planning department memo on avalos tsf amendments

8/19/2019 Planning Department Memo on Avalos TSF Amendments

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Transportation Sustainability Fee (TSF)

Memo: Impact of Proposed December 8th Duplicate Ordinance (12/23/15)

Background

On December 8th

, the Board of Supervisors unanimously passed trailing TSF legislation (“Ordinance as

adopted”), updating the fee schedule for the TSF to establish new fee rates for Hospitals and Health Services.

At that same hearing, Supervisor Avalos introduced a proposal to duplicate the ordinance (“Proposedordinance”) with the following amendments, to be heard at the Land Use and Transportation Committee:

• Increase the fee for Non-Residential development square footage above 99,999 GSF by $2 (from

$19.04 to $21.04).

• Increase the rate for Non-Residential developments that have submitted a Development Application

(“Grandfathering”), requiring payment of 50% of the difference between the TIDF and TSF rates (was

previously equal to the previously existing TIDF rate). The fee that applies to projects that received

their first approval between 12/26/15 and the effective date of the proposed ordinance would

continue to be as adopted in the 12/26/15 ordinance. Only projects that receive their first approval

after the effective date of the new ordinance will be subject to the increased fee.

The motion was passed 7-4 (Aye: Avalos, Breed, Campos, Kim, Mar, Peskin, Yee. No: Wiener, Cohen, Tang,

Farrell). The following tables summarize the impact of the proposal on the TSF Fee Schedule and on Non-

Residential Grandfathering rates.

TSF Fee Schedule: Ordinance as adopted vs. December 8th

Proposal

Land use Before: TIDF

($/GSF; 2015 Fee

Rates)

Ordinance as

adopted

($/GSF)

Proposed

Ordinance

($/GSF)

Residential, 21-99 units

Residential, all units above 99

n/a

n/a

$7.74

$8.74

no change

no change

Non-Residential, except Hospitals and

Health Services, 800-99,999 GSF

Non-Residential, except Hospitals and

Health Services, all GSF above 99,999

Hospitals1

Health Services1, all GSF above 12,000

$12.12 - $14.59

$12.12 - $14.59

$14.59

$14.59

$18.04

$19.04

$18.742

$11.00

no change

$21.04

no change

no change

PDR $7.46 $7.61 no change

Office Grandfathering as Proposed (December 8th

)*

Land use Before: TIDF Grandfathering Net fee increase

1 Non-profit hospitals and health services were previously exempt from the TIDF; private non-profit hospitals and

health services are no longer eligible for a fee exemption under the TSF.2 This number is derived from a calculation method based on net new # of beds


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($/GSF) Rate as Proposed

($/GSF)

($/GSF)

Office, 800-99,999 GSF

Office, all GSF above 99,999

$14.56

$14.56

$16.30

$17.80

$1.74

$3.24

* Note: Proposed ordinance would apply to all non-residential development. For illustrative purposes, rates for

Office uses are shown here, as they comprise the most common non-residential use.

Potential Impact of Proposed Ordinance on Financial Feasibility

Based on the results of the TSF Economic Feasibility Study, Staff evaluated the impact of the proposed Non-

residential fee increase on 3 sample prototypes (1 medium office and 2 large office projects). This analysis

incorporated the impact of the proposed Child Care Fee legislation introduced by Supervisor Yee of

$1.57/GSF for Non-Residential uses. The analysis also considered the impact of grandfathering proposal for

non-residential uses. Feasibility is measured by potential change in land value (a 10% change was selected as

the threshold to evaluate ongoing feasibility) in combination with other commonly used financial indicators,

such as Yield on Cost (YOC). See table below illustrating the impact of the fee levels on land values. It shouldbe noted that this analysis is based on a sample of expected office development types using current

development assumptions that were studied in the TSP Economic Feasibility Study. It does not represent the

full range of possible project types and financial situations, nor the feasibility of other non-residential uses

(such as retail or institutions).

Staff found that the fee increase is within the maximum amount that could be supported while maintaining

development feasibility for all development prototypes that were looked at as part of the TSP Economic

Feasibility Study. The fee increases as modeled at various levels have a marginal impact on Yield on Cost, so

the more relevant metric in this analysis is the change in land value. As shown below, even when taking into

consideration the proposed fee increase and child care fee, the percentage change in land value falls within

the 10% threshold.

