Municipal Transportation Agency - Regular Meeting

3rd, 2026 regular meeting of the Municipal Transportation Agency Board of Directors and Parking Authority Commission to order. Secretary Silva, please call the roll.

On the roll, Director Chen.

Present.

Chen, present. Director Felder.

Present.

Felder, present. Director Hemminger.

Here.

Hemminger, present. Director Henderson. Here. Henderson, present. Director Hinzey.

Presence.

Hinzi present. Director Kahina.

Here.

Kahina present. And Chair Tarloff.

Here.

Tarloff present. For the record, I note that Director Hinzi is attending this meeting remotely. Director Hinzi is reminded that she must appear on camera throughout the meeting and in order to speak or vote on any items. Places you on item number three. The ringing and use of cell phones and similar sound-producing electronic devices are prohibited at this meeting. The chair may order the removal from the meeting room any person responsible for the ringing or use of a cell phone or other device. Places you on item number four, approval of minutes for the February 17 regular meeting.

Thank you. Directors, are there any changes to the minutes? Nope. We'll now open public comment. Secretary Silva, shall we do one minute? Since today's hearing has a pretty robust number of items, we are going to, for our regular non-action items, there is an action associated with this, so let's do two minutes each.

Very good. Members of the public wishing to provide comment will have two minutes each. There will be a warning sound at 30 seconds and a chime when the time is up. Any speakers can come up to the podium at this time. This is to provide comment on the minutes. Seeing none in the room and no accommodation requests.

We'll now close public comment. Colleagues, is there a motion and a second?

So moved.

Second. Secretary Silva, please call the roll.

On the motion to approve the minutes, Director Chen.

Aye.

Chen, aye. Director Felder.

Aye.

Felder, aye. Director Hemminger.

Aye.

Hemminger, aye. Director Henderson. Aye. Henderson, aye. Director Hinze. Aye. Hinze, aye. Director Kahina. Aye. Kahina, aye. Chair Tarloff. Aye. Tarloff, aye. Thank you. The minutes are approved unanimously. Thank you. Please call the next item. Places you on item number five, communications. I have none.

Thank you. Please call the next item.

Places you on item number six, the director's report.

I have a pretty fun report today. I am incredibly excited that the latest Muni ridership survey has been released. The survey was conducted between September and early December 2025. Riders gave us their highest satisfaction rate in the survey's 25-year history. 78% of riders rated Muni service as excellent or good. This is six points higher than our 2024 overall satisfaction rate, which was already a historic high. Our ratings on individual service categories, including trip time, reliability, cleanliness, and safety, all the things that we've been emphasizing also improved. And while rider satisfaction improved among all riders throughout San Francisco, Of note, there was a 10% improvement in rider satisfaction for riders based in the Excelsior and in the Bayview, and a 9 point improvement for riders based in the Richmond and the Sunset. The highest ranking community service attribute is providing access for people with disabilities, which is rated 84% excellent or good. I think that is reflected in the fact that we work really hard to remove barriers and to make our system easy and accessible, not just checking a box when it comes to accessibility. The credit for all of these results go to the incredible SFMTA staff. They are constantly challenging themselves to make Muni fast, frequent, reliable, clean, and safe, even in the face of our agency's tremendous financial difficulties. So thank you to all of them. I also want to make sure that members of the public have the opportunity to learn about and provide feedback on our next two-year budget. We have open house meetings scheduled at a time when people who work during the day can hopefully attend. The meetings will cover much of the ground that we've been covering in our meetings here, like transit funding needs, the SFMTA budget, and proposed changes to fares, fees, and fines. There's two in-person meetings, one on Saturday, March 7, from 11 AM to 1 PM at the SF LGBT Center at 800 Market Street in the Rainbow Room. And there's one on Wednesday, March 11 from 530 to 730 PM at the Richmond Senator Milton Marks Branch of the Library, 351 9th Avenue. We're also offering a virtual open house meeting for those that prefer to participate online on Thursday, March 12 from 530 to 730 PM. The link to join the meeting and all of the meeting information is on sfmta.com slash budget. Moving on to our legislative update, on February 19th, Governor Newsom signed the bill that authorized $590 million in loans to AC Transit, BART, Caltrain, and the SFMTA to help avoid major service cuts this next coming fiscal year. The loan uses money awarded but not yet allocated for Bay Area projects by the California Transportation Commission through the State Transit Intercity Rail Capital Program. It includes a clear defined repayment structure, a guaranteed revenue source to secure the loan, and a variable interest rate. We deeply appreciate the efforts of Mayor Lurie, State Senator Scott Weiner, the Bay Area Legislative Caucus, and many local transit advocates who worked to make this loan a reality. We wouldn't have crossed the finish line without the hard work of our partners at the Metropolitan Transportation Commission, who will be administering the loan. We are also thankful to MTC for negotiating the loan and to the governor and the Department of Finance for helping us to get to yes. We will include the loan in the budget balancing plan we present to you on March 17th. In another legislative update, I wanted to let you know that a group of citizens has taken the SFMTA proposed parcel tax structure and submitted it as their own measure to the Department of Elections. It is now on the Department of Elections website with the title and summary and full text. And signature collection has begun. As a reminder, San Francisco's Chinese New Year Parade will be held this Saturday, March 7. I am a judge. Super excited. The Board of Supervisors approved legislation to use funds from the General Reserve to provide free parking and muni service to celebrate the Lunar New Year. We will use those funds to provide the first hour of parking free from February 8th through March 8th at the Portsmouth Square Garage in Chinatown and to provide free muni on all service except cable car on March 7th for the Chinese New Year parade. There will also be bus reroutes and extra service on the 7th because we're expecting really strong attendance. Finally, two more items. Black History Month has just come to a close, and I wanted to take the opportunity to share a short video that was created by our agency, by SFGov TV. The SFMTA has a long and proud history of Black and African American leadership, and it's really important for us to celebrate that. This video features one of our current employees, Carlton Baker, who's an assistant manager of our Cameron Beach Streetcar Shop.

I'm the assistant supervisor for the Cameron Beach Streetcar Shop. I worked for the agency for 10 years. Well, primarily, I wanted to advance my career. City and county had really good benefits and there was growth potential. Our job is to maintain these vehicles. You know, these streetcars are, they're like rolling museum pieces. They're tourist attractions. You know, people love them. They see them going down the street, people taking pictures of them. And we all take a lot of pride in maintaining these vehicles. Black History Month, it's just 28 days where the rest of the country tries to recognize what black people did in this country. I think if you look back, you'll see that there's a lot of African Americans that in the early stages of this agency started at the bottom and worked their way up. When I first started here, that's when I first learned of Curtis Green. Come to find out he was one of the first Black managers of a transportation division. Happy Black History Month.

Finally, I wanted to talk about the Olympics. Like people throughout the Bay Area, we are very excited that Alyssa Liu won the gold medal in figure skating at the Olympics. It's always great when a Bay Area heroes are highlighted on an international stage. In September 2024, when Alyssa was studying at UCLA, we invited her to join us for the celebration of the relaunch of the El Terraval. I'm going to show you a short video of what she said during the inaugural ride. Alyssa also recorded onboard announcements welcoming riders back to the El Terraval. Congratulations to Alyssa for her amazing performance at the Olympics. We're all inspired by her.

This is Alyssa Liu, Olympic figure skater and US national champion. Happy to have you back on the El Tarvel train, a short ride from San Francisco Zoo Adventures and the beach. I think it's going to really bring the community together.

It's just more access to transportation, and I'm glad I get to represent a little bit of my culture and represent the Bay Area as well. So I'm just really excited to be here and see this project take off. I know it's been long and hard. Many people worked tirelessly to make this happen, and I'm just really happy for everyone.

That concludes my report.

Thank you, Director Kirschbaum. Before I open public comment on the director's report, I would like to remind members of the public that they may provide comment on the topics Director Kirschbaum shared, which are the Munirider survey results, upcoming budget open house meetings, the state loan and parcel tax update, and events including the Chinese New Year parade, Black History Month, and recognizing Alyssa Liu. If you feel the director missed addressing a topic, you may comment on that during item nine, which is general public comment. If you're here to speak on an item later in today's agenda, please wait to make your comment until that item is called. With that, public comment on the director's report is now open for one minute.

Very good. Members of the public wishing to provide comment will have one minute each. There will be a warning at 30 seconds and a chime when the time is up. Speakers for this item can come up to the podium at this time. I'm seeing none in the room and no accommodation requests.

Public comment is now closed. Colleagues, any questions or comments about the director's report? Vice Chair Kahina.

Thank you so much, Chair. Julie, thank you so much for your report. It's exciting to hear that our satisfaction, our registered satisfaction increased in Excelsior and the Bayview. With that in mind, I'm hoping to see if the team can consider holding a budget open house also in those neighborhoods just to, again, keep up the good faith and make sure folks are fully aware of some of the input and feedback that we're trying to get about our budget process. So just offering that up in the event staff could be directed to do that, that would be super, super great.

Thank you. Anyone else? Very good. Secretary Silva, please call the next item.

Places you on item number seven, a Citizens Advisory Council report. We have no report.

Thank you. Please call the next item.

Places you on item number eight, new or unfinished business by board members.

Colleagues, any items to share? Director Henderson.

Thank you, Chair. I just wanted to share with you all sort of as a book into the Black History Month video that we just saw, I wanted to let you all know that I was at work at the restaurant this weekend and was greeted by a group of cyclists who were on their Black History Month ride. And so they started at Yerba Buena. and ended at the 4800 block of Third Street. And so it's a little bit of a ride. And it was a beautiful day. And a number of riders were there. But I also was greeted by a number of SFMTA staff that had, I think, also gone on the ride. and cheered some of the cyclists on as they, you know, made their way down Third Street. And so it just said to me, you know, in that moment, I was pretty surprised to see staff there, but I think it's really important to, you know, just sort of acknowledge that the community outreach process is evolving, and I think we've had a couple of items in front of us where we have had staff go back and do a little bit more outreach. And so I think to see staff, Director Kirschbaum, at an event that wasn't organized by SFMTA, but participating in a community event and coming in and meeting the business owners and all of the restaurants and the other business owners on the block and chatting and working with the the patrons that were there, I think it was a really nice event. And it was nice to see staff engaged on their off time and really sort of cultivating the organic and natural relationship with the community, especially in an area that has had a little bit of tension sometimes. And so I just wanted to acknowledge that all the staff that was there, there were a bunch of people there. It was a really nice event. And it was nice to run into them at my second job. So thank you.

Thank you. Thank you for that feedback. Director Chen.

Thank you, Chair. I'll try to do three things very quickly. In addition to, I think, what Director Kirschbaum mentioned, the MTA has done a lot of events around Lunar New Year. And I wanted to acknowledge and thank staff for doing that and also working with community partners. I was fortunate to be invited to some events organized by the Chinese Chamber of Commerce in Chinatown representing MTA. in celebration, also going with Director Kirschbaum to the Lunar New Year event last weekend on Ocean Avenue in Ingleside. And then also, two cable cars have been decorated for Lunar New Year. And that was a big effort from staff at the Cable Car Division and also from volunteers. And so those were all great events with the community. And so my thanks to staff and also to community partners for that. Secondly, this is not necessarily our department, but I... In case folks do not know, there was a hearing yesterday around the Waymo disruption in December. That was at the Land Use and Transportation Committee. And as most of you may know, SFMTA doesn't have direct regulatory authority over Waymo. That is reserved to the state. But supervisors have asked questions about disaster response and recovery on operations around Waymo. That's number two. And number three, I believe Clipper 2.0, that target timeline has been, I believe, a bit delayed. I don't think we need to go into that today very in-depth, but it is something that I feel like the board should be keeping an eye on. Thank you.

Thank you, Director Chen. Director Kirschbaum, did you want to address the Clipper? I know that you serve on the committee for MTC for that.

Yes, thank you for those comments, Director Chen. I participate in the Clipper Executive Board, which is general managers and MTC providing guidance on this transition. I had the honor of being appointed the chair of the Clipper Executive Board at the last meeting. And in that position, I will continue to advocate for swift resolution to the issues that we've been experiencing during the rollout. I was heartened to learn at the last meeting that the customer experience has improved at the call center. They have expanded their hours and also expanded how they are dealing with peak time periods. as well as to see some progress on the technical issues, including both the ticket vending machines in our subway stations, as well as the devices that both our fare inspectors and the Caltrain conductors use to collect fares. But more progress is needed, and I will continue to emphasize the urgency. Thank you.

Thank you. Any other comments from directors? If not, we will go to public comment for these items for one minute each.

Members of the public wishing to provide comment will have one minute each. There will be a warning sound at 30 seconds and a chime when the time is up. Any speakers can come up to the podium at this time to provide comment on the director's items they just shared about. Seeing none in the room and no accommodation requests.

We will now close public comment. Secretary Silva, please call the next item.

Directors, that places you on item number nine, general public comment. Members of the public may address the board of directors on matters that are within the board's jurisdiction and are not on today's calendar.

We will now open public comment for one minute each.

Thank you. Members of the public wishing to provide comment will have one minute each. There will be a warning sound at 30 seconds and a chime when the time is up. I have a speaker card for Richard Johnson. And for anyone else who wants to comment, you can queue up on the TV side of the room.

Hi, my name is Richard Johnson. I spoke to you many times before about the 8th Street closure. We're actually going on week number 64 of violations that have not been addressed. And we officially got the word from a staff member at SFMTA that it falls within your court to make this decision of revoking this permit. We are on 64 weeks, so I'd like to take you back to the three-legged stool that we are so aptly talking about these days. If you as the board cannot make a decision within 64 weeks of doing something, what kind of precedent does that set forth the SFMTA staff? If you don't act, what forces them to act? And then the other is the amount of financial loss that's being happened by this street closure. We're subsidizing to the tune of about $70,000 a year. We're losing lost revenue. The department is not posting no parking signs. So it prohibits us from making reports to have vehicles towed.

Thank you. Your time is up. Next speaker, please.

Hello, everyone. My name is Kelsey. I was just coming to see about the eight bus reroute in hopes to get it back to its original route. Currently, the eight bus inbound towards Fisherman's Wharf completely skips the Sunnydale and Visitation area, and we only have one bus going in one direction. And if we want to catch that bus in the opposite direction, we have to walk 10 minutes out of our community to catch the bus. And it does a really big disservice to the community. We have elderly students, disabled, who rely on that bus route. And everything has been detoured. The reasoning behind it was supposed to be the construction, which has ended. There is no signage. There is no communicating to the residents. And there is really no reason why it has to continuously skip the community. So I'm coming here in hopes of you guys redirecting it back towards the original route, so that way it can actually service the community who rely on it every day. Thank you.

Thank you. Next speaker.

Good afternoon, board. Griffin Lee here, District 2 resident and staff at Connected SF. Yes, Connected SF still exists, and we are still alive here. Three things. One is encouraging to hear about the customer satisfaction percentage at 78%. I think one of the things I consistently hear from members and general public is who these surveys are being shared with, what's the demographic, et cetera. So details around survey engagement would be, I think, appreciated. Secondly, on the Hay Street saga, Come on. Let's face the facts here. Two more stores have said they're closing down, if not already closed down, Allbirds and Timbuktu in recent months. I'm not saying, we're not saying the street closure is directly tied to the closures, but it could be a contributing factor. I've mentioned multiple times, I've walked that corridor myself.

Thank you.

And the businesses have very mixed feelings about the closure. So I would... RE-EVALUATE FROM SQUARE ONE. THANK YOU VERY MUCH.

THANK YOU.

NEXT SPEAKER, PLEASE.

GOOD AFTERNOON, EVERYONE. MY NAME IS SIANA. GLAD TO HEAR ABOUT THE passenger customer service report doing well, would like to encourage MTA to focus on the employee morale at the same time. And understanding the importance of the parcel taxes or these ballot measures that need to get passed, I think that we need to work on building the morale within the agency in order to ensure that the messaging is properly communicated to the passengers and to the voting public for everyone to understand the importance of it getting passed. So again, I just want to emphasize the importance of happy employees will help to ensure that the taxpayers who are voting for these parcels to pass or these ballot measures to pass for it to get passed. Thank you.

Thank you. Any other speakers for general public comment?

Hi, my name's Pete Wilson. I'm with Local 250A. Sienna Dunn just motivated me. Thank you, Sienna. I think employee morale here in the city and county of San Francisco, when the SFMTA has put money and invested it into finding out who has the lowest employee morale, It is fare inspectors and parking control officers and operators. And, you know, it's not just about can we afford to live in San Francisco. It's how we're treated on a day-to-day basis. And, yeah, there was just a company that came in and did a study. And let's see what they came up with. And let's see if we can raise employee morale of all city workers. Thank you.

Thank you. Any other speakers for general public comment? Please hold the clapping and interruptions. I'm seeing none in the room, and I do have one accommodation request. Speaker, you've been unmuted. You have one minute.

Thank you. Thank you. I actually prepared two minutes per Christine Silva's email for my accommodation request. Good afternoon, directors, and thank you for the opportunity to speak today. My name is Carrie. I'm a resident of Treasure Island, speaking on behalf of my neighbors who share the same concerns.

Madam, I'm sorry to interrupt you, but are you hoping to speak on an item later in today's agenda? We do have Treasure Island on our agenda.

I do, but this is independent of that.

All right, then.

I'm speaking on two items. Thank you. Thank you. Since last year, residents, including disabled residents like myself, have requested ADA-accessible curb spaces directly in front of buildings, use of nearby fence slots as interim resident priority parking solutions, reconsideration of residential streets currently marked no parking, and establishing a residential parking permit zone. These requests have largely gone unanswered. The designated public visitor lot at 9th and 7th was recently presented with a temporary parking solution. During peak event season, it's full and unavailable for residents, including disabled tenants, creating a reoccurring access barrier. Title II of ADA requires meaningful proximate access to parking. Expecting residents to park half a mile across gravel lots and incomplete pedestrian routes raises compliance concerns. Treasure Island residents are primarily long-distance commuters who leave the island daily for work, school, and healthcare. Structured resident priority parking access is needed right now. Policies for on-street parking management, including Section 905, direct the SFMTA to evaluate resident needs, occupancy, and spillover when determining parking controls. Under Section 905, an RPP district may be established for the condition. And with your guidance, we are prepared to begin that process. We request that SFMTA pause parking enforcement in any new residential meter proposals until the RPP evaluation is complete. We have an obligation to ensure safe, reliable resident priority parking access. for ADA compliance and for the people who live here today. Please consider the RPP proposal and help protect our parking rights. Thank you.

