rest to the authority high. -- the risk to the authority high. they say we will get repaid by revenues but because they don't know the uses or magnitude, this is a big risk they're taking. this is a risk profile that is advantageous. this gives them flexibility and they have 10 years to try it out. it is hard to assess. on the construction side, the normal side has to do with time and money and how much it's going to cost and time over run.

i'm confident they will be able to perform even on the tight schedule that they had. they are responsible for some of the cost overrides. the most we can reimburse them is we are evaluating that at about $88 billion. we have no obligation to reimburse them. on the port side, there are some flip side risks and i would say this is a big benefit. we do not have $88 million to make improvements to the waterfront. we are getting short term venue's back. the current space on revenues is the current amount we would try to release is about

$200,000. we have to get new tenants when a short-term sites return to us. the city is back stopping the port matching rent losses. finally, a long-term revenue, i thought the graph was brilliant. the reality is we're not giving up the revenues we expected to have. getting these sites redeveloped is in a form of options right now. this provides a pathway -- that said, i will talk about the next steps and opening up and be

available for questions. tomorrow, we will be in front of the budget finance committee and the port staff will be there to answer any questions from the board of supervisors' committee and the full board is expected to take up this item on february 28. if that goes according to plan, we will be back in her early march 2012, both to improve the changes -- especially if the board changes us again. these are the legal instruments were the authority will be able to entrants are making these improvements. we plan on bringing that to you in march and with that, we're

here for any questions. >> is there any public comment? >> i live and work here in san francisco and i grew up sailing in northern california. i currently a sale on the day with my two boys, ages 11 and 13 and we have a great time out there. i wanted to come here today to flag an issue you are going to be confronting soon as you begin to consider the long-term development deals that will be generated out of this agreement. one of the great ironies emerging out of this whole deal is the america cup -- america's cup legacy actually does very little to support saving on the day.

you will notice it is conspicuously absent from the benefits listed. the recreational marine as envisioned by the development is position an agreement are optional to the event authority. the incentive that is bill been to get those marinas built -- the incentive that is built in to get those marinas built -- i would note that dredging is not mandatory and the rent credits can be applied to something else besides the are read. the incentive to get any facilities done to support sailing and boating on the bay are almost insignificant. to be blunt, it's like vaporware. against this context, you have to ask what you get out of this deal. i thought your own ceqa findings

to the good job in noting that it would generate interest in the sport of sailing. the problem is neither the court nor the city can meet the current interest that we have in san francisco. we are already one of the world's capitals for sailing. that is well known. there are no public boatyard facilities for sailing this side of the bay bridge. there is no public hoist to put your boat into the water. the wait for a berth at the two city parade is is 10 years. there is tons of demand for facilities. -- birth at the two city merinos is 10 years. the facilities for small boating in san francisco are rapidly being eliminated. the ongoing renovation you are familiar with at the san francisco marina will eliminate nearly all the facilities for small boats. all of the 20 foot slips are

being eliminated and 200 of the 216 25 foot slips are being eliminated. they're being converted to slips for large boats, 40-foot boats and 50-foot boat. against this context, seeing the vision in the final ier be dedicated to super yachts and a boat that run from 25 feet to 50 feet seems like too small of the provision. we have to find a way that there's a place for recreational boating, particularly small boating. it's not going to be easy and i appreciate the port staff already beginning to have this conversation, but unless we have the support of you and other leaders in the city, this part of the public trust and it's not going to happen. i look forward to talking with you about it down the road. i have letters here that sale of this in writing. >> is there any other public

comment? commissioners, questions? >> the $2 million we expect to be reimbursed, that is supposed to come through the organizing committee? if they do not raise the entire amount they're supposed to, is there some proportional payback? is there a letter of how that money is going to be repaid to various city agencies? >> the payment in lieu of rent is a mandate. it's the first call on fund raising. the eir is referenced as an early call on fund raising. beyond that, there is nothing formal. we have all submitted our budgets.

