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 know, the port has the ability to create districts for infrastructure and other improvements. we currently have an enhancement of the ifd law sitting on the governor's desk. we hope it will be passed. that being said, one of the agreements of the ifd would be for the developer to include the golden gate tennis and swim site in the district. in that case, all the condominiums, residential, commercial, the increment to the property tax would be followed to the port. this is something that we value at about $2,000 a year.

we are estimating the bonding capacity at about $24 million to be used for port improvement. in exchange for agreements put forth in and ifd district, the board would agree to suspend up to $5 million of qualifying public improvements on public parcels that are related to the project. either on the park parcel or on the surrounding public ground. in a similar vein, the court agrees to work with the developers to create facilities and community districts. these are meant to be funding public use projects. as i mentioned, over all, it has benefits in the magnitude of about $10.1 million of direct payments support. over time, the ability to

increase the ifd revenues the port can expect to capture. overall, our assessment is transaction guarantee short-term payment, payments up to $5 million in the next couple of years. it will enhance our long-term lease revenue through the park and other commercial revenues, and provide the part report -- port new mechanisms. given the current state of the market, this financing structure allows the port to unlock the value of these sites by unlocking stabilization and receiving long-term compensation on these properties. that is the financial analysis. i want to take a couple of moments to allow the developer and architect to tell you about the project as it is currently proposed. >> good afternoon,

commissioners. thank you for the opportunity to present to you today. as you know, we have been coming to you since july 2005 with this budget. as jonathan pointed out, you awarded this subject to a planning process. that was expected to take six months to eight months. the study actually took 18 months. and vigorous meetings, a lot of work on both parts of staff, and through various extensions of time requests, we made a lot of

studies, models, and today we will be showing that to do. we recognize that any time that you build a project in san francisco, you will get a great diversity of opinions. you cannot build in this city without vigorous debate. sometimes the opinions are divergent, in fact, contradictory. these are terms that have been used to describe now successful projects such as the embarcadero, the ferry building. we enjoyed this vigorous debate about what is best for the neighbors, the city, which is greater benefit. we fully appreciate and respect

that many of our neighbors have legitimate concerns to preserve their standard of living, quality of life, amenities, and even their views. at the same time, we appreciate the port must execute its fiduciary duties under the city charter and balance these concerns with the best interest -- interest of the port, a city at large, state of california. resolving these issues out is arduous, complicated, and we appreciate the hard work that our neighbors have put in. we will never get unanimity in this city. but we are going to show you today what we believe is a best project to recognize the value of combining your land, 351 with

the golden gateway, and the benefits that we have been able to produce not only for the neighbors, but city at large. for five years, we have expended $25 million in try to get to this point. we have retained one of the world's leading architectures who will present today. we think the proposal should meet the port's subjective -- objective on sustainability projects that serves the public at large, while providing the board with economic sustainability, which will enable it to realize some of its capital obligations, public area improvements, rehabilitation, infrastructure, and the like. i would like to introduce craig

hardeman, our lead architect. he has a tremendous team behind him. craig is going to -- push the first button. this is what jonathan was saying for those of you in the audience that are not familiar with this site. the red islot 351. in green is thegolden gateway. ústhe combined site is arguably the best use that was contemplated in the northern waterfront plan. &p>> thank you, commissioners. craig hartman. it is a pleasure to be here to present this project. the project site is extraordinary, as simon said.

as you know, one of the great civic places in the world with the removal of the embarcadero freeway. this has become an extraordinary place in the city and an example of what a waterfront needs to be. you see here is, in my opinion, a gift to the city. it begins with a public open space which is almost 20 times what currently exists. n 20,000 square feet is more than the entire seawall lot 351 @bñcombined. this space will be very active on the pedestrian level, including resta, private recreation, residential -- 155 -- 165 units facing south of jackson street. residential parkingpvñ and publc parking of 255 spaces, which will support the activities of the waterfront.

spaces for computers and walkersvañ withine basement level of this project. level of this project. we have clear principles about like for a city, including strengthening the waterfront significant open space. this project doesç beginning at washington. it designed apartment is recommenód narrowing the street, straightening it, making it more pedestriançy friendly,d making a strong connection from the waterfront to the street. s?second is opening up the view, as you can see on the left-hand sidek@ -- the

articulated that there is a green space. it would open up to the waterway, jackson street. along the northern section at the pacific,á to the waterfront to create a neiwood park that is of the proper skill and support of the neighbors in the district. )hthe program itself at grade  important in terms of its activity and vitality. his partners have been /+especially passionate about. as you can see, it begins from the north end, repair shop, child-w care. that will support the park on the north side. we talk wraps around the corner of additional retail surrounding

the site. it will be an of course, adjacent to one of the primary mass transit systems in the muni ystem, the trolley system adjacent to the stop. withkçñ this, a series of these trials represents over 18 points in. it will be very porous. itdw will be a space that is active and supportive of activities' as well, the removal of curved cuts at5m embarcadero and washington. 2rit will be replaced by simple and clear and vehicle access. the green#n triangles' shows access to secured parking, again for bicycles,úc walkers off of

