place to put a flowmeter but it is important to test and i'd like to have an explanation at some point how we are going to go about measuring this how do we know whether we've succeeded or now whether we should put more money into share projects so if at some point we could have a report how to measure the report and the success measures i'll appreciate that. >> that's why their earlier implementation projects to answer those questions. >> i think this quick emerging there's a lot of data out in the country and looking at the construction projects to monthly manage the water flow and quantify them i think if we can

sooner rather than late in realtime getting the opportunities to the community and the - i know we're to have much bigger discussions coming up across town. >> you're absolutely right the challenges for this vision is 3 fold one we have to change this culture it is new technology not the run-of-the-mill landscaping and secondly it is a small project not a big project and they're always challenging and to do it in one area the one that is changing and how to convince people that is the right thing to do so there are challenges we need to deal with and the cult. >> maybe we could have a presentation i don't know at the next meeting how the challenges

are going and how to ultimate make decisions movrd. >> what i think we can do we'll either next one or the following one to give you an update with the 8 projects and you can locate it and two projects have moved into the conception how their professionalism and how we're going to collect the data. >> thank you. >> thank you. >> any other any public comment on this item. >> can we move this item. >> the point is losing >> second. >> all in favor, say i. >> i. >> opposed? the motion carries. >> could we read the items to be heard in closed session please. item 19 unmitigated clam with

the nation's local 261 versed city and county of san francisco item 20 existing litigation city and county of san francisco with the golf and recreation company and 21 the existing litigation restoring hetch hetchy and 23 as planning staff and 23 conference with the real property on marin and she and he streets in san francisco and negotiation and price in terms of apartment and the the real property on mission valley rock with the portion of the parcels and under negotiation in terms of the payment and 25 the city and county of san francisco versus pacific gas & electric 2 six the existing litigation city and county of san francisco versus pacific gas & electric and pacific gas & electric and

29 cellist litigation with pacific gas & electric and 29 existing litigation with pacific gas & electric and thirty existing litigation with pacific gas & electric and 31 cellist litigation with pacific gas & electric and we will not hear 32. >> thank you. any public comment on this items to be heard in closed session today? hearing none may i have it notation whether to assert thesession. >> we're going now back into open session i'd like to report on the items item 19 was obsoleted and items 20 through 31 no action taken on them may i

have a motion whether to disclose. >> i'll move not no disclosure. >> all in favor, say i. >> i. >> opposed? other new business commissioner seeing none, the meeting is adjourned at 348 ahead, amy.

>> roll call. commissioner adams, here. commissioner brandon here. commissioner ho here. approval of minutes, for the

april 28th meeting >> second >> all those in favor, say aye >>-a- >> opposed? so moved. anyone here to comment on the closed session? so moved. >> okay. >> all those in favor? >> aye. >> so we're in closed session >> okay, council sell regarding existing litigation. >> is there a motion to reconvene >> i move to reconvene in open session, >> all in favor? >> (multiple voices): aye. >> i move to disclose agenda item five a, the closed session, voted 4-0, to approve the existing litigation described in

agenda item four a one a, between the part and andrea wirum as trustee of the bankrupty state of peer maritime, recreation center, and not disclose anything else discussed in closed session >> there is a second >> second >> all in favor? >> (multiple voices): aye. >> opposed? motion carriedscarries. item six. pledge of allegiance america and to the republic for which it stands, one nation, under god, indivisible, with liberty and justice for all. >> please be advised the use of cell tones, pagers, and similar

sound producing electronic devices, are probited at this meeting, the chair may remove for the use of a cell phone, pager or other sound producing electronic device, be advised a person has up to three minutes to make comment on an agenda item, unless they adopt shorter period on any other item item eight or not listed on the agenda >> any public comment? seening none public comment is closed. next item. >> nine a, executive directors report >> good afternoon members of the port staff, thank you for joining us today, welcome those that are new to our meetings and those of you that come regularly thank you for come why, i have a couple of items today the first is to recognize

the 50th anniversary of scoma's restaurant opened in 1965 when probrothers, al and joe scoma, heard about a coffee shop for sale, contained six stools, on peer 47, that served local fishermen breakfast and burgers alan scoma bought the restaurant and turned it into a world renowned restaurant it is today. it's recognized as one of the top ten seafood restaurants by san francisco open diner choice award, which is an important award to receive, we're proud of them if being a great service, and great sea pooed here at the port, we wish them many happy returns, equally lengthy service red's java house, they