the ports budget submission is part of the submission and i would suspect that the operating costs associated with the event, police, the mta, the general fund department, that is one reason why we thought it was prudent to put in an america's cup budget allocation. >> any other questions or comments from the commission? >> thank you for a very cogent presentation. showing us what has evolved. >> thank you. there was a slide -- in determining the lost opportunity cost for the four -- for the

port that was provided -- on the net present value -- >> the present value of the rent streams we would turn on those assets, the event authority by what we are reimbursing mumbai use of the assets is discounted by a 11%. that's a difference in methodology. baer investment earns 11% interest. >> i have a question to clarify. is it because budget and less use an estimate that we are now

at 88 million and we would not -- i hear that correctly? >> that represents the estimate. the budget analyst recommends we reimburse them based on an estimate rather than actual. the actual cost may be higher or lower. one benefit to move to an estimate model is of helps us -- >> this is now on a fixed level for us. even know it's not based on actuals to move up and down. >> the payment options are fixed.

what that cost is from estimate to cost to reimbursement, that is an area where at the $88 million estimate, we may say we would want to exercise a buyout option to maintain pier 29, but if those costs raise in that 10- year window or the actual costs is much higher than the estimate, we would not want to consider that option. >> i think at one time, many versions ago, we were concerned this was an unlimited amount that was actually more dangerous for us than the other side. >> that is right. with great thanks to our port executive director, the steering committee, and the mayor's office, they agreed to limit the

sources of repayment. it's a major benefit to us that it is in that the proposal. >> there is an important new ones as well. i love this slide. we did this 15 months ago and we were really close. but what this shows to me, on the side of 88.5 estimate of cost they're getting close to finding the maximum price guaranteed contracts. wait reputable builders getting to that point, that brackets the risks. the reality is it's not going to come much closer. it only gets higher if there is a change of scope and new

conditions that were unknown and unknowable when the authority did their due diligence. if anything, back cost is only going to go up. that is almost all their risk, even under the current deal. while the budget analyst recommendations reflect best packages -- best practices, i'm not sure there is a dramatic difference other than planning purpose and understanding whether it makes sense or not. >> the passage of time helps to clarify more. any other questions? we will have to wait for the next steps that come at the finance committee. we look forward to hearing what the next steps are thank you.

>> i am 11, new business from the commission? >> how about some old business? water taxis? water taxis will be on the full word calendar. as we look at february 28 and march 13, it will be all little after that. we will do that. >> anything else, commissioners for new business? we have public comment. we have one person. >> thank you.

>> the clock is over here to the left. the time has started. >> can you give me 10 extra seconds? i'm with a neighbor's organization down the street and i wanted to give you an update on the epic restaurant expansion. not only is there a concern about that expansion, but the expansion of many of the restaurants along the embarcadero that i understand most of a month to add these tacky metal and plastic

extensions that seem one grade above a sears storage unit. i don't know where people got the idea that those tacky little buildings are ok, but if i can respectfully remind you folks you have obligations to maintain the fairly formal and the elegant architecture on the embarcadero and these tacky prominent restaurant extensions are not ok. i pointed out at your last meeting of the ports of known deviations for the income park restaurant created a lose/lose /lose situation. the developer was allowed to violate the restrictions by building a second restaurant, exceed the square footage by over 50% and adding a second stories and exceeding the height limit.

the epic restaurant is completely outside the area shown on the map in the rflp -- in the. the owner is crying he needs more room and if you stuck to your guns, there would be more than enough room. to build the current addition which i have a schematic of, the port staff told the operator he would have to go to the south beach for approval. they shot it down. keep in mind this is a very conservative, pro development. i know because i served on it for two years and they usually rubber-stamp everything but they said this project is too much.

so they started calling this addition a canopy. they were doing that because the restaurant was allowed to have a canopy. but this is not a canopy. i have seen the formal definition of canopy and that is one of those awning type things that stick out from a buildings doorway over the sidewalk. they then went back with another plan and they shot down the project a second time. they stated it very clearly that the plastic siding being proposed is not acceptable, so the project never died. the port should be telling the operator that this is not a canopy. the community has spoken. your restaurant complex's 50% over size. you designed the restaurants the way you wanted them and you need

to live with what you designed. we do not want tacky metal and plastic and we do not want them lining the embarcadero. thank you. >> any further public comment? >> do i have a motion for adjournment? second. >> all in favor? happy valentine's day.

