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 are so what is wrong with going back to that original language? >> simply put it is what you heard earlier. december 14, there was a metula agreement. what was approved was will forward without their approval. we are 15 months into this effort. we have spent a lot of time and energy to get here. it is appropriate to move forward. we worked hard to compromise on a number of these issues.

we appreciate the work of the event authority and this is how far we got. >> it is up to this committee to decide what is appropriate. from a business standpoint i do not see why we would prove -- deprived the taxpayers of that benefit. my understanding is that there are a number of projects where the port has had that kind of arrangement. maybe with some differences. i do not see why we would not provide that provision in the resolution to make it clear that we are simply -- we simply want to get the benefit of the bargain that we approved in december of 2010. >> i think what you're saying is a key point. each of these individual transactions as we found out is a complex animal. you have to work through the costs and liabilities and come to an agreement. we have done that in a lot of

ways. part of the challenge is exacting these participation rights could reduce the value of the assets. so we have a fairly intricately complex agreement. we appreciate the work of the event authority of getting as here. >> it is an entirely -- an agreement. it is not what the ideal of what the recommended. i would be happy -- be happier if it were for sale. there was a reason why we did that. back in 2010. i still have not heard an explanation as to why we need to change that at this point. i would simply submit that i think we need to go back to that original language that this board approved.

supervisor chu: thank you for your comments. we have gone through all the difference items here and we wanted to have the budget analyst respond to any items that were perhaps missing from the list. if i can ask mr. rose to speak to that. >> i have referenced the one item. mr. campbell will speak to any additional. supervisor chu: ok. white -- why don't i give you some time to do that. i wanted to revisit the issue about the work for salomon. this is an area where supervisor avalos has brought this area of. i would like to hear from jennifer or laura lester on this item.

>> get afternoon. i am a consultant to the event authority. -- good afternoon. i believe that what probably will be most useful to you is if i review some of the modifications that have been made to the workforce plan since we last prevented -- presented to you on february 1. what we did represent changes we made to be responsive to the concerns and issues that you raised, particularly with regard to their being very clear consequences if contractors and

businesses did not really fully participate and did not perform according to the workforce development plan. so the first thing i need to do is give you a new version. however, i have to tell you that as of this afternoon, there is one change in this version. supervisor kim, i apologize. i have four copies by new york office has a coffee -- i know your office has a copy. >> i appreciate your work on this. we have had a couple of hearings on this very topic since october. the last we had there was a discussion about the appearance of what the consequences would be meted out in the past.

the consequences kicked in when there were certain steps that were not followed. in hiring people. i believe the movement has been toward the request from members of the community and labor organizations was that the consequences would be on the actual outcomes. meeting particular goals. i am curious to see how things move from there. thank you. >> i should say also, thank you very much to supervisor natalee's and his office because -- supervisor avalos and his office because they have spent time on this. if you turn to page 20 in that particular version, one of the things we needed to do was to make a very clear statement that event authority will contractually require its

contractors to achieve 20% of all construction hours going to san francisco residents, again with 10% of the hours going to economically disadvantaged residents, the 50% of the all printers hours going to san francisco residents and 25% of these hours going to disadvantaged apprentices who are san francisco residents. we indeed made it clear -- made clear statement that this is contractually required. this is on a trade by trade basis. the other thing we did that i should say trade by trade bases accept the trades that are exempt and this is exempt according to oewd, what is posted on their website. it applies to other trades. >> could you say which trades

would be exempt? >> i could not name all them. one of them would be marine pile drivers. >> that is the trade that is always discussed. >> there are other trades. i apologize. i do not have the list of exempt trade with me. we could send that to you. >> thank you. >> and page were -- on page 21, we did -- we strengthened the language around contribution to the workforce pipeline. what the plan is proposing is a contractor for every trade must meet 20%. if at some point they feel, and -- in looking at their production -- projections, they say they will all sort -- fall short, they must meet with oewd

and they have the option with negotiating with oewd a pipline-pipeline and that could take the form of sponsoring an apprenticeship in one of the construction trades in which residents are underrepresented, it could -- and that means up to sponsorship is not a big item. it would sponsor up to about $5,000 because there are fees associated with the premise and there are work hours that are associated with production. -- apprenticeships. they could sponsor a san francisco resident participant in city build academy. making a contribution, $5,000, or they could provide a job for a san francisco resident on a project, and other projects they have and with the idea of

