which can be reliable for the city of san francisco. our expansion plans divides it two categories. there's projects that don't have any identified funding but they are in conceptual stages and that's in the straights, martinez, hushg lease red line cities. none of these projects are possible without an expangs of our city at the fairy building. that's a key part of our program. it's a central component of our program. this is today's fairy terminal and for those that don't know, there's gate b. there is no gate a.. gate c and d is where the salsaledo

gate is. gate e is oakland services. this is the build out of the anticipated project which is adding a new gate in the basin. adding two more gates in the south basin and some significant improvements to the environment there decking over the lagoon area and providing more areas for stages and queueing of passengers. that adds dpat a. weather protection is a big part and a lot of our passengers complain about weather protection. we see a regulation of our service and rider ship. we're adding the -- the concept is to canopies. those will be north of the bay

bridge. this is is what it would look like at build out. you can see the canopies. there's going to be serious work to come on those canopies whether those can fit within this architectural environment we have here. we're committed to working with the port staff and we've had a productive relationship. in the south basin it's adding two gates. gate f and g which would be a significant improvement even today for impacted services that we have. during our strike situation in our bay bridge closure, we were trying to get boats into a single gate south of the fairy building. if you were here around this area, during that period the crowding and the lines and the cuesing that happened was a mess. not anybody's fault. they were trying to organize that. it's awkward with the layout of the lagoon. here's a

rendering of what it would be like. the lagoon area is open water today would be decked over and we create a clause saturday. that's used five percent of the day and of the rest of the day is a clause saturday that we enhance already a public area here in san francisco. with that, i'll conclude. i'll be available for any questions. >> is there any public comment on the presentation? commissioners. >> i have a couple of -- thank you very much for that. it's very helpful because i think we're trying to emphasize more water transportation and i appreciate learning what your current and how you respond to the crisis. i think that helped and also what your plans are. i'm wondering with all three events where you had new

riders, do you find you convinced a few people to take the fairies on an ongoing basis. did you get a little plato so he you can have new riders. >> if we compare before the strike and the week after and we've seen a bump. the weather is nice and people take the fairy more, but a lot is getting exposed to a service they didn't know about. >> related to that when you set up service, they probably drive or find other transit where they embark upon, is parking going to be a consideration? is there another space >> that's a struggling issue

that we have today we were have full parking in harper bay and we can't add anymore to meet demand but that is a key component of our richmond project. because of those projects they're on the edge of town, being in the water and there's not a lot of great transit service to those areas. >> okay. my last comment, i guess, it seems like you got the east west figured out. and you have 2-points from north south and i'm sensitive because i drive the southern part of the city. i'm in the city and that's where a lot of the traffic congestion is come from the city. we should have a shuttle service along the water front either for commuters as well as for special events as well for tourist and what thoughts do you have on how you

could feel that need. it doesn't seem to be in your plan today but that would help and port would need to know what kind of infrastructure when we go through these piers to make sure we have the right stations. it wouldn't all the fairy building and it will be stops along the way. do you see that as part of your plan. >> that's a great point. our service was designed around congestion relief and bridge relief and a lot of our funds come from bridge tolls so that's where it was originated from. in the spring we started a pilot service from south san francisco to san francisco during the mid-day and we did it twice a week, and that service has thrived and surprisingly for us we've seen good in that. that's an indicator that that's a market that's there that we're not offering or no one is offering

today. in addition, we're doing a lot of strategic planning and looking at our overall operations and how we can better utilize vessels and the idea of san francisco water front beyond the fairy building or pier 41, and ideas like the at and t park other than baseball games that's a part of what we're looking at and exploring. it's with the idea of bringing more people to the water front and move people up and down the water front. >> that will be terrific because that will relieve the congestion and it can be a tourist attraction. it could go beyond port property over to marina green. so i think it's not just port -- from the port perspective but i would like to encourage you to think like that. we're going to hear more about water tax later today, but if there's a shuttle that goes back and forth and who are

in the water transport business, if you can help think that through because you go on those, it's not friendly in the morning on 280 or the afternoon. >> i think we have 3 million people a year that take our fairy. a lot of people don't know that and that might be second to seattle. do you see a fairy from the treasure island coming over and maybe as a possible warrior and what the president was saying to really educate more of our community to the fact of the availability, the take water taxis like 15 or 20 percent of the people that go to the giant's game, it's fun and it's fast. to use the water front and a lot of our communities

doesn't know the efficiencies of water tax. there's an alternative that people can take water taxes or taking them to the city. >> on treasure island we have worked closely with the treasure island development authority and we do have a plan in place where once they reach a certain threshold, there's a fairy terminal and that's a part of that project sort of vie ability in terms of getting people to and from the city and elsewhere and i agree in terms of ideas about other locations and we've recently met with warriors organizations and we're starting to look at and explore ways that the fairy can enhance that project and our own service so those are the things that we're looking at. >> there's destination points

