing additional detailed planning and design on the Terminal and Caltrain Extension to take place, and the Redevelopment Agency Commission and the San Francisco Board of Supervisors can adopt the Redevelopment Plan.

 

PROJECT  REFINEMENTS  BASED ON  PUBLIC REVIEW OF  THE DRAFT EIS/EIR

 

Refinements were made to the proposed Project and EIS/EIR since the Draft EIS/EIR was published.  Under both the federal and state environmental processes, refinements are often made to the EIS/EIR in response to both public comments and any additional project planning that have occurred.  Federal Department of Transportation (DOT)/FTA procedures and regulations also call for selection of an LPA from among the various project alternatives evaluated in the Draft EIS/EIR.  The Final EIS/EIR provides detailed analysis and mitigation measures for the LPA and the other alternatives.  Per CEQA Section 15088.5, none of the refinements identified below and evaluated in the Final EIS/EIR introduce significant new information or new adverse impacts that cannot be mitigated.

 

There were three main types of refinements made as part of the process between publication of the Draft EIS/EIR and Final EIS/EIR.  First, the proposed Project itself was modified to reduce environmental impacts, reduce costs, and improve operations.  Second, additional, more detailed environmental analyses of the temporary bus storage facility were completed in order to respond to public comments on the Draft EIS/EIR.  Third, the Caltrain operating plan, Project capital cost estimate, and Project funding plan were refined.

 

Project Refinements

 

During the public review period, residents and businesses located along Stillman Street submitted written comments on the Draft EIS/EIR and testified at the public hearings.  The comments generally addressed noise and air quality impacts.  Supplemental air quality and noise studies were completed in response to these comments during preparation of the Final EIS/EIR.  These supplemental studies support the conclusion that the proposed Project, specifically, construction of the midday bus storage facility, would not have adverse environmental impacts.  For more information, please see Section 2.7 of Volume II of the Final EIS/EIR (Responses to Public Comments), which lists all the specific comments on the mid-day bus storage facility and presents detailed responses to the comments

 

On March 28, 2003, the TJPA, following DOT/FTA guidance and regulations, adopted the West Ramp Transbay Terminal West Ramp Alternative, the Second-to-Main Caltrain Alternative, and the Full Build Redevelopment Alternative as the components to be included in the LPA for the Final EIS/EIR.  The TJPA prepared an LPA Report for the Project in advance of the LPA selection.

 

In developing the LPA, the study team refined the alternatives based on comments received from the public and various agencies.  These refinements improved the Project by reducing its environmental impacts, reducing its cost, and/or improving its operational efficiency.  These LPA refinements to the alternatives described in the Draft EIS/EIR consisted of:

 

  • Movement of the Transbay Terminal Footprint to the West – The footprint of the new Transbay Terminal was moved approximately 150 feet to the west of the location shown in the Draft EIS/EIR.  This would result in the terminal structure no longer spanning Beale Street, thus reducing capital costs and visual impacts without substantially changing environmental effects or the operations and efficiency of the terminal.  This change is described in the Final EIS/EIR Section 2.2.2.

 

  • Elimination of the Temporary Bus Ramps to the Temporary Terminal – The temporary ramps for use by AC Transit buses to the temporary bus terminal were removed from the LPA in response to public comment regarding the need to reduce overall project costs.  AC Transit has agreed to their removal.  The proposed temporary terminal access is described in Final EIS/EIR Section 2.2.2, while its impacts and mitigation measures are described in Final EIS/EIR Section 5.21.1.1.

 

  • Refinements to the Second-to-Main and Second-to-Mission Caltrain Extension Alternative Alignments and Station Layout – The Caltrain alignment in both alternatives was refined to improve railroad operations as a result of public comments on the Draft EIS/EIR.  Both alternatives were refined and presented to the public in the LPA Report (TJPA, March 2003).  These refinements consisted of:
    • Platform lengths were increased to better accommodate Caltrain and high speed rail trains;
    • Length of straight (tangent) platforms was increased to improve passenger access to trains, reduce station dwell time, and improve terminal flexibility;
    • Through tracks through the terminal were added to improve terminal flexibility;
    • Length and number of tail tracks were increased to increase storage capacity, reduce operating costs, and increase terminal flexibility; and
    • A third mainline track was added to the segment between the Fourth and Townsend Station to the terminal to improve rail operations and capacity.

