Mayor’s Office of Housing and Community Development

City and County of San Francisco

EDWIN M. LEE MAYOR

OLSON LEE

DIRECTOR

1 South Van Ness Avenue, 5th Floor, San Francisco, CA 94103

Phone: (415) 701-5500 TDD: (415) 701-5503 www.sfmohcd.org

To: Olson Lee

From: 88 Broadway Selection Panel through Teresa Yanga

Cc: Faith Kirkpatrick, Joel Lipski

Re: 88 Broadway RFP Developer Selection Recommendation

Date: April 4, 2016

Executive Summary

On December 4, 2015, the Mayor’s Office of Housing and Community Development (MOHCD)

issued a Request for Proposals (RFP) for the development of two adjacent parcels for low-

income family and low-income senior affordable housing. Both parcels are currently used as

surface level parking lots. The lot located at the corner of Broadway and Front Streets is owned

by the Port of San Francisco (the “Port Site”) and is anticipated to be developed as mixed-use

affordable housing for low-income and moderate-income families. The adjacent mid-block lot is

owned by the Department of Public Works (“DPW”) and is perpendicular to the Port Site,

running east from the Port Site to Davis Street (the “DPW Site”). The DPW Site is anticipated to

be developed as mixed-use affordable housing for low-income and moderate-income seniors.

The RFP highly encouraged the two projects to be developed, designed, and built simultaneously

to maximize cost savings. The RFP sought proposals from qualified development teams to

develop, own and operate both developments with at least 20% of the units for formerly

homeless and up to 25% of the units for middle income households. The Human Services

Agency (HSA) and the Department of Public Health (DPH) intend to provide an annual

operating subsidy and service funding for the formerly homeless families and seniors

respectively once the projects are complete. The RFP required proposals for neighborhood

commercial uses along the ground floor, per the applicable zoning code, and encouraged child

care facilities on the Port Site.

The RFP pursued goals articulated in the MOHCD Consolidated Plan and San Francisco’s Ten

Year Plan to Abolish Chronic Homelessness. Furthermore the RFP’s goals are to 1) to select a

qualified respondent that can develop, own, and operate the development in a professional,

sustainable, and expert manner; and 2) to ensure that the development will be developed in a

manner consistent with the Development, Design and Financial Objectives described in the RFP.

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The Design Objectives were developed with input from the Seawall Lot 322-1 Working Group

and community stakeholders who participated in the Community Design Workshop and were to

be applied to the development as a whole.

MOHCD staff made outreach efforts to attract submittals from qualified developers by the

February 29, 2016 RFP response deadline. An optional pre-submittal meeting held on December

17, 2015 was well attended by a broad range of interested parties.

MOHCD received comprehensive submittals from the following two teams:

Chinatown CDC - Self-Help for the Elderly ("Chinatown")

Developer

Chinatown Community Development

Center

Co-Developer Self - Help for the Elderly

Lead Architect David Baker Architects

Associate Architects Min / Day

MEI Architects

Architectural Resources Group

Property Manager (both Projects): Chinatown CDC

Services Provider, Family/Homeless Services: Chinatown CDC (Families)

Services Provider, Senior Services Self - Help for the Elderly (Seniors)

Childcare Provider Kai Ming Head Start

Commercial Consultant Erika Elliott, Colliers International

BRIDGE - John Stewart Company ("BRIDGE")

Developer BRIDGE Housing Development Corp.

Co-Developer John Stewart Company

Lead Architect Leddy Maytum Stacy Architects

Property Manager (both Projects): John Stewart Company

Services Coordinator (both Projects) BRIDGE Housing Development Corp.

Homeless Services (both Projects) Lutheran Social Services of No. Calif.

Childcare Provider YMCA of San Francisco

Commercial Consultant Vikki Johnson, Bond Retail Partners

After confirming that both submittals were complete and met the minimum qualifications, both

respondent teams were invited to a two hour interview. The interviews consisted of one-hour of

presentation from each development team followed by one hour of questions from the panel.

After careful review of each proposal and interview, the selection panel composed of MOHCD

staff, a representative from the Human Services Agency and DPH, a representative from the

Port, and three community representatives from the Chinatown/North Beach/Telegraph Hill

neighborhood, reached consensus to recommend the BRIDGE team.

