southern waterfront purification and which we set aside the rental fee to be used to beautify the waterfront and mitigate impacts. we like to have lots of sources and they end up going in the same places and helping with the overall program of beautification. >> you mentioned the plan was if we could get to 20 million and provide to the operating budget for the capital plan which would be great. but in the context of the -- if i added the 693, -- in terms of general obligation bond, is that counted already or is that on top of -- >> it is included in the west

meant as an enhancement. >> the goal of hoping to get to a $20 million level is not part of the projection? >> the projection assumes a flat but it about $10 million annually. it does not yet show improvements. >> we heard a presentation earlier today that would help defray if the project moved forward. that is not in the numbers as well. >> some of the projects are in the numbers. if we know there is an obligation that will be met, it is included as a source. >> any plans in terms of incremental property tax revenue

is not included in that potential funding source or how much is? >> there is ifd included the potential funding source. ifd is 231, but it is way in the out years. it's in the last five-year projection. >> the biggest issue i see is this $2.2 billion strategic issue in terms of how are we going to preserve the peers with fat and we are short -- this is over time but it's what i consider the biggest financial issues and the operating surplus is only going to go so far. that is something we will

obviously have to continue to think about where we can find the sources. >> the 2008 bond -- getting these -- this is expanding the envelope and that is the key way match with public-private partnerships to resolve this issue because you are absolutely right. we will not be able to solve this through our capital budget. i would like to see a time when we could resolve renewal with it but we cannot resolve this level of deferred -- >> this is our own internal search -- own internal sources that we have to solve for. >> we can use our annual capital budget to use these services to

me that that match grants and meet other opportunities. that's important and i think the criteria helps us maximize where we are allocated these limited dollars. >> post the adoption of the land-use plan, the only recourse we had was tentative improvements. private investment through development and post-adoption of the capital improvement plan which was adopted without the planning -- subsequent plans have identified the same sources and private development and tenant improvement but has inc. and allowed us to be more creative and and think of these options for the port. even to meet the funding that we have which is a quarter of what

daddy is continue to pursue all of those and it whether we are working on pier 70 or part of the america's cup, all of those are identified in the plan as funding sources even though they are not secure. we have a wide gap, but we are slowly inching our way forward and i if this is a point to not let that grow. this is before we took into consideration of the new annual add-ons. for all amount>> we are pleasede

improved trends and we want to give you credit for helping us to get on the right track and we know it is not enough to help us on the strategic challenge. and >> i would like to thank the divisions, real estate, a maritime to help us see these revenue enhancements. >> any public comment? >> hearing none, we will move on to the next topic. >> request approval to forward to the board of supervisors the supplemental approval of fund balance and for phase one of the international cruise terminal project. >> the item before you is to appropriate 7.4 2 million to the

cruise terminal budget. this is within the $62.4 billion budget you have improved for phase one of the home construction. -- $62.4 million budget you have approved. this is a timing of cash for the project. the sources of funds are the fund balance in the amount of 3.448 that we would have replicated through the capital budget. this is recognizing in the budget which is where we will be contributing and using that source of revenue. the plant revenue bonds in the amount of 1.1 million.

finally, to recognize that there was a savings in the project also funded through the port revenue bonds and the savings are $700,000 and with like to use this 40 cruise ship port. your approval will have less advanced it and get it before the budget and finance committee. you can see the timing of the cash i am referring to. >> so moved. second. >> is there any comments from the commissioners? is any public comment? if not, shall we move to approve, all in favor.

>> the resolution has carried. >> thank you. >> informational memorandum regarding the disposition agreement and related actions to approve the port commission, 2011, to approve the america's cup project involving peer's 19-23, 27, 29, and adjacent water areas, water basins between peers 32 and 48. these are all located along the embarcadero waterfront. >> good afternoon, commissioners and members of the public. i am with the planning and development division and one of the project managers for the america's cup efforts. we are here primarily to present

the revised memorandum that we sent to the commission after the december 16th meeting and approval at that time by the commission of the dba in its current form. that presentation was an oral presentation with many business terms outlined in that regard because of how quickly things were changing about the america's cup. we thought it was important to bring in a memorandum which would describe the entire -- and the presentation that discusses the difference of what was before you launched on december 13th verses what is now introduced to the board. i like to say that at the time, we were taking care of the business of the port regarding the dda and we did not get a chance to celebrate what the america's cup was going to be like.

