San Francisco Budget and Finance Committee Meeting - October 21, 2026

The Budget and Finance Committee of the San Francisco Board of Supervisors met on Wednesday, October 21, 2026. Chair Matt Dorsey presided, joined by member Danny Sauter; Vice Chair Chen was excused. The committee considered a FEMA emergency-alert grant, 10 airport concession lease extensions, an amended lease for the San Francisco Wholesale Produce Market, and a loan purchase and permanent financing for a 100% affordable housing project. The agenda also listed legislation under the 30-day rule (items 261012, 261052, 261053, and 261055), but those items were not taken up during the recorded portion of the meeting.

Roll Call and Announcements

• The meeting was called to order with Clerk Brent Talipa. A motion to excuse Vice Chair Chen passed 2-0.
• The committee noted that Budget and Legislative Analyst (BLA) reports were available for items 2-11 and 13.

Item 1: FEMA Next Generation Warning System Grant

• Jackie Thornhill, Communications Manager for the Department of Emergency Management (DEM), presented a resolution to retroactively accept and expend a $238,480 FEMA grant, passed through the California Governor's Office of Emergency Services (Cal OES), for the 2025 Next Generation Warning System Grant Program.
• The grant, which requires no general fund match, would fund software connecting FEMA's Integrated Public Alert and Warning System (IPAWS) to SFMTA's digital signs at stops and stations. Of the total, $226,560 would go to SFMTA for software development, multilingual templates, testing, and training; $11,920 would cover DEM grant management.
• The grant period runs August 1, 2026, through June 30, 2028. DEM noted the item was retroactive because Cal OES notified the city on August 21, 2026, and Cal OES conditioned funding on Board approval by November 1, 2026.
• Supervisor Sauter asked when alerts would be displayed; Thornhill said initial testing and operationalizing could occur by early 2027, though the full grant period extends to 2028. Chair Dorsey asked about confidence in state funding; Thornhill said DEM is proceeding with City Attorney guidance and is confident enough to continue.
• No public speakers commented.
• The committee forwarded the resolution to the full Board with a positive recommendation by a 2-0 vote.

Items 2-11: Airport Concession Lease Term Extensions

• Daniel Sang of San Francisco International Airport presented 10 resolutions approving two-year extensions of concession leases with no other changes. The tenants include Sunglass Hut, L'Occitane, Marshall Retail Group, Park Café Group, Lady Luck Gourmet, Andalé Management Group, High Flying Foods, Sidewalk Juice, and Rylo Management.
• The extensions were justified by construction costs that exceeded original estimates ($1,300 per square foot for food and beverage, $900 per square foot for retail) between 2015 and 2019, creating financial pressure on tenants. The Airport Commission had authorized similar extensions for 30 leases in September 2019; staff later determined 10 additional leases met the criteria.
• BLA analyst Mr. Bernard reported that the affected tenants spent about 30% more than originally assumed on tenant improvements. The leases collectively provide about $3.4 million per year in minimum guaranteed rent, which would continue during the extension period.
• The BLA and the airport recommended an amendment to item 5 (file 260937) to clarify that the two-year extension applies only to the departure-side retail location in Harvey Milk Terminal One, not the pre-security Wayfare location.
• Supervisor Sauter asked whether fewer passengers in some areas were due to construction or airline changes; Sang cited construction and the ongoing pandemic recovery. Sauter praised the airport for working with retail partners as the city models good behavior.
• No public speakers commented.
• The committee voted 2-0 to adopt the clarifying amendment to item 5, then voted 2-0 to forward items 2-11 (item 5 as amended) to the full Board with a positive recommendation.

Item 12: San Francisco Wholesale Produce Market Amended and Restated Lease

• John Lau from the Mayor's Office of Economic and Workforce Development (OEWD) and Michael Janis, General Manager of the SF Market Corporation, presented a resolution approving an amended and restated lease for the San Francisco Wholesale Produce Market, located near Jerrold Avenue and Toland Street.
• The market, which has operated on city property in Bayview Hunters Point since 1963, is the only nonprofit wholesale produce market of its scale in the country. Its merchants connect California farmers with Bay Area restaurants, retailers, and grocers.
• The amendments replace a rigid schedule of performance with a development plan concept, streamline future review and approval processes, and fine-tune the separate parcel lease structure to help the market obtain private construction financing. The market expects to close on a significant financing package and break ground on a 67,000-square-foot warehouse and distribution building in the coming months.
• Lau noted an additional lease section/exhibit distributed to the clerk would provide a mechanism for the city to allocate already dedicated funds from a Prologis development agreement to the market project.
• The market's food recovery program distributes 4,000 pounds (two tons) of free produce daily, making it the largest source of recovered food in San Francisco.
• Public comments: Patrick Mills, co-CEO of Bi-Rite, expressed strong support for the legislation, saying Bi-Rite works with over 300 regional and California-based farms and relies on the SF Market as an essential partner. Tim Bacon, a member of the Market's Board of Directors, also expressed support, citing the importance of flexibility and financing for the project.
• Chair Dorsey said he was happy to support the item and be a co-sponsor; Supervisor Sauter asked to be added as a co-sponsor.
• The committee voted 2-0 to forward the item to the full Board with a positive recommendation.