TSF Financial Feasibility Analysis: Impact of Proposed Ordinance & Child Care Fee*

Prototype GSF Height

% Change in Land Value

October 2015

legislation as

adopted

Proposed

Ordinance:

Grandfathered

projects

Proposed

Ordinance: New

projects

Proposed

Ordinance

(New Projects)

+

Proposed Child

Care Fee

East SoMa

(medium)

84,500

sf85' -5% -3% -5% -7%

East SoMa

(large)

249,300

sf160' -4% -3% -5% -6%

Transit

Center

384,700

sf400' -4% -3% -6% -7%

* Notes: A threshold of (-10%) change in land value is considered an indicator of ongoing financial feasibility. The

analysis also considered other commonly used financial metrics, such as Yield on Cost (YOC), and found that the fee

levels studied had a marginal impact on overall project feasibility.


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Potential TSF Revenue Generation

Increasing the Non-Residential fee for square footage above 99,999 GSF by $2 (up to $21.04) is projected to

raise an additional $2.4 million annually or $72.3 million over 30 years.

Requiring non-residential projects currently in the pipeline to pay 50% of the difference between TIDF and

TSF would raise an additional one-time amount of $22.2 million (at current TSF rates) to $30.7 million (if theadditional $2/GSF for Non-Residential GSF > 100k is adopted.) See list of grandfathered projects for more

information.


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Transportation Sustainability Fee (TSF)December 8th Ordinance: Estimated Revenue Projections for Non-Residential Grandfathering (Updated 2/5/16)

Projects highlighted in green are currently on the Planning Commission advance calendar (now through May)

1. Grandfathering @ Adopted TSF Rates represents 50% of the increase between TIDF and the adopted TSF rates ($18.04 for GSF 100K)

2. Grandfathering @ Proposed TSF Rates represents 50% of the increase between TIDF and the proposed TSF rates ($18.04 for GSF 100K)

Add ress Ali as Land Use

Supervisorial

District

Non-Residential

GSF

CPC calendar

date (subject to

change)

Fees Under TSF

as Adopted:

TIDF Rates

Grandfathering

@ Adopted TSF

Rates1

Net increase

Grandfathering

@ Proposed

TSF Rates2

Net increase

PIER 70 ̂ WATERFRONT SITE Mixres DISTRICT 6 2,024,050 $29,470,000 $33,752,000 $4,282,000 $35,676,000 $6,206,000

PIER 48 / SEAWALL LOT 337 ̂ MISSION ROCK Mixres DISTRICT 6 1,950,000 $28,582,000 $32,585,000 $4,003,000 $34,335,000 $5,753,000

50 01ST ST OCEANWIDE CENTER Mixres DISTRICT 6 1,704,000 5/5/2016 $25,029,000 $28,506,000 $3,477,000 $29,910,000 $4,881,000

630-698 BRANNAN STREET FLOWER MART Mixed DISTRICT 3 1,541,810 $22,471,000 $25,698,000 $3,227,000 $27,110,000 $4,639,000

598 BRANNAN STREET MIPS DISTRICT 5 692,568 $10,084,000 $11,516,000 $1,432,000 $12,108,000 $2,024,000

1800 - 1900 OWENS ST EXCHANGE ON 16TH MIPS DISTRICT 10 680,000 $9,901,000 $11,306,000 $1,405,000 $11,886,000 $1,985,000

1500-1580 MISSION ST GOODWILL Mixres DISTRICT 10 483,018 $7,060,000 $8,016,000 $956,000 $8,363,000 $1,303,000

1455 03RD ST*

MISSION BAY BLOCK 26 -

UBER OFFICE SITE MIPS DISTRICT 8 423,000 4/14/2016 $6,159,000 $7,014,000 $855,000 $7,337,000 $1,178,000

950 MARKET ST Mixres DISTRICT 2 169,834 4/14/2016 $2,468,000 $2,790,000 $322,000 $2,842,000 $374,000

555 HOWARD ST Mixres DISTRICT 10 136,745 $1,987,000 $2,263,000 $276,000 $2,330,000 $343,000

501 BRANNAN ST 501-505 BRANNAN MIPS DISTRICT 10 133,750 $1,949,000 $2,184,000 $235,000 $2,216,000 $267,000

1800 MISSION ST Mixed DISTRICT 9 119,599 $1,741,000 $1,947,000 $206,000 $1,967,000 $226,0001995 EVANS AV MIPS DISTRICT 6 105,150 $1,531,000 $1,706,000 $175,000 $1,711,000 $180,000

