OUR MISSION: To provide our customers with high-quality, efficient and reliable water, power and sewer services in a manner that values environmental and community interests and sustains the resources entrusted to our care.
Real Estate Services Division
525 Golden Gate Avenue, 10th Floor
San Francisco, CA 94102
September 19, 2024
Memorandum
To: Tim Paulson, President
Anthony Rivera, Vice President
Newsha K. Ajami
Kate H. Stacy, Commissioner
Dennis J. Herrera, General Manager
Through: Ronald Flynn, Deputy General Manager
From: Rosanna Russell, Real Estate Director
Attached please find the Annual Real Estate Report.
Annual Real Estate Report
San Francisco Public Utilities
Commission
September 20, 2024
2 MIS SION
The San Francisco Public Utilities Commission (SFPUC) provides its customers with high-quality, efficient, and reliable water, power, and sewer services in a manner that includes environmental and community interests, and that sustains the resources entrusted in its care. The Real Estate Services Division (RES) of the SFPUC furthers this mission by carefully issuing and administering rental agreements for the real property over which the SFPUC has jurisdiction (SFPUC Property), increasing rental revenue, and by selling underutilized SFPUC Property.
RES also serves the three SFPUC enterprises by negotiating real property acquisitions and office and industrial leases for SFPUC operations and SFPUC capital projects and by resolving comple x title issues. RES negotiates with third parties who desire to acquire property interests from the SFPUC. Finally, RES works with colleagues in other divisions to protect the SFPUC by vetting proposed third- party projects for potential negative impacts on SFPUC Property and infrastructure. To this end, RES leads the In- City Project Review Team in San Francisco and engages in two Project Review Teams outside the City.
RES does not perform facilities management, which the three enterprises handle.
SFPUC RENTAL REVENUES AND PROPERTY TAXES
RES staff spends significant time negotiating new leases, licenses, and memoranda of understanding for the use of SFPUC Property. The SFPUC rental agreement portfolio generates over $14 million annually from over 600 agreements. These transactions are subject to a complex project review process by several SFPUC divisions, the City Attorney’s Office, and regulatory agencies. The real estate agreements often require Commission and Board of Supervisors’ approval. Final agreements for the use of even a small amount of SFPUC land can take many months to negotiate and approve.
The SFPUC earned $14,254,329.65 in real estate rental revenue during the fiscal year 2023- 2024. Please see the chart attached as Exhibit A for a breakdown of the revenue by enterprise.
The SFPUC paid $2,781,033.46 in property taxes and assessm ents across the seven counties in which the SFPUC operates. Please see the chart attached as Exhibit B for a breakdown of taxes paid per county.
3 SFPUC rental agreements require tenants and licensees to reimburse the SFPUC for their pro rata share of property taxes and assessments paid by the SFPUC in proportion to the square footage of the SFPUC parcels they occupy. The SFPUC recouped $230,007.83 in property taxes and assessment reimbursements from its tenants and licensees in the past fiscal year.
SFPUC RENT AL EXPENDITURES
The SFPUC is both a landlord and a tenant. The SFPUC is currently a tenant under 36 leases, licenses, and Memoranda of Understanding (MOU s) with the Port of San Francisco (Port); however, it is a rent -paying tenant under 21 of these agreements. The agreements allow a variety of SFPUC uses including staging, storage, and parking of vehicles, equipment, and materials; additional office space for staff; installation and operation of water, power, and sewer infrastructure; and operation of SFPUC telecommunications equipment.
RES records indicate that the SFPUC’s base rent expenditures as a tenant increased from $5,871,749.93 for FY 2022-23 to $ . 24-for FY 20236,330,017.23 Base rent does not include the cost of any utilities, insurance, taxes, or other fees that the SFPUC enterprises may be required to pay under each agreement. Please see Exhibit D for a summary of the agreements where the SFPUC is tenant and the paid base rent during the fiscal year 2023-24.
Other notable changes and updates where the SFPUC is a tenant include the following new and extended agreements:
New Agreements
1:
• 600 Portway Passage, Treasure Island, San Francisco: This 99-year lease for wastewater treatment commenced on August 25, 2023. The SFPUC does not pay any rent under this lease.
• 1900 Oakdale Avenue, San Francisco: This market-rent warehouse lease for the Wastewater Enterprise commenced on July 15, 2024.
• Port MOU (M -17104) for Park 22 at 7640 Bayfront Park, San Francisco: This 66- year agreement allows the SFPUC to maintain electrical distribution and service facilities installation to serve the Port. The MOU commenced on May 15, 2024. The SFPUC does not pay any rent under this MOU.
1 More detailed information may be found in Exhibit D.
4 Extension of Existing Agreements:
• 300 Radio Road, Daly City : The term of this license for the SFPUC to maintain telecommunications facilities and a radio antenna at San Bruno Mountain was extended through July 31, 2029.
• 1876 Oakdale Avenue, San Francisco : The term of this lease for Water Enterprise staging and storage was extended through September 30, 2026. • 1325A Evans Avenue, San Francisco: The term of this lease for SFPUC office space was extended through December 31, 2026.
• 2725 Oakdale Avenue, San Francisco: The term of this lea se for Wastewater warehouse use was extended through May 31, 2028.
• 3801 Third Street, San Francisco. The term of this lease for Wastewater Enterprise office space use was extended through June 30, 2027. • Port MOU (M- 16583) for Pier 23 Shed. The term of this MOU for Power Enterprise warehouse use was extended through November 30, 2026. • Port MOU (M-16584) for Roundhouse Office s. The term of this MOU for Power Enterprise office use was extended through November 30, 2026.
5 KEY REAL ESTAT E INI TIATIVES
525 GOLDEN GATE AVENUE CHILDCARE CENTER LEASE
REQUEST FOR PROPOSALS
525 GOLDEN GATE CHILDCARE CENTER
The SFPUC leases space on the ground floor of its headquarters at 525 Golden Avenue in San Francisco (SFPUC Headquarters) to a childcare center operator. The SFPUC childcare center (Childcare Center) has approximately 2,551 square feet of licensable program area and approximately 1,652 square feet of fenced outdoor play area fronting Redwood Street. The Childcare Center has space for up to 75 children, including infants, toddlers, and preschoolers.
After a Request for Proposals (RFP) issued in 2012, the SFPUC issued a lease to the current tenant, C5 Children’s School, to operate the Childcare Center. This lease expires at the end of 2024.
RES worked with the San Francisco Department of Early Childhood, the SFPUC Contracts Administration Bureau, and the SFPUC Community Benefits team to draft a
6 new RFP for a Childcare Center lease at the annual rental rate of $1 per year for an initial five-year term and one, four-year option term.
The RFP, among other things, requires the new Childcare Center tenant to prioritize serving the children of SFPUC employees, the children of other City employees, and the children of the community surrounding the SFPUC Headquarters which includes the 94102 (Tenderloin) and 94103 (South of Market) zip codes. Most of the census tracts within these two zip codes are considered either disadvantaged or environmental justice communities according to demographic and environmental data presented in local 2,
state3, and federal4 screening tools, and should be prioritized accordingly.
On July 11, 2024, the SFPUC issued an RFP for a childcare operator to lease the Childcare Center, with proposals due on August 22, 2024. The SFPUC received five proposals. At the time of the submission of this report, the SFPUC’s selection jurors are reviewing and scoring the proposals based upon the criteria outlined in the RFP.
The SFPUC anticipates that the new lease will begin on or about January 1, 2025.
2 Environmental Justice Communities Map, SF Planning, https://generalplan.sfplanning.org/images/environmental- justice-framework/Environmental_Justice_Communities-Map.pdf 3 CalEnviroScreen 4.0, California Environmental Protection Agency's Office of Environmental Health Hazard Assessment,
https://experience.arcgis.com/experience/11d2f52282a54ceebcac7428e6184203/page/CalEnviroScreen-4_0/ 4 Climate and Economic Justice Screening Tool, White House Council on Environmental Quality, https://screeningtool.geoplatform.gov/en/#3/33.47/-97.5 7 SOUTHEAST COMMUNITY CENTER AT 1550 EVANS AVENUE
Southeast Community Center - Office Space
The SFPUC operates the Southeast Community Center (SECC), located at 1550 Evans Avenue in San Francisco, California to offset the effects of the Southeast Wastewater Treatment Plant on the surrounding neighborhood. The SECC benefits the local Bayview-Hunters Point community by providing reservable event spaces, non- profit office space and workstation desks, open space, an on- site café, and a childcare center.
In 2023, RES staff worked with Community Benefits staf f to issue licenses to Greenaction for Health and Environmental Justice, Manylabs, and the University of California, Berkeley to install air quality monitoring devices on the roof of the SECC. The services provided under the licenses fulfill one of the recommendations in the Environmental Justice Analysis for Bayview -Hunters Point report by providing publicly accessible air quality data.
