city dollars, all of this section 6.22 would apply, but without the public and the structure financing made available through the legislation, the event would not happen. simply because a private entity in this case the event authority is spending money through a contract does not and should not exempted from section 6.22. in drafting the legislation, it was my intention that projects benefiting from the financing, whether spent by the city or county or a private party through contracts would prevail judgment comply with prevailing wage and hiring laws. it is my belief that all of section 6.22 should be applied to the project. given that this position is supported by the three largest trade unions as well as community advocates and as part of the original signed host agreement authorized by the board of supervisors in a december 2010, it is clear that the event of 48 must follow the

local hiring law in all pre-and post construction. permanent and temporary. thank you for your consideration. chair chu: thank you very much for your comments. why do we not moved to the department conversation? >> good afternoon, supervisors. mike martin, a office of work force development. i am very excited to be before you today. we have, along way since the city was selected as the city for the america's cup. it has been a monumental effort by staff, are partners at the event authority, in the organizing committee, all i think with an effort towards drawing a clear picture as to why this is a good thing for san francisco, not only taken as a whole but in its individual parts, and i think in the presentation from the staff level, we will give some context as to how we got to the proposal

that is before you, talking about some of the issues that have been raised so far, but we will try to be agreed to allow more direct questions and direct answers. as noted, there are also members from the america's cup committee and be a better authority that can respond for their part of things, so i have a short slide presentation i am going to start with and then handed over to the staff, so if i could get that? i sort of already went through this overview, but my piece will be about talking about the strategy, the operational framework of the events, and our effort to create a positive legacies that i heard from each of the statements from members of the committee and the supervisors that are with us today. i think that is really vital. that has been our guiding light. understanding what will be left behind after what we expect to be a spectacular series of events, just because i think of the backdrop. the san francisco bay.

the excitement of that tableau is something, but part of this dialogue is pulling it together in a way that really matters and make sense for the city. i am going to do some quick backgrounds of people understand what we are looking at. right now, there is what is called the america's cup world series, which is a world tour of the teams that will be entering in 2013 in the actual america's cup. they are using the small vessels, the 45-foot vessels. there will be a number of stops around the world. they attacked a number in the past year, and they will hold another set of them in the coming year. the stock in san francisco if everything gets approved as part of this process would be two separate regattas, one in august, six days of racing over nine days, and then in august to early september, over seven

days. really sort of a dry run. it allows some piloting of the operational strategies before we get to the main set of events. that starts in july and august. there is the challenger series, where they have the round robin, to see who will be the defender, the best five of nine match races in september 7-22, 2013. here is the diagram that the coast guard has put out as part of its rulemaking procedure to establish the race area. this has morphed overtime as the uva authority and the america's cup race management have learned more about the capabilities of the boats and what is needed to have an exciting, competitive races that we are looking for. as you can see, the 2012 blue area to the bottom left is smaller than the 2013. . that is to reflect that the

smaller boats are not as fast and do not need to cover as much ground to have a length of race that is desired. the smaller boats in 2012 can do a smaller racecourse, said those events will be centered along the northern waterfront. part of that is that the port and then use we will be talking about today will still be under construction, including 30, 32. in 2012, you see the larger polygon for the larger vessels, against all concentrated along the northern waterfront, but it will likely have more than one it finishes, at 27, 29, the bottom right corner of the polygon on the screen. and a little snapshot of our planning status, as we alluded to in the opening comments, there was a unanimous certification both at the planning commission with a similar vote on the industry to appeal with the board of

supervisors. we have negotiated implementation plan that is part of this package. a few of those will have to be revised as we move forward. for example, the traffic plan with the area of racing, but largely, those plans really helped to draw the picture of what is going to be required to put on the event. federal environmental review under one lot is the national environmental policy act. that is in progress. we are working with the coast guard, the park service, the army corps of engineers, and the presidio trust to address this. we think our ceqa effort really provides a good foundation for that, and in a related effort, the permitting process more broadly is under way, not only including those agencies but state agencies, such as the bay conservation and the amendments that are required to do the activities we are talking about.

