commission would like to recommend is you all spend more time with the community to explain how the leaders will work so they understand and there is no misunderstanding, and we do want to get feedback so we can hear how the program is working so we can view this as a program on a pilot basis until we ironed out the kinks. part of this is so we can understand how it will work. >> i am a little bit confused again. and when games are going on, at the meters at 7:00 and not dropped to 50 cents? >> during at&t special events we do have a special meter race. i cover that and more debt in january 20. >> thank you. > -- i cover that in more depth on january 20.

>> can get someone send another time via smart phone? >> yes, all the meters can or will shortly. sounds like beginning of april, the port meters will have the technology. >> you could be sitting at your desk and realizing the meter is going to expire. you are not to go to the meter. you can use your smart phone and extend the meter? >> that is correct. >> any other comments? >> perhaps something that could be looked into that has not been discussed is if there may be some way of getting there through the parking cards you

can purchase for the various leaders around the city, if there may be reduced rates to provide those cards to businesses in the area for employees. >> i can discuss that with mta. i will discuss that with mta. we're willing to do so in think we should come up and i cannot imagine it would be extremely difficult to manage that, but i will check in to see if that is feasible. >> thank you. >> item ten10c -- >> sorry. we have to to approve. approve. >> we have a motion on the table. it has been seconded.

all in favor? >> item 10c, request approval to award the pier 7020 history historic buildings of element opportunity to orton development and to enter into exclusive negotiations for a lease and development agreement of these buildings to achieve the objectives specified in the ports october 4, 2011 request for proposals. >> good afternoon, commissioners. i get to be here today recommending we start a new developer process. i will walk through this relatively quickly, but i am available for questions. we are here today at the end of an extensive our reach and marketing process to find private-sector process --

private sector partners to help us recover extraordinary buildings in the city, not just at the port. this builds upon the peers of the master process, and also, when we came forward and made recommendations on how to move the process forward, we broke pierce 70 into what we hope were manageable-sized pieces. the first one being below were right-hand corner, which is the waterfront site, which we entered into negotiations last year in anticipating coming back to you this year with more information on that. the second being the park project under way right now. the third, the 20th street historic buildings, the row of buildings lining 20th street. we offered these three or really

extensive out reach. we spent much of 2011 talking to people come out reaching. i think it was 176 people toured the buildings. we received four proposals to the rfp. in the january 20 package, you received summaries of the proposals. between the package as going out and your meeting, one of the proposals with through. a second proposal withdrew prior to the meeting. now we moved forward with an in- depth review of two proposals. that is after an enormous amount of people kick the tires. i am pretty excited we really did look for the funding and sources to move forward. the proposals came from equity in -- equity consortium building

and orton development inc.. as you saw in their presentation, these are both extraordinarily strong developers. they have done a lot of historic preservation is in san francisco. they both really understood the pier 70 context. we're really excited with what we got here. the concept of what they would propose doing come at the words are a little bit different, but they are talking about unions -- using office building for office-type uses. looking at converting the powerhouse to some sort of public food/restaurant use. south of 20, these are the interesting buildings, some of the more expensive buildings to redo. in the plans we called for a market hall.

what has come forward in both cases is light industrial use. more the extension of the economic activity that we see right now. rickshaw bags or other things going on in the american can't building. that is interesting if we can have this part continue to be a light years and continue making and creating things in san francisco. i would note the team included a team that had expressed interest in the building. when we really dug in, and i thought about what to put up here. the issue really comes down to the economics. and the financial capacity and cost to do the projects and how we can move forward and the distinctions between the developer teams was and how

this of the project economically, and what funds they have available now to commit to the project. predicting the cost before you dig in and hire engineers is called a conceptual performance. tell us how you are considering this project. how do you consider it? the difference between the real -- the teams is the ore orton ty can do it at a lower cost and secure a low or equity. and the developer would split the proceeds. ecb group sees this as a project that will be really difficult to do without some sort of subsidy or funding or feasibility gap, and they came to that table

offering to spend the money, which is to figure the project out, and then to go look at the funding sources. we moved forward and undertook the evaluation process. we saw the presentation in january were a consultant reviewed the proposals. we convened a technical panel of score and review. we had a great meeting and both developers presented and understood. then we did the actual scoring on the evaluation criteria. the panel consisted of mike viewebueller, toby levine, who has played an enormous role at the port and served on the planning commission on a number for roles. they each representatived the waterfront advisory group.

