certify the sanctuary, implementation of ios environmental management systems, a year-one refuse diversion goal of 81%. perhaps that is a time a bit of information considering the previous item. and development of an environmental education program -- all of this would work to green standards. they have committed to certify the concession of the green restaurant. as i mentioned earlier, ortega is very committed to the community and interested in working with the existing major groups and education groups that frequent stow lake to continue to provide the educational opportunities both for san franciscans and visitors, and particularly for our youth.

ortega proposed to work with naturalists. there will be walks around the lake. there will educate people about the nesting habits of the blue heron. stow lake is the only known nesting site of the blue heron in san francisco. they would offer demonstrations to these groups and organizations so that they could, in addition to the nature walks, they could bring people into a comfortable environment for expanded discussion about what they would have just seen on their walk. there would partner with the unified school district to provide region to promote educational awareness and provide reduced cost field trip opportunities. the benefits to the city of the ortega lease, obviously, first and foremost, the nearly quarter million dollars in capital improvements we would see up front into the boat house -- taking stow lake

boathouse of the ledger and to the list of places we do not need to worry about. there will be a dedicated capital maintenance fund so that in your 12 or 13 of the lease, we will have a building in great condition, as well as in year one of the lease. the personal property fund, the equipment matches the condition of the building. the purchase of an all new fleet of boats, a rejuvenated experience for users, and rent of $200,000 in year one of the lease. i'll also wanted to talk a little bit about the projected benefits to the local economy of the ortega lease.

in addition to the sizable and significant benefits to the city, there are numerous benefits to local economy of the lease. those include the fact that ortega will be working with a local architect and a local construction company. they will be using a local manufacturer to produce all of their furniture on-site. management and staff, pursuant to the expanded food service menu, comes a need for a larger staff. ortega proposes that they will roughly double the current staffing levels to support the increased food service. all of the staff will be hired locally and pursuant to the city's ordinance. frank kline as a restaurateur, as is the executive checf.

in addition, with the commitment to purchase all of the food supply from within 100 miles, comes a direct benefit to the providers. this is a list of some of the local food manufacturers and farmers that ortega will be partnering with to deliver the expanded food service. one of the things i wanted to point out, the comparison between the existing lease and the proposed ortega lease. in the existing lease, we have a term of 15 years. in the proposed lease, 15 years with a five-year option. in the current lease, we have a minimum rent of $110,000. i should note that that $110,000 does not include bike rentals, which are no longer going to be a part of the stow lake boathouse. we wanted to separate them out

so we had a true apples to apples comparison. $120,000 for the current lease for the minimum rent. the proposed ortega lis, a minimum of $140,000. the boat rentals are the largest slice of the revenue pie. it would go from 31% of to 33% of revenues. the food and beverage percentages would go from 21% of to 10%. as i said, that reflects the fact that we're implementing a full menu. the industry standard for a cafe or restaurant in terms of their percentage rent is about 6% to 7%. this is aggressive rent we have negotiated. we are confident we will see some revenue come out of that. particularly in the fact that we will go from a situation where people might have been purchasing an average ticket of

just a few dollars to perhaps, since they're buying a sandwich and a drink, perhaps we will say a $5 average ticket. we will see growth in that. we project those revenues staying flat. the percentage of gross retail revenues actually goes from 21%. i realize that although the current concessionaire does not operate a retail concession, in negotiating the lease, city staff and the current concessionaire did agree that he should pay 21% of gross retail revenues to the department. that has never come to fruition, since the retail section is not operating. the new value of the capital improvements, not applicable in the existing lease, would be $233,000. the ongoing, dedicated maintenance budget would be 2%

of bloggers revenues. the ongoing -- 2% of gross revenues. at the end of the day, in comparing year one ortega revenues to 2009-2010 actual revenue from the current concessionaire, we would see the number increased from $153,000 up to just over $200,000. it is an increase of roughly 33%. the comparison of the last five years of revenue vs. projected revenue for the first five years of the or take a lease shows $748,000 for the currently send just over $1 million for the ortega lease. the average annual rent for the last five years of the current

lease, $149,000. the projected average annual rent for the first five years of the ortega least, $212,000. that is a difference of about $60,000 per year. i prefer to measure things. that is about one gardener that would be retained in the park system. throughout this process, the department has undertaken a significant and extensive community outreach effort that, prior to the issuance of the rfq, that has included multiple community meetings, meetings with previous bidders, meetings with the state of the stow lake boathouse coalition, meeting with supervisor mar, conversations in e-mails with over 70 individuals and organizations, posing as rfq on the website, -- posting the rfq

on the website, and there is more information in your packet. there has been a significant amount of outreach. in the interest of brevity, i did not include all of it in my presentation. during these lease negotiations, staff has implemented and following -- and follow the following policies, a community meeting held on november 3 in the county fair building, a meeting held november 8 in the county fair building, meeting with the leader of sf nature, meeting with the planning association of richmond, meeting with eric maar and carmen chu, alerting all interested parties and notifying individuals with -- notifying individuals online, and posting

the notice of this meeting at the stow lake boathouse in four separate locations. i should say that we did have a problem with them notification falling down on a couple of occasions. we had to go back up and replace it on two occasions. in addition to the department community outreach, there has been a lot of press attention to this. on august 17 -- i won't go through all of these. we have had articles in "the examiner," "the chronicle," postings on local blogs, an article in the community newspaper "the marina times," an article in "the richmond review

