francisco so this allowed me to stay here i'm from john rahaim. >> to the mayor and uber and the giants and i hope this story helps other families and please join us in 2017 to end family homelessness and honored to be the first one at the home opener this year to say go giants. >> (clapping.) >> all right. that's it let's score let's score for our families. >>

>> commissioner willie adams. commissioner kimberly brandon, commissioner kounalakis, commissioner doreen woo ho. >> so moved. >> second. >> all in favor say aye. item two public comment. >> public comment is closed. >> item four executive session. >> so moved. >> we are now in executive >> madam secretary.

>> the commission has recessed. closed session and we will be going back into closed session after the open session. but we would like to disclose that the personnel item agenda item 5a, the commission unanimously approved the appointment of diane and byron. >> congratulations. >> i would like to move that we reconvene open session. >> so moved. >> pledge of allegiance. i pledge of allegia nce, to the flag of the united states of america and to the republic for which stands, one nation under god, indivisible, with liberty and justice for all.

>> please be advised use of cell phones, pagers, electronic devices are prohibited. chair may record removal from the meeting room for ringing of or use of cell phone or electronic device. be adviced a member of public up to three minutes to make public comments on each agenda item. item eight public comment are not listed on the agenda. >> is there any public comment? public comment is closed. >> item 9a, executive director's report. >> good morning. president adams, vice president brandon and members of the commission it's afternoon.

members of the public and port staff. the first item is i would like to acknowledge that our new cfo is here. she has joined us. a big welcome to katie. katie has several decades of city experience and coming to us from the rec and park department where he has helped the recreation and park department. very skilled personnel manager. her team is upset with us. very happy to have her join the port and senior leadership team. welcome to you katie. next item is to acknowledge the bethlehem shipyard museum photo exhibit. our building from april 14th through may 4th.

this is an exhibit on history of the 1906 great earthquake and fire. it's put on by the bethlehem shipyard museum in partnership with the san francisco museum. the exhibit will be located in our lobby at pier one. will be accessible to the public from 8:00 a.m. to 5:00 p.m. the exhibit exhibit of historic photograph and videos of the earthquake and fire and recovery efforts. the bethlehem shipyard museum is not for profit organization established by retired staff at pier 70 in the central water -- water front. this is a great opportunity to learn about 1906 earthquake and consider the city's vulnerability to future earthquakes. you can learn more at

http/bethlehemshipyardmuseum.or. this is a saturday. architectural heritage will hold annual fundraiser at landmark number 167. will be from 6:00 p.m. to midnight. this year the theme of the 50 year anniversary of the summer of love. landmarks from the ash berry neighborhood. this is unique opportunity to enjoy san francisco history. it's a black tie affair. the heritage mission is to preserve and enhance san francisco's unique architectural and culture identity. heritage is a significant waterfront partner to us and has a collaborative relationship on preserving port property and planning issue. i encourage the public to take a

look at it and attend. now i like to present the port's proposed reorganization further advance our strategic planning goals and objectives. good afternoon given. the port is a very successful port. we have a great diversity of uses. our waterfront draw over 24 million people to it every year. for a variety of activities. we manage 600 leases over our 7.5 miles of waterfront property. the richness and diversity of experiences with general public faces makes our waterfront unique. to make and keep the waterfront great requires that our port staff have a broad set of

responsibilities to promote maritime commerce and preserve and enhance the waterfront. today i will discuss with you a proposed reorganization that i will make to help staff achieve our goals and to help staff achieve goals in a way that is more effective and efficient for us. we have a strong foundation of planning effort that drives our goals. in february of last year, we adopted our 2016, 21 strategic plan. which articulates our vision for delivering our port modern day mission. this plan has seven strategies and 42 objectives. we have 245 employees working to accomplish this aggressive agenda. in addition to our strategic plan, we have the waterfront land use plan which is a tool that provides for the long term vision of how we are to use

