down at pier 80. pier 80 is a backup location for the team basis. if 3032 is not available, our -- i think our hope, hope of the teams and event authority is 30-32 is available and we're working to meet that schedule. that's a spin through the venue sites. i would like to provide a high-level summary of the financial analysis that port staff is going to get into further detail on later in the commission calendar. but just as a point of comparison with disposition and development agreement, under that former agreement, the event authority would have extended about $111 million to improve the waterfront both preand post match. here the port would spend $25 million is the estimate we're working with from proceeds

repaid by the rents that the port will retain over the long term. under the former long-term agreement the port was going to give up $3.9 million in rents on an ongoing basis and by getting -- being able to retain those rents, we have added deck capacity as elaine forbes will explain in more detail. so our recommendations are to approve the project, that would allow you to approve the lease disposition agreement and authorize the port executiver to epter that ageement. following that approve the form of venue lease. if commission takes actions there are additional permitting steps that are required and contracting steps that are required both through the port and some of the permitting agencies.

we expect we would be back in front of you to provide regular updates about what's happening over time and with that, i want to invite mike martin to come up and briefly talk about some of the acoc security issues, insurance issues to protect the harbor fund and general fund. thanks, mike. >> good afternoon, commissioners. mike martin, america's cup project director from the office of economic and workforce development. i definitely want to echo the words plaintiff benson that's been an extraordinary effort to get here and i think we're all pretty excited about what's taking shape as s a very exciting and extraordinary event here in san francisco. the specific things i want to come up and talk about a little bit do relate to the lease disposition agreement that's before you. there are a little bit sort of less directly port related but underscore what it's going to be

happening at the port. the first and most significant of these is the security relationship and this is something that was called on the host and venue agreement that was originally executed among the city, america's cup organizing committee of the nonprofit supporting the city's effort and america's cup event authority. nar agreement acoc would procure a bond or security instrument that would secure the performance of both the city and acoc to ensure the event comes forward. so that provided protection in two directions. first to the city's general fund and to the harbor fund because then our cournts parties can look to the security instrument and not those funs to get their recovery if there's something that goes wrong down the line. on the other hand, you know obviously, provides protection from the event authority so they can be be sure events will happen and take place. we're working now that we understand more about the specific, for example, specific infrastructure improvements that need to be made at piers 30, 32

and ongoing project pier 27 to 29 to work with security instrument and insurance underwriters to understand how we can buy a purchase a product in conjunction with the acoc that would actually secure performance such that if one of the other projects is delayed, we wibel to move, for example, the team basis to pier 80 without having to reach additional capital funds. in addition, we're also working with the acoc on an approach that would allow funds to be available for -- to support the city's operation requirements such as bringing security police, fire, e.m.s. or transit through muni to the events. again, trying to ensure a successful and exciting america's cup event. so those efforts are ongoing. i think your approval today allows us to move quickly with the insurance markets to bring that piece together. those things would then mesh with the insurance and indemnity provisions in the l.d.a. to create the security structure we're all looking for. our goal obviously to move as

quickly as we can. the other thing i wanted touch on very briefly is as noted in mr. benson's presentation, there's an mmrp being approved today, mitigation monitoring and reporting program. as before in the first deal, d.d.a. that you saw there is a separate agreement between the city and event authority as to responsible for those mitigation measures. that's been modified a little in thyme around in part because probably the mosting significant modification is because the event authority is not going to be doing programming in national park service lands at crissy field or aquatic park, the city will take the lead on the relationship to make sure that those parks have an adequate staffing and have an appropriate commitment from the city to strore those parks once the events are over. we're continuing to dialogue with the national park service in conjunction with their nepa compliance process. but we're very much looking forward to completing that in the next few weeks. sime here to answer questions. but i want to compliment the work of the port staff and everyone else in the city to get us here today and also our

partners at the event authority. thanks. >> thank you, mike. i just wanted to do a few thank yous and then i have one technical amendment recommended by the city attorney's office on resolution 12-34. i wanted to thank acoc and mark buell who chairs acoc and kerry mcclellin who's the executive director. they're both working to really cover a lot of the city's costs, including port's lost rent. we're very appreciative. we have a number of representatives from america's cup waste management and the event authority, bob billingham from race management, lizzie spalding from the event authority.

people they're working with marsha, paul. and principal race officer john greg as well from race management. there's really been a very large group effort here. and port staff is deeply appreciative. so i would like to turn to the technical attachment a-1 resolution 12-34 is a date change and in the first paragraph, there's an incorrect april 10th, 2012 date that should be changed to april 24th, 2012. and with that port staff available along with mr. martin to answer any questions that the commission may have. thank you very much. >> move up 9-a with the suggested technical amendment. >> second. >> public comment. kevin carroll, hotel counsel.

