Loading...
HomeMy WebLinkAbout04.20.2016 Joint SP & PCH Minutes @10:30 MINUTES x s.41-; JOINT SPECIAL MEETING o° 4 OF THE , ►!_92 CITY COUNCIL AND ° PLANNING COMMISSION HOUSING -4z/hi- �r SUBCOMMITTEE OF THE CITY OF SOUTH SAN FRANCISCO P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, California 94083 Meeting will be held at: CITY MANAGER CONFERENCE ROOM 400 GRAND AVENUE SOUTH SAN FRANCISCO, CA MONDAY, APRIL 20, 2016 10:30 a.m. TRANSCRIPT STYLE MINUTES. PROCEEDINGS CAPTURED VIA AUDIO WITH STYLISTIC EDITING WHERE POSSIBLE. 1. Call to Order. TIME: 10:30 a.m. 2. Roll Call. PRESENT: Councilmembers Addiego and Matsumoto, and Planning Commissioners Faria, Ruiz and Wong. ABSENT: None. 3. Public Comments. None. 4. Motion to approve the minutes of the meeting of April 11, 2016. Commissioner Wong stated he would make a motion to approve unless discussion was needed. City Clerk Martinelli,present for this portion of the meeting, stated her interest in learning of the group's preferences regarding the transcribed minutes approach for these meetings. Mayor Addicgo stated he would like to hear the Clerk's thoughts on the minutes format. City Clerk Martinelli stated that the "court reporter" format imposes an unedited "transcript" feel, but accomplishes the goal of making sure the detail the committee is sifting through is captured. The difficulty with the particular means chosen, namely that the transcription service is not present, is challenging for Clerk's staff in terms of matching up speakers with commentary, but is doable. The Clerk's Office was willing to take this task on, given that the service charged only$25/hour and would provide the committee with the level of detail it desired. Mayor Addiego did not prefer the transcription fonnat to the more story telling approach generally taken by the City Clerk's Office. Nevertheless,he believed $25/hour was a great price for anyone to do anything, and asked how many hours it took the service provider. City Clerk Martinelli stated staff wouldn't have that answer until receipt of the bill. Councilmembcr Matsumoto stated that she liked the turnaround time. She preferred to have the minutes of the Housing Standing Committee available for review when the items appear before Council, even if in draft form, and this approach permitted that. Mayor Addiego stated that he completely appreciates that when the Committee went through the session with the workforce housing it seemed like there were different conversations every time they sat down to meet. He felt that was a problem. He stated that the only thing worthy of remembering from the meeting was when Commissioner Wong hit upon the fact that a commercial aspect might be the most important aspect on that corner. He stated, if he had a notepad, he would have jotted it down and retained it, adding that it was the only different thing that came up in the meeting. He stated that they will see what the bottom line cost, as it doesn't matter to him. He stated that the didn't like the stenographer version. Councilmembcr Matsumoto stated that it might help if they identify, explaining that they do conference calls with other regional bodies in which she sits by teleconferencing. The person on the other line doesn't know who was speaking because they are not familiar with them and they always identify. City Clerk Martinelli stated that it will be helpful. Mayor Addiego asked if, before they comment for die first time, they could identify themselves. Mayor Addiego stated that the primary problem was, if they roll the clock back, there weren't published agendas or minutes for what were formerly ad hoc meetings. This allowed people to get together to share some ideas, somewhat informally. Now that these committees have risen to the level of Standing Committees, the free flow of thinking and verbalization is the victim. City Clerk Martinelli agreed, mentioning that most of their standing committees were ad hoc, up until about two years ago, when they started to be used in a different way. When they started to meet more frequently and have continuing jurisdiction, the clerk's office had to implement the law and make sure to abide by its parameters. Mayor Addiego understood that. Councilmembcr Matsumoto commented on transparency. JOINT HOUSING SUBCOMMITTEE MEETING APRIL 20,2016 MINUTES PAGE 2 City Clerk Martinelli stated that the City went from zero (0) standing committees to seven (7). Her style of minutes takes about a week or two (2) to fine tune and edit when written in a story, depending on the other business coming through her office at the time. Since the general level of activity in the office had increased, an immediate turn around for multiple sets of minutes was not. possible. She knew, once the City changed over to seven (7) standing committees, she could not sustain that type of quality for seven (7) new committees. Mayor Addiego understood, but added that he was frustrated with where they find themselves. He suggested that they get into the meeting and he will be very cautious. City Clerk Martinelli stated that the alternative for the standing committees was summary style minutes, as they cannot do the full story telling for the seven standing committees. She agreed that, in doing a deposition type transcript word for word, no one ever sounds like they would want to sound as every detail was put in there and you lose that sort of polish, but you gain a very solid record of what was said if you want to go back and try and remember, especially on a quick turnaround time, which was what they were all facing with the housing decisions. She stated that they were considering the transcript style record of what was said versus a quick summary of what the decision was which was what the Clerk's Office could provide. Councilmember Matsumoto added that it goes to another point. She mentioned receiving a call from Councilmember Normandy asking her about 1.50, and she had no idea. The councilmember called her because she was on the housing committee and she had no idea what they were talking about because it was not shared with some of them on Council. She stated that, in the future, she can suggest that the councilmember, who was asked about 1.50, go and look at the minutes of the meeting. Mayor Addiego thought it was valuable and superior to having a conversation with another councilmember person and you have three people in the mix. Councihnember Matsumoto acknowledged it was about the Brown Act. City Clerk Martinelli stated that she could note at the top that they were transcript style minutes and would alert people to the fact that they aren't polished. Mayor Addiego stated that he will keep it in mind that they were putting down every word potentially, adding that he was Mark Addiego. Councilmember Matsumoto stated that they didn't approve the minutes. Mayor Addiego acknowledged that they didn't, but they talked about them a little bit. Commissioner