largely on the central waterfront as the primary venues of the race. it would have ceqa lot 3032 as the public face of the race over here, and it would have the industrial that shop most racing activities where they would hold the votes out of the water, tweak them to make them the best racing boats around. around 3032, the other venues that would be almost all the surrounding vineyards would be part of the operations. peer's 28, 48, and potentially 38, 40, and 54 as well. those are the short term or backup facilities that would all be theoretically pressed into service for the america's cup there. and if i could have the overhead, please.

there is actually a list of the facilities as proposed in the host city agreement. as you know, with a term sheet -- a term sheet has gone to the board of supervisors. it was pretty high level for a race and event and land use this complex. it was a relatively short document that turned around and actually negotiated a host city agreement that would be a little bit more detail. it's surrounded the set of uses in the central waterfront, and essentially court staff was involved in both crafting that agreement of the central waterfront concept of how it works as well as putting -- trying to analyze what it means, so i'm going to sort of launch into that analysis. if anyone wants to follow along at home, all these tables i'm showing more in the port commission staff report.

so the issue is -- what does this mean? many of these venues are in productive use for the port. there is a variety of free and did uses, such as parking, that happened on these facilities -- a variety of preemptive uses. what does it mean for the court to vacate these areas? if you look at that, there is approximately 46 tenants in these facilities. they currently bring $5.2 million to report annually, and much of that is from participation, rent, and parking, and is variable. if you look at the overall time of the race, which is generally from the end of 2011 to when racing concludes somewhere in 2013, we bracket those costs from those facilities of a rent loss of about $13.3 million, so

these are the facilities that would be in use. especially if you look at table two, you will see that south of mission creep, which is essentially the industrial area of the port, has some very significant events to report right now. we are really -- just to step back, we are a very interesting mix port. we do not have a lot of cargo, but we have a number of maritime uses, whether they are supporting the maritime uses on the bay, maritime construction, etc., and then, of course, we have our excursion and visitors serving uses on the waterfront. this sort of looks at the financial implications from that perspective. the next way to look at it is to include not just the overall net loss, which i think is the most complicated, but specifically because here 50 in particular is

a very productive facility, brings about $1.8 million in revenues to report every year, it is also the home of our maintenance facilities. over half of all court employees are based our appear 50. we have about 100,000 square foot shed, which has 20 craft shops in it. the idea of moving those facilities and demolishing not just the port shed, but all the sheds on pier 50 is a big undertaking. it creates a big industrial had, and it is a great benefit, but there are some pretty significant implications. they add up to about $25 million in capital costs. if you add that to the red walls, look at the loss of maritime revenues because there are a number of maritime users, you have to think about how you would create settlements and move some of those tenants in an equitable way so that they can

be moved before the race, and how you would finance some of these, it comes to about a 43 million-dollar price tag of port-related expenses. these are things that would have to be handled, and on the port/city side of the ledger, it would have to be financed by essentially short-term debt obligations from the city. acoc contributions would also be involved, but this looks at the central waterfront option of the hca with host city agreement that is sort of a basic top line financial implications of the port. as part of the transformation of the central waterfront, there is also another key concept that has been embedded in our discussions from the authorities from the beginning, and that is that there are specific long- term investments that we've made

on for property, specifically the properties i just mentioned. they are currently functional, especially here 50, but they are not -- frankly, they are not in the condition to last for the long term, and they do not necessarily meet the full per view of the modern building codes if you are going to be subject to a change of use, so there is a significant amount of work that has to happen essentially under the debt. permanent port improvements that have to be made to make them ready to host these major race- related events. the public will be there, and there will be significant industrial uses. that is something unique to the waterfront where the land that we are trying to entice into public/private partnerships does have significant amount of infrastructure work that needs to happen. so that challenge had to be crafted.

