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Transportation Sustainability Fee (TSF)

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


Background
On December 8th, the Board of Supervisors unanimously passed trailing TSF legislation (Ordinance as
adopted), updating the fee schedule for the TSF to establish new fee rates for Hospitals and Health Services.
At that same hearing, Supervisor Avalos introduced a proposal to duplicate the ordinance (Proposed
ordinance) with the following amendments, to be heard at the Land Use and Transportation Committee:

Increase the fee for Non-Residential development square footage above 99,999 GSF by $2 (from
$19.04 to $21.04).
Increase the rate for Non-Residential developments that have submitted a Development Application
(Grandfathering), requiring payment of 50% of the difference between the TIDF and TSF rates (was
previously equal to the previously existing TIDF rate). The fee that applies to projects that received
their first approval between 12/26/15 and the effective date of the proposed ordinance would
continue to be as adopted in the 12/26/15 ordinance. Only projects that receive their first approval
after the effective date of the new ordinance will be subject to the increased fee.

The motion was passed 7-4 (Aye: Avalos, Breed, Campos, Kim, Mar, Peskin, Yee. No: Wiener, Cohen, Tang,
Farrell). The following tables summarize the impact of the proposal on the TSF Fee Schedule and on NonResidential Grandfathering rates.
TSF Fee Schedule: Ordinance as adopted vs. December 8th Proposal
Land use

Before: TIDF
($/GSF; 2015 Fee
Rates)

Ordinance as
adopted
($/GSF)

Proposed
Ordinance
($/GSF)

Residential, 21-99 units

n/a

$7.74

no change

Residential, all units above 99

n/a

$8.74

no change

Non-Residential, except Hospitals and


Health Services, 800-99,999 GSF

$12.12 - $14.59

$18.04

no change

Non-Residential, except Hospitals and


Health Services, all GSF above 99,999

$12.12 - $14.59

$19.04

$21.04

Hospitals 1

$14.59

$18.74 2

no change

Health Services1, all GSF above 12,000

$14.59

$11.00

no change

PDR

$7.46

$7.61

no change

Office Grandfathering as Proposed (December 8th)*


Land use
1

Before: TIDF

Grandfathering

Net fee increase

Non-profit hospitals and health services were previously exempt from the TIDF; private non-profit hospitals and
health services are no longer eligible for a fee exemption under the TSF.
2
This number is derived from a calculation method based on net new # of beds

Transportation Sustainability Fee (TSF)


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

Rate as Proposed
($/GSF)

($/GSF)

Office, 800-99,999 GSF

$14.56

$16.30

$1.74

Office, all GSF above 99,999

$14.56

$17.80

$3.24

* Note: Proposed ordinance would apply to all non-residential development. For illustrative purposes, rates for
Office uses are shown here, as they comprise the most common non-residential use.

Potential Impact of Proposed Ordinance on Financial Feasibility


Based on the results of the TSF Economic Feasibility Study, Staff evaluated the impact of the proposed Nonresidential fee increase on 3 sample prototypes (1 medium office and 2 large office projects). This analysis
incorporated the impact of the proposed Child Care Fee legislation introduced by Supervisor Yee of
$1.57/GSF for Non-Residential uses. The analysis also considered the impact of grandfathering proposal for
non-residential uses. Feasibility is measured by potential change in land value (a 10% change was selected as
the threshold to evaluate ongoing feasibility) in combination with other commonly used financial indicators,
such as Yield on Cost (YOC). See table below illustrating the impact of the fee levels on land values. It should
be noted that this analysis is based on a sample of expected office development types using current
development assumptions that were studied in the TSP Economic Feasibility Study. It does not represent the
full range of possible project types and financial situations, nor the feasibility of other non-residential uses
(such as retail or institutions).
Staff found that the fee increase is within the maximum amount that could be supported while maintaining
development feasibility for all development prototypes that were looked at as part of the TSP Economic
Feasibility Study. The fee increases as modeled at various levels have a marginal impact on Yield on Cost, so
the more relevant metric in this analysis is the change in land value. As shown below, even when taking into
consideration the proposed fee increase and child care fee, the percentage change in land value falls within
the 10% threshold.
TSF Financial Feasibility Analysis: Impact of Proposed Ordinance & Child Care Fee*
% Change in Land Value

Proposed
Ordinance: New
projects

Proposed
Ordinance
(New Projects)
+
Proposed Child
Care Fee

Prototype

GSF

Height

October 2015
legislation as
adopted

Proposed
Ordinance:
Grandfathered
projects

East SoMa
(medium)

84,500
sf

85'

-5%

-3%

-5%

-7%

East SoMa
(large)

249,300
sf

160'

-4%

-3%

-5%

-6%

Transit
Center

384,700
sf

400'

-4%

-3%

-6%

-7%

* Notes: A threshold of (-10%) change in land value is considered an indicator of ongoing financial feasibility. The
analysis also considered other commonly used financial metrics, such as Yield on Cost (YOC), and found that the fee
levels studied had a marginal impact on overall project feasibility.