88 Broadway RFP

RFP Respondents were required to form a team consisting of the following:

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One or more San Francisco based non-profit developers in a joint venture where at least

one of the nonprofit developers is San Francisco-based, or a qualified for-profit developer

working in partnership with a San Francisco-based nonprofit developer (the

“Developer”);

A property management entity with experience managing low- and very low-income

affordable housing in San Francisco, in a culturally competent manner;

A lead architectural firm with experience in design and construction of multifamily

housing, preferably with residential experience in San Francisco;

A retail/commercial designer/planner/consultant, and

One or more qualified supportive service providers with experience providing culturally

competent services appropriate for low and very-low income seniors and families.

The development program described in the RFP for the site included the following requirements:

At least 120 units of family housing with 20% set aside for homeless families referred by

the Human Services Agency, up to 25% of total family units for middle income

households earning up 120% of area median income, including 15% of the family

housing units as 3-bedroom units;

At least 50 units of senior housing with 20% set aside for homeless seniors referred by

the Department of Public Health, up to 25% of the total senior units for seniors earning

up to 70% area median income, including 70% of the senior units as 1-bedroom units;

Maximum rents based on 30% of the targeted incomes;

A feasible project financing plan that minimizes MOHCD’s financial subsidy assuming a

75-year initial term ground lease agreement (with an option to extend to a total of 99

years) with MOHCD for the DPW site and a maximum 75-year term ground lease with

the Port for the Port Site;

A description and estimated cost savings of innovative financing approaches or cost-

saving strategies intended to minimize MOHCD’s financial subsidy;

A development program that meets the RFP’s goals and objectives guidelines;

A supportive services provider and plan to serve the needs of the residents, including the

formerly homeless families and seniors;

A property manager with experience successfully managing supportive housing for

formerly homeless households and ground floor commercial;

A plan to undertake extensive community outreach and establish positive links with

surrounding neighbors and the larger community, both during project development of the

and during ongoing project operations.

Selection Criteria

All applications were required to meet the minimum experience and capacity requirements and

were rated and ranked according to the following scoring criteria:

Category Points

(1) Experience and Capacity: 40

a. Developer Experience & Capacity (20 pts)

b. Architect Experience (10 pts)

c. Property Management Experience (5 pts)

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d. Service Provider Experience (5 pts)

(2) Development Concept and Preliminary Site Plan: 40

a. Commercial Retail Plan (5pts)

(3) Financing and Cost Control Innovations: 10

(4) Services Plans: 10

TOTAL POSSIBLE POINTS 100

(1a) Development Experience & Capacity -- (20 points possible):

Respondents were scored according to the number of qualifying projects that are affordable to

low or very-low income families or seniors completed or under development in excess of the

minimum and whether or not their experience includes middle-income/moderate-income

housing, at least 5,000 square feet of retail/commercial space, and the developer’s experience as

lead organizer of a collaborative community outreach and planning effort. In addition the

developer’s staffing capacity to carry out the project during the entire development process is

scored.

(1b) Lead Architectural Firm Experience – (10 points possible):

Points were awarded according to the number of completed family housing developments in

excess of the minimum Architects’ experience, the architect’s experience with collaborative

community outreach and planning efforts, and whether the architect has any experience with the

Secretary of the Interior Standards.

(1c) Property Management Experience – (5 points possible):

Points were awarded only to Property Managers whose experience includes managing housing

for formerly homeless persons (seniors, families or single persons) in San Francisco for at least

24 months. Points are awarded for experience managing a mixed use property (ground floor

commercial with residential use above), and separate points for experience managing housing for

homeless families and homeless seniors.

(1d) Service Provider Experience – (5 points possible)

Proposals were scored according to the amount of experience (length of time) the service

provider has successfully provided services to low- and very low-income families and seniors,

including homeless families and homeless seniors. This experience should include linking clients

to the City’s safety net of services and supporting their efforts to access those services. A Letter

of Interest from each service provider was required to be submitted with the application.

(2) Development Concept and Preliminary Site Plan – (40 points possible):

Proposals were scored according to the degree to which the Development Concept and

Preliminary Site Plan for the entire Development achieves the Design Objectives described in

RFP Section IV.A.3, including, but not limited, to ensuring housing habitability through

appropriately sized units and resident interior and exterior amenities; providing good urban

design by maintaining the overall scale and character of the Northeast Waterfront Historic

District; addressing community concerns about the project’s scale through its height, bulk and

massing; providing active uses along the street frontages; providing neighborhood/community

amenities; and maximizing sustainability to the extent possible.