8 In the next year, RES will be working with SECC and Community Benefits staff to issue a new Request for Proposal for Community Hub workstation desk licenses (approximately six desks) that will begin to expire.
CONDITIONAL TRANSFER OF FRANCISCO RESERVOIR
In 2014, the SFPUC entered a MOU with the Recreation and Parks Department for the conditional transfer of the Francisco Reservoir to the Recreation and Parks Department .
The SFPUC tendered possession of the approximately 4.5- acre site to the Recreation and Parks Department on September 30, 2014.
The final transfer of the Francisco Reservoir will occur after the Recreation and Parks Department pays the sum of $9,900,000 in installments plus interest over 12 years to the SFPUC. RES calculates periodic interest and monitors the transfer payments. To date, the Recreation and Parks Department has paid the SFPUC the sum of $7,389,953.91, representing $6,475,188.60 in principal and $914,765.31 in interest, An additional $1,750,754.53 is due on or before September 30, 2024.
Here is an image of the beautiful Francisco Park on the former reservoir site:
Francisco Park
9 SALE OF REAL PROPERTY INTERESTS FOR STATE HIGHWAY
IMPROVEMENTS
The California Department of Transportation (Caltrans) and various counties frequently target SFPUC land for road improvement projects. These entities seek to acquire easements and small areas of SFPUC land to widen bridges and roads and install other road improvements. Sometimes, Caltrans and a county public works department will join to accomplish a road improvement project.
Highway improvement projects generally are complex and time- consuming. They require significant SFPUC staff resources to vet the projects to ensure their compliance with SFPUC policies, and to negotiate purchase and sale agreements and ancillary agreements, such as temporary licenses and cost-sharing agreements for the relocation of SFPUC water transmission pipelines.
One time -intensive RES project is the ongoing Stanislaus County - Caltrans North County Corridor Project – Phase 1 State Route 108 Expressway Project.
This is a high- priority project for Stanislaus County to build a west -east expressway to improve regional circulation. The project seeks to connect State Route 219 near Modesto to State Route 120 near the Town of Oakdale. Stanislaus County and Caltrans have completed their environmental review for the project. The proposed expressway alignment crosses SFPUC Property at two locations during two different phases of the project. The current phase (phase 1) will require widening Oakdale Road over SFPUC Property, a section of the right of way designated as SFPUC Parcel Numbers 647 and 648, to support an anticipated increase in vehicular traffic.
RES issued and delivered the fully executed revocable license to Stanislaus Count y in March 2024 so that the road widening project can commence while the purchase and sale of the easement is completed. RES also sent the draft purchase and sale agreement and deed for the road easement to Stanislaus County for review in March 2024. RES staff continue to check in with Stanislaus County for its review and comment on the draft purchase and sale agreement and deed.
10 PENDING SALE OF PARCEL 9 IN SAN BRUNO
As reported in last year’s report, the SFPUC desires to sell one remnant parcel of the former Old Muni Right of Way to San Bruno.
In 1944, the City acquired the Market Street Railway Company, an old railway line running from San Francisco to Burlingame. Caltrain and BART later acquired most of these railroads right of way parcels through condemnation or purchase to install their surface and subsurface infrastructure.
The City, through the SFPUC still owns remnant non- contiguous parcels of the former railroad right of way (Old Muni Right of Way) in San Mateo County. The Old Muni Right of Way has long been on the SFPUC’s list of underutilized properties, meaning that the parcels do not have a utility use for the SFPUC. The SFPUC rents the use of the remaining Old Muni Right of Way parcels to various third parties for street improvements, pedestrian pathways, and other uses.
In 1999, the SFPUC issued a Revocable Permit to San Bruno (San Bruno) Under the Permit, San Bruno uses four parcels of the Old Muni Right of Way, including the 50- foor wide Parcel No. 9, to maintain a roadway, landscaping, and underground utility facilities on Huntington Avenue in San Bruno. The SFPUC does not maintain any infrastructure in Parcel No. 9.
Parcel 9
Since 2021, San Bruno has sought to construct a two-way bicycle track on Parcel No. 9, among other parcels owned by other parties (Project). The Project would narrow the existing roadway median and vehicle travel lanes on Huntington Avenue between Forest Avenue and San Bruno Avenue on Parcel No. 9 to accommodate the construction of the bicycle track while also maintaining a pedestrian sidewalk along the northbound direction of the roadway.
11 On July 9, 2024, the San Bruno City Council approved the purchase of Parcel No. 9 for the appraised fair market $5,000 value.
RES anticipates seeking approval from the SFPUC Commission and the San Francisco Board of Supervisors in the upcoming months.
OTHER ONGOING INITIATIVES WITH PUBLIC AGENCIES
Many older revocable permits issued by the SFPUC for public agency use of SFPUC Property are outdated. They often do not document all of the current public agency uses on SFPUC Property. In addition, these older permits lack the modern engineering restrictions, environmental protections and indemnity and insurance requirements found in current SFPUC real estate agreements.
RES works on an ongoing basis to issue modern revocable licenses to replace these outdated agreements. This is a time- consuming process due to other agencies’ desire to maintain the status quo and avoid entering into modern licenses with more restrictive terms. Lengthy negotiations culminated in RES issuing updated agreements last year for the following municipalities’ use of SFPUC Property:
CITY OF LOS ALTOS
The SFPUC finalized a nearly six -year negotiation for a new license with Los Altos in 2023. The long- standing discussions arose from some historic land use issues pertaining to Los Altos’ maintenance obligations and the vegetation removal of over a dozen trees and the local community’s use of an unlicensed portion of SFPUC Property for a pedestrian and bicycle pathway.
The new license requires the removal of the trees and maintenance of the entire portion of the SFPUC Property used by Los Altos constituents. In addition, the license replaced and superseded four licenses dating back to 1961 with a modern form of agreement for the existing uses.
CITY OF BURLINGAME
The SFPUC owns the former Muni Right of Way parcels in Burlingame. In 1962, the SFPUC issued a revocable permit to Burlingame to maintain a portion of California Drive, and the installation of public street parking, and landscaping within the SFPUC Property.
12 In 1990, the SFPUC issued an updated lease to Burlingame for the continued use of the SFPUC Property for street purposes, parking, and landscaping. In 1995, the SFPUC terminated the lease due to an unauthorized sublease by Burlingame. Despite the terminated lease, Burlingame continued to use the SFPUC Property without a lease due to its existence as a roadway. Since then, the SFPUC has conducted many discussions with Burlingame to discuss a potential sale of the SFPUC Property or enter into a new license.
The SFPUC recently authorized a new license to Burlingame to renew its use of a portion of the SFPUC Property for a roadway, parking, and landscaping. Further discussions are required to achieve a new license for the other portions used by Burlingame.
CITY OF MENLO PARK
RES began negotiations with Menlo Park nearly two years ago to review a major street improvement proposal within SFPUC Property commonly referred to as Ivy Drive. The project included the replacement of seven outdated permits issued by the SFPUC between the years 1966 and 1984 for the use of SFPUC Propert y. In 2023, RES finalized the new license with Menlo Park.
CITY OF SUNNYVALE
RES is currently negotiating with Sunnyvale to replace eight outdated agreements issued by the SFPUC between 1976 and 2004 with two new licenses allowing the use of portions of SFPUC Property for various public uses including a pedestrian trail on SFPUC Property in Sunnyvale. RES has been in a multi -year discussion with Sunnyvale to remove the unpermitted encroachments before the issuance of the new licenses. Sunnyvale has begun the encroachment removal process.
These licenses will also require Sunnyvale to install and maintain six SFPUC signs at various locations of the SFPUC Property to educate users about the Hetch Hetchy Regional Water System and the importance that the pip eline right of way plays in the transmission of water.
CITY OF DALY CITY
The SFPUC and Daly City are working together to implement the complex Vista Grande Drainage Basin Improvement Project to divert stormwater from the Vista Grande Watershed to Lake Merc ed. The project would address storm -related flooding in the Vista Grande Drainage Basin in the northwest portion of Daly City and unincorporated San Mateo County. The project would benefit the SFPUC by augmenting water levels 13 in Lake Merced by reconnecting a significant portion of the Lake Merced watershed to Lake Merced. RES is working with Daly City to assign the SFPUC’s interest in the existing easement for its Vista Grande Tunnel to Daly City and convey easements to Daly City for the installation and operation of new and existing infrastructure.
CITY OF SOUTH SAN FRANCISCO
RES is currently working with the City of South San Francisco to convey a remnant of SFPUC Parcel 21 in South San Francisco to facilitate South San Francisco’s Civic Campus Project. This remnant of Parcel 21 never contained any SFPUC utility infrastructure, and South San Francisco has historically used it as part of the public streets known as Mission Road and Antoinette Lane under a revocable license issued by RES. South San Francisco seeks to purchase the property so that it may have full control of its road infrastructure and all future improvements.