," and these articles have been naturally occurring as recently as this sunday. today, we had two articles touching upon this. a little more media coverage. next steps, upon commission approval of this lease, the next step would be for the staff to take this item to the board of supervisors. in working with the office of supervise mar, he agreed to sponsor this legislation. we are thankful to him in that effort. we appreciate his sponsorship of this item. additionally, there is an informational item before the historic preservation commission on december 15. staff will be attending that hearing. that hearing will be addressing

-- there has been a nomination from the community to nominate the stow lake boathouse as a landmark. this is an informational hearing to determine the appropriateness of that. staff will be present at that hearing and will be expressing the significance we have held over the last few years to treating the boathouse as a historic resources, to working with the historic preservation commission, which, glenn beck overcome all the documentation show our commitment to working with historic preservation in ensuring that any proposed improvements at the site reflect the historic nature of the building, and additionally, approval of any capital

improvements will be subject to the approval of this body and the appropriate regulatory bodies including potentially the planning commission and the historic preservation commission. i would like to show a list of some of the supporters and opponents of this project. with that, i make myself available for any questions. >> i met with some community members earlier in the week. the issue that was outstanding for me was the issue of insurance. it did not show up in some of the documents. could you comment on that? >> in inserting language into the lease, that his language that is not inserted by departments that. the city retains a team of risk managers that review each

proposed contract and determine the appropriate insurance levels and the appropriate policy types. in working with the city's office of risk-management, they determined that as this lease is for small boats, pedal boats, rental boats, there is not a watercraft liability insurance -- it is not necessary. the general comprehensive insurance limits are sufficient. we double checked that and triple checked at after hearing some of the community concerns. we have been assured thoroughly that the insurance levels for the contract are appropriate. commissioner lee: a received the letter as well as the commissioners from the historical preservation commission. what impact would -- i am wondering what would happen if

they did emit a historical site. would that impact the capital plan? what would happen in that case? >> let me back up. this is an informational item only. there is no action on the item on december 15. the commission could decide to hold an initiation hearing at a later point. should the property -- should the initiation process be initiated for landmarking, there were the 180-day hold on the property. the building would be treated as a landmark. no improvements could be made to property.

they would work with staff to determine the appropriateness of making docca stow lake boathouse a landmark. should it be decided to be a landmark, we would work with historic preservation commission and the leasee to implement improvements to the building that met the requirements outlined in those documents. commissioner lee: if the improvements, if it restricted your improvements, where a cafe, perhaps, what if you could not do it, what with the remedy be in that case? >> in that case, what the lease provides is that we would essentially work with the city and the of leasee would work with each other to develop an

improvement plan. we do believe that the idea of landmarking the interior of the boat house is one that, while we strongly feel is something that should be maintained, the exterior, this idea of maintaining the use rather than the physical attributes of the building is one that department staff would like to have an extended conversation with hpc about. if the interior and exterior of the building were ultimately landmarks, we would work with aleasee to develop an appropriate plan. that plan would come back to this policy body for their approval. commissioner lee: i suspect the lease would be changed in that case, given the revenues from the cafe would not be existent, in that case. >> we -- i think that point,

there would be a need to potentially amend the lease. i think we should note that there are not very many examples of a use itself being landmarked here in san francisco. that is what we would be talking about, preserving the use of the space as a historic landmark, rather than the physical attributes of the building. >> i would be happy to answer any questions you have about the overall landmarking process thathpc -- that hpc is talking about. in our multiple meetings informing the decisions about whether to initiate a landmarking, and in conversations with charles, the chair of that commission, it is clear that the focus of hpc is on the physical buildings themselves in golden gate park.

