our kids. you get the people, but you do not get the real people. president chiu: thank you very much. are there any others that would like to speak during general public comment? at this time, public comment is closed. madam clerk, could you please call our special item, items 3 through 5? clerk calvillo: the board of supervisors has agreed to sit as a committee as a whole forepersons looking to the amendment for the america's cup project and related transactions and a proposed resolution of intent to form the waterfront infrastructure financing district. best -- president chiu: thank you. we are here to hear about the america's cup as well as the intent to form the waterfront district. why do we not first start with a

presentation from the city staff working on the america's cup? mr. martin. and, colleagues, he should have received circulated copies of the amendment as a whole that mr. marden and mr. bentsen will be speaking about. >> get afternoon, supervisors. i am mike martin with the office of work force development. i am very excited to be here today. it has been a tumultuous i guess four weeks since this item was on your agenda that we continue on today's agenda. we really built up a lot of thinking that went into the original proposal on the america's cup events that was before you before, and we had some really robust committee hearings on what all of that meant to the city in terms of brain the events here and also for the long term development. as we know, the long term

development piece has fallen away, and we are really focusing on the event plan, and i think we have got some good thinking before you today than i will run for at a high level and also talk about some of the pieces of the resolution that will be before you, but in the meantime, i wanted to commend the committees as well as america's cup race management, all of whom the king together in a very short period of time to think about and put together what really is a very solid approach, and i would be very remiss without complementing and demanding city staff for bringing this forward, which many different departments were involved, the planning department, recreation and parks, muni, all coming together. during the planning commission hearings, i said something that this was a really uplifting experience to be a part of this, and i want to talk about that now, and i appreciate all of the work that has gone into what is before you today, but what is

before you today is really a straightforward proposition, bringing the most venerable sailing event to san francisco. i think we have already been able to see what be sailing and the catamarans is all about. what the event of 40 has already put on at races around the country. i think what we are excited about is translating that to what we feel is pretty much one- of-a-kind spot for this idea, a way to really build its brand that is going to acela rate from here. we have put a lot of thought into this plan and really wanting to build a foundation for a nucleus of things that we can deliver in a feasible way and to move ahead to sort of all-out retreated -- creativity and innovation of san francisco and the san francisco bay area in general to really make this a one-of-a-kind event, so with that, i will go through a few slides.

to begin with, and wanted to go over the changes to the event plan at a high level. really, there was the field or envelope of what was studied in the environmental review document under ceqa, and trying to use that, to understand what it would be like to deliver the events in a way that would make this waterfront event work well, so we consolidated the event of sites with the event authority for their needs going forward, but some of these were removed from the short term plans, so those sites are now still held by the port, and the revenues

from renting of those sites will still accrue to the port and thus reduce the need for the general fund to backfill those revenues under what was approved last year. there is also in the configuration that would allow for a more truncated schedule and to use that area still as a great public attraction for what i colloquially referred to the work that goes into making this. on the part front, the focus on the northern waterfront focuses to the marina green. we have been in discussions with the park service for the use of the lands. i think we will move away from having actual programming, but as i will describe later, we are still aware of the impacts, and we are working to address those with our partners at the park service and the park conservancy. there is a new infrastructure financing plan.

as i mentioned earlier, there is no longer any long term development for this proposal, so no longer is it where they are reimbursed through long term development rights. now that that has fallen away, it is a much more straightforward approach where it will be constructed using poured funds, and mr. bentsen will describe more about the mechanics of that, and then the remainder of the operation costs will remain as they were under the original plan, between the america's cup fundraising as well as event related tax revenues. lastly, another portion that is a change to this event plan is a new schedule for the 2012 races. instead of two event in august, the idea is to have one event in august over five days and then another event in october, hopefully coinciding with fleet week, and we are working to coordinate those efforts, we are hoping will be a really one-of-

a-kind waterfront event that will serve as a stepping stone towards the excitement of the 2013 america's cup events, which, i want to say, remains the same in 2013, july and august being the challengers' series, and september being the america's cup final. as noted in the budget analyst's report, we have updated our cost projections to reflect the new and consolidated event plan. primarily, the changes to the costs reflect what we were referring to as the fixed costs. that was in contrast to the variable cost of operations to do with the actual services during the 2013 event, so things like muni buses on the street, police, fire, e.m.s.. those things will vary with spectator demand, and so we're trying to make sure that our event plant continues to be adaptive so that our revenues can better match expenditures.

