Letter of Determination

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1 SAN FRANCISCO PLANNING DEPARTMENT Letter of Determination 1650 Mission St. Suite 400 San Francisco, CA October 13, 2011 Reception: Steven L. Vettel Fax: Farella Braun + Martel LLP Montgomery Street 0 Planning San Francisco CA Information: Site Address: 1400 Mission Street and 201 Folsom Street Assessor s Block/Lot: 3507/042 and 3746/003 Zoning District: C-3-G/150/200-S and RC-4/400-W Folsom and Main Residential/Commercial Special Use District Staff Contact: Corey Teague, (415) or corey.teague@sfgov.org Dear Mr. Vettel: This letter is in response to your request for a Letter of Determination regarding the properties at 1400 Mission Street and 201 Folsom Street. The 1400 Mission parcel is located in the C-3-G (Downtown Commercial) Zoning District and a 150-S Height and Bulk District while the 201 Folsom parcel is located within the RC-4 (Residential-Commercial, High Density) District, the Folsom and Main Residential/Commercial Special Use District, and the 400-W Height and Bulk Districts. You requested that I determine that for-sale units proposed at 1400 Mission Street to be affordable to households earning an average of 90% of area median income (AMI) and to be completed within 5 years of the start of construction of the 201 Folsom Street project will qualify as off-site inclusionary units for the project located at the 201 Folsom Street parcel. 201 FOLSOM STREET APPROVALS The 201 Folsom Street project was approved on September 4, 2003, by the Planning Commission (Motion No ) contingent on a rezoning of the site. Conditions of Approval Nos require the project to comply with then Planning Code Sections by providing 12% inclusionary on-site units; 17% inclusionary off-site units, or pay the applicable in lieu fee. Condition No. 30 specifies that the sponsor may seek a Zoning Administrator determination that proposed off-site units satisfy these conditions. The Board of Supervisors rezoned the 201 Folsom Street site on February 2, 2004 (Ord ). The rezoning ordinance specified and the project sponsor agreed that the 201 Folsom Street project be subject to heightened inclusionary requirements of 17.5% on-site or 25% off-site but would otherwise be required to comply with the applicable provisions of then-section of the Planning Code except that offsite inclusionary units could be completed within 5 years of the start of construction of the 201 Folsom Street project, rather than be completed prior to completion of the 201 Folsom Street project (Ord , p.5-6).

2 Steven L. Vettel October 13, 2011 Farella Braun + Martel LLP Letter of Determination 235 Montgomery Street 1400 Mission & 201 Folsom Streets San Francisco CA MISSION STREET Tenderloin Neighborhood Development Corporation proposes to develop approximately 188 dwelling units at 1400 Mission Street. A large proportion of these units would be for-sale units affordable to households earning an average of 90% of area median income (AMI). In your letter, you indicated that these for-sale dwelling units at 1400 Mission will meet each of following criteria: 1. Price: The units will be priced to be affordable to households earning an average of 90% of AMI. 2. Completion: The units will be completed within 5 years of the start of construction of the 201 Folsom Street project as described in Ord Comparable, appearance and finishes: 1400 Mission Street will have a comparable exterior appearance as the 201 Folsom project, in a modern concrete frame high-rise building, and the interior finishes, although different from those at the 201 Folsom project, will be of good quality and consistent with current standards for new housing. 4. Unit Mix: The off-site unit mix (number of bedrooms) will match the 201 Folsom unit mix. Square footage of inclusionary units: The total floor area of the 1400 Mission off-site units will be at least equal to 17.5% of the square footage of the 201 Folsom project s residential square footage. APPLICABLE PLANNING CODE REQUIREMENTS At the time the 201 Folsom Street project was entitled in 2003 and 2004, Section 315.1(25) specified the maximum purchase price of for-sale inclusionary units as the price affordable to a household of median income (100% of AMI). Section 315.5(c) and (d) set forth the other off-site inclusionary requirements: (1) the units shall be completed no later than the principal project; (2) the units are either to be (i) in close proximity to the principal project, (ii) in a high need area, or (iii) be a project type identified as a high priority in the Residence Element or MOH s Consolidated Plan; (3) the off-site units be comparable in number of bedrooms, exterior appearance, and overall quality of construction as the principal project, with interior features "of good quality and consistent with then-current standards for new housing"; and (4) the total square footage of off-site units shall be no less than what the total calculation of the square footage of on-site affordable units would be. Since 2004, Section has been amended several times, most recently in December 2010, and is now codified as Section Current Section summarizes the application date of each such amendment. For off-site inclusionary units, the manner in which median income is calculated, resulting in a reduction in household income from 100% of AMI to an average of 90% of AMI, is applicable to projects that receive Planning Commission or Planning Department approval after September 9, The 201 Folsom Street project received its Planning Commission approval, but not a site permit, prior to September 9, Therefore the manner in which median income is calculated, reducing family income from 100% of AMI to an average of 90% of AMI, does apply to the 201 Folsom Street project. Other recent requirements, including the reduction to 70% of AMI for off-site for sale units and that off-site units must be located within 1 mile of the principal project, do not apply to the 201 Folsom Street project because 201 Folsom Street received its Planning approvals prior to those amendments. SAN FRANCISCO PLANNING DEPARTMENT

