Completing Octavia Boulevard T S R DEVELOPER PROPOSAL: CENTRAL FREEWAY PARCEL T CITY AND COUNTY OF SAN FRANSICO APRIL 4, 2014 1. INTRODUCTION AND EXECUTIVE SUMMARY April 4, 2014 Ms. Robin Havens City & County of San Francisco Office of Economic and Workforce Development City Hall, 1 Dr. Carlton B. Goodlett Place, Suite 448 San Francisco, California 94102 Re: Developer Proposal – Central Freeway Parcel T Dear Ms. Havens and the City & County of San Francisco: Troon Pacific, Inc. is pleased to provide the enclosed offer for the purchase of the Central Freeway Parcel T, on Octavia Street in response to your Request for Proposals. This is an integrated proposal for the fee simple purchase of all three sites R, S and T, providing us the opportunity to develop a cohesive plan for these sites to work together to achieve greater community benefits, planning and design goals. Our Purchase Price has two alternates – based on a For Rent and For Sale combinations: Preferred Development Plan (as outlined in this proposal) Alternative Development Plan Parcel R, Rental Units - $1 Million Parcel R, For Sale Units - $1.25 Million Parcel S, For Sale Townhomes - $1.25 Million Parcel S, For Sale Townhomes - $1.25 Million Parcel T, Rental Units - $2.5 Million Parcel T, For Sale Units - $3.5 Million Total Purchase Price: $4.75 Million Total Purchase Price: $6.0 Million The opportunity to make a significant contribution to the fabric of a San Francisco neighborhood through development, architecture, and design is exciting particularly when that opportunity will create much needed inclusionary housing in a neighborhood as vital and unique as Market and Octavia. To succeed, a development team must emphasize a collaborative approach that places equality among key stakeholders, including tenants, owners, neighbors and locally owned retailers; demonstrate experience in solving housing challenges through innovation and creativity; and possess the financial strength to see the project through to its completion with efficiency. On behalf of the entire proposal team, I believe Troon Pacific is the right developer for these parcels. As the Chief Executive Officer I am the individual authorized to obligate the firm in the performance of the commitment described in Sections VI and VII of the RFP and have fully read and agree to the terms and conditions set forth therein. In our proposal we plan to uphold the City’s vision and values as they relate to the urban planning of the Market and Octavia neighborhood. For this reason we intend to prioritize affordable housing; recognize and preserve neighborhood character; and integrate planning of housing, jobs, transportation and infra- structure. Furthermore, our plan for these three sites is to creatively combine a mix of mostly rental units with for-sale housing types which provides residential opportunities for individuals and families of diverse One Post Street, Suite 2210, San Francisco CA 94104 • 415.504.8100 • troonpacific.com Ms. Robin Havens April 4, 2014 Page 2 income levels. The range and affordability of housing types will contribute to the health and vitality of the Market Octavia/Hayes Valley Neighborhood. In addition, the plan emphasizes the use of the ground floor for retail or other street activating uses that will reinforce Octavia Boulevard as a pedestrian oriented street. The rooftops and select building exteriors will be landscaped and planned for productive urban agricultural use, acknowledging the importance of landscape to the Hayes Valley community. Introduction to Troon Pacific: A San Francisco Developer Focused On Sustainability Troon Pacific, Inc. is a local San Francisco business, which was founded in 2000. Through various affili- ates, our company and its principals own, develop, build and manage a diverse array of real estate projects throughout the Western United States and internationally. Our real estate experience encompasses a wide mix of uses and scales, from multi-family development, master planned communities and single family residential to retail shopping centers, office buildings and technology parks. To date, our large portfolio of combined development and investment entities exceeds $650 million in value. We are a company that has developed a reputation for excellence, has over a decade of experience working in the City, and has the financial strength to follow through on our commitments. Beyond our diverse capabilities and financial strength, we pride ourselves in our record of success in creating places that achieve the highest standards of quality, livability and sustainability. Our mission is to incorporate green building practices as well as health and wellness into each project. When it comes to merging healthy living into residences, Troon Pacific, Inc. is