so the overall planning strategy is really informed on three pillars. environment responsibility first and foremost. when people talk about doing this in the san francisco bay, i think that is one of the things that springs immediately to mind. the comprehensive environmental review process we went through over the past year and how intensive that was, i think we are very appreciative of that. the second pillar is a financial stewardship. there are things that we have held very close to home as we have tried to continue to refine these agreements. we have negotiated i think to limit, of a liability that people were concerned about early in the process, and i think we have a clear picture on the potential costs and potential revenues, and with that, i think we are able to recommend the proposal that is before you and hoping to engage in this dialogue to understand where there are places to make the plan better and join

together in moving this forward. lastly, the positive legacy, i think it is vital to look beyond the immediate excitement of the events, because i think they will be fantastic, but what is going to be left behind for san francisco i think is a key question. i want to talk it about the event operation. i think mr. rose had a report that did an excellent job with estimates. i do want to say that those are based on 5.4 million spectators. there was some commentary during the ceqa appeal that we have revised that spectator number down in the ceqa. we actually did not. it had to do with the number of boats on the bay, so we are still looking at 5.4 million spectators under this ceqa document. that allowed us to establish a conservative on but about what it will take us to put on this event. it is helpful for us to think about, because i think the city

has a lot of experience in dealing with short-duration high-spectator events in sort of a direct, bring those services sort of way, and one is fleet week along the waterfront. there is the duration of the event, especially in 2013. it will not be just one weekend or one week, but it will be and at buffalo -- and ebb and flow. chair chu: one question. supervisor avalos. supervisor avalos: the bookings, with the critical race events coming up, are we seeing a spike this coming august and hotel bookings? are we seeing a spike next year as well? >> we have not evaluated that. typically, those bookings are closer to the date. we are not officially approved, so i am not sure that people

believe it is coming here. these times of year are high occupancy times, so i think if we look at it, if we get a spike in the other 15%. we can look into that. and get back to you. supervisor avalos: next week would be good. i think it is not enough to assume we are going to get 5.4 million spectators coming here for the events of the world cup, the america's cup, but we should be looking at what we are doing as a city to put the resources and to ensure that we will be attracting those people, and that could cost money. also, what are the things that we do that are separate from the event. are we going to be able to support spectators? the race is only part of the day. what do other people do what their time? what can we do to provide entertainment, as well. i think our arts community has not been addressed as much as

they could be, and i think that is part of our plan in attracting a great deal of spectators, to make sure we are using all of our various resources and talents to make that happen. >> thanks, supervisor. i want to be clear that i do not think that there will be 5.4 million spectators. this was a conservative estimate. we will come back to you more information to describe more of the target, but, again, it's sort of an apples to apples sort of way, i just want to be clear that the numbers in the budget analysts reports are for the conservative estimate. we need to make sure we find the adaptive strategies so that if it comes in, we are able to right size our efforts. in addition, i think we have to look at operational efficiencies. this has not happened in a lot of other spectator events. we have been able to use the permitting process to have a thorough dialogue with the partners involved, not only in

terms of security, law enforcement, the agencies. everyone has really good ideas. based on past events. i think all of that comes together in the operational plans, because we have plans for the worst in terms of the most challenge, but at the same time, that great challenge represents the economic impacts that everyone wants to see, so i think if we have been adapted strategy, which still need to have what you were talking about to bring the dollars and the liver, but we also have to have a way to do it at the city level. a couple of other things on this slide i just wanted to cover, the budget analysts report, the projected fundraising program was implemented tax revenue associated with this event do basically match up with that conservative cost profile. i definitely understand the questions and concerns, and we are hoping to talk more about that today. i've still very strongly that