701 03RD ST Visitor DISTRICT 3 99,925 $1,454,000 $1,629,000 $175,000 $1,630,000 $176,000

633 FOLSOM ST MIPS DISTRICT 1 92,072 $1,342,000 $1,493,000 $151,000 $1,493,000 $151,000

1053 MARKET ST Visitor DISTRICT 9 65,755 $954,000 $1,070,000 $116,000 $1,070,000 $116,000

77 & 85 FEDERAL STREET Mixed DISTRICT 6 54,977 $817,000 $901,000 $84,000 $901,000 $84,000

250 10TH STREET CIE DISTRICT 10 54,754 $839,000 $913,000 $74,000 $913,000 $74,000

700 INNES ST ̂ INDIA BASIN Mixres DISTRICT 6 46,400 $711,000 $774,000 $63,000 $774,000 $63,000

1601 - 1537 MARKET ST LOCAL 38 UNION HALL Mixres DISTRICT 6 36,571 $540,000 $597,000 $57,000 $597,000 $57,000

200 POTRERO AVE CIE DISTRICT 7 30,034 $460,000 $501,000 $41,000 $501,000 $41,000

717 BATTERY ST MIPS DISTRICT 5 27,870 $408,000 $453,000 $45,000 $453,000 $45,000

707 BAY SHORE BLVD CIE DISTRICT 10 25,447 $390,000 $424,000 $34,000 $424,000 $34,000

100 CHANNEL* MISSION BAY BLOCK 1 Visitor DISTRICT 6 23,000 $335,000 $375,000 $40,000 $375,000 $40,000

625 MONTEREY BL Retail/Ent DISTRICT 6 21,378 $322,000 $353,000 $31,000 $353,000 $31,000

10 SOUTH VAN NESS AV Mixres DISTRICT 6 20,400 $313,000 $340,000 $27,000 $340,000 $27,000

1200 17TH STREET Mixres DISTRICT 6 19,968 $309,000 $335,000 $26,000 $335,000 $26,000

300 GRANT AVE Mixed DISTRICT 6 16,990 $233,000 $266,000 $33,000 $266,000 $33,000

447 BUSH ST - HOTEL DES ARTS Visitor DISTRICT 6 16,590 $242,000 $270,000 $28,000 $270,000 $28,000

340 11TH ST Mixed DISTRICT 6 16,176 $237,000 $263,000 $26,000 $263,000 $26,000

1240 & 1250 17TH ST CIE DISTRICT 6 12,995 $199,000 $217,000 $18,000 $217,000 $18,000

203 COTTER ST CIE DISTRICT 6 12,250 $188,000 $204,000 $16,000 $204,000 $16,000

972 SUTTER ST - MITHILA HOTEL Visitor DISTRICT 9 11,731 $171,000 $191,000 $20,000 $191,000 $20,000

1298 HOWARD STREET Mixres DISTRICT 6 10,050 $146,000 $163,000 $17,000 $163,000 $17,000

1028 MARKET ST Mixres DISTRICT 6 9,675 $148,000 $161,000 $13,000 $161,000 $13,000

3701 NORIEGA ST Mixres DISTRICT 6 8,325 $128,000 $139,000 $11,000 $139,000 $11,000

3357 26TH ST Mixres DISTRICT 10 8,046 $120,000 $132,000 $12,000 $132,000 $12,000


2435-2445 16TH ST Mixres DISTRICT 10 7,399 $113,000 $123,000 $10,000 $123,000 $10,000


249 PENNSYLVANIA AV Mixres DISTRICT 6 6,094 $93,000 $102,000 $9,000 $102,000 $9,000

249 PENNSYLVANIA AV Mixres DISTRICT 6 6,094 $93,000 $102,000 $9,000 $102,000 $9,000

1601 MISSION ST Mixres DISTRICT 10 5,471 4/7/2016 $84,000 $91,000 $7,000 $91,000 $7,000

1601 -1637 MARIPOSA ST Mixres DISTRICT 10 5,265 $81,000 $88,000 $7,000 $88,000 $7,000