Transportation Sustainability Fee (TSF)


Memo: Impact of Proposed December 8th Duplicate Ordinance (12/23/15)
Potential TSF Revenue Generation
Increasing the Non-Residential fee for square footage above 99,999 GSF by $2 (up to $21.04) is projected to
raise an additional $2.4 million annually or $72.3 million over 30 years.
Requiring non-residential projects currently in the pipeline to pay 50% of the difference between TIDF and
TSF would raise an additional one-time amount of $22.2 million (at current TSF rates) to $30.7 million (if the
additional $2/GSF for Non-Residential GSF > 100k is adopted.) See list of grandfathered projects for more
information.

Transportation Sustainability Fee (TSF)


December 8th Ordinance: Estimated Revenue Projections for Non-Residential Grandfathering (Updated 2/5/16)
ProjectshighlightedingreenarecurrentlyonthePlanningCommissionadvancecalendar(nowthroughMay)
Notes:
1.Grandfathering@AdoptedTSFRatesrepresents50%oftheincreasebetweenTIDFandtheadoptedTSFrates($18.04forGSF<100k;$19.04forGSF>100K)
2.Grandfathering@ProposedTSFRatesrepresents50%oftheincreasebetweenTIDFandtheproposedTSFrates($18.04forGSF<100k;$21.04forGSF>100K)
3.ProjectlistisfromSanFranciscoPlanningDepartmentDevelopmentPipeline,2015Quarter3,basedonlatestavailabledataonprojectstatus.Feeamountsareestimatesonlybasedoncurrentproject
descriptiononfile.
4.ProjectsinMissionBay(markedwithanasterisk)aresubjecttotheMissionBayRedevelopmentPlanwhichsupercedestheTSF,andmayhavedifferentratesthanthosepresentedhere.(Theseprojectsareto
beevaluatedonacasebycasebasis.)
5.Projectsmarkedwithan"^"areundergoingDevelopmentAgreementnegotiationswhichmayimpacttheirtransportationimpactfeeobligation.
Fees Under December 8th Proposed Ordinance

Land Use

Supervisorial
District

Non-Residential
GSF

Mixres
Mixres
Mixres
Mixed
MIPS
MIPS
Mixres

DISTRICT 6
DISTRICT 6
DISTRICT 6
DISTRICT 3
DISTRICT 5
DISTRICT 10
DISTRICT 10

2,024,050
1,950,000
1,704,000
1,541,810
692,568
680,000
483,018

MIPS
Mixres
Mixres
MIPS
Mixed
MIPS
Visitor
MIPS
Visitor
Mixed
CIE
Mixres

DISTRICT 8
DISTRICT 2
DISTRICT 10
DISTRICT 10
DISTRICT 9
DISTRICT 6
DISTRICT 3
DISTRICT 1
DISTRICT 9
DISTRICT 6
DISTRICT 10
DISTRICT 6

423,000
169,834
136,745
133,750
119,599
105,150
99,925
92,072
65,755
54,977
54,754
46,400

Mixres
CIE
MIPS
CIE
Visitor
Retail/Ent
Mixres
Mixres
Mixed

DISTRICT 6
DISTRICT 7
DISTRICT 5
DISTRICT 10
DISTRICT 6
DISTRICT 6
DISTRICT 6
DISTRICT 6
DISTRICT 6

447 BUSH ST - HOTEL DES ARTS


340 11TH ST
1240 & 1250 17TH ST
203 COTTER ST

Visitor
Mixed
CIE
CIE

972 SUTTER ST - MITHILA HOTEL


1298 HOWARD STREET
1028 MARKET ST
3701 NORIEGA ST
3357 26TH ST
1740 MARKET ST
2435-2445 16TH ST
3140 16TH ST
249 PENNSYLVANIA AV
249 PENNSYLVANIA AV
1601 MISSION ST
1601 -1637 MARIPOSA ST
519 ELLIS ST
1212 THOMAS AV
2120 TARAVAL ST
1350 VAN DYKE AVENUE
22 FRANKLIN ST
280 07TH ST
1278 - 1298 VALENCIA ST
2429 CALIFORNIA ST
88 ARKANSAS ST
1125 MARKET ST
827 KEARNY ST
851 TENNESSEE ST
469 EDDY ST
1924 MISSION ST
1228 25TH ST
3225 LINCOLN WAY
1900 MISSION STREET
1270 MISSION ST
44 MCLEA CT
222 SUTTER ST
700 36TH AV
300 OCTAVIA STREET
430 EDDY ST
1100 MARKET ST
280 BAY SHORE BL
3620 CESAR CHAVEZ ST
2092 03RD ST / 600 18TH STREET
1726 - 1730 MISSION ST
4024 24TH ST