3 Steven L. Vettel October 13, 2011 Farella Braun + Martel LLP Letter of Determination 235 Montgomery Street 1400 Mission & 201 Folsom Streets San Francisco CA DETERMINATION Based on the above, the for-sale units proposed at 1400 Mission Street affordable to households earning an average of 90% of AMI will satisfy all of the off-site inclusionary units requirements applicable to the 201 Folsom Street project (as set forth in Planning Code Section applicable at the time the 201 Street project was entitled and in Ordinance 20-04). As for location, I note that 1400 Mission Street is in relatively close proximity to 201 Folsom Street. The sites are approximately 1.5 miles apart and both are located in the greater South of Market neighborhood Mission Street is also in a high need area, as evidenced by the previously proposed Mid-Market Redevelopment Plan that incorporated the site and the fact that an affordable senior project was previously entitled on the site. In addition, affordable family for-sale housing for households earning up to 120% of AMI is a high priority identified in the Mayor s Office of Housing s Consolidated Plan. Accordingly, I have determined that 1400 Mission Street is in close proximity to 201 Folsom Street and is in a high need area. Therefore, units at 1400 Mission Street will qualify as off-site inclusionary units for the 201 Folsom Street project. Should the square footage of inclusionary housing at 1400 Mission Street dedicated to fulfilling the inclusionary housing obligation of the 201 Folsom Street project total less than 17 percent of the square footage at the 201 Folsom Street project, or the number of inclusionary units at 1400 Mission Street dedicated to fulfilling the inclusionary housing obligation of the 201 Folsom Street project total less than 25 percent of the number of units in the 201 Folsom Street project, the 201 Folsom Street project sponsor must fulfill any remaining inclusionary housing obligation with other on-site units, other off-site units or payment of a partial Affordable Housing Fee, or any combination thereof. APPEAL: If you believe this determination represents an error in interpretation of the Planning Code or abuse in discretion by the Zoning Administrator, an appeal may be filed with the Board of Appeals within 15 days of the date of this letter. For information regarding the appeals process, please contact the Board of Appeals located at 1650 Mission Street, Room 304, San Francisco, or call (415) Sincerely, FSanche Zoning Administrator cc: Carl Shannon Managing Director, Tishman Speyer One Bush Street, Suite 450 San Francisco, California Corey Teague, Planner SAN FRANCISCO PLANNING DEPARTMENT

4 CI FARELLA BRAIJN+MARTEL LLP Attorneys At Law Russ Building / 235 Montgomery Street San Francisco/ CA T / F ir# 96O2 - May 6, 2011 CV 4 4?3q STEVEN L. VETTEL svettel@fbm.com D Scott F. Sanchez Zoning Administrator San Francisco Planning Department 1650 Mission Street, Suite 400 San Francisco CA rCfo12 Re: 1400 Mission Street and 201 Folsom Street Off-site Inclusionary Units Request for Letter of Determination RECEIVED MM O fl fl CITY & COUNTY OF S.F. PLANNING DEPARTMENT Dear Mr. Sanchez: We represent Tenderloin Neighborhood Development Corporation (TNDC), the owner of 10th a 24,631 square foot site at 1400 Mission Street (at the northwest corner of Mission and Streets), Block 3507, Lot 42 (the "Site"). In 2004, the Planning Commission approved construction by TNDC of 200 units of affordable senior housing and 10,000 square feet of retail space in a 15-story building on the Site (Planning Commission Motion Nos and 16883). Since 2004, the Mayor s Office of Housing has been unable to identify available financing for the proposed affordable senior housing, has advised TNDC that it does not foresee such financing being available in the foreseeable future, and has requested that TNDC explore securing private financing to develop affordable housing on the Site. TNDC is pleased to advise the Planning Department that it has now entered into an agreement with 201 Folsom Realty Partners, L.P., an affiliate of Tishman Speyer (collectively "Tishman"), to privately finance for-sale family condominium units at the Site as off-site inclusionary affordable housing units under the City s Inclusionary Affordable Housing Program, set forth in Planning Code Section 415 et seq. ("Program"). These for-sale units would be affordable to households earning an average of 90% of area median income (AMI) and would be off-site inclusionary units associated with Tishman s 201 Folsom Street project, which was approved in and includes up to 725 market-rate units ("201 Folsom project"). Tishman is in the process of finalizing the design of the 201 Folsom project, including a final unit count and unit mix. At such time as the unit mix, unit count and total unit floor area is finalized, TNDC and Tishman will seek further confirmation from you that the precise program is consistent with and complies with all applicable provisions of the Program.

