schedule, it will be going up in two weeks' time. this is deal that has been fabricated in the united states. we are very happy about that. this is the demolition project that was boarded up almost seven years ago. it has been slated for demolition for well over 10 years. it includes a very important repair of the sea wall. under this expanse here, we have discovered that there had been a crack in the sea wall that had been repaired and that is of critical importance to us. this is what the new wharf will look like when it goes in. this will align the embarcadero. it will create another great place for people to come and create and interact with the day.

it's funded from numerous sources, including gl bonds. this is another seawall project up in fisherman's wharf. that project is underway, funded by g l bonds. this is what it will look like when completed. all told, we have public finance projects going on at 14 years and that another going on at 15 and 17 publicly fund -- privately funded by the exploratory and. -- by the exploratorium. hopefully we will realize the value after the america's cup by renting this improved space as well as the public spaces we

were already working on. supervisor chu: with regards to capital, does it include any thing not potentially in the 2012 spot? >> nothing is in the 2012 parks bond per say, but we do have a proposal that it would help us pay for the new plaza which is part of the cruise terminal project. it is more for the terminal itself than for the park. we feel like one of the main things we contribute to is to generate jobs. we have just over 200 employees but generate a lot of jobs from the businesses located at the port. we think it is just shy of 10,000 jobs on the property.

most are sold proprietorships. some are things like equity office partners. all told we think we generate approximately 16,000 jobs with an economic benefit of $2 billion. the bulk of that comes from smaller items accumulated here. the maritime industrial usage is a fairly significant portion, especially if you include the cruise ship business. there are 57 restaurants on port property and 25 retail establishments. most of which are managed by the ferry building or the giant ball park. >> on the --

>> it could be a lot of non profits because of the affordability of this space, there is obviously activity that comes out of parking but that is very low. warehousing is a very low. that is part of the 8000 in the yellow. things like that. i want to mention passenger cruise. there were 420 jobs we think are attributable to crews. it's not a huge amount but what does come into the city can be pretty amazing. i want to mention one in particular.

sunday, may 12, therefore princess ships in port. we think this is somewhat historical for any port to have this many ships from one line in at once. but all told, those four ships brought in 18,400 persons for 24 hours, which is pretty amazing. that includes passengers as well as the crew. we see a real economic impact when these ships come into port. this is something we take very seriously. supervisor chu: how do you expect the passenger cruise portion of your portfolio to change? >> we are showing anticipation of more crews calls but also

we're getting more ships with more passengers -- bigger ships with more passengers. a couple of years ago, we partnered with princess cruise lines and our repair operator and the expansion of the dry dock. that allowed for the bigger ships to be repaired and we no one was towed up here to be repaired. the line to the biggest ships and reposition them on the west coast. before we did that to the dry dock, they would have had to tell them back to the gulf or even across the pacific. this was a huge investment that our city and partners made which benefited the cruise industry in california. the budget shows an uptick in the revenues that we expect and we have been told just because we are building it doesn't mean

we're going to get up but we are already seeing new bookings. princess cruise has announced they will be home birthing a cruise ship in 2013 that will run from day 2013 through may 2014. a home port ship is a ship that starts and ends its tour in that city. in some of his passengers visiting for the day, we will see passengers coming to get on the ship and leaving the ship. they will be coming to our airport and staying in our hotels and we expect to see an even bigger economic impact from the home port of calls than we do from in transit calls. we are planning for more growth , and most of portly, growth of bigger ships. the little pier sandwich there is pier 35 that it was built in 1918 to serve ships which had a 500 passengers and crew combined. this ship here would carry about 5000.

speaking of the dry dock, here is a picture of the golden princess in dry dock on mother's day. this has been picking up over the last couple of years. it has grown 20% from the time we enlarge the dry dock itself. it's the first time it has ever been done in the united states, so it was a very gratifying thing to do. we have coming in, two ships from the u.s. navy which we think will generate over 100,000 new man-hours coming forward. we are very gratified to our partners in their excellent work of bidding for them.

there are two things that are most important -- we just participated in dredging the central base there. this has allowed them to bring in bigger ships and be more competitive. to direct results is they are bringing in these and navy ships, the knee -- the kaiser and the shepherd. pier 70 -- there's a big business after before them. we are trying to be ready for another bid it that the maritime administration will be putting out where they are asking specifically to have short power and that's being funded as well with some of the financing provided by some of our friends at the public utilities commission. we are very grateful for that. these activities provide various levels of financial support in different categories to the city. we wanted to point those out.

parking is a good one. the big one is the interest tax assessed all long-term leases. in terms of work force development, we have been steadily growing our program in the last seven years. we are working with five different programs. you can see the sheriff's garden -- americorps is helping us out and a couple of years ago, we piloted two new programs -- the port pilot apprenticeship which is moving forward and is terrific and then enhancement training at pier 70 which we hope will touch 165 individuals. we are very excited about that.

