but twice. the first time we reviewed all the alternatives and said please look at more and this was still their clear first choice. so the scope of work for that, semisubmersible dry tow is a service contract and really for sale of the asset, transfer of title and for transportation to an appropriate site overseas, but for purposes of our contract, the contract terms, the key elements are that it transfers all liable from the port. . from the time they pick it up it is no longer ours. that's a particularly attractive point for me. what's going to pick it up? the vessel that we have in mind, there are only a few of them globally that can handle this kind of work, are the [inaudible] vessel operated by dock wise companies, which is a

dutch heavy lift company. you can see here hauling about-i never confirming what those are, i think they're ferries, seven of them. container cranes, i believe that's a destroyer and offshore oil rigs so this is their business, they move big things all the time. and to my surprise they do it with not a lot of room on either end so this is the loading plant for dry dock number one. it has 3.5 feet of room on either side so when i called heavy lift master and asked if he was comfortable with that and he said it's no problem, they do it all the time. as so where it's going, our contract is really about transfer of title and all the financial, poe exposure that

remains after that. really we do have an interest in where it goes because part of the contract terms are that they deliver to us proof that they did it in a green environmentally responsible way. i'm going to handle it to the utility specialist with the real estate division and green environmental guru. >> good afternoon commissioners, rich burrman. the location that dockwise proposed and ultimately that the staff has found to be acceptable is a recycling facility near shanghai. that's the name of it. the reason that we of course, took a great interest in it, is because most of us have seen

films and videos of less than ideal ship recycling facilities in places like pakistan and bangladesh where you have places running rusty metal without any ppe without any management tools for handling the hazardous materials. we tried to vet this and think we found a very suitable location. i would venture to say this is the new convention for international recycling standards for ships. this was a new shipyard that came online in 2011 and was designed specifically for recycling ships and the goal was to recycle into the highest international standards. those standards were set in 2009 in development with the hong kong convention under the interventional maritime association.

it sets out a number of protocols that include how ships are managed while they're in service. a prejudice or portion of that is the [inaudible] hazardous materials and you have to renew that over a series of years. before you take a vessel out of service you have to do a final inventory for hazardous materials and you're looking at structure and waste that's generated throughout the vessel itself. so 14001 has a standard for environmental systems management. there is one for quality management and then there is -- i guess it didn't make it on there. there's also an international standard for occupational health and safety and the international ship association has confirm that had the shipyard is fully compliant

with the hong kong convention and these other certifications. the port has done a series of environmental testing over the course of four years as we've explored various opportunities to dispose of it. we have a very good profile of materials on board at the moment and we are going to use that as a way of establishing the [inaudible] is the world's leading environmental monitoring association for ship recycling.

of all the materials at the shipyard. then you have the green certifications, which is essentially the environmental monitoring proof that everything that took place within the shipyard was in concert with the ship recycling

plant so you tie it all together with that finance certification. and i will turn it back over to dayly. >> so the approval we're requesting today. the reason we're here asking for you to approve material contract terms instead of the contract itself is because the contract itself is still underway, we're still working out the details and the reason for that is that i can't stress enough how unusual this contract mechanism is. the heavy lift companies don't typically do these types of things and it is a fortunate set of circumstances we're able to come together on this. we're asking you to approve do not exceed a limit of [inaudible] for those who are

familiar is unexpected idle time. we frankly don't expect to need to use any of that because the terms of the contract we're negotiating now give us four free days for bad weather. anything beyond that would accrue at $45,000 a day up to a max imum of six days and it's not our liability anymore. we don't expect that. we've planned it for the best time on the bay to do this type of removal. all financial exposure from transferable liability. i'm going to ask to make an errata change to the clarify a little bit.

in the contract discussions the transfer of liability is really a technical term and what we're really talking about as another one of the strange accommodations with the insurance companies on the dookwise side is that they have asked that the port and the city carry insurance for the voyage for the vessel because we're the charter of the vessel for their insurance carriers they can't carry themselves. that's advantage. strange. in talking through with them we came to the agreement they'd cover any deductibles, any overage, anything if the policy become insolvent, so it's a technical adjustment but i wanted to make sure that we're -- that was a recent development that we're clear when it comes time to sign a contract that we have your proper authority to enter into

it. the third is that any indemnity provision that we come up with, there's some massaging done to it. and lastly that it includes retention of sea to cradle. they're really a third-party. they don't work dockwise. we're funding them through the project, but they oversee great shipyard with a great track record. so with that, i'll leave it open to any questions and then make the errata changes after that. >> you can read it into the record right now and then when the commissioners makes a motion to approve they can make a motion as amended. >> thank you. so there are two changes, one is on the second page.

second whereas down, subsection 2 which currently reeds title and all transferable liability associated will transfer upon completion of the heavy lift operation. i'm inserting four words to that. it will now read title and all transfer from associated so that captions the idea that there may be some technical way of we still having liability, even though it presents zeros financial exposure to us. second is the first line of the first resolve clause. after waiver, the new language includes, "or administrative waivers from administrative departments." that's been a recent development [inaudible] through the board of

supervisors. those are the two changes or two amendments and i'm open to any questions. thank you. >> for a motion and a second. >> so moved as amended. >> second. >> is there any public comment? any commissioners comment? >> the completion of lift operation, that's when it arrives or when the dry dock is lifted. >> when it's lifted out of the water so the heavy [inaudible] probably going to be a swan, they'll go to anchorage nine, will submerge itself down about 25 feet, dry dock number one will be floated over the top of it and then it will deballast and lift up and then when it breaks the water again the loading operation is complete and the transaction triggers title transfers.

