response was right. the city attorney articulated a situation where we are looking into the future, and we are unsure about what the numbers would be. when we collectively did was limit the bucket so that once the bucket was empty, the bucket was empty. that got us around trying to come up with numbers where it was our crystal ball verses the city's crystal ball. we have a bucket of is a fine. we have limited its from 44 gallons down to about 20, and we have done the with the partnership and we hope to have in years to come, so we are in the strongest position impossible to believe a cap exists, and we believe it will work. we do not believe there is lack of clarity.

>> when we look at a crystal ball, i do not think we anticipated expenses going up to $110 million, and it seems to me the bucket has gotten a lot larger. i am looking at how large it has grown to that we could tell people this was level of repayment they are going to get for it. >> i just want to respond a little to what you said. one of buckets is what ever they are able to develop. that is putting tens of million dollars into the structure. they are going to make it a

money-making enterprise so they can get their money back. they have to go forward and come back. it is limited. the only thing to get them to build what we want to build are the things we enumerated today. i do not want the paradigm of the growing bucket to obscure what we have been able to achieve here. >> could i bother you for the overhead? let me see if i can add a little clarity to my sense of comfort. you heard a lot of discussions about assumptions behind the numbers today. the beauty of what we have

designed is physical assets and the cash that comes off that and nothing more. if we guessed wrong about how much the tax credits to generate and it does not generate enough, the risk is on the event authority. if we guessed wrong about how much they generate because it's part of later or the development program was less than we thought, that risk is on the event authorities. get all they have is what is on this paper. that is all we can give. that leaves us free to do what we want to do with the portfolio and other sources, so that is why the port is more comfortable than anything we have had. >> what would be wrong with the board providing and clarifying

language that makes it clear in a way that meets the concerns that have been articulated here. certain things around the reimbursement, whether it is making sure there is no use of the general fund, i do not know what the limitations are, but what is wrong with the board having language that i extra protection beyond what you have included the talks about and aggregated amount? what is wrong with that? >> i am not going to say it is right or wrong, but we are talking about the ability of the port authority to compel the city to do anything with respect to the fund, so if you reiterated that language, i think you are at the same place. >> you also heard from the event

authority, they are not willing to waive the right to sue with respect to this issue. that is what they said. i understand the reasons, but that is not necessarily a comforting thing to hear it, so why not create language that provides extra protection to the taxpayers of san francisco what is wrong with that? >> i do not think we were commenting on what was right or wrong. we are talking about what was read into the record earlier. if you reiterate it again, i think that is perfectly fine. >> are you uncomfortable with the resolution? >> i am comfortable with what we have.

supervisor avalos: just some clarity on the general fund, what it means. i guess i heard there could be a payment with certificates of participation. i want to make sure that is not an option. >> participation is simply a debt vehicle. they are issued by the city because of the credit of the city. the source of the payment could be the source of revenues. it could be whatever is determined at that time. what we are trying to do is have the maximum flexibility that if we see a dead vehicle cheaper them what is on the table right now, all we would never do we see us -- if we see a debt vehicle cheaper than

what we have right now, we could use it. >> i am wondering whether i want to ok something like abouthat. is there a way to say we could borrow from the general fund but pay back to a different source? that is not possible. >> i have to think about the longer. >> what we are hoping to do is have flexibility and makes this decision later. if you want to make this decision now, we would urge you to not foreclose the ability to use a city that vehicle. i think you're concerned -- your

concern is with repayment. you could make those choices then if you are uncomfortable by about when you could do it now. we were hoping for maximum flexibility. >> thank you. and we have talked about the cap, and i am sure we may return to it. we can move on to the next item. >> moving on to no. 3, the budget analysts pointed out that the reimbursements should be based on estimates provided by a third party engineer. what we have done is to propose a revision that would specify there would be a peer review of this proposed item. in addition, this highlights the number of the engineering review

board that calls for a non- linear time sensitive analysis that will go a long way to the finding the most efficient solution so we feel very confident that the combination of those provisions will allow us to make sure what is being done is what is required to reach for the peers are safe but not beyond that. >> next item. >> moving on to item number four, prior to the upgrade of 30 and 32, in dovetails with the situation we just had. at the time before the second phase of work, to a evaluate the financing option.