supervisor avalos: that is something we worked on together back in 2009, so i'm glad to have that seeing some success as well. i got a chance to visit your 70 last year and was very impressed with the whole operation there and the great capacity there. in terms of the ship repair operations, it seems like there is a lot of opportunity for making sure we are preparing a pipeline of workers at that site. the population there is currently aging and could soon be retiring. especially close by the area, that could have real living wage jobs and the friendship helps in that direction. but i'm wondering what would happen in terms of making it

more robust? >> they're very much part of the city build program. they had about 15 people come through. on any given job, they have a fair number of san francisco employees already. that is something that grew out of our budget hearing -- i don't no. what year, but has been a great success and is something we continue to work on. the pilot apprenticeship is very novel and it really exciting. the time we find this, we knew it would take a while to get it up and running. there was a bargaining issue as well but it is now up and running and we hope to be able to have to apprenticeships in this budget. what also not mentioned here is our program with the maritime

administration. this was something supervisor maxwell had the idea for. we work to provide a summer intern ships with our maritime institutions and at any given time there are students going to the program here in san francisco and work on everything from working with tugboat operators, cruise ships, ship repair, it has been a terrific program. we do have a fair number of physician changes proposed for this budget. nine of which are driven by the assumption of the south beach harbor. that's a significant change. we have five other positions either that we are reclassifying or looking to add to the budget. i can go through those if you want, but they are program here. it generally, things are pretty stable in terms of employment.

i talked about the south beach harbor, but here is a great picture of it in case you have not seen it before. it is sizable and has a relatively important breakwater their and makes a nice place for the vessels to be berthed. under the language access, we have not had the robust employment of language access of the way the airport has. we -- we are not required to and we don't actually track our language inquiries, but we have a number of key staff and our divisions that are available to help. the most common language is needed are either spanish or eight chinese dialect. in talking to my staff getting ready for today, we have been asked to three or four times in

the last five months to come out and translate. mostly when we do that, we have foreign dignitaries who are visiting and they are typically either chinese or japanese. we do have signs built back when the embarcadero road was built. they are all in english but they are not very verbose and use words like chinatown or fisherman's wharf. so far, we have not had any issues with that. we have found people will wonder into the reception area wondering how to get into the areas, wondering if it is walkable to fisherman's wharf. we get schedules more than anything else. i would point out, during the oil spill, you may recall the spill happened in the early morning, mid morning hours.

it was determined whether closing the beach was a county issue or a state issue. at the county level, and number of departments got together and we determined it was probably safest to restrict fishing and access to the beaches. we did run out and put signs out there, mainly pictorial, no fishing, but in multiple languages to make sure that people understood to stay away from the beaches. we found that to work very well. that was something that we had to respond to same day. packing together with the help of a number of departments, to permit a public health and partner of reproductive services. in conclusion, we continue to have the same story of try to keep operating revenues growing faster than operating expenses,

generating surpluses to make the needed pairs that we -- repairs their behalf. we have leverage pretty much as much of our balance sheet as we have capacity for, if you take the revenue bonds we issued in 2010, combine with the debt service. we have a bit of debt capacity left that we are hoping to employ four phase two of the cruise terminal project and some under pier utility projects which are growing in significance, but not a significant amount of flexibility. we have been able to capture all that and expend it, as i showed you. we are not off to become ever, but we're happy with where we are at the moment. that includes what i have to say. supervisor chu: with regard to the general fund contribution to the port, this has to do with america's cup and the loss of rental income that would come to the port relating to america's

cup. when we had heard about the project, we have heard about a general fund contribution of $6.7 million. i wanted to indicate that i am glad we have been able to bring that number down to $3.2 million over a two-year time. i appreciate that. there is one component that i am not quite sure how it flows into the port's budget. i know there is a private fund- raising effort to help offset some of the costs for america's cup. i do not see that in the budget. i think the report indicated it goes to low duty, so i am wondering whether the -- oewd, so i'm wondering what the mechanisms would be to recover some of that. >> i can have the chief financial officer answer that because she has been working on that. >> we have an america's cup project within our own operating

budget but we also have a request to the office of economic workforce development to support about $1.1 million and project costs for america's cup. depending on fund-raising, we will receive replenishment on that. you can note a dramatic increase -- decrease due to fewer piers used in the america's cup, if your tenant relocation. that agreement is an of requirement of reimbursement to the port. if there is sufficient acoc funds to that point, it will come from there. to be clear, the rental loss will be paid either from the general fund or either from acoc. the project's cost will come from acoc funding or the port's budget. >> does it flow from acoc first

and then to the other budgets? >> that is correct. supervisor avalos: just a quick question on the policy of reserves for the port. does the port have its own reserves? >> yes, for a long time now we have had a reserve policy, probably for as long as we have issued revenue bonds. in 2006, the port commission adopted a policy on maintaining reserves. that is a 15% of operating revenues. we meet that test and all of the budget proposals we are showing you here today. i believe that is the key attributes of our revenue bond rating. i wanted to take a moment to mention amy and jim from the four redevelopment agency have joined us -- former redevelopment agency have joined us in case you have any questions.