we are not having conversations about uses. we are even talking about conversations -- excuse me. i am dehydrated this evening. we are talking about landscape. i think the focus of the conversation are around stow lake should -- are around stow lake, should step aside it is a contributing feature toward the landmarking effort, that it will be focused on the building itself. president buell: commissioner harrison? commissioner harrison: i have a question. there is nothing on the exterior of the building that will be changed. >> there will be some new paint put on, and some of the elements that have been disrepair will be repaired. i should note that this is, as i

said earlier, one of the reasons we chose ortega, they have experience working on his tour buildings. the recently completed a renovation of a concession where it was an approximately 7-year- old building. they undertook a historic round is -- renovation of the project. they restored it to standards. they had to balance the standards and the leases standards, at times, conflicting requirements. it speaks to their capacity in performing renovations on projects. one of the other projects they have worked on in the past, probably known as the oldest house in the united states, it was a property built in 1610, made of adobe mud. they undertook a renovation of that property. these are the qualifications we were soliciting, pursuant to

the commission's direction in issuing the rfq. commissioner harrison: one other question. when this started, commission asked for an inspection of the building. a general structural, and if there was a seismic necessity, repair necessity. what happened? >> our team went out to look a the building and performance evaluation of the building. they found the building was in generally sound condition. some buildings were in need of upgrade. the work was outlined as necessary. that is reflected in the ortega a proposal, upgrades to the hvac system. they found the building in generally sound condition. commissioner bonilla: just for clarity, and for the purpose of discussion, we are here not to

discuss the merits of both bids. we are here just to discuss the merits of the lease. that is all we are here to do today. is that correct? >> that is the policy decision before the -- commissioner bonilla: the bids are no longer on the table. the ortegas have won the bid. we aren't just now looking at the least. that -- we are just now looking at the lease. >> correct. we approved the selection of the commission. now, the decision before you is to either approve or disapprove the lease of ortega. president buell: see no other

commission questions, let's proceed with public comment, margaret. >> [reading names] president buell: i see quite a stack of those cards. we will continue with one minute. if you would give thought about how we would like to proceed, the chair would appreciate it. thank you. >> thank you. my name is kristin. i walk around stow lake. i did not realize the lease -- what ever.

the main thing, though, they say the outside is going to be kept original. a to sayboathouse. -- it is a boathouse. where is the boat hoist? it is gone. it should have been kept as a boathouse. there are six tables. we sit out there anyway. i feel boathouse needs a boat hoist. >> i will read more names. [reading names] >> commissioners, i am really amazed at what i am witnessing here tonight. it seems to me like there is an unlevel playing field here. as i mentioned, i think you are

playing with the fabric of san francisco by stacking things so that it is not fair to the people. why should we have a democracy so we come up and talk to you, you are ready make the decision, the deal has already been done, and you just rubber-stamp it? i think it is a crime. i think -- i wish there was some sort of spirit that i used to see in the city about caring about people's lives and about the history. it seems like in the last few years that, it seems like the leadership of this city and all the people who have been selected like yourselves, i am sure you are all fine people, but there is a mechanism going on in our democracy today where the people don't count. your unanimous decision with the last vote to rubberstamp that deal with the testimony that i heard is shameful.

i think you ought to be ashamed of yourselves. here is a man -- how was a man going to improve his -- improve his business if he is from a long from year to year on a lease that has no framework? you where the guy down. then it is time for willie to come in, or newsom to come in, and work out a deal with new mexico. i think it is a shame. [applause] >> next speaker, please. >> i am born in san francisco. i'm a native san franciscan, property owner, a registered voter. i did not vote for any of you. i agree with this man. the deal is done. we didn't even get a chance to say how we feel about what stow lake means to us. our city, we walked in there

every day. do you walk there every day? they will take thatboathouse and they will want to bring more people in. what about our roads? it is already crowded with traffic. no more traffic out there. that is not what our forefathers wanted for this stow lake area. we will have more trash. this man, ortega, who is he? we have had mcclellan out there. it is already decided. i am very disappointed. thank you for listening to me. >> next speaker, please. >> commissioners, my name is oscar. i live about four blocks from golden gate park. we walk there almost every day around stow lake.

we like to have a brief smack. that is all. the chief business of the ortega is souvenirs'. we went up and saw the concession elsewhere. we were appalled. 3/4 of the building as souvenirs. -- is souvenirs'. in santa fe, their main business is indian artifacts and souvenirs. i worry that this will be a big souvenir shop, and the cafe is an afterthought. i think it is just a crime. this is a boathouse. it should be for boats and maintenance of boats. i think the concessionaire, he is from new mexico.

how much control will he have here? i think it is a crime. >> let me make an observation. this will not be a souvenir shop. this matter has been before the commission to put a request for proposal out. those proposals have come back. the issue was heard about the competing proposals and who was selected. tonight's issue is the terms of the lease of that vendor that was selected. this is not a surprise or the first time it has been here. the idea that it would make mearwoods is incorrect. it is not a souvenir shop. i think the staff description was fairly accurate about it. i am not taking issue with what you say. i would be equally concerned if i thought it was going to end up that way. >> [inaudible] >> well,