Faria agreed that talking more legibly into the mike would help. He stated that one comment he made on page .5 said that Commissioner Faria stated that they had a bid of at least $30 to $ 60 million and you have an idea. He stated that he could have been not legible. He also made a comment that the Brookwood group had stated parking not addressed and that may be one of the comments. He thought he said concern. JOINT HOUSING SUBCOMMITTEE MEETING APRIL 20,2016 MINUTES PAGE 3 Mayor Addiego stated that he has the right to correct them as he remembers them, and he just did that by mentioning it. Commissioner Faria stated that it was on page 6 and he would change the word from "comments" to "concern." City Clerk Martinelli stated that they also had "ether". Commissioner Faria stated that he was making that change for the record. Commissioner Faria moved that they approve the minutes of April 11, 2016; Commissioner Ruiz seconded the motion. Motion passed unanimously. ADMINISTRATIVE BUSINESS 5. Discussion of 150 Airport Boulevard proposed development: 107 rental units, a mix of studios,one (1)bedroom and two (2)bedroom units;two (2)level garage (138 spaces);bicycle parking spaces; fitness room;game room and clubhouse;podium and roof deck open space areas; 85' in height. (Sailesh Mehra, Planning Manager). Mayor Addiego asked if Alex was subbing for Sailesh Mehra. Alex Greenwood stated that Sailesh Mehra sends his regrets but he is sick and their senior planner, Adena,will be giving the report. He stated that this was the same project they reported in the weekly reports in late March and most recently on April 12. He stated that they were very excited to bring this project forward. He expressed that it was important to realize that this is the start of what will need to be an in depth design process but it was coming forward at this time as a first look of a project being developed for downtown. They are excited to have this first look and provide comments, following which it will go to successive public meetings through the design review board and back to this body followed by the Planning Commission and Council. He stated that it was exciting to see the fruits of the downtown plan,as approved by Council,coming to fruition. He stated that the main point was to prime the pump for a developer investment and interest in downtown. They were seeing that transpire today in an early project. He then turned it over to Adena for the report. Adena Friedman stated that she would not talk too long as she would like the project designers to give a presentation and get into the details of the design. She reiterated that this was very close to the redesigned Caltrain station and will be a great example of transit oriented design in downtown and implementation of the downtown station area specific plan. She then turned it over to the project designers for a brief presentation and then opened it to discussion. She stated that it was very early in the process and they want feedback and give direction to move forward. Marisa Cadsen stated that she was with Rocky Shen with DNA Design&Architecture to present the 150 Airport Boulevard project. JOINT HOUSING SUBCOMMITTEE MEETING APRIL 20,2016 MINUTES PAGE 4 Mayor Addiego stated that they have had trouble in the past when people are away from the microphone when turning and looking at the screen that doesn't carry sound. He was sorry, but he thought she would want her words to be recorded correctly. Councilmember Matsumoto stated that she was at the MSB during the design review and they were kind enough to give her a sneak preview. Mayor Addiego asked Marisa to introduce her team so they know the team in regard to the project. Marisa Cadsen introduced Rocky Shen with DNA Design&Architecture,along with Galon Ma and Victor Low of the development team. She then stated that the project was located between Airport Boulevard and the Caltrain tracks, south of the new plaza and Caltrain platform,southeastern corner of the downtown core and across the 101 Freeway from the newer Biotech office buildings. They were using both the character of the historic downtown as well as the Biotech offices to help form the design of their building, with this location being a gateway between these two neighborhoods. She showed images of the site which was currently an industrial building and, looking away from the site. They were focusing on trying to create a strong pedestrian connection toward Grand Avenue and the new Caltrain plaza. She added that the project was between the transit/downtown core and the R&D core. They were connecting,vehicularly,to both areas,with two points of access to the building. They also incorporated multi-use loading zones. They were using the naturally occurring slope of Airport Boulevard to access the two levels of the garage,lower level accessed from the south and upper level from the north, foregoing an internal parking ramp. The parking was toward the train tracks to concentrate the amenity spaces, leasing areas and public spaces along Airport Boulevard toward the northern portion to activate the sidewalk along Airport Boulevard. She pointed out the locations of other open areas,and mentioned that they have five levels of 107 residential units. She then pointed out the colors proposed, as well as materials such as plaster, etc.,with a store front system in front of the leasing office, as well as the designs of the three main landscape areas. She pointed out seating areas on the sidewalk area in front of the leasing office, and mentioned many of the other features. Commissioner Ruiz stated that he looked at the site in regard to a lot of noise from the trains, Hwy 101 and Airport Boulevard traffic. He asked,aside from insulated windows,if they had any buffered walls, especially on the train track side. Marisa Cadsen stated that they had a wall incorporated on the edge of the podium deck to protect the outdoor space,and they were working on their acoustical consultant on the construction of the walls, with staggered stud wall on both exterior and corridor walls and on both sides of the building to help with the acoustics. They were still working through the process but they have every intention to do what they can to mitigate the acoustics. Commissioner Ruiz thought they night want to consider a sound barrier or butler between the land itself and the train tracks, such as a sound fence. A representative from DNA Design&Architecture stated that they were working with their acoustical consultants to reline the amount of mass and height and distance necessary to bring the decibel level to an acceptable level. JOINT HOUSING SUBCOMMITTEE MEETING APRIL 20,2016 MINUTES PAGE 5 Commissioner Ruiz thought the speed train will be using the same track with the same right of way. Councilmember Matsumoto mentioned that Caltrain was doing some TOD where the city owns the property and they don't have to reinvent the wheel