These refinements were made in a collaborative process among the TJPA, Caltrain, and the City; additionally, meetings were held with the public to help plan the refinements.  Final EIS/EIR Section 2.2.3 describes these revisions.

 

  • Release of Transbay Redevelopment Project Area Design for Development Vision/Redevelopment Boundary Revision – In response to public comments on the Draft EIS/EIR and to advance the planning work for the proposed Transbay Project Area, San Francisco Redevelopment Agency staff released for public review the draft Transbay Redevelopment Project Area Design for Development in October 2003.  Development of the Design for Development involved extensive public input and involvement.  The Design for Development provides additional detail regarding the possible elements of the Plan, as described in Final EIS/EIR Section 2.2.4.  This section also describes revisions to the proposed redevelopment area boundary made in response to public comments.

 

  • Revised Project Construction/Implementation Schedule – In response to public comments, the co-lead agencies have refined and updated the proposed Project construction and implementation schedule, which is shown in Final EIS/EIR Figure 5.20-8, Section 5.20.

 

Additional Environmental Analysis

 

As a result of public comments on the Draft EIS/EIR, the co-lead agencies completed a supplemental air emissions assessment and a supplemental noise assessment of the proposed permanent off-site bus storage facility.  The proposed facility would be located at the current site of surface parking lots under the I-80 freeway (West Bay Bridge Approach) between Second and Fourth Streets.  The following studies were completed:

 

  • Supplemental Air Emissions Assessment of the Permanent Off-Site Bus Storage Facility – The supplemental air quality analysis concluded that pollutant concentrations would not exceed the California Ambient Air Quality Standards (CAAQS), which are designated to protect public health with an adequate margin of safety, and thus, would not have an adverse impact at any sensitive receptor locations.  Additional information can be found in the Supplemental Air Quality Analysis Report, which is available for review by appointment at the Planning Department.  Final EIS/EIR Section 5.7.3 presents more detailed information and findings from the supplemental air quality analysis.

 

  • Supplemental Noise Assessment for the Permanent Off-Site Bus Storage Facility – The supplemental noise assessment study found that there would be noise impacts projected for residences to the north and south of the AC Transit storage facility.  The Final EIS/EIR details measures that would mitigate these impacts to a less than significant level.  Final EIS/EIR Section 5.8.6 presents more detailed information and findings from the supplemental noise analysis.

 

Revised Operating Plan and Financial Analyses

 

The Caltrain operating plan and Project financial assumptions were refined following publication of the Draft EIS/EIR.  These changes, which are fully described in the Final EIS/EIR, consisted of:

 

  • Revised Caltrain Operating Plan Assumptions – The number of daily Caltrain trains assumed to be operated in the Year 2020 has been revised downward from 170 to 132, as shown in Final EIS/EIR Section 3.1.6.2.  This reduction reflects Caltrain’s more recent planning.  Train ridership projections have been revised to reflect this new assumed Caltrain service level, as described in Final EIS/EIR Sections 3.1.6.2 and 5.19.2.

 

  • Revised Project Capital Costs – As a result of the refinements made to the Project, the capital costs of the LPA were reduced by $143.7 million in 2003 dollars.  The revised costs are provided in Final EIS/EIR Chapter 6 and in Section 2.2.2.4 for the Transbay Terminal and Final EIS/EIR Section 2.2.3.5 for the Caltrain Downtown Extension.

 

  • Revised Project Financial Plan – The Project’s financial plan was refined to reflect the revised capital costs, the anticipated year of expenditure for various costs, and recent events regarding various funding sources (e.g., passage of San Francisco’s Measure K transportation expenditure plan in November 2003).  The refined financial plan is provided in Final EIS/EIR Chapter 6 (and summarized above).