part of what we are looking forward to is if we are able to find an agreement that works for the board and we can move forward. i think that helps all of our fundraising efforts. looking forward to that part of the dialogue today, but we also understand that is part of the financial imperative to make this particular deal worked out. -- work out. i want to talk a bit about the legacy, and this will be the last piece in my presentation. i think legacies in a lot of past america's cup have been bricks and mortar. we are doing that for sure, with the cruise ship terminal project, which we are all very excited about. we are also looking at other improvements in terms of the waterfront access, as supervisor of all those mentioned, and we are also -- as supervisor

avalos mentioned. this also provide a legacy benefit of cleaner air force san francisco bomber force, even after the events are over. in addition, i have mentioned some of the intangible benefits. i have talked a little bit about the operational command and coordination, but i am also excited about the transportation, like the embarcadero rail line, serving other parts of the city like a waterfront, which is generally pretty congested, but we realize we have to get people out of their cars and onto transit and on to their bikes, so we are excited about that. and coming back to something supervisor avalos said, it is not just about building something and having people come. we have to work to win this economic benefit. i share the excitement or the

appreciation for the movement in terms of the work force development plan itself, but as i have said in past hearings, that is only one point of economic benefit that is coming in. our goal is to bring in spectators, racing teams, sponsors, and show them what is great about san francisco and all of its neighborhoods. we have technology and using web tools. we have had a number of members of the arts committee in meetings, talking about how we could join with them and bring their inspiration forward as part of the event, and we are looking forward to do that, as well, and then small businesses. i think driving these kinds of businesses in these neighbor corridors i think is something we think is vital, we think will improve the events, and we think will help bring all of san francisco forward to make this a civic event like none other, so with that, i will stop now. bobby is here to answer questions.

>> ok afternoon, chair chu, supervisors. i am jonathan with the port. good afternoon. i am going to present the facts and figures, and my colleague will talk about our policy analysis that we have done as part of negotiating this. so i want to start out reminding people of what we're talking about in terms of port property. there are a number of sites that will be used either as short- term and besides, only fo the venue itself, and that long- term, which will be used for the event and will be improved and could also be the source of -- term development sites. the short term, the northern waterfront, including 27, 29.5, 29, which could become a long- term revenue side, 19, 19.5, 23.

in the southern and, at 80, and the long-term side, -- site, 26, 28, and others. chair chu: we have a question. supervisor kim? supervisor kim: the delivery dates for the facilities, i noted very. -- i note they vary. when they are delivered back? >> some of the short-term sites, they need to be delivered in march 2012, specifically 30, 32. many of the others are june 1, 2012 as a delivery date. most, almost all need to be returned to report no later than six months after the end of the match. there are certain exceptions specifically for 27, the crews terminal, with construction

under way, that has to be delivered back to us sooner within one month of the match so that we can get that project up and running. supervisor kim: just to clarify, everyone other than the one is within six months other than the completion? and does that include 29? >> that does include pier 29. these are for the venue leases to be clear. when we talk about the interim releases, the event authority has the right to be reimbursed to become the intra occupant of 29, 26, and 28, and 30, 32. in most of those cases, , -- most of those cases, 30, 32 --

in other cases, they would pay are parameter rents, are current market rents that reset every year at the port. supervisor kim: thank you. >> you are stealing some of my thunder for later. these are the sites that are contemplated. this shows 26, 28, 30-32. as you can see, these are facilities that are part of our historic district. they have been in service on the waterfront for a long time and are in need of repair. the port has struggled to find the right users and the right path way to improve them. both 30, 32, and 26 have been the source of partnerships in the past four potential deals that have not come to fruition.

