>> morning i'm john the president of the bank brewering company. we've been making beer and have doubled the number of employees we have. we recognized about a year and a half ago we realized we would eventually out grow ourself and discussing this with the giants and jack and john and fran they were the ones who made the introduction to the port for a variety of reasons we have now committed it that. the top of the list is we're

delighted to be in partnership with the city of san francisco and the residents and the port. we love the faculties a historic building on the pier and it will maintain the manufacturing fashion of its or begins. we can think of no better a partner to have and we wholeheartedly support this mission rock and project >> thank you. next speaker. >> good morning the biting line this this is an exciting opportunity. most of us who like baseball.

and do a lot of work around jobs and community partnerships. and one of the things in the last couple of weeks i want to clarification on because there's been some local higher. we want to see local higher and through this conversation i think we arrived at the place that the local hiring should be a part of this agreement. i think there's a letter going around to solidify this to work with the giants, trades and other organizations for the city to do. it may have already happened but i think that would be important. it's kind of one of the reasons why organizations that typically don't come out and say yes on

projects i think we're here today for that and we want it clarified. it will also - you start to have similar frameworks it's great for the community good for labor by you got asked the questions and our friends maybe the giants can answer it. i think the giants might be on board if that's the case we're there and it's full steam ahead need clarifications. >> thank you. next speaker. >> good afternoon board of supervisors. i'm the president of bay. we think this is a neighborhood project and we really support it

but what our position is on the neighborhood project should be built by local businesses and local workforce. that will help san francisco and the san franciscans to enjoy the stability and prosperity and better living. we are happy that giants and go to set up a mandatory 25 percent local hiring. we hope you can move forward for this entitlement thank you >> thank you. next speaker. >> i'm here today also in support for the project. we see a lot of development coming through this project and

with that development there will be opportunity for job placements. i support the resident from san francisco that come from decide advantaged san franciscan community. so we're very pleased to hear about the giants working with the communities and make sure to say union hiring and vienna support of the project. >> thank you. next speaker. >> hello local 82. not only have the giants been a great partnerships for the

community >> thank you. next speaker please. i'm joseph scott with local 2 61. this project as you know is one of the several important decisions that will come before you on waterfront projects. sometimes, people think that the building trade unions will support any jobs that come up because of the construction but this is not the case. if the project is not incriminated to the workers we also like the opportunities where the local community members because of the big part of the what the labors don't

increase in in this case, the giants have signed an agreement using the city local hiring policy to make this work. support the worker families and the workforce we're proud to support in workforce commitment for the last fall will help establish a policy for the waterfront development in san francisco. we appreciate the giants labor support and ask i urge you to approve this >> seeing none other comments

the public comments are closed. we have a number of amendments suggested by mr. rose? and so moved the motion to move item 4 we can do that await opposition. thank you very much >> item 6. resolution improving the outdoor with the channel airport. >> okay. thank you very much mr. clerk this item was continued a number of weeks ago to the call of the chair so everyone could be present. first, we'll have mr. martin up.

>> thank you supervisor farrell. this may be the first big disagreement in 33 years. overall this is a very good deal for the airport and the city. we're reducing advertisements leases down. we received 3 bids last time around we only received one bid. $10 million a year and over the term of the lease $80 million compared to the existing lease which will generate 72 million over and over 12 years. i want to assure the board this

very high bid would not have attained this and the bids would have been submitted i believe sixthly less than $10 million a year. personally made t this bid we're in a very different position then when we last put this bid out to bid. it was about 28 million so our passenger traffic has ripen a lot. we're recording traffic record

numbers and we're recording traffic level of 44 million passengers. it took us 12 years to get back to your 19 want 9 peak. we're particle prone to it because of the competition between other northern cities. we have a very high market share of 71 percent among the 3 bay airports 71 percent compared to a lower market share. we have one of the most

competitive shares in the airport environments today. and that will resolve more traffic shifting. >> could you please repeat that slower? you said it was 51 percent when? >> it was 54 percent in 2003. so in 10 years we've published u picked up 10 percent? it's remarkable. >> it is going to change we have a lot of people who live and work in san jose and oakland who can't to get to cities they want to get to new york and sometime that will shift.

we worked on this lease to make sure we honor the city's attorneys policies. we came through with 2 hundred and some plus we have no billboard and no wraps of our buses so we really are limited attorneys opportunities for the airports. compare that to other arrangements 2 others have over 6 hundred attorneys locations. we have honored the city's policies. as i said i personally made this decision because i revenge we're going to have a low passenger growth. and we will see a drop in passenger traffic. and the opportunity to lock in a

minimal opportunity make sense to me. he received a very competitive bid. one of the birds said their bid was commercially unreasonable. i don't agree but it was a very aggressive bid. i'm pleased with that bid and we've locked in bids to secure our financial future >> sorry you said someone's bid was unreasonable? >> this was the code team to question whether the clear channel bid - said the bid was

commercially unreasonable and. >> mr. martin can you talk about one letter you handed back to us i talked about the passenger we can talk about the macro picture here. obviously there's a discussion about the magazine per passenger. i know i have some data here compared to other airports i want to hear about that. >> the news lease will result in a passenger - it reflects the fact that the third channel was going to take a higher risk on

