your family for sharing him. i know that you've all given up his time with us because he spent so much time here. i understand you're a very analytical family so, i asked him today how you get anything done in the family. you must have to analyze everything. but it sounds like we have a future architect and some really good analysts in the family. so, maybe they will come back and share that with the port some day in the future, but again, thank you very much. we'll miss you and i think you're going to look forward to seeing your legacy along the waterfront as years go on. i think it's going to last awhile. thank you very much. elaine ford, port cfo. i really want to congratulate jonathan. he has been an absolute pleasure to work with, an amazing collaborater, always someone who has many ways to

solve a problem. and my colleagues have really said already what a big hole we'll have to fill without him. we've all relied on him. i have to make a public admission while he's here and his family is here. twice jonathan and i talked about numbers and analysis and sort of the bottom line of an equation, [speaker not understood]. and he very quickly put a number on the board and left. okay, i'm going to validate that number. it took me about two hours with the spreadsheet and it was the same number. it happened to me twice. [laughter] he's very smart. i'll miss you. good afternoon, jack [speaker not understood] with the san francisco giants. on behalf of the giants family, i want to congratulate you on your new position and also assure monique that jonathan was a zealous advocate of the port's interest at all times. [laughter] >> he never complained, though,

i know. but also an incredibly smart and sophisticated person on the other side of the transaction, which is often what you really want in a sophisticated and complicated transaction. so, thanks for all of your time and your help and your energy on behalf of the port and in connection with projects, the parking lot, [speaker not understood], so forth. want to present you with a token of our appreciation that's worth less than $25. [laughter] signed autograph baseball by john [speaker not understood]. [laughter] (applause) >> thank you. >> any further public comment?

president katz, member of the commission, port staff and public. so, first thing i'll say is i really hate praise. you might not know that but my family does. but i am really humbled and honored to be here and i'll echo peter dealy to say i'm honored to be here with jeremiah, not just his myriad accomplishments, but what he keeps giving back to san francisco and the waterfront. i really learned about public service here at the port, learned it from the port commissioners who serve and the port staff and i've been honored to serve with all of you. i am heart ened about the legacy people are talking about today, and i believe it. and i'm moving forward again to public service to try to create some more of that legacy. nothing will ever quite be the same as working with the waterfront where the legacy is right up in front and inter mingled with the new, the old, the historic. i'll always treasure the memories here and we'll come

and visit it [speaker not understood]. so, thank you. i thank you for the opportunity to serve. >> thank you. so, jonathan, now i'm speaking on behalf of my colleagues who i'm sure will want to speak as well. first of all, i just say that your son and daughter should be very proud of their father. as you've heard from his colleagues, you rarely hear so much praise heaped on somebody at work and this is just a fraction of what he really deserves. i think we've all youed the same word i have written down, i want to refer to your legacy, but that really is the theme that runs through. please be very proud of your father. as a cal grad undergrad and grad school, i am very pleased that you're joining cal. but as a port commissioner, i am very, very sorry to see you leave because you really have been such an extraordinary part of the fabric here at the port.

and over the years that you've been here, really being part of the dynamism that's taken place, pier 70, voter overwhelmingly supported recently to working with 337 and some of the other projects, the america's cup. everything you can point to that's really drawn people to the waterfront now, you have been front and center in that and you will certainly be sorely missed, but your legacy will live on. i know for one, i have always appreciated working with you. it's really been a pleasure, but in particular your ability to analyze such complex transactions that have come before us and explain it to those of us that don't do this day in and day out to feel comfortable and the negotiations that you've undertaken and have kept us

apprised of and worked with us, again, such a great level of comfort knowing that you were involved in coming up with those terms. so, again, i will be -- am very sad to see you leave and very, very grateful for what you've left behind here at the port and it's really been an absolute delight working with you. so, thank you. >> thank you. >> commissioner? [laughter] >> i, too, am going to miss you. i had the opportunity to work with you when you were a consultant to the port. i think i remember that project -- [laughter] >> it's been absolutely wonderful working with you. i'm going to miss your very deep knowledge of all the projects and your very detailed presentations. as commissioner katz said, just