5 Scott F. Sanchez May 6, 2011 Page 2 This letter is to request that you issue a Zoning Administrator letter of determination confirming that for-sale units proposed at 1400 Mission Street to be affordable to households earning an average of 90% of AMI will qualify as off-site inclusionary units for the 201 Folsom project. Upon your confirmation, TNDC will seek a Section 309 project authorization for the revised 1400 Mission Street project, incorporating the design changes necessary to accommodate this building program. 201 Folsom project approvals. The 201 Folsom project was approved on September 4, 2003, by the Planning Commission (Motion No , a copy of which is enclosed as Exhibit A), contingent on a rezoning of the site. Conditions of Approval require the project to comply with Sections by providing 12% inclusionary on-site units; 17% inclusionary off-site units, or pay the applicable in lieu fee. Condition 30 specifies that the sponsor may seek a Zoning Administrator determination that proposed off-site units satisfy these conditions. The Board of Supervisors rezoned the 201 Folsom site on February 2, 2004 (Ord , copy enclosed as Exhibit B).The Project Sponsor agreed that the project would be subject to a heightened inclusionary requirements of 17.5% on-site or 25% off-site but would otherwise be required to comply with the applicable provisions of then-section of the Planning Code except that off-site inclusionary units could be completed within 5 years of the start of construction of the 201 Folsom project, rather than be completed prior to completion of the 201 Folsom project (Ord , p. 5-6). Section 315/415 requirements applicable to 201 Folsom. At the time the 201 Folsom project was entitled in 2003 and 2004, Section 315.1(25) specified the maximum purchase price of for-sale inclusionary units as the price affordable to a household of median income (100% of AMI). Section 315.5(c) and (d) set forth the other off-site inclusionary requirements: (1) the units shall be completed no later than the principal project; (2) the units are either to be (i) in close proximity to the principal project, (ii) in a high need area or (iii) be a project type identified as a high priority in the Residence Element or MOH s Consolidated Plan; (3) the off-site units be comparable in number of bedrooms, exterior appearance, and overall quality of construction as the principal project, with interior features "of good quality and consistent with then-current standards for new housing"; and (4) the total square footage of off-site units shall be no less than what the total calculation of the square footage of on-site affordable units would be. Since 2004, Section has been amended several times, most recently in December 2010, and is now codified at Section Current Section summarizes the application date of each such amendment. For off-site inclusionary units, the manner in which median income is calculated, resulting in a reduction in household income from 100% of AMI to an average of 90% of AMI, is applicable to projects that receive a site permit after September 9, The 201 Folsom project received its Planning Commission approval, but not a site permit, prior to September 9, Therefore the manner in which median income is calculated, reducing family income from 100% of AMI to an average of 90% of AMI, does apply to the 201 Folsom project. Other recent requirements, including the reduction to 70% of AMI for off-site for sale units and that off-site units must be located within 1 mile of the principal project, do not

6 Scott F. Sanchez May 6, 2011 Page 3 apply to the 201 Folsom project because 201 Folsom received its Planning approvals prior to those amendments (see chart in Section 415.3). For-sale family units at 1400 Mission meet each of the off-site inclusionary units requirements applicable to 201 Folsom. - Percentage of Units and Unit Mix: The 201 Folsom project s off-site requirement is 25% of the total units in the 201 Folsom project. It is the intent of the parties that all of this off-site requirement will be constructed at the Site. When Tishman determines the final unit count and unit mix at the 201 Folsom project, it will inform the Zoning Administrator and TNDC of the final unit counts, unit mix and square footage. The total off-site unit count will be at least 25% of the total unit count at the 201 Folsom project, and the off-site unit mix will match the 201 Folsom unit mix. Any remaining unsatisfied requirement not met at 1400 Mission Street will be satisfied through payment by Tishman of a partial in lieu fee. 2. Price: The units will be priced to be affordable to households earning an average of 90% of AMI. 3. Completion: The units will be completed within 5 years of the start of construction of the 201 Folsom project as described in Ord Location and priority of type: 1400 Mission Street is in relatively close proximity to 201 Folsom Street. The sites are approximately 1.5 miles apart and both are located in the greater South of Market neighborhood Mission is also in a high need area, as evidenced by the proposed Mid-Market Redevelopment Plan that incorporates the site and the fact that an affordable senior project was previously entitled on the site. Affordable family for-sale housing for households earning up to 120% of AMI is a high priority identified in MOH s Consolidated Plan Comparable, appearance andjinishes: 1400 Mission will have a comparable exterior appearance as the 201 Folsom project, in a modern concrete frame high-rise building, and the interior finishes, although different from those at the 201 Folsom project, will be of good quality and consistent with current standards for new housing. 6. Square footage of inclusionary units: The total floor area of the off-site units will be at least equal to 17.5% of the square footage of the 201 Folsom project s residential square footage. Redevelopment Plan for the Mid-Market Redevelopment Project, approved by the San Francisco Redevelopment Commission on October 18, 2005, at page %20Agency%20 10_i 8_OS.pdf 2

7 Scott F. Sanchez May 6, 2011 Page 4 Please contact me at (415) or svettel@thm.com with any questions or if we can provide you any additional information. cc: Kevin Guy David Dologite, TNDC Brad Dickason, Maracor Development Andrew Junius, counsel for 201 Folsom Realty Partners, L.P 26115\