however, in these fixed cost categories, there are differences. there is an increase in preliminary and planning costs from what was proposed at the last meeting reflective of the added work we will have to do for the permit applications reflecting this new plan as well as additional work that is proceeding under the federal environmental review process that is being led by the park service, the army corps of engineers, the presidio trust, and others. i do want to say the we have been in contact with the america's cup organizing committee about this estimate, and they will continue to commit to provide these funds to the cities and be reimbursed. i described this earlier. this is from the retention of the three sites. this will add up to approximately a little over $3 million over the course of the event as compared with the original projections with all of the venues being occupied.

the next item is reduced even- related infrastructure costs. this has to do with the financing method for some of the port infrastructure, that instead of needing a general fund transfer to deal with the crews terminal, we instead are devoting the america's cup organizing committee dollars towards very discreet improvements that will allow the financing to proceed, and obviously be done and it more cost-effective way. in addition, this amount includes an allowance for certain improvements to telecommunications infrastructure that are needed for the event. the next item is a reallocation of park and they mitigation responsibilities, and in the file is a memorandum of agreement as to these responsibilities. what we did is, in negotiating with the event authority, there relinquishment of the right of theirs to these piers, we would use an amount up to that amount for reimbursement and

mitigating environmental impacts to the bay and parts plants, so we are continuing to be in discussions with that. the federal environmental review process goes on, but we hope this creates a nucleus for a very feasible project so our partners can move ahead and feel that they have the appropriate commitments. lastly, our cost projections for reduce costs for the 2012 schedule, that is due to a small reduction in the number of racing dates as well as the overlap with fleet week. we feel we can share resources in terms of getting people around the waterfront in a way that may save america's cup costs. the economic projections did not include the 2012 events, so these reconfigurations actually do not decrease this sort of dynamics behind what those projections were meant to measure. obviously, the task is on us now to move ahead and deliver on those projections, but i want to make sure it to say that that is

not a loss to the city and that the television exposure has been announced but nbc broadcasting as well as hopefully a great spectacle with fleet week and allowing it to be interlocked with the america's cup events. moving to a summary of the resolution amendments as a whole that i think will be introduced during this hearing, i just wanted to give an overview of the key changes. really, from the prior arrangement, we had to do a number of things to recap where we are. i think one of the most prominent is the references to the agreement which called for the long term development rights to be changed to what is known as a lease disposition agreement. we have filed a version of this agreement. we have been able to negotiate. it basically focuses on the short-term leases for the event and obviously eliminates all of the long-term pieces related to the long-term peace.

on a whole, they have new ceqa findings. it has been submitted to the clerk's file for this item. this also includes changes to certain uses at the event venues and other variance is under ceqa but did not create any new significant impacts or mitigation measures. one of these relates to the increase potential seating at any event stage act -- at piers 27 and 29, and we think it creates a potential opportunity, and so we have added a whereas clause to the resolution for the city and the event authority to work together to establish a preconditions for that stage, including number of events, timing of events, and making them available to other organizations as we really try to integrate that part of the neighborhood planning for the events along the waterfront. the next is in the work force development plan.

that has now been revised to reflect the incorporation of the city local hire policies for all construction, even for construction pollock -- projects that the event authority may pursue an be reimbursed for by the port. i think that is a step forward and really reflects the hard work of the board of supervisors as well as the staff for delivering on these jobs, even though it is a smaller permit construction footprint, and also, the mitigation measures responsibility, primarily the change were balls around the park service mitigation that i mentioned earlier. the resolution in corporate commitments that were described at the last budget and finance committee meeting, which includes the intent to enter into an m,ou -- mou , consequently bases as well as demonstrating receipts of $12 million by the end of this fiscal year, so we are looking forward to that being a helpful

planning tool and one that helps us very much to have the ongoing dialogue about the revenues and how they are really going to match up with event costs. the next item is a set of conditions to the delegation regarding the lease disposition agreement items on insurance, and then the security which is called for under the host and the new agreement. this stems from what really is an effort by the city to help them in filling their obligation to post a security of up to $32 million, reflective of, basically, securing the america's cup event authority with the organizing committee performance under the host agreement. and this is a way that this general fund is protected, with the insurance and the other provisions and the bond. that should the only place that recovery is sought under the agreement that the general fund would not be otherwise expos.