Thank you. No other callers. Thank you. Public comment is now closed for this item. Secretary Silva, please call the next item.

Directors, that places you on item number 10, your consent calendar. These items are considered to be simple or routine and will be acted upon by a single vote unless a member of the board or public requests that an item be taken off consent and heard separately. For all speakers providing comment, please identify which item number you are speaking to. Item 10.1, approving various routine parking and traffic modifications and making environmental review findings for those items listed under 10.1A through D in the agenda. item 10.2 approving two roadway shared spaces street closure applications for 37th avenue between ortega and pacheco streets saturday april 18 2026 through saturday november 21 2026 7 30 a.m to 5 30 p.m every third saturday of each month and Mark Lane between Bush Street and Harlan Place, Wednesday, April 1, 2026 through Wednesday, March 31, 2027, 11 a.m. to 11 p.m. daily, and making environmental review findings. That concludes your consent calendar.

We will now open public comment for items on the consent calendar for two minutes each.

Members of the public wishing to provide comment will have two minutes each. There will be a warning sound at 30 seconds and a chime when the time is up. Any speakers for the consent calendar can come up at this time.

I'm seeing none in the room and no accommodation requests. Thank you. We will now close public comment. May I have a motion and a second to approve the consent calendar?

So moved.

Second.

Secretary Silva, please call the roll. On the motion to approve the consent calendar, Director Chen?

Aye.

Chen, aye. Director Felder?

Aye.

Felder, aye. Director Hemminger?

Aye.

Hemminger, aye. Director Henderson? Aye. Henderson, aye. Director Hinze? Aye. Hinze, aye. Director Kahina? Aye. Kahina, aye. Chair Tarloff? Aye. Tarloff, aye. The consent calendar is approved unanimously. Thank you.

Secretary Silva, please call the next item.

Directors, that places you on item number 11, A and B. Item 11A, authorizing the Director of Transportation to execute contract number 1334, Potrero Yard Modernization Project Infrastructure Facility Project Agreement with PRG, Potrero Properties LLC for the design, construction and financing of a bus storage and maintenance facility for the Potrero Yard Modernization Project. SUBJECT TO BOARD OF SUPERVISORS APPROVAL PROVIDING FOR A 30-YEAR TERM COMMENCING AFTER SUBSTANTIAL COMPLETION SCHEDULED FOR 2030 AND EXPECTED TO END IN 2060. MILESTONE PAYMENTS OF $65 MILLION AT OR AROUND FINANCIAL CLOSE AND $250 MILLION DURING CONSTRUCTION. A $5 MILLION DEVELOPMENT FEE PAYABLE AFTER SUBSTANTIAL COMPLETION. ANNUAL AVAILABILITY PAYMENTS COMMENCING APPROXIMATELY ONE YEAR AFTER ANTICIPATED SUBSTANTIAL COMPLETION AND CONTINUING THROUGH THE END OF THE TERM. Pardon? Projected to start at approximately $33 million, with an estimated cumulative total of approximately $980 million, and potential delay, event, or termination compensation, all as provided in the project agreement, and for an estimated not to exceed amount of $1.4 billion, all expressed in nominal dollars, and authorizing the Director of Transportation to seek Board of Supervisors approval for the project agreement under Charter Section 9.118 . Item 11B, authorizing the Director of Transportation to execute a Lease Development and Disposition Agreement, LDDA, with Plenary Potrero Housing, LLC, for the development of an affordable housing project as part of the Potrero Yard Modernization Project. Thank you.

Well, this is a very big item, and not just because it took Christine five minutes to read it, but because it is the culmination of eight years of work on the Potrero Yard Modernization Project. Today, we are recommending that this board approve the final project agreement, as well as the agreement that facilitates the planned affordable housing project on the site. Delivering a new Potrero yard is the highest priority of the SFMTA's Building Progress Facility Improvement Program, and with train control becomes our two largest and most complex capital endeavors. It will have an incredible positive impact on our ability to deliver reliable muni service and provide our staff with a modern seismically resilient facility to safely and efficiently get our service out every day. Reaching this point has not been easy. I want to fully acknowledge that the scope of the overall project is reduced from the original vision of the bus yard with housing on top of it in order to reach an affordable price. And I want to apologize upfront for the expectations that this well-intentioned vision created. Images of the housing above the bus yard and the community's excitement about that vision created a feeling of certainty where none existed. I know this community has been deeply affected by housing affordability issues and the resulting displacement for decades. And I know that losing the housing above the bus yard is a wound that will not easily heal. I also want to apologize for not talking about the high cost estimate sooner with the working group. Members of the working group have been participating throughout this eight-year process, as well as the board. The SFMTA staff worked collaboratively and in good faith with the developer to keep this project viable, but it did not allow for others to weigh in on solutions. By their nature, these types of long-term development projects are impacted by many factors that are outside of our control. But we must do better about highlighting those risks to the board and the community and describing how they might impact the final project. And I am committed to approving our work on this front. I do want to be clear that even with the changes that we have made, this project is a once-in-a-generation investment to improve Muni, and I am excited to see that it be built. I know that the current and former Muni riders will appreciate that their buses are clean and well-maintained thanks to this new facility, and our staff will be working in the safe new yard that they deserve. Finally, I'm heartened that this project can enable the creation of about 100 proposed units of affordable housing on public land along Bryan Street. This combination, a new Muni bus yard with affordable housing, remains a vision worth turning into a reality. I look forward to the staff presentation, community voices, and board discussion. Thank you. Shawn?

Great. Thank you, Director Kirschbaum. And good afternoon, directors. I'm Sean Kennedy, Chief Planning and Delivery Officer here at the SFMTA, here today to talk about once-in-a-lifetime, as Director Kirschbaum said, once-in-a-lifetime opportunity to improve transit service as well as enable affordable housing on public land. So with that, I do want to preface the rest of my comments with the two things we're going to be asking you all for decisions on today. One is to enter into the project agreement for the Potrero Yard development. And the second is to set out the terms for the affordable housing development on Bryant Street. Before we get too far into those details, I do want to start with just the project scope and talk about where we're at. The project needs, so why are we here today? So Potrero was built over 110 years ago, back in 1915. And if you can remember back that far, the number one mode choice at that time for people getting around the city of San Francisco was horse and buggy, literally. Horse and buggy cars had not taken full hold yet. And so as you can imagine, this facility is really functionally obsolete in many ways. Additionally, there's some seismic issues that we need to address. It does not provide the capacity we need for a growing city. Some of our most busiest bus routes come out of this division, so we need to increase the capacity availability there. Finally, we do think that there's a lot of opportunity to improve how this space is used. By improving the footprint of the structure, specifically of the bus division structure, we think we can get a lot more higher and best use out of the remaining parcel. So the project scope will fast forward us into the 21st century. We also will get an increase in capacity on the bus side, adding about 100 space for another 100 buses. So going from 146 buses now to 246 after the project is complete. And then also it enables us to tie together some major sustainability goals for the overall city with some affordable housing on a portion of the property. Potrero Yard itself is really vital to delivering the mission of the SFMTA, which is increasing choices and providing that connection between people and opportunities. That's why we're all here. That's why we do this job, is to provide connections to opportunities. Potrero is a perfect example of that. A quarter of our bus ridership for the system comes out of buses that are operated and maintained out of the Potrero division. They also serve five of our muni service equity neighborhoods. As Director Kirschbaum mentioned, this is the number one project for the SFMTA, specifically the Building Progress Program within the SFMTA. But as you can see here, it's also a high priority for a number of other fellow agencies and sister agencies in the city, some of whom are here today. And as you guys know, every project that we bring forward from the planning and delivery group is founded in safety. That is where our base starts from. That's where we start projects from. And this is no different. This one is really addressing and improving safety for the staff versus the public on our street. But safety, nonetheless, is a key component as part of this project and part of the scope that we'll be delivering. You know, Potrero has now stopped revenue service. We stopped revenue service coming out of this yard on February 14th, so several weeks ago. We had a couple of really nice send-off events where some old staff came back. We had a barbecue for existing and old staff and then even did an event where we allowed the The neighborhood to come in and watch the last pull into the yard, really good overall event. I would say, though, that there, of course, is some trepidation on the staff side of things. I mean, this is a yard that has been here for 110 years. This is a yard that people have come to every day for 15, 20, 30 years of their service at the MTA. And it's, in many instances, considered their home or their second home. There is some fear and some worry about, as we disperse those employees to other divisions and ask them to work somewhere else that they're not as familiar with for the next four years or so, there is some worry about that. But on the other side, there is also some excitement about working in a new facility when they get to come back, as well as, as I said, the aforementioned safety improvements. It has taken us a long time to get here. It's taken eight years to reach the point that we're at today. But obviously, we're just at the beginning, so to speak. I mean, we've got a long way left to go. And as you can see in this timeline, there's many things coming. But before we talk about the future, let's talk about what is actually in this project currently. So as Director Kirschbaum noted, we have had some very challenging fiscal situation present itself in the last nine months or so. And that caused us to look at delivery not only of this project, but really our whole building progress program. Protrero is our number one priority. And so we've had to reduce and defund a number of projects. Three out of the five projects that we were hoping to do in the next five years of CIP had to be defunded so we could put all of our effort into making sure that we can deliver Protrero. Even with that change, we still were in the unaffordable range for this project, so had to continue to work to reduce the scope and make this a project that we could actually deliver as we had promised and as we need. I would say, even though the podium is no longer a part of the proposed project, we are excited about the Bryant Street housing. You can see that here depicted on the left, what the street view would look like. On the right is the other side of the lot, of the Potrero lot, showing the bus facility with no housing on top of it. But that's the view from the street. Over the last eight years, obviously, we've had a ton of outreach. Most of these numbers on the slide are related to the last eight years, but the only ones that are really important is really what's happened in the last six months since we made this unfortunate and know not easy decision to remove the ability to have podium housing what have we done since then we've had 24 community touch points including five working group meetings but as you know director kirschbaum noted in her opening remarks i think our biggest regret in this whole process was not bringing especially the working group into the issues we were wrestling with earlier we We selected the final developer and got final pricing about a year ago, so beginning of last February, and then realized that it was about 30% higher than what we had thought the price was going to be. So we maintained the same scope. We're trying to get to the same scope and reduce that cost to something that was actually deliverable. And unfortunately, at that point, we should have, lessons learned looking back, should have brought at least the working group into those discussions and talking through and bringing them along with us in the journey to understand how that price was so much different than what we thought it would be. After about six months of that, we made the decision and understood that we could not afford the project as is with that scope. And so that's when we decided to reduce the scope and make that decision. And so it's been about six months. And in that time, like I said, we've had about 24 different touch points with community and stakeholders. Most of the things are remaining within the scope as we had talked about, including restroom, community space. Of course, what's not remaining, even though we have heard a number of people requesting and asking it, is the podium housing. And once again, that is because we think we're going to have a non-deliverable project if we try to do the full scope. So now I want to switch into talking. That's scope background. I want to switch into talking specifically about the project agreement. We are contracting with a nonprofit entity, P&G, which is a 501c3. It will allow us to access lower amounts of financing, less interest financing. The actual design and construction obligations then are passed down to PNG or plenary, excuse me, PNC and plenary, and then WebCorp ultimately to do the actual construction work. The cost of this project is $612 million. We are paying that in several different ways. So first off, on financial close, we'll pay $65 million, which we anticipate roughly a month from now. And then the project team will go and build the new yard. We will not be making monthly or quarterly payments. They will be constructing that work. And at the end of substantial completion, which we think right now end of 2030, early 2031, we will owe them a milestone payment of $250 million. If you add up, obviously, the 65 and the 250, that does not get you to 612. And so at that point, starting in 2032, we'll be making yearly payments to pay off both the principal and the interest of $33 million a year for 30 years. We showed this same chart to this body in October when we came to give an update about the podium housing at that time. And these numbers are a little bit different to and specifically the milestone payment one. If you remember back in October, that number was 200. We've worked very closely with our CFO, Bremen Horder, and Rob Hockes to get that number up to 250. That was able to reduce our yearly payments. And when we showed you this chart last, the yearly payments, I believe, were in the $42 million a year range. So we've been able to bring that down with Rob and Hockes. and Breeze helped to $33 million. I do want to point out that Flannery has a project labor agreement with our trade partners. And we're excited about that. It will ensure that our skilled labor unions are building this new division as it rises up from the ground. The PA also allows for some pretty interesting risk changes, really, I guess you'd call it. How we're approaching risk with this project is a little bit different because of the way the project agreement is being set up. And specifically, a lot of the risk transfer is going over to the actual developers. One example is construction timeline. As I noted before, we're not paying them until the end of the project, that $250 million lump sum payment. So they have a lot of impetus to move through the project and get the project built on time and to our scope specifications. So that timeline risk is normally borne by the city. In this case, it's going to be borne by the contractor. From our side, one of the things I want to point out on the risk ledger is that we will be taking on the risk of making sure that some of the actual work gets done and approved and they get approval to enter into different facets of the construction on time. If there's a delay to some of that, that is going to come back on us. But for the most part, we think this is a pretty good transfer risk. And lastly, there are some shared risks, specifically like with PG&E. We'll be splitting the cost of PG&E delays. So we'll be working very hard with our partners at PG&E to make sure that It's in the pipeline. We're not getting delayed from the construction schedule standpoint. And we'll be able to move the project forward fast that way. On the housing agreement, we, once again, are not housing developers. But by the way that we're doing this project and really going vertical with the bus facility, it's freed up some space on the Bryant side of the parcel to do some affordable housing and at least making affordable housing possible. We're working with Meta and TCDC as the lead developers on that work. I think right now the proposal is about 100 units would go on that Bryant side of the parcel. And what we are asking you all today to do to make that possible is this LDDA, which basically sets the lease terms. and sets the lease up for META and TCDC to go secure final funding, get the project going. They will then return back to this body as well as the Board of Supervisors probably in about a year, a year and a half for final approval and moving that project through. And what we're asking for you all today is to approve those pre-lease set of decisions. Next steps-wise, obviously, we're with you all today. We are going to the Board of Supervisors Budget and Finance Committee next week, Wednesday of next week on the 11th, and then hope to go to the full Board of Supervisors on March 24th, then get the final signature from the mayor and move into financial close in April, which would then allow us to really start kind of minor construction in the summer, and then really ramp it up by this time next year. And like I said, do anticipate end of 2030 construction being finalized. Just a reminder of what we're asking for you all to do today is approve the PA as well as the LDDA. And with that, happy to take questions. I will say I've got a couple of the project team members here to help answer questions, including Tim Conf. Paran Maliki, Bonnie Jean Von Crow, and Chris Lazaro, all amazing members and will be able to help us answer questions. And then, of course, there's also several of our partners from other agencies in the city to help answer questions if we need at that point as well. So with that, happy to open it up to questions and comments.

Thank you, Mr. Kennedy. I'm going to open it up for public comment first before we have board comments. I would like to open public comment on this item, the two items together, for two minutes each.

Members of the public wishing to provide comment will have two minutes each. There'll be a warning sound at 30 seconds and a chime when the time is up. We do ask that during this time, all members of the audience maintain order and not speak out of turn or aloud from the audience area. This includes clapping or booing. If you care to show support or opposition, you may do so with a thumbs up, a thumbs down, a wave of the hands. We thank you for your cooperation. We will get through everyone here who wants to comment. So you can start to queue up on the TV side, but also know that we will wait and get through all of the comments this afternoon. If we could have our first speakers. Go ahead. I do just have one speaker card for Richard Johnson. Oh, I'm sorry. Tim Rayoff. Go ahead, sir.

Hello, everybody. Thank you so much for having me. My name is Omar Del Riel. I am the co-chair of the San Francisco Latino Task Force Employment Economic Committee. I strongly disagree with approving the revised Potrero Hill transit station without the initial proposed podium housing. There will always be a high cost of development building in San Francisco. That is our reality. Also, we have the reality that there is always money investment in San Francisco, so we can't let that be an excuse. Deciding not to invest in housing is a huge misstep. Higher populations in a dense area creates new districts. New districts create equal economic mobility for everyone. Don't let the future project become an embarrassing, expensive, underutilized transit stop like the T Line Central Corridor or the San Francisco Salesforce Tower. Thank you.

Thank you. Next speaker.

Good afternoon, Chair Tarloff and members of the board. My name is Tim Reif. I'm a field representative with the North Coast States Carpenters Union. I'm here this afternoon to voice our support for the trail yard modernization project. We understand the importance of this project and are eager for the next phase to start. We have been working collaboratively with Plenary for a year to develop a labor agreement. We look forward to continuing work with our signatory general contractor, WebCorp, during construction. We urge you to move forward with this project. Thank you for the time.

Thank you. Next speaker, please.

Good afternoon, Madam Chair and Commissioners, Director. John Doherty, I'm business manager and finance secretary of IBW Local 6. I am here to speak in favor of the project. As presented today, it is an important rebuild of a very critical transit repair facility that San Francisco needs. IBW has represented the 73-71 electrical transit mechanics, the 73-18 electronic maintenance techs, the 73-90 welder and supervisorial class series for 110 years. Well, actually, since the facilities opened. We understand how important Potrero is. It needs to be modernized. In the near term, it will provide work opportunities and apprenticeship opportunities across all crafts. But it is a vital cog in San Francisco's transportation system. It needs to be rebuilt. And it's not just for us that work in there on the maintenance of the transit vehicles, but also updated facilities for our transit operators and everything that goes with it. As we move to expand our greenhouse gas free transit, That's a facility that has always been greenhouse gas free, but as we can increase the capacity, increase the work opportunities, and keep the rolling stock of San Francisco going, this project is vitally important, and we urge your approval. Thank you for your time.

Thank you. Next speaker.