relative to other sounds. She mentioned a project in San Carlos that faced the same kind of problems and they might want to see how they arc addressing it,adding that the people in San Carlos are really particular and they might check out how they arc dealing with those issues. She stated that she liked the way they have utilized the space, mentioning that it was a very difficult configuration. She mentioned dealing with the soot from Hwy 101 and the rail, and she asked if their exterior material was easily washable, as they will get a grey dinge. A representative from DNA Design&Architecture stated that,for the walls closest to the tracks,they were proposing masonry block. He stated that they had to consider the residue from the trains, but also in talking with fire,they were concerned about potential graffiti on that side of the building. They have proposed to add some screening materials that buffer the garage from the track side which helps discourage potential graffiti artists. The garage facing the tracks was fairly open and they were trying to employ a naturally ventilated system for the upper level garage. He stated dial CM'J would probably find a finish that is easily washable. He stated that the materials on the higher parts of the building were further away from the tracks and that will help. They pulled most of the residents as far away from the tracks as possible, but the materials were maintenance easy. Councilmember Matsumoto had another suggestion. She mentioned other cities that were faced with the graffiti, stating they were finding out that putting creeping fig on the wall doesn't require a lot of water, and was pleasant and healthy. She also asked what green features they will be using, such as electric charge pumps, bike storage because it was TOD or other green amenities. A representative from DNA Design & Architecture stated that they have bike storage and they are parked at the reduced ratio that the specific plan called out and by nature of being near different modes of transit,this was about as much TOD as they can get,adding that it was under the flight path of the airport. He stated that it presents its challenges because it was so close to die infrastructure around it, but it also presents opportunities because of close proximity to freeway, train tracks and a major arterial. They were also enhancing the pedestrian experience by connecting to the train station and encouraging people to use that mode by orienting most of the public space closer toward the new train station. Councilmember Matsumoto thanked them for the parking ratio, but she added that what inevitably comes up to this Council and other bodies on which she sits,was guest parking. She asked how they were handling guest parking. Marisa Cadsen stated they were providing the amount required by the parking standards. They separated it behind the gate and the resident parking is assigned. Commissioner Faria asked the height of the masonry wall to be built by the tracks. JOINT HOUSING SUBCOMMITTEE MEETING APRIL 20,2016 MINUTES PAGE 6 Marisa Cadsen stated that, above the podium deck, they were proposing a 6-foot wall, but they were still working with their acoustical consultants to determine factors for the appropriate height necessary to mitigate the sound. Commissioner Faria stated dial might be an easy wall to get over if they have individuals along those railroad tracks, not wanted, but they are there. Marisa Cadsen stated that the podium deck is up about 15 feet and the wall was six feet above that, so they would have to climb a 20-foot wall. Commissioner Faria stated that,from a rental standpoint, as a potential tenant,he would ask why he would pay the sane as a front view when he has a rear view of tracks. He thought they might want to consider that, even if this was the cart before the horse as they are only designing now. Marisa Cadsen thought the different units will have a different premium depending on their location. Commissioner Faria then asked if part of the agreement was that the actual site will take care of all landscaping on Airport Boulevard and all around the project. Marisa Cadsen responded affirmatively. Commissioner Wong liked the renderings of what they were proposing. He stated that he usually pays more attention to the buildings along Hwy 101 because everyone was driving by and die properties along the freeway represents what people think of their city. He liked the view of the side facing the downtown area, but on the other side he didn't see as much indentation as the historical downtown view in terms of balconies, etc. He asked if there was anything they can do to make that side look nicer as people drive up and down the freeway. He then referred to Airport Boulevard, staling that there was no parking along the sidewalks so he wanted to make sure they have enough parking spaces for all residents and guests. While they talked about commercial last time, he felt that, for this building, parking was more important. He stated that this was one of the few projects in the downtown area that has nice landscaping and a grass area. He liked that they were including that. He loved the trees and the benches. He liked as much greenery as possible because of the limited grass area in the downtown area besides the City Hall area. Mayor Addiego thought the ingress/egress was limited by the geography,and he asked if there was any discussion with the city about aligning the project. He asked confirmation that it was city land directly across from Baden Avenue under the standard billboard. City Manager Futrell responded affirmatively. Mayor Addiego stated that, if they envision a larger project in agreement with the city for compensation that allows ingress/egress with the intersection of Baden and Airport Boulevard, what they are faced with is that,traveling south on Airport Boulevard,they need to drive down to San Mateo Avenue,take a hard I i-turn at a very impacted intersection to get home. When you leave and want to get on the freeway, you are heading in the opposite direction for some time before you can double back to head south on 101. He first said he loved the project and applauded them for being willing to JOINT HOUSING SUBCOMMITTEE MEETING APRIL 20,2016 MINUTES PAGE 7 tackle this unique site. He stated that the Burdleson Spun Steak Factory has been a bit of an eyesore for the last 30 years. He stated that it was called Spun Steak and he suggested they imagine a day in the 50s and 60s when they actually wove meat material together in a patty, put butter on top,froze it and sent it to local groceries. He stated that they ran into a problem and they declined. He reiterated that it was good to see that someone was willing to tackle this unique property. He asked if anyone can comment on the circulation of traffic. City Manager Futrell asked why they didn't include their parcel to make it a larger project. A representative from DNA