>> i think we would all agree to that. >> to define this a little more, we are calling this details. what is is a participation in 50% of the revenues in these sites for the first 15 years, and this was done as a way to make sure the projected expenses match the assets in the reimbursement stream, so this was the last one that was going to top it off and make sure we match the projected expenditures. as part of last week's discussion, there was a discussion of the potential of pursuing development rights on properties. this talks about the fact that

if such a refinancing tool is identified, who in amounts that would exceed the net present value of the tail, the tail would be extinguished. if that comes into a play, it most likely would be in an amount that would distinguish the tail. the net value is tiny. we have got that already, and we are hoping it does work are. if it does work out we would like to say there is additional value beyond what is needed to knock out the tail at those sites. we have the same size bucket, but it is a way to work towards the thing describe last week that would benefit these priorities and to limit the reimbursement need who for the porch.

requiring the return of short- term revenues to the port immediately after bands. this would highlight the mitchell compromises that were locked out. the event authority, there in a challenging position. they do not know how long it will take to break down the installations there doing four things like international broadcast center or their back operas -- back office operations. they have agreed to move the dates for piers 19, 19.5, and 23 to december 31, 2013. as we mentioned earlier, there is an mou between the general fund and the poor to that backfills support for lost rent revenue. the port can relet these areas

sinner. what we have agreed is for the city and the port to take over the obligation to put out the notice to voters. that was something we had agreed as of mitigation measure under ceqa. it will provide the duration about safe boating habits and where the races will be. it is something the port is excited to embrace. we thought it was more properly placed with a public agency. we feel like this exchange benefit both parties and we're happy to bring it forward. supervisor avalos: a question on that. what were some of the short term, what were the sites used for? what kind of tenants did we have in the spaces? >> the question was what did the poured in 10 for the use of some of the short-term -- supervisor avalos: my question was looking back before the

discussion of the america's cup. who were the tenants in the short-term lease properties? i have another question after that. >> there were 87 tenants who have been impacted. i and these appear sheds, -- in these pier sheds, theyw ere -- there were light industrial uses. they create light storage areas. we have a lot of people who were licensed to be involved in wholesale liquor activities. there were some tenants to or involved also in storage activity. >> looking forward now we have

language that there is moving closer to the present. once the event has been finished and the sites are vacated. do we expect we will get people looking to rent space right away? is that -- how likely is that three months like a difference -- will make a difference? >> this has to be one of the port's major focus areas over the next two years in addition to delivering a great event. it is getting ready for the day, whenever it is. to have these peers come back -- piers come back. whether or not the uses should shift from this fairly low rent warehouse types of uses to something else. that is going to be a

consultation with the port commission and the board of supervisors. supervisor avalos: we have requested this bump up of the time we couldrelend these bases. you're saying it is a positive change. we will see a difference. >> yes. we think it is a direct general fund benefit to shorten the period of time the city is subsidizing lost back rent to the port. we are looking forward to the discussion about what these piers can be after the event. >> if i could ask mo'niqonique moyer, how are we able to get tenants back in? we asked about the space needs back there. so if you could elaborate. >> thank you.

right now what is happening in the bay area is there is an increasingly narrowing supply with -- of warehouse space on the peninsula that affects subsidy burlingame. there is a large demand of unmet space. if you have been to pier 80, you have seen the improvements they have done at pier 80 and is our expectation with the improvements that will make to be in those piers we will release them quickly but at rates that are more market rate than what we are achieving today. we do think that will be some cache for having the america's cup events there. whether it or not that translates to real dollars, no one knows. the demand will be there for the space. supervisor avalos: -- supervisor

campos:. to the extent that we're talking about recommendations that were made by the budget and legislative analyst, i am wondering whether or not mr. rose and his office are satisfied that the recommendations, whether it is this side or other items, actually address the concerns that were raised in the report. i'm wondering if there is a process by which we can hear from the budget and legislative analyst's on the adequacy of the actions. through the chair. supervisor chu: we have hit upon an supervisor campos is going through the budget and the recommendation. what you see in the document is the budget analyst's recommendation, the status on how the negotiations have gone and what the mutually agreed upon action has been so far. i think we're going exactly

through the budget analyst's comments. >> let me clarify. in the first place, some of the recommendations have not been addressed from our report. number two, we just received this document. a fast look at it shows us that some of this -- some of the response we believe may not be adequate or maybe somewhat misleading. we cannot give the board an opinion as to whether or not these statements are being made in this document that is presented to the board has been fully responsive to our recommendations at this point. we can certainly, at your direction, do an analysis and report back to the board on it. having just received this document, we do have some questions about it. some of our recommendations have not been addressed. we would be happy to respond to the board if it what further information.