8 PLANNING COMMISSION September 4, 2003 Case No I073ECZ 201 Folsom Street Motion No Assessors Block 3746, Lot 1 SAN FRANCISCO PLANNING COMMISSION MOTION NO ADOPTING FINDINGS RELATING TO THE APPROVAL OF A CONDITIONAL USE AUTHORIZATION ALLOWING THE CONSTRUCTION OF A MIXED USE PROJECT THAT WOULD CONSIST OF TWO RESIDENTIAL TOWERS OF HEIGHTS OF 350 FEET AND 400 FEET, ABOVE AN APPROXIMATELY 80-FOOT PODIUM WITH FULL LOT COVERAGE AND WOULD INCLUDE UP TO 725 DWELLING UNITS, UP TO 38,000 SQUARE FEET OF COMMERCIAL AND RETAIL USES AND ABOUT 753 OFF-STREET PARKING SPACES FOR RESIDENTIAL AND RETAIL USES, AND ABOUT 272 PARKING SPACES TO REPLACE EXISTING USPS PARKING WITHIN AN RC-4 DISTRICT (RESIDENTIAL COMMERCIAL COMBINED, HIGH DENSITY) DISTRICT; RESIDENTIAL/COMMERCIAL SUBDISTRICT OF THE RINCON HILL SPECIAL USE DISTRICT PURSUANT TO PLANNING CODE SECTION 249.1), PRUSANT TO PLANNING CODE SECTIONS 303 AND 253. Preamble On July 11, 2002, Andrew Junius of Reuben & Alter, LLC (hereinafter "Applicant,"), made an application (hereinafter "Conditional Use Application") on behalf of TST Folsom L.L.C. (hereinafter "Project Sponsor") for construction of a mixed use project (predominately residential) that would consist of two residential towers of heights of 350 and 400 feet, above an 80 foot podium with full lot coverage and would include up to 725 dwelling units, between 15,500 and 38,000 square feet of retail and commercial space and 753 off-street parking spaces for residential and retail uses and 272 parking spaces to repace existing parking for the United States Postal Service ("Project"), and in general conformity with the plans attached as "Exhibit B". Conditional use authorization is required pursuant to San Francisco Planning Code Sections 303(c) and 253 to allow construction of buildings taller than 40 feet in an R (Residential) District. The Project will be located on the north half of Assessor s Block 3746 (hereinafter "Property"), within the Rincon Hill Special Use District. The Property is currently zoned P and is located within 150-R and 200-R Height and Bulk Districts. On December 20, 2000, the Project Sponsor, working with the property owner of the development site at 300 Spear, jointly submitted an application for General Plan amendments, Planning Code text amendments and Zoning Map amendments to change the zoning of these sites to RC-4, and to establish the new Residential/Commercial Subdistrict, and amendments to the General Plan (referred to together as the "Rezoning Application"). The Residential/Commercial Subdistrict would provide new controls for the Property, and the Height and Bulk Districts would be changed to allow construction of the Project. The proposed Project and Rezoning Application were reviewed pursuant to the California Environmental Quality Act ("CEQA"), Public Resources Code Sections 21000, et. seq. On September 14, 2002, the San Francisco Planning Department ("Department") published a draft environmental impact report ("DEIR") for the Project. On November 26, 2002, the Planning Commission ("Commission") held a duly noticed public hearing to take comments on the DEIR. The

9 PLANNING COMMISSION September 4, 2003 Case No I073ECZ 201 Folsom Street Motion No Assessors Block 3746, Lot 1 Page 2 DEIR identified several significant impacts related to traffic and transportation. On June 6, 2003, the Department issued a document entitled "Response to Comments" in which it responds to each written and oral comment received from the public during the comment period. On July 24, 2003, the Commission held a duly noticed public hearing and heard public testimony on the project EIRs, the proposed rezoning of the project site and associated actions, and the Project s conditional use application. On September 4, 2003, the San Francisco Planning Commission ("Commission"), having reviewed the DEIR and Response to Comments, at a duly noticed and scheduled public meeting, heard additional testimony and certified these documents as the Final EIR for the Project. Also on September 4, 2003, the Commission conducted a duly noticed and scheduled public meeting, and heard additional testimony on the Rezoning Application (Application No MZT, and adopted Planning Commission Resolution Nos , 16645, and 16646, recommending that the San Francisco Board of Supervisors ("Board of Supervisors") adopt the necessary ordinances to implement the requested General Plan amendments, Planning Code text amendments and Zoning Map amendment ("Rezoning Ordinances"). Also on September 4, 2003, the Commission, at a duly noticed and scheduled public meeting, heard additional public testimony on Conditional Use Application No EK for the Project. The Commission has reviewed and considered the information in the Final EIR in accordance with the requirements of CEQA, the State CEQA Guidelines, and Chapter 31 of the San Francisco Administrative Code. Findings Having reviewed all the materials identified in the recitals above, and having heard oral testimony and arguments, this Commission finds, concludes and determines as follows: The above Preamble is accurate and also constitutes findings of this Commission. 2. Description of the Site and Current Uses. The Project will be constructed on the north half of Block 3746, Lot 1, and will front on Folsom Street, Main Street and Beale Street. The site is 75,625 square feet in area, and is currently used as a surface parking lot by the United States Postal Service ("USPS"). There are no existing structures on the site. A USPS facility is located on the south half of Block 3746, directly adjacent to the project site. The USPS facility and use will remain. Block 3746 is currently zoned "P (Public), and has a height and bulk limit of 200-R/150-R. The site is also within the existing Residential Subdistrict of the Rincon Hill Special Use District (Planning Code Section 249.1). 3. Description of the Surrounding Context. The 201 Folsom Street Project site is located in San Francisco s Rincon Hill area, about three blocks south of Market Street. The

