M E M O R A N D U M. The Project and the items that the Commission will be considering at the June 15 th, 2010 meeting are summarized below.

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1 ECONOMIC AND WORKFORCE DEVELOPMENT MICHAEL COHEN, DIRECTOR CITY AND COUNTY OF SAN FRANCISCO GAVIN NEWSOM, MAYOR M E M O R A N D U M TO: Members of the Health Commission FROM: Michael Cohen CC: Mitch Katz, Mark Morewitz DATE: June 10, 2010 RE: Candlestick Point Hunters Point Shipyard Phase 2 Project and related amendments to Article 31 of the Health Code. On June 1 st, 2010 the Office of Economic and Workforce Development and staff from the Department of Public Health ( DPH ) provided the Commission with an overview of status of the environmental clean-up of the Hunters Point Shipyard ( Shipyard ), including: (i) an update on the current and future environmental condition of the Hunters Point Shipyard, (ii) the nature and extent of Federal, State and local regulatory oversight of the clean-up, including ongoing oversight of the site after transfer, (iii) the nature and extent of the analysis and characterization of the site, and (iv) the relationship of the cleanup with the Redevelopment Agency s ( Agency ) and City s development plans. Additionally, the Commission was also given a presentation and overview of the related ordinances and amendments to Article 31 of the Health Code that will be required to implement the development of the Shipyard. On June 15 th, 2010 the Commission will consider adopting and recommending to the Board of Supervisors an ordinance amending Article 31 of the Health Code to extend to the entire Shipyard area the special permit processing requirements that currently apply for Parcel A, approve amendments to the implementing regulations and adopt CEQA findings, including a statement of overriding considerations and a mitigation monitoring and reporting program, in furtherance of the Candlestick Point and Phase 2 of the Hunters Point Shipyard Redevelopment Project. The Project and the items that the Commission will be considering at the June 15 th, 2010 meeting are summarized below. Project Background The Candlestick Point-Hunters Point Shipyard Phase 2 Project covers approximately 702-acres along the southeastern waterfront of San Francisco. The Project has been reviewed and discussed in over 250 public meetings including meetings with the two community-based advisory organizations that oversee the Project site (the Hunters Point Shipyard Citizens Advisory Committee ( CAC ) and the Bayview Hunters Point Redevelopment Project Area Committee 1 DR. CARLTON B. GOODLETT PLACE, ROOM 448, SAN FRANCISCO, CA (415) VOICE (415) FAX

2 ( PAC ), the Agency Commission, the Board of Supervisors, the Planning Commission and other City commissions, along with other local forums. In March 2004, the Agency, in cooperation with the City, negotiated a comprehensive agreement with the Navy governing the terms and conditions of the hazardous materials remediation and conveyance of the Shipyard by the Navy to the Agency (the "Conveyance Agreement"). The Conveyance Agreement obligates the Navy to remediate hazardous materials on the Shipyard to levels consistent with the land uses designated in the original redevelopment plans for the Shipyard and to convey parcels to the Agency at no cost on a phased basis as the Navy successfully completes the remediation. In May 2007, the Mayor, the Board of Supervisors, the Agency Commission, and PAC and CAC, endorsed a "Conceptual Framework for the integrated redevelopment of Candlestick Point and Phase 2 of the Shipyard (Phase 1 of the Shipyard was approved and is under construction). The Conceptual Framework envisioned a major mixed-use project, including hundreds of acres of new and restored waterfront parks and open space, thousands of new units of housing including a robust affordable housing program, extensive job-generating retail and research and development uses, permanent space and renovated for the artist colony that exists in the Shipyard and a site for a potential new stadium for the 49ers on the Shipyard. In April 2007, the Planning Department also entered into a Memorandum of Understanding ( MOU ) between the City, the Planning Department, the Recreation and Park Department, the Mayor s Office, and the Redevelopment Agency. The MOU provides for the City and the Agency to cooperate with one another to facilitate the planning of Candlestick Point and Phase 2 of the Shipyard as one integrated development project consistent with Conceptual Framework. In June 2008, City voters approved Proposition G, an initiative petition measure named the Bayview Jobs, Parks, and Housing Initiative, regarding plans to revitalize the Project site. Proposition G: (i) adopted overarching policies for the revitalization of the Project site; (ii) authorized the conveyance of the City s Recreation and Park interests within Candlestick Point in furtherance of the Project, provided that there is a binding commitment to replace the transferred property with other property of at least the same acreage that will be improved and dedicated as public parks or open space in the Project; (iii) repealed Proposition D and Proposition F relating to prior plans for the development of a new stadium and retail entertainment project on Candlestick Point; and (iv) urged the City, the Agency and all other governmental agencies with jurisdiction to proceed expeditiously with the Project. Project Description Consistent with Conceptual Framework and Proposition G, the proposed land use and development program on the Shipyard and Candlestick Point include the following elements: 10,500 residential housing units, of which 31.86% (3,345) will be below market. The housing program includes the complete rebuilding of the Alice Griffith Public Housing Development, also known as Double Rock, with one-for-one replacement of existing units and phased development to prevent displacement.