i want to thank them for their dedication and for the working relationship. it could not have made it this far without them. supervisor chu: thank you. supervisor kim. supervisor kim: for the sake of the public, because we have been getting a lot of inquiries about the transfer of south beach harbor from redevelopment to the ports. maybe somebody to talk about what that cost will look like, some of the changes that residents can expect? >> i will start. first of foremost, we are going to have an item in front of the port commission at some point, probably at our july meeting, and hopefully at our june 12 meeting on information on accepting back the debt comes with it. half of the $4.6 million that is for operations for the marina,

the other half for debt service outstanding -- rough numbers. as a result of that, there will be an action at the port commission to formally accept that liability and assume that debt. to that end, the marina cannot find that everything in terms of its operating expenses and debt service. it covers operating expenses but there is a shortfall in the debt service. we are taking a long look at it. we're looking at some of the other facilities around the region to see how they are operating. this is a destination marina. if you will, a more significant marina in terms of the users that it attracts. we are looking to see if there is a way to rightsize the deficit. we have not made a firm decision about that, but it appears that some level of funding is required.

the marine operates now in the bottom third of rates for the unbearable we have looked at so far. there is some parking associated with best that is almost free, so we will be looking at that. that is more of an equitable issue, that we charge for parking. we want to be equitable to all of our tenants. there is more to come on that. for anyone who is following this, our process is, informational presentation on june 12 to talk about all of this in greater detail and suggest what our proposal is, whether it reflects any changes that needs to be done. we would not ask the commission to act on it until our july 10 meeting, so that gives the public a chance to play-and. i am probably stealing everything that amy or jim would say, but there is a very sizable waiting list for the berths which indicates that it is very affordable. >> good afternoon, amy lee.

i want to give you some background. as you know, the agency was pretty much frozen in 2011. prior to that, we were aware that there was work to be done in south beach harbor, rental agreements, birthed agreements, some inconsistency in some of the fees. we did not raise fees substantially. we had a minor cost of living increase in 2011. given the sizable list of the tenants that want to enter, we did a lot of work try to make it a green harbor. in 2010, we were going to look at our fees and increase, and then we realized we were on the lower spectrum of all of the berthing fees. so we were going to move forward and make some improvements and increases in the fees, but now

unfortunately, we have to give that work to the port, and they will have to implement it. as monique mentioned, once we get final information about the fees, we will make sure to work with the tenants, community, and south beach harbor. there is a lot of free space that the community uses. we had some challenging times with the world series, parking issues. that was an exterior -- experience that we want to make sure did not happen again. that is something that the port will have to implement as well. i do not think the port is doing anything inconsistent with what we had not planned on doing. >> thank you. with regards to fleeces, one of the persistent issues that has come up has been your lease portfolio. we have had a lot of questions over the years about how current your leases are, if you are negotiating renewals to old contracts, whether people are

staying on month-to-month basis. i wanted to get an update from you on how that is going. i know the port has a new policy with regards to carry over. >> this budget season would represent our third year of our project of bringing our hold over leases either to market or to turn status. we started the year with 277 leases that we needed to look at. we have addressed 216. i have put this turn up on the screen. -- chart on the screen. 35 terminated, four altogether. a number of leases were converted to market rate, brought up to market, which is terrific. we have a number of leases, by their very nature, are month-to- month licenses, which we have

discussed with this committee and budget analyst before. we still have a few we need to work on. what has been gratifying, with the change in the america's cup plan, we were able to relocate in number of tenants into piers 26 and 28, as well as giving those existing tenants some term. that is what is really driving the numbers. it is an ongoing process. for every least you get done, another one comes in determination -- into termination. the relocation of tenants for the america's cup project and cruise ship terminal project has a lot of ways to bring this to market. it has gone very well so far. supervisor chu: for all of the new leases that you enter into, one of the common areas where you put into the contract is,

once you hit your lease end date, it automatically adjusts to a higher level to incentivize us to get us to a place where we are negotiating a new lease. >> yes, well said. upon termination, there is a specific term called holdover status, which has always been in the lease, but now it adjusts to the market rate without any necessary action of rewriting the least. >supervisor chu: in terms of public interaction with the port, there are not that many instances where people would come into the port facility, but when they do, it is about ferry schedules, how to get two different places. what happens when people go there, how do you provide the services to them? >> depending on what is happening on the waterfront

influences the languages that are there. generally, the languages tend to be either chinese or spanish. the front desk, the receptionist will ask one of the bilingual staff to come out and help the person they're here, didn't want to know, can they want to fisherman's wharf, can they want to golden gate bridge from their. we can help them with the schedules, ferry schedules, and sometimes they are looking for a restroom. supervisor chu: one of your future projects has a potential language line. is there a connection at the front desk to answer other languages where you do not have the staff to translate? >> yes, more for recordings -- different information related to tourism. what i fail to mention