 


ADDITIONAL PUBLIC COMMENT

 

Members of the public have raised comments and issues after the public comment period on the Draft EIS/EIR closed on December 20, 2002.  Many of these comments are duplicative of those received during the public review period and are therefore addressed in the Final EIS/EIR.  In some instances,   the comments address the merits of the proposed Project (rather than the Project’s environmental impacts), particularly,  the concerns of property owners about  properties which may need to be acquired for the project.  These property owner concerns should be addressed when you consider the proposed redevelopment plan, a consideration which cannot occur until  the Final EIS/EIR has been certified.

 

CONCLUSION

 

Staff recommends certification of the Final EIS/EIR , which is a determination by you that the Final EIS/EIR has been (1) prepared in compliance with CEQA,   (2) is an adequate evaluation of the environmental consequences of the proposed project, and (3) represents the independent judgment and analysis of the Agency.   After tonight’s hearing, the Final EIS/EIR will also be scheduled for certification by the City and by JPB, which are also CEQA co-lead agencies.  After the Final EIS/EIR has been certified by all co-lead agencies, the proposed redevelopment plan will be scheduled for adoption by the Commission and by the City.

 

Originated by Michael J. Grisso, Senior Planner

 

 

 

Marcia Rosen

Executive Director

 

 

RESOLUTION NO. 46-2004

 

 

 

AUTHORIZING THE EXECUTION OF A NOTICE OF EARLY TERMINATION AGREEMENT WITH CHARLES H. BREIDINGER AND JOHN E. BREIDINGER, AS TENANTS IN COMMON, OWNERs of property located at 1375 Evans Avenue, Assessor’s Block 5237, Lots 13, 14 and 15; India Basin Industrial Park Approved Redevelopment Project Area

 

BASIS FOR RESOLUTION

 

  • In furtherance of the objectives of the Community Redevelopment Law of California, the Redevelopment Agency of the City and County of San Francisco (the “Agency”) has undertaken a program for the clearance and reconstruction or rehabilitation of blighted areas in the City and County of San Francisco (the “City”), and in this connection has undertaken a project in the area known as the India Basin Industrial Park Approved Redevelopment Project Area (the “Project Area").

 

  • The Agency has prepared, and the City has approved a plan, acting through its Board of Supervisors by Ordinance No. 26-69, adopted January 20, 1969, as amended by the Redevelopment Plan approved by Ordinance No. 474-86, adopted December 1, 1986, as amended by the Redevelopment Plan approved by Ordinance No. 141-87, adopted April 20, 1987, and as amended by the Redevelopment Plan approved by Ordinance No. 416-94, adopted December 12, 1994, providing for the redevelopment or rehabilitation of certain lands in the Project Area and the future uses of such land; which Redevelopment Plan and amendments have been filed as Document No. R-47100, on March 6, 1969, Document No. E-135915, on February 29, 1988, Document No. E135923, on February 29, 1988, and Document No. F-816262, on July 17, 1995, respectively, in the Office of the Recorder of the City and County of San Francisco (the “Redevelopment Plan”).

 

  • The California Community Redevelopment Law requires the Agency to adopt rules governing the participation of property owners prior to the adoption of a redevelopment plan (Health and Safety Code Section 33345).   On December 10, 1968, the Agency adopted Owner Participation Rules (the “Rules”) for the Butchertown Redevelopment Project, which was later renamed the India Basin Industrial Park Approved Redevelopment Project Area.

 

  • In furtherance of the Redevelopment Plan and on May 8, 1970, the Agency caused a Declaration of Restrictions affecting all properties within the Project Area to be recorded in the Office of the Recorder of the City and County of San Francisco, State of California, in Book B-422 of Official Records at page 870, as Document No. S-55260 (the “Declaration of Restrictions”).
  • Charles H. Breidinger and John E. Breidinger, as tenants in common (“Owners”), are the current owners of record of vacant land located at 1375 Evans Avenue and composed of Lots 13, 14 and 15 in Assessor's Block 5237 (the “Site”).

