old wharves on the north and west side and the pier 311. the next few slides illuminate the various stages where we at the inn the individual projects. pier 70 is one hundred and 50 thousand square feet supported pier into both the combination of wood and steel piles has been considered a project for removal under the b cdc project where a they were short one hundred and 08 thousand square feet of the bay removal. the port has submitted a project request to the u.s. army of core of engineers under the bill to receive $5.5 million to remove the pier if we're successful in getting the army core of

engineers funding the "x" to your memory fund will help to match the grant and hoping to hear from the army core of engineering for the funding of the project this fall. the next area highlighted in the yellow is pier 90 green solo approximately 80 thousand square feet area of pile supported deck that's deteriorated and the cost to remove this is $2.5 million we have not identified my source of funding to remove the pile supported area. as part of moving forward with my pile removal project we need to consultation further analysis to determine whether the pile supported structure actually spots the seawall.

the next highlighted the in jelling yellow is the site of the gateway project that's 13 thousand square feet derating and it's in the bid process and anticipated to be removed by the summer of 2015 and funded by 2008 parks obligation bonds. the next area is the creek wafers the old wharves and piles that supported what was once pier 84 supported the crane operations on the north and literally stick piles on the south side. the port applied for a grant to rehab the co-sponsorer crane and remove the piles and were successful and submitted for the necessary permits to remove

that. and light we have what's called the pier 96 lash term the lighter than area. this is approximately 25 thousand square feet pier that's gone to collapse it's just north of herself side park the source of funding could be the southern waterfront beautification funds we believe that this pier would be an approximately pier for the crews to demolish and as a it relates to proprieties each of those pile removal projects requires an army of engineers regional core board and this allows us to get credit for the removal and requires sequa and the pier 70 project specifically

requires the viral protection act funded through federal resources. the bay area gateway project is funded and will be demolished approximately in a year from now and ready to put in the wharves creek to be demolished and lastly our next steps is to return to the commission if you have any questions, i'll be happy to answer them i'd like to recognize the help from tom carter and others. it was a cross ignitional staff report in putting together the information. thank you >> public comment?

seeing none, public comment is closed commissioners >> i want to thank you and the team for doing this analysis and coming up with this report i truly appreciate it. so once those 5 sites pilings are removed that means there will be no more dead pilings in the waterfront >> that's correct and i thought that was some outside the ramp. >> it's pier 44 u 64 those r were required to be removed from america's cup and i don't know by the end of the year those will be piles will be removed completely we will be rebuilding some turn habitat out there but

not the rotting piers and off the shore a little bit. >> so everything is funded except for or possible funded for pier 70 and pier 90. >> pier 90 yes at the because of the silos. >> thank you that's great. >> so commissioner just an magnitude there's approximately seven hundred and thirty piles we think we can count on the water at the right levels we've removed that oh, my apologies so we're still plowing away. >> hopefully, the port will he remove them and we'll save money. >> this is the first time we've used our staff to get those removed and the piles they're doing it as easily as they're doing it but call roll more

piles are there because their hidden by the water if that method doing works we can reciprocate more. >> thank you tom and your team. >> commissioners? no comment. that's commissioner brandon's comments i know a lot of work has gone into this thank you very much. this is an inform presentation >> this is the presentation for the 2014-2015 mostly rental rate and monthly statistical rates and parking.

>> sorry pardon me i'm setting up the presentation. come on.

my apologies. commissioners i'm mr. cruise i'm the financial analysts with the real estate division i'm here to talk about the rental rates i'm joined by my real estate staff and we have colleagues for the third party review. by way of background the perimeter rents have been deliberated to the staff and we don't have to come back to the port commission for every review so before we came here before for all details. those perimeters that we have to meet unable to be able to execute the leases they're not retail use not a ranging restaurant or a term that is

less than 5 years anticipated to generate less than $9 million and finally has to have at least the rents that are presented in the rent schedule. to give you a little bit more sort of context how the perimeters effect us those are a huge portion of the lease transactions their approximately 64 percent of our lease count but in the everyday transactions the only represent about 15 percent of the real estate department leasing revenue we do the bond presentations to drum up the revenues this is really what the diversity comes from we have a lot of small businesses and they have found a home here. this is a way to look it over time this is port revenues for

