documents [inaudible] the special use december /treubgt will be accompanied by a development agreement that will be a statutory agreement under the city's stray ten i's code and one of the functions of that is to lock in the exactions that will be required to fund different public benefits at a fixed point in time. and finally there will be a public exchange agreement pursuant to ab 418 which i'll talk about in a bit. this is the site map, the area that emily has previously described in the southeast corner, describes the water front site.

emily talked a little bit about phasing. each phase will include development parcels and necessary streets, infrastructure and open space. public benefits are going to be distributed evenly across the /tpaess so the public can afford to deliver those benefits and the dea will set forth a schedule for delivered that horizontal infrastructure and benefits by phase, which could believe sunt to delay if there's a forced e vent, some natural disaster or something of that nature or a very bad real estate market. so the

project is not through, it's statutory and regulatory plan amendments. emily talked about the special use december /treubgt for the water front site. that would include the 20th and illinois property. the master developer is going to invest developer capitol in infrashuckture and streets and

open space and they'll receive a cumulative return of 18 percent on that. i talked about the illinois and 20th street parcel. the term sheet actually contemplates that the port would dispose of this right after project entitlement /ao*et /-r by lease or sale to generate early proceeds in the parcel and the benefit of this parcel is its right along illinois /sraoet so it can connect to the /kp*esing infrastructure and it's a way that we can pay for the entitlement costs and avoid developer return tolling or accruing unnecessarily. so these are the illinois street parcels. you can see that they stretch up as far north as street and 18th street right

near the cranial cove park project that david is working on. there are a few parcels that are behind the 20th street historic buildings and then the 20th and illinois street and the ho down yard parcels at the southern edge you can see there. and it's gouge to be helping the port analyze these parcels. so let's get to the financial terms of the agreement. the port is going to receive a variety of one time and ongoing revenues. the essential structure is that forest city needs to make an 18 percent return, but after that we would split the remaining

revenues /skwrepbl /raeted by the project -- 45 percent to forest city and 50 percent to the port. 55 percent of prepaid ground or land sales above what is required to pay developer return would come to the port. and we are also looking to appoint in time probably in phase four of the project where the developer reached an 18 percent return for the whole project and after that point in time the remaining leases would be annual ground rent leases where the port would get 85 percent of the ground rent. all of the parcels will be appraised and the fair market value will be established that way. there's

also a port participation component and this we have not had in our other deals, but in addition to the fair market value that i just described, in year 30 each of the development leases would start paying the port 1.5 percent of the modified gross revenues generated by the project. that would exclude a few parcels, /kopbld min yums would have been sold off, that historic buildings and place making uses as well as district parking are not sunt to that. that amount of gross participation goes up to 2.5 percent in years 60. emily mentioned that any time there's a refinancing the developer is taking capitol out of their lease, the port would get [inaudible] out of the net

proceedsfina ing. if there are sales of ground leases or fee parcels, we would get 1.5 percent of those proceeds and a 1.5 percent transfer fee on each condominium sale over time. and then finally -- and this is a very sick /tpheuf cant portion of the early revenue of the project, we have a lot of tax increment generated by this development and a lots of capitol needs that are not just in the water front site. the port would get 9 percent [inaudible] that are in the bae shipyard lease. so the master developer build the improvements that we've described. we're looking at a variety of sources of funding to repay developer equity. we

have community facilities districts that's basically where's there's a special tax that is levied on the parcels above the /pwaeuls property tax or in advance of the base property tax. you can issue pawns against those special taxes. ifd proceeds and that's basically the growth in property tax or [inaudible] interest tax created by the private investment in the property and the port would form an ifd district that may include sub areas through the water front site. and we're really trying to max /phaoeutz the amount of ifd proceeds that can repay these publicly owned pieces of infrastructure and parks so that we don't have to rely as much on portland value to make those payments. we'd

issue /pwopbldz, collect those proceeds on a pay go basis and finally with the developer, we'd form maintenance districts so we can maintain it appropriately. so emily talked about the seven or so acres of open space. the parkings would be port owned. the developer would program and manage those parks subject to port approval and bcdc approval where it's required with maintenance provided by special taxes. and we're still in the process of thinking of how to best finance the district parking facilities -- the three that emily mentioned. we have a per /tpered option, which would be to use public financing sources. the operating income from the garage, the parking

fees that people would pay. and the port would own and manage the facilities. there might also be a special tax on the office buildings that would have dedicated spaces in those garages, but we're keeping options open for you to consider as the process unfolds. so we are also looking apt a potential developer equity contribution to the garages with some /rurpbl on that equity repaid by port project proceeds. so this gives you a sense of some of the open spaces that forest city is looking at. they've been very /kraoe yehtive about how they're designing different rooms and different /spaoerpb experiences for people who are going to use the water front site. the market square is nestled in the historic buildings. there's this long commons area between the place

