>> calling this meeting to order. >> [roll call] >> approval of minutes for the september 14, 2010 meeting. >> all those in favor? >> item 3, public comment. item four, executive session. >> all in favor?>> good afterno. we are going to call this meeting to order. >> move that we meet in open session. >> all in favor? >> i move that we not disclose anything in closed session. >> all those in favor? thank you.

>> commissioners, before we go any further, item 11a, a request approval for the san francisco water taxi for water taxi services to hyde street harbor and pierre one-and-a-half is postponed to october 12. we promise it will be heard at that time. item six, please be advised -- please be advised that the ringing of and use of cell phones, pagers, and similar sound-producing electronic devices are prohibited at this meeting. please be advised that the chair may order the removal from the meeting room of any person(s) responsible for the ringing or use of a cell phone, pager, or other similar sound-producing electronic device. please be advised that a member of the public has up to three minutes to make pertinent public comments on each agenda item unless the port commission adopts a shorter period on any item. item 7a, executive director's

report. >> good afternoon. i will be quick. thank you for joining us today on this beautiful but warm day. welcome back to the waterfront. i have a queue item to report on. the first is to give an update on our public workshops related to the blue green way planning, which is exciting for us. the next round of community planning workshops will be this wednesday at tier 1. that workshop will focus on the central blue-green way, a central area running to the northern boundary of hunters point shipyard.

that will capture a great. there. then a week later, on october 6, again on pier 1. the next meeting will focus on the northern greenaway. we encourage anyone interested in how the greenway will be interested to come to the meeting. if you would like to see the material about the blue green way in advance, you can go to the port website, sfport.com. very exciting for us. secondly is cuesa's the eighth annual sunday supper. i cannot believe it has been eight years already. as you may know -- it is october

3, which is coming right up, at 5:30 in the ferry building. every fall, cuesa brings together market chefs, community members, and others for a feast to educate and support local farmers. there will be a reception followed by dinner at 7:00, a four-course supper served family style. there will be tableside carving, live options, and former presentations. each guest joins a communal table and enjoys a meal pair -- prepared by one of six chefs. it is a pretty amazing evening. next is to announce that next wednesday october 6, we will be commencing our shore power project. that is at 11:00 a.m. at pier 27.

because it is in a secure part of the facility, it is not open to the public, but that will take place on october 6 at 11:00. as you will recall, the port has partnered on this project with the epa, san francisco public utilities commission. we are grateful for all of that and look forward to plugging in the island princess. finally, it is about time to commence fleet week again. it will be from october 7 through october 12. and the fleet week of that does not start until october 7. fleet week is produced by the san francisco fleet week association, which is governed by a board of directors headed by general michael myett.

the mission of the association is to honor the dedication and duty and sacrifices of the men and women of the u.s. armed forces and to conduct a training. in new event, senior leaders seminar to discuss military capabilities. search and rescue training by the san francisco fire department. the air show with the blue angels will again be on saturday and sunday, october 9 and 10. that will be from 1:00 to 4:00. the parade of ships will begin at the golden gate bridge on saturday at 10:00. this year, the marine corps is also sending several hundred marines as fa.

the u.s. navy is also dispatching five ships. these ships will be open to the public and will be berthed at pier 27 and 35 in the northern waterfronts ,30 and 32 in the south. >> thank you. any comments? ok. >> item 8a, consent calendar. request authorization to advertise for competitive bids for construction contract no. 2746, 5-year maintenance dredging project. >> any discussion? all those in favor? any opposed? ok. resolution 10-67 is approved. >> item 9 a, informational presentation regarding san francisco public utilities commission proposed fats, oils,

and greece control ordinance. >> good afternoon, commissioners. in september 2008, you approved the port's adoption of a sanitary management plan. we are required to have that as a center operator and we are not permitted to release oil into the city. the manager of the puc will give you the draft board blueprint.

>> good afternoon, commissioners. i apologize for the graphic nature of my presentation today. i am with the sfpuc, sewer department, water enterprise. my job is to implement and manage programs that keep pollutants out of the sewer system, which are required by our permits. not only are they good for the environment but they are required by permit. we are going forward to the board of supervisors with a resolution that has already been approved by our commission for an ordinance that will help control greece in the sewers. this is an example of a sewer lateral. i am pretty sure this is coming from a restaurant. it looks like water, but this is hard in the crease with a trickle of water. this is what happens when it hits the name servers. the first one to the left is a manhole cover when you look down. we had to jackhammer that one out. it is not a pretty subject but

we have known it has been a problem for a long time, and we have inspectors that go out and have been teaching restaurants in the city about not pouring grease down the drain, dry white thing plates. we also started the sf grease recycling program. restaurants were interested in that, and companies are also picking up for free. it has a market value. what we are finding -- this is just to say that this is a suite of programs that we have to keep people from dumping things down storm drains, a chemicals in their homes and businesses. the question is, why is this happening? it turns out we have local ordinances that should be controlling this, both support and puc. the plumbing code of the port and city both require that they have grease-capturing of equipment.