Item 13: MEDA Loan Purchase and Permanent Financing for 2059-2065 Mission Street

• Alia Gage, MOCD Preservation Program Manager, and Sheila Gregorius, MOCD Director of Policy, presented a resolution authorizing the purchase of an existing acquisition/rehabilitation loan from the San Francisco Housing Accelerator Fund (SFHAF) in an amount not to exceed $20,258,781, assumption of obligations to complete rehabilitation, and an amended and restated permanent loan not to exceed $22,157,500 with MEDA Small Properties LLC.
• The project is a 39-unit mixed-use building (35 residential units and four commercial units) at 2059-2065 Mission Street, sponsored by the Mission Economic Development Agency (MEDA). It was acquired on September 6, 2024, with a $20 million bridge loan from SFHAF maturing December 1, 2026. Nine households with an average area median income (AMI) of approximately 44% were stabilized, and the building was preserved as 100% affordable housing.
• Rehabilitation includes conversion to all-electric, structural retrofit, plumbing and window replacement, HVAC upgrades, ADA compliance, legalization of a two-bedroom unit, and conversion of two guest rooms into dwelling units with an ADU permit. The ADU permit is expected by the end of October 2026, with rehabilitation completion expected by the end of the year.
• The permanent financing would include an up-to-$18 million Small Sites residual receipts loan and an up-to-$4.1 million Preservation and Seismic Safety (PASS) loan. The loan also includes about $1.4 million for future renovation reserves and a $400,000 development fee.
• Gregorius acknowledged a San Francisco Chronicle article reporting that the Controller's Office placed MEDA into tier three monitoring, the highest risk level. She said the Controller's Office confirmed there is no reason not to proceed with the loan at this time, and MOCD has confidence in MEDA and will work with the Controller's Office on oversight.
• Greg Wagner from the Controller's Office explained that tier three status means severe issues were identified in the citywide monitoring process. He said MEDA has been proactive, engaging outside auditors, changing financial controls, and accepting technical assistance. A corrective action plan will be developed, with more information expected within the next couple of months.
• MOCD outlined loan safeguards: as a closing condition, MEDA must fully address findings from its FY2025-26 monitoring letter; the property will be added to quarterly reporting alongside MEDA's 15-site refinance bundle, making 16 properties total; key performance indicators on vacancies, operating budgets, and rent delinquencies will be tracked. The $400,000 developer fee is at risk and can be reduced if lease-up milestones are not met.
• BLA analyst Mr. Bernard noted the remaining construction work is about 1% of the total budget and highlighted the loan conditions and check-ins on vacancies, but stated he considered approval of the item to be a policy matter in light of the recent monitoring findings.
• Supervisor Sauter expressed concern about the recent reporting and the novelty of the information, and suggested the committee could benefit from a few more weeks to gather information from the Controller's Office and MEDA. Chair Dorsey echoed those concerns and asked about the hardship of a delay; MOCD responded that the loan includes approximately a 30-day interest reserve cushion, which aligns with a few weeks' delay.
• Public comment: Daniel Cruz, a MEDA project manager, thanked the committee and MOCD and emphasized the importance of preservation housing for tenants at risk of displacement.
• The committee voted 2-0 to continue the item to the call of the chair, with Chair Dorsey committing to prioritize the item and return within roughly one to three weeks.

Key Outcomes

• Item 1 (FEMA grant) forwarded to full Board with positive recommendation, 2-0.
• Items 2-11 (airport lease extensions) approved as amended (item 5 amended for the Wayfare clarification) and forwarded to full Board, 2-0.
• Item 12 (Produce Market lease) forwarded to full Board with positive recommendation, 2-0.
• Item 13 (MEDA loan) continued to the call of the chair, 2-0.
• The meeting adjourned after no further business.