portlands. and our capital plan. which is an expression of ports property needs and funding sources. together these planning documents help guide us in what's most important for the waterfront and how to achieve our goals. we have more responsibility than staff. that's what the teeter totter is meant to convey. i've conducted review of our internal communication and organizational structure and measured up aggressive agenda. the goal is to harness considerable -- we are a largely successful organization that operates in concert with its mission and excels in many areas. but the department does have more demands than staff

resources and staff struggles to prioritize work and feels pressure to do more with less. there are key improvements to our organizational structure that will improve our ability to meet our objectives more effectively and ease pressure on our staff. the reorganization i am proposing has three key goals. one that are integrate the business units. create a strategic framework and asset development and management and broaden the planning division essential services. this is a reminder of our strategic plan that has clear mission and vision and seven key goals. all seven goals that has a focus on the fundamental goals that relate to the business units of renewal, economic vitality and

stability. the current structure which has been in place for several decades, has property management in three divisions in organization. real estate, maritime, planning and develop. each division has specific goals for the use of port property. the result has been tremendous. we have over sick hundred leases -- 600 leases. we have caused the investment of 250 million in private investment in port facilities sense 2006. these are notable accomplishments. however, because the business units are separated, they do not operate under one unified strategic framework. the structure results in a business model with three distinct and separate business units with different goals and objectives a all impact property. this also results in staff working on separate assignments

reducing opportunities to collaborate. staff has self-directed integration and has moved over time to integrated approach to property in asset management. the result is better use of our property. more diverse in public serving. this is in contrast to the 1997 land and water use plan. but turn to private development partners from most major upgrades to port property. increasingly the port is under taking major development and leasing efforts on its own accounts. this includes cause ship development, pier nine, jamestown project, pier 29, alcatraz landing. as an example, i'm showing you

the james r. hermann cruiseship terminal which is one of the most maritime projects. we have special events and parking being a major source of revenue. a real estate activity. we have funding sources, variety of funding sources causing the project and a public park, 2.7-acre public park that a geobond paid for that was managed oof our planning division. in this maritime project, you see the success coming together from planning development maritime. i'm proposing integrated approach to asset management. staff has begun to do with great success. this proposed change would include a senior deputy director a chief operating officer. you noted that. will be mr. byron.

development staff will be reassigned to real estate position. we'll have a stand alone planning division under the direction and leadership of diane. this is hard to read organizational chart that amy and i will provide to the commission and public for further review. basically what you are seeing here is the mayor and the port commission and myself reporting to the port commission, director office that includes the chief freighting officer. the chief operating officer will be responsible for maritime real estate development. i will be responsible for him finance and administration, engineering maintenance and planning. under the centerstructure the business units are integrated and reporting tot chief operating officer. the benefits here are enormous. we can innovate asset

development and management and streamline business processes. leveraging talents in each division for unified end for our property. the planning division serves a very critical and important function for our department. the planning division will support our business unit in addition to development to real estate and maritime goals. will focus on emerging issue like sea level raise, water transportation and will continue to deploy the high etcetera standards of stakeholderrer engagement. there is much work ahead for the planning group. in proving the port public realm in protecting its historic resources engaging the public for the update to the waterfront land use plan and working

through policy frameworks and regulatory agencies and state lands, etcetera. this is a trial period. i'm appropriating -- i'm proposing this reorganization today. we'll fine tune based on how it works and come back to you in february with a formal proposal for reorganization through the budget. we may find additions that we like to add here or subtractions if it's not kuwait working -- quite working well. the staff is working today to meet the port's modern day challenges. i'm here to answer any questions. >> is there any public comment on the executive director's report? any public comment? public comment is closed. >> port commissioner's report.