WASTEWATER EASEMENT RECOVERY PROJECT
Easement Recovery Project Subdivision Map
The SFPUC’s Wastewater Enterprise operates and maintains its sewer assets within public streets and easements through privately -owned land in San Francisco. For the past few years, RES staff has worked on the Easement Recovery Project, which is an
14 organized effort to locate and catalog sewer easements throughout San Francisco. In addition to this ongoing research effort, RES staff has been working to better classify easement information in the geographic information system (GIS) layer for ease of us e by Wastewater Enterprise staff.
REMAINING UNDERUTILIZED PROPERTY
The SFPUC has the following remaining underutilized parcels: (1) the two Manzano Way lots in Sunnyvale discussed above; (2) the Niles Reservoir and cottage in Fremont; and (3) the remaining Old Muni Right of Way parcels in Burlingame. RES continues its efforts to sell these u nderutilized parcels. The disposition of any property serving no present or future utility purpose eliminates operational and maintenance costs as well as unforeseen capital expenditures that arise due to continued ownership.
NILES RESERVOIR PROPERTY
Niles Reservoir
The Niles Reservoir property in Fremont consists of two parcels containing a residential structure, a shed, a garage, and utilities as follows:
• T he Niles Reservoir site at 38240 Canyon Heights Drive is a partially -improved approximately 7.45-acre site. The site contains an approximately 60,000 square- foot -inactive concrete reservoir with infrastructure and utility appurtenances; and
15 • T he cottage site at 38234 Canyon Heights Drive is an approximately 21,209- square-foot site improved by a vacant residential structure. The SFPUC refers to both sites together as the “Niles Reservoir.”
In 2016, the SFPUC , through a broker, advertised and issued invitations to bid on the purchase of the Niles Reservoir. In November 2016, RES staff pursued a purchase and sale contract with the highest bidder. Due to an anti -growth movement in Fremont, however, the bidder withdrew from the contract in January 2018, and the two other bidders also declined to pursue a purchase and sale contract.
RES staff will resume efforts to sell the Niles Reservoir and the Old Muni Right of Way in 2025 with the expectation there will be a more constant economic climate.
RES PARTICIPATION IN SFPUC CAPITAL PROJECTS
RES staff acquires real estate rights for many Capital Improvement Program projects implemented mostly through the SFPUC’s Project Management Bureau. These capital projects are varied and include those under the Water System Improvement Program, the Sewer System Improvement Program, Water and Wastewater Enterprise Renewal and Replacement Programs, and other capital programs requiring right -of-way acquisition work.
RES support includes conducting extensive research and analysis of right of way parcel ownership, providing input and feedback during the project planning and design phases, providing maps and drawings, coordinating with property owners and other public agencies and City departments, working with adjacent property owners to remove encroaching structures and vegetation before beginning project work, acquiring land rights from private property owners, negotiating agreements for temporary laydown and construction staging areas on third- party land, and negotiating, drafting, and seeking approval for various agreements.
CURRENT SFPUC CAPITAL PROJECTS
RES actively participates in the development of new capital projects during the alternatives analysis, conceptual engineering, and design phases, identifying potential right-of-way issues and needs, and providing opportunities to design around them at early stages, where possible. RES works closely with the Project Management Bureau 16 to assess alternatives, identify right-of-way issues, and plan acquisition strategies. RES supports the Project Management Bureau in drafting al ternative analysis reports , scoring alternatives, and selecting project alternatives and alignments for further development.
RES also participates in Technical Steering Committee meetings, presenting information to senior staff and fielding questions to aid the committee’s consideration of the project at certain key milestones and to determine whether project development should move forward.
MOCCASIN PENSTOCKS REHABILITATION PROJECT
For example, RES continues to work with the Project Management Bureau to evaluate alternatives for the Moccasin Penstocks Rehabilitation Project. The existing alignment of the SFPUC penstocks
5 crosses National Park Service land under the jurisdiction of the Bureau of Land Management, as well as private property. RES perfor med an extensive analysis of the required authorizations and property rights for each alternative and wrote the relevant sections for the alternative analysis report. RES then assisted the Project Management Bureau in identifying and recruiting panelists with right -of-way subject matter expertise and led the effort to score each alternative according to its complexity and feasibility. An alignment was selected and presented to the Technical Steering Committee (TSC). The TSC found that deeper analyses should be conducted, and the project team went back to the drawing board.
After a project is designed and approved, right-of-way acquisition begins. RES performs all work related to the property acquisition, including obtaining title reports, preparing legal descriptions and plat maps, ordering, and obtaining appraisals, drafting purchase agreements and deeds, preparing government code offer packages, meeting with property owners to make offers, negotiating offers, obtaining SFPUC Commission and Board of Supervisors’ approval, and coordinating and closing escrow.
5 A penstock is a sluice or gate or intake structure that controls water flow, or an enclosed pipe that delivers water to hydro turbines and sewerage systems. The term is inherited from the earlier technology of mill ponds and watermills.
17 FOLSOM AREA STORMWATER IMPROVEMENT PROJECT
The SFPUC Folsom Area Stormwater Improvement Project relies on the acquisition of subsurface tunnel easements across three privately owned commercial parcels. The easements would also restrict the development of the parcels within a certain area around the proposed tunnel structure. Two of the three parcels contain large buildings with potential plans for future development that could be impacted by the easements.
RES worked with an appraiser and the property owners to assess the current use of the parcels and obtained appraisals for the value of the proposed easements. Upon receipt of the appraisal reports, RES drafted and compiled the necessary offer documents for government code offers and met with each property owner individually to present and discuss the offers. RES is actively negotiating with the three property owners through a series of counteroffers and in-person meetings to reach a settlement for compensation.
Additionally, this project will impact accessibility to certain properties during construction. The SFPUC hired a right-of-way consultant, under a professional services contract, with experience in relocation assistance and loss of business goodwill to assist in working with impacted property owners. RES is also coordinating the involvement of the City Attorney’s Office in this effort.
SFPUC USE OF OTHER CITY LAND
Many proposed or active capital projects involve the use of land under the jurisdiction of other City departments. For example, RES negotiated and executed the above- mentioned MOU with the Port to install electrical facilities on Port property to serv e a public park across the street from the Chase Center.
Working with other City departments can be challenging, as each department needs to protect the operational use of its property. For instance, RES and the SFPUC project team are working with Recreation and Parks Department staff to negotiate a MOU for the joint use of lands at South Ocean Beach for the Ocean Beach Climate Change Adaptation Project.
The project would construct a protective buried wall parallel to the SFPUC Lake Merced Tunnel and would close the Gr eat Highway south of Sloat Boulevard to vehicular traffic, establishing a public park in its footprint.
The SFPUC and the Recreation and Parks Department each have jurisdiction over portions of the project area and a MOU is needed to identify the lands and 18 improvements of each department and how each will operate and maintain their respective improvements within the jurisdiction of the other department. RES seeks to reach an agreement that allows the project to proceed and accommodates the mission of each department.
SFPUC USE OF FEDERAL LAND
Finally, many SFPUC capital projects, including the Ocean Beach Project and the Seacliff 1 Pump Station and Force Main Upgrade Project, involve the use of federal lands under the jurisdiction of the National Park Serv ice, through its Golden Gate National Recreation Area.
RES works with the Park Service to review and provide feedback during the design phases of a SFPUC project and obtains the necessary right -of-way authorizations for project elements within Park Service lands. This year, RES and the Project Management Bureau have been working toward right -of-way agreements that would allow the SFPUC to construct project elements of the Seacliff 1 Pump Station and Force Main Upgrade Project on Park Service lands at China Beach. As if to emphasize the criticality of the project, the existing force main ruptured twice this year, creating a need to construct an emergency temporary bypass across Park Service land until the new pump station is installed and operational. RES was instrumental in bringing the Park Service and SFPUC staff together to create a solution that worked for both parties and is nearing completion on a Special Use Permit to construct the bypass.
The k ey capital projects in which RES is participating are described in the attached Project Appendix.
19 HETCH HETCHY WATER AND P OWER PROJECT S
Moccasin Reservoir
The SFPUC’s Hetch Hetchy Water and Power Division reviews a diverse array of internal (SFPUC) and external (third- party) projects tha t range from small projects to large-scale and unique projects that require significantly more RES staff time. Hetch Hetchy Water and Power projects often involve significant coordination with multiple government agencies at the federal, state, and/or local levels. When a project proposal involves coordination with additional government agency stakeholders, each government agency may have to conduct its own review of the project, issue its own authorization agreement (e.g., a permit), and/or participate in the real estate negotiations with the SFPUC. This additional coordination may add additional time to complete the review and authorization processes. The Hetch Hetchy Water and Power Division and RES, however, continue to coordinate to streamline and improve the Project Review process.