3 2,500,000 sq. ft. of research and development uses including office and light industrial uses targeting emerging industries and technologies such as green technology. 150,000 sq. ft. of office and other commercial uses on Candlestick Point. 336 acres of new and restored open space and active recreation areas inclusive of the dual use stadium parking lot, which includes neighborhood parks within Candlestick Point and the Shipyard, new waterfront parks around the entire perimeter of the Shipyard connecting to the region s Bay Trail, and a major renovation of the Candlestick Point State Recreation Area with restored habitat areas and public access to the water. 635,000 sq. ft. of regional retail on Candlestick Point. 125,000 sq. ft. of neighborhood-serving retail on both the Shipyard and Candlestick Point. Permanent new and renovated space for the existing Shipyard artists as well as an arts education center. A 150,000 sq. ft. (220-room) hotel on Candlestick Point. A 10,000 seat performance venue on Candlestick Point. A potential new 69,000-seat, world-class football stadium for the 49ers. New public and community facilities on both the Shipyard and Candlestick Point, including a new fire station on the Shipyard and space for an expanded police station or school on Candlestick Point. A 300-slip marina on the Shipyard. The development of the Project will require substantial new transportation and utility infrastructure including new roads as well as a new low-pressure water system, a reclaimed water system, an auxiliary water supply system, separate sanitary sewer and storm drainage facilities, and trenches throughout the Project site to accommodate electrical, communication, and gas utilities. Shoreline improvements will also be provided to stabilize the shoreline. Additionally, the Project provides for alternative uses that either shift some residential uses from Candlestick Point to the Shipyard and expand by up to 500,000 square feet commercial uses on some of the areas of the Shipyard currently reserved for stadium uses or expand research and development uses by 2,500,000 square feet on the Shipyard if the 49ers do not avail themselves of the opportunity to build a new stadium on the Shipyard. The bicycle and pedestrian bridge over Yosemite Slough can be used for game day automobile travel in the event the stadium is constructed. Article 31 of the Health Code - Existing Law Pursuant to the Conveyance Agreement, in December 2004, the Navy conveyed Parcel A of the Shipyard to the Agency for development. In planning for the transfer of Parcel A from the Navy to the Agency, DPH developed Article 31 of the Health Code in order to impose specific requirements on activities at the Shipyard in order to provide additional protection to human health and safety and the environment above and beyond what was required by federal and state law.