for commuters and i guess we're talking about water buses in a way or water shuttles and what they have on the sand where it's regular service and you can drop off at any time and get on. that's really what i think would help and if there was -- you have to solve the parking issue if you're going to try to figure out how these companies -- they have to go south instead of south. if we were able to provide that service, i think the commission would strongly endorse whatever you can do in your planning project to come up with great ideas and plan in this direction. >> great. thank you. >> thank you. >> okay. >> item 10 a, request

authorization to execute. contract 227 bail trail link project. with marine construction incorporated to increase the contract amount of $2,004,026 and approve an increase in the amount of $20,053 for a total contract amount of 7 million $7,060,973. >> so moved. >> second. >> all in favor. >> sorry. >> public comment? all in favor? >> i. >> i. >> item 11 a information presentation of meal, the port consultant management options for the james cruise terminal located at pier 27 on the numbered street >> it's a beautiful day outside and i'm sure that the shades

are drawn and that's my complaint every time i get up here. many is going to load a presentation. i want to give an introduction. the america's cup has been using our brand new cruise terminal since march. and it's a wonderful thing. come november, it will be turned back to the port and the port will be able to begin phase two of our terminal project. we build a cruise terminal for the san francisco once every two years. we thought it would be good for this facility to take advantage of an analysis of our business model and look at other ports around the united states and

the world. and do a comparative analysis of our port in terms of our pricing, our structure, and our commercial possibilities. we were lucky to be able to hire fermel and partners. they're one of the cruise terminal planning and architect firms in the world. they helped design in 2010. they have hands on knowledge of the facility. lewis, the chief executive officer of ba is here today to give you a presentation, an over view that we asked him to look at. our port compared to other ports in terms of business and so forth. lewis's is the expert in this stuff and we're very happy to have his guidance and expertise and without any further or do i

will introduce lashadmill. >> thank you peter and good afternoon. it's a pleasure to be here with you today to give you this report. you've worked hard to get to the stage that you're in and having to break some waters up and here's the part that people will feel the most. it's nice to have a nice building and functioning but the operations of the facility is where the next major step is and you have an opportunity to really take it to the next level. cruise terminals are a very busy place where people ' em base and disembark but it's the experience of how they're treated and getting in and out of the ship and that their luggage gets to where it needs to go and that sets you apart. you asked questions that i'm going to cover in the presentation. putting everything in a framework, i have a few slides that i want to show and talk about with the

cruise industry so it gives you an interesting perspective of san francisco. we're going to address the basic questions which goes to how do you compare financially, how do you look at the models and what are the recommendations we're reaching. i want to put it in a market context because at the end of the day you're trying to attract more business so you can have a higher economic return on the community and on the port. the key here is to attract the cruise lines to bring their customers, san francisco is a well known commodity that people want to visit. how do you put them together. the industry is a growing industry. there's no issue about the industry itself. it's healthy and they're buying new ships, so

the question is where are they going to put these ships. this slide shows you the growth over the last 20 years and it started -- >> the industry is growing worldwide as the demand for the product increases and that's 20 years and it -- >> the industry is growing worldwide as the demand for the product increases and that's healthy. as a result which was in the caribbean and the west coast and new england market, went into the mediterranean and it's a world wild industry, in many ways when you compete of the vessel, you're competes on a worldwide scare. san francisco as a city and as a place. the question is does it

work in the eye tien terry. >> it compares the cruise industry against attendance at theme parks. the yellow line is attendance at the theme parks and the blue is the passenger in the cruise parks. the entire cruise in the whole world is the same attendance as the major kingdom. it gives you a perspective of how much room we have to grow in attracting the business. another thing that is really an mega trend that's important and affects the paert ports -- it's not happening in the cruise industry, so you have in north america three lines, carnival and region. they control 85

percent of the marketplace. very important as you try to diversify attracting a client. so what drives a whole industry is the capacity. the ships are going full and put into different markets and this is how ships have been ordered and delivered on every year and you can see the nature in the economy. number of ships to be built. the yellow was -- i wanted to show. that was the way the chart looked in 2011 that the economy wasn't going good, the world -- everything was in chaos, so the ship order was going down and down. since then this is what happened. already for 2015 and 2016 there's less ships there's more cabins being built. again, it's the ability to expand rapidly is there, but you have

less ships to compete and moving around. so the cruise line without going through all of these things, the cruise line works on a specific model. they want to take the passeners -- passengers where they want to good. they do it by working with the tour operations and they highly rely on great deal of passenger satisfaction which means repeat business. like any other business, they're in the 70 and 80 percent repeat business. the whole experience at the terminal is critical. so the expectation for the industry and this is strong on a worldwide basis so looking at expanding the passengers. a lot of room for expansion. we think a lot of that will occur

in north america and these are our north america projections and there's high lows and usually it's the red one that's the target but it depends on the economy and currency exchange that drives those decisions but we're looking to doubling passengers in north america. where are they going to go? in san francisco -- well, throughout the united states the major home ports are really the four obvious corners, the northwest and northeast and southwest corner. san francisco is one of the few that is in the middle and the reason for that is because the iteneriary. it goes to the west and to the hawaiian market. each one has different characteristics. what i wanted to show you on this one is that all though this is the last five years, the percentage market captured by each of