the level you're able to break everything down and help us understand what's going on. so, we're really going to miss that and i just want to say congratulations and thank you. >> thank you. >> jonathan go ahead [speaker not understood] the last couple years. you did such a great job, all the projects you worked on that i was involved in. i wish you letter of success in your new job, new endeavor. seem like a very happy man. you have a great looking family there. the apple didn't fall too far from the tree, i notice. so, good luck. >> thank you. >> jonathan i congratulate you. we had a chance to talk at lunch and great to see your family here today and heaven knows they have a great dad. i want to add all the other things that have already been said i concur with, i probably have been one commissioner has challenged you a lot. [laughter] >> in terms of your analysis and the numbers and asked you to think further out of the box

sometimes in terms of our negotiation deal. i want to say that i respect [speaker not understood], patience, didn't look too frustrated, just went back and tried to answer the questions that i would ask, and i really do appreciate that. that's great in term of the staff and what we have appreciated here at the commission. our job is to ask questions and you sometimes have to have the difficult job of answering those questions, which are not so easy at times, but i appreciate all that you've done and just wish you very well. it is exciting that you're going to [speaker not understood], so thank you. >> now, on behalf of the port and the port commission want to extend a plaque to you the freshtion, leadership [speaker not understood]. colleague, can you please join me now? ~ appreciation (applause)

... (applause) [laughter] >> that makes more sense.

(applause) >> so, commissioner i have one more item to finish up. last week we lost our icon around the waterfront, salvatore tarantino. you know him as sal. he what rayed ~ raised in the marina. [speaker not understood]. he went off and joined the coast guard and eventually

deployed to japan during the korean war which sound like he didn't see much of war, more of a holiday, i think. but he had a really wonderful time at sea and when he came home he founded had i long-time company, the s.p. tarantino insurance brokerage which he located on jefferson street in fisherman's wharf. he took a short hiatus from that. sal's uncle was the mayor of san francisco mayor alioto and during the '70s became the executive vice president of something known as the pacific far east line where he again got to travel the world as a mariner. in his pseudoretirement years because he never actually retired, he was an avid tennis player, playing in tournaments every weekend at his beloved napa and coming home to be at

the waterfront ~ in the wee hours of the morning, he was known for walking around the waterfront in his exercise at 3:00 or 4:00 in the morning checking up on everybody, [speaker not understood]. so, last week he he passed away in his late 80s and there will be a celebration and a mass, actually, a funeral mass of his life this coming thursday at 10:30 a.m., thursday november 20th at st. peter's and paul's church in north beach. and we are going to really miss him, but he was extremely fond of the waterfront, particularly of the port and its maritime history and its maritime future. so, as i talked to a number of different people, everyone has to remember what a gentleman he was in his tennis playing years he was pretty aggressive. but other than that, he was really sweet and gentle and just a great person to have

around the waterfront and we will miss him. so, on behalf of sal, over and out would be his saying. if i may, would love to ask you to adjourn in his honor today. and that concludes my report. >> any public comment on the executive director's report? seeing none, public comment is closed. okay. >> item 9b, port commissioner's report. >> thank you. i have a couple items i'd like to mention. first as has been alluded to proposition f passed this past election which go to the port project with respect to pier 70. so, we're thrilled that we'll be seeing that project move forward. it has often been pointed out to me, much in keeping with our original rfp that went out a few years back.

so, thrilled that the voters saw fit to concur with the port's vision for expanding, improving that under served piece of the waterfront and we're bringing that up to what should be a spectacular, spectacular site. so, we're very excited to be working with the developer to see that project move forward. also want to report back that we signed a sister port agreement with the philippine report authority. san francisco has a sister city manila. we did one better because the philippine port authority not only has a port in manila, but they have a number of others all throughout the country. so, we actually have now entered into a sister port arrangement with the philippine port authority. they sent quite a delegation over here and one of the advantages of having the sister port relationship is it creates

additional opportunities for trade, for setting up technical working groups to look at best practices, policies, management operations within the industry, training programs will explore some logistics, some cruise tourism activities and we'll continue to monitor and report back on what has transpired as a result of our sister port arrangement. but it really is an opportunity to look at best practice and establishes relationships with other ports. and they sent quite a delegation. commissioner adams and commissioner murphy were here for the initial signing ceremony. commissioner wu ho joined us later. you missed quite an event. they sent over their general manager, ron sadana, they had several member of their board. they had the president of philippine harbor authority [speaker not understood]