washington. and;' as you may remember, we previously had two curb cuts) along washington in response to the planning department á[commentary. we reduced that to a single, to make this more pedestrian favored. z importantly, this site very much a part of the city's top biography, its urban typography. z>ñ--)k topogrophy. ret+tjp(hy that is created by this, jagged peaks and valleys, is similar to the peaks and3rku. is import we honor the general quality of this as it tapers j6from the financial district dn to the waterfront, into the northeast sectionvzñ of our cit. even along the waterfront itself,2[ defined by the hotels,

plaza,7 the neighborhood. looking at this in detail,dm tht little yellow swish is that we are talking about. you can see how it fits within the larger context in terms of its relationship to urban form. 4khere we are looking down on e site from the water. you can seevív how this projects massed in a way that brings the waterfront of to meet'"ç the financial district. on the other way, steps down to meet the neighborhood. itc! is anchored at the north ad by the pacific park. to the recreational park, finally to the/ dwelling units n the site. nebraska waterfront embarcadero study recommended northeast water from

embarcadero study recommended certain things. to be more clear]w about it, if you simply shade in white the areas6=u$at comply precisely wih that planning study, you see this are significantly below northeast embarcadero study would allow. m@then there is a small area tht is also above what is recommel blocks of dwellings which are in the.o shadow plane created by e davis court p it. -- tower adjacent to it. ñ

feet. if you take the average height of allz the the project from the corner of drum street and washington all the way to the park, the average height is about 36.5 feet. 9fthe massing of this and architecture was meant to bthe y level. simple, elegant, mat that are limestone, teak, and glassñ, green roofs, and will also be at the highest levelnlñ of sustainability in terms of survivability and sustainability. )&ñthe massing looking back from north to south, the product w1oe city. we believe it will be an elegant addition tob7 our great waterfront. with that, i think we will summarize the financial (jp&e%ei view of the financial proposal,s

then jonathan presented. it has to dotyu with more -- wee optimistic about this development. the total paym subject transfer were calculated 1.5% per annum escalation in real-estate prices. the average for theké last four years in california has been 7%, so we used 3%. v8we also used 99 yearsm$ perpetuity, even though the four releases 66. we just want/q to emphasize subsequent transfers in total annum would be three and $27 $405 million. $327 million, a net present valuew

it would result in total p9p to the port of $13.4 million against the rfp that was before the crash. p$we are very pleasedn; that s constructs that we have worked on for a number of years with port staff has resulted insometa long-term benefitjb for the port and set a precedent that we hope n enormous amount of benefit for the city. quickly so people do not have to readx8ñ it. ad best use for the land. we calculate the ifd a $40

million benefit which can be used for public focuses a the waterfront, and in addition to gramm values. we are delivering an areaés of public open space which is greater than the area we are buying. back. participation and and sales from fees, e feet of measurably improved/e%ec open space, about 51% of the retail restaurants for the securing the neighborhood. the taxing from a financing perspective to the port. bzi think i can spare you any more of9$ this -- thank you. >> thank you. outlining next steps.

courts have asked for the commission endorsement for the term sheet. e1ñif you endorse it, we will me their endorsement of the term sheet. as you recall inke the 2004 management audit of the port by the board of supervisors' budget analyst, one of the recommendations was that the board of supervisors should get ead of the term sheet, to make sure that the boardíáz is exercising its fiduciary responsibility to insure the port isw5rás best value for the money. we are hoping that thesekañ transactions -- that they will agree that this is a good project for the port. feel that the questions. i did want to point out some minor correctionsr# may occur to the resolution. they are on page:u÷ 8, resolutin

10.66. the two final whereas clauses e in the second to last clause,ay the project plans are showing exhibit b,13 not exhibit a. and for the last clause, áú term sheet is shown in exhibit b. ib÷ would ask that those amendments are made to the resolution. with that, we questions. >> so moved with the amendment. >> commissioners, any questions? ok, iñp have a stack of public comment cards. we want to make sure we hear ñ everybody. we are allowing three minutes. i will call a couple ofa( namesn advance, so if you can be prepared to go. íwand please be mindful of the clock. first public commentmuñ from brendan done again.

>> goodsññ afternoon, commissioners. pleased to be here. san)855jz resident. i am raising my children here. jmr+ely, as a city, this project clearly represents something that is better than what is thereñ(x now. i wholly endorsedzmñ project and would ask for your support. one of the things i would share is,p8ñ i have spoken with a frid of mine who lives at the golden gate apartments. we discussed the positive attributes, negative attributes, as his adjacent residents have shared with him. he also endorses the project. of the group andn he is, that is something that is impossible because he would be ostracized;5 by those who he lis with. the issue