the real estate division the bottom blue session is basically what the perimeter deals represent to use it really is another way to show the foundation the stable rent comes from the perimeter the developments and all layer on top of that and when we're able to weather the sessions the perimeters allows us to do that. so when we determine the rates for the given fiscal year we go through the method doing we include my tractions on port property and we voluntary 0 layer in certainly my condition on the port facility that might make it epilepsy our typical market condition and finally we look at affordability and i'll dive into that certainly we want

to maximize we want to balance vacancy periods so if something is vacant now if i try to maximize the rates it might mean i don't lease it up in 3 months but 6 months we're trying to balance the rate not per square feet but applies to existing places to the tenant those small businesses when their lease expires that's the perimeter we're setting to make sure that the rate maximizes our fund so those are the things we balance. those first pieces are more

complicated because it's tough to compare port to private sector protein i'm going to walk through the i and g park property across from pier 31 that's our crown jewel of market space so they're considered full services on the general definition and their rate rents those sort of gross rent rate is between 360 and 345 we're proposing today about 325 so i want to give you details. first, this is what i and g waterfront plaza looks like. the security i'm sorry the services have full-time security

and have a building engineer and a parking lot adjacent to it that's an extra fee. this is the roundhouse and it's a great 0 location and it's an interesting space but doesn't have the same quality level maybe think the b pluses and minuses must level we provide the janitorial the other things that's a big difference in the private sector lymph glands will fund tenant improvements we don't. when you adjust those transactions that range from $2.60 kent i back out the cost of the tenant improvements that we're making our tenants pay for out of the pocket you can see the apples to apples comparison and our 3 dollars and $0.25 is

right in between those tractions look like across the street. keep in mind our 325 is the minimal rent we can also ask for more a top floor with a view of the water it's less. the tenant improvements just to give you a sense of the significance this is an interior dishonesty round house and this is an interior shot of the house after the improvements from our design tenants they've sunk a lot of money into it. so i thank you for divulging me in the weeds of those examples back out in general we're increasing office rents by 6 percent and some not adjusted at all with the high adjustment of

a thirty percent increase in the round house. as a point of comparison cushman and wakefield did a study that shows the rents they're up 8 percent from the prior year that is a sense of where our 6 percent falls in market and so that's the port office rents. the challenge of comparing port property to private property also is a problem when you look at sheds to warehouses warehouses have loading bays for the trucks you don't have to lift things up and down they don't have supportive that pill last year's our advantage we have an amazing location this gos close to the businesses and

the restaurants in san francisco. we jefferson are able to charge more than our what is a exerts. overall we're looking at the an increase of 3 percent that includes a subsequential decrease in the shed of 33 by 44 percent due to the entirety of the load restrictions you can't drive large trucks out there and roofing problems and the lifespan of the building is in question so we can't give people a 5 year lease that's a changing situation. then on the high side increasing the rents by 40 percenters. and finally the last big perimeter rents is land land is again sort of a different part

of our portfolio it has a high vacancy rate and we're not having a location driven but in daily city and others counties generally, we're dollars doctors the rates of paved and unpaved land by $0.02 and leaving the improved land where it is. from here we're going to come back to the board an june 10th >> on the paved land can the prospective tenant put containers on that. >> i'm going to defer that to one of the leasing managers. >> what. >> please allow me to defer that. >> jeff bower leasing manager.

>> so we're actually commissioner we've jumped the gun for a mommy public comment seeing none, public comment is closed. >> go ahead jeff. >> sure someone wanted to put storage containers on that's an acceptable use. >> and the rent stays the same? >> well, when i say storage containers are you saying self-storage or it's a construction company. >> for construction equipment i see a lot of containers on the port property i have no idea if it's paved. >> it's acceptable in the construction company wanted to store the material it's the same. >> how much of our office space

or rentals would need to have an improvement all of that when we decide to rent out is it in that badass shape. >> it's u actually telethon you saw ammunition i believe i brought ammunition before you for approval they put 4 hundred thousand it depends on the tenants smaller tenants want a place for a phone and mailbox it depends on their resources. >> well, now i understand the difference between the private sector and the private sectors they do their own tenants or their tenants do their improvements. >> yeah. what an allowance we'll carpet it for you.