making uses and some of the ground retail around the park. and then slip aways park in the southeast corner of the site and the paint area leading up to the ship repair yard. if i could also say on top of the district parking facilities there is a plan sort of public /oeup space that may include recreational space that would be open to the public. so the master developer would have option rights to each of the development parcels. we would go through this appraisal process to establish a fair market value at the moment in time when the developer is taking down the lease so that we're sure that the value that the project in the port is getting is a real fair market value. we would only propose to you to sell those parcels needed for residential parcel

condominiums. we'd have a different structure for the historic buildings. the place making parcels and the district parking structures as i've discussed before and those would be further defined in the dea. now, there's a chance the master developer chooses not to take one of the parcels. then we would go to a public offing process where we would actually hold an auction and we would use that fair market value as a floor. that way we're sure that if our city's not ready to develop we can go to the private par /ket and bring

those resources to the site. /theupbl i'll close in terms of the proposed terms with the place making parcels and historic rehab. buildings 12 and 21 will be conveyed under 99 year ground leases problem write not through this appraisal process. we're tending to think that these buildings are not going to generate enough revenue to yield a positive value to them. that there's probably some need for infrastructure financing proceeds to help with the rehabilitation of these buildings. forest city would likely get historic tax credits as one source to help pay for the rehab, but we need to work on how to make these buildings financially feasible. they would be under 99 year leases. the thought with the place making parcels e 1 a and e 1d

right nec to the part -- it's just on the north side of the commons is where those buildings are -- is that they're not going to generate enough cash to pay for themselves so we would convey the land on which the master developer would build those buildings for no rent. the port would not be responsible for subsidizing the buildings. we might look at csd or ifd to help make those buildings financially feasible. and we're going to need to keep some flexibility in mind with these if for some reason the place making uses don't work we need to have some back up flexible zoning for these sites. so these are the areas for place making and historic rehab in the land use plan.

and we're going to be coming back to you on the 28th with a much more detailed financial analysis. today's purpose is to ex/phraupb the terms and get initial public comment. on a preliminary basis, the great thing about the plan is the port doesn't have all of the resources to fund all of this and our development partner is able to be bring equity and to pay for these improvements and to make this site developable. on a reimbursement basis they get their cost back, plus an 18 percent return and then we're looking at sharing revenues beyond a reasonable doubt that. we've got some pretty distinct funding resources. we've got prepaid sources early in the project, changing to annual ground leases late in the project, and /th-pb ifd as the

major sources to pay for improvements. we /ao*f got diversified port revenues. we're looking at participation in a number of forms. the /phaeupbl sources -- i /woepb go over each -- is the 55 percent port share after the developer gets the 18 percent return. we've got these modified gross receipts come /poe innocents happening in the years of the project and the nine percent of the ifd. also we're looking apt /sug /tpheuf cant parking revenues in those facilities /-fpt pier 70 overall represents a big chunk of the port's /tepbl year capitol liability and will contribute to other pier 70 needs. the structure port

participation really helps to make this project feasible. we talked about some of these market risks and absorb risks with pier 70. and we believe and we'll show you on the 28th that these determs compare favorably to the other mayor developments that the city has done. and we did want to talk a little bit about the 99 year lease structure 'cause normally we don't do that. we have a 66 year limit, but we are doing a trust swap at pier 70 and actually after lands come out of the trust they're no longer subject to the burton act so we are able to lease for a period to sell the few parcels that

will be used for condominium use, sunt to your approval, or lease for up to 99 years. we're not creating a precedent for other port property. and by being able to lease on a 99 year basis it starts to look like fee land and the market values [inaudible] shorter term leases and we believe that longer term structure is justified by the ongoing modified gross participation that we structured into the deal. so i think on behalf of both port and city staff we're excited about forest city's vision for the site. they've done some great moves in terms of the park space and how it connect, to the water front. they'll have a very active ground floor set of uses around the park. they've got a great vision for how to build new buildings in and amongst these historic buildings sort of retaining the character that

the master plan calls for. they're thinking about ways of designing urban open space in a way that we don't really have along the water front and that reflects a neat connection to the historic buildings. and it's been great to see how forest city has really embraced the ship repair activity that's happening at the site and how that's a key goal for the development of the site. so with that i want to outline the next steps /-fp we've got your consideration of the terms sheet on the 28th. we're hoping to get to the board of that could last up to three years that would include seqa rezoning and public trust swap. and if we're successful /p in that we would get back to you

