other improvements. we think the added time will only lead to better responses. frankly, we're very excited based on the number of phone calls we got last week. we should get a good number next month. i hope you will indulge us in allowing the date to be extended. commissioner brandon: great. commissioner lazarus: ok, good. an update on the exxonmobil corrective action plan. as you may recall, we've been working -- carol has been working diligently with exxonmobil to address petroleum contamination in a section along the shoreline in the fisherman's wharf area near 440 jefferson street. as a spot where there used to be an oil terminal. a number of things have already taken place. the next step is a corrective action to mitigate the contamination. the corrective action has been presented to the public. it has been approved by various regulators.

finally, it was given the green light in october -- excuse me, in november. that effort will begin, we hope, right after the holidays. we expect to have some mobilization of the team during the next two weeks. hopefully they will get to work right after the holidays. barring significant weather delays, the work should take place in six weeks to eight weeks. we're looking forward to having this resolved to our satisfaction. again, the area that is being estivate it is approximately eight hundred cubic yards of soil along the besshoreline. i do not see carol anywhere. my congratulations to her for pushing this forward. hopefully we'll have a good report for you in eight weeks or so. next is the schedule of port commission meetings for 2011. it is our standard schedule,

which is similar meetings in january, june, july, and august, and multiple meetings in february, march, april, may, september, and october. that is the same calendar as always. we do not fall on any holidays this year. i presume peter has updated you on the america's cup. a busy day. commissioner brandon: it was a unanimous decision? commissioner lazarus: it was a unanimous decision at the budget and finance committee yesterday. it was a 2-0 vote. today, it was an 11-0 vote in support of the america's cup. we are looking forward to having the mayor, and the head of the fund-raising committee signed the bid this evening and present it to the america's cup

authority three days ahead of the deadline. we are very excited about that. these are fantastic bids for all parties. our staff -- all the wonderful things that can happen locally for the port, but also for the race. the ability to have a race this close to the shoreline -- as you know, the bay area is 7.2 million people. it gives them a brand new market. as you can picture -- the types of crowds that came out for fleet week and see a mass of humanity standing atop the golden gate bridge to watch the oldest sailing sport in the world, it will be phenomenal. we're hopeful we will be awarded the bid. our bid is extremely good in my

unqualified opinion. we look forward to the next steps. we will keep you posted. commissioner brandon: thank you. >> thank you. commissioner brandon: any public comment? >> i did not really get to address the fleet week situation. my name is catherine hooper. i was one of the members of the fleet week committee. as someone who came into the board a little bit late in the game, and having been involved in fleet week for many years taking care of all the exciting stuff -- this year's fleet week was unlike anything i've ever seen in my life. this started out because we had a really good leader. a good leader is somebody, in my observation, that you never see their hands or feet move. they just make things happen. general myatt stood up there and

merged all these personalities, some with no knowledge about maritime and some with a lot come into what was a remarkable event. we have some goals for fleet week. one of them was to get out of debt. another very important goal was to put fleet back into fleet week. what has really been drawing people down is the blue angels, which is a very important part of fleet week. he also brought the marines into fleet week, which is something that has not really played a major part. imports and the, this board of directors, -- importantly, this board of directors, with the complete support, introduced something that we've never seen. it really involved in the entire

community. it was not just ships for a few days and then good bye. we had events all over the city. it is something that has never been done before. it will be expanded even more in the future. this could not have happened without the support of directors. they were all volunteers. these men and women gave countless hours. they met every single monday. we met every single monday and addressed small issues and large issues. there was tremendous cooperation from so many facets of the city and county and our citizens. i hope that all of you remember not just those tremendous crowds on the waterfront and the extraordinary publicity that we got, but what this meant to us as a city and they port -- and a port financially. as he said, if you think this year was successful, wait until you next year.

we plan to make next year's fleet week even more remarkable than it was this year. we could not have done it without you, monique. you gave us so much support. it takes teamwork. that is such a hackneyed phrase, but we had it this year. it will be even better next year. to my fellow board members, thank you. to the larger maritime community, thank you. it will be even better next year. thank you. commissioner brandon: thank you. [applause] >> i also wanted to thank general myatt and the fleet week committee. we felt that we were real partners with fisherman's wharf. we saw the results on fisherman's wharf. we look forward to working with you next year. we just want to thank you for

your leadership and the leadership of the committee. thank you. [applause] commissioner brandon: is there any other public comment? go ahead. >> thank you, monique, brad, and the entire team that worked on this america's cup bid. they made it so much better. they made it something that we can really look forward to at the port for the next few years. it gives us some tremendous opportunities. thank you. thank you. thank you. i hope they take it. [applause] commissioner brandon: is there any other public comment? thank you, general myatt and the fleet week committee. you guys did a phenomenal job. everybody had nothing but great things to say about fleet week. i know that 2011 will be