10 PLANNING COMMISSION September 4, 2003 Case No, 2000.I073ECZ 201 Folsom Street Motion No Assessors Block 3746, Lot 1 Page 3 Embarcadero and San Francisco Bay are two to three blocks east of the Project site. The new Rincon Point Park is located approximately one block to the east. The anchorage of the San Francisco - Oakland Bay Bridge is one block to the south. The South of Market neighborhood is to the west and south of the Project site, beyond the Rincon Hill area. The downtown office district begins immediately north across Folsom Street. The Transbay Terminal is to the northwest at Fremont and Mission Streets. To the north and northwest of the Project site, across Folsom Street, land previously dominated by the Embarcadero Freeway and opened up as a result of freeway demolition is now vacant or used for surface parking; it remains in Caltrans ownership. This land is a portion of the site proposed to be included in the Transbay Redevelopment Project Area. The proposed 300 Spear project site is located just to the east, across Main Street. 4. Description of the Proposed Project. The Project consists of a building podium and two residential towers. The building podium consists of floors 1 through 7. The podium will include approximately 38,000 sf of retail space, along with residential lobbies, freight loading, a pedestrian walkway connecting Beale Street and Main Street, and all parking for the Project and adjacent USPS. The podium of the building will extend to a maximum height of 80 ft. at the 7th Floor. The 6th and 7th floors will contain 73 units (approximately 92,000 gross square feet of residential floor area). The two residential towers will be located above the podium such that the first tower (the Beale Street Tower) will be located at the corner of Beale and Folsom. The second tower (the Main Street Tower) will be located diagonally across the site from the Beale Street Tower on the south-east corner of the site, and will front only on Main Street. The Beale Street Tower will be 33 stories high above the podium (400 ft.), and will include approximately 362 residential units (approximately 369,000 gross square feet of residential floor area). The Main Street Tower will be 28 stories high podium (350 ft.), and will include approximately 290 residential units (approximately 313,000 gross square feet of residential floor area). Dwelling Units. The maximum number of dwelling units proposed for the Project is 725. The total number of units actually constructed may vary slightly from this as a result of further design refinement of the Project by the Project Sponsor, including increases in unit sizes to address market demand. The Project Sponsor seeks authorization from the Planning Commission for a total number of residential units not to exceed 725 units. The current unit mix proposed for the project inludes 175 studios, 462 one bedroom units, and 88 two bedroom units. This unit mix is subject to change by the Project Sponsor in response to future market conditions or as part of the review of final construction drawings prior to issuance of a building or site permit. Retail I Ground Floor. Between 15,500 to 38,000 square feet of retail space will be included in the podium of the Project. Along Folsom Street, retail uses and pedestrian entrances make up the entire frontage. The precise area and configuration of the proposed retail space is subject to change as a result of further design review by the Planning Department staff and refinement by the Project Sponsor. The ground floor on the

11 PLANNING COMMISSION September 4, 2003 Case No I073ECZ 201 Folsom Street Motion No Assessors Block 3746, Lot 1 Page 4 Main and Beale Street frontages feature seven units with street level entires that could be used for either pure residential or residential I commercial purposes. In addition, 30 parking spaces would be located behind the Main Street residential / commercial units. Prolect Parking. The Project will provide approximately 725 off-street parking spaces for the residential uses, and 25 spaces for the retail uses. Residential parking will be above grade on levels 2 through 5, and the first below grade level.. The retail parking will be below grade on level B-i. Access to both the residential and retail parking will be from a parking throughway ("Parking Through-Way") that extends across the south side of the Project Site, parallel to Folsom Street, and provides access to parking from Main Street and Beale Street. USPS Parking. As part of its agreement with the USPS to purchase the Project Site, the Project Sponsor is required to provide approximately 272 off-street replacement parking spaces on the Project Site for USPS use. These parking spaces will be below grade on levels B-2 and B-3. Access to the USPS parking will be through the Parking Through-Way. Loading. A total of four full size off-street freight-loading spaces will be provided in the podium of the building for both the residential and retail uses. Access to the freight loading spaces is from a single entry point on Beale Street, approximately 200 feet from the corner of Folsom Street. Pedestrian Access. The Project will include two main pedestrian entry points for residents and visitors: (1) the residential lobby for the Main Street Tower, located midblock on Main Street, and (2) the residential lobby for the Beale Street Tower, located at the corner of Folsom Street and Beale Street. Open Space and Amenities. Both private and common open space would be provided for the residents of the Project. As part of the current design, 153 of the units would feature a 36 square foot private balcony, for a total combined area of 5,510 square feet. The project will also include 30,740 square feet of common open space available to all residents. This common open space is divided into three different areas. The largest of these areas is a grand central terrace at level 6 of the building podium with an area of 14,640 square feet. At the eighth level of the podium, two additional open space terraces will be provided for residents, with a total area of 16,100 square feet. 750 square feet of public open space will be provided at the ground level on Folsom Street, in the form of a pedestrian alcove or sitting area. Midblock Pedestrian Walkway. At the south end of the site, along the new property line between the project and the remaining USPS facility, the project will include a partially covered, attractively landscaped pedestrian walkway that will connect Main Street and Beale Street. The passage way will be open to the sky for 2/3 of its legth and then will transition to a covered arcade underneath the Main Street tower. The project sponsor also proposes to include a larger public seating area within the USPS space as part of the pedestrian network. The 6th project would also include a publicly accessible roof terrace at the floor, which would include