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(2b) Commercial Retail Plan – (5 points possible):

Proposals were scored according to the degree to which the Commercial/Retail Plan achieves the

Development Program Objectives described in RFP Section IV.A.1, namely, maximizing ground

floor active commercial uses along all street frontages after accounting for other priority

community-serving uses.

(3) Financing, Cost Control and Innovations – (10 points possible):

Proposals were ranked according to the degree to which the development teams proposed a

financing plan that is feasible and consistent with the requirements, limitations and opportunities

associated with its proposed sources; proposed development costs are comparable to similar

family and senior projects; minimizes MOHCD’s permanent financing; proposes innovative

sources or financing instruments; and uses innovative (i.e., non-standard, routine or commonly

used) but practical materials or methodologies designed to reduce development, construction

and/or operating costs, either directly or indirectly, without reducing the overall quality of the

completed project.

(4) Services Plan – (10 points possible):

Proposals were scored according to the degree to which the Services Plan includes providing

access to an array of services appropriate to the diverse needs of low-income families, parents

and children, including formerly homeless families, and to low-income and formerly homeless

seniors; how access to those services will be encouraged and facilitated; the degree to which the

Plan relies on coordination with existing services in the neighborhood and community; and the

appropriateness of the services budget.

Selection Panel and Process

The selection panel appointed by the MOHCD Director reviewed and evaluated the two

responses. The selection panel was facilitated by Joel Lipski (MOHCD consultant), staffed by

Faith Kirkpatrick (MOHCD Project Manager) and Teresa Yanga (MOHCD Director of Housing

Research) and consisted of 7 panelists:

Margot Antonetty (Interim Director of Housing and Urban Health, SF DPH)

Doreen Der-Mcleod (Chinese Progressive Association community representative)

Bob Harrer (88 Broadway Working Group community representative)

Bruno Kanter (Port of San Francisco Northeast Waterfront Advisory Group community

representative)

Briana Moore (Family Permanent Supportive Housing Program Manager, SF HSA)

Ricky Tijani (Development Project Manager, Port of San Francisco)

Harry Wong (MOHCD Construction Manager)

During the week of March 7th to March 11th, the selection panel met in smaller focus groups to

prepare questions about each proposal to ask the respondents at their interviews. These focus

groups included those panel members who were particularly well qualified to review

respondents’ Resident Services Plans, Preliminary Site Plan and Design Concept, and

Financing/Cost Control Innovations. During the same period, MOHCD preliminarily scored

respondents’ Experience and Capacity for later review by the selection panel. The questions

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identified in focus groups or by MOHCD staff were sent to respondents on March 18, 2016 to

allow them time to answer the questions during the follow-up interview.

On March 25, 2016 the selection panel interviewed both respondent teams. Each interview

consisted of one hour of presentation by the respondent teams followed by one hour of questions

by the selection panel. Following the second interview, the selection panel re-convened and by

consensus, scored each proposal using the four scoring criteria described in the RFP.

Final RFP Scoring

Category (Max Score) Chinatown

CDC / SHE

BRIDGE / John

Stewart Co.

Experience (40) 35 39

Development Concept and Preliminary Site Plan (40) 25 34

Financing Cost Control (10) 4 7

Services Plan (10) 8 6

Total 72 86

The BRIDGE team outscored the Chinatown/Self-Help for the Elderly team in all but one

category, with the most significant scoring differential in Development Concept and Preliminary

Site Plan.

Proposal Summaries

Consistent with the requirements of the RFP, both proposals included two separately-owned and

financed projects, one for families and the other for seniors on adjacent lots. Both included a

north-south pedestrian passageway along the property line between the two projects and both

included retail/commercial spaces on Broadway between the pedestrian “alley” and Front Street.

Both also included ground floor space for childcare along with standard resident amenities such

as open space, a community room, laundry facilities, and offices for property management and

resident services. Both included units with rents targeting moderate income families and seniors

as well as low-income households and formerly homeless households.

Neither team included any significant above-grade, public parking for Port’s consideration. The

BRIDGE team included 10 off-street spaces for commercial space tenants and housing staff.

