>> this is an exclusive negotiating rights. they have to prove there is a demand and put the money in improvements, so we are putting them in a situation to take the development risk of the project. your point is well-noted. we're getting close to the end of my presentation. i would like to touch on item nine. >> would you mind touching upon your 30 and pier 300? -- your 32. they are needed for the a event itself. gooit seems there were controlsn place to make sure the costs do

not rise. it seems there is no incentive to at all to control costs. that needs to be tightened incredibly for me to be comfortable about wanting to approve this. >> i appreciate that comment, and that has been a concern since last february 13, 2010, and i would refer you back to what i talked about earlier about the practical cap. right now the reimbursement we put on the table has a potential. that is all we can recover, and at the moment those are the estimates for expenditures. one way to go get it is in the cost beyond what they are currently estimating have no

source of reimbursement, so at that point, the discipline of making sure we control our own cost shifts to the of zandt authority, vico's there is no practical way it -- shifts their authority, so there is no practical way. it limits their costs. i appreciate the concerns, because we share the cost cap. good parts of seems like a great deal of money to go into -- >> of seems like a great deal of the money goes into the investment, of but we do not know what the long-term use is going to be. we put under great deal of money, but we do not know what the alternate use is. it does not seem sufficient at this point. >> there is a developer risk. the developer has to be concerned about making money.

i just wanted to make one last note before i turn it over to my colleague, the doing of policy analysis. there are obligations to establish ifds and these sites. we feel it is an important step for us to bring forward this ifd number two. when we went through, an ifd like this has never been formed in the state of california. this is a relatively new process. when we consulted with the city attorney and outside counsel, it was deemed best to establish a district, and this is really just a form of notice to the tax paying entities, and we were

told the best route would be to put a notice forward with all of the potential project herriot's -- project areas. these are subject to future project approvals. they have to come forward with their own financing plan to establish project areas. we are bringing this forward specifically because you have seen here 30 am here 32 -- we have seen pier 30 and 32. this is just a notice. we have heard there are some concerns, because the project we are willing to accommodate and amend the resolution and attention to reform, because it was not our intention to bundle

about anyway. good it was put in the notice. >> just a clarification. i want to be clear. good when you talk about the deal, is that truly the order, meaning we would have to exhaust all of the resources in one category before moving onto the next? >> i would say one exception is the interim leases would very likely come into play before isfds are available. it is likely there will not be taxpayers corn and now five years. gooit is likely the parties will agree it will be a valid mechanism to recover and rent credits.

one of the other comments that have come from budget analysts and from our commissioners as about -- is that we run a risk. we have to either relocate or move out, and we will have to retenant these facilities. interim leasing has mutual benefits. good >> i think supervisor jim of limited to this earlier. i know part of our budget includes $6 million general contribution to the port, and given where we are with the budget, we are looking for ways to minimize that, so i am wondering, are there opportunities to make sure we

are turning over facilities when we absolutely need here and returning those back as early as possible? >> i am going to turn this to my colleague. >> thank you. >> thank you, chair and committee members. i am the project manager, and i would like to turn to the next slide, if possible your your -- if possible. this goes to the point supervisors shoe is just amazing. -- supervisor chiu is just raising. we were thankful the board approved this.

we are providing in rent-free for a time generally going from june 1 until six months later a. this would require a significant drop and would have been a problem for the port's financial stability. you can see in fiscal year 11- 12, we are estimating $8,000 in lost rent. we are seeing a number of tenants move out on their own on a voluntary basis. we have not instituted in the notice to tenants to get them out of the facilities, but that would be attending on board approval. in fiscal year 12-13, $3.5

million is the estimate, and in 13-14, that drops to about $2 million for a total of $6.4 million. in addition, the court is estimating security staffing and other related improvements would give to avoid $5 million, and these costs would be reimbursed through fund-raising, but to the point you are making, there is a direct benefit of delivering these facilities later or having them returned to the court earlier, and for all of the facilities we estimate that benefit to be $190,000 a month, and if we get this direction from the committee, we will go back to the event authority and see if there is a more of efficient use of the facilities. we have to accommodate the event

planned commo, so we want to mae are delivering, and now of we would take that back. goojonathan spent a lot of time talking about the improvements they are going to make. the port is undertaking a lot of waterfront improvement of our really going to represent a pretty dramatic change to the waterfront. in the south beach area it has been a red flag area. when that is done, and they will undertake the wharf project. they have a composed completion

date of june 1, 2013. seeing that accelerated is really going to help the neighborhood. we have already started the process of relocating. it would be reconnected after the match along with phase two of the cruise terminal. the authority is contributing $2 million to that effort. toward staff has been before us on a number of occasions to talk about the cruise terminal. the plan would be to complete phase one by march of 2013, to deliver as part of the america's cup village improvements on a complex and. the court would undertake

removal of this pier, which was previously used for parking. it is right between pier 1 and the ferry building. it would substantially improve the building a. we have talked about here is 70. that is a project we hope to bring to this committee for your consideration, but that would have substantial air quality benefits for the southeast neighborhood. aport finance team with the help of others at the port has done a great deal of financial analysis. jonathan earlier talked about a total of land improvements that have a net present value of approximately $90 million, and i

think the question some of you are asking is is it worth it to undertake that amount of work under this deal, so the analysis and now here is to look out whether there was no america's cup and we continue to collect rent from them, what would the revenues to the port steve? -- wedgewood revenues to the port -- what would revenues to the port be, and we are looking at a total lost rent of 52 port $5 million, and for 26 28 cents, almost $15 million. -- 42008, almost 15 -- an four port 28, almost $15 million.