we are working with the acoc and the office to identify the options for this shirt or insurance project. -- product. we are moving quickly because we have now redefined the actual performance of the city and limited the construction projects, as compared to the previous model where others were developing those projects. we hope to have that in hand in the very near future. so with that in mind, the agreement as a law creates the parameters which will be in place, and those parameters match the structure of the original host agreement and make sure that the general fund is protected. the last year, which may be hard to see but the subtitles, we adopted all the budget animalist's recommendations, and this includes budget reports quarterly back, and the fund- raising, the port infrastructure expenditures, as well as city

operating expenditures. in addition, there would be a report back to the outcome of the sure did bond effort that i just described comment and then, in addition, reports back in the event that the fund-raising does not come in at the fall of $32 million, reporting back on potential changes to be the plan to reduce operating costs to make those match up with fundraising, so we are happy to embrace those as we move forward with this consolidated event planning. so with that overview in mind, i am here to answer questions, but i wanted to turn it over to mr. bensen. >> brad benson, representing the port and port staff. i want to extend the thanks of the port to mr. martin. he has done an amazing job

leading this project effort. i want to thank the event of 40 and raise management, as well. before i get into my presentation, i want to talk about the major change here, which is switching from a development model to a capital project delivery model. we did put a lot of time in putting this together, and i think the port staff has found that that had a set of development opportunities that would create great improvements in the south beach area of a waterfront consistent with the waterfront plan. that said, we do understand that it was a very expensive investment. there was a great risk involved in that, and the development discussion had started to overshadow what should have been the proper focus, which was the event. and i want to say that i think it is a testament to the strong planning effort that happened over the past year that with the

event authority and race management and city staff, we were able to come up with a revised plan which involves less investment but is going to support the same great racing activities along the waterfront, albeit in a slightly different configuration, support staff that started to think about what to do with piers 30-32, when it was not going to be used for an industrial basis. now i would like to switch to the slide. and piers 30-31, i think as we have testified in the past, it has some load restrictions. you can drive a truck on it. it had limiting functionality for parking, which was revenue generating, but there was trouble getting out to the east bay's for secondary issues, and deports staff, they started to develop an approach where the

capital project expenditures, we could create that access, and we realized that there was probably a further discussion to be had with the event authority and race management and engage them in a discussion about whether or not we could pursue a smaller set of improvements there so that this could remain the home of the industrial basis, 2013, and what you see on the screen is the result of that effort. we think this is about an $8.50 million project at this point. it would involve improving about 90,000 square feet of the deck. building an h-20 roadway to the center depressed aisle. that was built in the 1920's and is a lot stronger than the rest. by building a driveway that

connects to it, we think we can get buses out to that depressed area and returned functionality for a secondary. as part of this plan, we also propose to do marginal wharf repairs along the embarcadero, and we think that this collection of repairs will extend the life of the structure from the current estimate of 10 years to 20 to 30 years. so it is a good investment for the porch, for the maritime use that it brings back to the piers. we think we will be able to have evens at this location, not just the america's cup. we used to have some. and it could support future development, as well, and we do look forward to the proposed hearing on the development issues at the port. i know the director is looking forward to that discussion, and we will be ready to talk about how this plan could facilitate

a future development of this site. what could happen here for the america's cup par 5 team abases, over for the bases if there are more teams then that. that would be down and -- at pier 80. there would be some dredging along that side of the pier for the catamarans, albeit much reduced dredging from what was proposed, and it would face that green quadrangle area, where they would be loaded onto the pier. pier 30, at the top of this light, the event authority is still looking at what could go at that site. there could be some hospitality uses. we need to talk about public access. but there is a lot of room to work with, and we think this would be a great home for the team industrial basis. this is a rather busy slide, and

