Skip to main content

tv   BOS Budget and Finance Committee  SFGTV  September 8, 2021 10:30am-3:01pm PDT

10:30 am
sphofg i.d. 1460186577
10:31 am
10:32 am
>> chairman: all right. this meeting will come to order. this is the september 812th, 2021, budget and finance committee. i'm matt haney, and i'm joined by supervisors
10:33 am
safai and i want to thank kaleena from for broadcasting this meeting. [inaudible] >> clerk: to the same extent as those physically present. the board recognizes that public access to city services is essential, and invites public participation in the following ways: public comment will be available on channel 26, 78, or 99, or by streaming the call-in number across the screen. each speaker will be allowed two minutes to speak. comments or opportunities to speak during public comment period are available via phone call by calling 415-655-0001, i.d. 24957533684, then press the pound symbol twice. when connected, you will
10:34 am
be muted and in listening mode only. when your item of interest comes up, please dial *3 to be added to the speaker line. speak clearly and slowly. or you may submit public comment by an e-mail to the budget and finance committee clerk. if you submit public comment via e-mail, it will be forwarded to the supervisors and will be included as part of the written file. [inaudible] >> clerk: finally, items acted upon today are expected to appear on the board of supervisors' agenda of september 14th, unless otherwise stated. this concludes my announcement, mr. chair. >> chairman: thank you, madam clerk. and welcome back.
10:35 am
and thank you so much to everyone. i hope that you had a good recess and i'm really excited to be back with you all at the budget and finance committee. so today we have a very full agenda, so i want to thank everyone for being brief and for their presentations and in advance for their patience. madam clerk, can you call item one. [inaudible] >> clerk: in accordance with park provisions that authorize the rate setting on park property, making conforming edits and increasing parking rates for berth holders. members of the public who wish to provide public comment on this item
10:36 am
should call 415-655-0001, i.d. 24957533684, and then press pound twice. if you have not already done so, please dial *3 to speak. please wait until the system indicates you have been unmuted and you may begin your comments. >> chairman: thank you so much, madam clerk. we are going to be continuing this item. i want to make a motion to continue this item, but before we do that, madam clerk, are there any members of the public who want to speak? >> clerk: yes, mr. chair. operation is checking to see if there are any callers in the queue. members of the public who wish to provide public comment, please press *3 now. mr. coup, can you please let me know if there are any callers who wish to comment on item 1. >> mr. chair, we have no callers in the queue.
10:37 am
>> chairman: public comment is now closed. i want to make a motion to continue this item. i'm going to continue it to september 22nd, if we can take a roll call on that? >> clerk: yes. on that motion. [roll call taken] >> clerk: there are three ayes. >> chairman: great. this will be -- this item will be continued until september 22nd. i'm getting my chair voice and scripts slow back here after a month off. madam clerk, please call item 2. >> clerk: item 2,. [indiscernable] to exercise a lease extension option for property located at 165 capp street for continued operation of an approximately 6500 square
10:38 am
foot building at a neighborhood drop-in and administrative offices, serving people experiencing homelessness, for an approximate five-year term (indiscernable). members of the public who wish to provide public comment on this item should call i.d. i.d. 415-655-01 and then i.d. 24957533684. then press pound and pound again and then press *3. >> chairman: thank you, madam clerk, today we have -- ie dylan schneider from the department of homelessness in support of supportive
10:39 am
housing. welcome. >> thank you. i forgot i was in my fairytale land today. good morning, chair haney and supervisors. let me pull up my very brief presentation for you all. i know you all have a very busy day ahead. so my name a dylan schneider, manager of policy and legislative affairs. we are at the department of supportive housing, and i use she or her as pronounce. i'm here to seek your approval on a resolution to approve the lease extension for the property located at 135capp street. i'm joined by the real estate division director. and we will both be available for questions following this presentation. so the city entered into a new five-year lease for
10:40 am
this property that was approved by the board of supervisors in august of 2016, that included two five-year lease extension options. the proposed resolution in front of you today would authorize the city to exercise the first of those two five-year lease extension options for the continued use of the approximately 6500 square foot space at 165 capp street. if approved, the five-year term would run from september 2021, to september 30th, 2026. under the proposed lease extension, the first year base rent would remain unchained at $43 a square foot. with a one-month rent abatement for the month of october 2021. and rent would increase by 3% annually. the city would continue to be responsible for
10:41 am
utilities, services, including janitorial, pest, and debris, and maintenance and repairs on the interior portions of the premises with the landlord responsible to cover property insurance and maintenance to the exterior or structural system of the premises. and, just a little bit about the mission neighborhood resource center that is operated out of the property located at 165 capp street. this is a drop-in center for people experiencing homelessness. and it is operated by the non-profit provider mission neighborhood health center, through a contract with h.s.h. and this site has been a key resource for people experiencing homelessness in 2000, when the city first leased the location under an agreement with the human services agency. h.s.h. took over management of the program, of the contract for the program, in 2016. and mission neighborhood resource center is one of
10:42 am
two drop-in centers in the city with a third planned to open at the end of october in the upper hate. the mission resource center provides amenities, including showers, lockers, laundry, snack, and management to serve for our unhoused neighbors. with that, i will stop this presentation. thank you all in advance for your consideration of this item. and dr. penik and i are here to answer any questions you may have -- if i can forgive out how to stop sharing. >> chairman: great. we appreciate it, and we appreciate your work, and this is obviously much-needed. is there a b.l.a. report on this item? >> yes. nick bernard from the budget analyst's office, and good morning chair haney and members of the committee. this proposed resolution would authorize this city
10:43 am
to exercise the first of two five-year options, to extend the department of homelessness lease with b.c. capp, for space 165 capp street, which is used as a homeless service resource center. the total rent for the five-year extension is $1.5 million, as we show on page four of our report. and based on the recommendation of real estate, we recommend approval. we are happy to answer any questions. >> chairman: any questions or comments from colleagues? it all makes sense to me. is there any public comment on this item? >> clerk: yes, mr. chair, operation is checking to see if there are any callers in the queue. members of the public who wish to provide public comment, please press *3 now.
10:44 am
mr. coup, can you let us know if there are any callers who wish to comment on item 2. >> mr. chair, we have no callers in the queue. >> chairman: public comment is closed. i'm not seeing any other questions or comments, so can i move this item -- i want to make a motion to item 2 to the full board with a positive recommendation. can we have a roll call vote please? >> clerk: yes. on that motion. [roll call taken] >> clerk: there are three ayes. >> chairman: it will go to the full board with a positive recommendation. thank you so much for your work and your time. madam clerk, please call item 3. >> clerk: yes. item 3: resolution
10:45 am
authorizing a new lease between the port of san francisco and the foundation, located. [indiscernable] with a monthly rent credit of $87,000, in respect of previously completed capitol improvements to the property. members of the public who wish to provide public comment, please call 415-655-0001, and then enter i.d. 24957533684 and press pound twice. please wait until the system indicates you have been unmuted and you may begin your comments. >> chairman: great. and we have michael martin from the port of san francisco here to present on this item. >> thank you. good morning supervisors, michael martin, assistant
10:46 am
port director at the port of san francisco. i'm going to share a brief set of slides to provide background and recommendations as to this proposed item. one moment, please. so starting with -- i'm sorry. so starting with the background on the palara family foundation, they are a non-profit company, with limited public access to the non-profit photographer. photography.
10:47 am
[inaudible] the property needed a great deal of upgrades to be habitable for the use proposed, and so the tenant performed approximately $14 million of improvements, (indiscernable). the original lease expired in 2017, and the parties sort of had a dispute over how to continue the tenancy in relation to the expenditures. the negotiations continued back and forth for two years. the port issued a notice in december of 2019, which spurred the parties to make one more attempt at settlement, and we achieved an agreement no one the parties. the port commission approved the settlement and new lease on march 10th, 2020. and so we were planning to bring this to the board, but the pandemic intervened shortly after that march 10th hearing.
10:48 am
because the new lease included an operating requirement, and because the facility was shut down under the health orders, we agreed with the tenant to hold off bringing it to the board of supervisors until it was clear they could achieve that operating requirement, which they happily did a couple of months ago and have reopened to limited public access. to describe the settlement agreement approved by the port commission, it is conditioned on the entry of the new lease, and that's why we're here today, to get board of supervisors' approval, which is required before the board can execute the settlement and complete it. the settlement agreement acknowledges the $5.5 million remaining unamortized and the structure and shell and core costs as rent credits, and it will address the rent delinquency since 2017, and to provide rent relief going forward during the term of this lease, and
10:49 am
the settlement also calls for the payment of the attorney's fees. the rent is set at the market rate of $3.40per square foot per month. as i mentioned, the rent grants will be used to buy down or sort of reduce the rent may on a monthly basis to $5,735.31. the term will expire when the rent credits are exhausted. that depends on when we sign this lease, but we expect it to be approximately three years and 10 months. the extension proposal, there is a language in the lease that calls for -- or sets the terms of potential discussion as to further extension of the lease based on a facility condition report and feasibility report on sizeupgrades to the facility. and notably, the port that negotiated an unusual approach to termination rights based on the short-term of this lease, with the agreement of the
10:50 am
port commission. and we have limited transfers to the port's sole discretion to keep this tenant and this particular collection in the space. the port staff believes that the proposed settlement achieves the following goals: continuing the operations at 24 annex. and it sets us on a path of extending this operation if desired by the tenant. the establishment of this path is important to the port as we enjoy that the visitors can come in and enjoy the collection. it is another attraction on the waterfront, and we were able to resolve the parties' claims while avoiding costly litigation. for those reasons, the board staff recommends approval by the board of supervisors. one additional note, we found in preparing for this hearing, in the second "whereas" clause we have a typo that notes that the initial lease was
10:51 am
signed in i believe it was january of 2007, and the accurate date is june of 2007. that is not material to the transaction, but we wanted to make sure we were accurate in the resolution. with that, i'm available for any questions you may have. >> chairman: colleagues, any questions? is there a b.l.a. report on this item? >> chair haney, we do not have a report on this item. >> chairman: all right. are there any questions or comments? i'm glad that there was this ability to get this agreement and to be able to move forward. i'm definitely familiar with the foundation and the work that they do at the museum, and i grateful it was able to be worked out. so thank you for your work on that. and thank you to everyone at the port for the role that you played.
10:52 am
i'm glad we're at this point. with that, are there any members of the public who wish to speak on this item? >> clerk: operation is checking to see if there are any callers in the queue. any members of the public who wish to provide public comment, please press *3. mr. coup, please let us know if there are any callers who wish to comment on item 3. >> yes. i have one caller in the queue. >> clerk: let's please unmute the caller. thank you. welcome, caller. you have two minutes. >> caller: thank you. this is christopher mccall. i am the director of pier 24 photography, the museum that they operate on the waterfront. first, mike, thanks for that presentation. i want to start by saying that i speak for the
10:53 am
entire pier 24 family when we say we're proud of the work we've done, the exhibitions we've mounted, and the services we have provided to the san francisco community over the last 12years. with your support of this resolution, we'll be able to continue to provide a free art museum for locals and tourists, and, more importantly, the school groups who use our space as an educational resource. i can say for everybody on the staff that we're proud to be part of the port's community. and i want to acknowledge the work that the port staff has done through the last two years of our negotiations. especially michael martin, who has worked tirelessly to get us where we are today, and rona sandler. the last thing i want to say is i thank the budget and finance committee for this time to speak, and i ask that you support this resolution so we can
10:54 am
continue to operate as a museum on the waterfront. thank you. >> clerk: thank you for your comments. mr. coup, are there any other callers in the queue? >> mr. chair, that completes the queue. >> chairman: thanks. public comment is now closed. we appreciate that public comment and appreciate your continued commitment to serving the people and visitors of san francisco, especially kids and families and children. i appreciate that, and i'm also very happy that this is going to continue to be accessible to our residents. with that, i want to make a motion to move this item to the full board with a positive recommendation. can we have a roll call vote, please. >> clerk: yes. before that, mr. chair, i believe mr. martin mentioned there is a minor amendment he would like the committee to adopt.
