as a maritime facility with other ancillary uses. that is something that we examined and will have to reconcile. secondly, any plan for real occupancy, whether master tenant or master developer, would have to be trusted-verified. we would have to make certain that plans for re-occupancy would comply with that. we would also have to build land use plans for following procedures for competitive solicitation if we are going to have a master tenant or master developer. these are best practices that are laid out, both in terms of competing defined master tenants and developers, but also other policies and procedures at the port and city have put into place, involving competitive building, bidding for retail opportunities on the port --

even if it is just a restaurant. there is the recently passed maritime preservation policy. to designate as a maritime facility, we have to keep maritime uses. those are some of the overall policies. i also want to say, if we are in a master development situation and uses here contemplated are not the historic uses, there would have to be an environmental clearance process. this could be either some sort of a cursory review to say that it performs, or a more elaborate ceqa compliance document. as we go through that process we have to take into consideration issues about historic preservation.

pier 38 is part of the embarcadero waterfront national historic waterfront district. any modifications are subject to the secretary of interior standard for rehabilitation and guidelines for burkregarding the rehabilitation. additionally, and number of permits that we would need, depending on what has to happen at the facility. that would certainly include a bcdc permit, primarily concerned with public access and fill, but also may need to work with the corps of engineers, depending on what is anconsidered. i think that covers the issues we will have to look at. this is really dependent on what we find in the physical investigation. we hope to be back to the port commission in january 2012 with

reports and recommendations based on the physical condition and all the factors i presented to you. >> thank you. is there any public comment on this item? commissioners? >> in terms of the analysis that will be done, maybe you covered this, but is there anything that will look at the strength of the pilings underneath the shed? i know that alters potential cost. >> cnd work is premised on the notion that there is not additional catastrophic repair that needs to happen, or we are going to propose uses that would trigger a seismic upgrade. the engineering group has recently done a structural

assessment report, which means they have been under theire -- [inaudible] >> i just wanted to make sure that we had some assessment of that before going forward. >> ed burns. chief parker engineer. there are some damaged filings that have not gotten better. it is not a long life left on the pier. there will be subsequent repairs required. some of the aprons are in very bad condition. as we go through this analysis, we will be looking at them particularly from the perspective of exiting. we to make sure we have safe sex sitting, and in that case, some of those up -- apron's will need to be upgraded.

like jonathan was saying, we are going to take this to the point of no seismic upgrades. using that as our development limit. >> i just wanted to make sure that we at least -- >> we will be within the code. >> another question. i know the current use -- although on authorized -- involved creating a hub of sorts for small businesses and start- ups colon locating there. i know that many of the amounts the uses contemplated here. is there anything here that may or may not fit into the plans? >> the physical examination we are going to do will be geared towards re-occupancy.

i think there will have to be a policy analysis as well to see if we are triggering anything to see how we are in conformance with the waterfront land use program, with other entities, trusts. the key here is how expensive or an expensive it is. most of those triggers, and we are in development situations. we are talking about long-term commitments to long-term uses. the more expensive, the more we compensate with longer-term. i think we all need to keep our fingers crossed, after the testing, our understanding of the condition of pier 38, if it is is a patrician -- if it is a situation where we could have in term leasing, that is a potential option. the longer term we are, we are butting up against the policy discussions. >> i just had a comment.

this is more of it, then question. it seems we had this particular use and it has some attention and is in line with what the city is doing with innovation, small business, but when you consider whatever route we go, given when the lease was originally given out, the informant was different, that we think about what the uses are. i know we have all these policies and master plans that put these boxes, to a certain extent, that we think about the neighborhood and the characteristics of the surrounding area and not just the pier by itself, but when it could do for the whole environment, port or non-port property. i am not suggesting anything

specific other than to think about it in a long-term view. just keep that in mind. i drove by today and i was thinking, that is of great area. it is a terrific location with the ball park close by. i think we need to think about what it can do to change the neighborhood. >> any other questions or comments? thank you. >> item from the consent calendar. item 8a. request authorization to advertise for competitive bids for the pier 50 substructure repair, contract no. 2757.item 8b. request authorization to award a contract in an amount not to exceed $419,927 to urs corporation for consulting services to develop a san francisco bay region waterborne all-hazards response plan. for this item, the resolution has been revised to reflect the legal name of the contractor from your as corp. to you rs

corp. america. item 8c. accept update regarding amendment of the professional services contract with environmental sciences associates for environmental review and permitting coordination services for the 34th america's cup and pier 27 james r. herman cruise terminal and northeast wharf plaza by increasing the amount of the contract from $2,785,017 to a not-to-exceed amount of $4,124,774. >> so moved. >> second as amended. >> is there any comment on the consent calendar? all in favor? aye. resolution 65, 11-66 have been approved. except update regarding the amendment. >> item 9a. request approval of first amendment to license no. 14987 with the san francisco community fishing