>> nothing to report, thank you. just congratulations to our giants winning opening day yesterday. >> i want to read a letter that was sent to port commissioners. fyi for the public. this is from ron courtney san francisco businessman. this is a letter sent to all the commissioner. there's a serious problem on the embarcadero from pier one to pier 35 unlicensed food vendors. they have no health permits, collect no sales tax, pay no rent to the port, pay no payroll taxes, no sales permit, no insurance requirements and no real estate requirements. if this is not stopped now, there will be a proliferation of food vendors by some.

sincerely ron courtney. 4 san francisco businessman. >> this is an area away coordinate with the department of public health and police department. it is an area we had enforcement activities. has been persistent problem. we'll double down on that efforts this area. >> quickly, colleagues what happened since the last meeting. i got back yesterday. i went to singapore. i got a tour there, singapore has a second largest port in the world. had some meetings with people about what they are doing in singapore about sea level rise. what they are doing about earthquakes, infrastructure. one of the thing i like about singapore, they have a lot in common with san francisco, cruise ship and ferries. ferries is a big way to get around in singapore. from there i attended a conference in perth, australia with labor unions.

i went to the port there to see what they are doing in the port of fem free mantle. back -- they also have a lot as far as ferries and stuff like that. australia is a very beautiful country. on the political front, they just had a big political revolution in their country where we have like here, we have democrats and republicans. there they have labor and liberals. liberals are republican and labors are the democrats. they have a big revolution there. now the democrats are back in power. they have a lot of situations where a lot of foreigners are coming in from indonesia and other countries taking the work of australians. they are fighting australlians to do the right and to do work in their own country. just want to tell you what's going on there. i met bill shorten who is the

opposition. he will be like the nancy pelosi. he's running for prime minster. he came out as a labor movement. some of the things they're working on is coal mining. trying to have greener and be more environmentally correct. they are very interested what's going on here in america. one thing that they take pride in is that several years ago, they had a woman she was the first woman prime minster of australia. i met her. she did really good job. she really got attacked hard by the right wing and basically her own party did her in. i aid in america, lot of people were pulling, women, especially for hillary clinton. we never had a woman president in in england they had two women prime minsters and in australia. maybe one day in the states we will have a woman president. that's my report.

thank you. >> request approval of lease number l16159, port of san francisco and 26,901 feet office feet. subject approval of board of supervisors. >> good afternoon. my name is elsa lamb. i'm the commercial property manager for the port of san francisco. i'm here to request approval to enter into a five year lease with idolp under lease number l16159. ido is award winning global design innovation consulting firm. they focus on designing product and are highly sought after after a design thinking firm. they are credited for many of their designs, one of the ido is

dining apple first occupancy limitation is 208. the use is a continuation of existing and related uses and therefore not a project that subject to review by the california environmental quality act. ideo is seeking a five year lease with a right of first offer. the rental rates for the lisa conformed to the parameter rent schedule approved by the port commission. because rent revenues under the term of this lease will exceed

dollars the lease will require approval by the board of supervisors and charter section 9.118. at the end of the term, the tenant shall have a one time right to submit a written offer to extend or renew their lease. should the rent exceed $1 million for the extension period then we would have to come back to the port commission and to the board of supervisors for approval again. the port is required to obtained substruct roof and walls of the premise with the exception of the doors, windows and a staircase and ramp that is located on the westerly side of the facility which the tenant is required to maintain. the tenant is responsible for utilities, maintenance and repairs. this lease achieves the goals and objectives of the port strategic plans by one promoting economic vitality. by maximizing asset value and

stream to the port. by creating stability. by increasing port revenues and retaining diversified tenant base that will perform economic cycles. ideo is a tenant in good standing pursuant to the port commission policy. port staff recommends request approval to enter lease with ideo. thank you. >> so moved. >> second. >> is there any public comment on 10a? being none, public comment it closed. commission kounalakis. >> you said the number of staff that they have here. can you say again? >> the premises is actually the occupancy load is 208. they do have all the -- offices

in alto. they have met the maximum. >> are there any issues of concern so far in terms of how they've been as a tenant? >> they've been a wonderful tenant. they're a model tenant for the port of san francisco. >> a model tenant for the port of san francisco. that's all the questions i have. >> commissioner brandon. >> thank you for the report. can you tell me, what is the rate of their current lease? >> the rate current lease is just below the current one now. little background, they are operating under two separate leases. what we've done in under lease is combined both leases into one. they are just under the