contributing up to $5,000 in salary or what have you. if the contractor does not meet the 20% goal, does not meet with oewd to negotiate one of these off ramps, this is when the penalties kick in. the penalties are stated on page 22. the only thing that is different here is that rather than at $10,000 portrait penalty, event authority is agreeing to a $20,000 per trade penalty. again, like the local hire construction policy that is the cities, oewd has the authority in order to enforce the agreement and to assess the penalty. the other consequences that are included -- >> on page 22 where it is

highlighted in yellow here, it's as 10,000. you're saying it is 20,000. >> we will send you a corrected copy tomorrow. tomorrow morning or tonight. tomorrow morning, definitely. the other areas in which the consequences were strengthened and spelled out much more clearly are in the hiring for installers or temporary structures trade you can see that -- or temporary structures. you can see that on page 16. that is something that event authority is extending, the 20% goal for hiring to the construction related or the temporary structures, the direction of the tents and so forth. if and this is being done by

production companies and so forth. those contracts, if they do not meet this goal and they do not do the things they're supposed to do, there is a penalty. oewd has the authority to enforce and assessed a penalty of $5,000. this is something that is unusual and does not currently happen in san francisco. another strengthening of the consequences has to do with the local business enterprise. this is both for participation or utilization. this is for construction contractors and it also applies to non-construction contractors. on page 24 in the agreement, this authorizes the human rights commission, which has been working with us to again enforce

the agreement and assess a penalty of $5,000 per contract for failure to do all these, this is where we get into the steps for failure to do all the things they would need to do to achieve the lbe goals. one of the best things as things are marching on, we had our first bid walk for pier 30- 32. because of the combined efforts and the event authority, there were 100 firms who are interested in subcontracting opportunities on the project. many of whom were certified local business enterprises here in san francisco. on page 19, it is the same type of penalties that again, the human rights commission has been authorized to enforce shed the

non-construction businesses, and this is for the event activity. this is where we get into the concessionaire and people like this. if they are not completing all the things they're supposed be doing, hrc has the authorization to enforce the agreement and assess a $5,000 penalty. supervisor avalos: why did we not go ahead with -- not being the goal for the contractors? >> it is a similar question as to why it did not want to adopt the local hiring policy. part of it is because the local hiring policy is set up for public construction. public-works construction. it is set up for a hard bid and

low bid in vernon. despite the event authority being able to operate this as a private project, was not -- did not want to take on the risk and having basically the penalty structure exactly like the local hire ordinance. nor did they think that it was required. one of the reasons it was not necessarily being required is as the private owner, they're not obligated to simply operate in a hard bed in burma and or historically low bid and firman. they have a lot more latitude to include elements of their assessment of the contractors they are selecting and of the -- in reviewing the bid. they cannot operate with a lot more confidence -- they can

operate with a lot more confidence. they can select contractors who have the ability to meet the local hiring goals that are in the workforce plan. supervisor avalos: we had contractors apply for bids for america's cup? >> yes. the general contractor is power engineering. this is only for the first project, pier 30-32. the other project which is the construction of the end wall is not something -- it is a much smaller project. it will not take place until early next year. 30-32, that is the larger projects. that project went out to bid last year. the general contractor was elected not too long ago. and has advertised bids for all the subcontracting opportunities

and that is what that what was about. supervisor avalos: has that contractor also been subject to our local hire ordinance through other works projects in san francisco, to your knowledge? >> that is an interesting conversation. i am not sure if they have been subject to the local ordinance. they have been working with oewd on the export-oriented -- exploratorium pier project. one of the things that was impressive about this general contractor is the came in the door saying, we will meet all the 20% local hiring goals, including in the specialized trades and they had already hired 15 different city build academy graduates that are working on that project. they intend to move over to the

pier 30-32 project and have included their numbers in their projects which they submitted. >>supervisor avalos: it is important to make a case. it looks like they could apply their services for other projects in san francisco. we would have a different standard for america's cup. it would be good if liquidated damages would apply to both. >> there is someone who will talk much more about liquidated damages than i can if we want to continue. i do want to say one of the things that america's cup wanted to do in this agreement is to get to the heart of making sure that citizens got opportunities on the project and if for any

reason there was an inability which they do not anticipate from power which is 75% of the work already, we have the projections for 75% which we shared with you. what would happen is there would be a specific contribution to the pipeline. and in terms of embracing the local hiring in san francisco, san francisco residents would get opportunities to get in -- apprenticeships, to be trained for future work or to work on other projects. so that we were -- this event would be making a significant contribution. at the same time, knobby opening itself up for further brisk --