10:55 am
>> chairman: okay. what is that? >> yes. it's in the second "whereas" clause. it says january of 2007, and the date was actually june 2007. so we hope you could make a technical amendment there and move this forward on that basis. >> chairman: great. i want to move that technical amendment. i think it is clear to everyone. and can we have a roll call vote on the amendment, please. >> clerk: yes. on the motion to amend item 3. [roll call taken] >> clerk: there are three ayes. >> chairman: great. and now we'll have roll call to move this to the
10:56 am
full board with full recommendation. [roll call taken] >> chairman: thank you so much, mr. martin, for your work. madam clerk, can you please call item 4. >> clerk: item 4: resolution authorizing the mayor's office of housing and community development on behalf of the city to execute the center agreement with the california department of housing and community development c.d., for a healthy california program for a total award of 6.7 million, starting on the execution date of the standard agreement through june 30, 2024, and (indiscernable) with a grant of 6.7million for programming approved by the city. members of the public who wish to provide public comment on this item, should call 415-655-0001, i.d. 24957533684, and then press pound twice. then dial *3 to line up to
10:57 am
speak. please wait until the system indicates you have been unmuted and you may begin your comments. mr. chair? >> chairman: and we have ann ramero from the mayor's office of housing. >> good morning, chair haney and members of the committee. i'm the senior project manager. item 4is an accept and expand resolution authorizing to execute the standard agreement with the california housing of department of community housing for this total award of $6.7 million. it is a new pilot program that provides grants to create permanent supportive housing for those individuals who are chronically homeless. the intent of this pilot program is to allow individuals experiencing significant barriers to gain housing while decreasing the utilization of emergency service.
10:58 am
mocd is working to administer this grant to veto 32 units of permanent supportive housing for this population. the intended site is the 140 unit located a 604 sixth street, which the owner plans to rehabilitate to provide accessibility, and then to convert 30 vacant units into new permanent supportive housing for this population, with the wrap-around support services. so this funding would go into the capital development of this rehabilitation. we ask the committee today to approve this resolution authorizing mocd to receive the grant funds to invest new permanent supportive housing for this target population. thank you.
10:59 am
>> chairman: thank you. colleagues, are there any questions or comments? i'm not seeing any. is there a b.l.a. report on this item? >> chair haney, we do not have a report on this item. >> chairman: all right. is there any public comment on this item? >> clerk: yes, mr. chair, operation is checking to see if there are any callers in the queue. any members of the public who wish to provide public comment, please press *3 and wait until the system indicates you have been unmuted. mr. coup, are there any callers who wish to comment on item 4? >> mr. chair, we have no callers in the queue. >> chairman: all right. public comment is now closed. thank you so much for your work on this, ms. ramero. i want to make a motion to move item 4 to the full board with a positive recommendation. can we have a roll call
11:00 am
vote, please? >> clerk: yes. on that motion. [roll call taken] >> clerk: there are three ayes. >> chairman: this will go to the full board with a positive recommendation. thank you so much. madam clerk, please call item 5. >> clerk: item 5: the resolution authorizing the mayor's office of housing and community development on behalf of the city to execute the annual center agreements with the department of housing and community development under the permanent local housing allocation program for a total award of 52.3 million, starting on the execution date through june 30, 2030, and authorizing emerald h. city to accept a grant for programming approved by the department of housing and community development. members of the public who
11:01 am
wish to provide public comment on this item should call 415-655-0001, i.d. 24957533684, and then press pound twice. if you have not already done so, please dial *3 to line up to speak. please wait until the system indicates you have been unmuted and you may begin your comments. >> chairman: thank you. and welcome, lydia, from the mayor's office of housing and community development. >> good morning. good morning chair haney, supervisors mar and safai. i'm the deputy for housing. i am sharing my screen. i hope you all are seeing my powerpoint. is that up and visible? fantastic. so i'm very pleased today to present another accept and expand item also for the state department of
11:02 am
housing and community development. we are in the position to execute a standard agreement for over $52 million that will aloe us to create a permanent funding source for the senior operating subsidy. which has been in a pilot stage for several years (indiscernable). so as you all know and may remember, this is a really important project that we have not been able to identify permanent source for. so the state, back in 2017, approved sb2, which essentially allows a new fee from all real estate transactions to go towards affordable housing. [inaudible]
11:03 am
>> for seniors at 15% and 20% a.m.i.s, so these are extremely low income seniors. we did receive an award in february, and now we're in the position of executing a standard agreement that will cover five years of funds. we see no reason that these funds will be discontinued. although, of course, always subject to legislative action at the state. so as there is no need to convince anybody of the need for this type of subsidy, many of our seniors in the city are at about -- living at or below the poverty line. we were requested by the voters in our last affordable housing bond to target 30% of our unit to extremely low income households. without an active section 8 program in the city, it hat been very difficult. so this will allow us to support extremely low
11:04 am
income households and our pipeline projects. we previously received funds through an add-back, through a one-time allocation, and we've also been spending general funds annually for the project at 735 davis. so it has been essentially a peace-meal approach to getting these subs subsidies funded. it will allow us to commit to 15years in sub stay subsidiesfor these projects. approximately 40% of any units in a senior building will be set aside for s.o.s. subsidies. we'll be able to create permanent funding for the two pilot projects that are already operating.
11:05 am
and we will fund upcoming senior housing projects that are in our pipeline as they come,, as they come -- y move forward through the development and funding. and, also, we're required by some of our funding partners to hold a transitional reserve to prepare for the unlikely event that the funding goes away. so we have about a thousand units in our senior housing pipeline right now. and we will, as i mentioned, basically be able to subsidize about 40% of units in any given project. so you'll see on the screen, a list of projected projects. and, of course, the list is always subject to change. the projects may have to pause or be delayed for reasons beyond our control, but we're expecting that the list will be the first cohort of projects that will be
11:06 am
recorded by the senior operating subsidy program. 1005 powell will be our only rehab project. the other projects are new construction. in order, we expect they will come to us: trans bay west to 4200 geary, 1939market, 772 pacific, and 967 mission. there are other projects down the pipeline, such as laguna honda, affordable housing, and other projects that are projected farther out on our schedule. and, again, the subsidies will go into 100% senior projects. i hope you can see this better than i can, but essentially we're proposing to activate subsidies in about one or two projects a year. the state does want to see us activating these funds.
11:07 am
we can't be sitting on dollars for too long. it will jeopardize our ability to draw down additional years of funding. so our goal is to fund projects pretty much on an annual basis. that concludes my presentation. my colleague, sarah muster, from mocd, is also here to answer any questions. we hope we can count on your support of this resolution so we can move forward and start deploying these funds. thank you. >> chairman: great. thank you. this is super exciting, and thank you so much for your work. and this is such a critical program, and it is wonderful that we have a permanent funding source for it. supervisor mar? >> thank you, chair haney. i want to also thank you
11:08 am
and the city for all of your work on this. this is a timely and important opportunity to access new revenue to support ongoing s.o.s. subsidies. i just had some questions around just this new revenue. is this the first time we're actually receiving funding through this p.l.h. a.? >> yes, it is. >> the state issued the notice, the notice of funding availability, in, i think, late 2019. so this is their roll call. and the structure was quite flexible. some communities are using the funds just for housing development because they don't have local funding sources like we have with the housing trust fund and
11:09 am
the order approved bonds. but given the stropping strong voicein community and ths board, stating the need for permanent source for the senior subsidies, this was our chosen strategy. >> uh-huh. i support prioritizing or using this for the s.o.s. subsidies. do you expect that -- so this is a five-year -- an initial sort of five-year allocation we're getting, a little over $50 million. do you expect that we're going to need to use all of that for s.o.s.? or are there opportunities to consider some of the funding for other urgent priorities? >> well, as i think the slide -- let me see which slide it is.
11:10 am
we do show that about $45 million will be used by senior pipeline projects between now and 2026. there is also -- we also need to dedicate some funds for program administration and for reserves. so at the end of the day, when you add those costs in, there is only about $1.9 million left to play with. one promising -- you know, the state is estimating how many dollars will be available for this program. it is only at the end of each year that they actually can be certain about how much money has come in from this fee. so our plan right now is if our allocation ends up being larger, we could expand to add more units. we could leave space in the pipeline for projects that come up that are
11:11 am
fantastic opportunities for the city, but which aren't programmed on this list. so, you know, the $1.9 million is really not a lot to work with, but if there are more funds beyond that, then we can look at other options. >> got it. thank you. and the amount is determined every year, and that's based on the fees collected from real estate transactions, so it is sort of a formula amount that we get every year? >> well, it is a formula insofar as we get a certain portion that is pre-established, but the actual amount that comes into the state does vary from year to year, according to the market and how many trans transactionsthere are. >> and it is based on the actual revenue from the real estate transaction
11:12 am
fee in san francisco? >> that's right. so, for example, i believe the first allocation from 2019/2020 is about $5.8 million. and now we've just learned that the 2020 funds, which we need to draw down by the end of this calendar year -- we're always going to be a year behind drawing down funds that were collected by the state using this fee from the previous year. >> great. well, thanks again for all of this. i'm very supportive. >> thank you. >> chairman: great. thank you. seeing no other comments or questions -- oh, is there a b.l.a. report on this item? >> no, chair haney, there is not a b.l.a. report on this item. >> chairman: is there any public comment? >> clerk: yes,
11:13 am
mr. chair, operation is checking to see if there are any callers in the queue. members of the public who wish to provide public comment, please press *3. mr. coup, please let us know if there are any callers who wish to comment on item 5. >> mr. chair, we have no callers in the queue. >> chairman: all right. public comment is now closed. thank you so much, ms. eli, and all of the staff who worked on this. and we really appreciate it and are excited to see this happening and funded. with that, i want to make a motion to move item 5 to the full board with a positive recommendation. can we have a roll call, please. >> clerk: yes. on that motion. [roll call taken]
11:14 am
>> clerk: there are three ayes. >> chairman: all right. this will go to the full board with a positive recommendation. >> clerk: item 6: resolution authorizing the mayor's office of housing and community development on behalf of the city to execute a grant application under the department of housing and community development infrastructure, i.i.g. program for the project area located unionly north (indiscernable). authorizing the city to assume liability for completion of the project required by the terms of any grant awarded under the i.i.g. program and adopting various findings. members of the public who wish to provide public
11:15 am
comment on this item should call 415-655-0001, i.d. 24957533684, and then press pound twice. then please dial *3 to line up to speak. please wait until the system indicates you have been unmuted and you may begin your comments. mr. chair? >> chairman: all right. thank you. we have ms. amoral from the mayor's office of housing and development to present on this item. welcome. >> good morning. good morning, chair haney. item 6 before you today is for the city of county of san francisco, acting through mocd, to assume liability and obtain funds from the california department of housing and community developments infrastructure and infil grant, for the infrastructure improvement work at the balboa reservoir. it will support higher
11:16 am
density, affordable and mixed income housing, as well as mixed income and fill developments. it was approved hast year by the board of supervisors, and seeks to redevelop the reservoir into approximately a thousand new housing units, as well as new streets and public open spaces and new utilities. in order to be highly competitive, the project submitted an application on behalf of the city in the amount of $26 million, which is critical to start the infrastructure work on the project. they are expected to announce awards in december of this year. [inaudible] mocd will return to this committee on approval of this award to accept and extend those funds. we are excited to see this project move forward. at this time, mocd would like to request an
11:17 am
amendment to correct the long title of the resolution to replace west brook with westwood. we currently ask you to recommend this item to the full board and bridge housing, and mocd staff are available to answer any questions, should you have any. >> chairman: great. thank you. is there a b.l.a. report on this item? >> no, chair haney, we do not have a report on this item. >> chairman: great. are there any questions or comments from colleagues? i don't see any. is there any public comment on this item? >> clerk: members of the public who wish to provide public comment on this item, please press *3. for those on hold, please wait until the system indicates you have been unmuted. mr. coup, please let us know if there are any callers who wish to comment on item 6.