essentially, with the team, it was deemed about $150 million worth of work in our initial conceptualization of what improvements would need to be made for those improvements on the central waterfront. that would be repair and seismic upgrade to the structure of 3032. the same for peer 50 as well as any breakwaters or dredging other items that would have to happen to make those race-ready in those areas. those are permanent improvements that the teams will make. the question is what would they received in return on top of bringing the race here and the economic benefits that we will talk about in a little bit. so the agreement crafted in the original host city agreement was the long term lease right ability to create a public-

private partnerships as we have done around the waterfront, and as a way to make the ledger balance, this is a very large number. also included the long term development rights of seawall lot 330 or the outright sale, as well as ifd tax increment on proceeds from the ultimate development of those three sites. as you have probably seen in some of the analyses, that does roughly balance. $150 million of improvements, and that package compensates for that. if anything, it falls a little short. the return to the team with the initial $150 million investment. however, there are other impacts that have to be noted. by giving up the long term development rights on this three locations, that represents

about $3.4 million of long-term or permanent for revenue lost. about half of that is from pier 50 itself. that is a pretty lucrative facility. as well as hosting our maintenance division. port staff has estimated that is approximately equivalent to about $43 million of future bonding capacity. as you know, 2010 marks the first time the court has issued -- the port has issued revenue bonds to your infrastructure in decades, and we have others plan, and that is the bond capacity analysis based on others we have today. we talk about infrastructure and other core costs as well as the valuation development rights. so maybe this is a good time to talk about the economic impact. i would like to go into a little more depth to what carrie had mentioned briefly. essentially, the race is expected to attract all of the

race itself, the challenger series, the defender series where everyone brings their boats here and hopefully the sides the final two boats in the race, and all the -- as exciting activities are expected to be about 600,000 visitors gaze of true visitors to the region. additionally, it is expected about 3 million visitors gaze from local to people who are either going to drive from sanford cisco, get on bart and come here -- about 3 million visitors days -- drive from san francisco. economic activity as opposed to other one-day events like the super bowl -- the difference is that there will be a number of races, a number of very exciting days on the venue, even more than the world series. so with all those visitors in town, john is here today, has

done the analysis, it is conservatively estimated that they would attract a total -- about $900 million to $1.4 billion of new economic expenditures in the city. it would create the equivalent of 8840 full-time annual jobs -- full-time equivalents -- and on a relatively short time frame, so that is a lot of economic activity. just to give us some perspective, that is the equivalent of 5% of the full year except it is happening in two or three months. so it is a lot of activity. i think that's -- and also, i think it is important to underscore something carey was saying about how tenants will be involved.

with all those additional visitors in the city, the tenants, especially those who are taurus, whether they are serving them in a restaurant or by taking excursions' today, will benefit tremendously. again, if anything, we have conservatively estimated that instead of a 5% bump for tourism overall, it will be a 10% bomb -- 10% bump without doing any in-depth analysis of the individual establishments. about $1.2 million more, direct flow bruce, and there will be commensurate large increases to the tourist-related industries. it is also important to maritime-related industries that they will all be called into service. i'm certain that not every activity that will happen on the

they will be local, but, frankly, the businesses who are here now know today they have the infrastructure in place, and they will be by far the biggest beneficiaries of the event, so i think there is some significant benefits for the event as we have all been talking about. the term sheet was unveiled in early october. since that time, and i believe even at the board of supervisors when this was introduced, there has always been discussion of an event on the northern waterfront as well, so the court staff working closely with city staff and the authority have tried to catch up and tried to craft a no. waterfront alternative that serves all their needs, attract the authority in the events to san francisco, but will highlight the central waterfront and northern waterfront, so can you move that one there?

essentially, this takes the same level -- the same events, functions and starts transposing to the northern waterfront. the central waterfront will still be in play as one of the areas of use. it will convert to the industrial base, and the catamarans will be taken out of the water, will be worked on, and i'm sure that will be exciting activity for the central waterfront. then i can i ask what we're looking at? >> i'm sorry. right now, we are looking at table four from the staff report, and i'm trying to link it to -- exhibit a might be the best way to follow along in a staff reporter trying to name facilities and give people a sense of what this alternative looks like. still the first graphic that was attached to the host city agreement as well. >> hang on.