were opened in 1955 as reds in the 1930s an establishment called franco's lunch open to sell food to the sailers at that time breakfast was a burger and a beer -- selling copies of the san francisco news to the longshoreman during the great waterfront strike in 1934 he was hanging around when the restaurant came for sale in 1955. tom and his brother, mark migarvy, renamed it red's java house. then in 1994, the peers, 30/32, burned down, but reds remained due to the fire department now

it's celebrating, it's 60th anniversary, thursday may 27th. they will be rolling back their prices to their 1955 prices you can get a hot dog as a bud for $0.65, you get a double dog for $0.45,ened and a double dog and a bug, you can't misthis a cheese burger for $0.50 a double cheese burger for $0.75 and double cheese burger and bud for a buck see red's java house tomorrow if you work on the port do so on your own time after hours, [laughter] i can see all of you salivating, in the audience i wanted to meek sure i got that in, my other favor quip about red's, in

20001, they had their first addition, to the menu, with french fries, so join us in congratewe lacelating red's java house feeding the sailers and all of us that menader by. also for the nop for the environment impact report, for the mixed use, district project became available -- wait hold he let me revise this -- the notice for the proposed peer 70 project is available there say public scoping meeting, for the eir on thursday, may 28th from 6-8 at peer one, that is this thursday may 28th, you can come to the public scoping meeting for eir, for peer 70,. next is the schedulely scheduled

meeting for june the 9th. has been cancelled due to quorum issues and rescheduled for thursday june 23rd instead of tuesday june the 9th. then my last item commissioners is to ask david bubray to give you information on data for bids we received for the bayview project, which are available for public comment in the next month or so. david? >> thank you, david with planning and development i wanted to announce the arts are commissioning an art piece, on third and cargo way, as part of the bayview gate way project, through a panel selection process, through the arts commission, and the three artists, submitted proposals available online at the port's website sf port.com/bayview

gate way.com. and sf.org,/collection under proposals, they include sied alabi, with gate keeper a sculpture, along with plaque and quote, that is illustrated here. the flaming lotus, girls with the proposal for a spiral sculpture and the history and community of the bayview and lastly cliff garden with his proposal of [inaudible] skullture, and seating of islas, creek. again the public is able to review these proposals, from the bayview public library, from now to june 14th and submit written comments on the website at sf

port.com, or the bayview website, at sf commission.org public collection. thank you. >> commissioners, this concludes me report >> any public comment? seeing none public item is closed. next item. >> item nine b commissioner's report >> commissioners? anybody have anything to report? >> nope >> seeing none this item is closed seeing none public comment is closed, next item. >> item ten a, request approval of amendment so the san francisco building code remove 8.12, which provides fences, exceeding fence height, for construction of all future fences of port property ten b

advertise for competitive bids, for pier 32 building and repair project >> is there a motion >> so moved >> second >> all in favor -- oh, public comment? seeing none public comment is closed. all in favor of the two items on the consent calendar >> aye >> opposed? abtensions? the item carries next item. >> [reading] california corporation, for -- two lease number 15892, between the port of san francisco and tmg partners or it's affiliate for the term of 25 years, this action constitutes the approval of action for the project for

the purposes of ceqa, pursuant to the section 31.04 h of the san francisco administrative code. >> good afternoon commissioners elena ford port staff and joined by rent. director of development, and brad ben son, of port staff, jeff bower, and brett stall -- and the attorney helping us with our team. today we have representatives, cathy green wald a vice chair and charles gibson who is a partner. today, i will go over the project time line and give a brief overview i know you heard about this project back in april 28th i will keep it quick, but enough for the public

tuning in today, i will go over the changes to the deal terms, since the last presentation, and respond to the questions that came up that day, and provide a rationale for the finding, we're asking you to make of trust consistency, and the lease approval. brad benson will be helping with the presentation. we're very pleased to be before you today to recommend this lease, it restores the bulkhead of peer 38, it makes important public access improvements, this is 100 year old building, it's been closed since 2012, because of code violations we're glad to get it back into use for the beach community and the public trust -- while they're considered the capital investment in july, today marks the conclusion of the process of the selection of tmg as the

most qualified response back in 2013, that is with deal term presentation with november 2014, cadix, seqa determination on the thirty-first -- we're here before you today. may 26th, then we will be bringing the lease for the board of supervisors in july. the lease does include the investment option we have been discussing it's something we asked from tmg, it's not something they have asked of us. they continue to work through this option with us and to structure it, and provide for auditing provisions it's a creative option, that the port commission to choose to exercise or not exercise, in july it will be coming to you so you can look at opportunity costs,