 

  • By Resolution No. 194-2000, the Agency and the Owners entered into an Owner Participation Agreement dated October 10, 2000 (the “OPA”) to allow the Owners to merge the three existing lots and develop a three-story, 20,700-square-foot, light industrial building designed for multimedia companies on the merged 12,500-square-foot property.   To complete the proposed development, the Agency also granted the Owners four design variances (Resolution No. 193-2000).

 

  • Since October 10, 2000 when the OPA was executed, the regional economy (and the high-technology sector in particular) has experienced a sharp and significant reversal of fortune.   As a result, there is little demand for this type of space (i.e., multi-story, office/light industrial/flex space), especially in areas far from the City’s downtown core like the Third Street corridor, Potrero Hill, and India Basin.  Because the development program envisioned by the Owners, and enshrined in the OPA, cannot realistically be built any time in the near future, the Owners wish to terminate the OPA in order to pursue other development options for the property.

 

  • The Redevelopment Plan allows property owners to apply for an exception to their development obligations if they believe that these development obligations are causing “undue hardships, practical difficulties, or consequences inconsistent with the general purposes” of the Redevelopment Plan (Section II.C., Exceptions, at page 11).  Furthermore, the Redevelopment Plan allows the Agency to grant exceptions to property owners provided that they (1) are consistent with the general purposes and intent of the Redevelopment Plan and (2) do not change the land uses indicated in the Redevelopment Plan.

 

  • By seeking a termination of the OPA, the Owners have in essence applied for an exception to their development obligations under Section II.C. of the Redevelopment Plan.   As evidence of undue hardships and practical difficulties, the Owners cite that (1) there is no longer a market for multi-story, office/light industrial/flex space in India Basin, (2) multi-story buildings designed for high-technology users remain vacant in India Basin, even at very low asking rents, and (3) the marketing effort for 1375 Evans Avenue has been prolonged and unsuccessful.

 

  • Unfortunately, the Rules do not provide any additional guidance as to when the Agency can grant an exception to development obligations and terminate an owner participation agreement.   However, the Rules do require that owner participation agreements include provisions requiring adherence to a performance schedule and payment of a performance security – one that is “reasonably necessary” to ensure that the scope of development contemplated under the owner participation agreement is completed.

 


 

  • The Owners’ OPA does not include provisions requiring payment of a performance security, but it does include the remedy of specific performance in the event that the Owners fail to perform.   At the time of the OPA approval, the Agency determined that this remedy was sufficient to ensure the Owners’ compliance with their performance schedule and therefore did not include a monetary performance security.  OPAs customarily provide that an owner who fails to redevelop property in accordance with the agreement forfeit any performance security deposit upon termination of the OPA.  In this case, Agency staff does not recommend charging the Owners a termination fee because (1) provisions requiring a performance security were not included in the OPA, and (2) the Owners have proven to the Agency’s satisfaction that they have suffered “undue hardships, practical difficulties, or consequences inconsistent with the general purposes” of the Redevelopment Plan.

 

  • Agency staff has reviewed the materials submitted by the Owners and has concluded that, given the unique circumstances in this case, a termination of the OPA is warranted.   Agency staff believes that granting an exception to the Owners (one that in this case amounts to termination of the OPA) is consistent with the general purposes and intent of the Redevelopment Plan because the Agency is solely interested in furthering its redevelopment goals in the Project Area, and has determined that these goals are more expeditiously achieved in this case if the Site were either redeveloped as one-story, light industrial/warehouse space or sold unencumbered by the OPA.

 

 

RESOLUTION

 

ACCORDINGLY, IT IS RESOLVED by the Redevelopment Agency of the City and County of San Francisco that the Owners have demonstrated undue hardship and practical difficulties in the performance of the OPA because market conditions have changed so dramatically and unexpectedly since the date the OPA was executed; that the Owners cannot adhere in any way to the Schedule of Performance and cannot complete in any way the Scope of Development; and that relief from specific performance of the OPA is consistent with the general purposes and intent of the Redevelopment Plan.