11:18 am
>> mr. chair, we have no callers in the queue. >> chairman: great. public comment is now closed. i know we have a minor amendment. ms. amaral, did you want to discuss that amendment? >> it was just a typo for west brook to be changed to westwood neighborhood in the first paragraph of the long title. >> chairman: great. motion to accept the amendment to correct west brook to westwood. and if we can have a roll call on that amendment, please? >> clerk: yes, on the motion to amendment item 6. [roll call taken] >> clerk: there are
11:19 am
three ayes. >> chairman: all right. can we have -- i want to make a motion to move item 6 to the full board with a positive recommendation. if we can have a roll call on that, please, as amended. >> clerk: on that motion. [roll call taken] >> clerk: there are three ayes. >> chairman: all right. thank you so much for your work. we appreciate it. madam clerk, please call item 7. >> clerk: item 7: resolution approving modification of number three to airport contract number 5003.01, to increase the contract amount by 4.2 million for a new not to exceed contract amount of $17 million, to operate, maintain airport, bridges, and baggage handling system in domestic terminals, and to extend
11:20 am
the term by one year to commence following board approval. members of the public who wish to provide public comment on this item should call 415-655-0001, i.d. 24957533684, then press pound twice. if you have not already done so, please dial *3 to line up to speak. please wait until the system indicates you have been unmuted and you may begin your comments. mr. chair. >> chairman: great. and we have mr. olic from the airport to present on this item. >> good morning, supervisors. welcome back. the airport is seeking your approval for modification number three for the contract between the airport and vanderland vanderland, inc. (indiscernable). the operational reliability of these systems and equipment are critical to the efficient and secure movement of passengers and their luggage through the airport terminals on on to aircraft. the airport is requesting
11:21 am
an extension to maintain operational continuity. this modification would extend the term through september 30th, 2022. the airport agrees with the b.l.a.'s recommendation to amend the resolution to increase the contract amount by $3,863,816, not to exceed $16,610,647. i would be happy to answer any questions, along with my colleague, the director of terminal systems. thank you. >> chairman: is there a b.l.a. report on this item? >> yes, chair haney, there is. so this proposed resolution would approve the third modification to the contract -- to the airport's contract to extend the term by one
11:22 am
year, through september 2022. the cost of the extension, as proposed, is $4.2 million. as shown on page eight of our report. we note also in the report, that chapter 21 of the administrative code requires that the terms of professional service contracts be consistent with the terms that are advertised in competitive solicitations, and that the proposed contract extension is beyond the term originally advertised. we did confer with the city attorney's office and the airport staff, who told us that the board may still approve this contract modification, and as noted by ms. volic, the airport is intending to pursue a new competitive process for a new contract during the extension period. so based on our discussions with the city attorney's office, we're recommending approval of
11:23 am
the contract. and based on under spending on the existing contract, we're recommending amending the proposed resolution to the not to exceed amount by $400,000, and then to approve the amended resolution as amended. i'm happy to answer any questions. >> chairman: supervisor mar? >> thanks, chair haney. i just had a question. i noticed on the b.l.a. report one of the reasons why the new solicitation was delayed, and there is a need for this one-year extension is because of a labor extension. it looked like the operating engineers had intended that all or some of the contract would be done by city employees, rather than a contractor.
11:24 am
i was wondering if you could just speak to that a little bit. and i also would like to maybe share an update on where the discussions are at with the union. >> yes, i would like to ask our managing director of airport services, eva chong, to describe that situation more. >> thank you. good morning, supervisors. yeah, we did have discussions with the union, and they did feel that some of this work could be performed by city employees. unfortunately, we have a classification dispute with them on who could do what work to make it efficient and to make the system run and for continuity. so as a civil service commission, we agreed to have ongoing discussions with the unions and a classification study to be done with our human resources department. and determined that because of the complexities of the situation, that a five-year term of this contract would be appropriate so there could be proper transition if we
11:25 am
come to terms in those discussions. >> chairman: uh-huh. great. thank you. >> labor has agreed with us on that, too. >> chairman: thanks. >> i don't have any other questions. thanks, chair haney. >> chairman: thank you. i want to make a motion to move this -- oh, public comment. is there any public comment on this item. >> clerk: yes, mr. chair. operation is checking to see if there are any callers in the queue. members of the public public who wish to provide public comment, please press *3. mr. coup, please let us know if there are any callers who wish to comment on this item. >> mr. chair, we have no callers in the queue. >> chairman: great. public comment is now closed. i want to make a motion to move this to the full board -- >> chair haney, we do have
11:26 am
an amendment. >> chairman: i gotcha. do you want to speak to the amendment? >> just agreeing to the b.l.a.'s recommendation to reduce our requested amount by $400,000. so it makes those monetary changes throughout the resolution. >> chairman: got it. i'm going to make a motion to move the amendment. >> clerk: yes. on the motion. [roll call taken] >> clerk: there are three ayes. >> chairman: the amendments are adopted. can i make an adoption to move the item as amended to the full board with a positive recommendation. can we have a roll call on that, please. >> clerk: yes. on that motion. [roll call taken] >> clerk: there are
11:27 am
three ayes. >> chairman: all right. this will go to the full board with a positive recommendation as amended. thank you so much. and, madam clerk, please call items 8 through 11together. >> clerk: item 8, resolution approving harvey milk, lease number 11, lease 20-0046, joint ventures, doing business as johnston and murphy, at a guarantee of $365,000, for the first year of the lease to commence upon board approval. item 9, authorization approving the food and beverage concession leases in phases 3 and 4, between culinary heights hospitality, for a term of 12 years, with one two-year option, at a minimum guarantee of $385,000 for the first year of the lease, commenced on approval.
11:28 am
[inaudible] between proper food, all airport and l.s.f. d., with one two-year option, to commence upon board approval, at a minimum annual guarantee of $275,000 for the first year of the lease. item 11: a resolution approving the harvey milk terminal one between h.g.(indiscernable) at a minimum guarantee of $460,000, for the first year of the lease to commence upon board approval. members of the public who wish to provide public comment, call 415-655-0001, i.d. 24957533684, and then press pound twice. if you have not already done so, please press *3
11:29 am
to line up to speak. please wait until the system indicates you have been unmuted and you may begin your comments. mr. chair? >> chairman: great. ms. bolic. >> thank you. deanna bolic with the airport. the airport is seeking your approval to award four harvey milk concession leases to the following. one with jenesco partners for a min mull guarantee of $365,000, and h.g. s.f.o. retailers, for $460,000, both for a term of 12 years. the other two are food and beverage concession leases with culinary heights hospitality for a 283,000 (indiscernable) both have a term of 12 years with one-two year option to extend. three of the leases have joint ventures with airport sessions disadvantage business
11:30 am
enterprises, and three of the leases are partners with local san francisco brands. mutual coffee roasters, proper food, and green apple books, which has been a main stay in the community since 1968. 1967.[please stand by]
11:31 am
>> this lease will provide minimum rent of approximately $4.62 million over the terms not including any covid related rent suspensions. item 10 is a proposed resolution that would approve a 12-year concession lease at the airport with proper food. the terms similar on page 19 of our report are consistent with the r.f.p. for this space. this lease will provide a minimum rent of approximately $3.3 million over the term. not including any covid related rent suspension.
11:32 am
finally, item 11 is a resolution that would improve a 12-year concession lease at the airport with green apple, lease terms are summarized on page 22 of our report. are consistent are the r.f.p. for this space. the lease would provide a minimum rent of $5.5 million over the term not including any covid related suspensions. because all the lease terms are consistent with the r.f.p. for the spaces and consistent with airport policy, we're recommending approval of all four resolutions. i'm happy to answer any questions. >> supervisor haney: are there any public comments. >> clerk: members of the public who wish to provide public comment, please star 3 now to be
11:33 am
added to the queue. for those on hold, please continue to wait. please let us know if there are any callers who wish to comment on items 8-11. >> we have no callers in the queue. >> chairman: public comment is now closed. seeing no other questions or comments, i want to make a motion to move items 8-11 with a positive recommendation. roll call vote please. >> clerk: [roll call vote] there are three ayes. >> supervisor haney: full board with a positive recommendation of these items. thank you so much for your work.
11:34 am
please call items 12-13 together. >> clerk: item 12 authorize assistant district attorney to accept grant $2 million to support the san francisco parking administration and amend ordinance to provide additional one grant funded. item number 13 is an ordinance authorizing the district attorney to accept grant of in the amount of $1 million from the u.s. department of justice to fund the justice reinvestment initiative and amending ordinance number 166-20 for two grants funded for the period
11:35 am
october 1, 2020 through september 30, 2023. members of the public wishing to provide public comment on these items please call 415-655-0001, meeting i.d., 24957933684. >> chairman: thank you. >> thank you very much. i'm director of policy from the san diego office. both examples here in san francisco. in 2018, the john d. and
11:36 am
katherine t. macarthur foundation, determined they like to invest in san francisco with an additional $2 million grant. including five core strategies that addressed the main drivers of local jail incarceration. including practices that take heavy toll on black and indigenous people and people with mental health and substance abuse issues. the grant funds, four of the positions are sustained from the original award. one awarded position will now be a reclassified as an 1824.
11:37 am
it also continues to support data improvement across the criminal justice system. funding analyst in the superior court, the sheriff's department in particular. it also includes travel costs for when travel will be reinstated in 2022. the award is retroactive because it was granted in january. however, the contract amendment, the agreement want finalized until march. [indiscernible] i'm happy to respond to any questions about this award or continue with item 13. i will move forward with
11:38 am
item 13. this is a federal investment in the city and county of san francisco. for reducing violent crimes by improving justice system performance. this award would operate under the san francisco sentencing commission. which is convene i about the district attorney office and includes member agencies like the public defender's office, juvenile probation department, sheriff's department, department of public health, family violence council, superior court and nonprofit serving both victims and those who are justice involved, it also includes academic experts sentencing and data. two positions are funded under this investment in san francisco. one to coordinate the efforts of the initiative which will create a young adult action plan which was a recommendation of sentencing commission three
11:39 am
years ago. these are both -- [indiscernible] i'm ready to respond to any questions and urge your aye vote for recommendation to the board. >> chairman: thank you. colleagues, any b.l.a. report? >> we don't have a report. >> chairman: any questions or comments from colleagues? is there public comment on this item? >> clerk: members of the public who wish to provide comment, please press star 3 now to be added to the queue.
11:40 am
>> we have no callers in the queue. >> chairman: public comment now closed. thank you so much ms. anderson. this is a wonderful initiative and we're excited we're moving forward with it. i do not have any questions or comments myself. i want to make a motion to move items 13 to the full board with positive recommendation. >> clerk: would you like to move item number 12? >> chairman: 12 and 13. >> clerk: on the motion to move items 12 and 13 with a positive recommendation. [roll call vote] three ayes. >> chairman: great. thank you so much ms. anderson.
11:41 am
it will go to the full board with a positive recommendation. >> clerk: item 14 is ordinance amending the business and tax regulations code to revise its common administrative provisions provisions to implement proposition f amending the gross receipts tax and repeating the payroll expense tax and proposition l and imposing the overpaid executive gross receipts tax approved. members of the public wishing to provide public comment should call 415-655-0001. member i.d. 2495 7 via 3684.
11:42 am
>> chairman: thank you. >> i'm amanda freed. i'm today epresenting an item that we call trailing legislation. this is there all of the tax measures that were approved on the november 2020 ballot. which includes the gross receipts tax, the repeal of the payroll expense tax and proposition l, the overpaid executive gross receipts tax. as you may recall, any time a business tax has been approved or in this case, also repealed by the voters, our office brings forward administrative provisions so we can align our audit and collections authority and silent and payment requirements, penalties and taxpayer confidentiality.
11:43 am
it allows us to retain the ability to change the legislatively if the need arises in the future. thank you for your consideration. i'm happy to take any questions. >> chairman: thank you so much. is there any other reports on this item? any questions or comments? seeing any. i want to make a motion to move item 14 to the full board with a positive recommendation. >> clerk: members of the public who wishes to provide comment, please press star 3 now to be added to the queue. >> we have no callers in the
11:44 am
queue. >> chairman: great. public comment is closed. motion to move item 14 to the full board. >> clerk: on that motion. [roll call vote] there are three ayes. >> chairman: thank you so much. please call item 15. >> clerk: resolution approving modification of number 10 municipal transportation agency contract number 2013-19 procurement of new light rail vehicle with -- in the amount of $130.4 million plus applicable application costs with cancellation provisions through june 2025 with no increases in
11:45 am
total contract price or in the term of the contract. members of the public who wish to provide public comment should call 415-655-0001, member i.d. 2495 753 3684. >> this one i'm more qualified to talk about. i'm going to share my screen and just walk through a brief presentation. are you able to see it? >> yes. >> we're here today to talk about an exciting opportunity to open the door to expand the
11:46 am
fleet. it gives us the flexibility to not over commit our city's resources but also not pass up on what we think is an important investment in the future of transit. we as all of you are very much banking on, not only a full ridership return but continued expansion of muni ridership. having a reliable and strong lrv4 is key to that. we are seeking approval of contract modification number 10 to exercise an option for additional 30 vehicles. this contract was set up in sort of a unique way.