council general, henry bensorto, deputy [speaker not understood], representatives of the manila sister city program here in san francisco, retired ambassador arguello and we had a number of port staff that joined us that really were part of helping put together the ceremony and participate in the event. so, we really want to thank everyone involved and we're thrilled that we now have a new sister port. it's another port. >> i would like to congratulate the giants on winning the world series again. (applause) >> i would like to echo that. congratulations. [laughter] >> go giants. well done. >> go giants. [laughter] >> it seemed like forever, but it was fairly reese penult. we're looking forward to having those trophies show up here on the waterfront. ~ recent

congratulations to the giants team and staff and everyone involved in such a wonderful victory. one of our best and most successful tenants here. so, congratulations. and i think that concludes commissioners comments. is there any public comment? seeing none, [speaker not understood]. >> items on the consent calendar, item 10 a, request approval to conduct an informal solicitation from a qualified pool for financial advisory services for a term of three years with an option to extend for two years, with a not-to-exceed amount of $140,000 annually, or $420,000 for the life of the contract term. >> so moved. >> second. >> all in favor? >> aye. >> public comment? >> is there any public comment? seeing none, all in favor. >> aye. >> opposed? resolution of the 14-59. >> item 11 a, informational

presentation regarding lease no. l-15875 with bae systems san francisco ship repair, inc., a california corporation, located at piers 68 and 70 and seawall lot 349 near 20th and illinois street, for approximately 14.4 acres of land improved with 19 buildings, 17.4 acres of submerged land and port-owned equipment, including drydock #2, the drydock eureka and the shoreside power system, for a term of 20 years with two five-year extension options. ~ peter dealy maritime director at the port. we hope to come back to you in december, shortly thereafter, for your consideration of a final deal. as you all know, ship repair is a historic use of pier 70 dating back to really the

origins of the city, back to the gold rush. and ship repair is the one industry and maritime industry, one of the maritime industries in the bay area the port is the market share leader. there are shipyards in alameda, but bae's ship repair in san francisco really in terms of big ship market is the largest. bae took over the lease at pier 70 in 2005 and since that time our partnership with the shipyard operator ha been very beneficial. in fact, in the last five years the business at pier 70 for shipyard has increased 70%. there are a number of different factors why that is. three that come to mind, a, the 2007 agreement that the port commission passed regarding the expansion of the drydock at the handle what they call [speaker not understood] ships too big to [speaker not understood] the

panama canal by the addition of [speaker not understood] to the drydock that you can see in that picture. that has been a boone for our cruise business here in san francisco and for our ship repair business. the second major factor is our work with bae regarding giving the u.s. government through the army corps of engineers to take responsibility ultimately for the dredging of the entrance to the shipyard, that will reduce our capital expenditures into the future greatly and further enhance our competitiveness. and then lastly, the shipyard in 2013 as a part of the america's cup mitigation, the port installed shore side power at pier 70 which bae and commercially offering competitive power to users a opposed to having them bring fuel oil while they're in dock and also benefits the environmental through cleaner air. speaking of the princess

enhancement 2007, not ironically, i did it on purpose actually. [laughter] >> the picture in the slide is of the star princess, one of the first of our ships to be repaired in san francisco 2008. that ship will be back in december of this year in a couple weeks. so, a ten-day service that will employ upwards of a thousand people and [speaker not understood] 50,000 man-hours of labor. i'm going to do a brief introduction and turn it over to johnny from our development group who is really going to get into the details of the deal. i'm joined by jerry, our ship repair commercial manager and [speaker not understood] city attorney's office who kept an eye on us going forward. ship repair, as i mentioned, is a major industry in san francisco employing hundreds of

people. our current lease with the shipyard expires in 2017. we talked about legacy earlier today, and ship repair dating back to 1850 is a legacy industry for us. we think there is a nice future going forward. we're thrilled for the opportunity to negotiate a new lease. the economic benefit of the yard is tremendous in a city that has struggles to find skilled blue collar employment. the shipyard employs anywhere from 250 to 1100 workers from ten different trades unions. in fact, in the last two years the shipyard at pier 70 purchased $18 million worth of goods and services from san francisco companies by themselves. the premises, i think many of you know pier 70, but that is an outline of the current premises, highlighted by the two drydocks, drydocks in the americas, the eureka drydock