parameter rent approved for this last year. so this is why we're actually renewing their lease so they can be parameter rent and stand their lease. >> parameter rent is that the lower medium? >> at the low end. >> why is that? >> it's actually -- i can't remember what the low end is. they're a little above the low end >> what is that based on? >> i'm wondering why we're not bringing them to market? give them the opportunity. >> you referring to the current lease or the proposed lease? >> i was asking about the current lease and where they are. then with the proposed lease, i ask two questions. i think right now she's

referring to the current lease. , proposal. >> so the proposed lease will bring them a little up from where the minimum is. that's historically we've given them 3% increase. at one point, they may have not reached the current rent but it's been negotiated. >> given the opportunity that we have now, why aren't we trying to bring it to market? >> it is within mark. >> it's the lower end. is there something wrong with the building? >> no. there's nothing wrong. >> okay. >> the one thing that is coming up is the seawall resillency project. they would have preferred to have the 10 year lease. because of the project, up to five year lease. which is why they have the right of first offer.

>> maybe you can tell me what the rent parameters are for this space. >> under this current lease that we're trying to negotiate? >> no practice the parameters are. not what we're offering them. what the parameter. >> unfortunately i did not spring that with me here. >> i'm not quite sure i seen a right of first offer. what is the term of the right of first offer? >> the right of first offer allows them to make us an offer. that is based on rates that they -- they have to be within the approved parameter rent. they have to prepare the terms for us. we have to then negotiate from that point on. they are preparing a letter of intent on their part to say, this is what we like to renew our lease with five years, ten years. >> okay.

>> i think what we're hearing, i assumed that these were kind of predetermined by staff what the rates are. on the newest person. this is the first time i've seen one of those explicitly. the question is, end of their lease, they want to renew their lease. how do you make the decision of what the appropriate rent increase for a lease renewal is? certainly, everything in san francisco seems to have gone up. housing prices gone up. i assume that special space and office space is going up too across the board. when you sit down and say, their lease is up, they want to stay. what is the fair --

>> typically i will look to see what other tenants are paying if they're within the same rental rates. we'll compare to see if their similar in nature as far as what the space that they occupy negotiate from there. basically what the market will pull out there. >> do you look comparables that are not within the port? >> we have parameter rates that are set every year that will be reset again this july. this deal basically is in those commissioner approved parameter rate. >> for last year. >> for this year. these are the current rates that are in effect for us leasing property. this is actually complete

parameter deal. only reason it's here before you because it achieves a rental revenue of over a million dollars which it goes to the board of supervisors. which is unusual because it's parameter deal. we bring it to you because we have to bring it to the board. >> to reiterate what mark is saying, you all approve parameter rate schedule for the entire year. it set market rate. real estate does quite a bit of analysis to say what comparable properties across the street are valued at. we hire a broker. they help us and we set the rate. you approve them. if we lease space within those parameters, typically they don't come to the commission. here the value of the lease is north of a million dollars which requires board of supervisors approval. bringing it to you before we bring to to the board of supervisors. i think the question commissioner brandon is asking, within that parameter band, why

did you pick just north of the lower end? why note hire in the parameter rent schedule? can you help us understand the rate you're proposing? >> yes. because we're trying to look at all the other tenants are paying within the same area and same use. trying to keep within that area. of course, because this is five year lease it will go up. there's 3% annual increase every year for this lease. >> you set a rate within market approved by commission but it's on the lower end of the scale because it's consistent with other port lisas? >> -- leases? >> yes. >> this is actually the parameter for this particular property. it's one of the higher parameter

rates. >> why don't you tell us what are they currently paying and what will they pay under this lease? so we understand the dollars. >> we need that information. >> the current parameter -- the lease deal that this is under is $3.15 a square foot. >> a and b are lower. >> right. that's a different parameter. these are among the higher rates for this type of shed space that we have at the port. if you look at the entire port. >> i guess my concern is that -- we have current tenant. we love to keep our current

tenant. we like to bring them closer to mark than just at the low end of the parameter rent. i know that we make the parameter rent range because some spaces are better than others. if this is a class a space and we're giving them close to low parameter rent, that doesn't make sense. if we're doing it based on other tenants. we have tenants been here 40 and 50 years. >> this isn't office pace. it's class c office space at best. it's shed space that's been studio space. this is market present for -- rent for this space. when you set parameters, you set parameters for market rents. our parameter rents are market. >> can i build on this a little bit?