for transaction documents for your consideration. that concludes our paren /taegs and we're here to answer any questions you have. >> hank you. this is public commented and actually we have two people who have parentally been sitting here but really it was for this item 10b. can you pull the /ph*eubg down too just a little bit? thanks. >> that better? my name is kim austin and i'm here to speak today on the behalf of [inaudible]. first i would like to express or group's support for the preservation project at pier 70. we have been an act ten i's community resource here for many decades

and believe the work you are doing is an important and necessary project that will both save the existing buildings on the historic site and will revive this area in ways that are yet to be seen. we are excited to be part of the evolution of restoration, /eupbl no /sraeugs and rebirth at pier 70. we look forward to continuing the rich history of art house community that the union building has [inaudible] of building number 11 as /staeted in the pier 70 master plan. we understand that the nu /tph*rbgan building is slated for /tkepllation for two reasons. in your opinion one, even though this building was built within a period of historic significance in 1941, it has not been classified as a

historically significant building within the pier 70 master plan. this is a criminal intenting building. number two, the bidding is considered beyond repair. the infrastructure is said to be compromised and it has been claimed that it is too expensive to be included in the forest city water front project. we question the validity of these two arguments and we could elaborate from various perspectives, but today we would like to point out and re/tphrepblgt upon two reports that are available to the public on the san francisco port website. first we fight the request for historic /tkegs /treubgt status prepared by terry and company. in this 26 page report the /h*es write of pier 70 is me tick /hroulsly outlined this report states

that this building maintains a high degree of integrity for location, feeling, association, design and workman ship. it does not cite any serious damage or alteration to the building. however, in the pier 70 /heuls toric building survey, also conducting by kerry and company in 2008, the newnan building is not included. there is no documentation at all. it was simply overlooked or worse yet, excluded. it is troubling that there appears to be no conclusive examination of the newnan building while other buildings are thoroughly nted i

reports. we feel the demolition of this building would be a terrible and irreversible mistake. the [inaudible] it supports would touch many in the surrounding dog patch neighbor /haold as well as hundreds of visitors who come to the site each year. /-z one of the few remaining /arpt houses in san francisco and an active participant in the city wide open studio program, it is hard to determine the impact the destruction of this building would have on the community. in conclusion, we on the to any plans that propose the demolition of building /#1-g without research justification or /kraeur /tpeu /kags of the living resource that it is. we are deeply concerned with the

[inaudible] and not surveyed /-fpt we thank you for your time. >> thank you. >> good evening, i'm here to describe the vibrant and creative community currently alive and /tphrao*eufing in the nunan bidding on pier 70 and to ask the commissioners to be sure were included in the development. we are painters, film makers, photographers,

print makers, writers, architects, computer consul /tapblts, sign painters and inventors. we feel really strongly about fosterering our community in a creative work space. his work brought attention to quite a group of /paeupblters were doing in the mid 60s and 70s. they went on to be known as the bay area figure painters. it also brought a lot of really unique brilliance to the fabric of our city. times are different but the spirit is the same and today we're hard working, talented and we have dreams, ideas and /spweg /reulty. we

strive to contribute [inaudible] we're a lot like you. what we do today in the building resembles what forest city [inaudible] we up hold an integral part of san francisco fabric. a mix /-td media hub already exists in this building and it's working. we've created a -- and how its unique toe that place. we have made it tangible. we have objections to forest city research project. we haven't been included. the creative working force in this building hasn't been included. forest

city's interviewed hundreds of people but they haven't interviewed all of us and haven't included us either. we'd like to be interviewed and included. we've been trying to say so for two years. that said, it's probably no surprise that we're here to on the to the proposed pier 70 . until we finalize and submit our proposal, which is under way. it focuses on a program that will criminal intent to success [inaudible] and include the current community. our proposal is in concert with the port's five year financial plan and it /sho*es that we like the private public idea. our proposal coexists with some of

the developer's plan. in conclusion we'd like to see pier 70 evolve into something that we can be part of and proud of. we want to coexist with change. we want to maintain affordable studio space. we'd like this development to include us instead of erasing us. thank you. >> thank you. >> i think he's gone commissioner. >> you're right. >> mrs. woods. >> good afternoon. i'm wearing my central /waurb fund advisory committee hat. i want to let you know we're having a sea wag meeting tomorrow at 5:30 and we will be talking about pier 70

and this proposal. we'll also been talking about the port's gnu infrastructure finance legislation. again, would encourage you to hear what the community has to say about these. >> okay. commissioners, comments, questions? >> i was going to say thank you for the presentation and i look /tpword to when you come back in two weeks with the financial and other information. thank /kwroug. >> i got one question [inaudible] asked the question about why they had been excluded. is there a reason why they