Hi, good afternoon. My name is Pete Wilson. I am a trolley operator, and I appreciate the updating of Potrero Yard. I had the pleasure of operating out of Potrero for six months, and it is a wonderful location and a wonderful location. Wonderful lines. And I am just concerned about the lack of housing, lack of employee housing, the idea that, well, yeah, we need housing for for workers. If you don't put housing for workers, then the workers are going to. I took my medical today. My doctor, she said, I'm sorry. I lived in San Leandro. I couldn't afford the city. The doctor couldn't. If we can't afford it for mechanics and for operators and bus cleaners and everything else. So if you can't put housing here, which If you can't put housing here, I would hope that we would look at where we could put housing, because we need San Francisco employees to live in San Francisco as well as living in other places. When people are stuck in traffic, like operators, if you get stuck on the bridge, you're 45 minutes late. You not only miss a day of work, but you get suspended for three more days. So I am lucky enough to have rent control and live in the city and county of San Francisco. So in my 10 years of driving, nine years of driving, that never happened to me. But it does happen to people when we have them commuting in from over bridges. So where are people going to park? Per the contract, we should have 30 spots for parking. I don't believe that's there. So just building this as is, that is a violation of the contract that we have. At Woods Division, they put parking meters. And we were promised 50 cent parking meters and smart meters. And we got them. And six months later, the SFMTA says, oh, they're so popular, we have to raise it 150%. That was after we were promised at low parking meter rates for operators and other employees of the SFMTA. So we want you to look at parking. We want to look at housing for us somewhere. Thank you.

Next speaker.

Good afternoon. My name is Cameron Robbins. I'm a field rep for the operating engineers, and I'm here to speak in support of this project. I think it was a great project to move forward and help apprentices to grow and continue to support the city. Thank you.

Thank you. Next speaker.

Good afternoon, Board Chair and members. My name is Efrain Barrera, and I serve as the Education Chair of the Latino Task Force Education Committee. We strongly oppose the revised project that eliminates the 365 affordable housing units above the bus yard. The decision makes progress, and this process disregarded the input of the working group stakeholders, residents, and the 10,000 individuals who supported the project. I urge you to vote in favor of a project that includes the podium. Make affordable housing a reality. Thank you.

Thank you. Next speaker.

Madam Chair, members of the board, my name is Brandon Bracamonte, and I represent the Sprinkler Fitters Local 43 that cover all the Bay Area counties. And I'm here today in strong support of the Potrero Yard Modernization Project. This isn't just a contract. This is a generational investment in San Francisco's transit system and in San Francisco's workforce. Potrero Yard is critical infrastructure. If we want reliable public transportation, if we want safe working conditions, if we want a facility built to serve the city for the next 50 years, modernization is an option. It's necessary. This project represents hundreds of millions of dollars in skilled construction work from plumbers, mechanical systems, fire protection, electrical, and structural. These are career jobs. Middle class jobs, jobs that support families and fund apprenticeship programs that train the next generation. When you approve projects like this, you're not just building a facility, you're building opportunity. It also integrates affordable housing. It aligns infrastructure with housing goals. It reflects smart, long-term planning. Members of the board, reliable transit, good paying local jobs, apprenticeship pathways, long-term infrastructure stability. This is the kind of project cities either lead on or fall behind on, and San Francisco has always led. I respectfully urge you to vote yes and move this project forward for our transit system, for our workforce, and for the future of our city. Thank you guys for your time.

Thank you. Next speaker.

Madam Chair and members of the board, good afternoon. This is Aureliano Ochoa, and I'm representing the Heat and Frost Insulators Local 16. And I'm here today to speak on the strong support of this project. As my brother mentioned before, this is not just a transit project. It's a massive investment in the local workforce. By moving forward with these agreements, the city is securing years of stable, high-quality union jobs that pay the living wage and provide the real benefits. Projects of this scale allow us to keep our skills sharp. Our family is right here in the community where we are building. We are ready to build a 21st century facility in San Francisco. that we can be proud of. I ask you please to authorize this agreement, this contract, so we can get to work. Thank you.

Thank you. Next speaker.

Good afternoon, director, board members, and staff. My name is Greg Hardeman. I'm with the elevator constructors of Local 8, and we are also a neighbor. Our union hall is located on 19th and Potrero, so we would be impacted by this project as well. And I'm here to speak in support of the project. We support the project as well as the building trades and the carpenters. This job will be built by apprentices and journey workers that get paid a living wage. They all get pensions, and they will be learning skills as registered apprentices. San Franciscans deserve a state-of-the-art transit facility. As me being one of the San Franciscans that rely on public transit, I think this is a much-needed project, and I urge you all to support this. Thank you.

Thank you next speaker.

Good afternoon. My name is Rose. I work for Homeless Prenatal Program, Jelani House in the Bayview. I directly work with clients who are homeless or looking for housing. So I'm talking about the housing. Reducing housing in San Francisco for our families is really, really hard. To tell our clients that we have no housing because there's no place to put them. I work with moms that are pregnant, that are having babies, who need housing. And to tell them to go out and go look and they can't find nothing, it's really, really hard. I work directly with them. Homeless Prenatal is literally on 2518th Street at the corner of the trail. I work front line, and I work as a case manager now. So taking these apartments away and not building up is really, really, I don't understand it. I work directly with them, and it affects us every single day. As a case manager, it hurts me to know that they don't want to bring more housing for our families. So I'm asking you to revise this and bring more housing for our clients that I directly work with and our case managers have to face every day. Thank you.

Thank you. Next speaker. Hello, good afternoon. My name is Gabby Lozano. I am one of the founding members of the Latino Cultural District, San Francisco Latino Cultural District in the Mission area. I am here to speak against this measure. I urge you not to approve it just yet. We have seen very many families moved out of our neighborhood because we don't have enough housing. do not approve any path that functionally walks away from the 465 home commitment without binding replacement plan. Black and brown communities have suffered great losses, and this was a small sign of hope for us. I can see that also it is a small sign of hope for your employees. The SFMTA does not have a great record of keeping its promises to the community, and this breaks the trust that it has built recently once again. Thank you.

Thank you. Next speaker.

Good afternoon, directors. My name is Scott Feeney. I'm a neighbor of the yard and have served on the Potrero Yard Neighborhood Working Group since it was created in 2018. I am also a Muni rider. I depend on Muni. I have campaigned for Muni funding measures in both of the last two times that was on the ballot. I'm doing so this year. I never dreamed that I would be in the position of asking you to vote no on this project. And I'm heartbroken that that's where I find myself. Because unfortunately, a vote yes on this version of the project agreement would be a vote no on 360 units of badly needed affordable housing ever being able to be built on that site. In the eight years that I was on the neighborhood working group, a lot of things in the world have changed. But my intent there has been the same, to build a bus yard while maximizing the amount of affordable housing on the site. I thought that we were making good progress when we had a plan that was approved I believe by this board, as well as by the Planning Commission, on the order of 500 affordable homes. We were told at the last minute, late last year, as if it was already a done deal, there was no input from us, that this was being canceled in order to save $70 million on building a podium. $70 million is almost certainly much less than it would cost to acquire land and build a podium for this much affordable housing anywhere else in the mission. This is a bargain, and it doesn't make sense for want of that amount of money to cancel the housing permanently. I know that a sense of urgency is being created around having to get the bus yard done. There's this argument being made that every month that we wait, the costs will escalate. Well, guess what other costs are escalating every month? Rent. I think that I just don't believe that it's not possible to take a few months to raise the $70 million and do a version of this that includes the housing. I believe that that's what should happen, and I just don't believe the arguments that that can't be done. Thank you.

Thank you. Next speaker.

Good afternoon. Manny here with the Ironworkers. I'm here in favor of this project that would train and give San Francisco apprentices an opportunity to work where they live in San Francisco. Me, being a San Francisco resident, have used the transit and in favor of this proposal. Thank you.

Thank you. Next speaker.

Good afternoon. Rudy Gonzalez, San Francisco Building and Construction Trades Council. I think there's a little bit of nuance here that's being glossed over. This isn't like a binary. It's not like either or, and you either have affordable housing or you don't. Certainly, we wanted more housing. It would have created more apprenticeship and job opportunities and more workforce housing for our folks. What we're talking about is a scaled down version of that. And I think we can all support the SFMTA identifying other land for a nonprofit houser to deliver that. I have some skepticism, although I'm always eager to enter into a project labor agreement. I have some skepticism about the safety aspects of this that I don't think have been discussed very loudly. But you're talking about burn rates and flashover rates and temperatures that get into the 1,800 degree level when you talk about lithium batteries when they catch fire. I think it's a little foolhardy to say, let's just build whatever we can, as big as we can, on top of that podium where those buses will be housed. I think we have to think about the safety of occupants in the future. But I do support identifying other SFMTA-owned lands and coming up with creative solutions. Our pension funds have certainly stepped up to the plate to fund affordable and workforce housing, and we're certainly open to exploring that through the MTA and the community input process. As it stands now, though, I think delaying this project would be of significant consequence, not only to the scaled-down version of the affordable housing component, but also to the overall health of the transit system. It would seem foolhardy to delay or deny this modernization project because we couldn't get it the way we originally wanted it. Unfortunately, feasibility is a factor in construction, and that mostly boils down to money and to financing. So I'm hopeful that in the near future, we'll be able to identify other sites and be creative about other funding streams. But until that time, we have to move forward, and we have to approve these two projects. So please authorize your director to enter into these two important agreements. We have more steps that have to be taken, and we look forward to successful completion of the project when it's approved. Thank you.

Thank you. Next speaker.

Good afternoon, Commissioners. My name is Eric Arguello, and I am a member of the working group for many, many years since this project started. I am with our Mission to Eviction, and I'm also with Guaranteed by the Latino Culture District. I just want to say I appreciate the director's comments earlier and also appreciate the 100 units that are going to be built here in the near future. But one thing that I have not heard, you know, and I have not heard it from the meetings that we have attended either, is a commitment, a commitment from this body, a commitment from the SFMTA to really brainstorm to see how we can move forward with the additional 365 units that we're losing. There has been no conversation. It's been basically just this is it. move on. But I'm asking you now, this body, to make a commitment with the community, the people that put hours of work attending these meetings for years, We feel a little used. We gave you our contacts, our events to publicize these events, community. We worked to making sure that this was all available for the community to give input. And then this is what we end up with. We want a commitment to work with the committee, the community, and the unions. I agree with the gentleman. We have to figure out a way to build somewhere in the future to make up for the difference. It's what's needed in our community. We've had over 12,000 Latinos displaced from the Michigan community. We still are losing members in the community. So I'm asking you today to work with us, brainstorm, work out of the box. We were able to get this far with this project. It was, you know, talked about like it was never, ever seen a project like this before. So let's use that same spirit to move forward in the future to get these 365 units somewhere, land banked by other properties somewhere down the line. Okay, appreciate it. Thank you.

Thank you. Next speaker.

Hi, my name's Marie Sorensen. I'm a Mission resident. I'm here to speak against the current version that illegally reduces hundreds of units on this site with no plan, really, to replace one for one. The cities created a revisionist narrative where they say, oh, this housing project wasn't a realistic goal despite passing multiple environmental reviews and being fully entitled. There's always a narrative that we must build as much as possible. Hello, 60,000 empty units right now in San Francisco. Where's the outrage when housing for working people, including Muni's own operators and workforce, is cut? I hate to tell all the union workers here, but you're never going to be able to afford a unit in the building that's getting built. And another fun fact, tires from the buses create a lot of greenhouse gases. So this is not a zeroed out project. The project is asking the voters to support a bond this June, yet how can we as voters asking for more taxes when our taxes don't actually go to the housing projects our community was promised? Yet again, MTA has screwed the neighborhood. Thank you. Thank you. Next speaker.

Yes, it's on.

These two men have been hardworking their entire life. The one on the left, his mother passed away and he ended up being homeless and he grew up in the Mission District. When I picked him up, he had one pair of underwear taped around his shoes and he hadn't eaten in two days. The one on the right lost his wife. They're both senior citizens. He didn't know what to do, so he got in his car and just drove 500 miles away. We got a call from the police that he didn't know where he was, sleeping in the basement of a hotel lobby because he didn't know where to go. They have been on the waiting list for housing for three years, and there's nothing. They're in my living room right now because that's where they're living. And I can't take on 361 new people. And this whole willy-nilly idea to just randomly get rid of these houses for them is wrong. People have a right to die in peace with a warm bed and food in their stomachs. And this is just shameful, the way everybody just sits here smug with their suits and ties, not worrying about what's going to happen tonight to their families because they can afford $4,000 a month senior homes. But these guys worked hard their entire life, and they do not deserve to be treated like that. So we need to get that housing back, and there is just no excuse. Thank you. Next speaker.

Good afternoon, directors. My name is Michael Ruppe. I'm a Mission resident, District 9. I'm here to speak on the Potrero Yard decision before you. San Francisco is obligated to meet its housing element commitments and its RH&A targets. The city's own general plan housing framework acknowledges the scale of the mandate, over 82,000 units for the 2023-2031 cycle, and it includes the Portrero bus yard as part of the state mandated housing goals. When the city reduces planned housing capacity on a specific site, state law requires the city to avoid net loss in housing capacity. Under government code section 6586-3, if a reduction would make the remaining housing element sites inadequate, the city must identify additional adequate sites at equal or greater density so there is no net loss of unit capacity. We need to work with the community to plan and strategize finding those units that would create a net gain. I ask with you to work with us to create a people's agenda and make transportation not only work with the community, but also support the community's needs. Thank you.

Thank you. Next speaker.

Good afternoon, directors. My name is Christopher Melgar. I'm a Bayview resident, and I'm here to speak on the Potrero Yard decision. You know, first thing first, I do want to acknowledge the importance of building a modern bus yard to ensure a more reliable and efficient transit system for San Francisco. You know, strong public transportation is extremely important and essential for our city's future. AT THE SAME TIME, THE CITY HAS MADE A SIGNIFICANT COMMITMENT TO EXPANDING AFFORDABLE HOUSING AND WE MUST CONTINUE TO FOLLOW THROUGH ON THESE PROJECTS THAT ADDRESS THIS HOUSING CRISIS. THIS SITE WAS CAREFULLY PLANNED, ANALYZED AND ENTITLED FOR UP TO 465 AFFORDABLE HOUSING HOMES. IT WAS PRESENTED TO THE PUBLIC AS A COMPREHENSIVE PACKAGE AND WAS A PROPOSAL THAT EARNED COMMUNITY SUPPORT. The alternative proposal of 100 affordable housing units is a substantial reduction and a serious setback to meeting our housing goals. Eliminating those 361 homes from what was previously prominent undermines public trust and weakens the city's commitment to addressing the housing shortage. We must find a way to deliver on the original commitment made by SFMTA and the Mayor's Office of Housing Development. Whether at this site or through an equivalent alternative, upholding that promise is critical. Thank you for your time and consideration.

Thank you. Next speaker.

Hello. My name is Joanna Hernandez, and I'm a member of the community and also a member of the Latino Task Force. A mother and someone who has watched families fight just to stay in San Francisco. Since 2018, we showed up. We filled out surveys. We went to numerous meetings. And we believe when we are told that affordable units will be built here, your promises are not being kept. That wasn't just a project. That is hope. Now we are being told that those homes might disappear because there's no funding. But our families are not going to disappear, and our children are not going to disappear. Our elders are not going to disappear. They're still here, struggling to pay rent, facing displacement, doubling up in small apartments, trying to survive. Affordable housing is not extra. It's not a luxury. It's stability. It's keeping families together. It's preventing homelessness before it starts. Our communities did their part. Now we need you to do yours. Please find the funding. Keep your promise. Build the housing. Keep San Francisco natives here. Stop displacement. Build the housing. And also, please, this is part of public safety. That's what our mayor is talking about. Let's build the housing. Thank you.

Thank you. Next speaker.

Good afternoon. Sienna Dunn, Local 200, also a resident of the Western Edition. So this project hits very close to home for me. My dad started driving the bus in 1988. He started at Potrero, so I spent a lot of my time riding the 24 Divisadero and being at Potrero. In 2007, I started my muni career as an operator out of Potrero, where I cried every day for six months in real tears. I am excited to see a facility that is built for, not only for our members, but for people who will provide better working conditions. Understanding a lot of the concerns that were brought up in regards to the housing, hopefully there is a pathway still for some sort of housing to be incorporated, but hopefully the agency will do a better job of really explaining to them the reason behind why the changes have come about. I'm kind of biased, because as a union member, I'm privy to a lot of information as it relates to the budget. And I understand where it's come from, right? I understand there's no money. You can't draw blood from a turnip. So I'm hoping that there is still an option for housing, being that we have a lot of our members who come from places as far as Patterson, having to drive from Patterson and then still having to drive in San Francisco, provide a service to the San Franciscans in order to keep the city going. would really hope that people are able to understand the circumstances of which the city is currently in as it relates to the uncertainty of the budget and understanding that the city is doing what it needs to do in order to move forward and get a project for its employees to be able to have safe working conditions. So Local 200 and me as a San Francisco resident is in support of the patrol modernization project. Thank you.

Thank you. Next speaker.

Good afternoon, Chair Tarloff, directors, Peter Papadopoulos on behalf of the Mission Economic Development Agency and the Tabernacle Community Development Corporation, the Potrero Yard Affordable Development Team as the mighty team. We are proud to be developing this Potrero Yard site along with our team of development and city partners. and that we'll be adding to this transit modernization project by bringing 100 units of affordable housing to the neighborhood that it so desperately needs. While we are disappointed that we can't complete this full vision for the site that the community, the SFMTA, and our development team have been working so hard on together for years, we feel this joint development with the MTA provides an important model that we look forward to expanding on in future years. We know that for our low-income families, the reliability, the availability of public transit is critical. They need this public transit, and they need it far more than higher income demographics for day-to-day use. And when public transit is coupled with significant affordable housing, this provides stability, economic mobility, and it strengthens the entire ecosystem. While the 100 homes are a critical step, along with this very much needed infrastructure program, We are hoping that there is an opportunity in the future for this development team to continue working with our city partners and to complete this vision for affordable housing and its 365 units somewhere in some fashion. Thank you.

Thank you. Next speaker.

