complete it we can still spend it out of this project. if not we can go ahead and use these funds to do critical repair work that's on our line up over the next two years. then the next reallocation, city certificates of participation or cop's. it was part of the america's cup financing package. when port (inaudible) came to you in september we identified these savings so we would be returning to you to figure out what to do with that funding. well, this is us coming back and saying that there's a plan to spend those funds, about 1.2 million on public restrooms, we have amador street repairs and pier structure repair. you can see the pier structure repair project is really critical. we can just keep funding that

project for the amount of work that we want to get our pile repair crew to address over the coming years. actually just to go back to that slide, but i just want to emphasize that this is a neutral change that i'm not counting it as additional capital spending because we're reallocating it from other projects and reallocating it to new priorities. so just to reiterate, i believe we have controlled our operating expenditures. like i said, it's only about 4.5 percent increase in the first year and both fiscal years we're allocating or designating significant amounts of operating revenue to future capital. we are showing strong revenue projections and as far as capital projects, port staff really looked diligent in identifying the highest priority projects that we think

are ready, not just high priority, but shovel ready, ready to move forward, or if they are not shovel ready that we're doing things like doing a see wall study and an eir on the southern waterfront. so next steps, on the 21st i'll be submitting the budget to the mayor's office. but our next item, the next port commission meeting i'll also be coming back to you seeking approval of this item. if there are changes that you need to make, then i will report those to the mayor's office and then in august i'll bring the final budget back to you and report any significant changes that occurred. so thank you for your time and i'm happy to answer any questions. >> is there any public comment? seeing none, commissioners? commissioner brandon. >> thank you very much, this was a great report and you did a great job summarizing everything. and i think it's

wonderful that we're asking for 7 new positions. i'm sure they are much needed but i know that in the past we've limited that so how confident are we that we'll be able to get these through? >> we're not confident. we are proposing what we think, what we know we need and what we need to manage our self sufficientry but the process is the mayor's office is looking to see very low rates of position growth city-wide so the mayor's budget director will be looking carefully at our position request and we will need to make the case that these positions are critical to the port. after that process we will go to the board's budget analyst for the same type of review so we will be making the argument that these positions are needed for operating efficiencies and revenue enhancement but we will be very grateful if all these positions survive the process. >> that would be wonderful.

usually we get a supplemental binder that actually details the operating income and expenses. >> i can provide that to you for the next --. >> that would be wonderful. and then the capital plan, usually we have a summary of all capital projects, not just the amount that we're putting in from the capital budget, but the total capital project list that has grants and where the funding may be coming, not just the capital plan, but we have a lot of projects that are funded from other places. it seems like if we're just focusing on the 12.5, 12.8 million, it will take us forever to get through this 1 point whatever billion of capital needs. >> i believe that's an atampment to the capital plan

report. >> attachment, i have b and c and i have a. >> i think i know what you're talking about and i think it comes with the budget. i don't think we did it last year. >> attachment 2? >> i think i can answer that question too. in previous years we did a very detailed capital budget book that showed all sources and all uses and we haven't prepared that in the last two cycles because of band width issues and difficulty with the growing workload in the finance unit. what we do have is a very, very detaild description of where the capital budget is going in terms of project which we have lodged with the port commission secretary and we haven't included it this time and that goes through the capital budget. we can break out our

sources and uses if you'd like to see that. >> a summary, it doesn't have to be that detailed. >> when we return in two weeks we'll have that for you. >> and the budget also, i'll get that before --. >> yes. >> thank you. >> there is an attachment to the report, have you seen it? attachment 2-1. >> the last page of this --. >> c, b >> no, the budget, 2-1. >> gives you a summary. >> i think what commissioner brandon is referring to is we used to provide the commission with this summary of what is new funding but also what funding was in place on projects that were in progress. >> much larger. >> larger report. so to the question you asked earlier what are we funding in the current year we're already in, that would have been in the other report. so we'll get you that. i think i know what you want.

>> thank you. >> i don't have any other comments, just want to thank you all. i know what incredible amount of work has gone into this. we all look at where we're having shortcomings but really want to applaud you because i really feel like as was pointed out earlier, we have gotten on better financial footing and want to thank all of you for all your hard work on that and for a terrific presentation and we look forward to seeing you next month -- two weeks, two weeks. call the next item. >> item 9 a, request approve to the second amendment to the exclusive negotiation agreement with gsr arena llc for the lease and development the of pirs 30-32 bounded by the embarcadero road way and san francisco bay and the sale or lease and development of swl330

bounded by the embarcadero road way, beale and bryant streets. >> we are joined tonight by several folks i'd like to point out, david kelly is the general counsel for the golden state warriors representing the warriors. from the office of economic and work force development we have ann topia who worked on the ena and we're also joined tonight by ken rich who is mayor lee's director of development and is acting waterfront projects director overseeing the warriors project, the pier 70 waterfront height project with force see and the i'd like to invite ken to the podium to make a few remarks to the commission. >> good afternoon, commissioners, as brad said i