association, amending the fee schedule and term of the license for space located at pier 45 fish processing center, shed d-4. >> good afternoon, commissioners. my name is michael, a member of the maritime division. the item before you concerns the san francisco community fishing association which entered into a licensing agreement with the port in may of this year to operate the port's ice machine at pier 45 and selling bulk ice to fishermen and fish processors. the association is a group of local fishermen who came together to fill a need that rose when the previous ice machine operator vacated pier 45. the original license term is month to month for one year, through may 2012, and the fee

is $2,192 per month. which is within the perimeter rates approved by the port commission. the association has paid this be on time and is in good standing with the port. after four months of operation, the licensee found itself approximately $13,000 in the red and realize the financial arrangements were not sustainable for them. much of the shortfall was caused by high maintenance and repair costs on the ice machine, which had to be immediately addressed. the association approached the port to propose a temporary reduction in the monthly license fee, which would allow them to recover from the initial startup problems and costs and become better established as an

efficient and reliable ice supplier. this year's salmon season was the first full salmon fishing season in five years. despite obstacles, the association provided excellent service supplying ice to local fishermen and fish processors. dependable ice service is also a necessity for the upcoming crab and herring season, which begin in november and december. to help support this venture, which is vital for the upcoming fishing seasons, and could help attract more northern california commercial fishermen to fisherman's wharf and hyde street harbor, and could increase opportunities for the port's fish processing

businesses, court staff recommends amending the association's license fee to $500 a month for a period of one year, and extending the term to september 30, 2012. the association must continue to comply with all existing license terms and conditions, including maintenance and operation of the ice machine, and monthly reporting of ice sales, tonnage delivered, revenue, and expenses. the port will review the association's report, a track financial results, and monitor ice usage throughout the term of the license. this concludes my presentation, commissioners. thank you for your consideration of this item. >> can i have a motion? >> so moved.

>> there are several comments. larry collins. >> good afternoon. my name is larry collins. i am the president of the san francisco community fishing association, the first community fishing association on the west coast. we have eight members that are all local captains that support their families with small boat fishing. we use a hook and line here and we are a sustainable fleet. we have had a couple of pretty bad years here because of no salmon fishing up and down the coast of california. it has been very tough for infrastructure to stay in place we were in fort bragg this year fishing salmon. we're getting fuel from a truck on the dock and having to drag the hose over to fill up our

votes. infrastructure is important to bring in all these fleets. the ice machine, fuel, facilities, all that makes or breaks a port. there was short salmon everywhere up and down the coast. we have not seen anything like that in 10 years. we are expecting a very robust salmon season next year. we had the largest crab season in california history last year. we do not think it will be as big this year, but we think it will be a pretty good season. the herring quota was almost doubled from last year, 1,500 tons last year, 2400 this year. there is an opportunity here for this folly to start to get healthy again, and a lot more fish to come to the port of san francisco.

i appreciate you giving us a hand to bring the cost of this ice down where we do not lose more than we have already lost. it gives us a chance to break even. we have got to have an ice machine in down. >> thank you. -- in town. dan hunt. >> thank you anfor letting me speak this afternoon. i just wanted to emphasize the importance of an ice machine in a harbor. without it, we would not have a working harbor. if i wanted to keep on fishing, i would have to go to another location to get ice for my fishing activities. i just want to stress again how important an ice machine is to a fishing community. without it, you do not have one. >> thank you. is there any public comment on

this item? commissioners? all in favor? aye. the resolution 11-66 is approved. >> item 9b. request approval of second amendment to lease no. l-14282 with the san francisco bar pilots benevolent and protective association amending the rental schedule throughout the term of the lease for space located at pier 9. >> good afternoon, commissioners. port maritime division. the item before you concern of the san francisco bar pilots, who have operated as harbour pilots in san francisco bay since 1835, and have had their headquarters at thier nine since 1989. the bar pilots pharmacies include approximately 19,700 square feet of office, 20,100

square feet of shed, and 14,300 square feet of apron space. the port commission approved lease #l-14282 for the bar pilots in april 2000 a, and subsequently approved the first amendment in december 2009. the bar pilots paid the port $100,000 per month, which equates to $1.2 million in annual rent. the bar pilots are a tendon in good standing with the port. beginning in 2009, the bar pilots have experienced a significant decrease in revenues as a result of fewer ships calling san francisco bay, due to the worldwide economic downturn. in addition, the lease was

negotiated at an extreme high in the real-estate market with projections to go even higher. history proved the exact opposite, however, and the real- estate market, along with the rest of the world economy, went into a deep recession, leaving the bar pilots contract it rental rate much higher than market. under these difficult circumstances, the bar pilots approached the port to request that the least be amended as follows. one, and just the monthly base rent schedule. two, clarify the security deposit amount. 3, amend the five-year market rent adjustment provisions. the current police -- lease rate