Address
PIER 70 ^
PIER 48 / SEAWALL LOT 337 ^
50 01ST ST
630-698 BRANNAN STREET
598 BRANNAN STREET
1800 - 1900 OWENS ST
1500-1580 MISSION ST
1455 03RD ST*
950 MARKET ST
555 HOWARD ST
501 BRANNAN ST
1800 MISSION ST
1995 EVANS AV
701 03RD ST
633 FOLSOM ST
1053 MARKET ST
77 & 85 FEDERAL STREET
250 10TH STREET
700 INNES ST ^
1601 - 1537 MARKET ST
200 POTRERO AVE
717 BATTERY ST
707 BAY SHORE BLVD
100 CHANNEL*
625 MONTEREY BL
10 SOUTH VAN NESS AV
1200 17TH STREET
300 GRANT AVE

Alias
WATERFRONT SITE
MISSION ROCK
OCEANWIDE CENTER
FLOWER MART
EXCHANGE ON 16TH
GOODWILL
MISSION BAY BLOCK 26 UBER OFFICE SITE

501-505 BRANNAN

INDIA BASIN
LOCAL 38 UNION HALL

MISSION BAY BLOCK 1

CPC calendar Fees Under TSF Grandfathering


date (subject to
as Adopted: @ Adopted TSF
change)
TIDF Rates
Rates1

Grandfathering
@ Proposed
Net increase
TSF Rates2

Net increase

$29,470,000
$28,582,000
$25,029,000
$22,471,000
$10,084,000
$9,901,000
$7,060,000

$33,752,000
$32,585,000
$28,506,000
$25,698,000
$11,516,000
$11,306,000
$8,016,000

$4,282,000
$4,003,000
$3,477,000
$3,227,000
$1,432,000
$1,405,000
$956,000

$35,676,000
$34,335,000
$29,910,000
$27,110,000
$12,108,000
$11,886,000
$8,363,000

$6,206,000
$5,753,000
$4,881,000
$4,639,000
$2,024,000
$1,985,000
$1,303,000

$6,159,000
$2,468,000
$1,987,000
$1,949,000
$1,741,000
$1,531,000
$1,454,000
$1,342,000
$954,000
$817,000
$839,000
$711,000

$7,014,000
$2,790,000
$2,263,000
$2,184,000
$1,947,000
$1,706,000
$1,629,000
$1,493,000
$1,070,000
$901,000
$913,000
$774,000

$855,000
$322,000
$276,000
$235,000
$206,000
$175,000
$175,000
$151,000
$116,000
$84,000
$74,000
$63,000

$7,337,000
$2,842,000
$2,330,000
$2,216,000
$1,967,000
$1,711,000
$1,630,000
$1,493,000
$1,070,000
$901,000
$913,000
$774,000

$1,178,000
$374,000
$343,000
$267,000
$226,000
$180,000
$176,000
$151,000
$116,000
$84,000
$74,000
$63,000

36,571
30,034
27,870
25,447
23,000
21,378
20,400
19,968
16,990

$540,000
$460,000
$408,000
$390,000
$335,000
$322,000
$313,000
$309,000
$233,000

$597,000
$501,000
$453,000
$424,000
$375,000
$353,000
$340,000
$335,000
$266,000

$57,000
$41,000
$45,000
$34,000
$40,000
$31,000
$27,000
$26,000
$33,000

$597,000
$501,000
$453,000
$424,000
$375,000
$353,000
$340,000
$335,000
$266,000

$57,000
$41,000
$45,000
$34,000
$40,000
$31,000
$27,000
$26,000
$33,000

DISTRICT 6
DISTRICT 6
DISTRICT 6
DISTRICT 6

16,590
16,176
12,995
12,250

$242,000
$237,000
$199,000
$188,000

$270,000
$263,000
$217,000
$204,000

$28,000
$26,000
$18,000
$16,000

$270,000
$263,000
$217,000
$204,000

$28,000
$26,000
$18,000
$16,000

Visitor
Mixres
Mixres
Mixres
Mixres
Mixres
Mixres
Mixres
Mixres
Mixres
Mixres
Mixres
Mixres
PDR
Retail/Ent
Mixed
Mixres
Mixres
Mixres
Mixed
Mixres
Mixres
Mixres
Retail/Ent
Mixres
Mixres
PDR
CIE
Mixres
Mixres
MIPS
Mixed
Mixres
Mixres
Mixres
Visitor
PDR
Mixres