go ahead commissioner katz. >> we have who hold this over. i don't think we have enough information. i will let commissioners have their say. i want them to be happy and have all the information. i know some stuff you didn't bring. i think it's important to have everything here so we go through and we clearly understand it. >> one will be what is the parameter rent range that we have? is it five cents or 25 cents differentials. i like to have that information. second, maybe i misheard this, this doesn't seem to be a pursuant to any renewal in terms of the original lease. this is actually a new lease. there's no reason to say that, since we gave them a 3% rent increase last year, 3% this year. it's irrelevant. it's not based on a prayer lease. this is a new lease.

we start negotiating fresh out. it's not giving them the benefit. we appreciate them being long term tenant. the question i have, are we comfortable that given our parameter rent that we've approved that it makes sense to give the lowest end of that parameter versus the middle or higher end when it sames like just because other tenants are paying less, we trying to get everyone up to market rate. that's our obligation here. we have other factors. it seems to me if we've come up a parameter that's market rate, why not negotiate at the higher end of that parameter. hich isn't all that tie high. >> can i make a comment? i know you feel like you will going through the motion to come here because it's over a million dollars. i think the rationale of a lease

comes to us and board of supervisors, it is to have another set of eyes to look at it and see whether it is in interest of the port and the city. i think we need to go back and answer these questions so we understand fully what we're approving and not view it as a formality that we have to go through. i don't want to over state your case, it does feel like you're little bit saying, these are parameters. why are you asking all these questions. it's because it's a sizeable lease and we should be taking careful the city's assets and port asset because of the size. we should be looking at it carefully instead of having that independent review. >> also, the right of first offer. i think there has to be some terms associated with that. i don't think they can come back and give us whatever they feel is appropriate at that time. >> it's not even an option. it's basically because they're a

good tenant and good tenant in standing. a tenant we like to keep. we would entertain them to give use first offer for the space. >> at current mar market value? >> the right of offer we give it to the highest offer but they have a right of first offer. it doesn't entitle them to the property. >> does that mean like now we would put it out to bid and whoever offered the most for it, we would then let them -- how does that work? >> if they vacated, it will be vacancy. >> they would be to give the best offer. but there will be no other offer. >> i think this is an example. there's 600 leases in the portfolio. we do not competitively bid leases when they come up. if it's a tenant in good standing and pay us market rate

which the commission sets annually. we do need to understand what the tenant is paying now. we need to understand the range of the parameter rents and we need to understand why you settled recommending this particular rate in the band of parameter rent and to understand that that reflects the fair market value the prompt. -- property. there's more information that the commission need. >> we look at rent schedules it's a few months before the new one is set up. the market changes from time to time. we should just check what the -- it's not detailed research we should check the other side. we shouldn't be comparing leases on port authority. we should be comparing to the market because of the size of the lease. >> we're going to hold this over colleagues. director forbes, this thing need to be reworked.

you can tell the commissioners have a lot of question. >> what was the expiration of the lease? >> there's two leases being combined. one is on month a month hold over and the second is on a five year term. >> by asking to hold over, there isn't an issue? >> it's not an issue is it, mark? >> no, there's no issue. it's on month to month. >> make sure we understand. >> thank you. we look forward to seeing you next month. item 11a request approval of 66 year lease portions of a south basin and nonexclusive license for pile supported areas adjacent to west of the south

bain. in connection to downtown ferry terminal expansion project all located generally between the ferry building pier 14. >> this is an action item. we're seeking approval for two long term property agreements for the downtown ferry terminal expansion project. 66 year lease and companion license agreement. in terms of i will be presenting, it's pretty straightforward. i will provide an overview of each agreements. i won't be getting into lot of detail about the project design and so forth. we did cover that last fall. we had -- we were here twice. once with informational presentation on a project foll followed by approval of the construction lease. those two documents will govern

property rights or their ability to construct the project. these two documents the lease and license agreement provide me with property rights needed to operate the ferry terminal facility upon completion of construction and furring strategic plan which you had presentation on last fall. beginning with the lease, this slide shows diagram of the lease area. i don't have a pointer. this is basically what we called a south basin. south of the ferry building between the southern edge of ferry plaza, which is behind us here. and extending southward towards -- all the way to the pier 14 break water.