am ken rich. is this sound working? it seems very fuzzy to me. i'm ken rich with the office of development and work force development and i am the mayor's waterfront development office standing in for jen mats who is on medical leave. you are about to hear a presentation about a proposed extension on piers 30-32. as you may know last monday in front of your cac, which was formed to get community input on the project, we announced a new project schedule for this project. the highlight of this new schedule are an eir published in august of this year, a term sheet in front of you that's commissioned for endorsement of november of this year, the actual transaction documents and project approvals in front of this commission in january of 2015, and what this schedule does is it gets us to an opening date for the new

facility in fall of 2018, so staff may be giving you a more detailed schedule but that's sort of the highlights. i wanted to continue and say that we accept and expend to continue our intensive outreach centered on the cac as the project goes forward for approvals. we believe we need to work with the stake holders to come up with a project that succeeds in the following respects, first physically appropriate for the neighborhood and the site, you have seen many proposals that have been defined and will continue to be refined, a project that's fiscally responsible and advantagous for the port and for the city. thirdly, a project that addresses quality of life issues, in quotes, for the surrounding neighborhoods such as security, crowd control and cleanliness and fourth and last but not least, that addresses

traffic and transportation concerns and issues so that people who are -- so that most people who attend events at the facility are not driving to the facility and those who do drive are parked somewhere off of the embarcadero so the traffic is kept to a minimum. with that, that's all i have for you today, i will turn it back over to brad. i'm happy to take questions once the item is over. thank you. >> so my presentation on the second amendment to the ena is fairly brief. in november the project sponsor attended the port commission to unveil version 3 of the project. craig dipers gave a pretty compelling vision. i've got a few selected slides. this is looking south from the embarcadero of the proposed

fire station component of the project apblgd some of the redesigned retail along the embarcadero and this is looking sort of in the northeast direction across the pier level plaza to some of the open space that rises to meet the multi purpose venue. that version 3 differed from the prior versions in some key respects that i'll just i'll provide a few details. they really worked hard to lower the height of the facility so that it's now 125 feet above the pier deck. they have tried to shrink the total square footage of the development really largely in response to some feedback from bcdc staff. they have increased as a result of that shrinkage the amount of open space on the project now totaling a little over 60 percent of the site or 7.6 acres. they've got a new

entrance to the facility, a mid-block entrance along the embarcadero that's designed to really improve safety and separate pedestrian and bicycle traffic from auto traffic that is needing to get in and out of the facility. and then they substantially redesigned the retail frontage along the embarcadero as i showed earlier. they have also increased the amount of fill removal in this new version, actually cutting away a portion of the pier and showing new bay water. it's this version 3 that is being studied in the environmental impact report. the staff report also provides details about the program for seawall lot 330 which i'm not going to go over now, they have not changed since version 2 was issued, but together those two sides of the street as they are described in the staff report are the basis of the project description that the planning department is studying now.

you've been reading in the paper that some other things have been happening too, the warriors have announced a new cost estimate for the facility. we, too, at the port have been working to come up with a third party validation of that cost estimate. we just received that cost estimate, prepared by martin lee corporation from our as-needed pool in the engineering division. they estimate the hard costs, not including design, of the pier substructure, the rebuild of the pier substructure, at approximately $171 million dollars so very close to the warriors' revised estimate for the project. as ken mentioned we're here on this ena amendment largely prompted by changes in the schedule, new opening date for 2018 means we are taking more time in the public process to get to the eventual approvals. those were contemplated in the

not too distant future under the existing ena so we're pushing the schedule back by essentially a year and i'll go over that in some more detail. that's an additional year of work, so there is a revised transaction budget providing for reimbursement of some city costs, particularly city attorney costs, oewd costs and some consultant costs to cover that additional year's worth of work then there is a revised reimbursement schedule by which the warriors would pay back those expenses. this is a little difficult to read. it's available in the staff report. the ena includes about 14 items that are performance milestones, performance benchmarks and the warriors are required to achieve those benchmarks by date certain provided in the ena they have completed the first three items, those all were completed in 2012. they

provided their formation documents for gsw llc, we entered into a conceptual framework that was the basis for the fiscal feasibility project and the board of supervisors found the project was fiscally feasible. with respect to pretty much all these other dates we now shifted them forward a year, we are respecting the draft environmental impact report to come out in august of this summer and then go through an extended comment period. we're looking at the port commission consideration of a term sheet endorsement in the november time frame followed by board of supervisors action shortly thereafter. final eir certification would be in early 2015, followed by actions by the planning commission and the port commission and then by the state acting first through the state lands commission and then through a number of regulatory

actions including bcdc so that is the revised schedule. moving on to the new budget, we essentially added a year's worth of additional costs to the fy 14-15 reimbursement schedule totaling $875,000. that covers again city attorney costs, consultant costs and some oewd costs. along with that we're proposing, there's an existing deferral in the ena for reimbursement of some of these costs that was due to expire in april of this year. consistent with the other changes in the schedule we're pushing that deferral date out a year. gsw under the proposed second amendment would pay the port $200,000 of some outstanding costs and we would see about $500,000 deferred until april of 2015. so that summarizes my