519 ELLIS ST Mixres DISTRICT 10 5,082 $78,000 $85,000 $7,000 $85,000 $7,0001212 THOMAS AV PDR DISTRICT 7 5,000 $73,000 $81,000 $8,000 $81,000 $8,000

2120 TARAVAL ST Retail/Ent DISTRICT 6 5,000 $77,000 $83,000 $6,000 $83,000 $6,000

1350 VAN DYKE AVENUE Mixed DISTRICT 10 4,995 $73,000 $81,000 $8,000 $81,000 $8,000

22 FRANKLIN ST Mixres DISTRICT 6 4,323 2/11/2016 $66,000 $72,000 $6,000 $72,000 $6,000


1278 - 1298 VALENCIA ST Mixres DISTRICT 3 3,737 $57,000 $62,000 $5,000 $62,000 $5,000

2429 CALIFORNIA ST Mixed DISTRICT 6 3,553 $53,000 $58,000 $5,000 $58,000 $5,000

88 ARKANSAS ST Mixres DISTRICT 10 3,275 3/3/2016 $50,000 $55,000 $5,000 $55,000 $5,000


827 KEARNY ST Mixres DISTRICT 6 2,820 $43,000 $47,000 $4,000 $47,000 $4,000

851 TENNESSEE ST Retail/Ent DISTRICT 4 2,709 $42,000 $45,000 $3,000 $45,000 $3,000

469 EDDY ST Mixres DISTRICT 9 2,600 $40,000 $43,000 $3,000 $43,000 $3,000

1924 MISSION ST Mixres DISTRICT 6 2,515 $39,000 $42,000 $3,000 $42,000 $3,000

1228 25TH ST PDR DISTRICT 5 2,465 $38,000 $41,000 $3,000 $41,000 $3,000

3225 LINCOLN WAY CIE DISTRICT 9 2,450 $38,000 $41,000 $3,000 $41,000 $3,000

1900 MISSION STREET Mixres DISTRICT 8 2,437 $36,000 $40,000 $4,000 $40,000 $4,000

1270 MISSION ST Mixres DISTRICT 10 2,338 $36,000 $39,000 $3,000 $39,000 $3,000

44 MCLEA CT MIPS DISTRICT 6 2,025 $29,000 $33,000 $4,000 $33,000 $4,000222 SUTTER ST Mixed DISTRICT 10 2,025 $22,000 $28,000 $6,000 $28,000 $6,000

700 36TH AV Mixres DISTRICT 6 2,000 $31,000 $33,000 $2,000 $33,000 $2,000

300 OCTAVIA STREET Mixres DISTRICT 5 1,606 $25,000 $27,000 $2,000 $27,000 $2,000

430 EDDY ST Mixres DISTRICT 6 1,594 3/17/2016 $24,000 $27,000 $3,000 $27,000 $3,000

1100 MARKET ST Visitor DISTRICT 10 1,440 $23,000 $25,000 $2,000 $25,000 $2,000

280 BAY SHORE BL PDR DISTRICT 3 1,000 $15,000 $17,000 $2,000 $17,000 $2,000

3620 CESAR CHAVEZ ST Mixres DISTRICT 10 940 $14,000 $16,000 $2,000 $16,000 $2,000

2092 03RD ST / 600 18TH STREET Mixres DISTRICT 6 935 $14,000 $16,000 $2,000 $16,000 $2,000

1726 - 1730 MISSION ST Mixres DISTRICT 9 900 $14,000 $15,000 $1,000 $15,000 $1,000

4024 24TH ST Mixres DISTRICT 4 886 $14,000 $15,000 $1,000 $15,000 $1,000

NET REVENUE

INCREASE

Fees Under December 8th Proposed Ordinance

$22,182,000 $30,691,000

Notes:

3. Project list is from San Francisco Planning Department Development Pipeline, 2015 Quarter 3, based on latest available data on project status. Fee amounts are estimates only based on current project

description on file.4. Projects in Mission Bay (marked with an asterisk) are subject to the Mission Bay Redevelopment Plan which supercedes the TSF, and may have different rates than those presented here. (These projects are to

be evaluated on a case‐by‐case basis.)

5. Projects marked with an "^" are undergoing Development Agreement negotiations which may impact their transportation impact fee obligation.

planning department memo on avalos tsf amendments

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