11:47 am
we were -- we knew that we had greater replacement coming with which currently under way. but our existing system was so crowded that unlike lot of other system, we actually purchased 58 expansion vehicles before we began to replace the -- [indiscernible] that allowed us to address precovid crowding. it also hemming us to deliver more efficient service and fewer breakdowns. the 68 expansion vehicles have been performing strongly. we did have some initial challenges and we really appreciate all of the time and investment that the board of supervisors spent as we worked through the issues. we are now at a point where we have a very high performing vehicle. we've made a lot of investment
11:48 am
in staff to learn these vehicles and as we think about expansion, we want to keep the fleet as uniform as possible. the target performance is that these vehicle will not break down every 25,000 miles. which is five-fold improvement over our current fleet. we are hitting that target right now and we will continue to monitor for performance. we're also seeing significant maintenance improvements. it takes about half the time to do preventive maintenance on these new vehicles. you may need to remove five
11:49 am
panels. the lrv4s are much more efficient. we did have one issue that need to be addressed and that was seating. we got a lot of feedback that the lrv4s were too slippery. we have come up with a design improvement that allows more individualized seating. allows the combination of forward-facing seating as well as bench seating. we're also retrofitting all the
11:50 am
vehicles. we have the opportunity to purchase 45 more lrv4s brader replacement. we also know that we're in period of uncertainty. we have set up the option in such a way that we have no cost cancellation up until june 2025. we think that's important to allow time for the system to recover. but to make sure we grow in a way of fleet of consistency.
11:51 am
the lrv4s are also very cost effective which we think is a second reason to act on the action today. we purchased these vehicles right in the middle of the great recession. we did peer comparison at the time. we were the second lowest cost of comparison of about 15 other vendor properties. it's incredible, especially considering that we have one of the most complex vehicles in the country because we have so many tight turns, we have steeper hills and things like that. this option will allow us to maintain that really low cost baseline cost. the lrv4s will allow us to
11:52 am
make some important investments in the future of the system. as you know, we're in the process of reinflationing our train control system. that will allow us to run things like subway shuttles. we hope to launch three car in judas. having for cars will not only provide more longer trains but more frequent trains. as we look to our 2030 service needs. it contract modification, the cost is about $130 million plus the cost of any escalation between now and then. if we execute the contract within the next two years and there's no break in the production line, the cost will be about $119 million. if we have a break in production
11:53 am
line there will be an additional up to $11 million that will go towards restarting that production line. the option 2 funding plan currently is under development. in part because most of the funding that we plan to target for this work is discretionary funds like the tircp cap and trade funding that we've been very competitive for in the funding to date. as we develop that funding plan, we will make sure that we're very transparent and communicative with the board in how we plan to approach it. the contract is set up with prop e funding as a stopgap measure. we plan to modify the funding overtime.
11:54 am
in summary, we are seeking approval of contract modification number 10 of the lrv4 contract to exercise 30 additional lrv4s. it allows to maintain our yawn form fleet, it allows us to prepare for an optimistic future but it protects us to the extent that the future may or may not materialize. thank you for your time and i'm happy to answer any questions that you have. >> chairman: thank you. happy transit month. appreciate your work on this. it's very exciting to see the process of this expansion and what these vehicles will bring. supervisor safai?
11:55 am
are you there? >> supervisor safai: sorry about that. thank you chair haney. just couple of things. i think you might have touched on this. one of the things we were concerned about in the past was the breaking mechanism and how the breaking mechanism impacted the life of the wheel life. before we were using the mushroom and using the emergency brake system, you say really briefly, has that been solved for these lrv4s going forward? >> yes, that issue has been solved about we have retrofitted the existing vehicle and the new vehicles will come with the updated design. we've also are in the process of implementing a larger monitor. we've had a lot of input and some really good buy-in now with our operators getting bigger
11:56 am
monitors on the vehicles. in phase 3, hopefully, vehicles also address lot of other feedback that we've gotten about how the dash is laid out and other things to make their trip easier. >> supervisor safai: great. that's great to hear. the second thing was, we spoken with your team about doing an amendment that is essentially would say, we're happy with this being so many years in advance. we just wanted to ensure that sfmta will come back with a written report detailing the final sources of funding for option 2. then b.l.a. proposed some language as well.
11:57 am
we're not clearly defining the funding source for this. i know you showed on the screen that high likelihood is that it will be through a competitive process. which we are very likely to win with state and federal money. i feel good about that. i want to add that language that clearly says that you come back a report for the legislative file and when we're ready to execute the purchase. you're checking with the budget committee. >> thank you, we'll be supportive of that amendment. >> supervisor safai: i can propose that, chair, i can read into the record what the b.l.a. has and what we're proposing. i can do it now or i can wait until after supervisor mar ask his questions. >> chair haney: question. you have exact language you want to put into it?
11:58 am
>> supervisor safai: yes. we sent it to your office this morning. we didn't have the actual file to actually amend it in the file. we sent the exact language to everyone. >> chair haney: okay, great. let wait on that. let's have the conversation with b.l.a. and go back to that. are you done? >> supervisor safai: that's it. thank you. i'm very supportive of this. i'm glad we're thinking about this few years in advance. appreciate the hard work that sfmta and director tumlin are doing. these are important vehicles for our fleet. thank you. >> chair haney: great. supervisor mar? >> supervisor mar: thank you. thank you to all the sfmta staff working on this incredibly important project replacing our l.r.v. fleet in the city. this is extremely important in particular in my district. it's something we relay on the l
11:59 am
and n line to get to work and get around. i'm trying to understand a little bit better the purchase plan and the timeline and the financing for it. it's a little confusing because there's the phases and options and expansion and replacement. as of now, phase 1 -- completed >> yes, the original contract included 24 vehicles at the time
12:00 pm
of central subway. the first 68 vehicles are all here and they are all expansion vehicles. we have received last week the first replacement vehicle. it's the first of 151 as you described. the option before you today will be the 30 expansion vehicles that will come after the replacement vehicles are completed. >> supervisor mar: that's projected to be may be 5 or 6 years out. looks like '27 or '28.
12:01 pm
we would have finished 151 replacements. >> yes. we have a little flexibility. the brader replacement will be implemented in 2025. we're appreciative of the support we've gotten to help accelerate that. depending how quickly transit ridership rebuilds, we can go straight into the production of the additional 30 or space it out couple of years to allow demand more time to come back. >> supervisor mar: thank you. to the replacement 151 vehicles and 151 siemens, the funding has been allocated for that? >> yes. that's fully funded.
12:02 pm
saw -- >> supervisor mar: that can take five years. i was wondering if the funding fully allocated, why is it possible to accelerate -- when i rode in this morning on the m judah, it was one of the older car. it was pretty functional. i think it's pretty urgent to get those replaced. >> we actually accelerated it as much as we can. we invested in a separate facility where siemens built our car shelves. it's allowing them after about a year's worth of production to go from two vehicles a month to three or four vehicles a month. the 2025, unfortunately, already represents the accelerated
12:03 pm
timeline. >> supervisor mar: is the siemens production capacity? >> yes. along with our ability to take in the new train. we're capped at about four trains a month in order to be able to do all of the robust testing and things that we do to make sure that the vehicle we're getting is going to perform at its highest level. >> supervisor mar: thanks again. >> chair haney: thank you supervisor mar. is there a b.l.a. report on this item? >> yes, chair haney. this proposed resolution would approve the tenth modification between the contract and m.t.a. and the siemens industry to
12:04 pm
procure 30 out of possible 45 additional light rail vehicles and option 2. this order is consistent with current ridership projections. m.t.a. may cancel the order through june 2025. that will incur up to $11 million in fees if canceled after june 2023. as we show on page 30 of our report, the cost of the option to purchase is $130 million plus escalation costs up to $92.2 million. this resolution does not change the total $1.19 billion spending authority of the existing contract. when the board approved the original contract in 2014, the resolution that the board passed required m.t.a. to seek board approval before exercising this option so that the agency could identify funding sources for the purchase. but federal procurement rules require that m.t.a. exercise its
12:05 pm
option this month and m.t.a. has not finalized the funding plan because the purchase is beyond the capital planning cycle of the agency. because the original requirement that the board put on exercising option 2 in that legislation, we recommend amending this resolution to request m.t.a. to provide a written report detailing the final funding sources of the option 2 expenses. once the agency exercises option 2 and then include that written report in the legislative file for this item and to approve their resolution as amended. i'm happy to answer any questions. >> chair haney: any questions? any public comment on this item?
12:06 pm
>> clerk: mr. chair, operation is checking to see if there's any callers in the queue. members of the public workshop wish to provide comment on item, please press star 3 now to be added to the queue. >> we have one caller in the queue. >> caller: i'm in opposition to this purchase. on the capital budget side the m.t.a. currently has 300 projects. the m.t.a. current revenue bond debt is $442,000,750. the general obligation bond debt is over $265 million. because this g.o. bond debt issued by the city, the m.t.a.
12:07 pm
doesn't consider it to be part of the debt portfolio. if they did, the debt portfolio will be in excess $708 million. out operations budget side the m.t.a. supposed enterprise department, which is self-funding. yet 25% of its operating budget is general fund set aside equal to about $250 million per year. despite the g.o. bond and the budget set aside, the m.t.a. has been unwilling to restore full service for even give a tentative timeline. instead, the m.t.a. described its financial situation as dire and alludes to bankruptcy and debt spiral. transit dependent communities has had to beg to get services restored 7 at the 27 line. prop e left the board of supervisors with little leverage over the m.t.a. this is one of the few leverage points i strongly urge the
12:08 pm
community and the board to use it. thank you. >> clerk: thank you for your comment. any more callers in the queue? >> that completes the queue. >> chair haney: public comment closed. >> thank you. we appreciate the b.l.a. report and the thorough question. i wanted to clarify one issue, which is that if we wait until after june 2023 to execute this contract, there is an additional cost of restarting the production line. it isn't a fee. if in june of 2025 we decide to cancel this order, we incur no costs at all.
12:09 pm
there's no cost or fee associated with waiting. it becomes more expensive if we have a break in the production line. >> chair haney: mr. menard? >> i think that's consistent with what we said in the report. may be i said fee, may be that mean something specific to the m.t.a. i think the cost are accurate in the report. >> chair haney: okay. supervisor safai, you had some -- something you want to add? >> supervisor safai: i will read it in the record. we spoke with the sfmta. but essentially, on page 3 where a line 4 begins the final resolve. we have a new section and bump
12:10 pm
that area down. it would begin whereas, l.r.v. project is a capital project with proven track record and state and federal grant awards. whereas purchasing 30 easier to maintain and more reliable option 2 vehicle phase operating dollars when compared to operating 30 older vehicles and whereas, sfmta has confirmed that no enterprise funding sources for services and operation such as transit fair revenues parking fees and fines not included in the sfmta's five-year capital improvement program operating funds will be used for the purchase of these l.r.v. 4 option 2 vehicles. this is the part that i added on top of b.l.a. the sfmta will provide a written report detailing the sources of funding for the option 2 vehicles before sfmta initiates production of option 2 vehicles including in that report in the
12:11 pm
legislative file for this item and present that report before the board of supervisors. it will continue with the remaining final resolve and further resolve. that's already in the document. i make a motion to include those amendments. >> chair haney: we have a motion to approve those amendments that were read in the record. is there any comments or do you have any questions about them supervisor mar? please take a vote on the amendment. >> clerk: on that motion. [roll call vote] there are three ayes. >> chair haney: i want to make a motion to move this item to the
12:12 pm
full board as amended. we can take a roll call vote on that. >> clerk: on that motion. [roll call vote] there are three ayes >> chair haney: thank you so much. madam clerk, please call item 16. >> clerk: hearing on the technology and biotechnology sectors in san francisco particularly as it relates to new start-up companies and businesses requesting information on trends in growth and decline of new technology companies, jobs and employment the impact of remote work and covid-19 on the sector, efforts that can be taken by constituent
12:13 pm
to support technology sector start-ups in the city, members of the public who wish to provide public comment should call 415-655-0001. meeting i.d., 2495 753 3684. >> chair haney: thank you. before we call up our presenters, they're few introductory comments. i'm calling this final item on the agenda item is a hearing that i called on the state of the technology and biotechnology sector in san francisco specifically as it relates to start-ups new companies and new businesses. san francisco has been hub for technology and innovation. our city has been recognized where there's been tremendous benefits to starting a technology-based business. from digital music industry to biotechnology to social media to
12:14 pm
education technology to information technology and software, countless innovative start-ups with gotten off the ground here. they've started here and they've grown here. as a result, areas of concentration of talent, capital and culture of innovation and entrepreneurship that made san francisco technology ecosystem so unique and ubiquitous in the technology world. some of the biggest companies in the world found start in san francisco. every day new ideas and companies are launched here. these start-ups have been a huge source of jobs and economic growth and even more have created technology change the way we interact across the entire globe. it's something we should be proud of. over the course of the pandemic, we've seen businesses of all types struggle to stay in the city including small tech companies and start-ups we're hearing more and more new
12:15 pm
start-ups are choosing to start their business elsewhere. like nearly other business sector, future of covid is uncertain. we should continue to be a hub for innovation, a place ideas have provided the environment where they can grow and become a reality. i know like many of you, we know that the culture of san francisco special and our spirit is special in many ways. i think that culture and spirit has really welcomed new ideas. it welcomed people who wanted to start something new and different. that's been a big part why our city had such a unique role in the growth of new technology. i think it's important that we take seriously our responsibility to ensure that everyone in our city can benefit from the opportunity and
12:16 pm
resources that these companies provide. our commitment to ensuring access to jobs and local hiring, to increasing diversity, to making sure that the investments in these companies support communities and people of color. that we are growing industry that truly benefits all of our residents. it is my hope that at this hearing, we're learn more about the trend in growths and jobs and impact of remote work and covid-19 and efforts that can or have been taken by the city to support technology sector start-ups in our city. we have obviously important -- spent lot of time over the last year and a half thinking about small businesses, restaurants entertainment, hospitality industries, construction, all that is hugely crucial to our economy and the opportunities here in our city.