>> good afternoon, commissioners. my name is kevin carroll. i'm the executive director of the thole council of san francisco. have i the privilege of working with the industry that lks 15 million people to the steefer year. i wanted to let you know we still continue to strongly endorse the america's cup and thamplinge the city, event authority and port of san francisco for everything that you're doing to bring this event here. i think it's important to recognize that for every $300 spent in a hotel, additional $700 are spent in businesses surrounding the hotels. and those are often small businesses in other areas of the city. events that market san francisco to a global market have an effect and benefit beyond the event itself. while the america's cup will be wonderful for the city, there's also a way of getting a word out there we have an incredible city and world class waterfront and some of the changes coming about

because of america's cup will help us for generations to come. we wanted make sure that you know we support this and urge you to approve the recommendations that are before you today. thank you so much for your time. >> thank you. norman pierce, is this for 9-a? go ahead. >> norman pierce. i'm a sailor and staff commoner and big supporter of this project from day wufpblet i'm so happy it's gotten to this point. anticipating positive response from you as a group of people because there's an awful lot of citizens here waiting for this day to happen and we're looking forward to this big event that will hopefully bring other events like this to san francisco, revitalize our waterfront, make it more pedestrian friend will and give better access to the general population to on the water recreation. thank you, people that put this together.

you guys have been a good team for us. >> thank you. mike. >> hello. i'm mike vigilante with local 10 i.o.w., international long shore warehouse union. i'm here again in support of this event. it's been a long road and still has some hurdles to go over. but we're moving forward. i would like just like it introduce some of my members that are here. if you would stand up local 10 and associates. we're part of the community. we're from every part of the bay area. san francisco, you name it. so we're in support and we're ready to do the work on the docks. >> good afternoon, commissioners. my name is gabe hill.

i'm the vice president of the international long shoreman warehouse union local 34 ship clerk. located right next to at&t ballpark. i just wanted say when this process starts some months ago that on a leap of faith we supported america's cup all through the process and that's what we're doing here today, still supporting it. we theep the america's cup gets to the details of finalizing contracts for labor at the port's facilities, our scompeggetsations will be met. anything short of this would be a blow to the i.o.w.u.'s legacy and rich history in the waterfront. thank you. >> thank you. commissioners, my name is patrick ken. i'm the sec treasure for the i.o.w. local 75 union. we provide security here at the port of san francisco for the cruise terminals as well as security for port of oakland. i represent over 200 members, diverse, some live here in the city. let me start off i'm born and raised in san francisco. go fighting irish!

right, cats! we have the bruce mahoney -- >> this year. life -- [laughter] >> i want to say from the beginning we have been in talks with the america's cup people as well as port of san francisco officials. as mike said, it always hasn't been easy. we still have concerns and issues but moving forward we are supporting america's cup. we know some of the wealthiest people will be participating in this event as well as observing this event and we're looking forward to good jobs, good jobs for the working families being provided by the america's cup. everybody in our community can benefit. thank you. and also a lot of our members from local 75 here, local 3410. big turnout. thank you i.o.w. for showing up. >> thank you. holly king.

>> good afternoon. to all of the folks, commissioners, event folks and labor unions and all of the citizens of san francisco, i just want to say as a third generation san franciscan, i'm proud we will get this event here and have a positive history after the fact. i was one of the first people to work the cargo at pier 80 unloading the oracle equipment as well as the yacht. and i hope for goodness that as we go forward san franciscans and workers from san francisco will wind up doing this work under the prevailing wage that we have so we can live in the city. i ask all involved if we reach the agreement will be great. other than that, good feeling and go oracle! >> thank you. >> any further pub comment?

