supervisor avalos: good afternoon and welcome back to our recessed budget and finance committee meeting. last wednesday i said this would be the last meeting of the year for the budget and finance committee of the year and i was right. it's the last meeting. it was recessed. the other half of the last meeting. we are here to discuss final approval of america's cup agreement as well as the civic center community benefits

district and budget updates. mr. young, if you could call the items number three and actually did, two and three first. >> item number two, hearing before the budget and finance committee to review the fiscal feasibility and responsibility including analysis from the budget analyst of the city hosting the america's cup regatta under the conditions contemplated and set forth in the term sheet to fully understand and define the city's expectations for both the short term and long term benefits that would accrue to the city for the purposes of negotiating a formal host city agreement. people number three, resolution approving a host city and venue agreement among the city, the america's cup event authority, and the san francisco america's cup organizing committee authorizing the mayor or his designee and the port to execute the host city and venue agreement, authorizing and urging the mayor, office of economic and workforce development, port and other

such city officials as appropriate to take such steps and execute such additional agreements as are consistent with the host city and venue agreement and this resolution to bring the 34th america's cup to the san francisco bay and finding that the proposed event is fiscally feasible as set forth in administrative code chapter 29. supervisor avalos: thank you, mr. young. supervisor mirkarimi. supervisor mirkarimi: thank you, mr. chair. as you indicated, we are continuing our hearing from last week. i want to say in advance our strong appreciation to the city family in working around the clock in order to produce the kind of analysis that we just did not have the ability to have a thorough vetting of last wednesday. thank you to the budget analyst's office, controller's office, economic analysts and all of the city family. as we had well indicated in

last wednesday's hearing, the plan for the northern waterfront, in order to strengthen oured by to secure the rights -- our bid to secure the right to host the america's cup is substantial improvement. it has been amazing that based upon time lines that have been imposed upon us and how the city family has been able to marshall i think the resources to together in order to try to put forward the best bid we possibly could. the bid that is under consideration now on the northern waterfront is, we think we believe, the best that the city can do. and that we think by moving to the northern waterfront presents a number of advantages for both the city and the event authority. most certainly to develop facilities within the very restricted timeline that is

required in order to certainly allow for the race and prepare for the race to happen as delineated in 27 and 29. the cruise terminal process which is already underway, paragraphs 30 and 32 which has substantial ceqa review because of prior projects. there is less risk to the authority, smaller investment to achieve the same result and the questions of potential development in paragraphs 26 through 28 would certainly be facilitated a lot more smartly through our port. proximity to guests and hospitality facilities, housing options for teens within walking basis to industrial base, robust transportation infrastructure on embarcadero, f, f, and t and k lines. i'm surprised to the recent press as it relates to the city's good faith and very

steadfast commitment in trying to proffer the best deal possible where elected officials, we're part of the city family. we're working with public tax dollars and pursestrings that are well obligated in the sunshine of light by having these negotiations in somewhat of a very surreal way operate unlike any of the other competitors or contenders that are vying for the same rights to secure america's cup. spain who has a king, italy, a prime minister, they have more or less a unilateral right in order to affectate whatever deal they would like and not have to operate under the same conditions we necessarily do. other cities around the country and maybe abroad are hoping san francisco stumbles in some way to disadvantage so that the event authority would then be able to capitalize on my misunderstanding or mistake. we are not going to allow any misunderstandings to happen. we are putting forth the best

deal possible. i'm confident with the information that i think will be shared with us today that that will be well evidenced. mr. chair, i would like to go ahead and start the discussion, if we would, please, by bringing up the office of economic workforce developer, jennifer. >> thank you, supervisors, through the chair, jennifer matts from the office of economic and workforce development. supervisor mirkarimi, you referred to the press over the weekend. there has been one concern that i have heard or rumor today that was floating around that i would like to take a moment to dispel. within the framework somehow peer 50 continues to be a venue that is being discussed. it is not. it was not last week and it is not today as part of the northern waterfront alternative that we have now adopted, that you have now forwarded as the only alternative to be considered as part of the host city agreement. supervisor mirkarimi: that was our understanding, too. >> ok.