CCDC team proposed a below-grade, 90-stall parking but with no architectural layout.

The most significant differences between the two proposals were in their exterior design, unit

mix, sizes and affordability, and in their financing, particularly their cost assumptions and

proposals for commercial space financing.

Comparison of Residential Uses:

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Family Project: CCDC BRIDGE

Total Units 140 130

Average Unit size** 722 sf 790 sf

Average Low-Income AMI 40% AMI 45% AMI

Moderate Income units 34 24

% of Total Units 24% 18%

Average Mod-income AMI 120% AMI 95% AMI

Senior Project:

Total Units 63 52

Average Unit size 487 sf 542 sf

Average Low-Income AMI 39% AMI 45% AMI

60% - 70% AMI units: 15 13

% of Total Units: 24% 25%

** Both teams proposed units that are larger than the minimum sizes required for tax credits:

Chinatown by 10%, BRIDGE by an average of 19%.

Comparison of Non-Residential Uses -- both Family and Senior Projects combined:

CCDC/SHE BRIDGE

4,638 sf Infant/Toddler Head Start Childcare

Center (48 slots) plus 1,127 sf Youth Center

(offices)

4,431 sf Infant/Toddler/Preschool YMCA

Childcare Center (55 slots)

4,100 sf retail/restaurant commercial space (2

spaces)

7,000 sf retail/restaurant commercial space

(3 spaces) plus 4 moderate income live-

work spaces.

1,490 sf Community Room in Family Project;

1,950 sf Senior Activity/Community room

833 sf Community Room in Family Project;

915 sf Community Room in Senior Project

10,030 sf private open space 14,276 sf private open space

Mid-block north-south pedestrian walkway Mid-block north-south pedestrian walkway-

and east-west pedestrian walkway from

Davis to mid-block

10-space off-street commercial space

parking garage

Attached is a more detailed comparison of the proposals’ metrics, including copies of the

financing summaries, and lists of amenities.

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Key Differences and Scoring

EXPERIENCE AND CAPACITY: Both teams maximized points for Architectural, Property

Management and Service Provider Experience and Capacity for a total of 33 points each. The

remaining 7 points were in two categories:

(a) Experience with development that included moderate income units (3 points); and

(b) Evidence of project management capacity (4 points).

(a) BRIDGE identified sufficient experience with development of moderate income housing to

be awarded the full 3 points for this category. Chinatown’s experience has been limited to a

single project that included units at 80% of AMI for which their team was awarded only one (1)

point.

(b) The selection panel was not satisfied that either team clearly demonstrated that they have at

this time sufficient project management capacity in terms of identifiable assigned staff or

consultants with demonstrable capacity to be awarded the full four (4) points for project

management capacity.

The BRIDGE submittal identified supervisory development staff from both BRIDGE and from

JSCO who have the capacity to oversee project management of the 88 Broadway project, but

listed a single person – from John Stewart Company as Project Manager. The panel was

concerned that the primary developer during the development of the Broadway projects would be

BRIDGE and that the BRIDGE staff identified as Lead developer is primarily supervisory and

may be over-extended due to his involvement in one of MOHCD’s HOPE SF projects.

Nevertheless the panel was satisfied that BRIDGE could address this issue relatively quickly in

part due to the fact that both co-developers have experienced and relatively sizeable development

departments to support day-to-day project management activities. In light of this determination

the panel decided to award the BRIDGE team three (3) out of the possible four (4) points for

some project management capacity.

On the other hand, the Chinatown/SHE team would rely almost entirely on Chinatown CDC’s

development staff and acknowledged the need to expand Chinatown’s capacity not only to

manage the 88 Broadway sites if they are selected, but to manage other projects for which

Chinatown CDC has recently been selected by MOHCD. Furthermore, although a project

manager for the Family Project was listed as “TDB” in the RFP submittal, Chinatown CDC did

identify a staff person at the interview to manage the family project, but that person’s specific

experience, workload and capacity to take on the role of Lead developer was not clarified.

Chinatown did not identify a project manager for the Senior Project, although they had “short-

listed” several candidates for that position and Self-Help for the Elderly was apparently also

seeking to hire staff to perform its duties as co-developer. In light of these uncertainties the

selection panel awarded only one (1) point to the Chinatown/SHE team for lack of project

management capacity.