Good afternoon, directors. My name is Kevin Ortiz, and I'm a resident of the Mission District. I'm also a voting taxpayer. I want to first thank the SFMTA Board of Directors for your service, as well as SFMTA staff time. The Potrero bus yard has been years in the making, with many hours of labor to make this project a reality. We all want an up-to-date bus yard that can support a more resilient transit system. That being said, it saddens me to be here opposing the current iteration of the Potrero bus yard. Unfortunately, this project on public land illegally reduces hundreds of affordable units on site with no real plan to replace the units one for one. Even worse, this reduces operator and workforce housing that would go directly to municipal operators and other SFMTA staff. Not building this project with the fully entitled affordable housing likely violates the Housing Accountability Act, THE NO NET LOSS ACT AND SAN FRANCISCO'S HOUSING ELEMENT, OF WHICH THE PACHURO BUS YARD WAS PART OF THE FINAL DRAFT SUBMITTED TO THE STATE. THE CITY HAS A MANDATE TO BUILD THE HOUSING ON SITE OR CREATE A PLAN, A REAL PLAN FOR ONE TO ONE UNIT REPLACEMENT THROUGH CITY LAND ACQUISITION AND LAND BANKING AS SOME STRATEGIES. There's this constant narrative in the city that we must build housing at all costs, at all whatever level. But why is it that when affordable housing on public land, specifically for black and brown communities in the Mission, Bayview, and Potrero gets reduced? Where is the outrage for housing for working people? Over 200 units removed from Muni's own operators and workforce is cut. This is unacceptable, and frankly, the city has created a revisionist narrative where they say this housing project was not a realistic goal, despite it passing multiple environmental reviews and being fully entitled. Until there is a plan for the city to replace these 361 units one for one for workers and working people on site elsewhere, and not with other projects promised already in the pipeline, this plan falls short. For costs, this project is already included in the June ballot bond measure, as mentioned in discussion with SFMTA directors, and the city is asking the voters to support a bond measure this June. Yet how can we, as voters, ask for more taxes when our taxes actually don't go to the affordable housing projects our community and workers were promised? Thank you for your time.

Thank you. Next speaker.

Hello, good afternoon, commissioners. My name is Sunny Angulo, and I actually had the privilege of being able to work on a ballot measure back in 2015 that passed by over 75% of the electorate that identified the highest and best use of our public land to be affordable housing. Here we are over a decade later, and we are still not able to deliver on this mandate from the voters. completely hear the anger from community members that this is not the first time that this has happened. There was a bid, a proposal that was put out for developing the Forth and Folsom site as well. There was capital stacks and development proposals that nonprofits spent a lot of time pulling together, only to have the rug pulled out from under their feet when it was determined just wasn't feasible, this wasn't going to work. And I don't put that blame on necessarily MTA, because obviously the leadership at SMT is working very hard to fulfill their mandate, which is transportation. But at the end of the day, if we can't deliver on this, you guys are going to start seeing more ballot measures that strip authority away from the SFMTA to manage its own facilities if we can't deliver. You're going to see nonprofits start to get upset about spending legal fees and staff time to put together proposals that are never going to be delivered on. And voters are going to stop approving taxes and other fees that are not going to the things that they were intended after the city kills 365 units of affordable housing. If $70 million was the sticking point for a podium, if that was one of the main reasons why this wasn't going to deliver on the full affordable housing commitment, that's a lack of political will. So I want to encourage you, as you guys look at the other muni yards that are coming forward, not to make this mistake again. And it's going to be a bloodbath. If we're not able to do something with the Presidio Yard, if we're not able to do something with Kirkland Yard, that's going to have repercussions for this agency. And that would be a shame. You guys need to be putting pressure on the mayor and on the board of supervisors to be creative and to start taking these mandates seriously.

Thank you. Thank you. Next speaker.

Good afternoon.

My name is Chris Harig. I'm a senior vice president with Plenary Americas.

We are the lead developer for the Potrero Neighborhood Collective.

Over the past three years, Potrero Neighborhood Collective, including our affordable housing partners, Meta and Tabernacle, have undertaken a collaborative development process with SFMTA and the city family. Together, we've explored how to re-envision Potrero Yard as a mixed-use, vibrant block that integrates the surrounding community. Through this process, some difficult decisions, yes, had to be made to preserve the agency's primary goals of efficient and safe bus repair that supports Muni reliability, improved working conditions for hundreds of Muni frontline workers, and transitioning Muni into an all-electric fleet. As heard earlier today in the staff report, during this pre-development period, we worked with SFMTA to engage community to hear feedback on various aspects of the project. To every community member that provided feedback, heard project information, or simply took a tour of the facility, we want to say thank you. Your contributions are invaluable and impacted various design elements of the project, including the addition of a public restroom, community meeting space, bike, pedestrian safety measures. Of particular note, I want to acknowledge and thank the Petrariard Neighborhood Working Group, the local and small business and LBE community, and the local union members. All who asked tough questions and pushed the project to be better. particularly given some challenging times. Going forward, we are committed to continuing partnering with SFMTA to deliver a safe, modern bus facility that serves the city's transit needs and meets the agency's project goals. Thank you.

Thank you. Next speaker.

Hello, board. Dylan Fabris, community and policy manager with San Francisco Transit Riders. I'm here today to ask you to support the Potrero Yard modernization project. Potrero Yard is not just a piece of land, but a critical component of SFMTA's transit infrastructure. It houses about half of the agency's trolleybus fleet, which is responsible for almost 100,000 daily boardings, about a fifth of Muni's daily boardings. So while the agency can shift vehicles around for a short period of time while the upgrades are underway, we can't allow this closure to be drawn out any longer than necessary. Without an intact Potrero yard, the agency's ability to restore and grow service is severely limited. And as ridership continues to grow, the time to build these expansions is now. San Francisco Transit Riders supports initiatives to build more affordable housing, especially when those initiatives have such strong support from the community. So we were very disappointed last year to hear the news about the reduction of affordable units on this project. Still, because of the importance of finishing this project on time and therefore on budget, we urge the board to move forward with this proposal with about 100 affordable units. And we also urge you to ask staff to investigate how it can use its other existing properties, like parking lots, garages, et cetera, to make good on the community's expectation to build and provide even more affordable housing for San Francisco's residents and workforce. Thank you very much.

Thank you. Next speaker.

Good afternoon, Griffin Lee, representing Connected SF staff and members. I'm not here to take, and we're not here to take a stance today, but the one thing I think needs to be really clear on this project, if this does pass today and if the bond passes in June, how can the agency ensure the project is on time and on budget? We've seen too many times in recent history that projects have been over budget and not on time. So I think that's one thing to really think about. Again, not here to take a stance, but encourage you to ensure accountability is held here if passed. Thank you very much.

Thank you. Next speaker.

Buenas tardes. My name's Roberto Hernandez, and I'm a member of the Patrol Yard Working Group, born and raised here in the Mission District of San Francisco, and been with the group since its inception. And you know, when I got invited to be on the group, I was really so excited because I have a lot of friends who are mechanics, bus drivers, and I had heard about some of the problems on the yard. So I really looked at the safety of the people that I love and care that work for our city. I also Really was happy and excited to look at what else could be built on there. And of course, housing was the number one issue that came to my mind. This was not just a vision. This was a plan. And from the very beginning. And I just want to ask, is there any SFAMTA staff here today that has been with this project from the very beginning? Raise your hand. Two people. I've seen the revolving door of the number of people we've worked with on this project. And they will attest, we went housing, housing, housing, safety, safety, safety. Eight years of work. We had community meetings. We had at the park. We had events. We had John's here, our public affairs guy from SFMTA. Great job. We reached over 10,000 people. You know right now how many housing units are being proposed and there's opposition. across the city. To get the community to agree on this project took a lot of work. People were concerned about noise. They were concerned about shadow. They were concerned about parking was the biggest one.

Thank you.

And how do we sell? OK, can I ask? I've served on this for eight years. Can I ask for a couple more minutes, please?

Roberto, thank you so much for coming. I believe that we are in agreement that after we conclude public comment, Director Kahina is going to ask if you could say a few more words.

Thank you.

Thank you. Next speaker.

Hi, I'm Tracy Gallardo, and I live a few blocks from this project. I also serve on the board of MLVS, which is located about three blocks from the project. And this project was presented at the time it was in District 10. I work for Supervisor Walton. And we love anything that is going to bring more housing, right? And so while we support the project of building more housing, we also want to see if there's a compromise or a way that we can put on the bond or that we can get that platform to, in the future, build more housing. Because more housing is so important. to the community, to the city, to everyone. I know, living in the Mission District, where this project is located, that there are a lot of people that are living in crowded housing. There's a lot of homeless people. You've seen the news around what's happening at the BART plazas. This is a community that is really in need of housing. This is an exciting project. We want to support more affordable housing. We honor the work of the committee and their recommendations. And I hope that you will allow Roberto Backup to talk about some of that work, because we were briefed until I moved to District 9. on the project. And so I'm here today to thank you all for even considering this type of a project. It's exciting and we're hoping, you know, me as a resident in the area, I'm hoping that we can get all of the housing that And I know it's a lot of work, and it's a lot of money. But together, how can we figure it out? How can we get more money? How can we put it into some kind of future so that in the future we can continue to build? So I urge you to make all those considerations and hope that you will move this project forward in a way that brings us all the housing that was promised to the community. Thank you. Thank you. Any other speakers for this item?

I'm seeing none in the room and no accommodation requests. Thank you. Public comment on this item is now closed. I would like to just take a moment to thank all of the speakers who came today. There was a wide variety of folks from the community, our labor partners on the project, and various non-profits, representatives from non-profits who are concerned about the future of San Francisco and the health of the mission and housing in particular. I would like to particularly thank all of the members of the working group. It's really impressive to me how many people have shown up. Being here on the board for several years, this is a remarkable number of people who have come forward and have addressed this board. And I want to assure you that what you have to say is very important to us. So with that, directors, it is now time for us to deliberate. But I believe that Vice Chair Kahina, you had someone you wanted to ask Mr. Hernandez to speak a little bit.

Thank you so much, Chair. Yes, I want to thank the folks from the working group that are here today, Roberto Hernandez being one of them, Eric Arguello, Scott Feeney. Thank you so much for your years of service on this working group. It occurs to me, colleagues, that throughout the time, my time on the board at least, this body hasn't had much opportunity to hear directly from the folks that have served on the Potrero Yard neighborhood working group. I heard some points made during public comment. I would like to ask through the chair, of course, if I can recognize Roberto Hernandez, working group member representing small businesses on the working group. Yes. I just want to wait for him to come on.

Thank you.

Thank you. So I do have a series of follow-up questions from your public comment that I'd like to ask. And you can clarify, I've been advised by our city attorney that I have to limit my questions to what you've said in public comment. And if your answers can be limited to those questions, that would be very much appreciated, Mr. Roberto. Mr. Hernandez, you spoke to this already, but how long have you served on the Potrero Yard Working Group?

Eight years.

Eight years, OK. Many of us on this board have served on this board much less time, so I appreciate you and your service for all those years. From your perspective, and you spoke to this already, what was the purpose of serving on this working group?

One was to, and most important was to, from my recollection, is that the SFMTA wanted to tear down the existing barn and build a new one because it was old and it wasn't safe for the workers. And also because there were going to be new, more moderate buses that were going to be eventually brought to SFMTA that SFMTA was going to purchase. And so these new buses did not fit within the existing footprint of the barn that exists there now.

And in terms of the diversity on the working group, from your perspective, why was it important to have the type of diversity that you had on the working group?

I appreciated the fact that SFMTA put together an amazing group of people together on the working group that represented the Bayview Hunters Point, Patrol Hill, the Mission, the business community, residents, nonprofits. So it was a real good mix of people that were brought together to work together.

Thank you for that. And my last question, I wonder if you can give me a sense from your perspective what the tenor of the conversations have been amongst working group members as it pertains to the bus yard and housing element of this project, particularly when it was changed. I don't know if many of us have gone to many of the meetings. I, for one, have not gone to a meeting. So I would appreciate if you could just give us a sense of how the working group was feeling, how the working group, what sort of discussions or things that rose to the top in those discussions about the change in housing units with this project.

We were shocked, first of all, because we, as a group, there was different options that were presented to us. you know, throughout the years. And this with the 465 units, that was the final decision that was made for this particular project. And I remember there was the, we went through the process of getting this through the planning department staff. We went to the planning commission for approval, and it was approved and entitled by the planning commission. And then it went before the full board of supervisors last year, and it was approved by the full board. So moving fast forward, we all were happy and excited and celebrating that finally our work had been completed. And then when we... basically were told in October and I'm saying told and that's what really upset it a lot of the majority of the members from the group because we had no say we we hadn't there was no involvement or any communication we were just told hey we're gonna take away 365 units of affordable housing. And after eight years, can you imagine if you sit on a commission and then all of a sudden you're told, we're not going to do this? That was very upsetting. And so one of the things that we began to do is to ask questions of why. And it was really hard to get answers. Number one. Number two, you know, we began to talk about what options do we have, right? And so one of the options that we came up with was to look at having just the podium built now and then in the future build the housing, right? Because of the We were being told there wasn't any money. And part of the problem that we have is that, why is it that until now, you're saying you didn't have any money? You had eight years to financially come up with a plan for the funding of the housing as well as the funding for the barn, right? What we also learned, which was kind of, nerve-wracking was that there wasn't all the financing for the barn itself was in place. And then we learned that there was going to be recently a bond in June of $200,000. And today I just, from hearing today's hearing, I'm hearing that now that bond's going to be $250 million. And so just the lack of communication at the end and the lack of involvement, the lack, I mean, it was just, it was like we were nonexistent. It was like decisions were being made without us. And had those, the problems that are being described today, had they been brought up to us, there's some very smart people on this committee. You know, I mean, and that's why we've gotten, We came up with this amazing project because not only the people that are on the group, but then also, I mean, there's 10,000 people that we reached out to to support this. Now, how do you go back and tell these people you can't? We're not going to do this.

Thank you, Mr. Hernandez. Could you speak if between October to now, has the committee considered any sort of solutions? Or has the team presented any alternatives to address some of the sticky points that rose to the top in these discussions after that initial shock hopefully was assimilated by folks in the room or in the space? And that could be a yes or no. Did anyone come up with, from our staff or maybe plenary or somebody presenting solutions to address some of the housing concerns?

Planning staff, no. I actually went and called the mayor and had a meeting with the mayor and told him we needed $70 million for the podium. I've also committed to all the supervisors that we need to raise money. I spoke with Senator Scott Weiner and quite a few others to help raise the money for the podium.

Thank you so much, Mr. Hernandez. I appreciate your time, and thank you so much for taking your time today to come to this meeting, but also to answer my many questions. I appreciate you, and I appreciate all the work that you've done on this working group. Thank you.

Thank you, Director Kahina. Director Hinze.

Thank you, Madam Chair. My apologies, and thanks for everyone who came out today. I understand that there is a representative from MOHCD in the chambers. I have a couple questions for them, if I could, related to the housing. Now, I'm interested to hear what my colleagues will say after me, but I'm not a houser, and so we are a transportation agency, so I'm not inclined to hold up the project because of the lack of podium housing. But I do, just for my own curiosity, if you could educate me Mayor's Office of Housing Representative. I do understand that this project was submitted as part of the housing element so I do want to see if you have anything you can share around this project and affecting without the podium and affecting our compliance with our housing, all the goals, etc.

Hi, Robert Baca, Mayor's Office of Housing Community Development. So just to give a little bit of background on Mociti's role, we've been an advisor and we're a lender on the Bryan Street project. To date, we've provided pre-development financing for the Bryan Street project and work really closely with a mighty team. The Bryan Street project has been in our pipeline and our capital planning since the RFP was issued. The podium housing, we've never underwritten the podium housing. Bryan Street did go through our loan committee process. We've underwritten the deal. We've worked really closely with the developers. The project has been somewhat paused and still has a lot of pre-development to go through. And so we're eager to kind of get that restarted with the sponsors. My opinion about the podium housing and losing the housing is the only thing I can articulate is that MOSED has a very active pipeline of thousands of units that are essentially stalled because all our projects are financed. We leverage a lot of state financing, a lot of federal financing through the Low Income Housing Tax Credit Program. And we just have several projects that these funding sources are extremely competitive. And if we could, we would love to finance and to build out our whole pipeline. But the real constraint is financing. It's financing from the state and from the federal level and also from the local level. These projects are extremely expensive. They could range anywhere from $800 to $1 million a unit total development cost. So the real constraint is financing. And even with the podium housing going away, we have thousands of units throughout our pipeline in the city that we would love to move forward if financing was available at the different levels.

OK. No go yet. Now, we heard a lot in public comment today about one-for-one replacement in that same kind of mission area. in that same kind of neighborhood. Can you speak any to the possibility of that or any available buildings or land that MOHCD may be able to do in the future or at least work with the community to see if there are other locations for what would have been the podium housing?

Yeah, so most CD, we're always eager to facilitate any land acquisitions if money is available. So if there's private philanthropy or fundraising efforts, we would love to facilitate and to be part of finding sites for future affordable housing developers. We're always working with MTA to assess their future sites. So we're happy to play that role. We do have a pipeline in the Mission District. I think that the one project that we would recommend, just going back to rental housing, our new construction developments are financed through low-income housing tax credits. We leverage a lot of state financing and then our local financing, and then also private financing. We do have a project that is also meta-led. That's 2205 Mission, which is educator for sale, below market rate housing. A project like that doesn't have access to low-income housing tax credits. It can't leverage the same funding sources that a lot of our other projects in our new construction pipeline. can access. And so my opinion would be that's the perfect project for private fundraising in the Mission. And it's educator housing. It's for sale. It's ownership. We just don't have enough of that in the city.

And that's a project that's currently not in your pipeline?

It is in our pipeline. Meta is the lead developer. They fell out of a QCT, so they lost opportunities to leverage new market tax credits. But that's a project. And I believe somebody from Meta is here. But to us, that's a project that would be a great fit for any kind of private fundraising.

OK. I'd be interested in, again, I don't feel qualified colleagues to render an opinion on the housing. I know that Director Henderson probably has thoughts that she's going to share and I'm interested in those. But to the bus yard part of the project, this seems like a good project that staff has put a lot of care into. and with the community and getting feedback. So I support the project as a whole. We all, I think, realize how much of a bummer it is for the housing. But, and with support of individuals, the community working with the city to help facilitate other sites in the area if possible, but I support I support the project as is. Thank you, Madam Chair.

Thank you, Director Hinze. Director Hemminger?

