floor plan creates a unique valuable office space primary use of this area parcel city is special event likely for corporate event and trade shows and commodity 20 parking spaces for taunt in the office space project proposes public access improvements 4 thousand plus isolate for the embarcadero and repairs to the concrete wharf and north prarn the floating dock is available to our water taxi operator the refurnished dock represents 6 thousand plus scapegoat of new assess and in blue the water taxis will be

approximately 50 thousand square feet this is this is the preliminary hard cost budget this is those are conceptual breakdown we area the majority of costs in the corn shelf at $4.7 million this is the special hundred 74 k and pushing public access and guest dock show of a maintained and it includes 8 hundred plus those include the 10 percent contingency and escalation and t n g added the contingency you'll see that represented and the permit foes and port staff feels

this is this is prudent in the project at this time the preliminary development dpubt u budget is $11.9 million that excludes includes the hard cost-plus hard costs an initial ti and at leasting commission costs hard costs budget you saw in november of last year was $208 million lens today it was 2.7 taillight the owners contingency i discussed and the construction climate as well as the design nantd as t n g works through the project this is also preliminary budget and will change item such as a shortfalls construction is not included the budget will change that may actually go down gifblg the

contingencies ♪ had if budget the length of the term is 25 years did leased will be approved in august we have a 12 month construction period rent free the port can expect rent in the fourth quarter 25 there's per month and 50 percent of that is represent to the port and 50 is a rent credit it escalates every 57 years no longer 20 percent it exteriors in 2015 that is different than before and in years 21 through 24 t n g pays rent on a fair market value

the rent structure includes the base rent we projected at $6.1 million the percentage rent from special events and the structure is 20 percent of glow revenue t n d receives for the first $150,000.16 percent thereafter welch we've included foreperson percentage of restaurant and t n g earned from the percentage rent and the port option to include when we were last before the commission participation rent structure was different this is more valuable structure to cash portals proposed we're proposing performance standards open the event space as you can see in the next charts special event drive much of port rent and

important for t n g and the port as you can see in a moment we're proposing a metric where t n g must earner a minimum of $250,000 at least one of copy seismic years failure to meet the performance will not be a default under the determination for the port will participate in sailor transfers 6 percent of transfer proceeds no party is responsible for sub structure we've worked hard to incentivize both party for the investments of the lease t n g will be required to cause

american people sfriks a licensed certified engineer every 3 years the port nuts and bolts needs to identify any sub structure when they're required to be made if t n g elections to make the repair it they'll get a rent credit in years 21 through 24 and earner interest and if the ports elections to make the repairs we'll charge t n g depending on the cost for the remaining lease term so as one example if we were to make a sub structure improvement of $2 million for the last 20 years they'll charge the rent of approximately $70,000 that's

regretting our costs fund the sea level rise the parties talk about that in the lease but in general the chief engineer may recommend the measures and the parties will moot if the 90 no repairs are elected the lease will terminate >> so i wanted to go over the rent structure to you i described the base rent which is shown in green and the special event rent for letting me back up this is a base case scenario so we looked at t n g perm importantly a it assumes $250,000 for 5 special event a year basically t n ged

figures base rent is 6 point one $2 million and special event is additional now i'd like will going get to the ports investing capital at our request they've offered the opportunity to make an investment into the public access and earn a equity return i'm sure you're aware of we face a one point one billion dollars over the next year's we want to generate the cash flow to the port if we make a capital investment is it in lease as a result at the present time allowance mean we will earner rent over the term but our allowance would be treated as american people equity investment we'll earner an equity between 8 and 10

percent we've model this so show an 8 percent return this is total at the ports discretion we are offering this to you basically at a higher return option where by we'll generate a cash flow during the lease this look the ports looks to invest $2.4 million for the project development at this point we'll pay back our initial flchlt in year 11 and there's additional cash flow in the project we've earned we're paid $2 million of that cash flow once investors are paid additional cash flow to the developer and invest partners the verp verify earners

no more than that 50 percent a 50 percent split own knowledge and the how scenario it is all the factors are the same as the base cats except we show one of revenue here you see the baits represent is the same 6 point one million dollars but the special event eclipses base rent by $6.4 million and here if we were opting to make the same $204 million investment we earner back a return of 8 percent and earn additional cash flow after the capital of $4.1 million special