Please see the Project Appendix for a list of current Hetch Hetchy Water and Power projects.
20 PROTECTION OF SFPUC INFRASTRUCTURE AND LANDS :
RIGHT OF WAY AND THIRD- PARTY PROJECTS
City staff continues to handle a large influx of proposed development projects impacting SFPUC lands and utilities. RES works with colleagues in other divisions to protect SFPUC lands by vetting proposed third- party projects for potential negative impacts on the SFPUC’s access to and use of the Right of Way. To this end, RES leads the In-City Project Review Team in San Francisco and engages with the Bay Area Project Review team and the Hetch Hetchy Water and Power Project Review team. The purpose of these committees is to vet p roposed third- party uses for conformance with SFPUC policies, of which the foremost policy is that the primary purpose of SFPUC land is for its utility use.
Throughout the Bay Area and in more distant areas such as the City of Modesto, owners of the property adjacent to the Right of Way are redeveloping their adjacent property with denser uses. The third parties include savvy high- net-worth real estate developers and public agencies and their consultants. They are replacing adjacent low - density shopping centers, small office building centers, and once industrial and agricultural lands with high- density uses, such as mixed housing/office projects and large residential subdivisions. With recent legislation in the State Assembly supporting increased housing development, more and more accessory dwelling units are being installed, often with little setback from the Right of Way boundary.
SFPUC staff review public notices regularly to learn about third- party projects and then contact the project sponsor to try to offer early comments. Staff requests that the project sponsor present their projects before one of the Project Review Committees before proceeding with their projects. Despite these staff's efforts, third parties routinely proceed to plan the use of the Right of Way in their projects without attempting to comply with SFPUC regarding the use of the Right of Way. Here are some examples:
• Third parties often put SFPUC land in their public presentations for development proposals and CEQA documents without first obtaining SFPUC comments or consent. Often their proposed uses conflict with SFPUC land use and engineering policies.
• Developers routinely include the Right of Way in their subdivision maps even though the City, through the SFPUC, owns this land. They plan roads, utilities, art installations, and recreational uses benefitting their adjoining properties on the Right of Way. They sometimes seek to construct buildings close to property 21 boundaries that not only affect the SFPUC’s ability to access i ts utilities (especially its overhead powerlines), but also make it impossible for the walls and windows of these new buildings adjacent to the property boundary to be maintained without accessing SFPUC property.
• Public agencies plan parallel roads, other transit corridors like express bus lanes, utility installations, and recreational uses of the Right of Way without SFPUC input. Three communities recently developed recreational plans over miles of the Right of Way without first notifying the SFPUC or obtaining the SFPUC’s comments and without regard for the SFPUC’s utility installations or existing agreements.
• Public agencies often apply for grant funding for a particular use on the Right of Way without SFPUC input and then pr essure SFPUC staff to approve the use because of grant deadlines.
• Adjacent schools plan permanent uses like emergency access lanes and playgrounds on the Right of Way.
• Some Bay Area and Central Valley governments have changed, or tried to change, the zoning of SFPUC right -of-way parcels to “open space” with little or insufficient notice to the SFPUC. This effort complicates SFPUC operations and interferes with some exis ting SFPUC leases for other uses, particularly in jurisdictions with strict time limits for existing, nonconforming uses (e.g., a time limit for land uses, other than open space uses, to exist on the parcel).
22 THIRD- PARTY PROJECTS AND DEVELOPMENT WITHIN SAN
FRANCISCO
IN-CITY PROJECT REVIEW COMMITTEE
RES leads and manages the In- City Project Review Committee. This committee reviews project proposals initiated by third parties and other City departments which affect SFPUC infrastructure or use SFPUC Property located within the City and County of San Francisco.
The committee also reviews tentative subdivision maps, street and easement vacations, and sidewalk changes when requested by the San Francisco Public Works Bureau of Street-Use and Mapping. The committee meets on a bi -weekly basis to discuss the impact of the projects and their feasibility. RES staff review and comment on all projects and solicits input from other SFPUC enterprises in order to issue a single consolidated comment letter on behalf of the SFPUC for the proposed work.
In past year, RES analyzed and commented upon 28 proposed projects at the following locations in San Francisco:
770 Woolsey Street
1 Castenada Avenue
Beale and Folsom Streets Sidewalk Widening
636 - 4th Street
2 Lake Street
721-785 Junipero Serra Boulevard
5205 - 3rd Street
1650 Owens Street
4135 California Street
414 Brannan Street
915 North Point Street / 2935 Larkin Street
1450 Owens Street
23 Tulare Park Landscape Installation
Laguna Honda Reservoir PG&E Installation
524 Howard Street/Airspace vacation of Natoma Street
Proposed Bayview Caltrain Station
Street Vacation of Hudson Avenue and Hunter Points Boulevard Good Prospect Community Garden Expansion
3rd St and Jamestown Avenue
Shotwell Street and 26th Street
Street Vacation of Noriega and Moraga Streets at 8th Avenue 20th Street at Illinois Street Sidewalk Change
15th Street at South Van Ness Avenue (1500 15th Street) Twin Peaks Street Vacation - Eastern Side
SFFD Fire Training Facility
2501-2507 Folsom Street
533 Parnassus Avenue
3333 Mission Street
24 NEW IN -CITY PROJECT REVIEW COMMITTEE
WORKFLOW AND DATABASE
RES worked with the SFPUC Information Technology Systems Division to develop a new web-based In-City Project Review Committee workflow and database. The In- City Project Review Committee web-based system replaces the former administration of the In-City Project Review Committee project comment system via email by creating a comprehensive online system with the same information accessible to staff in several SFPUC divisions.
THIRD- PARTY PROJECTS AND DEVELOPMENT OUTSIDE SAN
FRANCISCO
BAY AREA PROJECT REVIEW COMMITTEE
RES collaborates with SFPUC colleagues in several divisions to protect SFPUC assets outside of San Francisco. Through the SFPUC’s formal Project Review process, SFPUC staff review proposals for secondary uses of SFPUC Property in Alameda, Santa Clara, and San Mateo Counties. Staff from the Water Enterprise’s Natural Resources Land Management Division, Water Supply and Treatment Division, and RES determine whether a proposal is compatible with City and SFPUC -adopted plans and policies.
Consistent with the Land Use Framework approved by the SFPUC’s Commission via Resolution No. 12-0042 on March 13, 2012, the SFPUC may permit a secondary use on the SFPUC right -of-way only if it benefits the SFPUC, is consistent with the SFPUC’s mission and policies, and does not in any way interfere with, endanger, or damage the SFPUC’s current or future operations, security or facilities. No secondary use of SFPUC land is permitted without the SFPUC’s written consent.
As the land adjacent to the SFPUC pipeline right of way in the Bay Area continues to be redeveloped for denser suburban and urban uses, vacant space has grown more limited. Private parties and public agencies increasingly seek to use SFPUC Property for various uses. Also, as a result of recent storms, public agencies have proposed many repair projects associated with storm damage on SFPUC lands.
25 The SFPUC authorized San Mateo County to perform storm damage work within its easement for Cañada Road on SFPUC Property.
As an active participant in the Project R eview process, RES reviews each application, analyzes any existing land rights in the proposed project area, and determines the appropriate real estate agreement in which to authorize the third- party use (lease, license, easement, or consent letter).
RES a nalyzed 85 projects in the fiscal year 2023- 24. Of those 85 projects, RES reviewed and commented on (i) 20 projects from public agencies; (ii) two projects from
26 private developers related to development projects; (iii) ten communications and utility installation projects; (iv) 32 PG&E projects; (v) seven other private-party projects; and (vi) 14 internal SFPUC projects.
These projects resulted in RES issuing (i) three real estate licenses, (ii) 12 consent letters, (iii) one Permit to Enter, and (iv) one work authorization letter for the use of SFPUC Property.
Real property appraisals show that SFPUC Property usually increases in value because of these projects. The owners of adjacent redeveloped private parcels seeking to use SFPUC Property often display significant resistance to RES’s efforts to meet the SFPUC’s obligation to charge fair market value. RES staff often spends significant time negotiating rental rates for new real estate agreements.
INCREASED INTEREST IN USE OF SFPUC PROPERTY IN ASSOCIATION
WITH ACCESSORY DWELLING UNITS
The SFPUC receives inquiries for construction access and setback variances in conjunction with Accessory Dwelling Unit proposals on adjacent land.
California Government Code Section 65852.150 declared that allowing Accessory Dwelling Units (ADUs) in zoning areas that allow for single -family and multifamily uses
27 is essential to help address California’s housing needs. This State ADU Law has since been revised to improve its effectiveness in creating more housing units.