supervisor chu: since we're going through the items 6 and the and making sure we're covering everything, why don't we go through the items that are on this document and if there are items that have been left out you can address those items. i would say that the high-value mr. rose's opinion is up to this committee to determine whether or not that is the response that has been adequate. it is not to say the budget analyst should tell us, this addresses it and the concern is addressed. it is upon us to say here were the recommendations the budget analysts put forward. to the points that have been recommended, do they speak to those issues? that is a fair question. it is up to this committee to decide whether the responses are what we expect. >> i agree it is up to this committee but in deciding whether or not response their responses are adequate, i

certainly think we would all benefit from hearing directly from mr. rose who is the one at his office has spent time looking at the fine print on this deal to see what their take is on the adequacy of these responses. not only on those things that were left out but the adequacy where responses were provided. i think it would inform our decision to hear that intimation from the budget. supervisor chu: thank you for your comments. let's move on to item seven. >> develop a document with the acoc. we have talked about in the earlier part of the presentation but we want to get the feedback of the board and the comptroller's office to make sure that document achieves what it needs to in terms of certainty of fund-raising and our ability to match up budgets

to the funds coming into the city. we proposed as this moves forward we provide you with a further draft of that document after getting your feedback and hopefully incorporate that to your satisfaction. supervisor chu: thank you. depending on when it is we have the mou language completed, to amend the resolution, would we -- with like to take action on that today. >> if the desire is to have the board conduct the hearing on the amendments next tuesday, it would be important to act on the amendments and make them today so that is what is sorted out. supervisor chu: thank you. i see no questions from the committee. let's move on. >> item 8 is not for the budget analyst report. it was the topic of discussion

during public comment. the talk about the neighborhood engagement strategy. the arts organizations, youth organizations, small businesses, neighborhood organizations. we drafted a memo that describes the progress we made to date. that is available and we provided it to you. we're looking forward to discussing at -- discussing that. i wanted to emphasize our overall strategy. this was finding a way to reach out to every neighborhood in the city and bring them into this event and as high-profile international opportunity to bring visitors to the neighborhood and the neighborhood to the visitors. the london olympics pioneered a program called inspire which looks at the groups that are inspired to do something in conjunction with the games. be part of that process and we want to be part of that open source, bringing in people all -- from different backgrounds

who may not have anything to do with sailing but look at the excitement of the event as an opportunity. our project has been designed around that effort. we think it is necessary to deliver on the economic projections that people have been talking about because we want people to spend their time and money in the city's neighborhoods when they're not watching the races. happy to get your feedback on that as we move forward. we are excited about that to move ahead and make the san francisco event. president chiu: i would love to get a copy of that memo. we have heard not just from neighborhoods but from the arts and nightlife and cultural communities how important this is. this is not necessarily -- it is an ask. it is not difficult this continue in a significant way to lay out what the plans are. this is a huge economic as well as cultural and community

opportunity that we're not taking advantage of. thus far, i do not think there has been the type of engagement with those communities that we need. i want to make that comment and appreciate the work you're doing. supervisor chu: thank you. supervisor. >> item 9. we have negotiated a revision of the dda that would provide for the 1% fee on the third and subsequent interest of condominiums. president chiu:u. supervisor avalos: that was from last week. >> this was not in the document last week. it was requested by the budget analysts. we have added this provision. the budget analyst talked about

after the initial sale. it is different from that recommendation. >> i think there was a discussion last week about the third sale and that is where i draw the conclusion that is where things already said. and i would like to go back to the budget analyst recommendation. it is possible to go back to the subsequent to the first sale. there was some direction from the committee around the valve or the first sale and that is something we as a city, i think is reasonable to expect that. that is a recommendation that to me was when i was hoping the committee would take up at the bottom line. supervisor chu: thank you. just be clear, the language in the previous dda did not include

a transfer but the budget analyst did recommend that. we did have a conversation around wanting to see some level of participation. what i understand is it was come back out. >> this was the dda -- it did not have that provision. we worked hard with our partners to negotiate. they have provided this compromise and this is what is in the proposal before you. supervisor chu: thank you. supervisor campos. supervisor avaloscampos: what t board of supervisors approved in december 2010 and i think it is specifically section 7.3 hi, how the 1% sale of any condominium constructed on

seawall lot 30 with the exception of the first sale. where understanding is it would mean the second sale. mike understanding is that what the board approved in december 2010 included the language. i wanted to confirm? from the budget and legislative analyst. >> that is correct. on page 4 of our report in the summary, we stated reinstate the provisions included in the foot -- host and venue previously approved by the board of supervisors on december 14, 2010. to require a transfer fee equal to the resale price after initial sale constructed on seawall lot 50. and the next item which has not been addressed in this response

as i understand it. in response to have before you which was previously approved by the board of supervisors on december 10. poor participation of 15% of the net proceeds of its transport or sublease of more than 55% of the event authority or interest in long-term leases from the event authority or the other parties excluding the first transfer. that letter has been silent in this document. >> on that i was going to get to that point. mike understanding is that this subsection 2i of what the board approved. the question to the chair for staff is simply one not go back to what the board of supervisors approved in december 2010 and include the 1% upon the second sale? the board has been clear at the outset on where we areo