 

IT IS FURTHER RESOLVED that the Redevelopment Agency of the City and County of San Francisco hereby grants an exception from the development obligations of the OPA and authorizes the Executive Director to execute a Notice of Early Termination Agreement with the Owners, thereby terminating the OPA.

 

 

APPROVED AS TO FORM:

 

 

 

                                               

James B. Morales

Agency General Counsel


 

108-06604-001                                                                                            Agenda Item No. 4 ( g )

April 5, 2004                                                                                                 Meeting of April 20, 2004

 

MEMORANDUM

 

TO:                  Agency Commissioners

 

FROM:            Marcia Rosen

Executive Director

 

SUBJECT:      Authorizing the execution of a Notice of Early Termination Agreement with Charles H. Breidinger and John E. Breidinger, as tenants in common, owners of property located at 1375 Evans Avenue, Assessor’s Block 5237, Lots 13, 14 and 15; India Basin Industrial Park Approved Redevelopment Project Area

 

 

EXECUTIVE SUMMARY

 

Charles H. Breidinger and John E. Breidinger (the “Owners”) own three parcels of land totaling about 12,500 square feet at 1375 Evans Street in the India Basin Industrial Park Approved Redevelopment Project Area (“India Basin”), as shown on the attached Site Map.  The Owners purchased this property on November 12, 1999.  On October 10, 2000, with the Commission’s approval, the Agency and the Owners entered into an Owner Participation Agreement (the “OPA”) to allow the Owners to merge the three existing lots and develop a three-story, 20,700-square-foot, light industrial building designed for multimedia companies on the merged 12,500-square-foot property (the “Site”).

 

However, since October 10, 2000 when the OPA was executed, the regional economy (and the high-technology sector in particular) has experienced a sharp and significant reversal of fortune.  As a result, there is little demand for this type of space (i.e., multi-story, office/light industrial/flex space), especially in areas far from the city’s downtown core like the Third Street corridor, Potrero Hill, and India Basin.  Because the development program envisioned by the Owners, and enshrined in the OPA, cannot realistically be built any time in the near future, the Owners wish to terminate the OPA in order to pursue other development options for the property.

 

The India Basin Industrial Park Redevelopment Plan (the “Redevelopment Plan”) allows property owners to apply for an exception to their development obligations if they believe that these development obligations are causing “undue hardships, practical difficulties, or consequences inconsistent with the general purposes” of the Redevelopment Plan (Section II.C., Exceptions, at page 11).  Furthermore, the Redevelopment Plan allows the Agency to grant exceptions to property owners provided that they (1) are consistent with the general purposes and intent of the Redevelopment Plan and (2) do not change the land uses indicated in the Redevelopment Plan. 

 

By seeking a termination of the OPA, the Owners have in essence applied for an exception to their development obligations under Section II.C. of the Redevelopment Plan.  As evidence of undue hardships and practical difficulties, the Owners cite that (1) there is no longer a market for multi-story, office/light industrial/flex space in India Basin, (2) multi-story buildings designed for high-technology users remain vacant in India Basin, even at very low asking rents, and (3) the marketing effort for 1375 Evans Avenue has been prolonged and unsuccessful.

 

Agency staff has reviewed the materials submitted by the Owners and has concluded that, given the unique circumstances in this case, a termination of the OPA is warranted.   Agency staff believes that granting an exception to the Owners (one that in this case amounts to termination of the OPA) is consistent with the general purposes and intent of the Redevelopment Plan because the Agency is solely interested in furthering its redevelopment goals in India Basin, and has determined that these goals are more expeditiously achieved in this case if the Site were either redeveloped as one-story, light industrial/warehouse space or sold unencumbered by the OPA. 

 

Agency staff has also discussed the proposed termination of the OPA, and the circumstances leading to this recommendation, with the Bayview Hunters Point Project Area Committee (“PAC”).  No PAC member has raised any issues on the proposed action.