DEVELOPMENT CONCEPT AND PRELIMINARY SITE PLAN: The RFP described six

Design Objectives that were developed with input from the Seawall Lot 322-1 Working Group

and community stakeholders who participated in a Community Design Workshop. They

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represented a consensus among those who participated in their formulation, including

community and neighborhood representatives, MOHCD staff and Port staff. The RFP explicitly

stated that scoring of the respondents’ Development Concepts and Preliminary Site Plans would

be based on the degree to which their proposals achieve the Design Objectives.

The Design Objectives included specific goals related to

(a) Housing Habitability, including appropriate unit sizes and resident interior and

exterior amenities;

(b) Urban Design, including conforming to the design characteristics of the Northeast

Waterfront Historic District and conforming to the urban design of the adjacent area by

stepping building heights down toward the Bay and providing mid-block pedestrian

alleys;

(c) Height, Bulk and Massing, including building within 50’ height on the Davis Street

frontage and reducing visual massing by breaking the façades on Front and Broadway

Streets with setbacks on the upper floors, and other architectural details;

(d) Facilitation of Active Uses Along Street Frontages, including the Davis Street

frontage, as required by the C-2 zoning;

(e) Neighborhood Amenities, including community-oriented programs and facilities open

to non-residents and landscaped open space at least visually accessible to the public.

(f) Sustainable Design, including building elements that reduce resource consumption.

Design Comparisons

HABITABILITY: While both site plans and design concepts would provide habitable spaces,

appropriate amenities, and desirable homes for their residents, the Chinatown interior plan was

more fully articulated than the BRIDGE concept. Although BRIDGE proposed larger units (at

the cost of providing fewer total units), more private open space at ground floor and roof level

(combined), and a larger childcare space along with other more or less standard amenities,

Chinatown’s concept included multiple service-oriented facilities specifically oriented toward its

future low income residents, including Head Start childcare, a senior Activity Center, a youth

center, and a proposed restaurant that would provide discounted food for low-income seniors.

URBAN DESIGN and HEIGHT, BULK and MASSING: In contrast to Chinatown’s more

detailed design of its interior space, the BRIDGE proposal – both in written submittals and in the

interview presentation – paid considerably more attention to the exterior of the development and

its external context. Both design teams included architects versed in designing to the Secretary

of the Interior Standards, included step-downs and set-backs at Davis Street and elsewhere, but

the BRIDGE presentation was more focused. The panel found both proposals still too bulky and

visually massive, particularly the senior buildings, but BRIDGE’s design included many more

architectural contextual details intended to break up the visual massing and to conform to the

general pattern of buildings in its vicinity.

FACILITATION OF ACTIVE USES ALONG STREET FRONTAGES: Both designs

addressed this Objective well for most of the street frontages, particularly along Broadway with

nearly identical commercial spaces designed at least in part for restaurant use, including exterior

seating. The respondents’ approach to the Davis Street frontage was quite different. Chinatown

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proposed a relatively “inactive” frontage composed of offices adjacent to a (set-back) senior

building entry. BRIDGE’s concept included a commercial space designed for a small café to

activate this street frontage and be complementary to the proposed development across the street

currently anticipated to be for a hotel and a dinner-theater operation.

NEIGHBORHOOD AMENITIES: Both proposals included nearly identical north-south

landscaped pedestrian walkways running along the eastern property line of the Family Project

and separating it from the Senior Project. Both would widen at their southern end to provide

outdoor space for a restaurant, but BRIDGES addresses this much more so than Chinatown’s.

BRIDGE also included an east-west walkway that would extend approximately three quarters of

the block from Davis Street to Front Street. Both would provide non-residents’ access to their

childcare, although funding differences will have an effect on both residents’ and non-residents’

access.

SUSTAINABLE DESIGN: Both proposals included a variety of Green Building strategies,

including photo-voltaic panels and solar water heating on the roof, green roofs to retard and filter

rainwater runoff, non-toxic interior materials, water-conserving fixtures and drought-tolerant

landscaping.