>> great, that's wonderful. i think it's wonderful that we have been able to come up with this option and have a second option available if needed. and i think what you didn't mention in the history is that we did try to sell it before and we thought we were successful and then broke away and we got it back. and so for the last 10, 15 years we've been trying to find ways to dispose of it. the fact that the timing and funding came in and to be able to have great options is really wonderful and to be able to transfer title as soon as -- is absolutely fabulous. i want to thank the whole team for putting this package together and i'm going to keep my fingers crossed that we actually see it sail away. >> thank you, me too. you know, i neglected to say,

to offer thanks to our city who's done a great job under the very demanding schedule of this project. thank you. >> well, i guess you all have given me history in the briefing before this on this and i haven't been as long associated with this as commissioner brandon, but i understand this has been a headache for a long time and we've now come up with a very, i guess for lack of better word, elegant solution that takes care of it fairly quickly without having to figure out how to demolish it some other way. it seems like from a standpoint of physical, environmental and financially it seems like a clean solution and i look forward to it without any problems. thank you. >> i want to follow up with my fellow commissioners. i agree. i had a chance in the briefing and i think that solution number one is the best and definitely with do have a back up and i appreciate the due

diligence and i think the best thing that it's going to do is go way away from here to china so i'm happy about that. hank you. >> thank you. one last tiny piece of good news, which i just got this morning, which is just icing really. the u.s. subsidiary of dockwise, the dutch health company, which is dockwise usa told me this morning they were playing around with the idea of a waiver to the city's ordinance and decided -- talked to him over the phone, this is the way things are trending, and he said you know what? you're right. we're on short staff to make sure we comply. we will supply domestic partner benefits to do business with san francisco. good news.

>> congratulations, that's great. thank you. >> 1440 as amended, all those in favor of resolution of 1440 as amended say i. >> i. >> opposed? . passed as amended unanimous. >> 11b request approval of amendment to lease [inaudible] and protective association for space located at pier 9 located at foot of vallejo street to reduce the size oaf premises, change the instrument type, specify rent adjustments and make other chaks. changes. i >> i want to [inaudible] so many years ago at midnight that the dry dock was on shore underneath the admiral's house. it was not a great birthday. but we will take you up on your

offer commissioner and take you out on the boat with some champagne when it sails under golden gate bridge. on to more mundane matters, pier 9 is one of the state's most valuable pieces of assets. it generates welcome $3 million a year to the port. it has a wide range of tenants, everything from the san francisco water transit agency, to the blue and gold fleet, san francisco bar pilots, architectural resources, arg, and most recently auto desk, you know, fortune 500 company that we all know of, proud of, being a port tenant. they are currently investing upwards of $16 million into the pier for their applied sciences development center. you know how amazing that premise is. this past december the port

commission agreed to an agreement with the auto desk to further expands their premises at pier 9 and this further expansion called for auto desk and san francisco bar palace to come to some agreement as to the gate and ingress at the end of pier 9. it became pretty clear as both parties started to look at the expansion that as envisioned, the expansion could cause some serious vehicular circulation issues. we've gone back and forth on solutions to this problem and the bar pilots and auto desk come to the port and come to a solution where the bar pilots

reduce their parking lot area by about 5,000 square feet. awe uto desk has agreed to take on financial responsibility in terms that would financially benefit the port. as consideration the bar pilots have asked h their lease rent readjustment that happens in 2020 be reset to the prevailing market rates rather than just the higher of the current base rent or the prevailing market rent, which could result in a decrease in base rent to the port, depending upon market conditions at this time. the rest of the business rooms are in the staff report, well documented in the report. it's a tricky situation where a victim of earned success in that pier. we tried to come up with a solution that splits it in half and solves the problem. we will take your guidance and real estate staff and myself are here to answer any questions that you might have.

thank you. >> excellent. motion and a second? >> so moved. >> second. >> any public comment? hearing none, any commissioners comment? >> i just want to comment that we did make some suggestions at the last meeting and i think we have seen some improvement and i would say that we obviously do feel that auto desk is a very important client and we're glad to see there's some ability to see there cease some pace that will work for them, the bar pilots and others. i think we feel we're captive in terms of what the bar pilots have asked us. i think we want a win win solution and move forward for everybody in this regard. >> i think she summarized it very well. i think we have had a lot of discussion on this lease and it has come back to us a few times

and i think that the port has done a great job in trying to negotiate better terms on the port's benefit, but we do feel that, you know, our arm is twisted and we have two tenants that we want to help resolve a situation and it may be to the port's loss, but to both -- they're both two tenants of the port that we want to keep so i hope in the future that prior to us approving new leases, we take all matters into consideration so that we are not in this position again, but, you know, nothing's perfect and i want to thank the staff for doing their best effort to make this matter work. thank you.