not the opening itself up for further risk. john " we have gone from 10,000 tunnell gipenalties. i am not sure we have all the references to the change in workforce development and local small business development plans. on page 9, the fourth bullet. it says oewd shall assess penalties for failure to complete the steps to achieve the hiring goals. we have discussed moving that from steps to a meeting of the hiring goals. wondering if -- we want to make sure that every part of this document is going to be -- conform with the change. >> that is probably part of the executive summary and it is possible it was not brought into alignment with the language on

page 21, which is quite explicit. supervisor avalos: as the event authority agreed? >> absolutely. all the way to the top. >> we could approve this and the event authority would not say, this is not part of the agreement. >> mine understanding is once this document is an attachment to the dda, it is binding. >> i could ask a question for our council. the question is about our dda has language about how the workforce development program will be carried out. is this binding, the language that the resolution refers to in the dda, the dda refers to this. with this be binding in making sure we carry out the goal of

the local hiring as pertains to the america's cup? >> the dda incorporates the workforce development plan into the actual documents to a becomes part of the dda and the -- becomes an enforceable document. the remedies are those specified in the applicable underlying ordinances or those to which the authority has agreed in its negotiations with the mayor's office. supervisor avalos: i am assuming those negotiations, the agreements are in this document. that is my ultimate question. >> that would be my understanding as well. supervisor avalos: thank you.

supervisor chu: thank you. we have gone through a number of the adams. let's return to you, mr. rose. >> good afternoon. in terms of a brief overview of the document presented by mr. martin in terms of the response to the recommendations, we have three of our nine recommendations we did not see in the documents i want to call that out to you. one of them was the intent was changed. our recommendation is requiring the return of pier 29 immediately after the event. if it was not going to become a longer-term venue. when we read this recommendation we believed it could be a longer

term venue. there was nothing to address in the timeframe when that would be returned to the port. president chiu: could you ask the port if they could address that point? >> our recommendation was to return pier 29 to the port immediately upon the end of the event. >> i believe mr. martin testified the dates had moved toward and there was a commitment to move it quickly. the date was this calendar year. arbour entering a question about what to do with those peers faster. president chiu: does that need to be in the dda? it was not enumerated in the proposed language changes. >> would you mind asking the

city attorney or mike, whoever? >> through the chair. i do not remember whose question this was. as noted in item six in the chart prepared by the mayor's office, there will be a new schedule which is attached to the dda and inc. that provides the dates by which the court -- pork should deliver and the date by which they should be returned to the poor. >> it refers to piers 19, 19.5, and 29. >> we would amend that as well. to the port. >> we have come to an agreement to taking the development rights out and that would include the interim leases. we would like to talk about this issue that was not part of that

discussion. we will try to come back with a meeting. president chiu: is there anything -- anyone from the event authority who thinks that would be a problem? we do not know what will happen. >> there is a challenge that we have to review with them. pier 29 is part of the america's cup village. as i talked about with the other venues, they were able to assess the break down and timing needs to have. it would be premature to say when they can get out without reassessing what they have to do to get out. if we could have the benefit of that time we could report back. president chiu: how long is that going to take? >> as soon as we can engage in the discussion. would your next meeting -- that is next tuesday. we will have an answer before that. president chiu: ok. supervisor chu: thank you. >> there were two of the

recommendations we made. one that i did not see in this response. one was to required to it -- the event authority to retain piers 26 and 28. the reason is the dda reads that they can be returned to the port. the port would lose the rental revenues. i did not see that in those recommendations. the other one was to -- the with the proposed dda works, they have a basement that was established in the dda. there is a delay and no escalation in the rents by c.p.i.. from the end of the venue leases to the beginning of the

longer-term leases. >> i will take the first one. on pier 26 and 28, they negotiated that options so they could take stock on whether or not they will use -- move forward with using those in the interim. one of the options is interim leases at 26 and 28. they're motivated to keep those locations to burn off their rent credits for the dollars they spent. while we did not have a firm agreement now, it is something that we think there is a self reenforcing dynamic that would allow those to be kept by the event authority if anticipating long term of bell -- developments at those sites. >> as to 26 and 28 in the starting rents, 26 and 28, we had them assessed in terms of

their current value and prospectively, our judgment from that analysis and from our engineering staff are twofold. one is the valuations that we derive from a real-estate economists supported by a team of historic architects and cost estimators is our valuation that we believe is a long-term lease value is slightly under $6 per built square foot. we think the $6 is a fair value. it might even be generous based on their current value. the second comes from the assessment of our engineering staff, which projects these with a ten year lease for life. it assumes there is no more will prepare that would occur. prepare that would occur. if the long term lease starts at