thank you very much. my name is scott [speaker not understood]. i'm general manager of [speaker not understood] companies, we're a relatively new team to the port. we relocated from the port of oakland. we're a small business and the port real estate staff was very accommodating and they really assisted us in our move in. we went through the environmental procedures and all the regulatory compliance and the environmental staff was a big help. we understand that they have a tough job. there's a lot of requirements and a lot of regulatory people looking down and checking their work. so, it's a tough business, but you have to -- we have to comply in order to make sure we comply. it was kind of stringent, but we understand that that's the requirement and they made it very accommodating so i'd just like to thank the port and your staff for their efforts. >> thank you. welcome to the port of san francisco.

is there any other public comment? come on up. hi, good evening. i'm paul [speaker not understood] with bill group. we're a general contractor building a project across the street from crane park. and we moved in about six months ago and the process was pretty easy. i heard it was difficult to get a lease, but it really wasn't. took about 30 days and got some good land, and it helped us build our project. so, yeah, we had a really good nice easy time. thank you. >> thank you. [laughter] is there any other public comment? commissioners, questions? >> thank you for your presentation. it's sometimes a little like secret sauce. we don't know what comes in when we get all the

presentations. we see the 557 leases that we have and they run the gamut from the giants stadium to mom and pop shops. so, i thank you and your staff for managing what is quite a portfolio i think in the private sector. i know we have significantly greater number of people managing all of that, so, thank you for your presentation and for clarifying more of the whole process here. >> thank you, susan. >> i'm sorry. i know i speak for my colleagues and i know certainly [speaker not understood]. to the extent we can be helpful in any way, we certainly want to put ourselves out there and let you know we'd like to help. >> thank you, susan and all of your staff for all that you do for our wonderful waterfront. >> item 13 a, informational presentation by one san

francisco waterfront partners 3llc, and [speaker not understood] llc, joint venture partnership consisting of tmg partners and premiere structures, the respondents request for proposal for the pier 38 bulkhead renotification project located at de lactiontionv i street and embarcadaro. ~ >> before we start can we take a five-minute break so everyone can get ready for this wonderful presentation? [recess] >> okay, we are ready to reconvene. we are ready to reconvene. okay, john? >> are we ready to go? >> we're ready to go. >> okay, good. john doe, planning development. good evening. this is pier 38 second presentation. just as i'll be very brief. just wanted to remind you the

port issued a request for proposals for pier 38 late last year and the respondent for this rfp was asked to submit a short-term implementation strategy of the pier 38 bulkhead building and demonstrate its qualifications to undertake developing a long height and bulk term project for the remaining part of the pier. as you know, we've got -- we received two responses to the rfp. both are highly qualified. san francisco waterfront partners and tmg partners responded to the rfp to rehabilitate and retenant the pier 38 bulkhead structure. again, on june 11, both developers presented their qualifications and plans for the phase 1 bulkhead rehabilitation to help the commission and staff to further assess their proposals, port

staff has requested each of the development teams ~ to further describe their vision for phase 1 rehabilitation and retenanting. accordingly, we have asked each developer team to address specific questions in their presentations. for phase 1, we have asked them to address project timing, incorporation of local hire, and local business enterprises into their project. and the price and term of their phase 1 project. in addition, the development teams have been asked to describe their overall vision of the redevelopment of the entire pier or phase ii. with regard specifically to development phasing and regulatory feasibility ~. so, as part of that we asked soon after completion of phase 1 would a phase ii begin. ~ how soon after we asked them how phase ii might affect their project

economics. and then finally, we asked them to demonstrate how phase i might enhance phase ii. and, so, with that, last time san francisco waterfront partners was first and tmg was second so we're flipping it now. so, tmg will be first with michael culverubios is all set up. and last, about approximately 20 minutes or so for each group. the next steps is we hope to return to the port commission in september with a staff recommendation of the best qualified developer for the pier 1 project -- pier 38 project. we did pier 1 already. [laughter] >> okay, thank you. >> good afternoon. hi, i'm michael [speaker not understood] chairman and ceo of tmg partners and i'm here today representing our group,

commissioners, and executive director and staff. what i want to do in the brief introduction is give a brief overview and we'll answer the questions in the time allotted. you have a description -- as soon as i click this. -- of our team members. all of them have had extensive experience dealing with the port and doing projects on the port. our partners at premiere structures you know well along with our architects, our structural guys, and construction and attorneys. the purpose of this conversation is to give you an overview of those two possibilities doing a phase 1 and then doing a phase ii on the bulkhead and the pier. they are tied together physically and we think they make a lot of sense together. i want to give you just a macro overview of what we think the tmg team provides, and then

matt field and amy will walk you through the specific questions. it was our intent to make sure we met your vision, both from a public standpoint of use and from a financial return on your investment. we wanted to make sure that the experience we provided combined all the relationships that exist today in the south beach community. other companies, the public, the tourism and all of that. our track record at tmg is now we're going to be celebrating our 30th anniversary next year. we have done over 20 separate developments in the city of san francisco alone during those 30 years, and we've done over $3 billion worth of transactions. so, we, as we mentioned to you last time as an entity have not built specifically on the port, but our team and our experience in the city we think makes us highly qualified to do that. so, as i said, we're going to try to answer your questions and matt is going to start it off with the first part.