Due to the changes in State ADU laws since 2021, the SFPUC has received an influx of requests from adjacent property owners seeking to use SFPUC Property to bypass local setback requirements and to use the SFPUC Property for access to the ADUs.
Additionally, the SFPUC receives proposals to use SFPUC Property for construction vehicle access related to the development of these ADUs.
RES works with colleagues from the Natural Resources and Land Management Division and the City Attorney’s Office to respond to these requests. In the past fiscal year, RES has received inquiries from adjacent private property owners in San Mateo County including 2835 Brewster Avenue, Redwood City, and for additional work at 711 Esther Lane in Redwood City, 531 W. Santa Inez Avenue in Hillsborough, as well as 384 Shawnee Place in Alameda County. RES also supports the Natural Resources and Lands Management Division in responding to public notices issued for ADU development in local municipalities.
REAL ESTATE POLICY UPDATE
The SFPUC’s Commission has from time to time adopted policies concerning Commission review and action on matters within its jurisdiction and delegated authority to the General Manager to award leases subject to certain terms and limitations. One of these policies was the 2015 Real Estate Guidelines adopted by the SFPUC’s Commission on January 13, 2015 by Resolution No. 15-0013.
The Real Estate Guidelines identified various types of real estate transactions and the protocols for Commission action and General Manager authority for real property matters.
The Real Estate Guidelines became outdated. On August 27, 2024, the SFPUC’s Commission adopted Resolution No. 24- 0185 to update certain policies and delegate authority to the General Manager to award and amend certain types of real estate agreements and revise certain Commission actions on real estate agreements.
This 2024 Resolution superseded prior inconsistent delegation policies, including the Real Estate Guidelines.
RES is presently revising the Real Estate Guidelines to reflect the 2024 Resolution. 28 PACIFIC GAS AND ELECTRIC COMPANY ( PG&E ) PROJECTS
Typical PG&E Pole to be Replaced on SFPUC Property.
As part of its ongoing plan to implement projects accommodate new, more stringent safety and performance requirements in the wake of the Northern California wildfires, PG&E continues to request SFPUC approval for a variety of projects. These projects include (i) vegetation management initiatives related to power transmission and distribution rights; (ii) gas pipeline inspection, replacement, installation, and retirement projects; and (iii) electric transmission and distribution line inspection, pole and tower repair, and replacement, and reconductoring projects.
In the past fiscal year, the SFPUC issued 12 agreements through RES (revocable licenses, work authorization letters, and consent letters), for new and existing PG&E projects. There was a decrease in the quantity of agreements from the prior year because PG&E’s ongoing annual vegetation management projects have become short - term, small scale vegetation maintenance (pruning) activities along roads and existing access routes. The SFPUC will still review PG&E’s vegetation maintenance activities
29 through the Project Review process , but PG&E projects may proceed under a short- term access p ermit issued by the Natural Resources and Lands Management Division rather than a revocable license issued by RES when appropriate.
SFPUC and PG&E staff continue to meet regularly to discuss pending and new projects and make process improvements to accommodate PG&E’s critical work.
A list of real estate agreements the SFPUC issued to PG&E in the last fiscal year is attached as Exhibit D.
OTHER KEY INITIATIVES
BISECTED ENCROACHMENT PERMITS
A SFPUC Bisected Parcel Permit allows the adjacent residential property owner ( each, a Permittee) access to and use of a portion of the adjoining SFPUC Property as part of the Permittee’s yard or driveway.
In certain areas of San Mateo and Alameda C ounties, the SFPUC Property bisects adjacent parcels. Thes e adjacent parcels have limited access and utility, and in some cases, would be landlocked, without the authorization to use the SFPUC Property.
SFPUC Property bisecting adjacent properties in Menlo Park
30 The SFPUC issues Bisected Parcel Permits to adjacent residential property owners for a five -year renewable term. The Permittee must pay an annual fee, retain sufficient insurance to indemnify the City, and maintain the SFPUC Property in use. RES manages 108 active fee- based Bisected Parcel Permits in Sa n Mateo and Alameda Counties.
RES issued four Bisected Parcel Permits in the last fiscal year. A list of Bisected Parcel Permits issued within the last fiscal year is attached as Exhibit F.
BISECTED PARCEL PERMIT DATABASE
In the fall of 2022, RES staff identified a need to compile the Bisected Parcel Permit s, including Permittee billing, insurance, and other critical information, using one common system accessible to both RES and other SFPUC staff.
RES worked with the SFPUC Information Technology Systems Division to develop a new web- based Bisected Parcel Permit Database. The Bisected Parcel Permit Database replaces the former administration of using separate spreadsheets to track Bisected Parcel Permits by creating a comprehensive database containing the same information in one common and accessible location.
The Bisected Parcel Permit Database presents the various information in an organized and concise way while allowing authorized staff the ability to run a wider variety of reports. The Bisected Parcel Permit Database was incorporated into the existing online RES Projects Tracker and was completed and ready for staff use in November 2023.
TRANSITION FROM EXIGIS TO YARDI
RES typically collects three types of insurance (general liability, worker’s compensation and automobile liability) for each of the hundreds of real estate agreements it administers. RES used the Exigis Insurance Tracking web- based application to track tenant compliance through a work order with the City’s Risk Management Division.
The SFPUC received notice of a relatively high increase in the cost of th e Exigis application. In order to reduce costs, RES located an alternative to Exigis as the City’s contract with Exigis will expire in late October 2024. that Exigis’ renewal costs would increase an additional 10%.
31 In June 2024, RES decided to replace Exigis and to replace it with the Yardi TenantShield insurance compliance module through a contract amendment. Yardi is a California company that focuses on public agency clients.
TenantShield works in conjunction with the SFPUC’s lease administration tool, Yardi Voyager. RES has used Voyager since 2013 to administer its hundreds of real estate leases and licenses. Voyager tracks the tenants’ contact information, the location and size of the premises, the payment of rent and security deposits, and key lease dates such as the commencement date, annual rent increase dates, and expiration dates.
RES has worked in the past several months with City Risk Management to receive all data and the certificates of i nsurance from Exigis. RES began migrating the data and current insurance certificates to the Yardi platform. At present, RES is testing the functionality of TenantShi eld and will continue to do so through September. RES expects to migrate over its hundreds of insurance accounts and go live with TenantShield in early October 2024.
TenantShield offers the following features:
• The ability for tenants or their brokers to upload insurance certificates directly to Yardi. There is an opportunity to also provide access to billing statements and agreements in the future.
• Outgoing emails to tenants and licensees can be branded with the SFPUC logo. The SFPUC logo will assure our tenants and licensees that the communications come from the SFPUC.
• The capability for RES to issue mass notices via email or on the TenantShield Portal landing page to SFPUC tenants and licensees to share timely information. • The ability for the RES Lease Administrator to view, in real-time, when insurance becomes compliant in order to set the commencement date of a lease or license.
Significant staff time savings will occur with TenantShield because staff will only have to enter a tenant’s lease and insurance information once into a single software system rather than in the past when staff had to enter this information into both the Yardi and Exigis software systems.
The system transition will save the RES operating budget an estimated $20,000 per year.
32 PROJECT APPENDIX
CURRENT WATER SYSTEM IMPROVEMENT PROJECT LIST
Regional Groundwater Storage and Recovery Project, Phase I and Phase II – This ongoing project seeks to continue building groundwater facilities in San Mateo County to fulfill the goal of diversifying the SFPUC’s regional water supply for drought protection. RES is currently:
1. acquiring a proposed access driveway and easement from BART on Mission Road for the SFPUC’s groundwater well station;
2. negotiating with BART, South San Francisco, and a private developer for temporary access rights and permanent access easements for the groundwater well station near Antoinette Lane in South San Francisco;
3. seeking Board of Supervisors’ approval to purchase new easements for water and electrical facilities, as well as temporary construction easements to install them, from Kaiser Foundation Hospitals for the groundwater well station near Antoinette Lane; and
4. seeking Board of Supervisors’ approval to purchase an aerial easement and two footing easements for a pipeline across San Mateo County Flood Control property.
CURRENT OTHER WATER ENTERPRISE CAPITAL PROJECT LIST • Auxiliary Water Supply System – The Auxiliary Water Supply System is an independent high-pressure, non-potable, water supply system built following the 1906 earthquake and dedicated to fire protection. The Auxiliary Water Supply System mainly serves the northeastern portion of the City. RES continues to support the project team in its efforts to improve the Auxiliary Water Supply System at various locations. RES is currently assisting with plans to install fireboat manifolds at Fort Mason on land under the jurisdiction of the Golden Gate National Recreation Area, and at Piers 20 and 35.5 on land under Port jurisdiction.
33 • Bay Division Pipeline Nos. 3 and 4 Crossover Project – RES has worked with the Veterans’ Administration Hospital in Palo Alto on a project to acquire an access easement for permanent access to the SFPUC Crossover facility that runs through the Veteran’s Administration Hospital campus.
