Response to Comments - Presidio Trust

appeared that the impact of Alternative 2 “significantly exceeded the impact of Alternative 3 on virtuallyevery measure.” PAR believed that Alternative 3 “best meets the project objectives of preserving historicresources, limiting parking and traffic demand, promoting high-quality design and protecting importantnatural resources while being financially feasible.”RPN excerpted text from the Draft SEIS to demonstrate that the document itself makes the case thatAlternative 3 best balances the project objectives, and stated: “[n]otwithstanding the substantial merits ofAlternative 3 in terms of its lessened impact on the environment, its lower traffic and parking demand, itspreservation and restoration of historic resources, and its financial viability, the Trust prefers Alternative2 because it has the potential to generate more revenue.” RPN offered that the additional revenue to begenerated from Alternative 2 versus Alternative 3 is between $200,000 and $300,000 dollars, “less than 1percent of the Trust’s annual operating budget,” and, “of the six leasing objectives, only the financialobjective is better met by Alternative 2 and only by a small margin.” RPN submitted that the financialobjective should not outweigh the other five objectives that are better met with Alternative 3. “The Trustcontinues to fail to explain why the modest potential financial gain of Alternative 2 should trump all otherconsiderations that favor Alternative 3.” Many in the adjacent neighborhood suggested that if the revenueshortfall is only $200,000 to $300,000 per year, then the Trust should give the neighbors the opportunityto fund the difference. It appeared to many of the neighbors that the potential increase in revenue to theTrust over the life of the 75-year lease is less than two percent of the Trust’s annual revenues.Response AL-4 – The Trust’s Preferred Alternative, Alternative 2, has been substantially modified sincethe Draft SEIS. A consistent message received through public comment was a stated preference for theselection of an alternative that reduced impacts on the environment and the neighboring community. Inresponse to these comments, the number of proposed dwelling units in Alternative 2 has been reduced bymore than 34 percent (from 350 to 230), down to the same number of dwelling units as Alternative 3. Asoutlined in Section 3, this reduction in the number of dwelling units results in decreased impacts on theenvironment.The restructuring of Alternative 2 also increased projected revenue. Alternative 2 has a superior projectedfinancial gain over all alternatives except Alternative 1. In comparison to the most similar alternative(Alternative 3), the additional revenue generated by Alternative 2 is currently estimated at approximately$540,000 per year. Neighborhood organizations suggested that projected revenue shortfalls could befunded by residents adjacent to the proposed PHSH site. However, Alternative 3 is only marginallyeconomically feasible and a private developer has not been identified that would be willing to undertakeAlternative 3 to date. Further, the increased financial gain from restructuring Alternative 2 makes thisproposition more impractical. Assuming a five-percent rate of return, to match the projected increasedrevenue of Alternative 2, a financial arrangement similar to a $11 million endowment would have to beestablished for the duration of the lease interest.Compared to the earlier version of Alternative 2, the Alternative 2 presented in the Final EIS has asubstantially more robust financial return coupled with a reduction in the number of units and acommensurate reduction in environmental impacts. This alternative matches the expressed desire thatproject objectives be met in balance with one another.14 Responses to Comments Public Health Service Hospital