12:17 pm
so is the technology sector and start-ups. i think it's critical that we look at the way that we can support this sector that we can expand opportunities that we can make it easier to start businesses in this sector. that we really think critically about what that the sector looks like in the future and our role as the city and county to support it. today, ted eagan of the chief economist for the city and county of san francisco and director from the oewd are here to present on this item. we have representatives from the you office of small business to answer any questions. the report is also sent to everyone posted. i'm going so start with mr. eagan who will present the highlights of this report. welcome. >> thank you, chair haney. good afternoon members of the
12:18 pm
committee. i'm going to share my slides now. i'm going to talk about the status and recent history and what we know so far and impact of the pandemic and post-pandemic environment means particularly for work in the future of that industry and the city. this is data showing information technology jobs and biotechnology jobs in san francisco over the past 10 years. both sectors grew very rapidly in the city, 16% to 18% per year on average. notably both industries grew
12:19 pm
during 2020 when the city as a whole lost 85,000 jobs. information technology is much bigger industries in biotechnology. that's an important thing to keep in mind. biotechnology also grew very rapidly during 2010. i want to point out, though, what i mean employment in san francisco here, these are employees who are registered to establishment in san francisco for unemployment insurance purposes. they don't have to be physically working in the office in san francisco every day. that became an issue in 2020 that i think will be our biggest issue related to technology going forward. as chair haney mentioned, start-up activities is very important to san francisco growth and the tax sector in both biotech and information technology. this is a chart showing the amount of venture capital that the bay area has gotten in both sectors over the past ten years.
12:20 pm
the bay area averaged about $22 billion a year and i.t. venture capital, $3 billion a year and biotech venture capital that's the largest of any metro area in the country by a very long measure. this data doesn't break it down by city in the bay area. there are other sources that confirm that san francisco is getting more venture capital exempt -- investment than any other city in the country. growth of tax with information technology has had large impact on the city finances. by 2019, the two sectors that tech falls within, we don't have a tech sector in our business tax classification system. we have two information professional services that are largely composed by tech companies. they make up about 40% of the total gross receipts tax base of the city.
12:21 pm
biotechnology is 1% of the tax revenue and all other is about 60%. this is something that happened because of the growth of tech and the growth of tech earnings and receipts during the past decade. i want to turn specifically to the question that chair haney raised about the beginning about moving in and out of tech sector. this is not official government data but it's data provided through a research organization at the university of wisconsin. it stitches together business directories from one year to the next and tracks if companies moving or not moving. is able to count employment from one year to the next for individual businesses. what this data is able to do and breakdown the components of change within the tech sector from the year before the pandemic to the first year of the pandemic 2020.
12:22 pm
what it shows is the despite the pandemic, the city according to measure, added about 7300 jobs in the tech sector. that was led by expansions. businesses that were in 2019 added. we had some growth of employment, businesses that were performed. we also lost employment and businesses that closed establishments. the number of jobs involved with businesses move in and out have very small. we had less than 20 businesses move in and out, number of jobs very small part of the total. that's typical. most employment change. businesses are formed or closed or when businesses flow and -- grow and contract.
12:23 pm
they can make headlines. this is our most recent look at venture capital before and during the pandemic. specific to san francisco. it comes from a source called crunch base. it allows you to search just for companies that are headquartered in san francisco. certainly there was not much to climb venture capital at the start of the pandemic. during 2020, the amount of venture capital coming into san francisco has been -- [indiscernible]. just in august last month, there was over $70 billion of venture capital investment just going into companies within san francisco. that kind of leading indicator of tech growth in san francisco is something that in the past has led us to forget there will soon be rapid employment growth in san francisco. it's clearly a sign that venture
12:24 pm
capital is continuing to invest in san francisco. as far as that is concerned, there are no warning signs there about venture capital moving to other places, at least not at expense of 46. another leading indicator of where the tech industry may be going is job listings. employers are increasing looking at job listings. this is tech job listings in san francisco going back five years. what it's really showing by 2021. tech job listings are basically not at a prepandemic peak, they are basic realize they were roughly in the 2017, 2018, 2019 period. they are increasingly remote. their companies track these listings, designates what the
12:25 pm
listings say. about 17% of the tech jobs listed now as two in san francisco location, are listed as remote jobs. before the pandemic, that was a much smaller number, like 2% to 3%. we don't know what that means in terms of specific job, how much time you will spend in the office, why does it stay remote while being registered in san francisco. none of that is clear from the job listing. it's just the data point. it does seem to be increasing though. hiring both remote and non-remote has recovered in 2021. there's been less recovery in biotech. the number of biotech jobs is a lot smaller and sector is smaller. it's still healthy. there's still been a recovery biotech hiring in 2021. there was a strong peak in 2019.
12:26 pm
there's some tendency for more remote hiring in biotech. it's now about 10% of biotech jobs at a very small level before the pandemic. in terms of venture capital and in they weres -- terms of job listings, those are positive signs for the city's economy. work from home issue is a significant issue. one i will mention first is on city tax revenue. this is a chart showing the pandemic, the 2020, first year of the pandemic. that is business tax filing. it's showing the average percent of the businesses total payroll across the whole enterprise either incurring in san francisco in both years. you can see in biotechnology that falls about half by information sector, it falls by a third. professional scientific and technical services, that falls
12:27 pm
by about a quarter. this is really due to working at home. it's workers who ordinarily commuted into offices in san francisco in 2019 who don't live in the city, didn't commute to the city in 2020 and therefore, their payroll isn't showing up in san francisco payroll. the reason is because we use that in our tax law, the percent of payroll in san francisco, as a way to apportion businesses gross receipt for the city. we need a way to fairly apportion businesses for the gross receipt to the amount that's taxable to the city. the less payroll that gets apportioned to san francisco the less revenue we get. depending on the sector, for example, professional scientific technical services, if a company share payroll in san francisco dropped by 25% from one year to the next and their total sales
12:28 pm
don't change at all, their tax to the city drops by 25%. it goes directly to their tax liability for the city. for oath two sectors, it still involves material drop in how much taxes they owe the city. because of work at home. it's starting to affect the housing market. this is a look courtesy housing price data of how housing prices have changed. this is for sale single family home prices since the start of the pandemic. in around downtown san francisco, we've seen housing prices fall. nationally, housing prices are growing at record levels, 20% to 30% approximately. in san francisco, since the pandemic they have fallen. away from downtown, elsewhere in city and down in the peninsula,
12:29 pm
all where the tech jobs are concentrated, housing price growth has been really low. much lower than the regional average or the national average. where has housing price growth has been high? it's in outlying areas that are difficult to commute from from jobs in san francisco, palo alto, or santa clara. the places that you might move to if you weren't expecting to commute to san francisco or to the peninsula as much are tech jobs. i do that other things going on here other than tech work is moving. that's a pattern of housing demand away from the courier where you have a easy commute to a high paying job and rapid housing price growth in more distant areas which makes sense if you don't have to commute as
12:30 pm
often. [please stand by]
12:31 pm
approval, most people get to work from home. that creates a lot of employee
12:32 pm
satisfaction and low levels of employees wanting to leave. even if it's only three days a week, much higher levels of employees wanting to leave. i think it's clear from this survey, i don't think it's the last point on it, they want a more liberal work from home policy and take it seriously enough to stay with the company. all the venture capital flowing into the tech sector, company are leery of are angering their work force with opposing companies. that may not stay forever. companies are listening to their
12:33 pm
employees. we're seeing companies on their list on when their return dates are regarding the delta variant or other reasons. this concludes on the slide with national data curtsy of cer e. they were kind enough to share with me. there's more subleasing space on the market than in the last 20 years. office tenants who need office space change their mind for how much they needed and need to take up space. it reconsiders how much office space they need right now or in the near future. when you look at it city by city
12:34 pm
san francisco is leading that trend. in percentage terms. san francisco office sublease space has increased by 30 percent. this phenomenon is is particularly pronounced in san francisco. i don't think we know all the reasons why. san francisco has more tech workers in their office space than any other city. tech workers as i mentioned are powerful enough to work from home, privileged enough and their employees are listening to them. we're seeing in san francisco the biggest drops in asking rent. when you see more office space, it's not surprising that rents
12:35 pm
are dropping. it's pretty mild after crash. we have an awful lot of vacancy. san francisco is already seeing 15 percent drops in rent. i don't think we've seen straiblization of that yet. the last point i will close on is to remind the committee that the tech sector doesn't just effect tech workers or finance. it effects industries because when they are downtown restaurants an other retailers can be a major source of customers. this is a source showing how sales tax have changed across
12:36 pm
zip codes. hotels have been largely vacant and office spaces have been largely vacant during that time. unfortunately for the city and the economy that's where most of the sales tax is generated. we need a recovery of hotel guests and office workers to restore itself between those two economic drivers and the small business sector of our economy. i'll conclude on a few points and happy to take some questions. in 2010 it emerges from being a small part of the driver to a big driver. it effects the city's economy and fiscal driver.
12:37 pm
there isn't a sign of a significant shift or investment from san francisco or bay area to other metro areas. we're still adding tech base companies, they are largely remote jobs for now. venture capital companies numbers have been fairly small. the rise of remote work is a challenge for office space in san francisco. it creates a major risk not just because it's pervasive and a critical sector for us but we don't know what it looks like at this point. we know generous work from home
12:38 pm
policy. historic amounts of office space is being put on the market and san francisco is leading that trend. the trend from housing crisis is showing a weakening premium that people are willing to pay for san francisco. people are not expecting to spend as much time in the is city. over the long term, it will work and adjust. it could take years. vacancy will small. the office market will adjust itself. i don't think we'll have office buildings in the employment center. the work from home phenomenon will have economic recovery on
12:39 pm
the city's taxes. i can take questions or move onto the next speaker. >> why don't we pause for some questions before we go to oewd. i have a few. it is a pretty remarkable increase in venture capital over the last year, do we have further breakdown as where the investments went? they could have been driven by a handful of companies getting the bulk share of it. to see that much increase in venture capital is somewhat surprising, maybe it's been certain companies that are doing
12:40 pm
well over the last year and maybe that's where a lot of it went. do we know where a lot of the funding is for tech companies. where money is going to relatively or already established companies. is there a breakdown there in terms of where the money is going. >> i don't have a breakdown slide on that. one thing about san francisco is it does have a number of large start ups that are getting serious funning. a large piece of it is -- those later round investments. i wouldn't suggest though that there aren't a lot of start up companies that are behind it too. it's not that only the start ups
12:41 pm
from seven or eight years are taking the venture capital. it's not that at all. the biggest reason we're seeing venture capital right now is because of the state of the market and interest rates are low, that has always driven people to riskier investments in hopes of getting a yield. the bay area has always gotten more of its share of that. the boom in the last year and a half, that won't last forever. traditionally when companies get venture capital they sign year and a half leases. i do think it's broad based and
12:42 pm
not only in a handful. >> when we do these analysis as a general approach to how you think about it, i certainly a lot of this connotative analysis is critical in our understanding is sometimes not always in line with some of the more anecdotal stories that we hear. when we do these analysis is there an element of this that is qualitative on our part. do we do our own surveys. are are we in regular conversations with these companies and the challenges they are facing. how do we analyze in more specific cases. for example, the experience of a
12:43 pm
start up whose thinking about where to be and why to consider san francisco and what it's like, the steps they have to go through to locate an grow in san francisco. do we have those conversations and ways they are engaging. certainly there's a narrative out there that companies are going elsewhere and companies are starting elsewhere because of the environment here somehow changed and made harder for start ups. can you speak to what you're hearing and how you analyze an collect that sort of information. >> i'm happy to, i think the question may be better directly to kate. that's more of a business out reach function that we do in the controllers office. i'm aware of the anecdotes
12:44 pm
you're referring to. changing industry does show a number of companies closing. i'm sure there's a number of companies struggling. there may be a number of companies that have decided to go elsewhere. there's a number of fairly large tech companies have decided to relocate or shift operations out of the bay area. the data i'm trying to bring to this is to anecdotes about bad things not everyone is going to rush out and say that it's great. it's important to look at the overall data and trends. i don't want to minimize any one business' struggle or growing or
12:45 pm
expanding of business, i think there's a value of looking at the whole. >> in terms of the closures and move outs and the gains the raw numbers there, it would show more greater increase in jobs but slight increase in the number of establishments. how did this compare to other industries because we've obviously seen a huge number of closures which over the last year and a half which has been a huge concern and concerning to see so many significant closures of establishments. how does that compare to a normal year? is it normal to have that many closures or is that a higher number than usual?