-- public comment. hearing none, commissioners and questions? >> i want to thank the staff for doing this twice. it's just been a real labor of love for the city i think that all of us put forward and i want to thank all of for putting in the long nights and long days and working so hard to really make this event a reality. i think all of us recognize that the america's cup will showcase the beauty of san francisco bay and of the port and appreciate everyone's kind words today and look forward to awful us working together to make this a spectacular event. thank you. >> mr. crowley? >> i would like to echo the words of the fellow commissioner next to me. in particular, i with like to call out brad benson, mike martin and especially peter daley working into the wee hours

of the day and monique. thank you for your leadership. we hope this is a great event and we hope it lives here a long time. >> thank you. i think you echo the sentiments of all of us. any other comments? >> i don't know if there's anything left to be said. go america's cup. >> yeah. >> i think there's a motion. are we ready to vote? all in favor -- >> aye. >> resolution 1234 passed the port commission. thank you. >> item nine, request authorization to enter exclusive negotiation agreement with orton development incorporated -- >> just confirming that the vote was for both 2334 and 1235 joint -- 1234 and 1235 -- >> i move the item as a whole.

>> enter authorization into exclusive negotiation agreement with orton development incorporated for the lease and development of the 20th street historic buildings on or near 20th and illinois streets of pier 70 and authorization to enter into a no rent lease for a site office. >> good afternoon, commissioners, pier 17 project planner and development. i'm here with a relatively brief item to take forward the decision you all made on february 28th, when you awarded the 20th street historic buildings after pier 70, six buildings, 250,000 square feet, dating back to the 1880's, places where ships were actually made. awarding that opportunity for the orton development team. since then we negotiated a negotiated agreement with them. sounds a little awkward but we -- this lays out the terms of

the parameter that's we will come -- be able to come forward hopefully sooner versus later with the development agreement like you just approved for the america's cup to go forward and do. this is fairly simple business terms. it's a nine-month agroment. there's $75,000 negotiation fee. there's two extension periods possible with a fee of $50,000 each. there's a set of benchmarks that would come forward and what this is a set of ground rules for how we work together. we hope to be before you this summer with the development concept and proposal so we can actually talk substance rather than negotiating agreement process. with that, i ask for your approval of this item and ability to move forward to make this happen. thank you. >> so moved. >> second. >> is there any public comment? comments or questions from the commissioners?

i just want to know when we came up with the $75,000, how did you come up with that number? >> we looked across some of our other negotiating agreements, which were for obviously with 337, lot 351, the forest city project at the same site. this is really in the range of that number for this amount of acreage or area. the difference between several of those were the negotiating fee was deferred until the approval of the project, this one was paid up front and that was how we established it. i guess i also should have mentioned the other action we're asking for is approval to enter into a lease for site office for the orton team on site. >> i noticed that. and if they extend beyond the 12 months, how will you be in the lease as far as parameter rent? >> right. this is an office using with it they would use at the building

at pier 70, not at one of these buildings, if they're going to spend $10,000 to improve the suite and get free rent for a year. if they were zoned beyond 10 months they would lease the area they're using at the parameter rent, whatever they would be then current, so -- >> are you spelling out what you mean by parameter rent in terms of the category? >> using noonan building rent, a dollar a square foot and you update that every spring. so it could be different at that point in time. >> any other comments? >> i'm sorry, i do want to point out it's my understanding there's going to be extensive outreach to the community and other participants are very excited to hear about those efforts. >> one of the very first deliverables in the sense is the community outreach plan and

chance to understand what folks want, how these buildings can come back to life. >> ok. all in favor? >> aye. >> ok. resolution number 1236 has passed. >> thank you. item 10-a request approval of one the city's issuance of certificates of participation for the pier 27 cruise terminal project, for the shore power project of pier 70 and america's cup infrastructure requirements to a memorandum of understanding between the city and port commission that provides for the term support repayment of the c.o.p.'s and recommend,s to the board of supervisors for three appropriation ordinance that allocate c.o.p. proceeds and reallocates 2012 port rev new bonds and port capital funds to the pier 27 cruise terminal project and america's cup infrastructure requirements. >> good afternoon, port commissioners. elaine ford, deputy director of finance and administration.