Design&Architecture stated that they didn't know. Mayor Addiego stated that it was for sale. A representative from DNA Design & Architecture thought that was a viable option that they can explore. He acknowledged that it was a very challenging site. They have exhausted a lot of options as far as looking at how to design the building and how best to enter and exit the building with the traffic. He added that, if they had known that was an option early on, they might have explored it further. Now that they do know, they can look at what that brings to the project and consider that. Mayor Addiego asked if Commissioner Wong had any comment. ECD Director Greenwood stated that they would be interested in discussing and preparing that site with the city property at 168 to 180 Airport. He stated that there were some logistics to work out with the existing billboard, but it was pretty straightforward. Mayor Addiego stated that they need to tackle that someday. ECD Director Greenwood agreed. He then stated that he wasn't sure of the chronology, but he thought this project has changed hands a couple of times or there was some activity during the last couple of months. He thought the current developers just took possession of the property in the last couple of months. He thought, at one point, there was an exploration of whether it could be paired with 180, but the discussions didn't go anywhere and he wasn't sure why. He stated that, if the applicant was interested, they would love to have that conversation. Mayor Addiego stated that Marisa Cadscn was talking about orientation and the view corridor and view of biotech offices. He asked if this building goes above the freeway. Marisa Cadsen stated that it does a little bit. Mayor Addiego asked if you are above the freeway,do you have a view of the biotech land or the bay. Marisa Cadsen responded affirmatively. Mayor Addiego referred to talk about making the wall graffiti resistant which he thought was great. He didn't think they would have a problem with a developer who has created something this magnificent but,over time,they have had difficulty with private property owners who don't rush out to take care of JOINT HOUSING SUBCOMMITTEE MEETING APRIL 20,2016 MINUTES PAGE 8 graffiti problems and it has become more of a challenge to get that done in a timely manner. He stated that it was in that spirit that he wondered if there was some language they could build into the agreement that would give them the proper amount of time if there was graffiti that needs to be taken care of within a certain number of days or hours. Councilmember Matsumoto stated that part of it was the city's responsibility. She was referring to graffiti removal. She stated that once it was noted, they have to wait for the PD to come out because they keep a record and they have to identify it. She stated that she has complained about the time, adding that it was internal to them as well as the city because there was a process. She stated that,the way it was built,the PD has been acting without proper compliance with the railroad,adding that they are not allowed on the railway right of way and it takes time. Mayor Addiego stated that his comment was about this project. Councilmember Matsumoto stated that it was having access since it was so close to the rail. Mayor Addiego stated that their wall was not on the rail right-of=way. Councilmember Matsumoto understood, but said you need one or two days. Mayor Addiego stated that it could be more than that, but some burden was on the city if the PD needs to take picture and they need to get there in a timely fashion. City Manager Futrell stated that they have improved that process in code enforcement and Park & Rec, Public Works or PD can take the picture. He stated it doesn't have to be PD. Mayor Addiego thought even a property owner could take the picture. City Manager Futrell stated that they could probably work that out,as all PD needs is the picture and they have changed the process. Mayor Addiego asked if anyone wanted to come to the mike and talk about their enthusiasm for South San Francisco or have any questions they would like to ask the Mayor or Councilperson. Councilmember Matsumoto stated that, as a member of the committee, she wanted to go on record that approval of this project was not predicated on their purchasing the extra parking for that. Mayor Addiego stated that it was not offered in that spirit at all. He felt,if it makes a better project and works financially for them, and improves ingress/egress, they might be able to come to terms,but he felt the project was going to be challenged by getting home and getting on the freeway. Commissioner Faria stated that it was critical because they were just relating to the egress and entrance because of the exact spot where it was located to Baden Avenue, He stated that,if you were too close to come out of the unit and have to get over to make the I 1-turn to head back north,you were literally cutting across four lanes and fitting a car in to make a turn. He stated that, if you tried to go out the JOINT HOUSING SUBCOMMITTEE MEETING APRIL 20,2016 MINUTES PAGE 9 other way, your next access north would be at Oyster Point. He thought it was critical from maneuverability as well as safety if it doesn't line up with Baden in some neat manner. Mayor Addiego commented that Commissioner Faria wanted to get credit for that brilliance. He then thanked them for joining them. 6. Status Report and Policy Discussion related to the City of South San Francisco and MidPen Housing Corp Development of Affordable Workforce Housing at the City Owned Miller/Maple Parking Lot (APN 012311330). Ron Gerber,Economic Development Housing Manager,stated that this was an update since MidPen was selected to be the affordable workforce housing developer for the Miller/Maple lot. He stated that staff and MidPen have been spending a lot of hours every week with conference calls, meetings, refinement, clarifications, and looking at different ways to finance with the goal of providing some moderate to middle income housing opportunities in this development. He stated that,as the project proceeds, it will come to the full Council for discussion and working with the authorization the City Manager received to negotiate the ENRA. He stated that there are a number of policy questions the Council raised when MidPen was selected on moving forward on the different types of housing groups. Because staff has been working with MidPen every week and discussing this more than once a week, and they were working on refining thoughts, looking at financing structures, working with the new architect, they thought it would be important, timely and helpful for them to come back and touch base and come up with questions and get feedback. He concluded that the purpose of this session was an update and to get some feedback. ,Jan Iandenthall with MidPen Housing commended them on