Thank you, Madam Chair. I'm afraid this is one of the projects for me where the perfect is the enemy of the good. And I'm going to vote for the good because the perfect is just not possible with this project today. Let me give you a couple of reasons for what they're worth. The first is that, as far as I could tell, the financial negotiations have produced a pretty good result for both parties. I think they're fair for both parties. For example, the first milestone payment has been reduced. At the same time, the second milestone payment has been increased. The one that I pay most attention to is the availability payment, which is an annual payment 30 years in duration, which has been reduced by about $10 million a year. And I'll take $10 million a year over a lump sum any time. So that's point one. Point two is, I think, a broader challenge to the city. I think one of our testifiers talked about San Francisco not leading on this subject, and I think he's right. And I think we do that to our detriment. We need to build a bench for these public-private partnerships. They're the way that a lot of infrastructure is being built around the globe. and even in the United States now. And that's a way of bringing private capital into the business of building infrastructure. And public capital is never enough. There are always competing demands. And when we've got a chance to take a project like this and not only do some good for Potrero, but also show ourselves how far away we are from doing it as a matter of routine, and how much private capital we can, in fact, replace. You've been hearing us talk about all of the bus yards. And bus yards are a pretty good candidate for the kind of things that we want to do. And look, the prior plan here was a good candidate, too. If you can't make the numbers match, though, you don't get your bank loan. And third, I did want to draw your attention, colleagues, and we've had sort of a through issue here that has to do with the trolley buses. And we are now on a very aggressive schedule to try to get battery electric buses because the state thinks that transit vehicles are somehow dirty. But in any event, we've got that challenge. And I still think that we ought to re-look at the question of using the trolley buses as a way to meet some of that regulatory challenge. Maybe not as much as the advocates would like. I'm looking at Julie because she's given them a pretty stern once over. But I do believe that that might be a place where we could do even some more good at this new yard because, as I understand, it has some capacity. And capacity is always a good thing to have. So for those reasons, I intend to vote yes. I don't find myself on the opposite side of a vote very often with my friend, Director Kahina. But I'm afraid and I'm saddened, really, that that might be the case today. But I thank her for her leadership, nonetheless. Thank you, Madam Chair.

Thank you very much, Director Hemminger. Director Henderson?

Thank you, Chair. Well, I have a question before I give you my comment about the sources that were anticipated to be used to cover the podium. So in the beginning, I feel like I'm talking the Bible, but eight years ago or whenever it was that you started and we had this big vision, what I get the pandemic and all that, but what did you anticipate was going to be used for that?

Right. And so the podium is only enabling or was enabling the idea of housing on top. It was a separate process then to pay for that housing and to actually develop that housing. So we were assuming, once again, that our full project cost was going to be 30% less than what it came in at. We thought we could get the podium and the entire redo of the whole bus yard and make available land on Bryant Street with a specific number of $560 million. And that turned out not to be the case when we got down to a year ago and we found out the actual number and what that was going to be. we thought we were going to be able to have the whole thing. And that's why we worked for six months after we got that final number to try to sharpen the pencils, keep the full scope intact, get that number down to something that was actually feasible for us to pay for. And it did not happen that way.

OK. Yes. And so at no point there was there consideration of a transit-related source for that extra portion? So there's no transit-oriented development something?

Finding sources for transit cannot be used to fund housing. That's the end there. Anyway, I'll stop there. And so then how do you get to the?

the number that I, well, I should say, I appreciate that there is a housing component to the project still, because I, you know, obviously, as a houser during the day. But also, just in general, I think as a San Francisco resident, we clearly need housing built across the entire income spectrum, especially affordable housing. And so I appreciate that you were able to land at the number that is included in the Bryant Street portion. But I'm curious about, was there a public process for landing at the 104, whatever the number is, for the Bryant Street.

Well, and so once again, our project is making that land possible and that development possible as an affordable housing location. We are not the developers of that housing. So we are not directing that development to happen. We are working closely with developer partners to make that happen. But that exact number is up to the development team.

Yeah, I get it. But I guess my question is, you started with 465, and now we're at 100. So what part of the discussion happened with the public to land at the 100, with the working group and everything?

Yeah, so I think.

So this is what I was trying to address in my earlier comments. When faced with the revised cost and also the tension that one of the guiding principles of this project was that we were trying to facilitate housing but not subsidize housing, we really felt that we were facing an existential crisis for the project, that we were either not going to pursue the project or we were going to find a way to make it deliverable with the dollars that we had. And that discussion was pursued as a technical discussion. We brought it to the working group and to the board in October, but it was briefed out as a fact, not a decision point, because In our mind, the project itself was only sustainable with these changes.

Thank you. That's very helpful. I think that this is sort of bittersweet, because I think we have a room full of people that would advocate for the 465. I certainly would. And I think, at the same time, We have working conditions that are not suitable for the staff that you have there. We have a space issue and a transit issue that we need to focus on as well. And so I think that this is just a really bittersweet moment for us instead of being able to celebrate and sort of do all the fireworks or whatever we have for what looks like a very good project. We have to sort of determine how we can still help the city reach its housing goals. I would advocate for this board to be able to continue to be part of that discussion and have the discussion particularly related to this neighborhood. Because I think that the experience that we heard from a number of members of the public and also that we may be familiar with, is that there's been so much displacement, so many challenges with affordability in the neighborhood. So the idea of being creative and being visionary, like San Francisco is, also then feels like an over-promise and an under-deliver when we get to this moment. And I don't want to not be creative and not be thoughtful. And I also do think that we have a role that we can play in making the city, that the transportation authority can play in the housing situation that we're in. But I really am, I don't know, I just, disappointed that this is not something that we can celebrate. And I would ask that we do consider where we can, especially where there are sites that are nearer or within the district of this site, that we would consider them for some of that replacement of the 365 so that we can continue to deliver on what feels like an unofficial, it's not an official commitment, but it certainly was something that thousands of people supported. And so for it to take an eight year, it's unfortunate too that six months can erase the good of eight years. And so I just, I hope that we are able to continue the discussions about where potentially we can help the city add 365 more affordable housing units using our MTA property, parking lots, whatever it is, or partnering with another city agency to be able to create a transit-centered housing development that also has commercial retail and fits within the neighborhood and has this level of support. I will vote to approve it today, but I would like to just emphasize how important I think it is for us to not leave the 365 out of the discussion today, but continue to work together as a city family to identify resources, available land, or whatever it may be, and start the process for the 10 years that it may take to line up the funding to build 100 additional units at one of the different yards, possibly. And so I appreciate the work that was done. All of the work that was done by everybody who's involved over the past almost decade is very admirable. I appreciate the time. And I don't want to belabor the, you know, the perfect, because we do have a good project here. But I do think that it's important for us to continue to somehow find a way to identify how we can be partners with our MOCD team and others to identify some way to replace that 365, or some portion of it at least. Thank you, Chair.

Thank you, Director Henderson. Just a small piece of housekeeping. I've been informed that there was a correction that needs to be made to one of the slides. This item will be before the full Board of Supervisors on March 17th, not March 24th, as previously indicated for the record. Vice Chair Kahina.

Thank you, Chair, and thank you, colleagues, for this discussion. Respectfully, it seems like we've been trying to have a partnership with MOCD for eight years, and this is the best that we got. So my faith is a little shaken. I will say, I'm just going to start with some facts of this project before I go into my line of questioning. This site is 4.4 acres of public land. The final housing element attributed 575 units to the Potrero Yard project. These 575 units were used in the San Francisco's housing element to help satisfy the city's BRINA commitments. And BRINA, for folks, is the Regional Housing Need Allocation. Our BRINA allocation is set through state and regional processes and cannot be changed once adopted. In December 2024, staff presented the project to this board and we celebrated the fact that this project passed environmental review and was fully entitled. The final project had 465 units with 247 units of affordable housing units and 218 units of workforce housing. In other words, by the time we got to December 2024, 110 units, less than those included in the housing element, were part of that presentation already. So there was already a reduction once it was entitled. Now the project is at 104 units. This reduction represents close to 82% of the housing originally included in our housing element, close to 78% of the entitled housing units on the site. Moreover, with 104 proposed units, there is now a complete elimination of workforce housing on the site, workforce housing that, when briefed in past years, was going to benefit our essential workers, such as our bus operators, PCOs, and educators. Furthermore, there is now a 48% reduction of affordable housing units. For context, based on the SFMTA's 2025 onboard survey, 42% of our ridership is low income. This would have likely benefited them in this housing stock. So I just want to make sure I say this on the record and make sure this is known, because I did not see these facts in our staff report. I did not see this in our lender agreement either. And I see this also scrubbed from our website as well. If you go to our landing page for this particular project, I see no mention of the 465 units on our website currently. And that was a recent change. I will ask Secretary Silva if she could also pull up the project that we saw in December 2024. Just to, again, give context, I want to make sure this whole board, as they're making their decision, understands all the facts in place. There's a lot of feelings, a lot of emotions, but I want us to center us on facts. Director, Secretary Silva, when you have a moment. And it's slide 13 of the deck. Thank you, Secretary Silva. If we can scroll to slide 13, please. So this was the project as we saw it in December 2024. So there's two variants that were entitled to this project. And you could see the breakdown of what was entitled. In your question, Director Henderson, you asked Sean if there was any sort of interest, or as we were financing this, if we were considering using capital funds to leverage the building and the podium. There is a complete capital project that was also entitled here. How are we thinking of financing that?

So once again, we were under the assumption that this was a $560 million project. The podium itself was always going to have to be reimbursed from the housing finalization. The development of the housing on the podium we cannot use. Once again, we cannot use transit money to fund housing housing work. It cannot subsidize it. We were just using it to provide that opportunity. And so when we thought the full project was at 560, we were still planning to do the full scope. And then the project actually was costing a lot more than that. And that's why we had to reduce the scope of the project.

So just let me repeat what I'm hearing, because I just want to make sure I'm understanding it correctly. So at some point, we were going to use capital funds to help build the podium. The incremental cost, which is now $70 million, was going to be reimbursed to us if the use on top of that podium would have been housing. What if that use would have been capital? Because one of the projects that was Also entitled was 160 SFMTA paratransit vehicles. Correct.

Yeah, correct. I think council wanted to talk about that.

Yeah, sorry, Deputy City Attorney Susan Cleveland-Knowles, that's correct. If the use above the podium was for housing, then the MTA would need to be reimbursed for that excess cost. If the ultimate use was a transit or transportation purpose, such as paratransit, potentially possible for the MTA to pay for that itself, assuming adequate funding.

So I just want to make sure that's clear, because I think that got a little muddled in the explanation. So we were going to leverage capital dollars to be able to build that podium. But we've made the decision not to do that for this iteration of the project. Is that correct?

Yeah, we cannot find the full scope.

This is more of a housing question. So I'm not sure if somebody from MOHCD or perhaps the city attorney can ask this. But we also heard this in public comment. I just want to give a little bit more insight. Using my oversight authority here and trying to understand a bit more our risk profile in moving forward with this project. We heard that there could be a set of legal exposure, perhaps, when close to 82% of the housing stock associated with this project that was used to fulfill our arena commitments is now eliminated. That creates a 471 unit discrepancy. Do we have any exposure? What risk are we facing with that type of thing, if at all? I just don't understand that piece. Again, similar to Director Hinze, I'm not a Houser, so I don't know what that means.

Go ahead. I can weigh in. If you want to start, I can weigh in. Or if there's someone from the planning department here, that would be helpful, too.

Sean, I was going to recommend that we speak to this. Sure, let's have it.

Good afternoon. Wade Wickruff, SFMTA's joint development program manager. This is a very complicated question that I will defer to legal, but I'll try to give my understanding of the issue because I worked on the housing element. When I was at the planning department prior to being at the MTA, I worked closely with the planning department to actually just go through the rezoning that you're speaking to. So I'll try to break this down. But basically, under state law, the region gets numbers that each jurisdiction has to meet to show how they're showing housing capacity for what's called their regional housing needs allocation. The planning department is tasked with figuring out whether or not we have that capacity. And in San Francisco, our recent eight-year numbers drastically increased. I'm not going to throw out all the numbers, but it's a lot. It's 82,000 units. They looked at our zoning and said, we need to actually rezone because we don't have enough capacity to accommodate those 82,000 units. And as part of that rezoning, They did a site inventory, which Petrero Yard was in there. Thousands or hundreds of other projects were in there. And they came up with this delta of 36,000 units. So 82 minus 36 means there were 46,000 units in the pipeline. As part of that 36,000 units, there's actually a buffer. And they specifically did this for circumstances like Petrero, like other projects, where knowing that project scopes are going to change over time so that if one project reduces by 365 units, it doesn't mean the city's all of a sudden out of compliance. So they actually wrote that in a memo to the Board of Supervisors in November as part of the family zoning plan. So in my layperson opinion, I don't think this creates a risk for falling out of compliance with the family zoning plan. But again, I'm not a city attorney.

Thank you, Wade, very much. Deputy City Attorney Susan Cleveland-Knowles. I think Wade set a very good framework for how the housing element works. And there isn't anything specific in state law that would prevent the city or its development partners from proceeding with this modified proposal. and including the reduction in the residential units. I think in addition, it's important that these documents don't preclude adding additional units. At this point in time, there's a minimum requirement of units that can be produced. But if circumstances changed, additional units could still be added. And then as Wade alluded to, there is a buffer and the question really is about a net loss or net inability to meet that specified number. And I believe that the planning department has taken a look at this and did not find that this would impede the city's ability to meet its overall targets.

And is that net loss piece, because I think that's the critical piece here, does that pertain to a particular neighborhood, or is that just a citywide net loss?

Recognizing my limits on housing element expertise, I believe it is an overall limit or an overall goal. But in designing the housing element, the planning department, the planning commission, and the board of supervisors did make sure that there were distributed sites throughout the city, I believe, and I think would be keeping an eye on that. But that would be something for the Planning Commission and ultimately the Board of Supervisors to make sure that we are meeting our goals.

So potentially we're beholden to still manage that net loss risk, but it doesn't necessarily have to happen in this neighborhood. It can happen anywhere else in the city.

That's my understanding. I'll just read you the statement from this memo that I'm looking at in response to this. It says, the city is including this buffer, the buffer of how much they rezoned, to proactively address the requirement for no net loss for lower income sites, as well as to buffer for the uncertain availability of individual parcels. So they certainly anticipated that, Things change over time, right? And we want to make sure that just because one project doesn't change, we being the city, it's not going to put us at risk. And I did talk to planning about this issue a few weeks ago as well.

But now that you're up here, and since you've been a part of this project for some time, this is a trap just to get you up here. I do want to ask you, from my perspective, we had an A plus with what we know how to do, which is bus yards and transit facilities. And I think our team did a stellar job with that. I heard from labor. I heard from all the folks in the room how important it is to have this bus yard. And I share that hope that we could have something like this for our staff and for our facilities and to be able to serve the city and county of San Francisco. That said, there's another component to this project, which is housing. And this is new terrain for us. This is new for us. it seems like something went amiss here. And so I just want to open up the space for you to, perhaps you or perhaps Julie, to speak about this a little bit more. Because it seems like for, and we're hearing this from what the Roken group said, For a number of years, we've been talking to community and we've been talking to this board, this body as well. I just don't want to just put it on the working group that heard this. We also heard this too, that there was going to be this really innovative project that happened above the bus yard. And we're here now. And that's completely changed. And so it makes me question our ability to deliver on this piece of the work that we felt really excited was going to be part of how our agency operated. It makes me question our capacity. It makes me question how we're able to do this type of work internally and how we work in partnership with our sister agencies who have been in this field for a number of years. and how well they advise us. So I don't know if you could speak to that a little bit more. But I'm just curious to understand, as we're thinking ahead to, and as I think other board members are also thinking about our future facilities, how does this not happen again?

Yeah, Director, great question. Thanks for the opportunity. I think Director Kirschbaum's opening comments acknowledging that we could do better, I think, is where I would start. And I think there are lessons learned from this project that we're trying to apply in how we're thinking about future projects. Mr. Baca from OCD mentioned a study that we were awarded a grant for that we're just kicking off right now with our consultant, where we're going to explore innovative opportunities for future joint development at future projects. And we're definitely using lessons learned from this project, whether that's how we split the site, how we think about the site, how we meet our core principles. as a transportation agency how we can be transparent and communicating what challenges and risks are for projects i think those are all things that we're we're learning from this effort and going to try to apply going forward and really having the partnership from the private sector to advise us as well as our other city agencies too thank you um

I think folks know how I'm going to vote on this project, so I won't speak to that too much. But I do want to just speak to the different partnerships that were made in this particular project. I know, respectfully, Director Hemminger, you mentioned that the two parties in this particular agreement, it was a win-win for both of us. This is the best that could happen. But I will press to say that we have to have a more expansive view of who the partnerships were in this particular project. I would say that we as a city have a commitment to affordable housing. So that's one partnership there that I think we failed in this particular project. And I will say that the most important partnership and the most important community that we strung along in this process was the Mission community. and to the Bayview community, too, because they actually are also beneficiaries of this project with the targeted marketing that's happening to that community as well. And so part of the reason why I'm not supporting this particular, why my vote is going to be no is because we failed those two partnerships and those two parties to this particular agreement. It's difficult for me to even look partners in the eye in this moment and say, and understand that we've strung you along for eight years. I feel, as a director, I apologize for my inability to advocate and do more. I wish I could have done more. And I'm sorry that I can't do more today than just cast my one vote. But I am very disappointed in how this ended up. And I'm very disappointed with the partnerships that we had from our sister agencies. This was the end result of us doing a stellar job with what we know how to do and not being able to meet our goals when we relied on our partnerships. And that is a really challenging situation to be in. And I'm sorry that we're in it.

Thank you very much, Vice Chair Kahina. Director Chen.

Thank you, Chair. I may ask questions from the Mayor's Office of Housing, Mr. Baca, Mr. Robert Baca. As far as sites go, the Mayor's Office of Housing has a portfolio of sites, potential sites for development. As far as sites go, my understanding is that Potrero Yard is not particularly exceptional in the sense that when looking at competitive funder, competitive places, the Mayor's Office of Housing, it's not necessarily a shortage of sites. I think alluding to your comments earlier, it is really a shortage of funding, and there are currently opportunities in the mission as well as across the city that could be funded. But right now, there is a lack of fees from new development, lack of funding from state, lack of federal funding. Could you speak a little bit to that?