DISTRICT 9
DISTRICT 6
DISTRICT 6
DISTRICT 6
DISTRICT 10
DISTRICT 6
DISTRICT 10
DISTRICT 6
DISTRICT 6
DISTRICT 6
DISTRICT 10
DISTRICT 10
DISTRICT 10
DISTRICT 7
DISTRICT 6
DISTRICT 10
DISTRICT 6
DISTRICT 3
DISTRICT 3
DISTRICT 6
DISTRICT 10
DISTRICT 3
DISTRICT 6
DISTRICT 4
DISTRICT 9
DISTRICT 6
DISTRICT 5
DISTRICT 9
DISTRICT 8
DISTRICT 10
DISTRICT 6
DISTRICT 10
DISTRICT 6
DISTRICT 5
DISTRICT 6
DISTRICT 10
DISTRICT 3
DISTRICT 10

11,731
10,050
9,675
8,325
8,046
7,630
7,399
6,715
6,094
6,094
5,471
5,265
5,082
5,000
5,000
4,995
4,323
3,892
3,737
3,553
3,275
3,005
2,820
2,709
2,600
2,515
2,465
2,450
2,437
2,338
2,025
2,025
2,000
1,606
1,594
1,440
1,000
940

$171,000
$146,000
$148,000
$128,000
$120,000
$117,000
$113,000
$103,000
$93,000
$93,000
$84,000
$81,000
$78,000
$73,000
$77,000
$73,000
$66,000
$60,000
$57,000
$53,000
$50,000
$46,000
$43,000
$42,000
$40,000
$39,000
$38,000
$38,000
$36,000
$36,000
$29,000
$22,000
$31,000
$25,000
$24,000
$23,000
$15,000
$14,000

$191,000
$163,000
$161,000
$139,000
$132,000
$127,000
$123,000
$112,000
$102,000
$102,000
$91,000
$88,000
$85,000
$81,000
$83,000
$81,000
$72,000
$65,000
$62,000
$58,000
$55,000
$50,000
$47,000
$45,000
$43,000
$42,000
$41,000
$41,000
$40,000
$39,000
$33,000
$28,000
$33,000
$27,000
$27,000
$25,000
$17,000
$16,000

$20,000
$17,000
$13,000
$11,000
$12,000
$10,000
$10,000
$9,000
$9,000
$9,000
$7,000
$7,000
$7,000
$8,000
$6,000
$8,000
$6,000
$5,000
$5,000
$5,000
$5,000
$4,000
$4,000
$3,000
$3,000
$3,000
$3,000
$3,000
$4,000
$3,000
$4,000
$6,000
$2,000
$2,000
$3,000
$2,000
$2,000
$2,000

$191,000
$163,000
$161,000
$139,000
$132,000
$127,000
$123,000
$112,000
$102,000
$102,000
$91,000
$88,000
$85,000
$81,000
$83,000
$81,000
$72,000
$65,000
$62,000
$58,000
$55,000
$50,000
$47,000
$45,000
$43,000
$42,000
$41,000
$41,000
$40,000
$39,000
$33,000
$28,000
$33,000
$27,000
$27,000
$25,000
$17,000
$16,000

$20,000
$17,000
$13,000
$11,000
$12,000
$10,000
$10,000
$9,000
$9,000
$9,000
$7,000
$7,000
$7,000
$8,000
$6,000
$8,000
$6,000
$5,000
$5,000
$5,000
$5,000
$4,000
$4,000
$3,000
$3,000
$3,000
$3,000
$3,000
$4,000
$3,000
$4,000
$6,000
$2,000
$2,000
$3,000
$2,000
$2,000
$2,000

Mixres
Mixres
Mixres

DISTRICT 6
DISTRICT 9
DISTRICT 4

935
900
886

$14,000
$14,000
$14,000
NETREVENUE
INCREASE

$16,000
$15,000
$15,000

$2,000
$1,000
$1,000

$16,000
$15,000
$15,000

$2,000
$1,000
$1,000

5/5/2016

4/14/2016
4/14/2016

4/7/2016

2/11/2016

3/3/2016

3/17/2016

$22,182,000

$30,691,000