Scoring:

The maximum scoring under this Design category was divided as follows: 35 for the overall

design concept and site plan, and 5 specifically for the commercial spaces. The panel used the

following matrix as a guide for scoring the overall design concept and site plan:

Outstanding 30-35 points

Very Good 25-29 points

Good 20-24 points

Fair - Poor 0 -15 points

OVERALL DESIGN AND PRELIMINARY SITE PLAN By consensus, the selection panel agreed that although the Chinatown interior design concept

was stronger in terms of its emphasis on serving the needs of residents and overall Habitability

and would merit a “Good” score, the BRIDGE plan did a much better job of addressing the other

Design Objectives laid out in the RFP, particularly those related to Urban Design, Massing,

Contextual Design/Details and Street Frontage Activation, and would merit a score of “Very

Good”. The panel felt with respect to design, the BRIDGE proposal with its variety of massing

profiles along Front Street and an appropriate setback of upper floors facing Davis Street, as well

as its creative use of modern materials and window treatments that acknowledges the adjacent

and neighboring existing masonry buildings would have a considerable advantage over the

Chinatown plan when the developer begins the effort to garner neighborhood support for the

development.

In addition, while Chinatown proposed more units in both projects (139 family units to

BRIDGE’s 130; and 62 senior units to BRIDGE’s 52) the selection panel noted that Chinatown’s

design concept was likely to lose units as a result of adding more setbacks to the family project

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and stepping down more of the senior project and that while BRIDGE may lose some units as

well for similar reasons, it would not be as many and their loss could be mitigated by adjusting

BRIDGE’s unit sizes if necessary. The panel decided that a fair score reflecting this analysis

would be a score of 29 points for BRIDGE and 22 points for Chinatown.

COMMERCIAL SPACE PLANS

The key differences between the two proposals with respect to commercial spaces were the

amount of non-Childcare commercial space proposed and their locations. Chinatown proposed

2 spaces (4,100 sf total) both located on Broadway between the new pedestrian passageway and

Front Streets. BRIDGE proposed 3 spaces (7,000 sf total) including one large (divisible) space

on Broadway and one each on Front Street and Davis Street. The Front Street frontage would

also have four (4) live-work units with entries off of Front Street.

The selection panel had a favorable impression of BRIDGE’s proposal for a small café on Davis

Street which would be designed to attract visitors from across Davis Street as an example of how

the BRIDGE concept was more thoughtful about integrating the overall development into the

neighborhood programmatically as well as architecturally. The panel awarded BRIDGE 5 points

(out of 5) for its commercial space concept and Chinatown 3 points.

FINANCING AND COST CONTROL INNOVATIONS

Evaluation of respondents’ financing and cost control proposal included consideration of the

degree to which each proposal was consistent with proposed financing sources requirements and

opportunities, minimized MOHCD permanent financing, and proposed innovative financing

instruments and/or innovative cost control strategies or methodologies.

Both proposals included what are now standard sources of financing, including tax-exempt

bonds and 4% Low Income Housing Tax Credits, General Partner equity, Federal Home Loan

Bank Affordable Housing Program funds, permanent debt and State Affordable Housing and

Sustainable Communities (AHSC) funding.

The proposals differed in several significant ways, regarding:

Overall strategy for moderate income unit financing;

Leveraging assumptions, particularly regarding AHSC

Cost assumptions; and

Commercial space financing.

MODERATE INCOME UNIT FINANCING STRATEGIES

Chinatown’s financing strategy was to use moderate income units’ excess income to cross-

subsidize very low income units in both Projects in order to deepen the overall affordability of

the non-moderate income units, serve more very low income households and increase potential

AHSC funding. Consequently, their plan assumes a higher percentage of moderate income units

at the highest income (all 120% AMI), and less tiered low income units, with 41 of their 30%

AMI units cross-subsidized in the family project.

BRIDGE’s approach was to maximize the debt-carrying capacity of the moderate income units

to lower the dependency on MOHCD funding for those units and to offer a more tiered

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affordability for both the moderate income and low income units. BRIDGE also offered an

“equity financing” alternative for the moderate income units that would replace some portion of

MOHCD funding for these units - an equity investment that would pay a reasonable return using

cash that would otherwise be used for residual receipts payments to MOHCD.

Consequently Chinatown’s proposal includes a higher percentage of moderate income units in

both projects (24%) than BRIDGE’s (18% in the family project and 13% in the senior project),

deeper affordability for the low income units (an average of 40% AMI vs. 49% AMI), less tiered

overall affordability, and ironically, a slightly higher average affordability for the entire Family

Project than BRIDGE’s (60% AMI vs. 57% AMI).