Yeah. Potrero Yards is not any less competitive, or I wouldn't call any less desirable than any of other sites. It's just the whole environment that we're in. The financing environment, all our projects require, as I said earlier, state financing and federal financing. And they're very competitive. There's just so many projects. in San Francisco, in Northern California, which is usually how we compete at the state level, and then throughout California. State credits is allocated at the state level. So the financing is extremely competitive. There's a lot of sites, not only San Francisco, but throughout the region, throughout the state. And this project would just face the same challenges that our whole pipeline is facing, and that's not enough state funding, competitive tax credits, and then also just not enough local financing.

Got it. And so what I'm angling for is that, you know, what Director Kahina, through her questioning, said with Mr. Sean Kennedy is that, well, if SFMTA did build this platform, then it would have to be paid back by the housing developer. And so my sense is that even if SFMTA did build this platform, it is not guaranteed or it's not necessarily even probable that immediately there would be housing, that it would be first in line for funding. And I know that's very hard to speculate for something that would happen five plus years in the future. But am I wrong here?

Without getting into specifics, I think developing hundreds of units in one given site, it takes a long time. And any single one project of ours in our pipeline can take five, seven years. Occasionally there are exceptions, but these projects will take a very long time. There's a lot of design work. There's a lot of pre-development work. It has to go through entitlements, through permitting. But the real constraint is financing. It's always been financing. That's the real issue today. If we had the financing at the state level, at the federal level, at the local level, I think we could build housing a lot faster.

Thank you.

And then I have a few questions for Mr. Wade Weakriff. Sorry, I have to make you walk from the back. And I'll preface by saying this board approved a joint development program last year. And part of that program is across MTA's portfolio of especially large sites that it will be building housing. And there's also a commitment to building below market rate, affordable housing. And my understanding is that there that the policy that this board has passed and that staff is carrying out will see the development of hundreds of units of below market rate housing across the city.

Yes, Director Chen, Wade Wycroft, thank you for that introduction. Reminder, this body adopted joint development program goals and policy for the first time last year. And the Board of Supervisors actually adopted a resolution in support. As part of that, we adopted this portfolio of properties that we think have the best potential to advance our goals through future projects. There's 25 properties in that portfolio. And as part of the grant that I mentioned earlier, we are looking at some of those properties over the next year to assess which properties have the best potential for different types of development, including affordable housing and across the city. So one of the key things that will enable housing and other types of uses to come online in the future is the zoning. So if you remember, part of the reason this took eight years was it required a rezoning and environmental review. We just rezoned 21 of our properties, or the city did, as part of the family zoning plan to enable us to continue to have transportation uses on those sites, but also to enable us to have housing so that we don't have to go through site by site to rezone. So that was a big step for us recently that will help us set this program up for better success in the future. Thank you.

Let's see. I don't work in housing like Director Henderson, but I have been an advocate for this in some time. So I'll try to keep these remarks short. I'll say that I plan to vote yes on this item. And my reasoning is that SFMTA's first priority is to transportation. And as a board, I believe we have a fiduciary duty to make sure that our transportation is working. This project will improve our working conditions for our staff. It will improve transit service for the riding public. It will help everyone. It's just very hard, I think, for one agency to try to solve every problem in the city. And talking about the podium, we were talking $70 million. Who knows what the actual cost for that will be? But three weeks ago, this board was arguing over $40 million of capital funds. And so question of the $7 million, which we might get paid back sometime in the future in 20 years versus being used for for capital needs that we've been discussing, for urgent things about replacing our buses and fixing our train control system and things that Mr. Rob Hawkes mentioned, I think, last month in our board meeting. I think it's a very tough decision to make, but I feel like our duty as a board is to say we really need to make sure we prioritize our transportation. I think there were alternatives that could have happened that maybe would have made this project scale better with below-market-rate housing. I think there was maybe a discussion on the table of adding market-rate housing to change the financials, but I believe that that was rejected by the community. I also know that in a time of really high inflation, that cost escalations are a huge concern. And I think, unfortunately, time is of the essence. That said, I do hear the community feedback, and it is, I think, very painful to say after an eight-year process that went through an EIR, that went through the rezoning, that went through, I think, a lot of vision exercises. I don't know exactly where the communication broke down, but I think there is this gulf between the community expectation and I think what... And then I think maybe what staff said, hey, there is... that there is risk and was there some sort of gap in communication? Did we as the agency account for all the risks and the range of realities that are out there? Did we as an agency? account for the cost escalations, and we're able to really try to forecast some of that before we got that initial bid. The length of process itself is something, it's like if you start with something eight years ago, and then with inflation, if you could shorten a process from eight years to three years, then that is a lot of cost savings that could go to other community-serving needs. And so one thing I would like staff is to see how, I think along with some of my fellow directors is to say how can we learn from this and also if we are doing further joint development and other really large, these large real estate projects of which I think the MTA is not necessarily, this is maybe one of the first very large ones that the MTA has done, how do we make sure that the future ones do better? So from that downer, I think I will say that regarding affordable housing in general, as an advocate, I think that we know from the planning department, from the mayor's office of housing, from the city resources, is that there's not a shortage of sites in San Francisco where you could build lots of affordable housing. The real issue right now in the current moment is a lack of funds. Historically, most of our affordable housing was funded by large new developments. So new office space, new market rate housing, they would pay into the affordable housing fund, which would then fund all this 100% below market rate housing. Of course, with COVID inflation, higher construction costs, that money is not coming in. And so until we find a solution, until the city finds more funding, either through the traditional sources or through new sources, and that's way beyond the scope of this board. Very few sites are moving currently through the program. And that is something that the MTA is not really equipped to solve, except in the parts where it does have ability. And that brings me to the last thing, which is our joint development program. The joint development program that this agency did approve last year is, I think, very revolutionary because I think it helps on a whole range of issues, and it is something that can be, in many ways, a win-win-win. will provide sustainable financing and operating funding for this agency to help us run transit and to help us provide services that really do help low-income people the most. It will provide housing which including below market rate affordable housing across its sites. It's just that unfortunately the MTA does not have a ton of sites. My understanding is that there's not a lot of sites in the mission itself. But it is truly across the board. And for sites in the mission, we are looking to our partners at the Mayor's Office of Housing and in the Planning Department to make sure that we do have sites that we can expedite affordable housing in the mission, pending funding. So all that to say, it is This is not a pure win. I recognize that there is a lot of pain here and a lot of disappointment. I know that this advances so many of our goals and will make the next generation of Muni better. We are going to, you know, within our capacity, we will be working with communities and also with our agency partners in the city to try and make things better. We will try to also improve conditions in the mission as much as we can with the tools that we have around transportation. But for this project, I think it is the best that we can do in an imperfect time and an imperfect world.

Thank you, Director Chen. Director Felder?

Thank you, Chair. Thank you, Director Chen. I think you've summarized a lot of what I had intended to say. And I'll also note that in general on this, I agree with Director Hemminger that in this particular case, we really cannot let perfect be the enemy of good. I think that is where we are. And I think that in terms of this project, we've got to really stick to our core mission as an agency and make sure that we handle that well. And I think we can handle it very well in this situation. I think what's unfortunate is that The good project is probably not as appreciated by the community because there was a breakdown in communication. And I think were we to have communicated better, I think we would all feel better about where we are today. I very much appreciate, though, that we're acknowledging that we made some mistakes. We're going to learn from them, and we're going to move on. And as we approach future projects, we can do a better job of communicating so that at the end of it all, we can feel good about the projects that we should feel good about. As it relates to the housing specifically, which obviously is a critical city need, and it's something that we as an agency, as part of the city family, need to pay attention to, I think we've got to be mindful of those lessons as we move forward. In this particular case, though, and Director Chen said a lot of this, I think that had we communicated, there would have been a realization that there are challenges when it comes to more housing than we are actually providing, you know, through this final project because the cost of that podium, the world changed a lot since when this project was first envisioned. And the ways in which the world changed, I think, would have made it more difficult to make sense of housing on top of a $70 million podium. And I think if we had been able to have that honest conversation and that transparent conversation with the community, I think we could probably feel pretty good about the fact that we're making the decisions we're making because there are probably better ways to spend that money towards getting the most affordable housing out of the limited dollars we have. a somewhat long-winded way of saying that I am going to vote in favor of this project moving forward. I appreciate the, you know, extensive efforts of the community in this project. I wish that as a whole the community could feel better about this, and I hope that moving forward we will all feel better about the endpoint in these projects. But I nonetheless feel this is a good project that we should support.

Thank you, Director Felder. Vice Chair Kahina, I understand that you have an amendment to offer. Before you do that, I would just like to take a moment to thank my colleagues for your very thoughtful comments. COMMENTS ABOUT THIS, I WOULD LIKE TO ACKNOWLEDGE THAT I THINK THERE'S A UNIVERSAL DISAPPOINTMENT THAT THE MTA WAS NOT ABLE TO DELIVER ON THIS BRIGHT PROMISE OF 365 ADDITIONAL AFFORDABLE HOUSING UNITS AT THIS LOCATION. I do believe that the 100 that remain will have a positive impact on our housing goals as a city. And I feel that MTA is working to do its part. I DON'T KNOW IF OTHER AGENCIES AND DEPARTMENTS IN THE CITY ARE HAVING SIMILAR HEARINGS ABOUT PROJECTS THAT THEY'RE TRYING TO PUT FORWARD, BUT I HOPE SO. I HOPE THAT WE ARE ALL WORKING TOGETHER. MY QUESTION IS FOR MR. BACA, AND IT RELATES TO THIS. I think it's very important the role that the Mayor's Office of Housing and Community Development played with us in getting this project to its final iteration with the 100 units that are, you know, now still in the pipeline. What do you feel are, beyond financing, the most important takeaways as you and your colleagues advise other city departments as we together work to fulfill this shared goal of using public land for public good and addressing the very serious housing crisis that we have in the city?

Just off the top of my head, probably agility. I think one of the things that we've seen in the last five years is just how, and it goes back to funding. I know I've been really focused on the financing. But the funding climate has just changed dramatically over the last five years. And it's creating a lot of constraints on our projects. And our developers are dealing with high cost, inflation. Not to get into nuance here, but our tax credit pricing has gone down 10% ever since the federal tax bill that was approved last year. So we're constantly dealing with these external factors that are constantly requiring our sponsors who do great work, our borrowers who do great work, to just constantly be nimble and agile and flexible, because projects are constantly evolving and changing.

Thank you. That's very good feedback. And I think that part of that agility is avoiding a pitfall that we experienced here, which is, and I heard it in public comment, and perhaps from my colleagues, that to over-promise and under-deliver is a position that we want to avoid. going forward. That being said, I think that I also heard a lot of really positive elements in terms of our community engagement on this project that we were able to engage so many people to to, despite a famously difficult environment for any large project, to be in favor is a real accomplishment. So I don't need to belabor that. Mr. Wheatgrief, I wonder if I could hear a little bit more about our efforts to have a comprehensive plan for the projects and regular updates for the board. Our approval of the program last year, it's an important step that we took. But can we be more engaged as a board going forward?

Yeah, Chair Tarlow, Wade Wycroft. So I think it's a tricky question, though, too, because whenever we will talk about individual sites, it may set expectations for those sites when we're just in idea phase and having conversations with, community stakeholders, private stakeholders about ideas for a site. So what I would recommend through the director is that I look at our work program over the next two years and try to identify some key decision points or informational points that it would make sense to engage you all either at the board or in briefings. One of the work program scopes that I'll just put out there, though, is to create a strategic plan. So we are going to be evaluating concepts for a bunch of sites. And then from that, we're going to try to identify a handful of sites that we think are the best potential for joint development over the next few years. And when we get to that point, I think it makes sense to have a larger sort of conversation with the board about it.

Yes, thank you. That's very helpful. I just have one comment to make in addition to what many of my colleagues have said, which is that when this project, and I've been on the board for two years now and two plus, and I So I have not been here for the full eight years. But when I first understood about this project, putting on my small business hat, one of the things that I found most promising is joint development as a revenue source. for the agency. And this is a source of revenue that is not coming in the form of taxation to the citizens. It's not coming in the form of higher fares to the riders. It's not coming in the form of higher fees and fines for motorists and other users of the public right-of-way. I am in favor of that. I think that it's very important for our long-term financial stability that we explore and utilize other sources of revenue. And I think that joint development is a promising avenue for that. And how affordable housing fits into that Something that is, there is complexity there. Having a healthier populace that is able to afford to live here, having our own workforce able to afford to live here is our real points that need to be brought into the However, I believe that it's the primary responsibility of this board to ensure our long-term financial health. And so I think that's the primary reason that I do not want to see this project delayed in any way. I think that we need to continue to look for opportunities to be a partner with the other members of the city family in helping to solve the housing crisis in San Francisco, but the reliability of our service The efficiencies that will be gained by building this project are of primary importance to me. So that concludes what I have to say. Vice Chair Kahina.

Thank you, Chair. I'm sorry to be taking another bite at the apple here, but since my colleagues brought up the joint development program, I just want to share a couple words. I have concerns about this program, and it feels, at least in this moment through this project, that we will always have this constant friction between housing and our transportation goals and our transit goals. And we're living this right now. We have a stellar project on the transit side, and we have a housing project that is not what we ideally want to support. But because we are a transit agency, and because we feel compelled by our duty to serve as transit directors, we are here to support that particular piece of the project. There is a multi-step approval process for this, but as it pertains to us, I think transit will always, no pun intended, will always take the wheel when it comes to our decisions. And so I'm seeing this and realizing this as we're in real time that I have questions about how we can truly have a joint development program where this friction will always be there and our housing priorities will always come second once we have to determine how to vote on something. Many of us here in this room said, we are not housers. I said it. Mike said it. Fiona said it. We all said it. We're not housers here. And yet we're taking a vote on a housing element to a project. But my faith was restored when I saw that within our working group, we did have housing experts. We did have folks. in that particular working group that have fought to make the pipeline the pipeline in the mission. And I realize that we just never gave ourselves the opportunity to work in good faith to come up with a solution to this. And that still stinks. Atonement can't be realized without action. And so as many times as even I say, I'm sorry, if we don't see something actionable come out of this, we lose credibility with this community. And so I just want to join Director Henderson's guidance to staff. directing staff to work with a working group or folks in the community to look for binding commitments to ensure that the net loss solution as it pertains to this housing unit remains in the Mission District and continues to benefit the Mission portrayal and Bayview-Hunters Point communities. And I'll part that there because I do have an amendment that I do want to introduce. But because I'm not voting in favor of this item, I will ask a colleague who will be voting in favor of this item to make, once they make their motion, if they could make the motion with this amendment. And it's a friendly amendment to the resolution for item 11b. I can read it into the record if that helps.

You'd like me to read it?

Oh, sure. Or do you want to read it? No, you can read it. That's OK. Go for it.

Go for it, Susan. Either way, or Secretary Silva, do you prefer? Sure. OK.

This is to amend the resolution for item 11b, whereas the FEIR studied in an expanded and modernized transit facility that would include residential uses above and adjacent to the transit facility, as well as a project variant proposing to construct residential units next to the transit facility along Bryant Street and a paratransit facility above the transit facility. Ordinance number 58-24, effective April 22, 2024, allowed for 465 residential units above and next to the infrastructure facility or a paratransit facility above the infrastructure facility and a housing project with up to 103 residential units next to the infrastructure facility. This would be an added whereas clause.

Thank you so much, Secretary Silva and colleagues. The reason why I'm amending the resolution to add this, again, when I was reviewing the documents, once they were public, I noticed that there was no mention of the 465 units that were entitled. And this is my way of at least memorializing that that did happen as we codify this project, as you vote to codify this project, and ensure that that history is not lost.

Director Hemminger, did you have a question?

Yeah, I do. And maybe it's because I'm the oldest guy in the room. But it'd be helpful to me to see that in writing so that we can know what we're voting on. There were a lot of numbers and words in there.

A lot of numbers and ordinances and things. Susan understood the assignment. She brought a copy. Thank you so much, Susan.

Oh, that's right.

Madam Chair, I can go ahead. Are we taking one vote on both items, or would you like to do them separately?

I believe we can do it as one item, unless one of the directors wants to put it forward as two. OK. Can you see city attorney Susan Cleveland-Mills is?

I have it.

OK, great. Thank you.

Don't worry. Um, I will move both items 11 and yes, and B, um, as amended, but as amended as read into the record by, uh, secretary Silva.

And to clarify, this amendment would be to item 11b, is that correct?

11b, yeah, the housing agreement, yes.

Director Hemminger, can you read this language, or do you want me to?

Yes. So that's step one. Step two is to ask you, does this put, I take Director Kahina at her word about being a friendly amendment, but do you see anything in here that might be problematic in terms of our legal posture?

No. Our office has reviewed this language, and we're okay with it.

Okay. Thank you.

Very good. We have a motion. Is there a second? Thank you. Secretary Silva, please call the roll.

And just to clarify, that was a motion to approve item 11A, amend the resolution for 11B, and to approve as amended.

Yes.

On that motion, Director Chen.

One quick point of information. Is that adding, that whereas is added to the end of the whereas clauses between the last whereas and the first resolved? Is that?

I would actually recommend that it appear after whereas clause number 10, which also discusses the environmental impact report. That would be the third one from, above the third one from the bottom, if that's easier.

Yes, when the staff report is page 11. Okay.

Thank you.

Got it. OK. I vote aye.

Chen, aye.

Did I get a second?

There was a second, yes.

OK, good.

OK. On that motion, Director Chen?

Aye.

Chen, aye. Director Felder?

Aye.

Felder, aye. Director Hemminger?

Aye.

Hemminger, aye. Director Henderson?

Aye.

Henderson, aye. Director Hinze?

Aye.

Hinze, aye. Director Kahina? No. Kahina, no. Chair Tarloff? Aye. Tarloff, aye. Thank you. That motion passes 6 to 1.

Thank you, colleagues. I would like to suggest that we take a break now. I have 4.18. Let's return at 4.40. 4.40. Very good. Thank you.

Thank you. Thank you. Thank you. Bye.

SFGov TV. San Francisco Government Television.

