Three San Francisco supervisors were not comfortable in letting the Municipal Transportation Agency lease a new training facility for its Muni operators in South San Francisco, but did move the contract forward full Board of Supervisors without recommendation.
At issue with the Supervisors sub-committee was the justification of the transit agency paying an initial annual rent of $2.5 million, and eventually paying more than $25 million in rent over the nine-year, six month lease term without any guarantees that the transit agency would be able to either purchase the property or continue using it as training center after the expiration of the lease.
The facility is at 30 Tanforan Avenue in South San Francisco. Transit officials said this would be the ideal place to train new operators because of the facility’s 7.3-acre space. The owner is also investing an estimated $12 million to meet the transit agency’s training facility needs such as putting in a constructed paved path for its buses.
SFMTA Director of Transportation Ed Reiskin told the board’s Budget and Finance Sub-Committee Wednesday that the need for new training facility was dire, and that the transit agency faces indirect costs and benefits by not having a more stable place to train operators:
“What we’re trying to do is not repeat mistakes of the past.”
He said understands the Supervisors’ concerns on the increase in rent the transit agency would be paying compared to what the transit agency currently pays in short-term licenses agreements on various properties throughout The City:
“There’s no question that this not an insignificant cost.”
John Haley, the SFMTA’s director of transit, brought back answers to Supervisor Norman Yee’s questions from two weeks ago. Yes had previously asked about the costs to the transit agency for not scheduling classes because of facility availability.
Haley said that the transit agency has had a difficult time finding a facility in the last 15 years to meet the transit agency’s needs. Currently, Muni operator training is sometimes held at the Alameda Naval Base and Cow Palace parking lot, but the properties may not always be available.
He said there are impacts to the transit agency missing training classes such unscheduled operator overtime, which the transit agency spent $920,000 in that category. The previous year, the transit agency spent $6.9 million in operator overtime. He said the cost of missing just one operator class could amount to $415,000 per month in unscheduled overtime.
Daily Muni service could also be affected from the lack of training classes, but that figure has actually improved with less than 1 percent of daily serviced missed in 2015 from 5 percent in 2014.
Haley said though that if the transit agency were to miss a class, it could set the transit agency back in providing reliable service:
“It does jeopardize our ability to deliver high quality standards of service that we’ve come to expect as well as to meet the future service demands.”
Last year, the transit agency held 13 operator classes. None of the classes were cancelled, but the transit agency did reschedule classes because of facility availability, said Haley. The SFMTA is planning for nine operating classes this year.
In the Budget and Legislative Analyst report from Harvey Rose, it stated that the transit agency paid $375,000 in training-related costs, which included renting the facility, moving buses to various locations and additional overtime costs for trainers to work on Saturdays.
Rose said that was still 575 percent less than what the transit agency would pay in South San Francisco.
The SFMTA’s Real Estate and Development Manager Jason Gallegos said that the transit agency has searched for such a facility in San Francisco and peninsula, and that the 30 Tanforan property is the only site available for the transit agency’s needs.
Supervisor Katy Tang said she understood the need to have a more stable training facility available, but still had concerns in the jump in rent and what would happen after the lease term expired:
“This is an enormous cost and there’s still uncertainty passed the nine years.”
The full Board of Supervisors will now hear the lease contract. Tang said it’s possible that her other colleagues could add input into the discussion.
The SFMTA Board of Directors approved the lease contract earlier this year on Jan. 16.
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Why doesn't the MTA purchase the property? Why would we rent? We need the facility and that need will not diminish in the future. Follow the money and you will see someone getting rich off this deal.
It's very simple. The value of the land combined with the cost of improvements is close to $30 million. $30 million that the city government probably isn't willing to pay because they are already dealing with budget shortfalls for different city departments.
So you would rather spend 2.5 million/year and not own it then spend 1.5 million/year for 30 years and own the property??? How does that make sense? Get a mortgage and buy the property! Sell a bond, do whatever it takes. Renting makes no cents.