thank you if i could have the overhead for a moment what you see before you are the venues that would be included in the northern waterfront alternative to host the america's cup. i know we have talked about them at length, i want to include a visual that shows the full breadth of the piers that are anticipated to be used for short term and long term used by the authority to briefly go through. at pier 80 would be the berthing of the u.s. a 17. other temporary facilities and preare ngata staging for the 34th america's cup. moving up there would be race yacht viewing. 30 and 32 would be the team bases. sea wall lot 30 would be used for tv compound and parking. 36 and 28 would be team hospitality. the area between pier 14 and 22 1/2 would be superyacht center

and mo motherings for boats. and pees 19 through 29 -- piers 19 through 29 is the media center to watch the event when it takes place. last week, supervisors, i just wanted to share that visual because we talked a great deal last week about what the northern waterfront was and had less than ideal visuals to show the full breadth. as you know what is being discussed is he is start and finish lines would be at pier 27 allowing them to go out from there to the golden investigate bridge and back. there were a series of questions that you asked about the host city agreement as well as recommended amendments that you requested that we make. we are here today having made those changes and i would like to briefly talk through what they are.

supervisor campos had wanted to understand if undue requirements could be placed on the city with regard to the security and the people plan. what we found is in section 2.2 of the host city agreement, there already exists language that allows for a termination right by either the city or the event authority should we fail to reach agreement on the terms and conditions of those plans. so that language was already included in the plan in terms of having an ability of the city to have a say-so over the terms of that security and that people plan. in addition, we were able to add language into sections 9.4 of this agreement that really takes the language around the youth plan, the lead environmental plan, and the workforce plan and memorialize those and make a requirement of this agreement that those plans are fully fleshed out to the same degree and on the same

time-lane as the people plan as the -- timeline as the people plan and the security plan. we will have a great deal more detail around what those activities will entail. in addition, there was a great deal of discussion last week around the $32 million being raised by the acoc and wanting to have a higher degree of certainty with regards to that fundraising. one of the things we were able to do over the past week if i could also have the overhead again was develop a more specific list of sources and uses of funds that we see as necessary to properly host the america's cup. in this worst case scenario that i put before you, we assume no acoc fundraising whatsoever. if you assume there is no acoc fundraising whatsoever, what you see in the gray column is that this event still nets out a $5 million general fund surplus for the city. however, we obviously have a

time, we have a time flow issue as to when the projected tax revenues from the america's cup land, accrue to the city versus when our expenses and our costs are going to be incurred. if you see in 2011, we anticipate that, assuming no acoc, there are $6.3 million in costs that will be incurred by the city in order to support the america's cup. in 2012, that number rises to $11 million. in 2013, all of the costs are offset by taxes that are accrued in that year. so in a world in which there is no acoc contribution, we have liabilities in the first two years of $6.3 million and $11.2 million that do not net out until after the event occurs. however, what we have done is

in consultation with mark buehl, the president of the acoc, we have strengthened the language by creating a new section which states that the aco:will use best evidence to raise $32 million over a three-year period that includes raising $12 million for year one, $10 million for years two and three that the city retains a termination right if that $12 million is not raised in the first year. section 2.2 of this agreement lists a host of termination rights that the city and the event authority have in this first year before ceqa is completed and at the moment in which ceqa is completed. we added a section if the fundraising has not been met, the city can terminate. by having gone through this exercise of really drinking down what our costs are and requiring in effect double fundraising from the acoc that

we have well covered our costs. supervisor mirkarimi: that's a hell of a layaway plan over the next three years. i understand the 32 ceiling, but what about a floor, to make sure we're absolutely seeing a minimum amount that is being raised? >> i would tever to mark buehl to come speak to that. as we have said, a central tenant of this event has always been philanthropic fundraising in order to make the city whole. it depends on the mothers and fathers of the city and the region coming together to support this. we have to look to the commitments that are being made for some degree of assurance. what i do think we have shown by diligently working on the northern waterfront alternative is to create an event which does pencil for the city and the general fund over the life of the event and i look forward to hearing harvey rose, the budget analyst's report.

ted egan's report on the numbers we can talk about our feasibility analysis as well. what we believe we're talking about now is a balancing. lastly, supervisor campos had some concerns about the binding arbitration provision. we have added language in there which says that should any dispute or difference arise out of this agreement that is subject to binding arbitration that that would be in a location in northern cal and in the event that the parties file a suit, that the venue for this action should also be northern california. supervisor mirkarimi: the suggestion that grew out of that conversation between supervisor campos and you all was that is the terms riddled potentially with the other what ifs of there being the

possibilities that were taken abroad to mediate any kind of disagreement or discrepancy. and i think that we want to try to do our best to address that so there is no unresolved concerned in that regard. >> we heard that concern and we went back over the past week and reviewed the disagreement with an eye towards the discretion making decisions that are to be made by the city, to be made by the events authority and the ones that are to be made in consultation with each other. we're confident that this agreement provides the city with discretionñ with discretion where it needs to be. and more importantly, there are further decisions to be made with regards to hosting this event, with regard to the venue leases, with regard to the long- term legacy leases that will be before either the port cosi