12:46 pm
how does that compare to other industries. when we have hearings on restaurants on other small businesses, it was a huge number. what's your analysis of how normal this is for a year, is it way out of step and also how does it compare with other industries. >> clearly the number of direct layoffs in the tech sector is smaller than other industries. the overall recovery in tech hiring is higher. despite a very strong 2021 so far is still down 25 percent from before the pandemic. how does 2020 compare to a
12:47 pm
typical year. it was a healthy year but not a record setting year. there does seem to be more job losses than normal. a lot of start ups don't make it and fizzle. that churn is more in the tech industries than other industries. >> i definitely saw there's a preference to flexible work from home policy. one of the things i didn't see is how many, what percentage of folks are going to be working from home in san francisco. work from home doesn't necessarily tell me they are not
12:48 pm
going to be here and what that looks like. move ins and move outs an those cosine of things. kind of things. the subleasing of the vacant office spaces was interesting. do we have a sense of who is subleasing the vacant office space are they new companies, non tech companies. this is a trend that is increasing a lot more in san francisco than other places. >> to speak to your first point, that does factor in to our business for cast. forecast. half lived in the city and half communed in.
12:49 pm
that number is going to be fluid. that is something we're tracking and trying to keep on top off. who is leasing the space? what i'm hearing from the brokers, it tends to be large tech companies that wanted to grow a lot before the pandemic and took more space than needed, are the ones putting the sublease space on the market. it's the smaller tech companies that are leasing it back. i'm not hearing from the brokers that we're seeing a tilt to other industries. we still have a big gap between supply and demand. we'll have to see over the next while how that closes. >> did we analyze lab space more
12:50 pm
directly. i know bio tech an some of the other companies are are more likely to be in lab space and that's the type of commercial space we categorize separately. >> it seems to be healthier because of the nature of lab work, you can't really do it at home. the demand for that space is healthier. i've heard stories that developers are looking at office space, looking at that being chilly in the year future. life science and bio tech is a better short term bet. >> got it. okay.
12:51 pm
ted is doing an overview in the trend. we're going to dig deeper in terms of what ware doing for opportunity and access for our residents. it's how they are supporting businesses to open and grow. >> thank you for calling for this hearing. thank you for all of your work and the informative presentation. i had a few questions about the bigger picture analysis. really interesting to see the key points about the continued growth about the tech secretary you're and the growth and i think you mentioned historic venture capital in the city.
12:52 pm
overall economic development perspective. obviously that trend over the last decade created a lot of challenges and has been a key driver in quality as well. the implications of the work from home tend. that was another significant point in the presentation. just around the impact on the growth receipt tax. there's been a big shift during the pandemic to work from home policies and a lot of the employers especially in the tech sector will continue that on some level. that will mean a reduction in our gross receipts tax. you have projected what that's going to mean in terms of gross receipts tax revenue.
12:53 pm
>> we've certainly done five year revenue with my colleagues in the controllers office. we've had to make assumptions about how much work from home will take place after the pandemic over the next five years. the rate of the office space left vacant. these estimates are highly uncertain. we know this is an issue, it's currently being negotiated by employers and employees and the effected businesses, we don't quite know where it's going to land. however it happens, it's a major thing and could have a major impact on our cities economy. >> thank you. the other area that the work from home policies of the tech sector have is on housing, you
12:54 pm
touched on that a little bit. you mentioned that it will reduce the housing demand and housing premium to live in san francisco or near san francisco. can you speak more to that. could this be one positive effect from the work from home policy where there will be decreased housing demand and affordability as a result of that. >> one thing we've clearly seen is that san francisco has seen larger drops in apartment ask asking rents than any other large city. we've seen some pretty rapid recovery in 2021, we're still down around 15 percent from where we were before. whether that low price
12:55 pm
translated into greater affordability depends on the income side of that equation. people in the restaurant sector who are not able to come back or other sectors who are unemployed or have seen their wages reduced, lower rents may not benefit them the same way. people's whose incomes have -- you're seeing a drop of the multiplier effect associated with the effect. lower wages in the other sectors of the economy. at the moment we're seeing a lot of industries wanting to higher a lot of people in san francisco. i would like to wait to see until we see have the census
12:56 pm
data to look at trends within the housing cost and income for different groups before weighing in on that. we're clearly seeing lower housing prices though. it could mean business for them in the short term. >> thank you. >> i'm not seeing any questions from other supervisors at this time. >> good afternoon. very excited to have this opportunity to talk to you all about something that is important to us and also a lot more nuanced than we understand
12:57 pm
technology to be from the media. with that do you have our presentation you can bring up?
12:58 pm
today we saw a presentation of the data which is very significant around what we might call traditional tech which is companies self identify themselves. a lot of the data is is focused on technology as we think of it in software, social media, cloud computing and bio tech which i
12:59 pm
might call life science medical device. however, for that what we're also seeing is tech in terms of how it's being adopted across industries is expanding out side of the box how we historically thought about tech. manufacturing. advanced manufacturing, we're seeing technology, computer driven design and rapid prototyping methods adopted by san francisco manufacturers who do short run production and specialize in quick iterations of consumer products and medical devices. it's a hybrid that is giving birth to this new industry
1:00 pm
sector that we haven't yet talked about today. it's all about how a company. self identifies when we pull the data on a traditional tech company. you may have heard the term sim tech. traditional financial product companies combined with technology. a quick example of that would be square. it started as a provider of solutions in farmers markets to be able to access electronic payment mechanisms that aren't wired up to a brick and mortar store. they've become this hybrid company that involves finance,
1:01 pm
technology, hardware and defies traditional tech solutions. as we look at the evolution of tech in this city, i think we're seeing a lot of hybrids now that really combine traditional industries and are now using technology and are here in san francisco because of their ability to pull from different facets from the tech sector there's a reason these companies are around and have a preference for san francisco. paying attention to these hybrid models is going to become an important part of how we think about tech entrepreneurship and work force strategies. beyond the very important financial impacts of the tech sector that i think ted really laid out are tax based generally
1:02 pm
having diversification i want to highlight some elements that have become so important for usas we look at entrepreneurship and innovation. the role that technology driven companies have been playing in our public and environmental health and philanthropy. looking for an equitable work force advancement. here is one example of how all of this comes together. one of our small manufacturers do prototyping and support manufacturing partnered with the
1:03 pm
city to finance and build. they in turn have been working with another non-profit that have launch as a direct result of the tech focus called human made. human made provides skill based training and incubator space for manufacturers. they run the manufacturing training program. aproe have directly worked with the city trying to innovate on our extensive public trash cans to make them cheaper and more usable. there's a virtual cycle that is worth noting. >> it all comes back to the
1:04 pm
trash cans at the anne of the ee day. >> in some ways it is all connected. here is another example. another tech company that has been innovating around creating a robotic exo skeleton to work with people with disabilities. they are growing to create products for folks to work in warehouses to lift more weight and do it safely. they came out of an incubator called other lab. they are highering at all levels including levels for folks with less than a college degree.
1:05 pm
philanthropy. i think the notion we see it in many different forms. sales force is one of the most large donors to hold variety in this city and beyond. sales force is both something that helps power and drive for profit businesses, we use it here to enable us to track data and help us manage all of our interactions with the companies and small businesses that we support. it really has also become a key tool to allow other non-profit organizations to have the ability to have that technology and have it for free. for smaller organizations to grow the services they provide to our community and sales force themselves have the foundation
1:06 pm
which provided significant support to the community and beyond. last but not least as we talk about how do we take this platform called tech in all the forms that i laid out whether it's tech entertainment for traditional tech, how do we enable it to more diverse folks or folks with less educational background it create a pipeline to have the opportunity to be part of it. this is another example that i'm very excited about that's been going on for a while now somewhat quietly in our high schools. it was started by microsoft but has 14 different tech companies involved providing volunteer
1:07 pm
time directly into high schools. to date, it has yielded 928 students coming through those programs and in turn being placed in jobs in the sector. what are we doing in terms of the city right now to support start ups for employment and a healthy equitable sector. our office of small business is our front door, everything from
1:08 pm
permitting to those that have a brick and mortar element and financing that can compliment venture capital. venture is an important part it's not the only way that we give birth to technology companies. i would pause at that for these hybrid company that's i've given examples of. they are not as -- they do not enjoy and have not relied on venture. low cost loans and other financial mechanisms are important to these companies. we have our core set of programming which includes our small business development technological assistance recourses. our many non-profit partners
1:09 pm
from renaissance that we fund and support through eowd. what more can we do, the first is around venture capital. we have traditionally seen venture going into traditional tech companies. we're starting to unpeel and look at how we get venture and other forms of patient capital into some of these other tech company fields. when i say patient venture often heads for the companies where they can get quick multiples and a company can grow really
1:10 pm
quickly. these hybrid companies whether it's medical device, manufacturing that has a brick an mortal element an there is capital that flows to those kinds of businesses that are more willing to wait for a longer return. that's really important if we're going to continue to grow those kinds of companies. another piece of this that is clearly part of our mission is to increase bipoc tech entrepreneurs get started. our dream keeper funding that we're looking at to support those start ups that have the technology element to them. overall what i would call the opportunity of this pandemic and the opportunity of our vakanceys in our downtown offices to seize
1:11 pm
this moment to help start ups that not be as well capitalized as others to take advantage of our softer real estate prices right now. we're paying close attention to everything coming out of the federal government right now. the bipartisan infrastructure and jobs act is a new source of funding that we'll take a close look at and see how we can drive that into the community. on the other side of this is as we grow and continue to sustain our companies here in the city, how do we dig even deeper into the higher and opportunity to enjoy the financial and hive sustainability benefits to having a job in the sector. what we're currently doing and
1:12 pm
tech sf is to date since we launched which is our training partner that we provide skills quillly to the under employeed so far since 2012 placed 3,300 people into full time tech jobs. ware growing that as we speak. our advanced training program which is younger and modeled off of city build has placed over a hundred people into full time jobs. jobs. some of which we have placed into oae.