the down side so that's how they weighed that arrest $0.10 and $0.09 and lax is $0.21. >> i think you hit on it the difference between a mac only and have all the studies that have been done you mentioned some airports phoenix that have massing only. >> no, it was incorrect we corrected that vehicle correspondence to show those

have a percent in a magazine. >> i want to give you a chance to further elaborate. >> but could you talk about the recognition p of what it is meaning to san francisco. >> we don't follow what other airports do we wouldn't have concession things off the chart. we're unique we're maxing out on our airport we need to have oakland to help us with the

passengers. so the city's attorneys constraints i thought that that was the best solution >> can you explain in one of your correspondences you talked about how to foster more attorneys location can you talk about the correlation a little bit. >> it was a nature incentive for the operator of the lessee to try and find more locates and tell the airports to share in the revenue we can find for revenue to continue will i trying to kriep up and pushing into the city's policies to try to limit advertising locations. so this fixes the advertising.

>> there was no cap on the old lease. >> okay. >> colleagues any questions? >> okay. thank you very much mr. martin. mr. rose i believe you had an opinion on this matter >> i don't know why you would say that. mr. chairman you continue this resolution at our meeting of march 16th and i did direct the analysts about the airports whether they required the advertising for limited. you required the budget analysts

to provide more information on the percent of the rent and the minimal guarantee and we've included that information. in the professional judgment of the budget and legislative analysts to pay rent to the airport if the percent rent exceeds the guarantee it's not in the best interest of the city. i'd like to make two more comments. you just harder mr. martin say that concession sales are off the chart quote/unquote. that's precisely supervisors why it's important why every other airport in the country requires a percent of gross if it exceeds the guarantee of the concession

off the chart. that's why the general fund has benefited to the tune of a million dollars over the past few years because the revenues has exceeded the minimal guarantee. the other comment is mr. martin statsd that the 10 millions was a generous minimal guarantee and he wouldn't have gotten that if he had the gross. supervisors clear channel has paid the airport 9 point that $3 million during poor economical times. we're now in a continual comforted economy with the stock exchange high and in the last seven years is only $7,000 less

and with that i would like ms. newman to summarizes our report >> meblz i would just go over the additional information that we've provided in our updated report. as we had previously noted under the exciting 12 year exciting lease oh, the last few years the clear channel actually paid the airport based on the percent of the gross oh, $5.6 million of additional revenue to the airport. because the airport pace 15 percent of the concession revenues to the cities general fund those additional revenues

resulted in over $835,000 additional revenues to the cities general fund because of that percentage of gross. as mr. rose noted as this was previously continued this committee suggested we go back and look at it 83 all the airport leases and advertising contract. based on that we found all airports going do get a percent of gross and the department of public works and the s f mta transportation agency all of their it isably contract are

based on both a minimal guarantee and a percent of gross. and i would also note as shown on page 56 of our reports the result of our survey of airports every other airport for their advertising contract has a guarantee and a percent of gross. i would note of those 28 airports 15 of them contract with clear channel. in addition we asked all of those airports what their revenues from those advertising contracts were in the last calendar year in 2012 and of the 2g 8 airports 19 of those airports were 68 percent were paid based on their percentage of gross.

i know their paid a minimal guarantee or gross clever is higher. so based on our analysis and information we're preside we're relating to disapprove the resolution. actually, one other point - one of the issues that mr. martin did bring up several times is under the new lease with clear channel p there would be fewer locations now their 2 hundred and 48 locations under the new locations 1

contract. >> solo that the making never comes into play. there's multiple ways to look at

the same thing but i want to make sure i'm not missing anything here and mr. chairman that is correct we didn't pursue that and we only looked at the few years. it could flip back and forth which it has with san francisco airport. half of the time we've been paid based on the percent of goes >> colleagues do you have any questions. i do want to ask one question. mr. rose mentioned concessions through the roof because of the percentage and i want to give you a chance to respond >> there's a difference retail and beverage we want for expensive items that's all good

for us we don't want to have more advertising locations. that's fundamental. the other thing there. >> risk control. we would have seen greater opportunity on the high-end by potential less revenue on the low end the business decisions are a unique thing that make sense i want to make sure we're doing what's right for us >> i like the fact that the number of advertising locations has gone adopt. have you allotted 278 that's gone down there? we allow 1 hundred and 78 we're

pleased it's come in much lower >> right the fact that we're lowering the locates is a good thing. i still don't like the idea but have you allowed up to 3 hundred you think you would have been getting more. >> they would have they likely would have put in for 3 hundred and that way they're not competing against themselves. and the >> supervisor. >> i was going to thank mr. rose and ms. newman for the great report.

like supervisor farrell i support the airports efforts to reduce the aesthetics. i want to say i'm looking at page 4 7s of the la report which has the chart of the 57 gross revenues. i think mr. roses is reporting to the last year of the gross revenues and the year before the 2011 where the gross revenues are lower and we're reaching a down turn and he we're back up to the level and i