 

Staff recommends authorizing the execution of a Notice of Early Termination Agreement with the Owners for property located at 1375 Evans Avenue in the India Basin Industrial Park Approved Redevelopment Project Area.

 

 

BACKGROUND

 

The Owners own three parcels of land totaling approximately 12,500 square feet at 1375 Evans Street (see attached Site Map).  The Owners purchased this property on November 12, 1999.  On October 10, 2000, with the Commission’s approval, the Agency and the Owners entered into the OPA to allow the Owners to merge the three existing lots and develop a three-story, 20,700-square-foot, light industrial building designed for multimedia companies on the merged 12,500-square-foot property.  Conceived during the high-technology boom of the late 1990s, the building was specifically designed to house multimedia companies and Internet-based start-ups that could no longer afford sky-highs rents in the downtown financial district and areas south of Market Street.  At that time, multi-story, high-technology space in India Basin was leasing for between $1.75 and $2.50 per square foot per month, according to brokers interviewed at that time.

 

To complete the proposed development, the Agency (with the Commission’s approval) also granted the Owners four design variances for off-street parking, freight loading, exterior metal siding, and setback standards.  In exchange, the Agency required the Owners to provide substantial employment training and hiring opportunities in the computer, multimedia and/or high-tech industries for economically disadvantaged residents in the 94124 and 94134 zip codes over a 10-year period.

 

However, since October 10, 2000 when the OPA was executed, the regional economy (and the high-technology sector in particular) has experienced a sharp and significant reversal of fortune.  During the last four years, scores of multimedia companies and Internet-based start-ups have gone bankrupt and millions of square feet of office space have been placed back on the market.  As a result, there is little demand for this type of space (i.e., multi-story, office/light industrial/flex space) in San Francisco, especially in areas far from the downtown core like the Third Street corridor, Potrero Hill, and India Basin.  Multi-story, office/light industrial/flex buildings currently on the market in these submarkets are not renting, even at drastically reduced rents, according to real estate brokers.  Because the development program envisioned by the Owners, and enshrined in the OPA, cannot realistically be built any time in the near future, the Owners wish to terminate the OPA in order to pursue other development options for the property.

 

 

DISCUSSION

 

Analysis Underlying Recommendation for Terminating the OPA

 

The Redevelopment Plan allows property owners to apply for an exception to their development obligations if they believe that these development obligations are causing “undue hardships, practical difficulties, or consequences inconsistent with the general purposes” of the Redevelopment Plan (Section II.C., Exceptions, at page 11).  Furthermore, the Redevelopment Plan allows the Agency to grant exceptions to property owners provided that they (1) are consistent with the general purposes and intent of the Redevelopment Plan and (2) do not change the land uses indicated in the Redevelopment Plan. 

 

By seeking a termination of the OPA, the Owners have in essence applied for an exception to their development obligations under Section II.C. of the Redevelopment Plan.  As evidence of undue hardships and practical difficulties, the Owners cite the following:

 

  • There is no longer a market for multi-story, office/light industrial/flex space in India Basin.  As already mentioned, the OPA was executed at the very tail end of the high-technology boom in the San Francisco Bay Area.  Unable to find space anywhere near the downtown core, multimedia companies and other Internet-based start-ups in late 2000 were vying for space in outlying submarkets such as Potrero Hill and India Basin.  At that time, monthly rental rates for this type of space in India Basin ranged from $1.75 to $2.50 per square foot, according to real estate brokers interviewed at the time.  However, shortly after the OPA was executed, the regional economy (and particularly the high-technology sector) took a nosedive.  Today, there is no longer a market for multi-story, office/light industrial/flex space in India Basin.  Buildings suitable for such uses are languishing vacant, even with very low asking rents (see below).  The India Basin submarket has returned to its more traditional focus – that is, in low-cost, low-rent traditional industrial space.  Monthly rental rates for traditional industrial space in India Basin remain healthy and currently range between $0.50 and $0.75 per square foot, according to brokers. 