• Bay Division Pipeline Nos. 3 and 4 Valve Lot Safe Pipe Entry Project – RES is working with the project team, the City of Sunnyvale, Stanford University, and others to acquire the necessary right -of-way authorizations to construct the project.
• CDD Campus at 2000 Marin – RES is working with the project manager to negotiate an i nternal MOU between Water, Power, and Wastewater Enterprises for the mutual use of parcels belonging to the Wastewater Enterprise. The Wastewater Enterprise parcels would become part of the new CDD campus for traffic circulation. The project will also install an AWSS pipeline and a BCTD duct bank across the Wastewater Enterprise property. The MOU would provide for the use of the Wastewater property by the Water and Power Enterprise, while protecting its original utility purpose of the Wastewater Enterprise • Corrosion Protection Capital Upgrades Phase III – This project will install cathodic protection improvements on the SFPUC pipeline right of way. RES is providing feedback to the SFPUC project team during the design phase. RES will acquire utility easements, access easements, and temporary construction easements, as and where needed, for the improvements and for the installation of electrical supply lines needed to power the improvements. • Crystal Springs Pipeline No. 2, Reach 5 Relining – RES is working with the project team to reclaim portions of the pipeline right of way for project construction. The Crystal Springs Pipeline No. 2 Reach 5 Project would re- line a
3.84-mile segment of Crystal Springs Pipeline No. 2. The project would requir e access pits at multiple locations, as well as construction of new manholes and modification or relocation of pipeline appurtenances. The project is currently finalizing the design phase.
The anticipated right -of-way needs include negotiating memoranda of agreements with impacted municipalities for project implementation and clearing the right -of-way of significant encroachments along residential stretches of the right-of-way. RES has met with each property owner impacted by the project construction to present and discuss the project and work with the property owners to remove encroachments before November 2024.
34 • Crystal Springs Pipeline No. 2, Reaches 2 and 3 Re- Lining – This project would rehabilitate Reaches 2 and 3 of Crystal Springs Pipeline No. 2 by replacing a portion of the pipeline within a new alignment, and re- lining the rest. The project would require access pits at multiple locations, as well as construction of new manholes and modification or relocation of pipeline appurtenances. The proj ect is currently in the design phase. The anticipated right -of-way needs include (i) acquiring easements for the portions of new pipeline that would cross private property; (ii) locating temporary space on SFPUC Property or within public right - of-way for temporary equipment laydown and staging; and (iii) negotiating memoranda of agreements with impacted municipalities for project implementation.
• Millbrae Yard Lab and Shops Improvements Project – This project would redevelop the Millbrae Yard over multiple phases. RES support for the project to date has included extensive research related to existing historic easements and agreements on the multiple parcels that comprise the Millbrae Yard, assisti ng with obtaining an accurate ALTA survey for the project site from the City’s Bureau of Streets and Mapping, and coordinating with the existing tenants to perform geotechnical investigations. Anticipated future RES support will mainly include coordination with the existing tenants and easement holders to implement the project.
• Moccasin Penstocks Rehabilitation Project – This project is in the Alternatives Analysis Phase. RES is working with the project team to describe the right -of- way needs for each alternative and score the alternatives accordingly.
Anticipated future work includes (i) acquiring special use permits from the Bureau of Land Management for necessary access road improvements; (ii) acquiring a temporary construction easement on private property for access during construction; and (iii) coordinating with Caltrans to define its Highway 49 right -of- way where it crosses SFPUC lands; (iv) and obtaining an encroachment permit from Caltrans to allow for new access to the project area from Highway 49. • Potable Emergency Firefighting Water System (PEFWS) – This proposed system is related to the Auxiliary Water Supply System. The PEFWS will serve the west side of the City and will be connected to the drinking water system, using a system of valves that can be closed, when needed, to function at the high pressure required for firefighting. RES will negotiate any necessary agreements with other City departments to install pipelines for the new system through City property (i.e., Stern Grove and Golden Gate Park).
35 • Southern Skyline Boulevard Ridge Trail Extension – This project would construct approximately six miles of multi -purpose trail generally following Skyline Boulevard (State Route 35) from State Route 92 to the southern boundary of the Peninsula Watershed at the Phleger Estate. RES support for this project has included a significant amount of historical research, production of right of way maps, and support to facilitate the project team’s efforts to obtain an encroachment permit and freeway maintenance agreement. RES will also work to assume the existing easement across the Skylawn Memorial Park. The easement is currently owned by the Bay Area Ridge Trail Council. • Town of Sunol Pipeline Replacement Project – This project seeks to replace a portion of the Sunol Pipeline where it crosses Laguna Creek and the Sunol Glen School. RES has negotiated a purchase and sale agreement for an easement for the new pipeline alignment and appurtenant facilities on and across the school property, as well as a temporary construction easement on the school property. RES will seek Commission and Board of Supervisors’ approval for the acquisition in the coming months.
CURRENT NON- SSIP WASTEWATER ENTERPRISE CAPITAL PROJECT LIST • Ocean Beach Climate Change Adaptation Project – This project focuses on alleviating chronic shoreline erosion at Ocean Beach between Sloat Boulevard and Fort Funston. Project elements include managed retreat, beach nourishment through the placement of sand, construction of a buried wall to protect the Lake Merced Tunnel, public beach access and recreational improvements, and permanent closure of the Great Highway Extension. RES support for this project involves working with the National Park Service to obtain easements for the project components on Golden Gate National Recreation Area lands and working with the Recreation and Parks Department to negotiate a MOU to govern the respective responsibilities and obligations of each department for the various improvements installed on the Recreation and Parks Department lands as part of the project.
• Quint Street Vacation and Jurisdictional Transfer – A Caltrain project in 2014 bisected Quint Street just south of Jerrold Avenue, creating a dead- end street on a block where the SFPUC owns the property on both sides of the street. To mitigate the security issues, illegal dumping, and public safety concerns common to dead-end streets in San Francisco, the SFPUC seeks to install a control gate across Quint Street, securing the site and preventing public access. For the SFPUC to be able to control access at Quint Street (a public ROW), the Board of
36 Supervisors must pass legislation ordering the vacation of that portion of the street and authorizing the jurisdictional transfer of the vacated portion from PW to the SFPUC. RES staff is leading the effort with Public Works and City’s Read Estate Division to complete the street vacation and transfer of the property. • Presidio Trust 50-Y ear License for SPUC s ewer infrastructure within the Presidio.RES just concluded negotiations with the Presidio Trust for a new 50- year replacement license that will allow the SFPUC sewer facilities to continue to operate on Trust property. RES will seek Commission and BOS approval for the agreement.
CURRENT SSIP PROJECT LIST
• Channel Force Main Intertie Project – This project is in active construction. The SFPUC is constructing an intertie between the Channel Force Main and the Islais Creek Transport/Storage Box, providing a bypass that will allow the Wastewater Enterprise to inspect and rehabilitate approximately 2,500 linear feet of the Channel Force Main. The intertie will be constructed within the public right of way at the intersection of Cesar Chavez and Indiana Streets. It will connect the Channel Force Main to the Islais Creek Transport/Storage Box within the adjacent SFMTA bus yard.
RES negotiated an agreement with the SFMTA providing for project construction, temporary laydown, and access to shut -down valves within the bus yard. RES is currently supporting the project during construction by continuing to coordinate with SFMTA, Caltrain, and the project manager of the CDD Campus at 2000 Marin project, where some overlap in contractor staging will occur. • Folsom Area Stormwater Improvement Project – This project proposes to manage stormwater and minimize flooding through the integration of “Green” and “Grey” infrastructure including upsizing and deepening existing sewer structures and constructing new sewer components to improve conveyance and flow distribution. RES is negotiating with property owners to obtain permanent tunnel easements across three privately owned commer cial parcels. RES is also working with Caltrans on a lease for the use of Caltrans right -of-way for a launching shaft and staging area. Additionally, RES is working with the project manager and the City Attorney’s Office to address and mitigate for a number of access issues that will occur during construction along Harrison Street.
37 • Lower Alemany Stormwater Improvement Project – This proposed project is currently in the design phase. The SFPUC proposes to bore a 5,650- foot-long 10-foot-diameter tunnel to alleviate flooding and improve flood resilience in the Lower Alemany Boulevard area. RES support for the project would include the acquisition of tunnel easements across and below three residential properties, and access easements across two commercial properties. RES is also working to acquire temporary construction easement(s) for laydown and staging on private property.