LEVERAGING ASSUMPTIONS

The proposals differed significantly in their assumptions about how much AHSC funding could

be leveraged. Chinatown assumed the maximum allowable funding based on the AHSC per unit

funding limits at over $25MM for the two projects combined. BRIDGE assumed only $9.5MM.

The primary reasons for this dramatic difference were:

1. Chinatown did not assume any reduction in their request for AHSC for purposes of

getting additional competitive points; BRIDGE did assume some accommodation would

be necessary, and acknowledged that the $9.5MM figure could be as little as half of what

they might actually be awarded.

2. Chinatown also incorrectly assumed that the LOSP units would be scored for AHSC

purposes as 15% AMI units. This is contrary to HSA and DPH policy as was pointed out

in the RFP and at the pre-submittal meeting. Adjusting the proposed leveraging in both

cases, Chinatown’s by assuming LOSP units at 30% AMI instead of 15% AMI and

BRIDGE’s by assuming no reduction in their request to obtain additional points, results

in a much closer total AHSC funding: approximately $23MM for Chinatown and

$20MM for BRIDGE. This difference would clearly reflect the fact that Chinatown’s

proposal would include more low income units at a deeper average affordability.

The proposals also differed significantly regarding how much developer equity would be

contributed to the projects from their developer fee. BRIDGE included $2,000,000 in the family

housing budget and $1,445,000 in the senior housing budget, taking advantage of a recent

increase in the amount of fee that could be included in the basis for calculating tax credit equity.

Chinatown included $1,000,000 for each project.

COST ASSUMPTIONS

Chinatown projected total development costs (TDC) per unit of $438,000 for the family project

and a construction cost per sf of $301. BRIDGE’s projections were $549,000 per unit TDC and

$368 per sf construction costs.

The selection panel agreed that while BRIDGE’s assumptions might be a little high, particularly

with respect to the TDC for a project without any acquisition costs, they were probably much

closer to the “real” costs of development and construction. This was corroborated to some

degree by examining Chinatown’s most recently completed family project at Broadway and

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Sansome Street. That project’s TDC (excluding acquisition costs) was $553,000 per unit and its

construction cost per sf was $352.

COMMERCIAL SPACE FINANCING Chinatown proposed to develop all three commercial spaces, including a childcare center and

two retail spaces, using funds from the housing development budget. The budget also includes a

tenant improvement allowance for the two retail spaces. Rent for one of the retail spaces would

be discounted in return for the proposed restaurant tenant’s agreement to provide meals at a

discounted cost for seniors who qualify for a Department of Aging and Adult Services meals

program. Net income from rents of both retail spaces would be used to reduce the Family

project’s LOSP subsidies. Chinatown also proposes to guarantee 75% of the non-childcare

commercial space net projected net income for the first full year of operations through a master-

lease agreement with the Limited Partnership that will own the development. The childcare

center would pay for its own tenant improvements.

BRIDGE proposed that their four retail commercial spaces be separately owned and fully

financed by the co-developers themselves, as was successfully accomplished at North Beach

Place. BRIDGE would secure debt financing from a third party lender with guarantees from

BRIDGE and JSCO if necessary. BRIDGE also assumes a ground-lease payment to MOHCD

using the North Beach model of 20% of annual net proceeds. The shell of the childcare center

would be incorporated into Family housing development budget. T.I. and start-up costs would

be financed separately.

COST CONTROL INNOVATIONS

Both proposals included similar strategies for saving operating costs, such as PV panels and solar

water heating. Chinatown did a better job of identifying cost-saving ways to take advantage of

the proximity of the two projects, such as negotiating better consultant contracts, and mobilizing

both projects at one time. Chinatown also referenced design components that would result in

savings such as open air lobby, stairs and circulation to reduce mechanical loads.

Scoring:

Top ranked proposal re: financial and cost control innovations: 10 points

2nd ranked proposal 7 points

The selection panel ranked the two proposals’ Financing Plans and Cost Control Innovations

according to how well they:

are feasible and consistent with the requirements, limitations and opportunities associated

with their proposed sources;

propose development costs that are comparable to other similar Family and Senior

Projects;

minimize MOHCD’s permanent financing;

propose innovative sources or financing instruments; and

use innovative materials or methodologies designed to reduce development, and/or

operating costs.

