residence and the works as clients, as customers, as partners. all of this space is tied together by the public realm. that's the parks and the walkways and the shoreline. we worked hard to orient the plan so the open spaces have a maximum opportunity to be activated by the buildings and the uses that are a djacent to them so around building 12 where we envision a market hall where you got low market scale that's making and selling their goods. you have the historic building on the water front site in an area we're calling it -- you got it unique space where the buildings are the right side of the park could be

an indoor, outdoor venue. there's no road between the building and the park so there's an opportunity for those uses to spill out directly onto the park to live them. it's a place where people can have a picnic or their children can play. it can accommodate to the outdoor concert or an outdoor movie and lastly an area called the slip way promanade where it's a unique place in san francisco where you have the bay trail which will pass through pier and south with restaurants and retail on one side without automobile access separating that space from the buildings

and on the other side these historic piers that give people an opportunity to pop out onto the bay and these amazing views as you can see on the screen looking at downtown san francisco and the bay bridge. so we're extremely excited about this. we've been extremely encouraged by the positive response we've received. we've had three open houses on the site. it has been incredibly impressed by having upwards of 700 people attend these and folks are excited about what's happening at pier 70. >> supervisor mark. >> this is a great presentation, the slide you're giving us, but having visit that flip way area and even just seeing what it looks now now compared to what you're proposing, that would make the

presentation stronger. and how things aren't used at all and how you're creating an amazing community. i like the presentation too but it doesn't bring out as you stated in the beginning, how what a creative process it was to look at a vision and the panels you had in the community and how people looked at the history and creating something that's based on the respect, but this is a great presentation. >> i appreciate you acknowledging and also the fact that you showed up at one of the open houses. i will end, i don't know if you all received a few letters of support that came in late last night and early this morning. i'll leave them here in case you didn't and we're available to answer questions after brand benson finishes the presentation.

thank you. >> good morning supervisors, brad benson and the last part of the presentation is to describe the term sheet that we have negotiated and the term sheet is the proposed high business terms between the city and for a city to build it new neighborhood. and then also the fiscal feasible code and starting a code. we've been in -- if we could move back to the presentation, victor. we've been in -- after four city completed its two year process,

we entered into an sharet process and the port and the municipal transportation agency. as you can see from this slide, we're looking at developing a complicated neighborhood in what is, you know, largely a historic industrial site. maintaining that ship repair use and building all new infrastructure and amendities to support the vision that four city has put together. there's challenges and there's high infrastructure cost. there's a market absorption with this site. we think the natural development of the site starts from illinois street on the west and through those purple sites down into the four city site. so it's going to take up to 15 years to see this vision

realized in phases over time. jack over gave an over view of this site consists with the ports preferred master plan. it's a major goal of the master plan and these retail maker uses at 270,000 square feet. four city brought forth the idea of incorporating residential having 1,000 to activate the staff and the staff agreed that that 24 hour presence was needed to have a vibrant neighborhood at pier 70 and associated parking. we always focus on open space development. david bopray who is the lead planner for the master plan is working on the

blue green way up and down this water front and we're excited about the new editions that they propose to that network of parks and water. as a city team, we're excited about this place making notion. four city's got new ideas but they implemented those ideas at the 5-m project at 5th and mission. four city was very generous with dealing with the artist who currentry have studios at pier studio and offered like space to those artist when the nunon building goes away and the office space which was apart of the port's preferred master plan. so you can see

that these -- the historic rehabilitation and the place making congregate around open space and come in early phases of the project. jack talked a little bit about the need for height on the edges on the project and just to give you a sense, he references a few buildings can go as high as 230 feet. the city put together this analysis of the example the height along the water front so we think these heights are fit in with pier 70. they're going to look at the best place to put height on the site. that's looking at how height relates to historic buildings and the open space, how shadows fall. and what you see on this slide are in green areas where city staff believes would be preferred areas for height. in red areas that are

probably not appropriate for height and the areas in yellow suggests that maybe eight will be appropriate in those areas. jack showed you the vision for different rooms of open space. what he didn't have a chance to mention, you'll see on the west side here, 3 rectangles, those are district parking facilities, realry planned as a way of keep willing cars from having to go into the site, but they also include an active remembering creation component and we need that for the surrounding neighborhoods. to get into the financial aspect. we're looking at $20 million to go through the phase and to rezoom the site. $160 million for new infrastructure streets, utilities and other improvements including the open

space. the structure of the deal is looking at how to pay for those entitlement and infrastructure cost with market base return to four city and how to generate revenue the port. so we've come up with a structure that shares risks between port and four city. and it rewards if it's success. this gives you a sense of the infrastructure. the site is partially filled area and lying low. and the projected sea level rise would inodate the site. we would add soil and