their excellent staff working on this project. She stated that Ron,Julie and Yvonne have hit the ground,going from 0 to 60. They wanted to check in with them and get input, as well as give them a sense of the next steps coming up and get feedback about that as well. They see this as a very collaborative and iterative process as they move forward. She introduced the development team working on the project, Novato Merriman,director of their Peninsula office, who will be heading the team, and Sara Brett will be the project manager. Alice Talcott was the director of finance and Felix Adiyung was in-house cap and trade expert and would stay involved in the project. She stated that they will likely see them at the next presentation. She stated that they have retained Rick Williams,of Van Meter Williams Pollack,who has done some work for the city in the past,as the project architect. She briefly touched on the schedule, specifically that ENRA will come to the City Council for approval the following Wednesday starting a 90-day negotiating period. She stated that, because they were working in a short timeframe, they wanted additional input and guidance and will be coming back for an in depth working session in late May or early June,looking at different building design alternatives and financing alternatives and making actual decisions. She stated that three questions they want to explore now are affordability levels of who they should think about serving,input on available resources for the project and target population and lastly the unit mix and sizes. She stated that they have examples of properties that MidPen has recently completed or was in the process of completing and properties they might like to tour. She then gave the examples of city employees who would fall into the workforce income category,such as librarians, planners, etc., and asked for guidance as to whether this was an important group to include in the project. She then pointed out the housing funds the city had that could target individuals in the gap JOINT HOUSING SUBCOMMITTEE MEETING APRIL 20,2016 MINUTES PAGE 10 between affordability provided by the tax credit program and market rate housing if the city was willing to consider that moderate income group. If they want to consider setting aside units as a priority for city employees, that would take them in a direction in terms of structuring financing. Mayor Addiego asked if they should begin to answer some of the questions. Ms. Lindenthall stated she wanted to share one more statistic with them. Mayor Addiego stated that she will have to remind him of the questions. Ms.Lindenthall stated that she will go back and recap. She then addressed the statistics on 49,000 city employees,of whom only 4,000 live in the city which she thought was shocking. She stated that,of the 45,000 who don't live in the city, 55% are commuting more than ten miles and 31%are commuting more than 25 miles. She thought they"hit the nail on the head"when they set out to serve workforce housing as there was a real need. Then, looking at the income of the 45,000, 71%of the downtown area employees make less than$40,000 a year which is much higher than other cities on the peninsula and 41% in the entire city are in that less than $40,000 a year. She felt there was definitely a need. Mayor Addiego asked if she was talking about workers, not the general population. Ms. Indenthall responded affirmatively,clarifying that it was just the people who do not live in the city now and are commuting to work. She stated that one of their goals was to help people who work here but aren't able to live here. She then stated that they would like direction about the interest in continuing to pursue housing for that moderate income workforce and consider evaluating using some of the city's funding set aside for moderate income to serve them. Councilmember Matsumoto was in support of the very low who cannot afford market rate and feels strongly about providing housing for that workforce. She considers them working poor,with a good salary once you delve into everything else. Ms. Lindenthall stated,as relating to city employees,there were two options,having a preference and then actually setting aside units dedicated for city employees. She asked if they should consider both options. Councilmember Matsumoto stated that when the survey was narrowed down,they found the number narrowed,and she thought they would open it up to some of the workers who were not city employees, and she would like to keep it at that and substantiated her support of that category. Mayor Addiego stated that he needs to be reminded. He asked how many units they were talking about on a floor. Ms. Lindenthall stated that it would be nine. Mayor Addiego stated that he met three individuals who would likely put their name on a list to be able to live here instead of northern Sonoma County. He stated that they know within their family of JOINT HOUSING SUBCOMMITTEE MEETING APRIL 20,2016 MINUTES PAGE 11 workers there are people whose life would greatly benefit by being able to live in the city to which they are committed. He didn't see a problem with delineating nine units for city workers. Councilmember Matsumoto agreed,adding that they were losing employees to other cities,through no fault of their own,due to the market. She thought this would be a benefit,mentioning that for teacher housing, SSF Unified pays very low. Mayor Addicgo stated that the members of their workforce were housing challenged as they earn money equal to what he earned in his past career. He stated that he never felt poor, but it was so difficult in this environment compared to even 15 years ago. City Manager Futrell thought there was a strong demand signal. He met a police officer this morning that commutes an hour and a half and was looking for a room to rent in South San Francisco but hasn't found it. Mayor Addiego commented that the City Manager has a large home. City Manager Futrell asked if it was possible to have a cascade effect,such as setting aside nine and end up with 30 employees who want the housing,explaining that if they say it was for city employees but if they don't fill it, then it cascades to a second tier of people. He stated that they could limit it to nine and the other 30 would form quickly. He was concerned about what would happen if they had a long list of city employees and they only had nine units available. He acknowledged that it was better than where they arc, but he asked why they are going to put a ceiling at this stage. Ms. Lindenthall stated that it comes down to the fair housing. If the city's goal was to have some units reserved for only city employees, that needs to get financed in a different way and they talked about having it on a floor and condo out that portion of the building and the city would essentially retain ownership of that portion of the building. Mayor Addicgo asked if they would