4 Currently, Article 31 provides a mechanism for certain types of subsurface activities on Parcel A to require submittal of plans to DPH in order to ensure that subsurface work is conducted in a safe manner. In addition, Article 31 requires compliance with institutional controls and coordinates with relevant departments to monitor and enforce compliance. The mechanism for compliance with these requirements is the submittal by an applicant for certain permits at DPH, the Department of Building Inspection or the Department of Public Works. More specifically, Article 31 requires that in areas on top of or within 1,000 feet of old landfill disposal sites and where there is evidence of landfill gas migration that could pose a threat to public health and safety, the Director of DPH (Director) can impose protective measures as a condition of a permit. In addition, the Director can require additional sampling based on site-specific conditions. Furthermore, Article 31 provides that the both the Director and the Health Commission can charge fees to recover oversight costs and can add or implement certain requirements by regulation. In 2004, the Health Commission adopted implementing regulations for Article 31. These regulations, specified details for the required plans and reports, including the preparer s qualifications. The following required evaluations, plans, and reports were specified in the ordinance and regulations: Review structures within 1,000 feet of old disposal sites for concerns related to landfill gas Site Evaluation Report, including project descriptions, site history, data evaluation for areas with fill materials Dust Control Plan Disposal Plan Health and Safety Plan, including a contingency plan Soil Importation Plan Determination of whether additional characterization is necessary If additional characterization is required then submittal of a Scope of Work to Collect Additional Information and a Supplemental Site Evaluation Report. Closure Report Proposed Amendments to Article 31 of the Health Code At the time Article 31 was adopted, it was anticipated that it would be amended to include other parcels on the Shipyard, as they are transferred out of Navy ownership. In anticipation of the transfers of the next few parcels in 2011, DPH is proposing amendments to the ordinance and regulations in order to extend Article 31 of the Health Code and the associated regulations to the balance of the Shipyard. The structure of the review and permitting requirements remain the same with a few important changes, which are articulated below. The amended ordinance reiterates applicant compliance with institutional controls included in any deed conveying ownership from the Navy to the Agency or included in any recorded covenant to restrict use of property containing environmental restrictions and the DPH role in overseeing and enforcing compliance. Additionally, the Shipyard parcels are divided into two main groups: Unrestricted Residential Property and Property with a Durable Cover Requirement. Unrestricted

5 Residential Property requires compliance for actions involving wells or any permit that involves demolition of structures with lead-based paint or when at least 50 cubic yards of soil are being disturbed. For property with a Durable Cover Requirement, meaning properties that are required to have a durable cover or engineered cap, compliance is required whenever soil is disturbed. For both types of properties, the evaluations, plans and reports listed above are still required. In addition, the following significant changes have been made: Soil Screening Criteria are updated to current regulatory standards. The Article 31 Map is updated to show all HPS parcels. Unknown Contaminant Contingency Plan is called out as a separate plan from the Health and Safety Plan A Foundation Support Piles Installation Plan is required for areas where piles will be driven into artificial fill materials. A requirement for submittal of a Stormwater and Erosion Control Plan is removed because this duplicated requirements for submittal and review of this information to the SF Public Utilities Commission. Details for a Serpentinite Cover Plan for Unrestricted Residential Property are specified in the regulations. New Site Evaluation Reports for Unrestricted Residential Property that have an approved Closure Report and a Serpentinite Cover Plan, do not need to submit a site history, data evaluation, or statement of adequate characterization. Site Evaluation Reports for HPS property subject to a Durable Cover Requirement need to contain project description information but need not contain a site history, data evaluation, or statement of adequate characterization. Clarifies that HPS property subject to a Durable Cover Requirement must submit proof of compliance with specific institutional controls as detailed in specific transfer documents. If a Risk Management Plan for the property already includes approved Dust Control Plans, Site Specific Health and Safety Plans or Soil Importation Plans then the Applicant can submit copies of those plans and approval letters from USEPA to meet the submittal requirement for those plans. If the USEPA approved Dust Control Plan does not include specifics about particulate monitoring then the Director can require that information to be submitted. For Unrestricted Residential Property, there are more details about how to comply with lead based paint in soil sampling requirements under the Scope of Work to Collect Additional Information Other minor wording changes were made and are highlighted in the attached copies of the amended ordinance and regulations. Environmental Review