can you turn at it for the commissioners for just a moment? you can turn it back to the audience. >> maybe you could put it over there? i think that is fine. my apologies. 3032 essentially becomes the industrial base. they will be supported by sea wall lot 330, and pier 28 will be a potential area to support that industrial area, and the northern waterfront will really be the public face of the event in this case. the main venue will be pier 27. 21, 23, and 19 are also likely to be pressed into service. we have been moving very quickly. i'm not sure we have specific visions of what will happen in each of these locations. it should be noted that unlike the southern portion of the central waterfront, piers 48 and

50 where we have a number of tenants, but a lot of those tenants are long term maritime tenants, many of the tenants in these specific facilities are short-term. they do storage. they have other activities going on. it should be noted that, as you commissioners have heard a lot about a project at pier 27, is our cruise terminal. part of the excitement and was the no. waterfront is catching up a little bit is first, staff had a difficult time envisioning how long term occurs terminal will work with a short- term or long-term america's cup race, and one of the key events that happened is the teams -- the authority announcing that the ac 72 catamarans were going to be the boat of choice. these are very fast, very low- drop catamarans, and these ships really -- the maneuverability

and speed probably will not need breakwaters. breakwater was probably the one thing that would make this incompatible with the terminal, so you can envision, and we have been in discussions with the city and even the authority on demolishing shed 72, and making it available on the basis of accelerating the cruise terminal but stopping for the event. building a building, similar to the buildings you have had before you. a new building there. essentially have that available at the primary race event of a new where all the boats with launched from and race from and essentially come back to the winner's circle at the end of the race. this would be sort of the primary exciting the new. if you take down the shed and look at the value, that is a significant amount of land that can be used for public revenues.

of course, there will be some industrial uses there as well. this really creates a wonderful focal point on the northern waterfront for the public event of the race. so this is sort of our concept of what a race primarily on the northern waterfront supported by the central waterfront would look like. i think, quickly, we need to go through our estimates of what it would look like from the financial perspective from the port. turning to table five in the staff report, there is 57 tenants in these facilities. a little bit more than on the central waterfront. as i pointed out, almost all those tenants in 1923 complex or pier 27 our short-term storage units. pier 27 was up to 10 not that long ago because of shoreside power and our conversion and moving forward.

those tenants have already been there. they are not going to be long- term tenants. the effect is significantly different. another factor on the northern waterfront is rather than trying to transform the northern waterfront permanently, we are viewing the first race and any subsequent as a shorter-term event from the northern waterfront. that is how we have been conceptualizing it. but in short-term uses in use for no more than six months at a time, and that would allow us a lot more flexibility about how the investments balance with the rewards of the race to the city and port. just to summarize this table, we believe the over the total event, rather than $13.2 million of event lost, we would have about $6.7 million of revenue loss.

if you step back and look at the capitol and other costs as well, there are still tends to be relocated. there is still some debt that would need to be issued. in this case, that debt, i should point out, will be essentially doing secret clearance and corp. and shell improvements on the asset we are already leaning towards. then, there is some short-term cruise terminal shortfall. the project will need to be accelerated, and as you have seen before, there has been a shortfall in how we will fund the project to accelerate the project and make it part of the improvements of the northern water from alternative. we will take a contribution both from the team as part of the infrastructure contribution as something they will be able to recoup. we estimate that currently at $6 million. we will need an investment as a financing mechanism.

now, we are allowed to not only deliver a terminal corp. and shell but deliver earlier than the terminal has put into play. again, there still will be investments. there will still be some long- term trade in terms of that compared to that infrastructure investment compared to their long-term capability. we are currently envisioning that as commercial leases at pierce 3032, seawall lot 330, and there's potential that there will be other facilities as well. if you look at it in that regard, we are proposing a slightly different structure. i guess i should step back and say court and city staff have been working on this tirelessly but have not always been in as close communication with the authority to say that all this