still manage the entire building. Ms.Lindenthall responded affirmatively. She stated that they can get into more detail when they bring back plans and financing to show how it works,but that was what that would mean. She stated that it does impact the financing of the rest of the building as they are segregating that portion. For the city to totally control it, it has to be completely financed that way. City Manager Futrell anticipated that, due to the fair housing laws, they would have to do a demographic study of the city and a demographic study of the workforce. He thought, if the two matched, they would pass that test. Ms. Lindenthall agreed. City Manager Futrell asked if that would solve the problem she described. Ms. Lindenthall stated that it would. JOINT HOUSING SUBCOMMITTEE MEETING APRIL 20,2016 MINUTES PAGE 12 City Manager Futrell stated that he has already talked to the city attorney and that was their plan to go forth. He thought Los Angeles has already done the same thing as they passed the test. He thought, knowing their workforce, they would pass the test as well. Ms.Lindenthall stated that they would be looking at,and engage Goldfarb and Lipman as the attorney they have used in fair housing issues in the past,and they would not have to go to the extent of a legally defined separate parcel,which makes the overall financing more efficient. She stated that they would have a priority for a certain number of units for city employees and then other workers. She stated if there was more interest than units, they would have to wrestle with that. City Manager Futrell stated that, by going through that, that would give Council and the maximum flexibility to do whatever makes the most sense. Ms. Lindenthall agreed that the demographic analysis was key. Novato Merriman, Director of Housing Development,agreed with what was stated,that the function of fair housing as it overlays with which income groups they want to serve makes it more tricky and something they will have to dive into. She stated that the cascading effect works if all the units are being targeted to the same income group of people. City Manager Futrell recognized that the results of the study may have some nuances that require them to adjust. Mayor Addiego stated that he wanted to attempt to understand what just transpired. He asked Ms. Merriman if she was saying that they get involve ill a cascade effect to another floor then that floor also has to be financed in the same manner as the condom floor. Ms. Merriman stated that potentially that was the case. City Manager Futrell stated that, if the demographic study works out that their workforce was,in fact, completely reflective of die community, then all the rules go away and they don't have to play that game. Mayor Addiego asked what rules they were talking about, the ability to get the 4%monies or the tax advantage. Ms. Merriman stated that it was the ability to reserve a floor or more for a specific category of city workers. Mayor Addiego understood, but he thought that had nothing to do with financing the building. Ms. Lindenthall stated that it does if they have to go to that extreme and hopefully they don't. She thought it was great that they are going to do that analysis which will be helpful. She stated that they have to segregate the financing so the city can have total control over those units. She stated that it means you have a portion of die building financed leveraging other sources. She stated that this was how the community college district has done it. To prioritize their employees for that housing, they JOINT HOUSING SUBCOMMITTEE MEETING APRIL 20,2016 MINUTES PAGE 13 pay 100% of the cost. She stated that they want to come up with a strategy that allows the city to prioritize some number of units for their employees as well as leverage other sources and is more financially efficient for the city. City Manager Futrell stated that the fair housing laws are trying to avoid over or inadvertent racism. You end up with people getting a preference and racially they do not represent the community. He didn't think that was our case. Mayor Addiego mentioned that,if you only rented to firefighters and the department happened to be all white, it would be a problem. Ms. Merriman stated that it was helpful clarification that city employees remain an important priority; they will get the demographic information which will help them determine if they have to jump through some hoops to make that happen and what they are. She asked if she was correct that she was also hearing a strong need for other workers in the community and not limited to city employees but some units set aside for city employees was preferred. Mayor Addiego stated some, not all, and that was what he thought was the intent. Commissioner Wong was in agreement. He felt city employees hold the preference. He stated that the study they slid showed that not that many were interested,but he wonders if,once it happens and people learn about it, more people will realize the benefit of it and they will surpass the nine and go much higher. While he realized there were financing issues and one option may be more attractive than the other,the more city employees they can help out is better to him. He thought of considering extending to teachers who live around the area and others who work in South San Francisco and would lessen their commute. Mayor Addicgo thought he filled it ten times. Commissioner Faria thought it answered a lot of questions for him. He was in favor of city housing. He thought they have to do the demographic study to see what the interest would be,because when talking about the nine units, he wondered if they needed nine units of one bedroom, two bedrooms, how much overflow they have,what will the AMI going to be if they show an interest where they aren't single individuals but families or a couple. He thought there were a lot of variables for him to get answers on how to go by just what they were looking at,adding that he could not answer the bedroom issue now as they didn't know what the inventory was asking for. He gave the example of two employees who make $30,000 and they combine the income,which would impact the financing. He reiterated that a lot of the questions have to be answered before he can make honest opinions of what the need is. Commissioner Ruiz asked,out of the 45,000 that live outside the city,if they know how many of those need to come in and rent or lease one of the units available. Ms. Lindenthall stated that, in the downtown, they have roughly 600 workers who make less than $40,000 a year. On that salary,they are doubled up, living with their parents, and likely commuting. JOINT HOUSING SUBCOMMITTEE MEETING APRIL 20,2016 MINUTES PAGE 14 Commissioner Ruiz asked if they know if some of them are already property owners even if they live outside the city. Ms. I indenthall stated that they don't know that. She stated that