12 PLANNING COMMISSION September 4, 2003 Case No I073ECZ 201 Folsom Street Motion No Assessors Block 3746, Lot 1 Page 5 a children s play area. The project sponsor will continue to work with Planning Department staff to refine the design of this walkway. 5. Rezoning Associated with the Project. The Project site is currently zoned P (Public). Prior to development of a private residential or commercial project, the site must be rezoned to allow for these types of uses. Therefore, the Project Sponsor has applied for a rezoning that would include reclassification of the project site, amendments to the Planning Code text and amendments to the General Plan. The proposed rezoning would allow development of the Project, as well as a similar project at 300 Spear by (1) changing the use district from Public to RC-4, (2) amending the Planning Code to include a new Residential/Commercial Subdistrict within the existing Rincon Hill Special Use District, (3) amend the Zoning Maps to reflect the new Residential/Commercial Subdistrict, and (4) amend the Zoning Maps to change the height and bulk districts for the Project site from 200R, 150-R, 105-R to 400W and 300W, respectively (collectively, the "Proposed Rezoning"). As set forth above, the Planning Commission has approved Rezoning Application No MZT, and recommended that the Board of Supervisors adopt the necessary ordinances to implement the Proposed Rezoning. This conditional use authorization is conditioned upon such approval. The findings set forth below are therefore based on the assumption of the passage of the Rezoning Ordinances by the Board of Supervisors. 6. Conditional Use Required. Under the Proposed Rezoning, the subject site will be within an RC-4 (Residential Commercial, High Density) District and within the Rincon Hill Special Use District / Commercial - Residential Subdistrict. Pursuant to Planning Code Section 253, Conditional Use authorization is required for any structure that would be taller than 40-feet located within a "R" (Residential) District, including RC Districts. The proposed residential towers would be 350 and 400 feet tall, respectively. 7. Planning Code Compliance. The Commission finds that the Project is consistent with the Proposed Rezoning, and following adoption by the Board of Supervisors of the Rezoning Ordinances, the Project will satisfy the new provisions of the Planning Code in the following manner: a. Use. Residential uses are permitted within the RC-4 District. The proposed Rincon Hill Special Use District/ Residential Subdistrict permits residential uses as well as a range of commercial uses similar to the adjacent C-3 District. The Project includes residential uses, retail uses, and a health club for use by residents, all of which are permitted under the Proposed Rezoning. b. Density. There are no density limits within the Residential Subdistrict of the Rincon Hill Special Use District (Section 249.1). There are no density limits under the Proposed Rezoning. The ratio between residential and non-residential uses must be at least 6:1. The Proposed Rezoning would allow a non-residential FAR of up to.75 to 1. The Project s proposed non-residential FAR is approximately.5 to 1. c. Rear Yard. Planning Code Section 249.1(b)(1)(C) states that the rear yard

13 PLANNING COMMISSION September 4, 2003 Case No I073ECZ 201 Folsom Street Motion No Assessors Block 3746, Lot 1 Page 6 standards for dwelling units, as provided in Planning Code Section 134, do not apply in the Rincon Hill Special Use District. The Project will cover the full lot and will not provide a rear yard. d. Open Space - Residential Uses. The Proposed Rezoning includes a residential open-space requirement of 36 net square feet for each dwelling unit if all private, with a ratio of 1.33 of common useable open space (48 square feet) that may be substituted. Residential open space may be provided through private usable open space, or through common open space such as an enclosed park or plaza, or an enclosed or partly enclosed pool or health club, accessible to residents and guests of residents, but not the general public. As currently configured, the Project provides 30,740 square feet of common roof deck area, terrace and garden areas above the base; 153 units include private balconies. These open space elements may be modified during final design review with the Department staff. e. Open Space - Nonresidential Uses. The Proposed Rezoning requires that the Project provide publicly accessible open space for non-residential uses at a ratio of one square foot of open space per 50 square feet of use. "Publicly accessible open space" is defined as open space situated in such locations and which provides such ingress and egress as will make the area accessible to the general public and which is open to the public daily for at least 12 daylight hours. The open space is not subject to any dimension requirements. The Project includes approximately 38,000 square feet of retail uses, and will provide 750 square feet of public open space in the form of a midblock plaza accessible directly off Folsom Street. f. Height. Planning Code Section 250 limits the height of all buildings to the height limits set forth the Height and Bulk District in which the site is located. Under the Proposed Rezoning, the high-rise buildings would be 350 and 400 feet, respectively, within a 400-W Height and Bulk District. g. Bulk. The Proposed Rezoning limits the plan length and diagonal dimension of any structure within the "W" Bulk District as follows: Buildings over 300 feet in height shall not exceed a maximum plan length of 115 feet and a maximum diagonal length of 145 feet. The Project satisfies this requirement. h. Parking. The Proposed Rezoning allows up to one parking space for every dwelling unit. Planning Code Section 154 and 155 provides specifications for parking stall size and maneuverability. All parking spaces located within the Project shall satisfy these requirements. i. Previously Existing Parking. The Proposed Rezoning provides that additional parking shall be allowed as of right for any project that submitted an application for environmental review prior to December 31, 2001, where such parking is necessary to replace parking for any agency or department of the United States Federal Government that is located on, or immediately adjacent to, a development site. The