presentation. i'm available to answer any questions that you may have. >> so moved. >> second. >> is there public comment? i have one dennis mckenzie >> thank you, commissioners, i'm dennis mckenzie, education. i provided you with a short update on proposal to ask the warriors to collaborate and provide a college classroom that could also serve as a field study classroom which as one -- also a copy of a letter i provided to this commission 5 years ago exactly which details some of the comprehensive benefits a high school classroom inside this arena

could provide. the port property, everybody talks about trying to attract more visitors and tourists and i consider this a magnet effect, not only tourists to walk around and advisity the water front but also become involved in high school projects we have here, high school students and kids and classrooms from around the state and around the country to come meet our kids and see this high school classroom that would be provided as a model for other sports facilities around the country. i also want to support this exclusive agreement with the warriors and hope all the city leaders and the port and the warriors continue to work on this. obviously it's a challenge, has many different challenges, not just the neighborhood, our socioeconomic situation throughout this city is very critical and i believe

with some intelligent vision both the seawall lot 330 and the arena could provide a lot of benefits. thank you very much. >> thank you. thank you. >> sue wester, i'm reading from page 5 of your report. why the ena in order to provide adequate time for environmental review, consideration by state and federal agencies and maximum public input. you are doing this schedule. the public is being short changed in the schedule that is before you. the dar is supposed to come out august -- pardon me -- august 27th. that means the time for

comments is going to be october 27th. at the same time that -- this is right before the election, folks. there's an election 11-4. on 11-4, five supervisors will be up, including this supervisor, district 6, two supervisors are running for the assembly and there will be two measures put on the ballot by the warriors to increase the height. so we will be having a campaign on the site on the ballot before even the eir is available. the final deadline for ballot is before the eir is out. the eir is supposed to be accompanied by the waterfront transit coming about the same time. we don't have a detailed transit assessment for this area, so everyone on this area is going to be dealing with comments on the eir, reading the eir for the first time, the port and

the warriors have the eir but the public doesn't. we will be reading it for the first time, commenting on it, dealing with the term sheet hearings which are supposed to be adopted at the same time, be adopted by the port 11-18-14, go back a couple months and you have the term sheet coming through. the whole public process on the term sheet happens about the election, the election happens around the election, duh, and the eir comment period happens about the election. what has happened is the opening date, which was unrealistic all along, the eir has slid 7 months, the planning commission approval has slid 5 months, the city and port commission approval has slid 4 months. i don't -- and we don't have any firm proposal

for seawall at 330 as we sit here now. the warriors said maybe, and i believe it's always maybe, maybe it will be out in march. they have had 3 iterations of 3032, there is still a lot of questions about 3032 because the only presentation they had that was serious about this was a land use committee. all hell broke loose at the meeting. my time is up and so this is unrealistic schedule and you are abusing the public, big time. it's as though the election isn't happening. thank you. >> any additional public comment? then public comment is closed. commissioners. >> thank you very much for

this report. >> i had some similar questions just in terms of the likelihood that there will be a ballot initiative addressing or concurrent with some of our timeline here. how would that impact any of these? >> well, i know that there's a lot of speculation about a ballot measure. i think the mayor has said on several occasions he's always thought that it would be appropriate for the voters to weigh in on the project and clearly that was the case with the giants. there's been no formal announcement of a proposed date for the ballot measure. november would be one possibility but that's not currently on the schedule. what we're trying to do at staff level is to pursue the formal analysis under ceqa to

engage bcdc and the other regulatory agencies and the processes that we need to undertake to shape the project so that it can be ready for approval by the voters by the port commission, by the board of supervisors, the comment period that will be afforded under the ceqa schedule i believe is a two-month comment period. what's that? >> 45 days. >> yeah, 45 days or more. there is a plan on the term sheet i think that there is a requirement under the enabling legislation adopted by the board of supervisors encouraging the formation of the cac that there would be at least two full hearings of the term sheet at the cac before it is brought for consideration. and project staff are looking forward to working with the term sheet subcommittee of the cac to address issues over the spring and summer so that there

can be a good deliberative process at the cac about those term sheet issues and the other sort of quality of life and transportation issues that ken mentioned in his remarks. >> then in terms of the timing i know more often than not we do extend, we don't cut, just do the minimum 45 days for public comment. has there been any thought given to extending that a bit longer? >> so with large projects like this it's very common to extend the time period. the reason i don't want to stand here and tell you it's 60 days is because it's not my prerogative, it's the environmental review officer at the planning department who would make the call, usually with requests from the planning commission. if i were beting i would bet it would be extended to 60 days but that's not our decision but it's likely.

>> thank you for your presentation. i do want to point out one item. you touched on it briefly, but the port will be getting their reimbursement for some of the costs and there will be some additional costs incurred from staff time and that's also addressed in this. >> yes. >> thank you. thank you for your presentation. >> yeah, i just wanted to thank you for the presentation and say that i really think it's a good idea that we're slowing down the process and the lawyers have time to meet with more community groups and get more input and feedback and looking forward to, you know, the next phase. >> so all in favor? aye. opposed? the addendum. item 9b, request authorization to award lease no. l-15771 for

the ecocenter at heron's head park and surrounding 6,058 square feet of non-exclusive license area located near the intersection of jennings street and cargo way to the bay