looking at the city as a whole, the percentage was still very high of people commuting in and is in the lower wage range. Commissioner Ruiz stated that his point was what the city manager was saying,which is a police officer living in Santa Cruz who wanted to rent a unit here. He asked, if he was a property owner in Santa Cruz,whether he would be prioritized to get a unit here. Ms. Merriman stated that not under the tax credit program,but that was where,if the city controlled a number of the units, that was a policy decision the city could make. It would have to do with the financing sources they use to finance those units and any restrictions on how people's income was calculated. She stated that,even in affordable housing,someone isn't prevented from owning property but you have to take into account the revenue that was generated from that asset. Councilmember Matsumoto asked,when they say work outside of South San Francisco,whether they were able to define whether they work on the peninsula, San Bruno, or in Oakland. Ms. Lindenthall stated that there are 49,000 jobs in the city and only 4,000 of those people live in the city and 30,000 commute outside for work. They have data that they can share and she will get it to Ron Gerber about where those 30,000 are going. She stated that it doesn't say where they are working but tells them what direction in which they are going and how far they commute. Councilmember Matsumoto thought that would help. Ms. Lindenthall added that, as they know, they have more jobs than they have workers. Councilmember Matsumoto stated that it was the economic engine in San Mateo County,adding that the bad comes with the good. Ms. Lindenthall stated that these were things they know,but seeing the numbers brought it into focus of why this was such an important priority and it impacts their employees as well as other workers. She stated that, in consultation with staff, they will look at a range of options, factoring in the demographic information which will be helpful. She stated that, in terms of the unit mix and sizes, they need more information from the market as to household sizes. She stated that what they see coming out of this was a series of different alternatives with pros and cons that they will need to collectively wrestle with and they thought a good forum would be a meeting like this in a workshop format. They would have the architect and financial experts present and they would go through the options and talk through the pros and cons and cause them to tweak a version and look at it differently. They anticipate that it could be an iterative process. She wanted to get their interest in that kind of a working session that they would have together and then move forward from that. Councilmember Matsumoto stated that she would like it to be a study session and have all councilnembers involved as opposed to a subcommittee. JOINT HOUSING SUBCOMMITTEE MEETING APRIL 20,2016 MINUTES PAGE 15 Mayor Addiego thought a nice way to jump start that would be to take them up on their offer for the Foster Square property and take a tour of what they have done there. He would be interested in that and suggested that they oiler it to all councilmembers. Ms. L indenthall asked if the planning commissioners will be invited as well. Mayor Addiego stated that he didn't see the harm in offering it. Ms. Iandenthall stated that Ms. Sara Brett was the project manager for that project. Mayor Addiego asked for the address. Sara Brett stated that it was 790 Alma Lane, adding that it was a new street. Ms. Iandenthall stated it was right next to the Jewish Community Center. Mayor Addiego commented that they were on the 15 acres that they have wrestled with forever. Commissioner Wong asked confirmation that it was 790 Alma. Sara Brett confirmed that the correct address was 790 Alma Lane, reiterating that it was a new street. Novato Merrimen stated that the 1,5-acre site he knows so well was a former city-owned site that they purchased,with the project on approximately a half acre and it was similar in that they arc trying to do a lot with limited footprint. Mayor Addiego thought it was a great location with the lagoon across. Novato Merrimen thought the city has done an excellent job, locating all of the senior services right there. She thought it will be a wonderful place. Ms. Lindenthall stated that Sara Brett will work with their staff. They were rapidly approaching completion and they expect residents to be moving in by June 1, and it will be great to be able to do the tour in May. She thought they have covered all the questions they had. Mr.Gerber stated that Jan did a really good job,and looking at the different sources of funds. The city was in a unique position because,at the Council's discretion,it has some funds available to it that can touch upon the moderate to medium income range. He stated that, if they want to pursue reaching the moderate to middle income workforce and go through the process and the Council and subcommittee would like to connect those funds with that income category, they were in a unique position to do so compared to most communities. Councilmember Matsumoto thought they were going after cap and trade and she asked where they were on that. JOINT HOUSING SUBCOMMITTEE MEETING APRIL 20,2016 MINUTES PAGE 16 Ms. Lindenthall stated that they worked with stall to submit an application by the March deadline. As they don't have their entitlements yet, they were not optimistic for this year, but their goal was to be ready for next March and it would still be a part of any financing plan. City Manager Futrell thought the announcement of April 28 on which applications for cap and trade would be invited to go to the next round. Councilmember Matsumoto asked confirmation that it was April. Ms. Lindenthall stated it would be about a week. Councilmember Matsumoto had a concern,explaining that while they were developing 636,as a city, they were being asked to put in more money,and she didn't want them to be there again,so she asked how they make sure. She thought they were coming to Council for the ENRA which she felt was important. She referred to what they did for the mentally ill,but there were glitches and,before they go there, she didn't want that to be an issue when they were dealing with things. She understood they couldn't promise anything but she wanted that tightened up. Ms. Lindenthall stated that was the purpose of this discussion. She stated that their proposal assumed a certain level of affordability and leveraging of tax credits and the cap and trade funding. She stated that, depending on the demographic analysis of the city employees and the moderate income workforce,those would impact the overall financing. They were asking,in the context of looking at all the options, if the city was open to factoring in the possibility of leveraging the funds in their financial analysis. She stated that the