But I will read the next item into the record. Thank you. Hearing noise from the audience, if you could please silence your phones, we would appreciate it. Directors, that places you on item number 12, approving parking regulations to establish paid on-street parking on all Treasure Island and Yerba Buena Island streets, newly constructed or reconfigured as part of the Treasure Island-Yerba Buena Island redevelopment project, consistent with commitments made in the Treasure Island Transportation Improvement Program and other approved development documents and making environmental review findings.

Thank you. And good afternoon, Chair Tarloff, members of the board. I'm Andy Thornley from the MTA's Streets Division. And we're bringing you a question of parking management on the Treasure Island and Yerba Buena Island redevelopment project. I'm going to immediately turn things over for some background in history and some context to Kia McCarley from the Treasure Island Development Authority. And we'll catch you up on the context. And then I'll come back and we'll talk about the actual question before you. So Kia, if you'd come up and speak to the board.

Thank you. Good evening, directors. My name is Kia McCarley. I'm Treasure Island Development Authority's Senior Community Development Specialist. As Andy mentioned, I'm here to share some background information with you all about the proposal that's before you today and kind of how this proposal plays into the larger transportation plan for the island, which supports the overall development. So I think the first question is, why is Treasure Island a transit-first development? A key vision of the development is for it to meet mobility and sustainability goals that we hope will support our new 20,000 residents on the island. By doing this, we hope to provide high quality transit promote walking and biking infrastructure, and reduce dependence on private vehicle use. This goal is visionary, but it also has a practical component as well. The capacity of vehicle infrastructure on the island is limited. We're currently undergoing a large infrastructure project on Yerba Buena Island that at full build-out will still only include one two-lane on-ramp onto the Bay Bridge and one two-lane off-ramp off the Bay Bridge. As well as building dense housing on the island, we're really proud of this plan to build 8,000 new units of housing. But that does have constraints for on-street parking. Again, we hope to build 8,000 new units of housing. But at full build-out, we'll only have around 850 spaces of on-street parking. As part of the transportation plan, we want to encourage transit usage through, again, robust transit options. The island is currently served by the Muni 25 service, as well as Prop SF ferry service. Future expanded service would include an on-island shuttle, more frequent bus service into downtown, and a bus line to the East Bay, as well as expanded ferry service. At the end of this year, we'll undergo a project to build electric ferry charging infrastructure, which will allow SF Bay Ferry to operate electric ferry service as early as 2027. Additionally, the transportation plan calls for parking management strategies that balance the needs of residents with this capacity issue, as well as encourage transit usage. Those strategies include having all on-street parking be metered parking, unbundling the cost of off-street parking with residential units, and instead bundling a transit pass with the cost of renting or purchasing a unit. We hope to expand that transit pass program, but currently are piloting a smaller version of that program with the Prop SF Ferry for some of the housing units on Treasure Island and Yerba Buena Island. So why do we need to implement those parking strategies now? Streets in the Stage 1 area are already complete, but without legislation, lack key curb infrastructure, like ADA parking signage, curb paint, meters, and additional clarified signage that let residents know where they can and cannot park. And we are also already seeing those capacity issues in the Stage 1 area. We are happy to have constructed over 900 units of new housing across Treasure Island and Yerba Buena Island, which supports over 1,000 new residents on the island. Most of those are in the Stage 1 area on Treasure Island. But we only have around 200 on-street spaces in that same area. Construction in the Stage 2 area has begun, and we anticipate new streets opening as early as 2028. We want these new streets and new homes to open with clear parking rules and legislation in place so that new residents know what to expect and anticipate for parking planning. We understand that this transition phase, both for the development project and for our residents, is a transition phase. While we are ramping up to full build out and a fully implemented transportation plan, we want to support residents in this current phase. Parking on legacy streets and parts of TI that have not undergone construction will remain free. until they are replaced or are removed by construction. Meters, once they are installed, will start at the lowest base rate, when typically my understanding is new meters in the city start at a rate based on their closest neighbor. As well as TIDA is partnering with our development partner to install a new temporary lot located adjacent to the Stage 1 area that will have a reduced monthly rate for residents living in our below market rate housing. We expect that lot to be available to residents for at least five years. Our team has been lucky to collaborate with some of our colleagues at SFMTA on engagement efforts to get this information about proposed legislation in front of residents. Back in August, Andy Thornley and Pamela Johnson joined us at our yearly transition talk meetings, which we did a digital as well as physical outreach campaign for. Similarly, back in October, we did an outreach campaign prior to the presentation of this item at the SFMTA public hearing meeting in October. As well as this item was presented as an informational item at the Treasure Island Mobility Management Agency, or TEMA, back in October by Swanee Cho. And this item was also included in a report to the TIDA board directors at a meeting back in November by former TIDA director Bob Beck. For additional context, I wanted to show you the full build-out of the street map for the island. But I think that this concludes my portion of the presentation, and I will pass it over to Andy.

ANDY RICKERSON- All right. Thank you, Kit. I'm going to probably come back to that map.

And I'm going to tilt this, just to make sure that I can give you the actual question before the board.

It's rather limited. textually, but pretty broad geographically. And it's completely coherent with the Treasure Island Transportation Improvement Plan that was adopted in the development agreements back in 2011. You heard Kia tell you that all parking on the islands, this is also Yerba Buena, but most of it is Treasure Island, but all parking on the islands, public and private, shall be paid. And that paid parking should be by the hour. It should not be long-term parking. We want to make sure that, for the sake of availability in this very dense neighborhood, that there's available parking for all various folks, not just residents, but visitors and others. Notion of paid parking is fairly decided. You can certainly reject that decision. But again, it's part of the development agreement that on-street and off-street parking will be paid, unbundled in the case of auxiliary parking. But staff are coming to you with a proposal to have those meters operate every day, seven days of the week, from 9 AM to 10 PM. This is effectively the operating schedule that you will see in Mission Bay. Mission Bay was born with meters on every street. This is what most of the port streets operate on, a seven day, 9 AM to 10 PM schedule. Pier 70, if you have visited, it's growing up pretty quickly. And all the streets on Pier 70 streets have meters that operate on that schedule. And you heard Kia say that staff are proposing that we will start those meters at the lowest hourly rate, the floor of $1 an hour. If we were putting in meters on the mainland, so to speak, we would look to the nearest meters and mimic the rates there. But here, we're starting with a blank slate, effectively. So we're proposing to start those rates at $1 an hour. And I think, let me put back to the map here, because I think it's important to look at this. You also heard Kia tell you that there are legacy streets. This is an island that was created a scratch in 1937, 38. In 1940, we had the World's Fair. And then the Navy took over almost immediately afterwards. And the streets and the buildings that are on Treasure Island are effectively Navy era. And that street grid that is on Treasure Island, and you've probably been driven around on it, walked around on it, is going to exist. for the next several years. The development is going to move in phases in a sort of a counterclockwise pattern. And the streets, the legacy streets, are going to continue to be there as the redevelopment continues to grow out. And so there will be parking on those legacy streets, effectively unregulated, for folks who are looking for a place to park. Eventually, all of the existing streets will have been erased, and new streets will be put in their place. And that's what this map is showing you. The blue lines are streets that have yet to be built. The green lines in the lower portion of the map exist, are built, have been accepted. They are city streets right now. And I think I should stop there and open myself up for questions.

Thank you. We will take public comment on this item before moving to director discussion. Public comment for this item is now open for two minutes each.

Members of the public wishing to provide comment will have two minutes each. There will be a warning sound, a 30 seconds, and a chime when the time is up. Any speakers in the room can come up to the podium at this time for item number 12. I'm seeing none in the room, but I do have one accommodation request. Speaker, you've been unmuted. This is for item number 12. You have two minutes.

Thank you. Good afternoon, directors, and thank you again for your time. My name is Carrie, and I represent the residents of Isle House on Treasure Island. We strongly oppose the implementation of metered parking on our residential streets. Our neighborhood is strictly zoned residential. Metering in these areas is highly unusual in San Francisco and represents a significant departure from the city's standard practice. Meters are intended to create turnover in commercial zones, but we have no stores, pharmacies, or daily services. We have housing. Because of this lack of services, residents must commute for work, school, health services. SFMTA's first obligation should be to the transportation of the San Francisco residents who live on and commute from Treasure Island today. Relying on a 15-year-old transit-first framework designed to eliminate cars, the SFMTA is choosing a theoretical sustainability model over the actual reality of our residents. This blanket metering creates an inequitable burden on working families, seniors, people with disabilities who cannot simply opt out of driving. Therefore, we respectfully ask the board to prioritize the parking rights of our community by establishing a residential parking permit framework consistent with other San Francisco neighborhoods, guarantee ADA accessible curb spaces directly in front of our buildings, and implement interim resident priority parking in nearby lots, and potentially pause residential metering, or at least limit it strictly to future commercial corridors. Thank you very much for your time.

Thank you.

No other callers. Thank you. Public comment for this item is now closed. Directors, it's open for our questions and comments. Director Felder. No, you're fine.

You know, I think that the analogy to Mission Bay is a helpful one. Obviously, there is more commercial activity, more event activity in Mission Bay, but that is a new essentially built from scratch residential community that at least in terms of the portions of Treasure Island that this particular plan is pertinent to is a fairly analogous case. There is actually some commercial activity. There are events that take place on Treasure Island. I think even from a resident perspective, it is important that there be some level of turnover within the spaces. And I appreciate that there is an off-street lot that's located within about a block or two of most of the residential properties that have recently been constructed where a very affordable monthly parking is available. So I do feel like this plan addresses the core needs of the emerging community there. And I trust that we'll continue to work with the community to make tweaks as is needed as it relates to the specific needs. But I think as an overall plan, I feel like this is a responsible approach for us to take.

Thank you. Director Hemminger?

Thank you, Madam Chair. Maybe just to catch me up on the history because I used to follow this one fairly closely because it connects to a bridge that I'm aware of. Is tolling still a part of the picture out there?

Mr. Director, yes, tolling is still part of the picture. It's not an active conversation at the moment. We had a representative from TIMAA present, and I see a couple of colleagues standing here. I think that for the MTA's purposes, we're paying attention, but it is not an active conversation. This might be a helpful way to answer that, that to the extent that we are pricing parking on the island, that has two purposes. One of them is transportation demand management, expressing to people clearly that the island cannot take up that much car traffic, and there's really not going to be a place to put enough cars. But it also is going to serve as a revenue source to help nourish and grow alternatives to driving. make MTA's interest whole. As the parking meters go in and enforcement goes forward, we will get our expenses back. But surplus revenue that's generated is going to go towards nourishing those other modes, as tolling is meant to do. But Tia, do you want to say something more about tolling?

TIA COWIN- Sure. You don't have to answer the question twice. That's OK. I got a few others. TIA COWIN- OK.

Thank you.

Yeah. The first other is there's no other example in the city where everything in the neighborhood is metered parking. Is that correct?

There's no other. Well, we mentioned Mission Bay. We've got most of the port properties that the MTA manages the parking, but it's port jurisdiction and the port takes the revenue. Meters operate most of those blocks. If you go up and down Illinois Street and go down to Pier 70, certainly as Pier 80, the various redevelopments of the port, they're coming in with meters.

But I guess I'm trying to get at, what is the status, the legal status of Treasure Island? It's a neighborhood in the city, right? It's subject to city law and all the rest of it, right?

Yes, the streets that have been opened are accepted streets of the city.

Directors Artema, a colleague may have.

Answer this question.

Sure, I can speak to that. Yes, the streets that we're talking about currently metering are accepted city streets and are city property. The remainder of the island is in different phases of ownership. The Navy has transferred a large amount of the island to TIDA, Treasure Island Development Authority, maintains ownership of a portion of the island that is mostly related to their remediation efforts. WHEN THEY FINISH THOSE EFFORTS, THE REMAINING LAND WILL BE TRANSFERRED TO TIDA.

WHO IS PAYING TO INSTITUTE ALL THESE METERS?

MY UNDERSTANDING IS THAT THE FUNDING TO DO THAT IS A COMBINATION OF TIDA FUNDS BUT ALSO FUNDING THAT IS SET ASIDE BY OUR PRIVATE DEVELOPMENT PARTNER.

SO NOT US. IS THAT CORRECT?

THAT'S RIGHT.

TIDA, the master developer, a city agency if you don't know, but TIDA is an agency under the city administrator's office. TIDA has purchased the metering machines that are going to be installed assuming this proposal is approved.

Are they the same as the ones we have here?

They are. They are. And our meter shop have consulted on that. They're ready to install them and maintain them. And TIDA has paid for that, as Kia said, from multiple funding sources. But these are city streets. The ones that you see in orange and if you go over there now and walk or drive around are accepted city streets. MTA engineers and operations team have been striping streets. They've been striping bike lanes as city streets. And there are, again, Mission Bay, Pier 70, are very effective analogs for what's being proposed here.

OK. Andy, let me just ask you a final question about timing. I mean, this is an election year with two different elections. And do we have to do this right this minute, or can we wait a while?

That's an excellent question, Mr. Director. We have over 1,000 people currently living in the redeveloped streets. The development is going on. The next phase is underway. By the end of this year, there will be even more streets that will be accepted city streets. Right now, there's very little parking enforcement happening on those streets. There are streets that have been built and they have parking spaces. But we don't have much of a reason to get parking control officers out there. We also need to decide and build out capacity for enforcement to be out there. They can't be driving their go-fors over the Bay Bridge every day. and we are working with TIDA and other partners on an MOU that we'll come back to. We'll share that with you shortly, so that we can pay and have an understanding or make sure that we are accounting for the expenses that the city is incurring. But if we don't do this, the streets keep getting built, people keep moving in, and cars just park and never move, and the curb system doesn't work unless we regulate it.

So at a minimum, it's foregone revenue.

I'm sorry?

At a minimum, it's foregone revenue. That's what you have now, today, right?

Yes. Well, our obligation to regulate city streets is not being met, really, at this point, if I can put it in that terms. We have city streets that have people using them that don't have parking regulations, and they don't have enforcement for those streets. And yet they are being occupied more and more by residents. There are businesses. There are institutions there that all want to have access to parking. There are already events going on. Director Felder pointed out. This summer, pretty much every weekend, there's going to be something going on there that's going to bring people out to visit. And curb management is a bit chaotic at this point. I want to note that we do have accessible ADA spaces already built into those streets. And some of them have actually been signed. You can park in a blue space, but only a few of them. Those are all up to ADA and pro-wag standards for accessible parking. But again, without finishing the regulatory aspect of that curb, it's pretty chaotic. And we're really not serving the public well with that street system.

If I could also, sorry, just to add on to what Mr. Thornley has said and to my colleague, Deputy City Attorney Susan Cleveland-Knowles, the other jurisdictional issue with Treasure Island, aside from the accepted streets, is that it's all being implemented under a development agreement, which is, as we've discussed before, a binding contract between the city and the developer and the regulatory entities. And that development agreement, as discussed in your staff report, calls for a transportation implementation program, which this paid parking is part of. So that was called out in the development agreement or the side agreement to the development agreement.

Is there a deadline or something like that?

I think I do not know, but I would assume that it is as buildings are being occupied that the obligations begin to accrue. I can follow up on that question if you'd like.

Thank you, Madam Chair.

Thank you, Director Hemminger. Colleagues, anyone else? want to weigh in? I could just offer that just as a learning point for myself, I am curious, since it's my understanding that Mission Bay, Pier 70, the port properties, that this model for no free parking and all metered parking on the street is already in process. I'm wondering how our experience is of that. Is it meeting our goals for shifting modes? How do we feel about how it's going?

Thanks, Chair Tarloff. Hank, excuse me, Hank Wilson, Policy Manager for Parking and Car Management at the SFMDA. It's a great question. I think, well, we probably all visited Mission Bay probably many times. It's obviously right next to our two largest sports arenas. I am fairly certain, I mean, you know, we do, WE DO QUARTERLY RATE ADJUSTMENTS AS YOU PROBABLY KNOW AS PART OF OUR DEMAND RESPONSIVE RATE ADJUSTMENT PROGRAM. THAT MEANS THAT WE'RE CALCULATING THE OCCUPANCY ON THE BLOCKS ON EVERY METERED BLOCK IN THE CITY EVERY THREE MONTHS AND THE OCCUPANCY IN MISSION BAY IS CONSISTENTLY VERY HIGH EVEN ON NON-SPECIAL EVENT DAYS AND NIGHTS. What we see is that there's a lot of demand, that if we had something other than metered parking, I think the demand, it's hard to prove a negative. It's hard to know what the demand would be if the parking were free. But it stands to reason that it would be a whole lot higher than it is now. And I think that the only way that anyone is ever able to find a place to park along the Embarcadero or in Mission Bay is because of the way that we've managed the parking.

And the analogy with the New Treasure Island development, is the residential component of those areas roughly analogous as well?

Yeah, that's a good question. I don't know the answer. I mean, I know the Mission Bay has thousands of units. I don't know if it has 10,000 units, but it's got thousands of units. And again, has these other pressures, sort of like Treasure Island will have with special events. It's got a lot of reasons why people from outside the neighborhood are coming in on a fairly regular basis. So just really, really intense pressure Demand. Mission Bay also, when it was originally built, it didn't necessarily have the same transportation improvements that it does now. You know, improvements to Third Street. There's the 15 bus. The 55 bus has been added. Obviously there's bike share stations all over the neighborhood that weren't there when it was first built. So a similar, you know, the library wasn't there. The grocery store wasn't there. the elementary school is not done yet. So it's a very, very similar situation where you've got a from scratch neighborhood being built over time, all of the amenities come in, but we've got to make sure that we're managing the parking correctly or else, as Andy said, it's going to be chaotic and a mess from the start.

Okay. Thank you. My next question is for Ms. McCarley. And it's around messaging for the residents. So I do hear that this was baked into the original agreement. And so should it be a surprise to anyone who's moved into one of these units that this is happening?

that's a good question i think residents unlike city staff don't often read pages and pages and pages of development documents but as i mentioned in my presentation we have done a outreach program about the upcoming legislation since the fall we had our annual transition talks meetings We had this conversation at the TIDA board meeting, at the TEMA meeting, as well as at one of the On Island Treasure Island board meetings. So our hope is that we've worked to spread the message to residents in stage one, especially in the stage one areas, and that residents have heard about the legislation through this process. I think we have heard from residents that, especially living in the stage one area, To kind of echo what Andy said that there is some chaoticness around parking and I think that's particularly while we're thinking forward to stage two is Having this legislation in place having meters come up as the streets come up will create more clarity as residents are move in to the Stage 2 area. I think that potentially an opportunity was maybe missed in the Stage 1 area to prepare residents ahead of time with having meters already in place. So I think we're hoping to do a better job and learn from those lessons in the Stage 2 area by having legislation already ready, having meters already ready.