relative to this investment should you choose to exercise the investment option, we will bring it in august and the board of supervisors in september when they return tr the board recess as the lease is structures to the option we have to provide cash, october 30th, 2013 or after lease commencement this schedule will allow you to exercise your options, should you choose to do sto and the other bodies concur. the proposed uses are consistent with the rfp, issued, with bulkhead restoration for ongoing port revenue office serving commercial and maritime uses and historic rehabilitation. you will see the green is the first floor the blue is office,

the pink is special event space, and the taupe yellow, is the north access area north apron, and birth. the restaurant is going to activate a portion of the peer eight apron, and provides an important amenity for this project. the project includes approximately 29,000 square feet of office space, it will be to creative and technology uses and the open floor plan will provide, unique space, will you see from the revenues side that the tenants generates revenue and allows for some of the other improvements in the project. you will notice when you came here on the 28th. the office parcel c, was larger

it was 45, now it's 3880 the reduction is with the fire marshal exiting this is for special events, likely to include corporate events and it will accommodate 20 parking spaces solely for the tenants and working with the commission last time it is proposing public community use of this space, event 135es, will you be hearing more detail about that shortly. the project includes quite a bit of public access improvements needed, including 4,300 on embarcadero, in north apron, repairs to the gate way and floating dock -- and short

term guests [inaudible]. represents 6,000 square feet of public access. now to changes in term. since your last review. the majority of the lease terms are the same, so we will cover everything that has changed that is significant, first, a tmg partners requested three months additional due diligence period to assess environmental riskses of the project, commencement we're 40th quarter of this year, to second quarter of next fiscal year the earliest is september of lease commencement, it could go out as long as second quarter, 2016, the tenant will provide a completion guarantee, for capital work, in lieu of a performance bond.

four parcel c, the special events area. if for three years there are no special events, the port will have a right to propose a subtenant, and participate in revenues from parcel c. regarding sea level rise, when we were here last time we would discuss sea level rise and how to deal with it in the lease, this is proposed in the lease framework, how to pay for flood mitigation requirements, so temporary improvements, sandbagging, that kind of thing, for needs of temporary improvements for permanent, they will meet for nine months of improvement, if the work is required to prevent threats to public safety the lease will terminate.

if the tenant makes the improvements they will be eligible for 25% of base credit, year 21-25, we will charge back the cost of the improvement based on the em mer tiezation of the asset, but no one in the rent exceed 25% the base rent. we have changed credit in years 21-25, the port commission will recall the rent credit is initially structured from year 1-25, when we look to change the deal term determines for important rent one commission that tgm, made, is have a market reset in year 21. we have been discussing important improvements that are required substructure the prior deal, included substructure up

to half of it's base rent for substructure improvements, we removed that to provide for rent. we have looked to resolve and incensivize sizement improvements, the bulkhead and flood mitigation, we're offering rent credit up to half years 21-25, 25% can be used for investment needs, throughout the term of the lease, substructure or upgrades, in the bulkhead building, if the tenant made substructure improvement in year 18, we look at the cost of the improvement see it as an eligible substructure improvement, and prime plus two, and reduce rent commence rate with that improvement, for a

voluntary, seismic upgrade in the bulkhead and a 25% credit for end of term improvements flood mitigations more measures, we discussed, and these improvements tenant would propose in the last five years and port could approve in it's sole discretion. this chart will be familiar with you from last time it differences i'm now showing that end year 21-25 rent credit. so the basic tenant is the same, port's rent has improved noticeably from november 14th because of the tmg's willingness to restructure our rent also, we added investment option for the sole discretion the green is the base rent worth

6.12 million over the year term. 3-and-a-half million is in the first year, and 3.5 million in the last year. the rent credit is worth up to 1.3 million the value of the rent credit will depend on the market rate readjustment, we don't know the timing of what economic cycle we're in when that market rate reset is made, it could be more, it could be less. the yellow here is the special events this is what we're calling the low scenario based on five eventses, that is 1.5 million over term what we're calling capital investment is repayment of port capital with a rate of return, by year seven in the light blue. the dark blue, is net cash flow distributed to the port

totalling 2 million, in the base case the total rate of return is about 9.7%, it's about $34 million, of net revenue so port staff believe this is a fair and reasonable internal rate of return for a project with this risk portfolio. the high scenario is almost exactly the same except it goes from 5-20 in the special events, what you see happens is the base rent stays exactly the same but the special events revenue goes to 6.3 million which then flows through and increases the payment to the port from that initial investment. port would earn back return on capital in year eight the dark flew