outstanding. thank you so much for your volunteering to take on this effort and making it so special. thank you. thank you. [applause] >> i have not had a chance to welcome our new commissioner. you can laugh. we've known each other before. i'm looking forward to working with commissioner crowley. anything we can do to help you get oriented to this wonderful organization, i promise you are going to love it. commissioner crowley: thank you. with that, the staff has been wonderful. the staff has generally come up with good will. thank you. i look forward to working with you both. i am also going to miss rodney. that said, i look forward to rolling up my sleeves and

working diligently for the port of san francisco. thank you. commissioner brandon: thank you. welcome. we have one of the best conditions and staff in city government. [laughter] and we do not have to meet at city hall. [laughter] welcome. commissioner crowley: thank you. >> items on the consent calendar. request authorization to advertise for competitive bids for construction contract number 2727, and adoption of the 2010 port building code. . commissioner brandon: moved. commissioner crowley: second. commissioner brandon: all in favor. they have been approved. >> item 6, request approval of new form license landing rights agreement, including new rate structure and fees, authorize

the executive director to enter into the licenses substantially in the form of the form license with ferry and excursion operators, and authorize the executive director to make additions, amendments, or other modifications to the form license. >> have the holidays. -- happy holidays. san francisco is the leading passenger port in california. 6 million people get on or off. 6 million. that is an amazing number. we operate secure and maintain two major facilities. first, the downtown ferry terminal to my left and to your right. and then the china basin ferry

terminal. golden gate ferry also operates here. it's not minister or maintained. we are not involved in those. the ferry building is the hub. we work closely with the san francisco water emergency transit authority as they implement an emergency water transportation system management plan for the bay area. and we continue to adopt a transition plan to facilitate the transfer of existing transportation ferry services within the bay region to their management. we have a couple different layers. we have the state agency and then we have the port. the item in front of you today, we briefed the port commission in may on this. it has kind of been a longstanding item. this item does essentially two

things. first, it updates are legal agreement, which is the document that the operators signed. they have not been updated since 1995. this updated license includes city of san francisco requirements, federal requirements, and insurance. we have given this agreement to current operators. upon your approval, we will have them sign this before they can use our facilities starting next month. secondly, this action in front of you will result in a new rate structure for ferries and excursion. we have not changed our rates in some time. the reality is that the port provides a substantial subsidy each year. in fiscal year 2008-2009, each

downtown ferry passenger was subsidized in the mouth of 23 cents. -- in the amount of 23 cents. it resulted in several hundred thousand dollars. in light of the continued shortfall, staff recommends increasing ferry rates at the downtown ferry terminal by 50%, effective at the first of the year, and an additional 50% on january 1, 2012. at the china basin terminal, the shortfall was more pronounced due to lower passenger volumes and seasonal usage of the terminal. our recommendation for regularly scheduled ferry landings effective april 1 to coincide with the baseball season. this implemented $25 per landing fee per vessel, and 25 cents per passenger fee. and then it went up another 25

cents. so there was a total of 50 cents. these combined rate increases will reduce but not eliminate the port's shortfall. it gets cars off the road. is more environmentally friendly for people to get in and out of san francisco. it is part of our mission, hence the subsidy. we are working closely with other possible funding sources to see if we can further reduce this. this action today will be a step in the right direction for the port to update our agreements and bring our rates up to a reasonable level. i want to thank denise turner, our market research specialist at the port staff, who really did all the hard work on this. with that, we will answer any questions that you might have. commissioner brandon: moved. commissioner crowley: second.

commissioner brandon: any public comment on this item? commissioners, all in favor? resolution 10-77 has been approved. >> item 6b, request approval to apply to the foreign-trade zones board, on behalf of valero energy corporation, to establish a foreign trade zone subzone at valero's benicia, california petroleum refinery. >> good afternoon. i would of course maritime staff. i'm here to rest your approval to allow the port to apply to the foreign trade zones board to benefit their refinery. as you may recall, commissioner lazarus and commissioner

brandon, we came to you for your authorization. it included a new strategy for developing foreign trade zone business, which essentially was to take the foreign trade zone designation to the cargo, rather than bringing it to a fixed site. as a result of the commission meeting, the court has submitted to the foreign trade zones board in application for reorganizing our foreign trade zone, as well as applying for the new alternative site framework program, which will essentially allow the foreign trade zone to set up a general-purpose zone in a much more streamlined process. our application has subsequently been approved. about one month ago, we received word that our application has been approved. now we have a streamlined process for setting up new sub

zones where it makes strategic and economic sense. the port is also setting up a web page that basically outlines the features and benefits of the foreign trade zone. we have also been working closely with the mayor's office to develop a marketing strategy with them and also to set up a link from their web site whertor web page. we intend to work more closely with san francisco international airport, and other areas that are within our geographic scope to see where we can benefit using our foreign trade zone benefit. foreign trade zones were established by u.s. congress in 1934 to expedite and encourage foreign commerce while

promoting manufacturing in the u.s. and creating u.s. jobs. in 1948, the port of san francisco received a foreign- trade zones grant is 42 establish, operate, and maintain a foreign-trade zones. allowed establishment of special purpose sub-zone, such as oil refineries. the port has established others. for example, we have one covering the chevron refinery in richmond, california. since the early 1990's, the foreign-trade zones board has approved over 90 sites. we have now been approached by valero energy corp. to set up a sub-zone so they can take advantage of the foreign-trade zone benefits for that