as was just read into the record, i am here today to request your approval and recommendation for city certificates of participation in an amount not to exceed $45 million. to authorize a mem dim of understanding between the city and the port, which will govern our terms of repaint of the city's c.o.p., c.o.p.'s and to recommend the appropriation of those proceeds and reallocation of 2010 revenue debt proceeds and port capital funds. and all of this financing, of course, is for the 34th america's cup improvements and cruise terminal project. as you're all well aware, the america's cup agreement has changed. we have transferred the scope of work, which went from 111 million of private investment to approximately 25 million to public works projects. while the investment size has

changed, we also will be retaining 3.9 million of long-term rent. those facilities will no longer be utilized to repay that initial investment through long-term development rights. prior to the change in the america's cup agreement, we were planning to issue -- planning a financing plan for to partially fund cruise terminal phase one and also for the shore side power equipment at pier 70. this slide shows our original plans, adjustment due to the america's cup change and new total. we've made a decision along with the city family with the great thank you for the office of public finance to utilize city c.o.p.'s instead of port revenue debt for this financing. this helps the port because the city's credit rating is better than ours so the pricing will likely improve. it also helps us with coverage and you will notice combining our original anticipated financing with the adjustments

also shows efficiencies in the overall costs of the financing. we're looking at 2.4 in the original that just grew 1.5 for total cost of finance of 3.58 million. is 3.5 8 million. now to what you briefly through the uses 4.8 2 million in project costs. the most notable project in use is in terms of sizing is 23.8 for the cruise terminal project. the project is underway. the event authority has transferred scope for the project to the poor with the value of 5.6 million. this project will be -- i will be pleased to say will be almost fully financed up to phase one but for a $5.7 million a preparation that we're waiting for from the city which they intend to appropriate in the new capital budget.

the next scope of the project we're calling ac 34 infrastructure improvements. the notable project is the improvements to piers 30-32 and the engineering staff can go into more detail. the improvements will not only allow for the event to take place but will extend the useful life of a portion of that facility from 10 to 30 years. allowing for public assembly and making way for future development. in this category is electrical upgrades and dredging. as noted, there is a range of costs for this category the costs will likely come down as the staff is working to refine the scope of the project.

this allows for the contingency for the higher amount this can be provided on time. there is fill removal for pier 64. there is a range of costs here if we're able to have our maintenance biocryst brick -- perform the work. costs depend on the final requirements and the timing of those requirements.

this is ed ceqa mitigation requirement the financing strategy is threefold. any tax exempt proceeds that were available. we have appropriated mostly funded pier 35 product to the cruise terminal project and we defunded the back land project for the pier 30-32 project. that was to utilize what we had first and to reduce the size of the new obligation to the city in the c.o.p. and to fund demolition and dredging with the real -- reallocation of budget sources and finance the remainder of the costs with c.o.p.

you'll find the poor revenue bonds and real cal -- reallocation of poor capital funds and the c.o.p. not exceeding 45 million. you'll note in the report that capital funds is a combination of reallocating things to prove it in our capital budget. some of our projects come -- came in under budget. we also defunded the anadir 00 -- anadir amador project. also you approve for budget 13. that comes from leasing project and allocations to the cruise terminal project and from the elevators and escalators project. regarding our overall capacity prior to the change in the america's cup agreement, we were estimating our total bonding capacity at $65 million.

that is using the revenue, 13 million with two times coverage. with the america's cup change, we have -- we're retaining those long-term trends. we're utilizing 35 million in the proposal today. the projects generate revenue to the poor. we will be replenishing the back land project. peer's 19-23 and pier 38. that will leave us unprogrammed capacity of 5.8 million. the success in selection and implementation of those revenue generating projects during next

issuance will be a key to help us refine our funding capacity. the benefits of this financial strategy that you devices available sources, the city c.o.p.'s will result in pricing benefits to the port and combining what we're planning with our new requirements is efficient in terms of issuance costs. the risks are the projects i have described that are defunded. overall, we feel that this is the best solution for the port now, given the importance of this project but also our band with to perform these other projects we have defunded in this proposal. following the america's cup events, the port will refocus our attention on bringing to you capital projects for financing that have a positive impact on our balance sheets so we can build back the bonding capacity and continue