so i am going to summarize it at a high level. we had been relying on the of the authority to do sort of worked at 27, 29 -- to do work at piers 27 and 29. there also public access improvements to improve public access along the waterfront, and there are certain dredging expenses that we now propose to undertake as public works projects, and i would just summarize a few of them at a high level. the 29 substructure need some more done to it. the water control board want to see storm water improvements to improve the quality of water flowing to the bay. there is a 29 and wall, a historic preservation feature, that the port would undertake, and we have to fully fund the

relocation of the power company to make way for the construction activities. that is about $7 million worth of work. the bcdc costs are largely along the south apron and another area. there will be permanent dedicated access in this areas, which will be a legacy benefits which will improve the waterfront long after the america's cup, and removing pier half and pier 64. these are old and need to be removed from the bay to improve the health of the bit, and finally, for the large spectator vessels and the catamarans, we are looking at a variety of dredging in four locations, although we expect that it will no longer be required to have dredging at pier 14 south. that would be a savings of over $300,000 compared to what you

see on the slide. also, millions of dollars in capital projects. we have run through this scoring process using the standard criteria, and all of the projects got a score that merits funding without the america's cup, so we think these are good investments for the port to make. so as to the sources of funds, mike alluded to the fact that there will not be long-term leases, support will not be getting rent on a long-term basis, and the result of that would increase the ports bonding capacity, so we would propose issuing new debt in addition to new debt this year of $15 million, reallocating some existing debt that has not been extended on other projects, and look at either a combination of poor operating funds and other projects to reprogram funding to these projects.

we have got about a $967,000 current shortfall. we propose to make up that shortfall by reducing the dredging, as i talked about earlier, and refining these projects as they go through the design phase, and we think that is a design that we can easily do. so this slide gives you a little comparison about the development and disposition agreement in front of you right now, so under the old agreement, the port would have gone without $3.90 million in current rent on a long-term basis. that all will be staying with the harbor fund now. using very conservative two-time debt service coverage, that would increase the bonnett capacity of the port from $65 million to $89 million, -- the

bonding capacity. we were planning on issuing $24 million in 2012, primarily for the cruise terminal project. that would go up to approximately $40 million under the disposition agreement. and then we have another planned debt issuance of $27 million in 2014, and that would finished phase two at the crews terminal and other projects planned at that time, and that would remain unchanged. finally, to our own program to bonding capacity, the amount of debt capacity remaining after we are taking into account all plans for the debt issuances, it was $40 million under the prior development and disposition agreement, increasing to $22 million under the revised disposition agreement, so the short story is that the court believes we can pay for this back into capital projects. we will be back to you to talk

about how we deliver them under such a tight time frame. we are switching gears quickly from the development model to a public works projects delivery model, and we will be talking to the budget and finance committee tomorrow about the flexibility we need to deliver those projects, so i want to say that we can deliver this work for the city and for the event and are eager to do so. i, too, and available for any questions if you have them. thank you very much. president chiu: colleagues, let me ask you have any questions to either mr. martin or mr. bemsen. supervisor campos? supervisor campos: i want to

know if you can tell us why we are moving so quickly through this, and through the chair. >> mike martin, project director. really what we are looking at is the timeline that is continuing to shrink between now and when the events, . by putting forward these construction projects, we know that the pier 27 project has already begun, so we have got that step forward, but we have to get permits, amend them, and then move ahead as mr. bentsen mentioned in time for the 2012 event. that is really the impetus. we appreciate the board being willing to take this up, and we are hopeful that you will support it. supervisor campos: thank you. president chiu: supervisor mar? supervisor mar: i appreciate all of the work to come up with the amended proposal, but can you talk about the work force

development and the percentage of local hiring? can you go into more detail on the work force developed part? >> sure. there is a revised work force development plan that is in the file before you. it continues to reference potential permit construction work done by the event authority, and that is in the event that the city can establish a flexibility that mr. benson mention. the of the authority would step in, and they would reimburse. based on this outcome, what was negotiate with the of the accord is that this is the city paying for the work under either approach, which supplied the local hire ordinance under each approach, so the current percentages apply no matter who does that work, just as they do now at the chris tillman project, so all the permanent and the structure improvements will be subject to the local hire ordnance. supervisor mar: bank.