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The panel decided that BRIDGE’s housing financing plan was more feasible, insofar as their

approach to AHSC funding appeared more likely to be successful, their understanding of current

tax credit requirements and opportunities appeared to be stronger, and their understanding of the

affordability limitations associated with LOSP funding more accurate as well. The panel also

preferred BRIDGE’s straightforward commercial space financing plan to Chinatown’s, which

relies heavily on housing development funds for its two retail spaces in return for public benefits

that are arguably less than adequate. In addition, the panel concluded that BRIDGE’s cost

assumptions were probably closer to actual current costs and if not quite accurate, probably too

high rather than too low, an approach that the panel found preferable to seriously under-

estimating costs. This was a major issue for the selection panel.

After adjusting both plans to maximize potential leveraging and to use the same cost

assumptions, Chinatown’s plan would still require approximately $50K/unit less in MOHCD

financing for the family project than BRIDGE’s plan. On the other hand, using the same

adjustments on the senior housing financing plan would have the opposite results: BRIDGE

would require approximately $20K/unit less in MOHCD funding that Chinatown would need.

Both offered innovative financing ideas: Chinatown to use excess moderate income family units

to cross-subsidize units at 30% AMI without the need for LOSP subsidies and BRIDGE’s

proposal to use equity financing for some of the moderate income units. Both also offered some

cost control strategies, although none that stood out as particularly innovative.

On balance, the panel decided that while neither proposal was outstanding in all respects, the

BRIDGE team’s financing plan was preferred and awarded BRIDGE 7 out of 10 possible points

to Chinatown’s 4.

SUPPORTIVE SERVICES PLAN The selection panel’s discussion of the Services Plans was led by staff from HSA and DPH and

eventually scored using the following scoring matrix:

Excellent 10 points

Very Good 7 points

Good 5 points

The panel found Chinatown’s plan superior in several respects, particularly in its incorporating

“trauma-informed” services for homeless households and residents and found their presentation

both in writing and at the interview more thoughtful and comprehensive than the BRIDGE

presentation. The Kai Ming Head Start childcare proposal was also seen as more advantageous

to the development’s low income families than BRIDGE’s YMCA proposal insofar as the Head

Start program would provide free childcare to all qualifying low-income households, while the

YMCA would need to rely on some full-fee paying families and other sources of assistance to

serve low-income families. As a result, only 35% of the slots available would be earmarked for

children residing in the building.

The panel found BRIDGE’s plan a good one as well and considered LSS to be a very well

qualified service provider for the homeless families and seniors, but expressed some concern

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about overall coordination of the services within each building and between the two projects.

There was some concern that the BRIDGE supervisory structure may include too many “chefs in

the kitchen.”

On balance, the selection panel decided to award Chinatown 8 points out of the possible 10, and

BRIDGE 6 points.

Recommendation

The 88 Broadway RFP selection panel recommends that the BRIDGE / John Stewart team be

selected to develop, own and operate the family and senior affordable housing proposed for 88

Broadway.

In addition, the selection panel suggests that the BRIDGE / John Stewart team consider the

following potential improvements to their proposal:

Both BRIDGE’s family and senior projects should begin operations with 24-hour desk

coverage and monitor the need for such coverage for the first year.

BRIDGE should work closely with LSS to be sure the location of resident services

offices ensures residents’ privacy and facilitates their access to services.

YMCA should consider the “up to 20” slots set aside in their childcare program for “at

risk children from low to moderate income families, and children of families residing in

the building,” a minimum, not a maximum, and give priority for their subsidies to lower

income families who reside in the building.

BRIDGE should give strong consideration to re-sizing the units in both buildings in order

to increase the total number of lower income units in the development.

BRIDGE should address concerns about height and visual massing by giving strong

consideration to adding setbacks at the top floor along Broadway and additional stepping

or deeper setbacks facing Davis Street.

BRIDGE should work with the Port to explore the feasibility of incorporating more

parking into BRIDGE’s proposal starting with design issues (e.g., can we go below grade

or partially below grade?) and then addressing the required financing.

BRIDGE should re-consider the 10-space garage and “pocket” retail space on Front

Street to determine whether additional community-oriented programming, additional

resident amenity space, ground floor open space, or larger retail commercial space may

be preferred.