1:13 pm
digital inclusion for seniors and adults with disabilities. we're looking to grow that and par lay that into building onramps for individuals with disabilities in a the tech sector. one silver lining in the current promote work situation we find ourselves in is for folks with mobility issues. it's an opportunity to have folks to get jobs in the tech sector who might not have been competitive in the tech sector. one of the other side benefits of having remote now there's nothing to stop someone from getting a job at google living
1:14 pm
in san francisco but in google down at the peninsula. it goes both ways and a broader opportunity to apply for jobs. one program i'm very interested in, it's only two months into the running is a real key is the north california apprenticeship program. a number of tech companies including linked in which is growing their office presence here in san francisco not shrinking it. i think it's a really important trend, rather than thinking about one model which is to train and push potential job seekers out to the companies,
1:15 pm
this puts the shoe on the other foot and their goal is to bring a thousand paid apprentices into the companies into the next year or two. beyond that just being very intentional to tieing our training programs into pipelines that we are very focused on as well as entrepreneurship and hiring programs continuing to keep the lens on diversifying hiring an not just total number of jobs and who is getting those jobs. let's briefly talk about industry in terms of the elephant in the room in terms of tax credits. in terms of what we have done an might do. we have had a variety of six
1:16 pm
ofdifferent tax incentives over the years. i want to start by saying the shift to payroll based taxes to gross receipts have been a very positive thing not just for the tech intellector but overall. i can speak to manufacturing who used to be taxed on their payroll but is being taxed on their gross receipts and is is an incentive to stay in the city. it's important to understand that the moment we had those credits, they were important to helping tech sectors to help plant their flag here in the
1:17 pm
city. continuing to remove start up barriers. the board of supervisors that makes it easy for someone to start an get their business open, that includes brick and mortar will benefit from those kinds of accommodations to make it easier to start. i do think that continued work to clarify our pdr zoning in the city as it specifically relates to life science an labs an advanced manufacturing which looks like a mixed use of manufacturing and office use continues to be important to we have a place for our growing medical device to be here in the city. i'm not recommends significant tax credits, i think we have to
1:18 pm
keep a close eye on our tax structure as it relates to start up funding across the different elements in tech and how venture is treated versus start up that might be funded through grants. in conclusion what more can we do. i want to leave you with a couple of things. at the end of the day when i talk to a variety of technology company as cross the city an you ask them, why are you here? why are you still here? what i hear and my team time and time again, they are here because their employees want to be here. of course the ability to do business with companies like themselves, they are also here because we're san francisco.
1:19 pm
some of the work we're doing broadly to have businesses want to be here in the city from shine on sf to the work we're doing to make our streets safer and cleaner, the work i'm personally very excited about to expand our arts and culture programming. the outer sun set are are really key to why people want to be back in the city in spite of other things we hear people are not fans of. that's really important to understand. it comes down to tech companies want to be places where their employees also want to be. for all of the negative narrative that we've had that we
1:20 pm
are will already seeing the narrative shift. the best thing we can do as a city is continue to find a way for us to talk about tech not as something that has been a problem or something that can't coexist with the city that we want to be but equitable technology driven companies of all kinds will continue to be important. we're at a moment in time, an inflection point where we can look at how technology works for our businesses and people. i'm grateful for the opportunity to talk to all of you about this. thank you. >> thank you so much. let me first say, i really appreciate your leadership and vision on all of these issues. think think it's incredibly inpressive and the scope of it
1:21 pm
as you said at the beginning is one that definitely moves beyond the typical ways we think about tech. i appreciate you included advanced maferring which i know you have a back grund in and transportation and all these things that so many of the jobs of the future and the present involve knowing how to work with new an emerging technologies. it's an essential part of much of our work force. ensuring there's evolving in
1:22 pm
multiple ways. we can support you an our residents. i did a couple things i wanted to ask about. i know that some of the things that we're doing involve sfusd and city college. i wonder if you can speak to what our work looks like currently in working with not just city college but usf and other higher educational institutions in our city. when i was a member of the school board, i was a joint council of tech company. it includes usf and thinking about how we think that tech pipeline for our students or for
1:23 pm
our young people and residents. there's lessons around building other things. can you speak to that, the role of city college and other important educational institutions in these industries. >> sure. i think we're just getting started, to be honest. what we have done to date has been to have very sector specific programs some of which we have done in partnership with the institutions you messengered. i do not think yet, this is is the lower hanging fruit that we pulled everyone together to look at what more we can do. the key again goes back to deep engagement with the employer so we are being very intentional with how we prepare students.
1:24 pm
one of the biggest challenges i find is is we often invest in training programs whether they are programs we stand up here at the city and push folks through the programs and we have on the other side employers. the world has been shifting quickly with tech knoll. technology. the apprenticeship program is taking the tools of the trade and applying them to technology driven companies to define what the entry level are requirements are to get a job opportunity is critical. tieing that back to our educational partners in must view is one of the very next steps. i know that network is just about three months into the beginning of that work.
1:25 pm
that's an obvious place to connect and state an city college and usf and others. i think that one of the interesting conundrums sometimes is we have this impression that we need a computer science degree or super technological experience. many of our technological driven companies are doing training in other sectors. the bar may be lower than we think it is, where can individual employers partner with a city college and sf state to develop additional skills. give people starting skills that
1:26 pm
also help employers advance folks when they get in the door. it's important when we look long term until the job. having the ability for folks to progress and earn more money over time. i think there's fertile opportunity to build on that. >> that's good to hear, i think there's a tremendous potential there we have to bring it all together. sometimes the city is in the the best position and you're in the best position in some ways to help build those connections. that includes, i know a lot of our companies and when we do hiring and develop these hiring firms and build talent that way and one of the things i would
1:27 pm
say is that we really need to find ways to insert ourselves into that process. we have great people here, brilliant people here. they may not have a computer science degree but can certainly learn. how do they have those opportunities as well. preparing our people not only to have the technological knowledge but have the knowledge of where they need to be and get in front of and all of that. i also -- you spoke to some of this, i do think that when folks are considering starting a company here or growing a company here, making sure that they have folks that they can talk to in your office and office of small business and other places where we can help
1:28 pm
them navigate the things we do for businesses more generally but may be unique to the experiences and needs of a technology company broadly defined. if you want to open a restaurant and all of that, you have the permits and inspections and that's one part of it. we need to be there for those folks and take them from a to z there. if you have a technology based start up and who is is going to come in and work for you and where you're going to get office space, how the city is going to support you, we need to have the front door for that too. you pointed to the narrative, i think we need to not only in how we talk about it, we need to
1:29 pm
amplify that we want the companies here and innovation and technology companies broadly defined here and grow here. part of that is how we amplify that and be acceptable to them. how we put our talk into action in supporting them into innocentizing it and helping to provide a network is a huge asset. if you open in san francisco there are all these folks coming through tech sf and computer science and they are are all here for you, that's a win win for the companies and win win for our residents, particularly those often shut out of these industries. it's part of a vision laid out, i want to express to you my
1:30 pm
hopes. if there's some of the other supervisors we can do to support, we stand ready because this is such an important part of our economy and residents over the long term. i appreciate your attention to it and focus on it an the comprehensive vision that you have. >> thank you so much for your leadership. i had a few questions following up on the points raised around the work force pipeline to the tech sector here in the city. it seems like an incredibly important part we should be
1:31 pm
doing as a city. i know you guys have been doing really good work with tech sf. i not familiar with the teals program but that sounds great too. when i was a labor advocate, early on there was a lot of hype about tech jobs and the fork force, you know billing out the work force pathway. there appear to be very little substance. the numbers of folks placed in the sector were embarrassing low early on with the central market tax credit or tax break and those community benefit
1:32 pm
agreement. it's encouraging to hear over three thousand placements in tech sf. i wonder if you feel there's been learning and significant improvements in the work force strategy that is working and creating a more meaningful way for economic opportunities in this very important sector. >> we had a starting point and have been accelerating since there. the key has been shifting from a compliance based hiring mandate if you will to more of a real partnership with technology companies of all cosines. kinds.
1:33 pm
to really understand what does it take not to be the janitor, not to work in the food service but to actually have an entry level professional job. it has been really essential to have employers at the table whether it's facebook or linked in or manufacturerror medical based company to tailor what folks need to be able to get a job. it's not just computer science. for example, we have plenty of technology driven companies that need customer service that have an important set of jobs of taking a technology product that will help you wear on your arms
1:34 pm
to help you lift boxes. there's a selling approach to selling that to warehouse and distribution operations. we're able to put folks into a tech company like that who have selling skills and learn more about the technology that they're helping to sell. in trying to help our communities of need particularly our communities of color and women who are are still under represented. that you can look at a job in this area has been as important as the actual training programs that we have stood up. it's that relationship of having more employers on board who are pulling and not just complying but realizing they do want to diversify their work force.
1:35 pm
take advantage of their asset not just i have to hire these folks but how can i hire more to help my business be better combined with tailor our programs. i do think the teals program, our continued broadening of what we call tech, i would say ten years from now, it would be like saying do you use the internet? of course you use the internet, you use the internet whether
1:36 pm
you're making dinner or trying to sell. in ten years we're not going to have a tech sector because tech is part of everything. we have a great opportunity with the younger generation that had iphones attached to their han h. we have to work harder to be very intentional as we populate downtown that we use this opportunity to get more diversity into the work force. >> thank you for all of that. i appreciate how you frame this discussion around the tech
1:37 pm
sector in san francisco being much more diverse and more than just the big name companies we're all aware of and the hybrid tech companies in a different job opportunity that exists in the sector too. it it's not just software engineers. i think, this has been a really informative presentation and discussion. for me i'm very interested in seeing more data and reporting on this particular work that the work force strategy in the tech sector and entrepreneurship seems really important.
1:38 pm
i'm not aware of any reports that oewd produces and our tech equity strategies. it would be helpful for us as a board and the public to have that so there's more accountability an awareness. >> i appreciate that feedback. i know we have very detailed program metrics on the econ side. this hearing is my first opportunity to knit it all together for you. that is a good suggestion that i can take back to look at as an additional step. we're going to be going into
1:39 pm
another planning cycle and our joint development that looks at real estate opportunities that can also house these kinds of companies is a good suggestion and something we're happy to entertain. >> thanks again and thank you for calling for this hearing. >> thank you. i appreciate the questions an the point of wanting to have some ongoing way to have these conversations and ways to hear about how we're progressing. i know you're developing your strategic plan. i hope this is a big part of it. i appreciate -- one of the reasons we wanted to have a hearing, we wanted to think about what it is we're doing and what we might do in the future
1:40 pm
and also to hear, i hope from all of us here that this is a huge need not only as we come out of the pandemic. with that, i don't see supervisor on. why don't we open this up to public comment. >> could you please let us know if there are any callers who wish to comment on item 16.
1:41 pm
>> part of the description reads efforts that have or can be taken to by the city for technology start ups in the city. this still sounds like the twitter -- twitter had a market capitalization of fifty one billion dollars during the eight year duration tax break. the community benefits which were part of the twitter tax breaks were largely unrealized.
1:42 pm
when asked to help unhoused benefit they largely opposed. california has the highest income inequality, highest number of homeless, gentrification, not to mention the out sized political influence of the tech sector at the state level. i remain skeptical. >> this concludes public comment. >> thank you. public comment is now closed. i will just say that there's no consideration of similar efforts to the twitter tax break. what we're talking about here is making sure our residents have
1:43 pm
access to the sector and start ups can can grow here and thrive here and we're focused on opportunities in the sector. i appreciate the public comment and appreciate your leadership director and we'll continue the conversation and i hope that we were able to demonstrate both that the sector is important to us and a lot that we're doing to support it and a lot more we can do to support the sector and start ups but more that we can do to ensure access for all of our residents and that everyone benefits from its growth. with that, i also want to thank mr. heagan for his presentation and the report. i think this provided a lot of information both in terms of
1:44 pm
helping look at the last year, things we need to be focused on and the overall budget and appreciate everyone's work and leadership on this issue. with that let's see, i am going to -- we is have to make a motion on this hearing? >> yes, mr. chair. could you make a motion to file this hearing. >> i'm going to make a motion to file the hearing and can we take a roll call vote, please. >> yes. (call).
1:45 pm
>> hearing will be filed. with that, are there any other items in front of us today? >> no further items. >> this meeting is adjourned. thank you.
1:46 pm
1:47 pm
>> san francisco recreation and parks department offers classes for the whole family. rec and parks has a class for everyone. discover what is available now and get ready to get out and play. henri matisse. frida kahlo. andy warhol. discover the next great artist. get out and play and get inspired with toddler classes. experience art where making a
1:48 pm
mess is part of the process. classes and the size the artistic process rather than the product. children have the freedom to explore materials at their own pace and in their own way. talks love art, especially when they died into the creative process -- dive into the creative process. at the end of the classes, they have cleaned and washup. great way to get out and play. for more information, visit that out and play and get into the groove. rec and parks offers dance
1:49 pm
classes for seniors. first-time beginners or lifetime enthusiasts -- all are welcome. enjoy all types of music. latins also, country and western. it is a great way to exercise while having lots of fun. seniors learn basic moves and practice a variety of routines. improve your posture, balance, and flexibility. it is easy. get up on your feet and step to the beat. senior dance class is from sf rec and park. a great way to get out and play. >> for more information,.