14 PLANNING COMMISSION September 4, 2003 Case No I073ECZ 201 Folsom Street Motion No Assessors Block 3746, Lot 1 Page 7 Project is being constructed adjacent to a United States Postal Service ("USPS") facility on a site that is currently being used for surface parking for the USPS. The Project will include up to 272 off-street parking spaces to replace surface parking lost as a result of construction of the Project. The Project satisfies this requirement. Street Trees and Right-of-Way Improvements. The Conditions of Approval include conditions that would require the project sponsor to implement sidewalk widening and streetscape improvements if such improvements are approved by the City within a certain amount of time. If such improvements are not approved, the project sponsor would still be responsible for compliance with Planning Code Section 140 and 249.1(b)(2). Planning Code Section 140 requires that for new construction projects within RC District, at least one-street tree be planted for every 20-feet of frontage. Planning Code Section 249.1(b)(2) requires that any new project permitted through Conditional Use authorization provide streetscape improvements including lighting, seating, and sidewalk paving. This Conditional Use authorization is conditioned so that the project sponsor must work with staff to finalize the specifications of the improvements and their ongoing maintenance. k. Shadow Impact. Pursuant to Planning Code Section 295, no new building above a height of 40-feet can create any new shadow on a property owned by the City Recreation and Parks District. A shadow fan analysis prepared by staff has shown that no new shadow on such a property will be created by this project. Wind. Section (b)(3) establishes a target maximum equivalent wind speed of 7 miles per hour (mph) in public sitting areas and 11 mph in areas of substantial pedestrian use, known as comfort criteria. New buildings and additions to buildings may not cause ground-level winds to exceed these levels more than 10 percent of the time. According to the Planning Code, if existing wind speeds exceed the criteria, new buildings and additions must be designed to reduce ambient wind speeds to meet these requirements, unless certain requirements are met for an allowable exception. Wind tunnel tests were conducted for the Project. A total of 44 velocity measurements locations were selected along sidewalk areas adjacent to and near the Project site for all tests. An additional ten measurements were made in the rooftop space. No violations of the wind hazard code were measured. The Project generally increased wind, with 34 points having increased wind, eight points having decreased wind, and two points having unchanged winds. The number of ground level locations exceeding the comfort criteria was 21 of 44. The new courtyards created on the outdoor rooftop decks will have slightly greater wind speeds, and these wind speeds will exceed the seven-mile per hour "comfort criteria" for seating areas in public spaces. According to the FEIR, these wind exceedances result largely from the large areas of vacant land in the Transbay area west of the Project Site. When building in this area proceeds, wind issues will be greatly reduced.

15 PLANNING COMMISSION September 4, 2003 Case No ECZ 201 Folsom Street Motion No Assessors Block 3746, Lot 1 Page 8 Pursuant to Planning Code Section 249.1(b)(3), the Zoning Administrator may allow the building or addition of a proposed project to add to the amount of time the comfort level is exceeded under certain circumstances. The Project Sponsor has submitted a request to the Zoning Administrator for an exception pursuant to Section (b)(3). m. Streetscape Frontage. The Proposed Rezoning requires a minimum of 50% of frontage for retail, building and pedestrian circulation. The proposed Project provides streetscape substantially in excess of 50%, thereby exceeding the proposed rezoning requirement. n. Dwelling Unit Exposure. The Proposed Rezoning does not have a dwelling unit exposure requirement, in light of the tower separation, large site and high-density nature of the proposed Residential/Commercial Subdistrict. All of the units will have access to adequate light and air. o. Tower Separation. The Proposed Rezoning requires a minimum 82 1/2 foot separation between towers within a particular project site in the new Residential/Commercial Subdistrict. However, along interior property lines, this tower separation standard will not apply. The Project proposes a minimum 82 %foot separation of towers. Therefore, it will satisfy the tower separation standards under the proposed rezoning. p. Affordable Housing. Pursuant to Planning Code Section 315, the Project will comply with the Residential Incusionary Affordable Housing Program ("Program") by either (1) providing 12% of the total units constructed on-site to be affordable units (Section 315.4), (2) paying an in lieu fee in an amount determined by the Mayor s Office of Housing (Section 313.6), (3) constructing 17% of the total units as off-site affordable units (Section 313.5), or (4) any combination of the above that satisfies the requirements of the Program. As required under the Program, this decision must be made prior to the issuance of any building or site permit for the Project. q. Jobs Housing Linkage Program (JHLP). The Project may include up to 38,000 square feet of retail space. If the Project is constructed with more than 25,000 square feet of retail space, the Project must comply with JHLP, which require either payment to a housing developer or payment of an in-lieu fee as required by Section 313, etseq. 8. Conditional Use Findings (Section 303). The Commission has determined that the proposed Project complies with the criteria of Section 303 of the Code in that: a. The proposed new uses and building, at the size and intensity contemplated and at the proposed location, will provide a development that is necessary or desirable, and compatible with, the neighborhood or the community.

16 PLANNING COMMISSION September 4, 2003 Case No I073ECZ 201 Folsom Street Motion No Assessors Block 3746, Lot 1 Page 9 The Project Site is in an area that is emerging as one of the City s newest residential neighborhood. Surface parking lots and miscellaneous industrial buildings have historically characterized the Rincon Hill area. Recent development in this area is changing Rincon Hill from an underutilized industrial/commercial area into a true residential neighborhood. The City is currently considering a substantial up-zoning of the Rincon Hill area through both its Rincon Hill mixed-use district proposal and the proposed Transbay Redevelopment plan. The existing Rincon Hill Plan, as well as the future Redevelopment plan, all focus on encouraging high-density residential development in near downtown. The Project is necessary and desirable because it will provide high-density housing in a downtown neighborhood that has been designated by the Planning Department as an area where high-density housing is needed and appropriate. The Project will provide a significant number of residential units near jobs and public transportation. The project is very close to downtown and within the Rincon Hill Special Use District where high-density residential project are strongly encouraged. The Project will satisfy the Rincon Hill Area Plan that directs the City to convert underutilized and outmoded industrial areas to residential neighborhoods close to downtown that would contribute significantly to the City s housing supply. The Project will provide a complimentary mix of commercial space for both retail and personal services that will support the new residential development, and will provide employment opportunities for San Francisco residents. The Project will add two well designed, high-rise towers to the City skyline. The two towers will be stepped and tapered in such a manner as to create attractive silhouettes that will compliment the City s skyline. The Project will not disrupt public views through the area from other vantage points. The Project avoids excessive screening of downtown views from the Bay Bridge, and minimizes the shadowing of surrounding open spaces. The Project provides adequate off-street parking to meet the needs of the residents of the Project, which will minimize the project s impact on street parking in the area. b. The Project will not be detrimental to the health, safety, convenience or general welfare of persons residing or working in the vicinity. There are no features of the project that could be detrimental to the health, safety or convenience of those residing or working the area, in that: i. Nature of proposed site, including its size and shape, and the proposed size, shape and arrangement of structures; The project is ideal for the subject site. The Project Site is currently underutilized as a surface parking lot. There are no physical constraints which would limit the Project. The site, with dimensions of 275 feet by 275 feet (approximately 75,600 square feet of total area) is large enough to accommodate a significant development, and will allow the high-rise towers