>> good morning. are you awake? [laughter] i like to welcome everyone for coming to market is very important day for the city and its infrastructure. i am from the department of public works. our agency is responsible for the care and maintenance of the city infrastructure within the city right of way. this includes streets, sidewalks, curb ramps, and all of the connectors for residents and visitors. we are also responsible for

maintaining and insuring that our roads and right of ways are safe, accessible, and enjoyable for everyone. this all happens with incredible support that we get from our mayor, the board of supervisors, and other agencies. that includes our valued customers and community partners all working together. we have representatives from walk san francisco, the san francisco coalition, members of the local 261 who work hard with us from getting the bond pas sed, san francisco capital planning committee, the office of the city administrator, norman kelly is here, the mayor's office of public

finance, the mayor's office of disability, the san francisco planning department, others and all the staff, the public utilities commission. we have been working hard with them to make sure that we support all of the projects and that we will be ready to implement. we're here today to launch the bond program that will make a significant -- that will make significant repairs to our streets and build new streetscapes for many neighborhoods. last week, the board of supervisors unanimously approved the sale of the first round of bonds. we're very happy about that. we're getting ready to start work. i will ask our mayor to come up and say a few words. mayor ed lee.

[applause] >> you do not have to lower it that low. [laughter] thank you, everybody, for coming today. i very much enjoyed these particular events. we have worked closely to make sure our infrastructure gets done. we enjoy seeing things get started, not just good legislation, but things that are employment -- implementable. you all came to make sure that we did curb ramps, bike lanes, pedestrian safety, to make sure the streets were more walkable. a lot of people came together

for a remarkable work that reflects that if we all come with the right reasons and with less politics, we can get a lot of good stuff done. i want to note that nadia is not a the mayor's office anymore. she is at the comptroller's office. her office along with the comptroller, our 10-year capital infrastructure planning, have provided the discipline for the public to understand the message. the message is that your property taxes would not be raised if you give us a chance to start paying our streets. we have not figured out that for decades we did not invest in our infrastructure properly. this is the beginning of a new relationship with our public, one that we will carry out with our new city administrator who will help us launch even more efforts to deliver on promises that do not raise property

taxes unless it is absolutely necessary. in this case, it is not. we kept that promise with the 10-year capital plan. we will make sure these projects come in on time. that is why our city engineer is here. it is his project managers that help was so much -- help with so much dpw were to make sure the city staff work together. this is valuable money. we will not squander the opportunity the public gave us. we will start seeing 17th street it repaved. this is $4 million of the bond passed to pave streets, and do additional curb ramps, and be consistent with the standards that we have. we will work with ed at mta to

get more signaling modernization to lessen the ingestion. they really need the efficiencies of our streets to properly get everybody through. then they will have less accidents and delays. we know all of this comes together with our other utilities. puc is here because they are going to help. every time we break up the street, we will look at opportunities to see what else we can do with our sewers and water systems so that we coordinate all of this. we will use every opportunity to be smart in come on, and beneath the streets as we do the infrastructure. bge and at&t and other utilities will be coordinating with us. we want to do it right and use the precious money. i know that rings well with our board president chiu adjuster

arrived. he knows this is a precious moment. we worked on the first effort that did not succeed. it hurts when we cannot get that stuff done. we will adhere to the rigors of our 10-year capital plan brian knows how hard it is to get all of the department's and agencies together to understand what we're doing with the 10-year capital plan. there are a lot of elements. as mayor, i want you to know that this is my new desk. it is global. it will be the kind of desk that i like working at. this is the one that will get things done. it is one that you can ride a bicycle around. it is kind of a public works type looking desk. it will evidence as we go around all these projects that the $240 million will pay for,

and as we work on long-term infrastructure funding that does not increase property taxes but honors what people pay through their taxes to get stuff done in the city. i am looking forward to working on this desk for many years to come. thank you very much. [applause] >> next, i would like to introduce the supervisor who was a strong supporter of the bond. he led the charge and built many bridges. he brought many community groups together. he was there working hard with us. it is only appropriate that we launched this bond program in his district, supervisors got leaner -- supervisors go scott