that was procured, help procured by the port by nancy pelosi a number of years ago. it's been a nice drydock to enhance our business. the question was how is the shipyard with redevelopment of pier 70 fit into the development that's going around pier 70. i think it fits in very interestingly and smoothly. you can see the delineation of the four city project the historic core, [speaker not understood] park, ship repair, again, it's been going on down in that location for decades and we think we can craft a deal that will be able to allow it to continue at the same time be good neighbors with the developments going forward. in a second ricky is going to get into the details of the agreement. in spite of all the good ones, there are some storm clouds on the horizon. there is a new competitor, [speaker not understood]

portland oregon just purchased a new [speaker not understood] drydock in china and it's here now. it's getting outfited and will be in operation in the next few months. >> actually yesterday. >> yesterday, i'm informed. thanks bill. so, i mean, there's going to be a commercial on deck by the com p/e he advertising, but we think we still have a very good position to go forward with. so, i'm going to turn it over to ricky when he's done he's going to throw deuce bill done bar, the general manager of bae [speaker not understood] give a brief overview of his view. ricky. >> thank you. i'm ricky [speaker not understood], development manager with the planning and development division of the port. we are excited to be here. [speaker not understood] as peter indicated, we are hoping we will be able to come back to you in december, on december 16 to have a deal.

on the other hand, if we're not able to cut out some of the remaining issues, we may be heading back to you in january. the site or the shipyard as indicated is in pier 70 and it consists of 14.4 acres of land and 17.4 acres of submerged land, the two drydocks and 19 buildings. those buildings are in different state of -- needing some improvement that is part of what we discussed in the lease in terms of commitment and the need to have this lease renewed so that bae could make additional investment on the properties. one of the unique -- besides the buildings and the land

area the main [speaker not understood] of the shipyard is the drydock. number 2 is awesome lifting capacity, it has the capacity to lift up to 54 tons. ~ main features as peter indicated the ships are huge. they usually carry up to 3,000 passengers. and having that capacity is really, really helpful to allow cruise ships to come to san francisco. as peter indicated, this shipyard will be facing two challenges. one is the one that what mentioned regarding [speaker not understood]. and the other is the aging of the drydock. in looking at this lease and renewing it we do take

although factors in consideration in terms of the detail lease term that i will be going to in a minute. here is a picture of the drydock number 2 which is [speaker not understood] capacity. this is the ship repair, another ship mentioned on drydock number 2. in starting to look at this lease, because current lease, bae currently has a lease with us that will be expiring in 2017 and it is mainly the port. [speaker not understood] in ~ 1994 [speaker not understood]. they want to include term in existing lease to be carried forward in the new lease. likewise the port. the current lease has a base rent, there is a percentage

rent. the current base rent is $1,050,000 a year. but it doesn't have a component to keep up with changing costs of living or inflation. the lease currently requires bae to continue to maintain the building and the equipment that belong to the port. however, there is no baseline established in the current lease. now there is a schedule as to when the equipment and the buildings are supposed to be maintained to certain standards. so, that has been carried over to the new lease, but with some addition and improvement [speaker not understood]. as peter indicated there is the [speaker not understood] to reduce pollution. i believe that was installed

back in 2012 and there is a couple of issues with respect to the [speaker not understood] in term of recouping the [speaker not understood] that the port made into it. currently we are charging -- there is a surcharge of 4 cents per square foot that bae is supposed to [speaker not understood] through sfpuc to pass through to the port within the utilization of the [speaker not understood] system is not optimum so we are looking for an opportunity to enhance that so that the city -- so that the port could recoup reinvest. there is also an existing rent credit that was provided in the port princess crude and bae into an agreement whereby princess cruise said an improvement needed to be made to the drydock to service the ship when it come into san

francisco. part of that deal was princess providing [speaker not understood] to bae and the improvement at that time was submitted to be between 5 to $6 million to which bae said, you know, the drydock is equipment that will need some assistance. so, the port provided a represent credit to help fund the cost of installation of that shore side power system. direct credit is taken at a rate of $300,000 per year. so, for a ten-year projection that rent contract is supposed to be [speaker not understood] in 2017. ~ rent credit bae has not collected those rent credit. the balance of that rent credit will be carried over into the new lease. also, the existing lease has a yearly termination provision which is a