we used jennifer sobel and our representative from alexandria partners that is a developer in mission bay for a private-sector perspective. the scoring really plays out what i set up front, they're both strongly-qualified developers. the difference comes down in the feasibility, which is the evaluation of will the project work, and the financial capacity that each brought to the table. what staff is recommending is that we get the authority to initiate an exclusive negotiating process with the orton development team to refine and bring for process. we would come back to you with the explosive negotiating agreement, and we would come back, and the main thing you do is you dig in and try to come up with a good project here and obviously we backed the port commission, a community, and any

number of bodies to review the process and go forward with creating economic terms to make it happen. so what we're asking is for you to approve the resolution at hand. it makes a number of findings. both is that both teams are qualified. the second is the ability to go into exclusive negotiations. this was the market imaging in 2010. and i thought we were our reaching come up but now i think we're going to make this happen. pier 70 is moving forward. i'm available for questions. >> public comment. james metson. >> i am with orton development. our team is here. i want to thank you for the consideration. we're very honored by staff

recommendation. we hope we can move forward quickly with you guys. we look forward to starting quickly if we are chosen. thank you. >> any other public comment? commissioners, comments? >> good afternoon, commissioners. my name is manual florez. i represent a carpenters' union local 22. this is a block from my office. i do not know how many times i have driven there and bought some day. now it is coming to light, and it is much needed. we strongly support it, and i think it is a great thing moving forward. i want to point out one thing, however, in that one of the

developers in the building we have had issues with. i wanted to bring that up. ongoing labor disputes with them. it has not been going well. we wanted to point that out concerning language, mature your standards and concern for the office. -- not above standards and concern for the office. we just wanted to point that out. we do encourage you to move forward on the project. thank you very much for your support. thank you. >> any further public comment? >> just one quick question. city hall directed us to the area as well. dave fenom with the venture

capital group. we were directed to san francisco. city hall directed us to that area. we have only just learned of it. i was curious why there are only two proposals? >> in public comment to get to say, but they do not respond. >> i wish there was more than two proposals. we would love to submit a proposal. >> see the staff afterwards, but you are about a year and a half late. >> i think you may have heard from the presentation earlier that we spend a lot of time seeking and soliciting bids on the project. i want to thank the staff for tremendous our reactreach, and s

imperfect and do not reach everyone, but i think we kept it open for quite some time to be created on this. i want to think staff. and i view this as an area that has such a uniqunique character i think it will be a tremendous enhancement. now that i have a team here, and i think especially as we're sitting here in this building, it would be something wonderful to see a can of local to this. it would be a showcase for local businesses, locally-produced items that businesses that project -- that produce in the area to have a storefront and destination for people to come and see local items and be a draw for more traffic so to speak. hopefully we can take a look at these buildings, and there may be some space that could be utilized, and that would reduce

the environmental soap grants by allowing the manufacturers to have retail space nearby so they would not have to ship products a good distance. i think there is tremendous opportunity, and i want to thank everyone involved. i am very excited to see this move forward. >> i think this stuff has done a tremendous job in trying to our reach. sorry we did not get the word out to everybody. i know we are here to approve the actual selection of the developer, but just to mention on the term she we're looking at there is some participation of the port on future revenues, and i would like to hope when this does come back for the actual term sheet, that we see it some modeling and understand if we are going to not only preserve the buildings with what the developer proposes investing, but ongoing revenue opportunity for the port, because this will

be a major project, and we know the whole area will be developing so we do not see a hope but evidence that projections could support the idea that the port could participate in some of the bottom line here over time. i understand your not sure to answer that question today come i am just requesting and giving you direction that we would like to see that modeled out and have a chance to see that in detail. >> yes. the first thing we will be back with is the ground rules, but it will clearly include the economics. president ho: a motion to approve? all in favor? enter into negotiations. all in favor?

resolution no. 1218 is approved. thank you. >> item number 11a, request approval of business terms for proposed sixth amendment to lease l-11320 with bae systems in francisco should prepare for a portion of pier 70 plan area and authorization of executive director to negotiate and enter into the proposed six amendments. and we have been working on this project with terry and peter daily in the engineering division. i want to welcome the general manager of bae san francisco ship repair, the ship repair partner with whom we are working on the project. i will invite you to speak when

we are done. as the commission knows, this project, pier 70 power site project, a rose out of the city's efforts to secure a clearance under the california environmental quality act for the cruise terminal project at pier 27, and the america's cup, and it was really through a very rigorous progress -- process led by the planning department that we identified some project early significance in air quality impact associated with the project. i want to acknowledge some of our environmental stakeholders who participated in that process. we have terry shore here from turtle island restoration network. not here today is diane daly from natural resources defense

council. terry in diaand diane really woh the port in our regulators to try to go through the air quality impacts and identified this project with things that could move it forward. >i am going to talk to you about the power side project appear 27, pier 70, and the benefits of the pier 70 project. the proposed financing approach to the project with been working on with dealinelaine forbes.