1:50 pm
>> shop and dine the 49 challenges residents to do they're shopping with the 49ers of san francisco by supporting the services within the feigned we help san francisco remain unique and successful and rib rant where will you shop the shop and dine the 49 i'm e jonl i provide sweets square feet potpie and peach cobbler and i started my business this is my baby i started out of high home and he would back for friends and coworkers they'll tell you hoa you need to open up a shop at the time he move forward book to the bayview and i thinks the t line was up i need have a shop
1:51 pm
on third street i live in bayview and i wanted to have my shop here in bayview a quality dessert shot shop in my neighborhood in any business is different everybody is in small banishes there are homemade recess pesz and ingredients from scratch we shop local because we have someone that is here in your city or your neighborhood that is provide you with is service with quality ingredients and quality products and need to be know that person the person behind the products it is not like okay. who
1:52 pm
>> candlestick park known also as the stick was an outdoor stadium for sports and entertainment. built between 1958 to 1960, it was located in the bayview hunters point where it was home to the san francisco giants and 49ers. the last event held was a concert in late 2014. it was demolished in 2015. mlb team the san francisco giants played at candlestick from 1960-1999. fans came to see players such a willie mays and barry bonds, over 38 seasons in the open
1:53 pm
ballpark. an upper deck expansion was added in the 1970s. there are two world series played at the stick in 1962 and in 198 9. during the 1989 world series against the oakland as they were shook by an earthquake. candlestick's enclosure had minor damages from the quake but its design saved thousands of lives. nfl team the san francisco 49ers played at candlestick from feign 71-2013. it was home to five-time super bowl champion teams and hall of fame players by joe montana, jerry rice and steve jones. in 1982, the game-winning touchdown pass from joe montana to dwight clark was known as "the catch." leading the niners to their first super bowl. the 49ers hosted eight n.f.c. championship games including the 2001 season that ended with a
1:54 pm
loss to the new york giants. in 201, the last event held at candlestick park was a concert by paul mccartney who played with the beatles in 1966, the stadium's first concert. demolition of the stick began in late 2014 and it was completed in september 2015. the giants had moved to pacific rail park in 2000 while the 49ers moved to santa clara in 2014. with structural claims and numerous name changes, many have passed through and will remember candlestick park as home to the legendary athletes and entertainment. these memorable moments will live on in a place called the stick. (♪♪♪)
1:55 pm
1:56 pm
. >> president yee: of the 26 neighborhoods we have in west portal, it's probably the most unique in terms of a small little town. you can walk around here, and it feels different from the rest of san francisco. people know each other. they shop here, they drink wine here. what makes it different is not only the people that live here, but the businesses, and without all these establishments, you wouldn't know one neighborhood from the other. el toreador is a unique
1:57 pm
restaurant. it's my favorite restaurant in san francisco, but when you look around, there's nowhere else that you'll see decorations like this, and it makes you feel like you're in a different world, which is very symbolic of west portal itself. >> well, the restaurant has been here since 1957, so we're going on 63 years in the neighborhood. my family came into it in 1987, with me coming in in 1988. >> my husband was a designer, and he knew a lot about art, and he loved color, so that's what inspired him to do the decorations. the few times we went to mexico, we tried to get as many things as we can, and we'd
1:58 pm
bring it in. even though we don't have no space, we try to make more space for everything else. >> president yee: juan of the reasons we came up with the legacy business concept, man eel businesses were closing down for a variety of reasons. it was a reaction to trying to keep our older businesses continuing in the city, and i think we've had some success, and i think this restaurant itself is probably proof that it works. >> having the legacy business experience has helped us a lot, too because it makes it good for us because we have been in business so long and stayed here so long. >> we get to know people by name, and they bring their children, so we get to know
1:59 pm
them, also. it's a great experience to get to know them. supervisor yee comes to eat at the restaurant, so he's a wonderful customer, and he's very loyal to us. >> president yee: my favorite dish is the chile rellenos. i almost never from the same things. my owner's son comes out, you want the same thing again? >> well, we are known for our mole, and we do three different types of mole. in the beginning, i wasn't too familiar with the whole legacy program, but san francisco, being committed to preserve a lot of the old-time businesses, it's important to preserve a lot of the old time flavor of
2:00 pm
these neighborhoods, and in that capacity, it was great to be recognized by the city and county of san francisco. >> i've been here 40 years, and i hope it will be another 40 yeararararararararararararararr
2:01 pm
2:02 pm
2:03 pm
2:04 pm
2:05 pm
2:06 pm
2:07 pm
2:08 pm
2:09 pm
2:10 pm
2:11 pm
2:12 pm
2:13 pm
2:14 pm
2:15 pm
2:16 pm
2:17 pm
2:18 pm
2:19 pm
2:20 pm
2:21 pm
2:22 pm
2:23 pm
2:24 pm
2:25 pm
2:26 pm
2:27 pm
2:28 pm
2:29 pm
2:30 pm
2:31 pm
2:32 pm
2:33 pm
2:34 pm
2:35 pm
2:36 pm
2:37 pm
2:38 pm
2:39 pm
2:40 pm
2:41 pm
2:42 pm
2:43 pm
2:44 pm
>> restaurants will be open for take out only, but nonessential stores, like bars and gyms, will close effective midnight tonight. [♪♪♪]
2:45 pm
>> my name is sharky laguana. i am a small business owner. i own a company called vandigo van rentals. it rents vans to the music industry. i am also a member of the small business commission as appointed by mayor breed in 2019. i am a musician and have worked as a professional musician and recording artist in the 90s. [♪♪♪] >> we came up in san francisco, so i've played at most of the live venues as a performer, and, of course, i've seen hundreds of shows over the years, and i care very, very deeply about live
2:46 pm
entertainment. in fact, when i joined the commission, i said that i was going to make a particular effort to pay attention to the arts and entertainment and make sure that those small businesses receive the level of attention that i think they deserve. >> this is a constantly and rapidly changing situation, and we are working hard to be aggressive to flatten the curve to disrupt the spread of covid-19. >> when the pandemic hit, it was crystal clear to me that this was devastating to the music industry because live venues had to completely shutdown. there was no way for them to open for even a single day or in limited capacity. that hit me emotionally as an artist and hit me professionally, as well as a small business that caters to artists, so i was very deeply concerned about what the city
2:47 pm
could do to help the entertainment committee. we knew we needed somebody to introduce some kind of legislation to get the ball rolling, and so we just started texting supervisor haney, just harassing him, saying we need to do something, we need to do something. he said i know we need to do something, but what do we do? we eventually settled on this idea that there would be an independent venue recovery fund. >> clerk: there are 11 ayes. >> president walton: thank you. without objection, this resolution is passed unanimously. >> and we were concerned for these small mom-and-pop businesses that contribute so much to our arts community. >> we are an extremely small
2:48 pm
venue that has the capacity to do extremely small shows. most of our staff has been working for us for over ten years. there's very little turnover in the staff, so it felt like family. sharky with the small business commission was crucial in pestering supervisor haney and others to really keep our industry top of mind. we closed down on march 13 of 2020 when we heard that there was an order to do so by the mayor, and we had to call that show in the middle of the night. they were in the middle of their sound check, and i had to call the venue and say, we need to cancel the show tonight.
2:49 pm
>> the fund is for our live music and entertainment venues, and in its first round, it will offer grants of at least $10,000 to qualifying venues. these are venues that offer a signature amount of live entertainment programming before the pandemic and are committed to reopening and offering live entertainment spaces after the pandemic. >> it's going to, you know, just stave off the bleeding for a moment. it's the city contributing to helping make sure these venues are around, to continue to be part of the economic recovery for our city. >> when you think about the venues for events in the city, we're talking about all of them. some have been able to come back adaptively over the last year and have been able to be shape shifters in this pandemic, and that's exciting to see, but i'm really looking forward to the day when events
2:50 pm
and venues can reopen and help drive the recovery here in san francisco. >> they have done a study that says for every dollar of ticket sales done in this city, $12 goes to neighboring businesses. from all of our vendors to the restaurants that are next to our ven sues and just so many other things that you can think of, all of which have been so negatively affected by covid. for this industry to fail is unthinkable on so many levels. it's unheard of, like, san francisco without its music scene would be a terribly dismal place. >> i don't know that this needs to be arrest -- that there needs to be art welfare for artists. we just need to live and pay for our food, and things will
2:51 pm
take care of themselves. i think that that's not the given situation. what san francisco could do that they don't seem to do very much is really do something to support these clubs and venues that have all of these different artists performing in them. actually, i think precovid, it was, you know, don't have a warehouse party and don't do a gig. don't go outside, and don't do this. there was a lot of don't, don't, don't, and after the pandemic, they realized we're a big industry, and we bring a lot of money into this city, so they need to encourage and hope these venues. and then, you know, as far as people like me, it would be nice if you didn't only get encouraged for only singing opera or playing violin. [♪♪♪] >> entertainment is a huge part of what is going to make this city bounce back, and we're
2:52 pm
going to need to have live music coming back, and comedy, and drag shows and everything under the sun that is fun and creative in order to get smiles back on our faces and in order to get the city moving again. [♪♪♪] >> venues serve a really vital function in society. there aren't many places where people from any walk of life, race, religion, sexuality can come together in the same room and experience joy, right? experience love, experience anything that what makes us human, community, our connective tissues between different souls. if we were to lose this, lose this situation, you're going to lose this very vital piece of
2:53 pm
society, and just coming out of the pandemic, you know, it's going to help us recover socially? well, yeah, because we need to be in the same room with a bunch of people, and then help people across the country recover financially. >> san francisco art recovery fund, amazing. it opened yesterday on april 21. applications are open through may 5. we're encouraging everyone in the coalition to apply. there's very clear information on what's eligible, but that's basically been what our coalition has been advocating for from the beginning. you know, everyone's been supportive, and they've all been hugely integral to this program getting off the ground. you know, we found our champion with supervisor matt haney from district six who introduced this legislation and pushed this into law. mayor breed dedicated
2:54 pm
$1.5 million this fund, and then supervisor haney matched that, so there's $3 million in this fund. this is a huge moment for our coalition. it's what we've been fighting for all along. >> one of the challenges of our business is staying on top of all the opportunities as they come back. at the office of oewd, office of economic and workforce development, if you need to speak to somebody, you can find people who can help you navigate any of the available programs and resources. >> a lot of blind optimism has kept us afloat, you know, and there's been a lot of reason for despair, but this is what keeps me in the business, and this is what keeps me fighting, you know, and continuing to advocate, is that we need this and this is part of our life's blood as much as oxygen and
2:55 pm
food is. don't lose heart. look at there for all the various grants that are available to you. some of them might be very slow to unrao, and it might seem like too -- unroll, and it might seem like it's too late, but people are going to fight to keep their beloved venues open, and as a band, you're going to be okay. [♪♪♪]. >> neighborhood in san francisco are also diverse and fascist as the people that inhabitable them we're in north beach about supervisor peskin will give us a tour and introduce is to what think of i i his favorite
2:56 pm
district 5 e 3 is in the northwest surrounded by the san francisco bay the district is the boosting chinatown oar embarcadero financial district fisherman's wharf exhibit no. north beach telegraph hill and part of union square. >> all of san francisco districts are remarkable i'm honored and delighted to represent really whereas with an the most intact district got chinatown, north beach fisherman's wharf russian hill and knob hill and the northwest waterfront some of the most wealthier and inning e impoverished people in san francisco obgyn siding it is ethically exists a bunch of
2:57 pm
tight-knit neighborhoods people know he each other by name a wonderful placed physically and socially to be all of the neighborhoods north beach and chinatown the i try to be out in the community as much as and i think, being a the cafe eating at the neighborhood lunch place people come up and talk to you, you never have time alone but really it is fun hi, i'm one the owners and is ceo of cafe trespassing in north beach many people refer to cafe trees as a the living room of north beach most of the clients are local and living up the hill come and meet with each other just the way the united states been since 1956 opposed by the grandfather a big people person people had people coming since
2:58 pm
the day we opened. >> it is of is first place on the west that that exposito 6 years ago but anyone was doing that starbuck's exists and it created a really welcoming pot. it is truly a legacy business but more importantly it really at the take care of their community my father from it was formally italy a fisherman and that town very rich in culture and music was a big part of it guitars and sank and combart in the evening that tradition they brought this to the cafe so many characters around here everything has incredible stories by famous folks last week the cafe that paul carr tennessee take care from the jefferson starship hung
2:59 pm
out the cafe are the famous poet lawrence william getty and jack herb man go hung out. >> they work worked at a play with the god fathers and photos he had his typewriter i wish i were here back there it there's a lot of moving parts the meeting spot rich in culture and artists and musicians epic people would talk with you and you'd getetetetetetetetetete
3:00 pm