before i dealt into the technical details come up with like the event authority to make some comments and i would like to invite up the chief commercial officer to discuss what this will mean for the port. >> thank you, commissioners for allowing me to speak today. i want to give some context to a lot of the things we have been reading and hearing about for a long time. san frcisco and the san francisco bay area should be proud of the fact that this event is here. you probably already heard it stated that this is the third largest sporting a tent in the world behind the world cup and the olympics. that is based in terms of economic impact benefit to the host city and coast region and this is based in no small part that this occupies a three month footprint in the year of the competition which is easily 10 times larger than the others that normally operate over two

or three months. it is also interesting and useful to know that this is the only international sporting event taking place in the year 2013 which means that all eyes will be on san francisco, on the bay area. in terms of at some benefits that are in transit when you close an event like this, day are really many and of a list a few of them pentode due to the time, i will not be able to state the questions the jonathan will act as an me and others can follow up for me in my absence. benefits, you are familiar as well with the work we're doing. money cannot buy advertising.

this is the only opportunity to cheer for team usa on usa soil. the less they will not be hosting a major sporting event for at least another 10 years. while it is nice for the giants to win the world series, it is only really celebrated here. if team usa happens to win, it will be celebrated and watched with interest in many countries around the world and clearly, if we lose another country wins, there will be a party happening somewhere else on the planet. that gives us this tale of international attention and drives towards our tourism and all of the benefit of having this large of that footprint in terms of restaurant traffic, hotel traffic, and terms of all of the work we're doing with our colleagues here in the city and with the colleagues and the port

staff. there is some knowledge capital that is a lasting legacy in terms of the knowledge gained. our sustainability activities, and duke youth outreach programs particularly around maritime activities. state and federal corporations, setting precedents there. and volunteer force numbering in the thousands that can be activated and speaking of future events, the calling card of the city will have as a major event host site going forward. this has proven to be very successful for other host cities. i can name a few like sydney, barcelona, that posted very successful games and that lasted to the benefit.

in particular for the fans come of this will create new tourism back to the bay area, back to san francisco specifically and also for the region and also for the country. as part of our plan, this provides an obscenity for anyone that would like to see it for free. this is a beautiful location. in closing, because i was asked to keep this bluff, i would like to thank our colleagues that have worked so hard with us on the port staff. thank you for your time. >> that was a lot more fun if we could have this dream come what i will go over our some of the changes and the technical

details and i will invite the land back up here to talk about the financial analysis we have of this deal, which we did not have a very detailed analysis at that point. as tom was talking about, this is a multi a vent. this is not just the city and port, this is the america's cup race management, the organizing committee. these are organizations that come together to make the event work. this is not just an event in san francisco, it has a lot of global lead up. i have the privilege of being in san diego to see this. this is a year round run-up to the event in 2013 here and again, maybe we are trying to hard to get the words of the

slides and look at the pictures. going back to develop an agreement, this is really how we spent the rates and responsibility of those parties. it tells what obligations they have to approve for property and it governs our rights and the scope of work and it has a governing of the conditions around the venues. it also governs their reimbursements. the work itself and the reimbursement of the major themes. there are major categories of work. these are some of the projects listed by the general agreement

and there is additional work that can be dredging, spectator vessels, both of these categories will mainly happen but they can also be deferred and there are some different authority infrastructures. hopefully, some additional work at pier 26 at 28. the authority has the right to do other works and hopefully we will get reimbursed for it but they have the right to do other work on property. that being said, there is the new dda which is similar to the presentation that we made. this government and limits the way that the work is reimbursed. if they do this work, this would be about $80 million an improvement.