>> commissioner brandon and yeah. i had a couple of questions you gave us the unpaved land but didn't discuss parking. so i see from our report 89 hundred and 80 thousand square

feet of unpaved land and 9.9 million of paved land and 8 hundred and 31 thousand this the the budget of our space is parking part of that configuration of all those numbers and what's happening with parking we didn't get a report on the parking side. >> thank you commissioner the parking that's subject to the perimeter rent schedule is generally, the stalls of the parking we lease on an individual basis like port employers like 3 hundred stalls we manage on the seawall lots those are through a competitive process. >> i guess at some point we'll proposed it as an informational item it's a breakdown exactly again but to refresh us again in terms of how the real estate sort portfolio whether that's a direct lease or how the real estate is putting forth and the components so we understand that so we get a better sense. you mentioned our first lot that was interesting to know that the perimeter rents they're the bulk of a number of leases they contribute very little in terms of the actual percentage of overall revenue is that right >> that's correct. >> so we look at we spend a lot of time looking at the port financials it's the other revenue sources that we need to understand and what's happening with those so we need an understand how those operate in terms of the increase so a summary without having to go through the leases a that's a little bit more informative. >> you mentioned on the buildings you said 6 months if we want to maximize rent is that a curiosity number i think in san francisco it takes 6 months if you wanted the highest rates in this asthmatic that a theoretical number i'm not sure that's current market rate information. >> that's a conceptual example. >> it's important to know that's a very good point on our

see of the street we go going through the progress of the commission and board but by the, go faster it generally take pretty long we have some - and i think non-market trends it takes time to negotiate. >> i think the differences is it's if i come to agreement when you sell a house if you measure at that time, from when the house is put on the market it's a very long time but when you measure an agreement to sell the house whatever that's a shorter period of time that's market driven but it's driven by other factors and you have to have time it's a question of which metric to use in terms of the actual revenues but how fast can

you get that property render and know it's going to be rented auto u out it the medicare metric. >> that's from one tenant another. >> one question i've been curious to know under the office buildings and other spaces you mentioned it briefly in saying okay if it's the top floor with the view is a different amount as a ground floor we know in hotel rooms for one night i pay a different amount what's the policy in number one how much office sprais space has a view and what's the range of charges that's what attracts people to the port what's our guideline in

terms of how much more premium do we put on the rate. >> i'm going to defer to the at large manager. >> i won't say there's a set policy but obviously in negotiations there's a bigger rate. >> what's the range. >> well, it could be 10 percent or 20 percent more. at pier 33 north for example, we received $3.50 a square feet but no view it's 320 >> many people were against this strictly to protect their views so we have is something to offer so let's make sure we charge for it. >> absolutely.

>> and you may have touched on this a little bit we may not have the ability to upgrade our office space but have we had an eye of the class c office space to office b is that changing a bit for example, many consider a to be the downtown office space but we have space over the water with the changing companies and businesses coming to san francisco that's a changing the category in some respects and class b is measured it's a typically former class a pier 33 north we approved the bay and put $1.5 million into the property it's a small development ground floor and

retail and commanding 350 a square feet for the space we put in a elevator and did finishes and the utilities if we have the people to do it we typically get the tenant to do that for example, ammunition rounds out the now, it's a lot of tenants want to come in and remove the hung ceiling and that's not cheap to do we get the argued and when we move out we get the better rent. >> we have a priceless view are reindicating riggs what we're offering for the view when i think about autodesk they wanted it to be industrial not a

typical class a office space how do we category that and i thought commissioner was going down that road. >> that's american people industrial feeling that's in a that's what the tech sector wants he don't want the old style class a but more of an edge i didn't atmosphere it's selling better in san francisco than having the finished class a office space and if we could convert or for example, pier 23 or 19, pier 27 for office we could lease it out the demand is there. the constraints come from the entitlements that we get the

change of use and the seismic upgrade is there demand absolutely. autodesk is up to $16 million in investment in the pier. >> right. >> and that is where i was going interest thank you commissioner ho. >> i guess along those lines and maybe we're looking at basis rents so we have the ability to - >> yeah. we can go higher. >> wheelchair seeing the tech companies coming in and we have a to make sure we taking into consideration the leases are very, very desirable and not your typical class a office space i would a rather business owner be on the waterfront. >> we're commanding rents and this vs.