private investors have backed out once they learned how expensive they were. so this largely covers the venue leases. it covers the rights and obligations of each party vis a vis construction and improvements for the property and then the reimbursement for the event authority for those improvements they are making to port property, but getting long- term development rights, with improvements on port property, so to start first with the improvements. there are several categories with improvements. generally, there is the infrastructure work, which is the primary work that needs to be done. 30-32 is the main site of that work. there is also $32 million for the relocation of shore power, which they are undertaking. they are doing the work. they have pledged to fund it. there are also regulatory conditions, approval, and

mitigation which was learned about during the course of 2011 as we went through the entitlement and printing process. these are all parts of the infrastructure work. some can be deferred, specifically the seismic strengthening of 32. there is also a category of additional work, specifically certain kinds of dredging, specifically for spectator vessels in the bay, and with 26 and 28, the supervisors may recall that this category was created in the venue agreement in november 2010 specifically because the dredging expenses were unknown and very expensive with our estimates at the time, some north of $20 million for dredging, so we thought it was important to pull this out as a separate category if we can get recovery, as a way of doing that, but as a way of right sizing that, to make sure the only did as much dredging as

appropriate. we created a separate category. 26 and 28 can be deferred until after the match. then, other than work that is necessary for the regattas, the infrastructure work, there is other work the authority can do. they can do other work regulated as minor improvements. that work is they are doing for their benefit and at their cost. so the cost has been a source of much discussion already. these are our current estimates of costs. the dda called for the reimbursement of actual costs, mainly for 2012, but i thought it would be important to review these costs. the authority infrastructure work happening in 2012 is estimated at just around $80 million.

some of that is at 30-32. there is some partial seismic strengthening. it is a big project. the project we have looked at before and struggled to make work. then there are other categories of work that needs to be done. many ofand there is a number of projects out here 23 for public access and the removal of files appear 64 and the southern waterfront. >> i just want to talk about some of the issues the were raised but we all read about, but these are tears the board

had not been planning to spend money on, and we made different choices. we are talking about $50 million expense of of 111. it is going to 91.4 million. this is a major driver of why we are having this discussion today. tell me why we are focusing on this. it seems we are asking the vent authority to put a lot of money in, double the amount of money and we anticipated in order to prepare for their long-term developments. >> this has been important for the port. we have made many efforts to get this developed a. there was a project we worked

on with this idea of cross subsidizing the reagan-maker was sold as part of the deal. we learned this is a very challenging site, and in the agreement and previously when there was a contemplation of a central and southern waterfront promenade of the venue for the america's cup, this was parts of the work we are going to do

it in 2012. this is a very large expenditure. it is an expenditure that goes well beyond what we estimated in 2010. >> there is a question as to why we were not able to understand what the full cost some would be pure good -- what the full cost would be. we initially thought it would cost $55 million. in order to cover the cost we have to ration out a number of real estate opportunities the city has, and that is what makes me uncomfortable. i am wondering if this does make sense to focus so much money on

pierre sergey and pier 32 in order to pay for the pure good -- to pay for the real estate rights. >> we understand that concern, and we have tailored the rest of the presentation to talk about house staff has made measures to control the risk. we will go further to talk about this. >> as the court have a plan prior to this coming to us in 2010 in terms of what appears they were intending to improve and strengthen and what value went to our city? >> the current plan has 2.22

$3.2 billion in need. it initially did not have a plan the specified how to deploy the capital resources to make those six shows. we have evolved over time to start programming the money. there are some tiers we have identified with those sources. you>> what year was the capital plan put together? >> in 2003 and in 2004 -- 2006. we updated annually. >> what were the top five priorities in 2006? >> we do not are retires in that way. we put them in categories of projects we think we would have funding for and but we have potential funding and projects

we do not have funding for. >> it is not based on the potential value for the city? >> it is raised on a number of factors. >> what was the potential use and value in 2006 in the capital plan? >> the capital plan really talks about the capital needs. it did not get into the capital budgeting side in terms of feasibility of potential revenues for the site. >> i understand it is a large site. i understand why it is important to the america's cup, but if we are going to pay to upgrade the site and improve it for the future, i feel like i have to have a good understanding for the future as to why we are doing ipsa -- why we are doing it. we