>> thank you. commissioners, it's great to be here. we really do see this as a unique opportunity to build on the transformation of what's happened along the waterfront. as a kid who grew up knowing the embarcadaro as a freeway, to see the embarcadaro now known as the waterfront and what's happened, we really see this project as the culmination of a lot of things coming together in this part of the waterfront. i'll start with the phase 1 implementation of the short-term strategy. we looked at four main tenants in approaching this. first is we're looking to not trigger a seismic upgrade. it's a very significant undertaking if we breach the occupancy thresholds here. so, it was one of the things that drove us in terms of selecting uses that we could put into the structure, particularly public assembly uses like restaurants trigger higher occupancy. so, we were driving towards a

threshold -- there's 6 34 occupants potentially allowed in here based on the prior use ~. we are at 6 30, so, i think we're about as close as we're comfortable getting without triggering. we wanted to have active public uses. we looked at financial feasibility as a big tenant of what we were doing, knowing that we were trying to not invest huge amounts of money to do something very quickly. and you'll see we're looking for the fastest activation. we saw that as one of the primary requests in the rfp. initially it was structured to be fairly short term and quick. so, that's how we approached this. in terms of trust related uses, we got retail, dining, and i think as you saw, food trucks that we're proposing to do on the front of the bulkhead building. if you haven't been to street food, which is over on 11th and division, i highly recommend you go see what's happening over there.

we plan on tiering off of that. the people, the activation, the -- it really does capture everything that's happening in san francisco right now with creativity and very light touch. we see a real opportunity here. coming back out onto the north apron, redoing the north apron, fronting into the battle street park, and getting public access back into the building. the at the same time we look at the shell of the building and ironically it's sort of what we would deconstruct buildings to do in smarttion right now. you can look at it as being in disrepier. we look at it as being an opportunity. ~ south of market we're doing tech in the south of market and frankly all over the bay area. this is exactly the kind of space that we would start with -- try to end with almost so we think light touch implementation here. so, the ground floor ends up being a mix of uses. public access onto the north apron.

restaurant on the front, and tech office on the balance of the bulkhead. and then the second floor would encompass more of that same tech office space. those big clear stand wood beams is exactly what we're doing. we're redoing the old hands building, brewery south of market. we had a celebrity chef coming n. we recently signed a lease with thomas mcnaughton, central flower and water to be in the building. you see those sorts of opportunities here on a short-term basis. they're really down scaling their concept to come into the building. we did something special with them to try not to put a ton of money in and do something quicker served. we see the same opportunities in this structure. as i was alluding to, we're really gearing this to fast implementation. we saw the request to turn the space around and get it active again as quickly as possible. we think the negotiateses and approvals based on what we're doing can be accomplished at

nine months at the outside, maybe five months on the inside. we think we've got about seven months of design and permitting to go through. and because we're not doing major infrastructure improvements here we think we can get this going in four months. that gets us in about 18 months from the time we start this process. we think that's about as fast as we can go, but really achievable schedule to get the bulkhead back in service. lease we're proposing is 25 years. we are still making fairly significant improvements here. spending about $6 million. we're proposing receiptction to the port of about $25,000 a month. it's $300,000 a year. it does escalate, 5% every five years. we are looking for credits against the rent for about qualifying improvements up to 55% of the rent. the port will receive a participation if we were to sell this to a nonaffiliated entity, if we transteder to

another entity which we wouldn't consider selling. if the port participates in our profit from selling it, so, it's a short-term quick turn around of the bulkhead building to get it active and we think compelling economic -- compelling economics given the investment into the space. before rehab, as you probably know, is a major undertaking of piers in pretty serious disrepair. we see this as a great, great opportunity to return the project to being a public asset. this is a great pier. it lacks aprons now that are accessible. being able to get back out on this part of the waterfront is going to be really spectacular. it will require a full-size mike upgrade as you probably know. ~ full seismic the shed undertaking, the pier itself being stabilized, it will be a complete historic renovation complying with the secretary of the interior standards. as we alluded to last time we were here, we've done a number

of these projects, complying with the secretary standards including 1 market street directly across from you here. we see a great opportunity in building on the fabric that's already there. those steel beams, the building has great bones and we really see a fantastic opportunity to build on what's there. and then, of course, building on the public trust and maritime uses that can be supported by office development. so, how do we see that going is, again, retail and dining in the front. our scheme really here is to make improvements to the front in our phase 1 that we can mostly reuse in phase ii and not disrupt. so, our temporary uses in the front when we start construction in the rear, we don't have long-term leases that might be impacted by the heavy construction that we see occurring in the rear. we see the ark shes and heavy construction as a real challenge we'd like to avoid disrupting if we can.