kathleen will talk about the ship repair background and the proposed six amendments to the lease to carry out the projects and other changes to the least. then we will talk to you about next steps. pier 70 was really a marquee for the pier 70 project. it was up $5.2 million project installed at pier 27 that became operational in 2011. we put together funding for the project for a number of -- from a number of sources. there quality management district contributed 1.9 million to the project. the san francisco public utilities commission contributed 1.3 million, and usap and the port. we got it up and running, and

we're turning around and shutting it down. the reason is construction of phase one of the cruise terminal, which is starting now. one of the first up in the project is decommissioning the shore power facilities so they can undertake demolition of the pier 27 shed it. as a result of the construction activity and the america's cup village concept, shoreside power will be out of commission from basically this month, february 2012-october 2013 when phase two of the cruise terminal construction project can start, along with reconnecting shore power at that location. that obviously creates a lot of air quality impacts and sequa

process quantified those. they found impacts to be significant. we had significant public comment from our environmental partners and regulatory agencies to look at these issues. as a result, the planning department through the environmental review officer impose a mitigation measure requirement to install shore power at pier 70. i really want to credit jay hawk who took the lead on the pier 27 project, and he was the person who identified the opportunity and have been talking with you over time and really came up with this solution. with the help of one of the sub- consultants we did some modeling of the air quality benefits of the proposed pier 70 shoreside

power project, and it will have major air quality impacts for the southeast community at the foot of petro. we did not really know it that well until we got into this project, but what happens at the dry dock is pretty similar to what happens at the crews of terminal. you have a ship that comes in for crews activity. the user -- indeed their runs its eengine to generate electricity so it can run the light and supply the teams with power in the vessel, or the shipyard has to bring in mobile generator start run on diesel and emit significant air pollution. all of those current activities happen. there are currently permitted under the shipyard's air permit. this project is the best way to

improve air quality of the ship yard. -- atht the shipyard. the mitigation i talked about earlier, this project fully offset the commission -- decommissioning of shoreham power at pier 27 for the two- year period, and it has surplus air quality benefits that help offset some of the additional america's cup race operations omissions to the point where in three of four air quality or air criteria measured by eight sikh wy sequa for cleaning up the ai. so what we spent quite a bit of time with hugh in the san francisco public utilities commission trying to finance this project, and it was an

uncomfortable initial conversation with dae, because as a result of this being a mitigation measure, the project is not eligible for carl moyer funding. i want to thank hugh for taking the news in stride as we try to come up with an economic solution for the project. and i think we have done a pretty good job of that. the letter of intent proposes it will construct of 20 megawatt system using an electrical contractor. it identifies highly-qualified company to do this kind of work. they are in the process of trying to meet the city's various requirements for doing business with the city, and we will continue to assist them with that. mayor lee and supervisor cohen have introduced legislation to

enable the port to work with them on the project an amount not to exceed $5.7 million, and that includes a $600,000 cost for disposing transformers that have been at the site for a very long amount of time and are well beyond their useful life. that is a pork obligation to dispose the transformers. under the term -- that is a port obligation to this force the transformers. we would come up with the initial sources of capital to pay for the work. bae would pay an equipment charge of 4 cents per kilowatt hour used by the system. that cost would be passed through to the vessel owners that are taking advantage of ship repair services. that is the major source of

payment. the p.u.c. was veryby 2017 to c5 million as a project to rebate. we envisioned that the m s cents per kilowatt hour will continue until all project costs are advertised. to the extent that that lease term as iranian and there is a need to continue paying back this project, then a sense would continue. the san francisco public utilities commission and would install utility-grade meter to measure the actual act. electricity use so we can pass around that force and charge. working met elaine, we estimate that the capital outlay for the project would be approximately six planform million dollars. that covers the capital cost,

and debt service reserve, and a p the long-term debt solution is some months off. mayor lee and supervisor: have introduced a supplemental appropriation ordinance that the board of supervisors that would reappropriate some money from the back land project, part of the 2010 revenue bonds project. it has been designed. it is ready to go to construction this summer. the proposal here would be to borrow funds on a temporary basis from th p