language requires the bar pilots to pay a monthly rent of $100 in the first year, increased by 3% per year for the first five years of the lease term. the proposed second amendment would amend the monthly basic rent schedule to eliminate the 3% annual increases, and keep the monthly base rent flat at $100,000 for the entire first five years of the term. the second amendment clarify is the correct amount of the security deposit to be $200,000, which is equal to twice the monthly rent. finally, the current lease allows for the rent to be adjusted to the greater of their greater base rent, or the prevailing market rate. this provides for an upward only

adjustment in the rent. the second amendment would allow the adjustment to be prevailing market rent, which means the rent could go up as well as down, depending on the market. the bar pilots have consistently expressed a willingness to pay fair market rate for its premise seas, which is reasonable. the bar pilots are outstanding partners with the port on virtually all of our maritime operations, including crews and cargo shipping, the use of the pier 70 dry dock for repairs, dredging recommendations, the pier 27 cruise terminal project, and the america's cup, just to name a few. therefore, board staff recommends you approve of the second amendment to the bar

pilots lease #l-14282. this concludes my presentation, commissioners. thank you for your consideration of this item. >> thank you. can i have a motion? >> so moved. >> second. is there any public comment on this item? there is. john cindery. >> good afternoon, commissioners. i am the business director for the san francisco bar pilots. first, i would like to thank monique and her staff for what they have done on this amendment. however, i would like to pass on some concern that we have. the bar pilots do everything we can to support the city and port, in their endeavor with the america's cup.

when we signed up for this amendment, we understood that we could be inconvenienced with the america's cup. the amendment is stated, the event may be held on property, including in the immediate vicinity of the premise. last thursday, when we got the staff memo, that language was changed to where it would now be a potential alternative site on the south side, which would cause us a lot of problems moving our pilot boats. we have some concerns about the security on that. we had a meeting right away with peter and like to express our concerns about that.

then on saturday, as you know, headlines about the changes to the super yacht. this article goes into detail on what may happen to appear 9. -- pier 9. and then i see further changes in the staff language, talking about public access to that apron. while we are very grateful for the work that has been done for our changing the rent here, but for any further amendments, we will need to have discussion on that. i want to let you know that we are not pleased about what we are reading, that we may have to move or give up most of our apron. thank you. >> thank you. corrine woods. ok. veronica sanchez.

>> good afternoon. veronica sanchez. we just -- i wanted to thank you on behalf of the captain for the rate accommodation for the bar pilots. the bar pilots are members of our union. certainly, we are very supportive of their work. we also support the request that they have before you now to try to bring some clarity -- what the expectations are going to be for their lease hold and property for the america's cup, with the hope there can be some resolution that it will be in their favor and will not be disrupted. there seems to be a difference in language between what is in

the least and in the staff report and the newspaper. so we are certainly supportive of that. thank you. >> thank you. is there any public comment on this item? commissioners? >> i was going to ask about the implications on the america's cup, but i think we cover that in staff's report. i did have a technical question. the change would be just the prevailing market rent. is that at the time of renewal? what if the rent goes up and down and it happens to be at a low period and it happens to go back up? are we picking a point in time? how do we adjust to the fact that markets can go up and down, how do we reflect that so we are both fair value? >> deputy director, real estate.

i believe the question is that what times doesn't adjust -- >> i understand after five years it is prevailing market rent, but that particular time, we could have adjustments in the real-estate market that go up and down. by the look of the draw they either get a lower rent or we get a higher rent at the time? >> at the end of five years, there is a market rate adjustment. that is based, basically, on the commission-approved parameter rates for pier 9. the red gets adjusted to our current market rates at that time. for the next five years, there is an escalation of 3% that goes on for five years. then again in five years, it is adjusted for market rate. it could go up, it could go down, but it is what we would be leasing the property on that given day. >> so we are only agreeing to a

fixed rate with no adjustment for the first five years? >> right. >> and when become to the end of that five-year, if the real- estate market goes crazy, we will not recoup that. that will be reflected in the rent, going forward. >> right. >> i guess i am concerned about the timing on the amendment as well. this is clearly a concession on the part of the poort, recognizing market conditions have changed, but there will be a lot of discussion regarding the america's cup. i do not know if there is any incentive, at that point, or those holding these leases, to

want to negotiate. if we're opening up one now, why wouldn't we be working on some provision that, in some sense, obligates them to talk to us? there is no stick, at that point. >> that is a good question. [laughter] that is a policy decision, i think, on your part. >> we would expect -- accept that recommendation. the alternative in the environmental impact report is not new. it has been in there since the draft eir was published. what is new is moving forward with the cdc. based on the comments today, i would suggest that we hold this over. i was surprised by those comments. >> would you please