again, maritime on the dock, the floating oblige on the north and the new dock on the south that would be implemented as part of this program. ~ dock decking and water taxis, floating facilities, we see this part of the waterfront is under radical transformation and providing additional access we think would be critical for not only all project, but for other projects that are occurring along this part of the waterfront. restoring the apron here, if you walk out in this building and you look out and you see whattion' possible here, we see a real opportunity to provide an apron that wraps all the way around the building. two pass throughs, one at the front of the building and a second pass through about two-thirds of the way down the pier to provide public access in a number of different places. we think this will be really a unique asset. this is a very, very long pier when you compare it to other piers.

so, there's an opportunity here that we think doesn't exist in a number of other projects that are maybe not quite of the same scale. we're providing office that would stretch for the latter, it's called three quarters of the pier. and we see that happening on first and second floor. we're looking at building mezzanines. so, the first floor is a mixed use component, public access, the docks, the retail at the front, and then office at the rear of the project. we think this is a really unique approach to putting the second floor in. if you've been in the building, it has a very tall clear story in the middle of the building. so, rather than pulling the mezzanines out to the glass line, we're helping to pull them into the middle of the building and build atriums between those mezzanines so we take advantage of the tallest part. and we don't push out against the glass line. we're going to enhance the transparency of the exterior of the building by not putting a

floor right up against the glass. as you know, this is about what the building looks like today. our vision for transformation does something along the lines of this, activating that north apron again, and picking up on the existing facade and improvements which we really think, if they're polished, the basic improvements are great. again, looking at the pier, this has more dock doors than other piers when you look at t. that are in many cases there wasn't a lot of natural light that was possible to get into some of these spaces. here we think the transformation can be using the existing openings in filling those with glass and allowing access back out to the north apron and getting the dock improved. this is a view looking back from the grand street wharf which we think this is really nicely with. here's that interior clear story i was talking about in the iron work. we think this is one of the great features. you can see the rollup doors

there. you can imagine transforming this to something that looks more like that on the inside, picking up off those existing improvements and getting light back into the middle of this. we think there's a great opportunity and great demand for this kind of space in the city. we've been very, very successful with tenants looking for this type of creative space, including this. i think we alluded to last time, macy's, riverbed, and we've done -- any number of large transas with tenants that would fit really neatly into this space. the process obviously has a number of steps and amy who is our partner thalmannage that process part of this will talk to that ~. really, really excited about this opportunity. >> thank you. delighted to be here again, commissioners. in this part of the presentation what we'll try to do is address some of the specific questions that the staff asked us to talk about as

part of this presentation to you. in terms of regulatory approvals, as you well know, there's a lot of complexity when you do anything on the waterfront, especially when you do anything that's a major project such as we're talking about here. when we designed our program of uses as [speaker not understood] has eloquently gone through, to make sure it is something that is feasibly approvable within the current framework of the regulation of the waterfront. the local approvals, of course, require the port and the board of supervisors, pursuant to a c-e-q-a clearance process, for the short term that might well be a categorical exemption. for the phase ii project we're pretty sure that would be a full e-i-r. there is an existing bcdc permit that is held by both the port and the leaseholder for this -- for the pier. that would need to be amended or possibly for the long-term project a new permit would be needed. we believe that our land use plan and types of use in

particular the maximum feasible public access is something that bcdc wrote in place and this is something that can be permitted with the combination of uses. and perhaps most importantly we've been very conscious of making sure that we are proposing a mix of uses the right balance that will be consistent with the public trust. the historic rehabilitation of the building to secretary standards is itself a trust use combined with the balance of restaurant and retail as well as the new apron and the bayside history walk, we believe will allow the appropriate balance with the office space that is needed to make this project financially feasible. and we believe that we do have a regulatory strategy that will get us through a reasonable amount of time. matt walked through some of the economics of phase 1. phase ii, we have not yet submitted a formal proposal that has not been requested at this time, but obviously it's a major project through the entire pier.