the public were coded which regulates the source system has requirements that says you could only discharge a certain amount of greece into the sewer system. both of this is to help us comply with our treatment plant. what we are finding is our crews that respond to work orders, over 40% of their calls have to do with trees. when you break that down into staff time, that is over three and a half million dollars we are spending on grease, despite the existing laws, it wears on the pipes, and it keeps people from dealing with more proactive inspection that could increase our levels of service. we started investigating a few years ago why this clause. there are about 3000 restaurants in the city that are potentially discharging grease. we found a lot of them do not have any equipment at all, maybe the owner of the building

changed hands, or that they do not clean it. what we realized is, historically, there is a gap in regulation where the department of building inspection, port inspectors will require that a new restaurant puts it in, but nobody goes back to look at it to make sure it is maintained, serviced, or kept their if the restaurant changes hands. what we have developed with the golden gate restaurant association and other key stakeholders is an ordinance that clarify existing requirements about cleaning and maintaining your equipment, making sure is fully operational, that you have it in place, and also, it will move more restaurants to modern equipment. before i get into the specifics of the ordinance, we have been working on this for several years. in your package there is a level

3 letter of support from the golden gate restaurant association. -- there is a letter of support from the golden gate restaurant association. we have done door-to-door outreach. we have been out there. hopefully, people know this is coming. in a nutshell, the ordinance make sure that people continue best management practices that are already out there. we will give more guidance on how to properly manage the grease that you get from your traps. it will also clarify that you need existing equipment for the plumbing code. new factors have to do with the type of equipment. there are three kinds of greece capturing equipment. grease trap is your typical trap. to the left is a clean one. to the right is what it looks like when you do not claim id. a large interceptor -- this one

is outside of a fast-food restaurant. there are not that many in the city because of space. it is technically not feasible in many parts. so you have to trap the first one, and then you have this new automatic device. this has mechanical parts that skims the grease off and a basket in front that helps to remove food waste. here is a picture of it on the right, tied into a three- compartment washing sink. the benefits of the d r d, cleaning it, it is not as offensive. it pulls out a solid, and we are looking at opportunities to reuse that race -- grease. the one new thing in does do, because we are this your department, we care what you discharge, we recorded categorize restaurants based on their risk of discharging greece to the sewer. there are four categories.

that depends on how much they cook, how much -- or kind of cleaning devices they have. this will be a category for a place that reheat food, maybe a coffee shop. they are not required to do anything in terms of grease- capture equipment. it will simply clarify that. then it goes all the way up to category 1. for example, a steak house that has a lot of greece but has no equipment. those in category 1, that have been violating the existing code, they will be required to put in the automatic grease removal device. other books with existing equipment just need to service and properly maintained it. there will be some clearer standards on that because we are finding out that most restaurants do not know what that means. the last thing i will touch on has to do with cost. the reason it has taken us so long to get to the board is because the grd's are more

expensive because they are automated. we have some vendors come out to give us some qtuotes -- quotes locally. they can range from $1,000 to about $3,000. one thing that we are going to do is reduce the loading charges that restaurants pay. right now, you pay a floating charge for the amount of oil and grease you're putting into the sewer. we figured out, with this equipment, you would be lowering the amount of oil and grease, so we take that loading, it would lower your sewer bill oby about 14%. that makes the return on investment for this occurred in between one year and five year. there are also benefits.

if you're laterals are not clean, they have to pay to get them cleaned out. the last one talks about the interaction with the port. you have your own inspectors. in other restaurants, we would be dealing with tbi. when a restaurant goes in, we tell somebody they are a category one, inspectors just need to know that they need to put this kind of equipment in. they can keep the same role of ensuring that it is up to code. i think i will end on that note. in terms of next steps, we have gone to the commission. we are approaching the mayor, board supervisors, to see who would like to sponsor it. then we will go to the board to get it adopted by the end of the year. >> any questions, commissioners? aside from getting my cholesterol checked next --

>> i tried to avoid the analogy of arteries. >> i know that fishermen work has done some things changing out things, pipes. i think the change will be noticeable. >> we are looking at a lot of issues working together with the port. >> thank you. any public comment on this item? >> item 10a. request approval of term sheet for seawall lot 351 with san francisco waterfront partners as part of the washington project. >> hello, commissioners.