those markets, the one thing you can see the caribbean is the largest percentage -- it captured 40 of the business and then europe. most of them are stable. the caribbean and the mediterranean, it's stable and there's not tremendous growth and the one that had change is northern europe, upward, asia, you're seeing a bump and you can see west coast mexico going down. this is reflected on these home ports and how they have operated where you see the biggest home ports is miami. each are staying between 300,000,000 passengers and this year you're going to see them reach almost $5 million because of the economy. you see the others down here. new york, seattle, los angeles, san

diego. when you look at the markets that are affected here by san francisco, the alaska, and mexico and the world market, they're stable. it has gone down and that has reflected on each of the ports that reflected that san diego you can see a drop in business over the past -- since 2010. all due to the economy conditions. san francisco is going up and a lot has to do with the new redeployment and the industry discovering this is a metropolitan area where they can really build their business. so i think it's very, very good news for you all. the one thing that is still in the horizon is the cost of operation and the environmental control areas that are affecting the type of

fuel that they'll be burning. anything in the center of the united states where you have longer sailing distance will effect those ports the most and we don't know the full effect of those but it's important. finally just a couple of things because i want to close to this. this is ten years worth of data. the three top ones are miami. i'm going to wipe those out because the scale of these things endorse the others. you're the light blue line at the bottom and the one growing the most is new york at the top. that's the collective new york, new jersey market that has gone to 106 million passengers. they go up and down as the ships deploy and redeploy. so you have to close your eyes and you begin to see what the trends are. the vast majority, the trends are up with the exception of los angeles and san diego that i

talked about but the mast majority are going up. some are exciting than others which create two case studies to think about what can happen in san francisco. the two are new york and seattle. seattle is the read line. it went from almost nothing to 1 million passengers. it created the home port city like you are and create the gateway. people fly to seattle from all over the country and they take advantage of the seattle area and go to alaska. the cruise lines are bringing people from all over the place and they're controlling that destination. the other is new york and you can see a growth in new york and in new york the model is different. in that case the cruise lines said we'll like to be able to sale cruises to those in the northeast of the

united states next to california. they're not relying to flying people all over the world, but they're relying people to drive and come to their port and grow. the future of san francisco is some where in between the two because it's not the gateway strategy. you have some gateway capabilities but there's no way to beat seattle because we're reaching the atlantic market faster or going south. there's potential. you have hawaii, but the local sources and that's region. that goes into three or four hundred miles away. it's a great potential for san francisco and the future for growing. you're about to embark on this new terminal. we'll give you that ability to embark on that growth model and we think that the next year or so as the new ships are coming in place and are beginning to sale on a regular basis rather

than passing by. i think if they get good deals you're going to see the growth. what happens is when one line is successful the others will copy and you'll double in size. if that doesn't occur, you're still going to grow. gdp they're success. that question has to be answered over the next year or so. how the terminal is handled and how the business is expanding, you have to ask that question. how are you going to operate the terminal? are you getting the maximum for the port and for the users and are you using the right model. the questions that were asked, how do we compare and stack up to other

ports as to cost and give a break down on how this business evolves and how sensitive is the cost. there's many cost that the cruise pays when they come to a port. the charges which are the loading and off loading of the vessels with baggage and security and line handles and game way operations. you have the port charges. in this case you have a charge which is one time charge per passenger and the port receives that money and then the security charges. there are other cost that the lines pay but we're not involved with that such as tugs and pilots and things like that. that is what total port cost basically exist sochlt what we did is basically the metholgy was straight forward. there's two sources for this information. number one is the port tours and we can get from all the ports but more importantly we collected rates

that are already negotiated between cruise lines and ports because a lot of ports on the united states have private agreement with tariff agreement in terms of volume. what we did was collected that. every port operates differently and how the tariffs are collected but we did do a medium and small and large ship. and came up with a charge and that's how they came up with the money. they charge the customer. we're showing a home port scenario. the customer are counted as they embark. this is just a chart. i'm not going to go through it. you can see how things are charged. bundle rates, water. just different things. so here's where it stacks up in terms of san francisco in terms of the money

that you collect as a port verses other ports. the highest port is new york and brookland which -- there's a discount to go to brooklyn because at that point they were brand new and everyone wanted to go to manhattan. those are the south and those suffering more in traffic are lower than yours. it's a nice slit. there's a $5 difference between you and seattle and a $5 difference between la. you're in the middle, so if the market is going up, you're $5 cheaper. if you're south, you're $5 more expensive. we think that tells you where your market is. now, to give you the port access as well, do you have any information on europe. these are the similar charges for all your ports and north american ports. the orange are the

european ports, green is north america and the dark blue is you all. so you can see that at the top of the list even ahead of new york you have ports like south hamptin. that's $4 or $5 that they charge for services they provide that we don't provide on this side. you can compare the most expensive of the european part is in par with the new york port. the biggest ports in europe are bars lone in a. you can see it's right under $15 and you're $12.50. amsterdam and then you can see the rest of them. you have a whole range in europe less than $5 per passenger and you're sitting in the