we would like to talk about what would happen if there is no improvement. it has a 10-your use for life, and once it is red tagged and sitting there, it becomes an influence like you're 36, so we have done some estimates, and we are seeing a cost around $41 million, and that would certainly improve the bay and remove the concrete structure, but it would provide no impact on the porch. this is another way of looking at the benefit on the courport. the engineering division does facility assessments for each of the peers. most of them were built 80 to

100 years ago. the engineers go out to assess whether or not the structure can continue to serve current use, and they will go under avathe piers to assess the condition. the current estimate is the pier 26 would have 15 years, as would appear 28 -- pier 28. we estimate a 10-year lengths for the facility. pier 29 is in better condition because its substructure is tied to the other.

if these facilities are developed and undergo substantial improvement, the life of the facilities would exceed 56 years, so they would continue to be useful economic assets far longer than without the america's cup, so i may just go over a few components rather than going through everything. i think i will focus on benefits. you mention the capital plan and what support had planned in terms of the capital plan. in 2006 and when we first published this, it was just assessing the overall need. we were still in contract for " mental development, -- contract

for developmenta. after that was determined not to be feasible, we have not programmed money in the capital plan. we do have a prioritization process we use in terms of prioritizing the limited funds available to the port, and it looks of the revenue potential. it looks set whether or not it restores cultural resources, benefits the environment, etc., and we will be pretty are revised plan this year to the port commission meeting, and one of the great benefits of the america's cup is it addresses the need.

we now have a solution we have not had in recent iteration of the plan. good >> at the time, you prioritize projects based on potential revenues. of what was the thought of the time? in terms of potential revenue benefit at the site? >> the most recent iteration have not include a proposed capital upgrades. we have proposed other projects for financing, and we only run a capital project through the criteria of the court uses if we are proposing an upgrade, so there was not a plan to deregulate >> -- there was not

alone. >> it did not hit the threshold to make it on the list of priorities in terms of what they did have its funding for? >> yes. i would say it with respect to 32, it served as a secondary cruz earth -- cruise birth. the upgrades that are being undertaken now would allow the secondary crews use -- cruise use. it had also been used as an a vent site -- an event site. that has not been happening, so upgrades to the pier not only support future development, but they support an array of interim uses that invents commission --

advance the mission. this is our analysis of the project benefits and risks, and we try to give a fair assessment to the port commission and the board of supervisors we bring forward. on the benefit side, i think we all recognize how exciting it would be to have the 34th america's cup happening in san francisco bay in 2013 and established san francisco as a place for racing. ports, retail, and maritime and businesses have gone through a tough time, and they are looking forward to a great deal of business coming out of this

event. supervisor jim asked about the spectator yachts. an -- supervisor kim asked about the spectator yachts. they serve a major function. we talked on public access to improvements. we are great to see the appears open to public access. we have talked about infrastructure upgrades and some environmental benefits of the projects. we cannot _ and not how this project has invents a 20-year long quest for a cruise terminal -- we cannot stress enough how much this project has of the cruise terminal. with respect to the waterfront land use plan, that along with the capital plan are probably

the guiding planning document that sets forth the mission. if you look at the south beach area, it articulates a great goals, which largely rest on developing and signing use for those areas. this project this board staff believes is excel rating division by decades and allowing a real way to envision a new south beach neighborhood, so clearly the cost us have increased by almost 100%. a lot of our effort has been to to grapple with those cost issues and try to come up with

this functional cap. we believe we have found a way to manage these cost says. -- these costs. there is a lot of public investment going on here. there are a lot of other public sources to subsidize these costs, and there is no financial sources cassation -- financial participation. we are having to relocate a lot, and that is not a fun process for the tenants or city staff. we are trying to find space on port property it where it is available. finally, this is an issue we are

going to be grappling with over the next two years. what are we doing with the piers after the event? it is in many ways more challenging to figure out how to find a use the unmakes cents -- i use that makes sense. that is my presentation, and we are available to a answer any questions or respond. i do want to say we do recommend this deal to you. we have tried to improve it and make better sense. i want to thank a lot of people. jennifer, and harrington, an

important sounding board. the project team, and our amazing attorney have to put in endless hours, and i want to thank everyone with the event authority. you recognize it as is democrats that is the recommendation curio -- you recognize it as is. >> that is the economic. >> i do not mean to imply we will not go back and talk to the event of authority. give we certainly will.

>> thank you very much. i do want to thank you for the work you have put into the presentation. we have the chair. welcome, and thank you. goo>> thank you. i am going to be brief. i wanted to try and give an impression of the work we are going to be doing, because i think it is important. the board was a stock was to try and win the bid. we worked hard to structure the package in order to secure the. one of the key conditions was

the organizing committee would take on the responsibility to try and raise the money, and i thought that went a long way to producing unanimous approval. i might say we have grown to about 75 distinguished volunteers the reagan -- volunteers. many of you have given generously, so i want to make that clear. there have not been any expenses for 14 months. >> i know it is a challenging thing to raise the money. i appreciate that. i was able to put my support behind this effort to raise

money. i come from the philosophy that there is no try. there is only do and do not. >> in the language of the agreement, we would endeavor to raise an estimated $40 million, and we would have fund-raising target of $12 million of first year, $10 million the second, and the reality is we have raised $5 million, so we have exceeded it, although the amounts were 12 million, although we did not have the document. the way we got there is when we first sat down with the event authority, one of the major targets we had to raise money with local corporations. it made no sense whatsoever to have to organizations raising money from corporations at the

same kind. >> we have to ask a question given the time limitations. you are saying currently you halve $12.5 million, and when do we expect to get that to the general fund? >> i was needed. i can address about that. we made an agreement to give them their corporations in exchange for a certain amount of money. that is represented. on top of that we have had $4.5 million in philanthropic money raised. over the years you can get larger amounts, and because this event is taking place over three years, many of those