these sources are reimbursed with a limited order of repayment and that is a really important point, that has been improved and a host of agreements. the deal is $55 million of improvement for the sale and a no cost police. after that, and there is pierced 30, 32, at interim -- and if necessary, potentially long-term rights at pier 29 including a 66-yong term lease and improvement. if they do not pay them back at

that point, the authority has a right to claim 50% up to the station rents and a form for a subsequent leaks. we presented this orally on december 16th and has not changed since then. this has a limited order of repayment options, whether they choose to perform that to be reimbursed, it starts off with long-term leases. thus began at $6 per square foot. this is the next source of repayment and this goes beyond the 66 year lease. in this case, there is some hope that there would be other

sources and if we provide these for historic rehabilitation, that would distinguish that the other way. they are starting to discuss what the planning department and others within the city which is some expansion of the transfer and development rights which is currently being used in the district and we are talking about expanding it to the port properties as well. there is a lot of details we have worked out from a policy level and from a details level. the other major work is dredging for spectator vessels and just to clarify, what would happen to reimbursed the dredging expenses undertaking the additional work, the port authority can get exclusive agreements for one or two sites and long-term leases which will be a commercially

reasonable rate termed lease with credits based on what they perform and additional work. the two primary names, we have some infrastructure challenges, substructure challenges that we would also give them the benefits. any work that has to be done to make the marin a work and the other thing is that the parties agree on a difference police. this is important because as we have found out, there is the opener water basins. there are a series of other small changes.

there is relatively minor and there are changes that are reflected in the memo. there are some of the termination provisions, that is one change. and there is the additional termination right. the authority has determination rise to be clarified the issues and the procedures for asking for additional news. this is potentially possible that the crews could happen there and there is a procedure in the document. similarly, pier 80 is poured produce and we're also calling out the trust uses and

commercial fishing as something that could happen even within the authorities water area. this clarifies assignments. it also be designates the works. we have undertaken the demolition and one of the core things we're doing and it really clarified the number of other terms and i covered almost all of them there. unless our questions, i was going to have this back over to elaine to discuss the financial analysis. >> thank you, jonathan. the staff report that we issued on december 10th included in this concept of nonexclusive balancing meaning that there is always a core concept in the

term sheet, in the signed -- that the event authority is repaid for improvements to our property. the staff report included a concept of nonexclusive balancing whereby the venue sides and this would be in a waterfall of repayment options. this focused a lot on buying out investment, different ways to handle that said that we could retain those peers because of the revenue generation which was stronger than the debt service. this does not include the nonexclusive balancing and setting a defined set of repayment sources dramatically improve the financial impact and risks to the port considerably. i will show you that now.

i will go over the short term revenue loss and event-related costs. the port capital projects that are the requirements and they go into the long-term development and what that means in terms of financial impact and briefly cover the budget analyst recommendation that the port was issued last week and will be in front of the finance committee tomorrow so i wanted the commission to be aware of the recommendations and then i will turn it back to jonathan to talk about the risks and rewards. the venue sides are going to be provided to the event authority rent-free and they generally have the delivery dates that very and generally returned to the port. we can hook up shoreside power and there are also differences in peter 80.

the general fund is reimbursing the lost rent under the mou and these are offset by the general fund. we estimate the cost to be $6.4 million and that will change either at the front end or the back and and get smaller and it would reduce it what the general fund pays us and that is what the budget analyst recommendations. the tenant relocation payments, security staffing, all of the short term project staffs not all of the short term project costs. we would be reimbursed contingent upon america's cup organizing committee fund raising. we have included a port ride a fund for the project costs as a contingency but we may in fact be reimbursed. in short, the short-term impact

as two funding sources. the capital projects that are required as a result are over and on the planned port projects. they include the pier 36 removal, we have a budget for that. we were happy that the requirements that are in the dda match the project we were planning to perform. we do have a new requirement which is to install shoreside power at pier 70. this is required as a mitigation. this is a $5.7 million project and it is a requirement but

luckily we found two good funding sources of surcharge on electricity and a potential puc incentive if we reach a certain rate of usage which will pay the project cost back. we will send that back to you with more details. this is a new project requirement but it also it advances and business theme of hours to enhance the shipyard and in an environmentally sustainable way. to get to the long-term development, jonathan has already gone over the different requirements but there are two sources of repayment. one is infrastructure work, the other is the story work. all that is included is listed her