event is the revenue that books the performance of this project from a good and strong project to a very strong project from our modeling t n g internal rate of return under the base scenario is 9.7 percent shy of 10 percent at year 24 and high 16 percent at year 24 we've conducted analysis of the option to invest and b.a. helped us looking at two of the forks one the construction costs go up and we looked at 24 percent more construction costs overall budget and there's no special event revenue the port will reearner that $204 million over term with the 8 percent but not participate in additional cash flow the port will be doing an

opportunity cost so you can make this decision in the summer to side was are the benefits relative to this purpose to generate more revenue along our waft waterfront this chart shows the graphic i've shown in a bar charter to show you the revenue we believe this proposal meets the standard it provides an ongoing revenue stream to the port we have not had from the facility for 0 long time we building we can offer this investment that is creative and interesting and want you to explore in terms of blebz the partners is an lbe they have an

outreach program and center identified where lbes participate including janitorial and evaluate parking and market services we're getting a report back on how the participation is going the local hover ordinance will apply to the construction component of the work and so with that i'm going to turn it over to mr. benson that will talk about the consistency. >> thank you elaine good afternoon again commissioners long term leases of port property the practice has been to consultant with the california states land commission to get a public trust determination a letter issued by the lands commission

particularly in case promotions includes ooze not consistent with the public trust including office uses that's been done in the pathologist what ferry building and piers one and a half and exploratorium it is not a legislative requirement to get a trust consideration and the port staff recommended to the staff you have the authority under the bureau ton act to make that determination on your own that's what in accomodation with the land use commission and t n g we are recommending you do with concurrent with the lease exhibit d to the staff report includes the public trust analysis of the project it's modeled on this public trust consistent determination letters by the land use

commission staff we've proved professed that and we'll continue to consultant with them now and the commission action item networks month i wanted to hostile a few of the key wants in this analysis first the planning context the special area plan applies, of course, the waterfront and in particular, the south beach area and the b cd special area plan promotes historic rehabilitation and public assess on the northern apron and this encourages the preservation of maritime uses and in the neighborhood creating novelist and recreational voting opportunity which we see with

the gangway in this project another main reason state lands allows non-trust uses to promote the preservation of historic maritime resources through 38 we generally constructed in 1908 the second old of the ports raining structures in 1934 and 3 six the bulk head building was constructed in the mission rival style with the city about how far movement a lot of rich history movement at pier 38 a big player in the attack in terms of the byron and elaine did is great job of mrs. jordan the revenue objective we have

consistent with the uses including visitors serving and argument uses and maritime outdoors that employment the outlet and big optimistic to commit peer 38 into the south beach neighborhood i want to hostile the trust uses the restaurant is visitor serve public access and gangway with the water taxi and boating assess and the rehabilitation of the peer the port and the city have good measures in place to measure that secretary standards will be followed this is not a tax credit project the terms are two short so taken as a whole he think the project is consistent with the public trust and will

be creating fund approving the the project to help the commission make that finding so some of the trust faefshdz the project and then next steps back in front of the commission for the elaine mentions in the summer be back with an additional analysis who to pursue the investment we envision a july 2015 board of supervisors lease consideration and have been in do you have an opinion with the budget commission to get that date and the board of supervisors will also have to sign off 0 on the capital investment concludes the

section. >> good afternoon. thank you for having us back i think the allotment i was up here i made a reference of being in the fourth quarter of a 49ers dame game i think we're in the fourth quarter but commissioner president katz has a by all this last go around with the staff and us have's or has been a good policy for transpiring to make that work there are were issues the staff had to try to solve we were trying to get the thing done and when it turned out it is a better deal for the port we're fine with the castle it's a win-win important both sides

other than we're here to answer specific questions the one thing on the main month to month on may 26th don't take office i'll not be here i'll be on my honey mountain you have a commitment to get this done with our approval if you have any questions i'm here. >> thank you congratulations. >> (laughter). >> public comment? seeing none, public comment is closed. commissioner brandon oh, i'll start on any left thank you >> okay. thank you i appreciate the presentation and the utilizations are

important i want to thank t n g for working with us the term are obviously a little bit different it is helpful to see we're making progress i have a couple of questions elaine you mentioned 5 event for the base case scenario how many event for the hot case scenario for special event. >> two i think 50 thousand so i believe its 20. >> it is 45 thousand square feet and the tenant approved a half that million dollar i want to understand how the derivative in terms of the special event will be duo to the engrossed we do have are a performer on the cost side but not the the other side.