is something that is agreed upon. there is still a lot of work to come to a final agreement, so the city agreement you have seen is a long, complicated document. but essentially, we are projecting there is about a $55 billion infrastructure investment of the port from the event authority, and there will have to be commensurate long- term leasing that will allow them to recoup that long-term investment. i would say this $55 million investment is well placed for the commission and molasses to kickstart our terminal. anyway, to summarize, there is about a $15.8 million price tag for the port. with that, i wanted to know one

change to the resolution in front of you, and then i will be ready to entertain any questions. because, as i mentioned, this is a work in progress for coming up with an accessible no. waterfront alternative, and i should note that both agreements are before you because there has been no conclusion either from the city or event authority side of what is the -- where the final venues are going to be and what the final arrangements are going to be, and this is something that given the shortness of time we are going to be asking you to approve both of the agreements. that just is a way to acknowledge that though you have two documents in front of you, there is some flexibility that is needed. we have some alternate language we would like you to consider. in the shortness of time, i did not take it out of my bag. but in the result clause on page

24, that begins, "resolve that the port commission hereby authorizes and urges," i believe that is the last one, that after the phrase saying, "do not materially increase obligations or liabilities to the city," we should add the phrase, "or the port, except those that are offset by the benefit to the city or the port, which will allow us in negotiating a final host city agreement and getting full agreement with the host authority that we will have the ability to essentially rejigger the give/get if you will. we have been talking about infrastructure works as something that the city or court needs to receive, the long term investments in four properties and anyone that does those improvements should expect to get something in return. i think that is a really

critical issue to align our interests, and i think what we are asking for in this change of resolution is that the balance between the liabilities and obligations stays the same, that we should have some flexibility in negotiating a final host city agreement. >> for the benefit of the audience, please say it again slowly, the language change. >> thank you. after the clause saying "do not materially increase the obligations or liabilities of the city," we suggest adding the phrase, "or the port, except obligations or liabilities that are offset by a commensurate benefits to the city or pork." and it goes on "and are necessary and advisable to bring the 34th america's cup." with that, i apologize for the link of my presentation. there is a lot of concepts we have been working on, and i am available for questions.

>> i second the amended resolution. commissioner fong: commissioners, you have questions for staff or public comments? ok, great, thank you. let's go ahead and open it up to public comment. i'm going to call a couple of different names at a time just a you can prepare yourself. first speaker is rich smith. second speaker -- kevin barry. >> good morning, commissioners. in general manager of marine services down ad pier 50. we are a women-owned harbor services company, and we employs 75 people in good-paying union jobs. released quite a bit of space from you folks.

margin of lock between 48 and 50. some space down at the south side of pier 96. we first least add pier -- leased at pier 46, but we relocated in 1997 with the construction of the giants' ballpark, and our former offices are now the right-field bleachers, so we might be in the same situation again. we did move to pier 50, but what that experience, we were not fully compensated for our move. now, we may have to move again. the staff report notes relocation capital costs would be $275,000. that is not completely correct. that is just the capital improvements we put into new fender piles when we renewed our

least a couple of years ago, so we have other capital costs that would be associated with this move. actual relocation costs, actually are unknown because we do not know where we would be moving. the other thing i wanted to imagine is that we're going to move further south down the waterfront, and it will introduce higher operating costs for us. our water taxi customers like the land close to the city, so moving two miles further south would require us to have some sort of commercial water taxi landing and a waiting room of here in this portion of the city rather than down pier down -- rather than down near pier 80. all we ask is that we be treated equitably. >> in the program director for the treasure island family center. i just came down here because i

wanted to show our support of my organization for this event to come from san francisco. i know one of the biggest questions is how is sailing available to people from different backgrounds. i know that it at times can be considered an elitist sport. we just wanted to come down and say that we worked tirelessly to try to provide sailing to people from all different backgrounds. we work with many organizations in san francisco, most of whom use organizations to provide a sport that will give them a lot of skills and a lot of self esteem, and just an opportunity to get outside of their normal comfort zone and deal with these things. we think that the dress that came here, they would provide -- it would make the sport more visible to people from different backgrounds and benefit us and the community in general, and it would also give ou