raise the site to have a projected sea level at 2100. we talked about this area of the site. you see on this slide is the shoreline. the fill area could in a major seismic event can plan a sea water edge to anchor that field area of the site in a seismic event. so now getting into the proposed financial transaction. it's a complicated transaction. development will come in four phases like parks in each phase. the project relies on three main forms of financing from the city. if land proceeds from the sale or lease of parcels and we would determine the price of those

leases or sales through an appraisal process to accomplish fair market value at the time they will be developed. we have the ability to impose special taxes on the water front site and to issue community facilities district bonds to pay for public improvements and emily mentioned we've gotten state legislation allowing the capture of property tax growth generated by this new development. so those are the three main sources to pay for infrastructure improvements. four sea are come up with the capital to make the improvements and the deal structure is going to repay their equity with an 8 percent return which we feel compares favorablely with similar types of deals that the city has done in the past. ground leases would be the main form of convey znswer. we would only

consider sale of parcels at the water front site for condominium purposes. these leases would be long term leases, 99 year leases. we would rely in the earlier phases for prepaid leases to have the proceeds payoff the developers equity very quickly. the goal of this deal structure is to retire their spend as quickly as possible. after they hit their 18 percent return which we're currently projecting to be in phase 4 after all the infrastructure is built, it will be split, 55 percent to the port. the parking structures that i addressed earlier are preferred option and we're going to analyze a number of options through the dda period, the disposition agreement and

negotiation period is to publicly finance the park. after they're paid off, the port would own the revenues from these garages over the remaining term of the pier 70 development. we're looking at how to finance these place making uses, they're not very profit uses as you can imagine. they don't generate high rents so we're looking at public financing strategies to fund these place making uses and we'll define that better with we come back on a final project approval. and then we're looking in addition to the fair market value, participation. those are what are called capital events that happen periodically or when

condominiums are sold, we get the revenue price. at year 30, the port will receive 1.5 percent of modified gross revenues from all these leases wrapping up to 2.65 percent. going to the land use analysis, what we're going to do over the next three years is coming up with a special use district to rezone the site from m-2 to this mix used neighborhood for cities that got a strong committee to affordable housing, they're meet the requirement of 15 percent inclusion natury on site. but they're looking at an 80/20 mix and working with mta over the next three year period to figure out the right transportation demand management plan for the

development and transit improvement that will allow people to access pier 70 easily. and improvement to the subway line to extend the turn around the central subway line to 20th street which is the doorstep to pier 70. so looking at the fiscal feesability analysis by the city, the total annual fiscal project of the project are close to $30 million of new tax revenue a year. there would be more than $90 million in of one time tax benefits and fees generated by the project and 14,000 construction jobs and almost 13,000 permanent jobs from this developmentment so it ment so it would be a benefit for the city. we have been

negotiating with our division to come up with an lbe goal for this next entitlement phase of 10 percent so they'll use row cal businesses to help -- they'll use local businesses to help in the rezoning. they've negotiated with the building trade and community organization with a local hire of 25 percent and we think that there there's outreach in the area has been -- the last two slides getting to the analysis. some are a bit hard to take in. the port is looking at total benefit over the 99 life of the project of close to $7 billion. but bringing that back to today's dollars, there's a couple of sources that's going to help the poor

in the near team. we're paying for other improvements around pier 70 and that's generated early. i talked about that the generated port and that's $2 billion. and then as we're looking at those parking garages that's a very smart financial play for the park. it can generate close to $3 million over the life of the deal. so you can see the revenues over time. the port isn't going to make money while we're paying for the infrastructure, but it will increase to $30 million by 2016. i want to close by recognizing that pier 70 has been a long term effort of a variety of port and city staff. it really takes a lot of staff

commitment to develop a neighborhood like this and i like to thank monique, the director, jennifer mats is the mayor's water front director, kathleen dyhap manage the selection process and we've had great participation from our central water front advisory group, so in closing i want to just point to the next steps, we're going to be in a three entitlement phase for the project where we'll have a trust swap and we'll be back in front of you hopefully by late 2016 to seek your final approval of the project. thank you very much. >> thank you mr. benson. colleagues do we have any questions at this time. supervisor mar. >> can you just elaborate more

on the negotiations with the building trades on a potential labor agreement and it sounds like there's some strong commitments for percentage of local hiring and it's going to be more formalized in a commitment letter. >> yes, actually. similar to the warriors project and sea lot 337 that was before the board recentry. four city had a commitment letter for the city and the port have executed that letter and that is with the building trades and advocates in favor of local hire. it's leading to something called a project labor agreement which would govern the infrastructure at the site and these private buildings that are going to be