 

  • Multi-story buildings designed for high-technology users remain vacant in India Basin, even at very low asking rents.  Buildings comparable to what is proposed under the Owners’ OPA have languished vacant for more than three years because brokers are unable to find tenants for multi-story office/light industrial/flex space in India Basin and other outlying submarkets.  For example, both the 32,000-square-foot Morgan Building (1550 Evans Avenue) and the 150,000-square-foot Spencer Building (3000 Third Street) have been vacant for more than three years.  The current monthly asking rent is $0.75 per square foot at the Morgan Building and $0.50 per square foot at the Spencer Building.  Real estate brokers report that, even at these low asking rates, the buildings are unlikely to rent to a commercial tenant anytime in the foreseeable future.  The problem is that traditional users of this type of space (i.e., multimedia companies, biotechnology companies, Internet-based start-ups, clothes manufacturers, and printing houses) are either out of business or leaving San Francisco in search of lower labor and real estate costs.

 

  • The marketing effort for 1375 Evans Avenue has been prolonged and unsuccessful.  After receiving Commission approval of their project in October 2000, the Owners acted quickly to fulfill the development obligations contained in the OPA.  In November 2000, they obtained a building permit.  One month later, they hired a broker with Cushman and Wakefield, a nationally recognized real estate brokerage firm, to market the property as a build-to-suit opportunity.  However, after 2.5 years of unsuccessfully marketing the property to potential owners and tenants, the broker concluded that the property would be more suitable for traditional light industrial or warehouse-type uses. 

 

Based on this information and conversations with real estate brokers, Agency staff believes that the market for multi-story, office/light industrial/flex space in India Basin, as contemplated in the OPA, is not going to return in the foreseeable future.

 

Agency staff has reviewed the materials submitted by the Owners and has concluded that, given the unique circumstances in this case, a termination of the OPA is warranted.  Agency staff believes that granting an exception to the Owners (one that in this case amounts to termination of the OPA) is consistent with the general purposes and intent of the Redevelopment Plan because the Agency is solely interested in furthering its redevelopment goals in India Basin, and has determined that these goals are more expeditiously achieved in this case if the Site were either redeveloped as one-story, light industrial/warehouse space or sold unencumbered by the OPA.  Therefore, Agency staff recommends that the Commission grant the Owners an exception from the development obligations of the OPA by authorizing the execution of a Notice of Early Termination Agreement with the Owners, thereby terminating the OPA.

 

Owner Participation Rules for India Basin and Requirement of Performance Securities

 

The California Community Redevelopment Law requires the Agency to adopt rules governing the participation of property owners prior to the adoption of a redevelopment plan (Health and Safety Code Section 33345).  On December 10, 1968, the Agency adopted Owner Participation Rules (the “Rules”) for the Butchertown Redevelopment Project, which was later renamed the India Basin Industrial Park Approved Redevelopment Project Area.

 

Unfortunately, the Rules do not provide any additional guidance as to when the Agency can grant an exception to development obligations and terminate an owner participation agreement.  However, the Rules do require that owner participation agreements include provisions requiring adherence to a performance schedule and payment of a performance security – one that is “reasonably necessary” to ensure that the scope of development contemplated under the owner participation agreement is completed.

 

The Owners’ OPA does not include provisions requiring payment of a performance security, but it does include the remedy of specific performance in the event that the Owners fail to perform.  At the time of the OPA approval, the Agency determined that this remedy was sufficient to ensure the Owners’ compliance with their performance schedule and therefore did not include a monetary performance security.  Owner participation agreements customarily provide that an owner who fails to redevelop property in accordance with the agreement forfeits any performance security deposit upon termination of the agreement.  In this case, Agency staff does not recommend charging the Owners a termination fee because (1) provisions requiring a performance security were not included in the OPA, and (2) the Owners have proven to the Agency’s satisfaction that they have suffered “undue hardships, practical difficulties, or consequences inconsistent with the general purposes” of the Redevelopment Plan.

 

Originated by Tracie Reynolds, Real Estate and Development Services Manager

 

 

 

Marcia Rosen

Executive Director

 

Attachment: Site Map