i am with the port planning and development staff. my name is jonathan. i am here to ask for your endorsement of a term sheet for see what 351 project as part of the 8 washington over all development. i put up on the projector a slide showing the site. it is about two-thirds of an acre. as a way of background, the commission authorize support staff to issue a request for proposals for development sub medal in 2008 for this parcel. we received a proposal in december 2008 from san francisco waterfront partners. we evaluated the proposal and came to the port commission for recommendation of a development which was awarded in 2009,

subsequently, imports have entered into a negotiating agreement in august 2009 with the developer. i am here today to present the term sheet that came out of those exclusive negotiations and asked for your recommendation to move on the endorsement and to endorse the term sheet. i should also note, in february, the port commission directed staff to work with the planning department's staff to come up with a planning study for all of the sea wall lots, especially parking lots, between washington street north to north point street. this was a study that the planning department designated as the embarcadero study. they concluded that in july 2010. after that study was completed, park staff work in earnest to negotiate a term sheet with the developer. that is what we are presenting here today. i will present the financial

terms of that term sheet. then we are going to go into the opportunities for the developer to have opportunities at the site. just to be clear, the 8 washington site, which should be up on your screen, is a compilation of steve a lot 351, which is currently at the bottom right -- see what 351, which is currently at the bottom right. the project happens to be combined with the adjacent to one-half acre golden gate tennis club. in their original some middle in 2008, -- submittal in 2008, they propose building residential homes up to jackson street, and

then reserving the rest for the swim club, four tennis courts, and a park. after the study was completed, that was slightly revised. they have already submitted a revised application for the process. just before i launch into the business terms, i wanted to say something about where we are with the term sheet. essentially, the term sheets for the economic parameters and other fundamental terms with a basis for negotiating further transaction documents, leases, a property transfer agreements, etc. these are project approvals that will have to happen after environmental review occurs and other regulatory action. there is an understanding that the project will continue to evolve around this public and regulatory review process. the process is subject to completion of environmental

review. that review will look at a full range of environmental program alternatives and any mitigation measures necessary brought forth by this ceqa review. the term sheet may be subject to further changes in the course of that review. during this extensive public approval process, there will be ceqa review, we will also be forced to respond to other city, port, and other public concern that come forward. the term sheet is very limited to the use currently proposed by the developer and does not cover all the potential uses for sea wall lot 351. the port may consider other uses as part of the approval process. term sheet may be amended along with subsequent proposals to change the mix of uses, intensity of development, or other fundamental terms.

along with any underlying document, the term sheet is not intended to be contractually binding until the party executes on the transaction documents. that being said, that is where we are in the process. one of the fundamental differences between the proposal received in december 2008 and the current term sheet has to do with transaction structure. that was contemplating a structure where they would lease the entire site for 66 years as part of the project. what the developer has proposed and this term sheet reflects an agreement, with park staff and the developer, something more complicated. essentially, a swath of public trust on certain properties of seawall lot 351, 6 certain

portions of the golden gate tennis and swim site. the current parts of the 351 that have the public trust are in great. the new areas that will have the public trust are in green. essentially, it will line public use on the site, would -- from what it is, parking. it will create waterways, corridors, and other opportunities. that is the fundamental change in the transaction structure. that led to changes in how we were caught bucket -- contemplating payment. we are essentially looking at a sale. a lot of the area south of the jackson street right away would be reserved for two residential condominium buildings, contemplating between 14070 to

170 -- 140,000 to 170,000 units. that part of the land which we sold are currently on 351, in gray. what we agreed to in the term sheet is, the sale price for that parcel will be the number of loads. the first cash payment will be $3 million at the stabilization of the project. no later than one year subsequent to finishing construction of the building on the site. in addition to this payment stream, this cash payment, the developer would agree to put covenants on the property and all the condominium interests in the property equivalent to half of 1% of all sales of residential condominiums, all but the first sale of any commercial condominium that results from the project. the developer would then go further to say all first sales

of the residential condominium, that half of 1%, would be geared to to bring forth the port no less than $2 million of proceeds. that is the second form of payment. burke form is all commercial and residential condominiums moving force will be subject to the sale. as the properties turnover, moving forward, we project an income stream from the property. it would amount to about $25 million over the 66 years that we were originally complicating. $41.3 million in at bellevue. -- net value. it is hard to follow numbers, so i thought i would put up the numbers i am talking about. that is the third form of value, the tale of proceeds from these covenants, moving forward.

also on the green park parcel, which the port would now have and be with the public trust, the developer would pay $125,000 a year escalating annually for 66 years and would prefer to par commitments on issues of perpetuity. depending on how the ceqa and planning process goes, there is planning for some commercial uses in the screening areas. you can imagine either a cafe, restaurant, to help enliven the park. the park would receive 50% of gross proceeds from that enterprise. -- 15% of gross proceeds from the enterprise. altogether, the total net present value basis, as if we were being paid today, about $10.1 million in value. the other benefits to the port is through public financing mechanisms. as we