• Seacliff No. 1 Pump Station and Force Main Upgrade Project – This project would replace the existing Seacliff Pump Station No. 1 in a new location. The current location of the pump station is a landlocked SFPUC -owned parcel at China Beach. The topography of the area and landlocked nature of the SFPUC parcel led to the decision to relocate the pump station to within the public right-of- way at the end of Seacliff Avenue. RES support for this project includes coordinating the effort to obtain Special Use Permits from the National Park Service, through Golden Gate National Recreation Area, for the necessary access to decommission the existing pump station and for the long- term placement of electrical cabinetry on Golden Gate National Recreation Area property. Additionally, RES is negotiating with a property owner to acquire a temporary construction easement on private property, adjacent t o an SFPUC easement, to perform the necessary work on the facilities within the easement.
CURRENT POWER ENTERPRISE CAPITAL PROJECT LIST
• Bay Corridor Transmission and Distribution – RES continues to support the SFPUC project team in its efforts to build a proposed electrical distribution system in the southeast portion of San Francisco that will allow the SFPUC to serve customers from its own distribution system.
• SFPUC/Port Northe rn Waterfront Electrification Project – The SFPUC and Port seek to increase the SFPUC’s capacity to provide power to Port operations.
SFPUC and Port staff identified Port property on which the SFPUC could design and construct electrical infrastructure for the benefit of the Port’s maritime operations. The project is currently in its design phase.
38 HETCH HETCHY WATER AND POWER CURRENT PROJECT LIST • Verizon Cell Site Modifications and Lease Renewals – The SFPUC and Verizon are currently negotiating an 8- year communications site lease for Verizon’s use of the SFPUC’s tower at Early Intake (also known as Intake Ridge). The SFPUC and Verizon were able to streamline negotiations by using terms that were already negotiated by the parties during the Moccasin Surge Tank lease. Verizon continues to work with Hetch Hetchy Water and Power and RES to install or upgrade communications facilities at other locations on SFPUC Property.
Verizon anticipates performing the work immediately upon execution of the lease, which will require Commission approval. RES anticipates that the Early Intake lease negotiation will be completed and presented to the Commission for approval in FY2024- 25. In addition, RES will be sublea sing space on its towers located on federal property at Poopenaut Pass and Burnout Ridge. • Consent Letters for Irrigation Line Crossings – In San Joaquin and Stanislaus Counties, the SFPUC Right of Way runs through miles of land used primarily for agriculture. The deeds for these parcels often reserve the right to cross SFPUC Property with irrigation lines, for which the SFPUC issues a consent letter. This is one of the more common types of projects reviewed by Hetch Hetchy Water and Power and agreements drafted by RES staff.
• Hetch Hetchy Railroad Underutilized Property/Potential Surplus Property Sale – The SFPUC owns former Hetch Hetchy right -of-way way parcels in Tuolumne County. The City constructed the now -defunct railroad to support the construction of the O’Shaughnessy Dam many years ago. The existing 19 remnant parceled parcels of the former Hetch Hetchy Railroad are either landlocked, non- contiguous, and/or licensed to the Groveland Community Services District to maintain a sewer main under the parcels. The Groveland Community Services District desires to acquire the parcels from the SFPUC to ensure its use of the sewer main and other utility facilities and to develop a recreational trail on most of the parcels as an alternative to State Route 120. The Groveland Community Services District is conducting a Record of Survey and title research for all the parcels it is interested in acquiring. Previously, the State of California Housing and Community Development Department tentatively agreed with the SFPUC analysis that the former railroad parcels may be considered “exempt surplus” land and would not be subject to most provisions of the State Surplus Lands Act (HCD will make a formal determination when more transaction details are available).
39 • Stanislaus County (in coordination with Caltrans) North County Corridor (NCC) Project – Phase 1 State Route 108 Expressway Project – Please see the earlier discussion in this report.
• Federal Highway Administration and Tuolumne County Evergreen Road Widening – Hetch Hetchy Water and Power and RES are working with the Federal Highway Administration and Tuolumne County on their project to widen Evergreen Road, a portion of which runs through SFPUC Property. Tuolumne County agreed to the terms of the purchase and sale agreement to purchase a road easement from the SFPUC and paid the General Plan Referral fee. RES continues to work with Federal Highway Administration and Tuolumne County to finalize the sale of the easement for the Evergreen Road widening, which needs Commission and Board of Supervisors approval. The purchase and sale agreement and deed has been revised to document and add additional protection provisions for the additional City infrastructure, including a Recreation and Parks Department utility line, located along the Evergreen Road alignment.
Tuolumne County anticipates breaking ground for the project in year. • Transmission Line Clearance Mitigation – HHWP is working with Modesto Irrigation District (MID) and PG&E to move existing aerial power distribution line conductors that cross under the HHWP power transmission lines to new subterranean conduits with new power conductors for MID and PG&E. This project will resolve clearance issues between the HHWP power transmission lines and other utility distribution lines. RES will issue one (1) revocable license to MID; and one (1) consent letter and four (4) revocable licenses to PG&E to underground the existing power lines at various locations across the HHWP power transmission ROW.
SFPUC COTTAGE TENANTS LIST
Bay Area Cottage Leases. The SFPUC has 14 cottages available for employee housing in the Bay Area. The SFPUC issued three cottage leases in the past fiscal year.
• Hetch Hetchy and Upcountry Cottage Leases – The SFPUC presently has 39 cottage tenants in Moccasin and in the greater “Upcountry” area of the Tuolumne Watershed. The SFPUC issued six cottage leases in the past fiscal year.
40 EXHIBIT A
REAL ESTATE LEASE AND LICENSE REVENUES IN FISCAL YEAR 2023- 2024
Enterprise Fiscal Year 2023-2024 Revenue
Wastewater $ 503,743.63 Hetch Hetchy Water and Power $ 118,591.88 Water $ 13,631,994.14
Total $ 14,254,329.65
EXHIBIT B
NEW REAL ESTATE LEASES AND LICENSES ISSUED IN 2023 -2024
County Commence
ment Date
Licensee Use Use Fee Annual
Rent /
One
Time
Payment
San
Francisc
o 7/1/2023
Edgewood Center
for Children and
Families
Office and Workstation
Use $ 10,488.00 Annual
San
Mateo 7/7/2023 City of Burlingame
Bike Path and
Landscaping $ 2,400.00 Annual
San
Francisc
o 7/8/2023 Cottage Tenant Cottage $ 3,600.00 Annual San
Mateo 7/21/2023
Dean Lyndon
Bayangod and
Erwin Medios
Vehicle Access and
Parking $ 7,500.00 Annual
San
Francisc
o 8/1/2023
The San Francisco
School
Playground, Parking
and Landscape $ 8,908.92 Annual
San
8/14/2023 City of San Bruno Bike Path $ - Annual
41 County Commence
ment Date
Licensee Use Use Fee Annual
Rent /
One
Time
Payment
Mateo
San
Mateo 8/16/2023
Christian G. Di
Petrillo and Kyle C.
Cady
Installation and Repair
Sewer Pipeline $ 748.80 Annual
Alameda 9/1/2023
MCI Metro Access
Transmission
Services LLC Fiber Optic $ 4,032.00 Annual San
Mateo 11/1/2023 Cottage Tenant Cottage $ 8,997.96 Annual Alameda 11/1/2023
Sunol Glen Unified
School District Parking $ 1,000.00 Annual San
Francisc
o 11/1/2023
The Regents of the
University of
California Beacon Roof Sensor $ - No Fee San
Francisc
o
11/15/202
3 Greenaction for
Health and
Environmental
Justice
Installation of Weather
Testing Equipment $ - No Fee San
Francisc
o
11/15/202
3 ManyLabs
Installation of Air
Sensor $ - No Fee
Santa
Clara 1/1/2024 Apple Inc. Fiber Optic Conduit $ 5,685.00 Annual San
Mateo 1/1/2024
MCI Metro Access
Transmission
Services LLC Fiber Optic $ 4,224.00 Annual San
Mateo 1/23/2024
D'Arcy & Harty
Construction, Inc. Staging and Storage $ 10,500.00 Annual San
Mateo 3/1/2024
City of South San
Francisco Vehicle Access $ - No Fee Stanislau
s 3/1/2024
County of
Stanislaus
Vegetation and
Relocation of Utility
Poles $ - No Fee
42 County Commence
ment Date
Licensee Use Use Fee Annual
Rent /
One
Time
Payment
San
Mateo 4/1/2024
MCI Metro Access
Transmission
Services LLC Fiber Optic $ 336.00 Annual San
Mateo 5/1/2024
California Water
Service Company Pump Station $ 2,400.00 Annual Tuolumn
e 5/1/2024 PG&E Parking and Staging $ 4,840.00 Annual San
Mateo 6/1/2024 Cottage Tenant Cottage $ 11,750.40 Annual San
Mateo 6/1/2024 Kenneth Guernsey Grazing and Storage $ 15,000.00 Annual San
Mateo 6/1/2024 Cottage Tenant Cottage $ 9,441.24 Annual Santa
Clara 6/1/2024 Pacesetter Inc.