>> the exhibitioners, there was a lot of discussion and that's one of the things, i like being on this port commission and everybody speaks and there's good discussions and i got a question here and i don't know if it should be either you or to [inaudible]. your lease includes the city stan darpdz of non discrimination language and proposed amendment includes [inaudible]. someone provide information regarding the make up of your work force, your pilots. >> yes, [inaudible] that information. >> i know that the bar pilots in our discussions with them discussed extensive amount of small business and local business procurement that they do in san francisco and gave us a number of port tenants and a number of small companies in

san francisco that they generate economic benefit from. in terms of employment, i do not have that information. >> okay. what i was asking was because maybe john, somebody from the bar pilots come up. >> what was the question again? >> can you give me the make up of you pilots that work for you? >> it's almost all male. it's mostly white. we do have two latinos, pacific islandser. we had the first female pilot in the country and there was, i believe only two others in the world. and we are more diverse than the pool we draw from. you go to cal maritime and

despite all the outreach efforts and having for scholarships there for the last 20 years, the deck -- you know, they have -- at cal maritime they have deck logistics and engineering and the deck program, it's not very diverse and they've been trying to change that. i was on a panel that looked at that and they are making some progress, but not a whole lot. and, you know, i think there's a misperception that we go out and we train the pilots. we do train the pilots, the pie hot candidates that come to us, it's the state of california goes out and they hold the exam. it's a very competitive exam. you have to have two years of command time to be eligible. during that two -- or then we get those -- we only get the

candidates that the state provides. you know, la's somewhat different. that's a city and a municipal [inaudible]. they are exclusively white male and even though they go through whatever process the city of la does, long beach is pretty much the same thing. i mean, there's just not -- the pool of candidates is -- we actually reflect better than that pool of candidates so it's -- i don't want to say -- it has been an issue that goes back a long time, but it's still -- there has not been a lot of change in the maritime business. >> so as far as your bar pilots you don't have any african

americans or asians, they're predominantly white male. >> and two latino pilots and one female. >> no more commissioner comment? on resolution 1441, all those in favor of resolution 1441 say i. >> i. >> opposed? resolution 1441 passed. next item, amy. >> item 12a, request approval of the fiscal year 2014, 15 monthly [inaudible] and special events and filming rate.

>> hi commissioners, nate cruise, i'm a financial analyst. we were here before you two weeks ago to present the parameter rent schedule. during the course of the presentation a couple of questions came up so we're back here today to respond directly to those questions and address your approval for the rent schedule for the next fiscal year. the first question had to do with how the parameter rent schedule fits into the overall register portfolio. the parameter leases and the parking stalls which are a very small component represent about $9 million of the total $63.5 million. the remainder is lease revenue and non lease revenue, non lease being parking meter and

parking fines. it doesn't represent a huge amount of -- it's a large amount of money, but not the lion's share of revenue, it represents a very large portion of the lease count. while we talk about the diverse and stable revenue base at the port, it comes from these parameter deals, it's where the local businesses and small businesses have found a home at the port. the second question that came up was requesting a little bit more depth in how to compare the market rates you see in the city and how they're published and how they compare to the rents. the biggest problem we have is our assets don't easily fit into intoo the traditional classifications of class a or b offices. we don't have the amenities on the typical checklist. that's sort of the first challenge. the second piece is a mathematical one. on the private sector side lan lords will provide tenant

improvements up to a certain space. on the port side of the embark dare row we don't have that option so tenants pay out of pocket for that. one of the [inaudible] include the financial district and there's a lot of marquee properties in there bringing the rates up. the market data is an asking price, equivalent of, like, a list price on a house. not the final transaction price. there's just naturally going to be a gap there. those are some of the big factors. another question came up about tech sector tenants and how we market to them. we don't have a specific incentive program or recruitment effort for tech center tenants. aside from, you know, our maritime tenants, we want to

maximize port revenues so the extent that the tech sector does that, we'll gladly take their money. however, because our space often has this industrial look that seems to be desirable by tech center tenants we have become the home to a number of nationally renowned tech center companies such as auto desk as well as others. the last question had to do with how we charge for views. relates a little bit to the classification of our space. sometimes we have class c space, but class a views so how do we reflect those views within our rates. within the rent schedule there's a view rate and a non view rate and the agricultural building in pier 35, a mark up for the view is anywhere between 25 and 60%.