Yeah, I certainly get that seeing it as a reality before you move in makes a difference. But were people signing leases not understanding that this was the plan for this area?

I think in terms of signing leases, buildings have been open in stage one since, I believe, 2024 at this point. So I think that those leases were signed as before maybe these current conversations were happening about this legislation. But the parking plan, the transportation implementation plan, what has been in place since prior to that date. And having metered paid parking as part of the transportation plan has always been a part of that plan.

So people should have been aware of it. Yes. OK. And I agree with my colleague, Director Felder, that the temporary lot for five years is a good amount of time to allow for transition, the affordability of that. And Yeah, I think it's a pretty big transition. My primary interaction with Treasure Island was teaching my kid to drive over there. And ample free parking everywhere. And that's a big transition. So I appreciate that we're managing that. That's probably enough from me. Vice Chair Kahina?

Thank you, Chair. Just clarifying questions. There are multi-unit developments there. Do they currently offer parking in those buildings?

In the legacy areas of the island, which I think is Old Navy housing that's outside of the stage one and the proposed stage two area, those residents do have free parking that's part of their housing.

OK, and so this would not impact that?

This would not impact that, yes. Those are all in the legacy areas with legacy streets. So on street parking, those areas will remain free until that area is eventually developed, as well as the current parking strategy in that neighborhood will remain free, or whatever is the current process with those housing managers.

And so the... The metering of Mission Bay, I understand that we have two sporting areas that have frequent events, concerts, all those things. I just wonder, and this is my ignorance at play, so apologies for that. Is there that volume of activity in Treasure Island? I just want to understand the comparison, if it is comparable.

Of current activity?

Yes.

Primarily, we do have commercial spaces on island. We have a few restaurants, a few bars. I think it's not at the level yet that is at Mission Bay. But in the larger development plan, we plan to get there.

I ask this mostly, and this is where you're going to come in, but to understand the parking demand in that area and just understanding if if and when we'll do that type of analysis to understand if it's correct to add metered parking on all city streets that have been incorporated or adopted into our city, I guess, if that makes sense. And what's our, I guess, what's our approach to course correct if we're seeing actually this site does not need to, like parking doesn't need to turn over as often here and we're seeing that perhaps a meter is not appropriate here.

That's a good question. I mean, I would just, just going back to the Mission Bay example, I think, you know, Pier 70 is another example where if you go out there now, some of the buildings have been redeveloped and there's some nodes of a lot of activity and then there are other spots that are, you know, weeds, but there are, there's parking meters on every block with the idea that let's get the correct parking regulation in the ground, make sure that everybody knows this is what This is what it's going to look like if they come to work there or come to live there. So I think that's maybe more analogous to the current situation in Treasure Island. But if you go back, the approvals for Mission Bay parking are old enough that they were done by the DPT and the Board of Supervisors. Those are from the 90s. And obviously, in 1998, Mission Bay didn't look like what it looks like now. And so when those meters were approved and when those meters were starting to be implemented, Chase Center wasn't there. It was a very different place. And so again, the idea is that as the neighborhood grows, it'll be well established what the parking regulations are. But to your question about might we reevaluate based on how the development goes, I think we're, of course, always happy to reevaluate. I mean, we're bringing you. I don't know, maybe half a dozen blocks worth of parking regulation changes on every single consent calendar. So we're always changing things and always reacting to the neighborhood context. What Ms. Cleveland-Knowles said about the development agreement may have some influence on whether we're actually contractually obligated to keep things as they are. But that's not a question I can answer.

Oh, that's a fair point. No, I just wanted to understand, as community members consider different options, even different parking features they want to add to their particular block or if they want to do residential parking or something like that, just trying to understand from their perspective what recourse they have, how to connect with our team and see if there's ways to lessen what will be a perceived blow to them of having parking when before they didn't.

right yeah again happy to talk i mean i will say that the the numbers are pretty stark i think i i know kia talked about 8 000 units i know i read an article recently in the chronicle about hoping to up that to 10 000 units so you know 10 000 units probably 12 to 15 000 people and 850 parking spaces so you know even even more kind of out of whack in terms of the number of units versus parking spaces as mission bay or pier 70 or you know pachura power station which is just south of pier 70 has the same setup when those buildings are built so um again not probably wouldn't be the best candidate i think for residential permit parking just because of you know it's a 10 or 15 to 1 in terms of units to parking spaces and a situation where the parking is free and sort of four cars per household can park on the island, you're just not going to be able to, it's not going to be able to be accommodated. But again, you know, we're talking 10, 15, 20 years down the road. So we'll see how it goes.

Thank you for the context. Appreciate it.

Thank you. City Attorney Susan Cleveland-Knowles, you're in the queue. Did you? SUSAN CLEVELAND- I'm sorry.

That was my earlier request.

No trouble. Director Kirschbaum.

I want to thank Tida and our staff for bringing you this complex item and just speak to a moment on the overall transportation and housing planning that went into Treasure Island. It is definitely viewed as a national model uh for how to get things right in part because of its location and proximity to the bridge it didn't really have the choice to to get things wrong so for example the densest housing is adjacent to a what is going to be a beautiful multimodal transit plaza. The streets were envisioned with biking and walking in mind in the very beginning. Making sure that residents had lots of good choices was a big part of the thinking. So I just want to just clarify that the transportation plan is broader than just constricting and pricing the parking. It's really about anticipating the relationship between housing and multimodal transportation upfront and giving folks a lot of great choices on how they get around so that driving can be reserved for those that really need it for you know, whatever their key aspects is, whether that's their family needs or their business needs or so on.

Thank you. Colleagues, any other comments or questions before we move the item? All right. May have a motion and a second to approve.

I'll make a motion to approve.

Second. Thank you. Secretary Silva, please call the roll.

On the motion to approve, Director Chen. Aye. Chen, aye. Director Felder. Aye. Felder, aye. Director Hemminger. Aye. Hemminger, aye. Director Henderson. Aye. Henderson, aye. Director Hinze.

Aye.

Hinze, aye. Director Kahina. Aye. Kahina, aye. Chair Tarloff. Aye. Tarloff, aye. Thank you. That motion passes unanimously.

Thank you. Secretary Silva, please call the next item.

Directors, that places you on item number 13, presentation and discussion regarding a six-month financial update for fiscal year 2025 to 2026.

Good evening, directors. I'm Brima Horder. I'm the CFO of the MTA. And I'm here to give you our six-month update. And we're going to start with just talking about where we are at this point in the year. It takes a while for financial data to come out. So just to clarify, this is where we were as to December of the year, which is halfway through the fiscal year. And then we're also going to do just a quick check in on the budget. But the primary point of today's presentation is to talk about where we are in the current year. So the good news is that 2526 is projected to end on budget, assuming continued performance both in revenue generation and in expenditure control. I'm really happy to report that we're showing higher than expected revenue, especially in transit, but also in parking, which I think is a really good indicator that competence has its own reward. You heard earlier that our customer service rating is at 78%. And that's being reflected both in more people riding Muni and more people paying. And in addition, our efforts to optimize parking are working. And we have kept our expenditure slightly under budget due to active financial management of both our labor and our non-personnel costs. So I think it's always important to think about what is going on in the agency with the overall financial context of this city. And at the city's annual economic briefing, which happened a couple of weeks ago, the controller reported that office absorption and visitor foot traffic downtown both started to turn a corner in 2025. So I think we're sort of starting to see the beginnings of a positive trend, and that is really good for Muni, because the more people who are moving around downtown, the more people are riding Muni to get downtown. And then we're also seeing, consistent with what we are seeing in our own data, BART system ridership is downtown, is higher in 25 than it had been previously. And that's consistent with both office absorption and visitor foot traffic. So where does that leave us? Altogether, that means we're projected to have a very, very small deficit of $2 million, which is basically a rounding error in a budget of $1.5 billion. If you remember back to the three-month report at that time, we were at negative 5. So we're basically making slow but steady progress throughout the year as we continue to generate just a little bit more revenue than we had expected and continue to be really mindful of our expenditure controls. So in terms of revenue, on the good side, you'll see that transit fares are up $16 million and parking is up $7 million. Unfortunately, that good news is offset by some weakness in operating grants. And this is something that we expect to see continued in our next year's budget. And so that's something that I'm watching very closely. And also, we have a little bit of underperformance in the other area. And that's mostly due to advertising revenues. Those revenues are lower as traffic in the system has been down. We've been making less money on our advertising contracts. I think the most exciting part of this data is that all of the growth that we're seeing in transit is due to passenger fares. In particular, we're seeing that it is coming from not just ridership, but also fare compliance. And the reason that we know that is because that our revenue has grown more than our number of rides. So if the amount of money we make is growing faster than the number of rides that people are taking, that must mean that more people are paying for their rides. And we think that that is about $6 million in additional fare compliance in this fiscal year. I think it's also important to note that our growth has mostly happened, and this has been consistent with our consistent post-COVID trend, that all of the growth is happening within our single rides, meaning that people are paying for one ride at a time rather than buying a monthly pass. And that's because of our transportation pattern and therefore transit usage changes. On the parking side, the revenue is generally driven by the actions that result from people parking. And those can be in one of four categories, either the permits that you buy to park your car the citations you pay if you park your car illegally, when you pay at the meter, and when you pay at the garage. And you can see that really our increase in parking revenue is mostly due to the active management that we started last year when we started our parking optimization program, and also growing demand. As people are downtown, not only are they riding more transit, They're also parking more. But that being said, our garage recovery is still mostly happening in the neighborhoods. And you can see that in downtown, it's still lagging budget. And that is even a really significant increase from where this was pre-COVID because we've dramatically decreased our budget expectations around downtown garages in the last cycle. So on the expenditure side, we have a small amount of projected surplus in non-personnel services and materials and supplies. I do want to caution at the six-month time of the year, these numbers are very much a projection. Because not only do you have to cut a PO, order the good, the good has to arrive, you have to do the AP cycle and then do the reporting cycle. We definitely see a lot more non-labor expenditure happening in the second half of the year than we do in the first half of the year. And I do run our projections that way. But there's always uncertainty when there's lumpiness in the data. And then on the salary and fringe side, we're slightly overspent $3 million, but that's smaller than it was at the three-month because of our continued controls over hiring and the continued emphasis on hiring only those positions that are the most important for us to fill. So in summary, I would say the actions that we've taken both to add resources and to reduce expenditure are working and are the hallmark of what I hope is a very competent organization that's doing the work that it was created to do. quality transit service and parking optimization have resulted in higher passenger fares and higher parking revenue and early monitoring of our expenditure shows that the controls that we've put in place are working and overall these two things together both the higher revenues and our demonstrated ability to control our expenditure I think make me cautiously optimistic about the budget cycle. We still do have a $300-plus million deficit to solve. But we now have in our toolbox some additional revenue from growth in passenger fares. some additional revenue from increased utilization of parking. And we can add that into the bucket with all of the policy choices that you all have made to increase our agency revenues. And we also have in our pocket these increased expenditure controls, which means that we can budget more tightly to what we think. The more we understand about the way that we spend money, the more we can understand how much money we need. and have really strong projections that can drive our five-year outlook. So on the subject of the budget cycle, you've all seen this graph many, many times. We have a $307 million deficit that grows to over 400 by year five due to COLA and CPI. We have a three-prong approach to solving the budget deficit, the regional revenue measure, which is a sales tax in the five Bay Area counties, a local revenue measure, which is just a parcel tax just in San Francisco, and our continued efforts to build a culture of efficiency and also to generate new revenues through our own activities. I'll be coming back on March 17, which is two Tuesdays from now, to give you a draft balancing plan to show you kind of how all of these things are going to come together to close out the budget cycle. And I'll be showing you both how we plan to fully balance the budget in 26, 27, and 27, 28, and how those actions are going to chip away at the long-term deficit for the final three years of our five-year projections. And if you have any questions, I'd be happy to ask them, answer them.

Thank you very much, CFO Mahorder. I would like to open this to public comment before the directors weigh in. Public comment on this item is now open for two minutes each.

Members of the public wishing to provide comment will have two minutes each. There'll be a warning sound at 30 seconds and a chime when the time is up. Any speakers can come up to the podium at this time. Seeing none in the room and no accommodation requests.

Thank you. Public comment for this item is now closed. Directors, as we move into discussion, I'd just like to remind us all that we are going to be having lengthy budget discussions at the next hearing regarding the next budget cycle. And so today's item is really about this current budget cycle that we are going through. It's very tempting to want to talk about the budget since it's all we talk about. But I think in the interest of time and following the agenda, we should try to be careful about that. That was very diplomatic. Director Chen. Come on.

I'll be very quick, but thank you, CFMO hoarder. I have been in touch with members of the public who have been coming up to me and going through many, many numbers and I think recognizing that the budget is in some ways a living document and things, you plan the best you can and then things change over the year. And we do a good job of staying under budget at SFMTA. And I think that is probably a testament to, I think, a lot of good planning that's happening with staff. And I think as I'm reviewing past documents and being like, OK, well, this change and then this change, and how do we do this? But I have a lot of confidence in the numbers. And so thank you.

Thank you. Thank you, Director Chen. Vice Chair Kahina.

Very quick. Brie, just a high-level observation and just want to gut check something with you. Noticing that with the increase of passenger fares, increase in parking as well, just trying to understand the role that enforcement plays in any of those increases. I want to just give you space to see if you have seen any sort of one-to-one connection there, or if this is just folks getting around more, folks paying their fare more, and folks just doing what they can to contribute to our revenue.

Well, I think that Director Wise has been really thoughtful about making our operations more efficient and more effective. Some of the actions that we've taken is we have changed the line staff to supervisor ratio so that we make sure that our line staff are really productive. I know we're being really thoughtful about having special campaigns where we enforce in the neighborhoods citations that really kind of drive our citizens crazy and are really trying to be responsive to what we hear in the public. And I think everyone's just working really hard. But I also want to note that I know that parking citations are super annoying to get. I seem to be paying a lot more sweet, creeping citations than I did in the past. But following the rules is part of what you do as a citizen and when you park illegally. you are inconveniencing other people who are trying to get around and live in the city just like you. So I think there's a positive benefit not just in revenue generation, but also in changing parking behavior that prevents everybody from getting around.

And in terms of our garages, you noted that neighborhood garages are doing better than those downtown. If you could just tell us more or less which garages are performing the best.

JAPANTOWN is just really shooting the lights out. Got it.

Thank you.

And the Fillmore. JAPANTOWN and the Fillmore are both. Those neighborhoods just must be popping off because they are generating a lot of money.

It struck me that the better than expected performance in the single ride fairs is very interesting to me, and I wonder if that is how we think about that. Do we think about trying to convert those fairs into multi-ride fairs and therefore have more revenue generated from that? Or do we think, oh, single-ride fairs are what people want. Let's try to grow. that portion of what people are buying. Or maybe it's both. I don't know.

I think we are learning about people's interest and appetite for monthly passes post-pandemic. It looks very different today, and how often people are traveling looks different today. Part of why we brought you the daily accumulator proposal is because we are interested in having our cake and eating it too and we are interested in a fair tool that is simple like the pay as you go, but also gives our customers some of the benefits, for example, of the day pass. So we're hoping to learn through that investment and then bring you something that reflects that learning in the future as it relates to the monthly pass.

Yes, and also how just attracting new writers or attracting writers to return to the service after maybe being away from it for some years. I think we are well prepared to surprise those writers with the quality improvements that we've implemented over the last few years. The tap to pay, I think, is, I'm sure, part of our thinking. And that may be part of what's driving the single ride, just because it's easy. You don't have to download anything. So it does kind of seem like single ride, it's good for us. It's a good area of growth.

I would agree, and I would agree with your comments, that making it easy to pay is a great way to enhance the customer experience and welcome back and welcome new riders.

Okay. I think that's all my questions. Colleagues, do you have any other questions for CFO Mahorda? Very good. Thank you so much. You're welcome. Secretary Silva, please call the next item.

Directors, that places you on item number 14, discussion and vote pursuant to admin code section 67.10D as to whether to invoke the attorney-client privilege and conduct a closed session conference with legal counsel.

May I have a motion and a second, please? Oh, I'll never get that one right. We will open public comment on this item for two minutes each.

Members of the public wishing to provide comment will have two minutes each. There will be a warning sound at 30 seconds and a chime when the time is up. Any speakers can come up to the podium at this time. Seeing none in the room and no accommodation requests. We will close public comment.

Colleagues, motion and a second? So moved. Second. Second. Secretary Silva, please call the roll.

On the motion to go into closed session, Director Chen.

Aye.

Chen, aye. Director Felder.

Aye.

Felder, aye. Director Hemminger. Aye. Hemminger, aye. Director Henderson. Aye. Henderson, aye. Director Hinze.

Aye.

Hinze, aye. Director Kahina. Aye. Kahina, aye. Chair Tarloff. Aye. Tarloff, aye. Thank you. The board will now go into closed session.

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SFGov TV, San Francisco Government Television.

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SFGov TV. San Francisco Government Television.

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SFGov TV San Francisco Government Television

Chair Tarlow, directors, we are ready to reconvene. Directors, it left you off at item number 15. The board met in closed session and voted to approve the item 3B, the foreman settlement. Places you on item number 16. Motion to disclose or not disclose information discussed in closed session.

We have a motion and a second.

Motion not to disclose. Second.

Second. Secretary Silva, please call the roll.

On the motion to not disclose, Director Chen.

Aye.

Chen, aye. Director Henderson. Aye. Henderson, aye. Director Hinzey. Aye. Hinzey, aye. Director Kahina. Aye. Kahina, aye. Chair Tarloff. Aye. Tarloff, aye. Thank you. That motion passes unanimously and concludes the business before you today.

Thank you, colleagues, staff, and members of the public. We are now adjourned. Our next meeting will be on March 17th and April 7th. Thank you.