Supervisors pause reprogramming of Muni Substation funds pending mayoral term sheet; Fillmore restaurants urge quick aid

Supervisor Ross Mercarimi opened discussion of a redevelopment‑fund reprogramming proposal intended to direct remaining Muni Substation project funds to stabilization programs for the Fillmore Jazz Preservation District and other Western Addition initiatives.

The resolution as introduced would reprogram approximately $3.301 million from the Muni Substation project into a package that includes tenant improvement loans, a Fillmore Jazz marketing/promotions program and a Western Addition property‑management line. Harvey Rose, the budget analyst, told the committee the agency has proposed corrected reprogramming amounts and recommended that the board require annual reporting on the repayment status of four Fillmore business loans.

Redevelopment staff described the loans as a mix of new and older investments: new loans for Yoshi—s and 1300 (opened recently) and older loans for Rosales and Sheba Lounge. Agency staff said several businesses experienced significant construction cost overruns during 2008 and that efforts to secure private financing were disrupted by the market collapse, leaving Yoshi—s with roughly $1.5 million in unpaid construction obligations.

Business owners and community representatives urged quick action. Kazuko Jimura, owner of Yoshi—s, said, "I cannot really stress the importance of getting the funding as quickly as possible because there's so much urgency involved in this." Arnold Townsend, a former Western Addition community advisory committee chair, argued the substation cannot remain fallow and urged that the community receive the benefit of long‑promised investment.

Several supervisors said they support aiding businesses but raised questions about the fate of the Muni Substation property if funds are moved. Supervisor Mercarimi asked for guarantees that the substation will be rehabilitated rather than left "orphaned" if the money is reprogrammed. Redevelopment staff and Amy Neches (project area planning) said the agency has drafted a term sheet to convey the substation property and transfer a certificate of transferable development rights (TDRs) to the city as a funding mechanism; staff cautioned the TDR value is market dependent.

Because the committee had not yet seen the final term sheet and the mayor—s office had not formally confirmed implementation capacity for the substation, supervisors agreed to a one‑week continuance so redevelopment, the mayor's office of economic and workforce development and the budget analyst can align on a plan. Chair noted the item will return to the Feb. 18 committee meeting with the term sheet available for review.

Next steps: the redevelopment commission was scheduled to consider the term sheet on Feb. 17; the committee asked staff to provide copies to supervisors and to the budget analyst before the Feb. 18 meeting so the committee can evaluate the linkage between the reprogramming and the city—s assumed responsibilities for the substation.