built on these parcels and so the goal would be to have 25 percent of the new jobs that are created by those construction opportunities filled by local residents. and there's a method for checking whether there's enough workers in the union hall to fill those slots. but we think that they've done a great job in sort of balancing that negotiation. >> further questions. sorry, jack you want to go. >> i want to clarify one thing that it's not a goal but it's pay commitment to 25 percent. >> mr. benson, i don't know if you had a chance to read the budget report, are you okay with the recommendations or maybe it's something we need to take up afterwards. >> i wanted to thank the budget analyst for a thorough and timely review of the project and we agree with all of their recommendations, the city

attorney has prepared -- proposed the sheet to reflect those changes and we're working on underlining changes to the term sheet as well. >> but in terms of approval state, we have amendments then? >> you do have amendments. i gave copies to the clerk and for each of you to reflect the budget. >> thank you. speaking of, mr. rose. we have a budget analyst report. >> mr. chairman, members of the committee on page 31 of our report, we state that for city would invest $28 million in entitlement in development cost and receive a return on their investment equal to 18 percent annual return on its equity. and then on page 32 of our

report -- excuse me, on page 3, page of our report we state that the estimated cost of the water front site project entitlement and horizontal cost return on equity are 240,000,000 umcnvrt_digit-dollar_nodecimal and that's shown on table four on page 28 of our report. and funds to pay this cost is bond proceeds, ifd tax increments and the 20th street parcel and that's on table 5 on page 29 of our report. on page 37 of our report in table 9, we show the estimated annual tax revenue to this city are $28,027,000. the

revenues to this city are $91,154,000. on page 40 of our report the proposed sheet finance entitlement and infrastructure at the water front which support doesn't have sufficient funds to finance at the development. an exchange for finances up to $2.16 million and the entitlement and infrastructure at the water front site and the city would receive $23.73 million from the 18 percent developer return on equity as well as 45 percent of proceeds from ground leases at the water front site. and the ports contribution is currently estimated at 2 hundred 40 million 6 hundred $240,645,147.

so on the bottom of page 41 we have found and conclude that the proposed water front site project is fiscally feasible under chapter 19 of the administrative code with the exception with financing the parking. we have $98.4 million. our recommendations are on page 42, supervisors it has just been stated, the budget analyst recommendations have been incorporated into the proposed legislation. so i will not read the recommendations on page 42. and given that those recommendations have beenen koerp rated we recognize that you include the resolutions. >> any questions for mr. rose.

>> a quick question. there's a funding gap for the facilities and the creative zone, how do you reconcile that with overall financial feesability for the project. >> we have stated that we're recommending approval of the financial fees ability and perhaps we didn't use the word contingent on that gap. in other words we're pointing out to the board there's a gap but we also state supervisor that the -- your finding of financial feesability simply enables the environmental impact to proceed so from that standpoint we believe that we are correct in saying it's

financially feasable and that needs to come back to you and be approved by the board of supervisors. >> thank you. >> any other questions or comments. we'll open it up for public comment. i do have cards from michael and taren woods. anyone else please step forward and line up on the side there. thank you very much. >> one moment. i'm having push button problems. >> thank you supervisor, tim collin on behalf of the san francisco housing coalition.

we support this project. what we've seen, it's evolving and we think it's a great use and we open to see it accelerate in our water front and have very maniment in the north and the south. we think this is a gym of a location and this is not the time or place to go timid. we're encouraged to see more housing is being added to the site. it didn't originally include that. and the affordable crisis becomes clear, we're not clear that 950 units is an add quit response. we like to see the extend possible, flexible zoning incorporated into it and not a single parking space that can't be justified reasonably. we think this is a terrific process and hope you'll approve the term sheet immediately.

>> next speaker. >> supervisor, tim tario, i actually jumped up at the last item but didn't get up here in time. i'm going to do something a little unexpected and praise bailly. when it was finally approved, i thought a vehicle by the interest -- that was an about reason we have i am had for a second term and i view the failure to replicate that. you have a simpler situation here. you have -- instead of multiple developers, you have a single developer and you have the most responsible developers around. i think their performance at 835 market indicates and we ask you to approve this term sheet.

>> thank you. next speaker please. >> good afternoon. i'm rodriguez and representing the brother hood of electrical workers local six. we're in support of this. pier 70 has been a neglected part of the water front for a long time. it will bring a sense of pride to the citizens of san francisco and will allow people from all over the nation to enjoy a piece of our history. this is an opportunity for us to beauty fie the water front. thank you. >> thank you very much. next speaker, please. >> good afternoon. supervisors, woods, cochair of the chairperson advisory group. you have an e-mail from toby where she talked about how