>> we have that detail i can provide that to you. >> how much of the revenue being driven on the performer and the question to the t n g side love of the skoenl will be for the special event but the improvement to make the space noviceer to understand how the special event will be marketed and what kind of a targeted and who's handling that we look at the crowds ships and so how will this be different and the special events it is one of the major differential measures. >> well, you get half of that required for the baits rent and this is the group we found

operate in new york it is a company up and running they do this on a boos they provide all the costs of improvements when we make the deal with the yourselves so the auditors pay for the spaces and pay for the improvement and know the stangdz and turn down and you go on the good news for both of united states is that the capital is driven by the user those companies are household names many in the san francisco bay area doing deadly in new york they want to be here they came out a year and a half ago we thought we were going to do the deal we showed them the spaces they were existed it as gritness to it and they'll fluff it up

with lighting and staging and the like when it depreciates going it will, a inclination of technician companies with product releases and they do a lot of fashion back there so companies doing fashion things and much more than that that relates to the be sure. >> there will be more corporate type of event not families or weddings. >> not the price they're asking so we have a i'm on the medical examiner board and those kinds of things can be done but not a big moneymaker you'll find it compatible at the cruise or terminals it will be capable but very excited. >> you want have this rode for

super bowl. >> we were asked that i don't within we'll quote. >> but it is not quoting with us anymore. >> it won't be. >> so before the final presentation maybe we can have the revenue side so we do how both sides work with revenue and costs so all the piece put together. >> and i had off sorry embed. >> just when you were talking about the event to interject will there be a specific management at the facility focused on event you say that is at outdoor company coupling how does that work. >> good afternoon, commissioners amy with t n g partners we're work with the group that micro mentioned out

the new york opening an office in san francisco they'll market the space and then manage the events manage they'll have develop the contracts for each of the users and supervisor the production and be responsible for on the port permits and responsible for the janitorial for security and all those things i want to add a little bit more to some of usually questions faye commissioners we're focusing think on a number of not very large events based on the event with our faush so it is not that large of an event as mike mentioned companies that do special events as their

blogginging a high production value to we'll limit this use to private events liquor nonprofits that are notification only no public event won't be october festive people lining up down the street very, very controlled in terms of traffic and security and impacts on the neighborhood and as micro said this is a raw space unliquor others spaces a company koimsz and build we provide the panel most of the money into sprinkled and windows we provide a water together sprinkler code compliant with the electrical and they have a do the analysis so we're hoping this will be a successful. >> so you mentioned 4 hundred

and 99 in terms of of understanding the parking needs those events happy. >> we've been work on that and working hard there will be no event parking insides of the pier are drom off thautsz one of the reasons having corporate event we'll control how people gets the information and people come by car and directed for example, the parking lot at pier 2032 and having a drop off for shuttle buses to make sure we are handling the traffic and not having negative impacts on the community. >> okay. this dismissals the

biggest successful component everything else is stable but this is the one. >> as micro said our operators companies liquor the feeling of raw space and industrial space we're hopefully, this is successful thank you. >> commissioner brandon. >> oh, i should ask one last question at event you have to have catering so you'll address that. >> each of the event producers they you know good looking would bring in their own production company that has indicators interesting redo provide any coming back facilities. >> not the potential extra. >> they bring everything in and out and pursuant to the faush and building inspection and under a special essential.

>> that is port potties too. >> yeah. but their novice ones (laughter). >> thank you so much for that presentation i think commissioner woo ho covers my questions regarding the special event of my focus and all the questions answered i know that the board of supervisors is now required with all development projects an l.b. outreach plan so i know they have to go with the package to the board. >> with our assumed timing the l.b. outreach plan is not required for this particular project there will be 4 months early for board approval is its going forward i don't have a date i did the novels to show we're 4 months prior to the