development costs would be in excess of $100 million. we would be requesting the full 66-year lease that is within the trust a because that would be required to amortize a very substantial investment, particularly with a full seismic upgrade and pier structure work that would be required. and we would finance this through a combination of private equity, debt, and federal and state historic tax credits. tmg has a lot of experience and we believe we can secure those credits and help make this project work. the project would generate a good deal of revenue over its life as well as a good deal of expenses up front,v and we expect that we would be able to pay a very substantial amount of rent to the port and would be willing to structure various forms of up side participation as is typical for these major projects, however, there would be a need to negotiate and offset credits, qualifying rent credits for the structural work that would result in this new project going forward.

we've been asked to address project phasing issues and we'd like to be as frank as we can with you about this. we have submitted this as a two-phase project. the bulkhead rehabilitation which as matt said we think we can have in place in 12 to 18 months, followed by the phase ii full rehabilitation of the pier. we believe the appropriate time from a legal point of view to start the entitlement process for that phase ii project is after phase 1 is approved. so, why in construction, say spring of 2013, realistically it's about two, maybe a little more year process to get through the entitlements and all the regulatory approvals for phase ii. so, we'd be hoping to finish -- get phase 1 in construction, get it open, while you finish the entitlements and permitting and design for phase ii. the major benefit of doing

that, phasing approach, is because as matt said, we want to help you meet this very reasonable goal of trying to get the bulkhead back into service, reactivated, full of life, public uses and returning receiptction to the port as quickly as possible. drawn rent but there is a realistic trade-off ~ that is more efficient to do this as a single project. in part there is a certain loss in the amount of -- certain some of the improvements, money that gets put into hard costs that can't be salvaged because of a need for full seismic upgrade. and additional cost of entitlements and development planning and self-costs and permitting that essentially and of course the additional time to get to phase ii. if the port chose to do this as a single large project, you would lose the benefit of very quick activation, but you would gain the benefit of a more financially feasible project which would then return higher rent and participation to the port. so, i think those are the

trade-offs that need to be thought about as you go forward. finally, we've been asked to address our goals for local business and work force programs. i want to ensure you as we did last time that we are fully committed to this. we understand that this is a public project. our partners at premiere structures have worked with you on the ac-34 plan. tmg right now is doing a fantastic job meeting with redevelopment agency work force goals and city work foregoals in projects at folsom and 3rd street. we are committed to. this we will work with you and the hoc on an agreement for both consultants and subcontractors as well as for work force participation through local hire program in san francisco. we are all san francisco-based firms. premiere structures, our jv partners, in fact registered lbe. and we are also excited that, you know, particularly the first phase of the project which will be about tech

businesses and small businesses is something that is another form of local participation. and we absolutely embrace the importance of these programs. i will not repeat what matt -- what mike said. we believe that we have a great team. we believe we have the right vision. we have a lot of patching for this project. we know these are difficult projects, but we think it's very exciting and something we'd really, really like to do. and we would look forward to working with you. that concludes our presentation. i've got 18 seconds left. [laughter] >> okay, we have representatives of our architectural structural engineering, legal staff, joint venture partner. we are all very happy to answer any questions that you have. thank you. >> thank you. so, do we want to take questions now or just wait

until the second presentation and do it all at once? >> all at once. >> i know we'll have san francisco waterfront partners led by simon [speaker not understood] to make his presentation. >> good afternoon, commissioners. executive director moyer, vice president brandon. sigh nonsnellgrove, san francisco waterfront partners. i'm going to make my presentation today on behalf of my partner alicia and our team because alicia said i could. [laughter] >> before i launch into our

presentation, i want to thank john doll and all the colleagues at the port for [speaker not understood] doing a very good job on what is a difficult concept. i also want to thank the entire team, our team, and especially our consultants who have worked very hard and given a lot of hard work to a thoughtful and brainstorming way to best accomplish the port's goals. so, our approach today is -- thank you, michael, for breaking the ground on that -- a single project broken into two phases. we accounted for size enough to think this is a fabulous project that deserves to be done in two phases. we understand the port's desire for a speedy reactivation. we believe our approach will

create immediate income for the port. a seamless transition to the second phase. and we are proposing to start with a relatively modest scale, slightly tweaked from the last one which you saw. and leading onto a very robust budget and we think that this approach is going to be the best way to accomplish your goals. so, first of all, i'd like to start with the first phase. i don't know if you can read all of these, but this is ensuring that we at all times stay in compliance and consistency with the secretary of the interior standards. first of all, the big idea we have and have worked on hard with co-consultants, our architects, engineers and land use attorneys is to start by installing a seismic joint in the first phase of the project.

this will enable us -- excuse me -- to upgrade the building entirely to current seismic standards and to occupy the building with some changes of use to accomplish what we think are an excellent solution to the state lands trust and the port's goal for public access. and to immediately reactivate the public access which is shown in green on the left. i'm not sure how large your screens are. to reactivate the maritime use with small craft, small craft launches, water taxi landings and kayak landings, and