location. james is visiting from houston. he is working with valero and representing valero today. he can answer any questions that you might have pertaining to a resolution. the united states remains dependent on imports of petroleum products, primarily crude oil. foreign-trade zone status will allow them to improve net margins and put them in a better position to retain jobs and compete with imports of petroleum products. the status will also allow the valero refinery to be better positioned to take advantage of exporting products that are produced in that zone in the future. also, it will allow them to better compete with other refineries that are set up. valero currently has eight other refineries in the u.s. set up within a sub-zone status, out of

the 15 they operate in the u.s. foreign-trade zones common benefits trade include -- this s getting a little technical. effectively, it matches the crude oil rate to lower duty rates. another benefit is delaying payment of customs duties of crude oil until the finished product leaves the subzone, effectively taking advantage of the time value of money. they can accrue savings from customs duties and products produced in the subzone that are subsequently exported. as the u.s. becomes more efficient in its own consumption of petroleum products and as developing countries increased their demand for petroleum products, u.s. refineries could take advantage of increasing

exports to those countries. foreign-trade zone status will promote the likelihood of exports. foreign-trade zones board estimates it will take between eight months to 10 months to process the application. with the new designation that we have been designated by the board, we think the process could be shorter. the port's tariff allows for a $10,000 application fee, which will be accrued from this application. it also allows for a 35 under dollar activation -- $3,500 activation fee and an annual fee. the federal law allows grantees to assess 8 nominal administrative fee to cover subzones. it will be operated pursuant to an operating agreement that will be negotiated with the port. any operating cost or capital crewman's associated with the

subzone will be the responsibility of valero. no public funds will be set up to pay for the operation of the subzone. the transfer agreement and the city charter authorize the port of san francisco to operate foreign-trade zones within the port area or of celery to the area. this is auxiliariy. it uses of vessels that utilize harbor services that are provided by port of san francisco tenants. bay delta maritime is one of their current vendors. the more ships they continue to bring into the bay, the more they will continue to utilize and need the port of san francisco's harbor services

which will help benefit the profits of the port. staff recommends that the port approve the resolution that is in front of you of raising application of the foreign-trade zones board to apply on behalf of valero energy corp. to establish a subzone covering their benicia, calif. refinery. commissioner crowley: i move to adopt. commissioner lazarus: second. commissioner brandon: public comment? >> i do have a question. this does not conflict with the maritime law? >> no, it does not. >> to other regions have these subzones? >> yes, the valero refinery is adjacent to the port of los angeles and is set up as a subzone. >> that has proven to be a good way to go? >> it has. i think the region is benefited by the jobs that have been

created at the refinery. commissioner crowley: thank you. no further questions. commissioner brandon: there's no cost to the port? >> there is cost in terms of staff time. that is covered by the administrative cost, the application fee. and then the $10,000 application >> so that would be the anticipated revenue for the port. >> the anticipated revenue would be $20,000 per year, which is for our foreign trade zone tariff, that is what chevron pays us today. >> by the benefit to the port is what the tenant will be benefiting from? >> yes. it gives our foreign trade zone more visibility. i think the fact that we have some high visibility customers like chevron and valero may

help us sell the foreign trade zone benefits to additional users as well. >> are piers 19 and 23 foreign trade zones? >> no. >> so just sub-zoned? >> right. if somebody is looking to set up a sub-zone or a purpose zone , then we can set these up using this new alternative site framework that the board has set up. we have been approached by a company in san bruno, who is importing semiconductorors through san francisco international airport. they are considering applying for a subzone to cover the

distribution of the semiconductorors. that could benefit them and provide economic benefit to the area. >> thank you. >> you're welcome. >> in here i didn't see the term as to how far out this resolution would carry in years? >> we will be separately negotiating a sub-zone operate can't agreement with valero. we are anticipating matching it similar to what we have with chevron, which is about a five-year term with opportunities for extending for threes three five-year periods. >> thank you. >> all in favor? >> aye. >> resolution 1078 has been approved. >> thank you very much. >> item 7-5, request approval of lease ahn ahn, a california corporation, for a seven-year restaurant lease for premises

located at 27890 taylor street. good afternoon commissioners. jeffrey bower, port leasing manager. i am here to ask your approval for the item as read by the commission secretary, which is a seven-year lease with andre -- ahn sometime ago andre-boudin bakeries approached the pors -- the port, and port staff has analyzed that proposal and determined that they do meet

the criteria outlined in the 1993 retail leasing policy. in these discussions we developed lease 814, which offers a seven-year lease. during the period of the term, there is a six-month construction period where no rent is charged. they must start construction by march 1st, 2011. the initial base rent is the greater of either $8,007 .53 or 9% of gross sales, whichever is greater. there is an annual adjustment of 3.5%. and they can make investment in the amount of $335,000. andre-boudin bakeries is required to provide all