Parking and
Landscape $ 93,240.00 Annual
San
Francisc
o 6/1/2024
San Francisco Fire
Department Parking $ - No Fee San
Mateo 8/1/2024 City of San Bruno
Bike Path and
Roadway $ 2,400.00 Annual
43 EXHIBIT C
SFPUC PROPERTY TAXES AND ASSESSMENT PAYMENTS PAID IN IN F ISCAL YEAR 2023- 2024
County Fiscal Year 2023-24 Property Taxes Paid
Alameda $1,033,982.92
San Francisco $30,793.94
San Mateo $802,650.78
Santa Clara $317,095.50
San Joaquin $4,790.52
Stanislaus $18,099.74
Tuolumne $573,620.06
Total $2,781,033.46
44 EXHIBIT D
LIST OF CURRENT AGREEMENTS WHERE THE SFPUC PAYS RENT
Landlord Property
Address
Premises
(in
square
feet)
Type/Use Start Date End Date Annual Rent
1880 Jerrold
Ave LLC
1876
Oakdale
Avenue
25,937
Staging and
Storage -
Materials for
Disposal
10/1/2018 9/30/2026 $ 189,600.00
2725 Oakdale
LLC
2725
Oakdale
Avenue
46,442 Warehouse
and Parking 6/1/2019 5/31/2028 $ 957,718.08
Raul and
Denise
Arriaza; and
Linda and Carl
Olson
1325A
Evans
Avenue
3,287 Office 1/1/2019 12/31/2026 $ 121,881.96
Executive Park
Properties LLC
150
Executive
Park
Boulevard,
Suite 1300
4,164 Office 2/1/2021 1/31/2025 $ 149,904.00
Bayview Plaza,
LLC
3801 Third
Street, Suite
600
10,740 Office 7/1/2024 6/30/2027 $ 386,640.00
City of
Hayward -
Hayward
Executive
Airport
22488
Skywest
Drive
(Hayward
Executive
Airport)
24,974
Ground Lease
for Pump
Station
1/1/2005 12/31/2054 $ 4,407.91
45 Landlord Property
Address
Premises
(in
square
feet)
Type/Use Start Date End Date Annual Rent
Kristian A.
Akseth, Lilly B.
Akseth, and
Libkra
Investments
1980
Oakdale
Ave
36,400 Warehouse
and Parking 1/1/2023 12/31/2030 $ 1,050,930.72
Filoli Center
Filoli Center
at Parcel
L3490
(37.459313,
-
122.331261
)
Near 86
Cañada
Road
10,323,72
0 Watershed
Protection 12/1/1982 11/30/2022 $ 1.00 Communicatio
n & Control,
Inc. -
Livermore Hills
Livermore
Hills
Near
Morgan
Territory
Road
APN#: 006-
070-021
(37.822556,
-
121.782861
)
Two (2) 6-
foot
dishes
and
shelter
space (+)
Communicatio
ns Site -
Antennas,
Microwave,
and/or Radio
12/1/2022 11/30/2027 $ 20,042.52
Communicatio
n & Control,
Inc. - Mt.
Allison
Mt. Allison
APN#: 096-
0090-005-
07 (37 29' 56",-
121 52' 16")
6-foot dish
and
shelter
space (+)
Communicatio
ns Site -
Antennas,
Microwave,
and/or Radio
5/1/2020 4/30/2025 $ 66,565.20
Vertical Bridge
Corral
Hollow
APN: 251-
120-080-
000
32322
Corral
Hollow
345
Communicatio
ns Site -
Antennas,
Microwave,
and/or Radio
1/1/2023 12/31/2027 $ 30,900.00
46 Landlord Property
Address
Premises
(in
square
feet)
Type/Use Start Date End Date Annual Rent
Road, Tracy
(37.652522
22, -
121.478066
67)
Lolita Lodhia,
Hersha Lodhia
Miller and
Sharmila
Lodhia, as Co-
Trustees of the
Lodhia Living
Trust dated
11/21/1994
1900
Oakdale
Avenue
33,000 Warehouse
and Parking 7/15/2024 6/30/2029 $ 706,722.00
Alameda
County
Sunol Ridge
(APN: 96A-
120-1-1)
37000
Palomares
Road
N/A
Communicatio
ns Site -
Antennas,
Microwave,
and/or Radio
11/1/2020 10/31/2025 $ 43,285.00
Alameda
County
Crane
Ridge
(APN: 99A-
2540-7-1)
14300
Mines Road
N/A
Communicatio
ns Site -
Antennas,
Microwave,
and/or Radio
11/1/2020 10/31/2025 $ 32,722.00
American
Towers LLC
300 Radio
Road
(San Bruno
Mountain)
9 Communicatio
ns Site -
Antennas,
Microwave,
and/or Radio
8/1/2024 7/31/2029 $ 31,788.36
Joaquin Bear,
LLC
Cedar
Ridge
(APN: 083-
010-075)
16601
White Fang
Drive
N/A
Communicatio
ns Site -
Antennas,
Microwave,
and/or Radio
10/1/2020 9/30/2028 $ 31,887.96
47 Landlord Property
Address
Premises
(in
square
feet)
Type/Use Start Date End Date Annual Rent
Crown Castle
(formerly
TriStar
Investors LLC)
2201 Blue
Gum
Avenue
(BU
819990,
Site
Modesto 2,
App. No.
297144)
N/A
Communicatio
ns Site -
Antennas,
Microwave,
and/or Radio
11/1/2020 10/31/2025 $ 31,679.16
Port Pier 23 87,363 Shed, Storage,
and Parking 10/1/2023 11/30/2026 $ 1,946,885.40
Port
Roundhous
e Two
Building -
Seawall Lot
318
10 Lombard
Street
7,350 Office 10/1/2023 11/30/2026 $ 421,896.96
Port
Mariposa
Pump
Station
Facility at
Seawall Lot
345
(851 Terry
A. Francois
Boulevard
at Mariposa
Street)
4,833 Pump Station 9/1/2018 8/31/2048 $ 30,255.00 Port
Shed at Pier
33 (between
Bays 20-26)
3,440 Shed, Trailer,
and Parking 8/1/2020 7/31/2025 $ 74,304.00
Total City as
Tenant
LEASES:
21 FY 2023-24
RENT
EXPENDITU
RE
$ 6,330,017.23
48 EXHIBIT E
AGREEMENTS ISSUED TO PG&E IN 2023- 2024
PG&E Project Title Agreement
Date
Agreement Type
PG&E Electrical Transmission Short Cycle Maintenance
Repair
09/05/23 Consent Letter
PG&E VM Ralston 1102 12kV 09/11/23 Consent Letter
Amendment
PG&E Power Pole Replacement (PG&E Job No.
35269132) – SFPUC Parcel No 277 (near Switchback
Road, Moccasin)
10/12/23 Consent Letter
PG&E Power Pole Replacement (PG&E Job No.
3268472) – SFPUC Parcel No 272-A (near Marshes Flat
Road/Kelly Grade, Moccasin)
10/23/23 Consent Letter
PG&E Peoria 1701 Line 03/22/24 Revocable License
PG&E Power Pole Replacement (PG&E Job No.
35268965) – SFPUC Parcel No 272-A (near Old Priest
Grade, Big Oak Flat)
03/25/24 Consent Letter
PG&E Power Pole Replacement (PG&E Job No.
35268975) – SFPUC Parcel No 272-A (near Old Priest
Grade, Big Oak Flat)
03/25/24 Consent Letter
PG&E Electrical Transmission Short Cycle Maintenance
(Alameda County)
06/10/24 Work Authorization
Letter
PG&E Electrical Crossing over San Andreas Pipeline #2
and #3 and Baden Merced Pipeline – 201 Camaritas
Avenue, South San Francisco
06/11/24 Consent Letter
PG&E Electrical Transmission Short Cycle Maintenance
(San Mateo County)
07/31/24 Consent Letter
PG&E Pole and Down Guy Replacement along
MILPITAS Distribution Line near Weller Rd
08/18/24 Consent Letter
PG&E VM Lower-Upper Crystal Springs – San Andreas
Reservoirs
08/28/24 Consent Letter
Amendment
49 EXHIBIT F
BISECTED PARCEL PERMITS ISSUED IN FISCAL YEAR 2023 - 2024
County Commencement Date Permittee Annual Use Fee
San Mateo 7/28/2023 Ramsey Nissan and
Yesenia Perez
$ 125.00
San Mateo 5/1/2024 Mingming Zhou
$ 125.00
San Mateo 5/1/2024 Qishen Li and Lin Li $ 125.00 San Mateo 5/1/2024 Jose D. Pashaca
Mendoza and Gloria S.
Fuentez Gonzalez
$ 125.00