6 The Final Environmental Impact Report (Final EIR) for the Candlestick Point-Hunters Point Phase II (CP-HPS Phase II) Development Project consists of the Draft Environmental Impact Report (Draft EIR), which was published on November 12, 2009, and the Comments and Responses (C&R) document, which was made available to the public on May 13, The Final EIR has been included as Attachment 2 to this memorandum. The Draft EIR was distributed for a 60-day public review period (extended from the statutory 45- day required period), beginning on November 12, 2009, and ending on January 12, The C&R document was prepared in compliance with the California Environmental Quality Act (CEQA), which encourages public involvement by requiring public review of the Draft EIR and further requires that written responses must be provided for all comments received on the Draft EIR during the public review period. The Draft EIR and the C&R document are numbered consecutively. The Draft EIR distributed on November 12, 2009, includes these volumes: Volume I Executive Summary Volumes II and III Project Description; Environmental Setting, Impacts and Mitigation Measures; Project Variants; Project Alternatives Volumes IV, V and VI Appendices to the Draft EIR The C&R document, distributed on May 13, 2010, contains these volumes: Volumes VII, VIII and IX Comments and Responses Volume IX Text changes Volume X Appendices to the C&R document Approximately 115 comment letters were received on the Draft EIR and approximately 150 individuals spoke at the three public hearings that were held on the Draft EIR between December 2009 and January As further required by CEQA, written responses have been provided in the C&R document for all substantive comments. The comment letters and public hearing transcripts, and the responses to the comments comprise three-fourths of Volumes VII, VIII, and IX of the C&R document. The C&R document also includes text changes to the Draft EIR. The text changes either clarify information or make minor changes and corrections to the document. This chapter of the document repeats text changes specified in the responses to comments, which added to the bulk of the document but enables the reader to easily review all document changes organized in the order of the Draft EIR chapters. Other changes were due to refinements to the Project, many of which have been prompted in response to comments received on the Draft EIR. These refinements include: A Housing/Research and Development (R&D) Variant (Variant 2A) as a non-stadium development option to provide a moderate increase of space to the Housing Variant (Variant 2). The total R&D space for this variant is 3 million GSF, which is greater than the 2.5 million GSF contemplated under the Project but less than the 5 million GSF included in the R&D Variant (Variant 1).

7 A Historic Preservation sub-alternative (4A) that is a subset of Alternative 4, which provides for historic preservation only. The intention is to clarify how the Project development plan could include preservation of identified potential historical resources. This sub-alternative may be applied to any of the variants and alternatives. An additional tower variant (Variant 3: Tower Variant D) that minimizes shadow impacts on the Candlestick Point State Recreation Area, while retaining flexibility in some tower locations. This variant also increases tower floor plates from 10,000 square feet to 12,500 square feet to allow efficiency and flexibility in the design of floor plans without increasing the total number of housing units. Incorporation of an updated development schedule (essentially, delaying the start of construction by approximately 1-2 years) to reflect current economic conditions and the entitlement process schedule. There are no increases in the severity of any impacts and no new significant impacts arising from the information and text changes contained in the C&R document. None of the refinements to the Project, responses to the comments, or other clarifications and corrections result in a change to the significance conclusions of the Draft EIR. In many cases the refinements are designed to respond to and further address issues raised in the comments. On June 3, 2010, the Redevelopment Agency Commission and the Planning Commission certified the Final EIR, consisting of the Draft EIR together with the C&R document, upon a determination that the document had been completed in compliance with CEQA and reflects their independent judgment and analysis as to the environmental effects of the Project. In connection with the Commission s consideration of the amendments to the Health Code and implementing regulations, the Commission will also consider adopting CEQA findings including a statement of overriding considerations and a mitigation monitoring and reporting program, for the Project. These findings and the Project s mitigation monitoring and reporting program are attached to the Commission resolution (Attachment 1) to this memorandum. Attachments Attachment 1 Commission Resolution Attachment A CEQA Findings Attachment B Mitigation Monitoring and Reporting Program Attachment C Proposed Ordinance Amending the Health Code Attachment D Proposed Implementing Regulations Attachment 2 Project Environmental Impact Report (Provided on CD)

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