a leader and one of the only residential developers that focuses its projects towards this goal. Moreover, our most recent projects have earned the highest available distinctions and ratings for energy efficiency from organizations, including: • The U.S. Green Building Council’s Leadership in Energy and Environment Design (LEED) certifica- tion program (LEED Platinum) • Energy Star, a government-backed program identifying energy saving buildings • Bay Area’s Build it Green certification rating program, GreenPoint • The U.S. Environmental Protection Agency’s Indoor airPLUS certification rating program Currently, Troon Pacific is working on a certified passive home development in San Francisco, which represents today’s highest standards for energy conservation, with the potential to reduce heating energy consumption by 90%. Also, our team collaborates and gives careful and thoughtful consideration towards the impact of the architectural design in terms of air and water quality, sound, lighting, safety, amenity and material choices. An Exceptionally Qualified Team That Reflects the Diversity of San Francisco We have assembled an exceptionally well-qualified team of San Francisco-based firms, including some LBE/DBE/WBEs, to assist us in the planning, design and implementation of the project. The team – One Post Street, Suite 2210, San Francisco CA 94104 • 415.504.8100 • troonpacific.com Ms. Robin Havens April 4, 2014 Page 3 most of whom live and work in the City – brings hands on experience in urban infill sites in San Fran- cisco and has demonstrated through implemented projects how livability, sustainability and diversity can be highlighted in urban environments like the Market and Octavia neighborhood. The key members of our planning, design and entitlement team know first-hand the various nuances of building a project that reflects sustainability and healthy living. The team includes: Troon Pacific, Inc., Developer, leader in developing sustainable and healthier housing in San Francisco; David Baker Architects, Master Plan Architects, forerunner in designing distinctive, high-quality buildings, which foster a strong sense of community; ROMA Design Group, Urban Design Advisor; Holmes Culley, Structural Engineers; Alfa Tech/Timmons Design Engineers, Mechanical and Sustainable Engineers; Integral Impact, LEED, PHIUS & Sustainability Consultant; Reuben, Junius & Rose LLP, Legal and Regulatory Advisor; Azari Group Real Estate, Inc., Property Management; and The Mark Company and The Concord Group, Market Research. In addition, we have begun to identify a number of cultural, recreational, commercial and non-profit enterprises that we plan to partner with to create a vibrant mix of ground level activities and alterna- tive forms of transportation linkage. The following is a sampling of partners listed for the development: ODC Dance Company; Public Art Trust/SF Arts Commission; Bay Area Bike Share; City CarShare; Bike Café Concept by SoSF; and Just One Tree. Financial Strength to Follow Through With a real estate portfolio of its affiliated company interests that exceeds $650 million in value, and a proven track record of local projects of similar scale, Troon Pacific has the financial strength to follow through on our commitment to the City and County of San Francisco. The equity capital required for the proposed project totals approximately $12.5 Million. Based on our record of similar scale successful developments in San Francisco and beyond, these projects are well within our ability to obtain the proposed financing for these projects. An Innovative Development Concept: Diversity, Sustainability, the Arts We understand the need for this project to represent a model for progressive urban development, which is why our proposed plan integrates affordable housing with healthy living, sustainability, and the arts. Our plan offers diverse on-site affordable housing – approximately 17% of the units will be inclusionary, exceeding the 15% requirement of the RFP, as well as 1-2 units that will be affordable per mutual agree- ment with Center for Dance (ODC) for student teacher housing. Furthermore, we intend to use creative methods to integrate low and moderate-income housing via a wide-range of housing types for individuals and families of diverse income levels. Units will include 2 bedroom family housing, studios, micro-units, and townhomes. Most of these units will be available for rent, however, there will be a small number of uniquely styled single family town homes that will be available for sale, giving a diverse group of residents the opportunity to own a home in Market and Octavia. One Post Street, Suite 2210, San Francisco CA 94104 • 415.504.8100 • troonpacific.com Ms. Robin Havens April 4, 2014 Page 4 We are