ultimate decision of the city would be as to whether they do that or not. Then,as she mentioned during the interview process,they intend to agree upon a financing plan and execute it. She stated that,once they agree on that,they would not be coming back for more funding along the way. She asked that they decide if they were open to considering the use of the funds in their analysis, and then they would make the decision of whether to do that or not. Councilmember Matsumoto stated that she was not familiar with the cap and trade and asked if there was a dollar amount. She asked, if you don't get cap and trade, were they responsible because the money has to be found. She asked if there was a dollar amount when they submit the cap and trade. City Manager Futrell stated that the maximum you can request is $8 million. Mayor Addiego recalled that,at a previous meeting Commissioner Wong had some good information on that, but the number might be significantly higher. Commissioner Wong stated that he would have to look at the number again, but he remembered it changed. City Manager Futrell stated that the overall cap and trade pot is$3 billion with the expectation that the next year it will grow to$5 billion, so it was the most lucrative grant program in California. He stated that their individual application was for $8 million. He stated that they had discussed from the beginning that, if they didn't get that, they would have Plan B for financing for MidPen. JOINT HOUSING SUBCOMMITTEE MEETING APRIL 20,2016 MINUTES PAGE 17 Ms. Lindenthall thanked him,adding that she was about to say that. She stated that the previous year, applications for funds available were 6-1 and this year applications were 3-1. She confirmed with what he said that, as the fund has grown, the number of applications didn't grow at the same rate, but remained the same number of applications. They continue to feel very good about their chances, adding that it may take one more try than they would like it to take,but they will also have Plan B and Plan C financing scenarios and they can look at all the options and the tradeoffs. Councilmember Matsumoto stated that,when approval of ENRA comes before Council on the 27th, she would appreciate having Plans A and B. Ms. Lindenthall stated that they won't have that by Wednesday. They will be working on that with them prior to actually seeing the final ground lease agreement. She stated that was where it would get codified. She clarified that ENRA was just approving the negotiating period. Councilmember Matsumoto asked if that was a 90 day period. Ms. Lindenthall responded affirmatively. Ms. Lindenthall stated that during that negotiating period, they would iron out all of the details with Council's input. She stated that what they want to accomplish at the end of that was to have an agreement about their preferred plan,who they want to serve,what it will cost,and then their job was to make that happen. They will have backup plans which are always needed. Councilmember Matsumoto thanked her. Commissioner Wong assumed that,if they don't get the funding for this round,they have the option of applying for next year. He asked if the decision of whether they want nine units or more units will affect how much money they can get or is that an independent factor. Commissioner Wong acknowledged that it does affect how much they get. Ms. Merriman confirmed that it would. She stated that they would be looking at sizing the cap and trade for the maximum amount possible but there were also some considerations as to how competitive their application was. She gave the example dial,if you are eligible for$10 million but you come in at $8 million, it might boost your score which is part of the competitive analysis and the financial understanding. She stated that, when they elicited support from Alice Talcott and Felix Adiyung, they were resources they have on their team to help them put forth the most competitive application possible. Commissioner Wong stated that they hope they get the funding this round,but if they don't,he asked if they give them feedback in terms of what they can do to make a stronger application for the lime. Ms. Merriman stated that it varies with the state administers. They would ask for teclmical feedback and try to make some of those resources available to the city. JOINT HOUSING SUBCOMMITTEE MEETING APRIL 20,2016 MINUTES PAGE 18 City Manager Futrell added that last year the city didn't make it to the final round and was not funded but they did meet with some of the decision makers to get feedback on their package which made this year's package better. Mayor Addiego concluded that,if they were tighter on their negotiations,there should be no surprises financially and there probably won't be an additional $1 million to give them back at the end. They shouldn't anticipate that because they were able to do that at 636. He stated that he has been very difficult with them on the 636 question,but he wanted to end this on a more positive note. He stated that he enjoyed this meeting and past meetings where he was getting to know her and her team. He mentioned that, when he was leaving his home on Baden, four blocks away, a neighbor came over because they received their 60-day notice by the landlord who wants to take possession of the home. He wants to fix it up which means bring it up and put it back in the marketplace at full market rent and they were devastated. He stated that it was a four-bedroom home and they were a relatively large family and he can't imagine what their options are. He didn't think that they will be South San Francisco residents much longer. He stated that what he really remembers from 636 was there was a wonderful little woman who lived on a trailer on the property and she had no belief in die system that she would actually live in this magnificent building but she is there and very happy, and he wanted to thank her. Ms. Lindenthall thanked him for sharing that. She asked if she was hearing, for purposes of this analysis,that they can factor in the possibility of accessing the funds the city has for moderate income housing as an alternative. Mayor Addiego stated that,when you identify some of the projects,like the Alta Vista property,which could be $1 million, where he thought that was what they were doing, creating housing for the mid- level person. He stated that, if he can roll out of that property and times it by 3 or 4 units, he was in support of that. Councilmember Matsumoto agreed, adding that the current tenants were having a hard time finding something and that exemplifies why they were doing this. Ms. Lindenthall thanked them very much. 7. Adjournment. Being no further business the meeting was adjourned at 11:58 a.m. Submitted by: Approved by: v0 *sta .rt.• , ity Cl ( . Councilmember City of Sou' _: Francisco 'ty of South Sa rancisco JOINT HOUSING SUBCOMMITTEE MEETING APRIL 20,2016 MINUTES PAGE 19