17 PLANNING COMMISSION September 4, 2003 Case No I073ECZ 201 Folsom Street Motion No Assessors Block 3746, Lot 1 Page 10 to be sufficiently separated so that view corridors will be preserved and the appearance of bulk reduced. The site is currently underutilized as a surface parking lot. The size of the site and the proximity to downtown, and its relationship to the street network in the immediate vicinity are factors that make the site highly suitable for a high-density residential development. The new retail uses will activate the street and significantly improve the pedestrian environment in this area. Adding up to 725 new residential units will increase the population in this area which will make other commercial and retail uses more viable. ii. The accessibility and traffic patterns for persons and vehicles,the type and volume of such traffic, and the adequacy of proposed off-street parking and loading; The Project will have excellent access to the local street network and nearby freeway ramps. The Project fronts directly on Folsom Street, a four-lane major arterial, as well as Main Street and Beale Street, two secondary streets. Folsom Street acts as an "inbound" arterial for traffic moving eastbound toward the downtown core, until Main Street, where it becomes a two way arterial providing local circulation. Harrison Street, directly south of the Project Site, acts as an "outbound" arterial for traffic moving westbound away from downtown. Access to the off-street parking, as well as freight loading and service entrances are located on Main Street and Beale Street. Because parking access, service areas and freight loading are located well away from both Folsom and Harrison Streets, potential for interference with traffic flow along those major arterials is minimized. Traffic volumes on both Main Street and Beale Street are low, as they provide only local circulation. Main Street becomes a dead end/cull-de-sac at Bryant Street; Beale Street terminates at Brannon Street on the Embarcadero. These secondary streets have the capacity to support both the entrance and exits to the off-street parking, as well as the access to the service and freight loading areas. The sites are served by eight Muni bus lines one street-surface light rail line,; Muni Metro service lines under Market Street,, and BART trains under Market Street. The site is also in close proximity to the Transbay Terminal, which provides bus service to the Pennisula (SamTrans), the East Bay (AC Transit), and to the North Bay (Golden Gate Transit). It is also close to the Fourth Street CalTrain Station. Finally, the site is in close proximity to Ferry Service for the entire Bay Area. Of course, the sites are also within walking distance of thousands of jobs in the downtown area. iii. The safeguards afforded to prevent noxious or offensive emissions such as noise, glare, dust and odor; The project will be residential in character and therefore not involve any

18 PLANNING COMMISSION September 4, 2003 Case No O73ECZ 201 Folsom Street Motion No Assessors Block 3746, Lot 1 Page 11 noxious or offensive emissions. The project sponsor will be required to manage the construction site according to City standards. iv. Treatment given, as appropriate, to such aspects as landscaping, screening, open spaces, parking and loading areas, service areas, lighting and signs; The Project has been carefully designed to create an outstanding residential community in every respect. Above grade off-street parking will be completely screened from view from the street. Freight loading and service areas for both the residential and retail uses are also located within the building base, out of view from the street. Buildings in the downtown area are typically constructed to the property line and create a consistent urban street wall. The Project s mid-rise component continues this pattern. Maintaining a continuous street wall, however, does not provide significant opportunities for landscaping along street frontages. The Project will include a number of open space amenities in other areas. Landscaped open spaces and terraces, located on the sixth and eighth levels, will provide a significant amount of attractive and usable open space for the residents. Lighting along the building fa ade and at the street level will be consistent with other downtown residential towers. An appropriate retail signage program, that is consistent with the building character, will be prepared by the Project Sponsor for review by the Planning Department. c. The Project meets the criteria in Section 303(c)(3) by complying with applicable provisions of the Planning Code as established in the Findings and affirmatively promoting the objectives and policies of the General Plan. With the proposed amendments to the Rincon Hill Area Plan of the General Plan and to the Planning Code Text/Zoning Maps, the proposed Project complies with the applicable provisions of the Planning Code, and does not adversely affect the General Plan. The Project is consistent with the following goals and objectives of the General Plan: RINCON HILL AREA PLAN (Existing Policies) OBJECTIVE 1: TO CREATE A UNIQUE RESIDENTIAL NEIGHBORHOOD CLOSE TO DOWNTOWN WHICH WILL CONTRIBUTE SIGNIFICANTLY TO THE CITY S HOUSING SUPPLY. OBJECTIVE 2: TO CREATE SPACE FOR ADDITIONAL USES, WHICH WILL PROVIDE NEEDED SERVICES FOR THE RESIDENT POPULATION. OBJECTIVE 3: TO ALLOW EXISTING INDUSTRIAL, SERVICE AND OFFICE USES TO REMAIN AND CREATE NEW SUCH USES IN DESIGNATED