then the western edge of the box is basically -- thank you -- basically where the port gates are. there are three gates. first one is gate e. it was built along gate b in the north basin. which you can't see here. built by the port and operated and maybe takenned by the -- maintained by the port today. then you have two new gates.

gate f here and gate g. here's rendering of the lease area. this is a view looking south. if you were standing on this floor of the ferry building down at the southern end looking down on this area. this is what you would see. you'd see in the foreground gate e. the existing gate. then two new gates f and g. you can see in the background, the pier 14 break water. key provisions of the lease agreement. this is a 66 year lease. it includes about 300,000 square feet of water in some area and 21,000 square feet of floats and

gang ways. under this agreement, we own, operate and maintain these facilities. in exchange for not only building but also operating maintaining and being responsible for all cost associated with maintaining these facilities, the port will not collect any rent or landing fees. however the port may charge a fee for vessels. continuing with the lease and focusing on gate e, the agreement calls for basically control of gate e to be transferred from the port to rita. the facility is in need of

refurbishment. they're going to be coring 80% of the cost for that refurbishment. today the port is responsible for 100% of that cost where we take it as service and refurbish ourselves. in terms of the fiscal impact of this arrangement for gate e, it's positive outcome for the port. weest pat -- we estimate operating gates b and e, it will amount to savings $125,000 a year for the port. just to mention gate b, it's not part of this project. it will continue to be operated and maintained by the port. we have discussed with them and it does contemplate the potential for gate b to be similarly transferred from the port to rea in the future

depending on funding availability and port needs. switching now to the lease agreement. you have diagram here of the lease area founded by the red. to orient you. this area here where i got the cursor as you know today, there's an open water basin doctor. we call it the lagoon section. there will be a raised new plaza. then you have this area that runs in front of the three ferry gates. i should mention, regarding gate

e, gate e will be relocated slightly eastward of its current position so that it lines up with the new gates and then so that promenade area in front of the gates can be expanded from what it is today. i should also mention that you got there today, we have pier two, it is now public access. that would need to be demolished as part of this project to create the water area. you see the agriculture building there and agriculture building is not part of this project. the port does hope to renovate the agriculture building in the future. this project contemplates that. we'll talk about little bit more in a moment.

the license agreement runs concurrently with and with the lease. as long as lease is in effect, the license will be in effect. they need both. the license area includes 38,000 square feet of new supported promenade and please areas. for passenger, for passenger circulation and access to and from the ferry gates. then very importantly, i think for emergency staging. so that's part of their mission. that's the e and wita and the entire facility, the license area is designed, engineered and will be built to central structure standard. the idea being that in the event of a major seismic event, the

facility will continue to operate and they can stage evacuees in that license area particularly in the plaza area. continuing with the license. the port upon application of -- completion of construction, the port will take over ownership management and maintenance responsibilities for the license area. the port will be responsible for all the costs associated with maintaining that area. we've estimated those costs at about $75,000 a year for labor. that's not net new cost to the port. port has cost today associated with the area and those costs will be absorbed by existing resources. i mentioned that it's a nonexclusive license. there are other uses that will take place in the license area. in particular, we would like to

see farmer's market expand to the plaza area. our permit allows for unlimited basis. on a trial basis for us to do that farmers market and other special events. it will be reviewed after two year period and potentially expanded and to allow for more frequent events. then, skip to one of the bullets. another use is the entire license area is public access areas. it will be -- we think it will be an area that is very popular. very desirable. people can go there and enjoy their lunch and enjoy the views. so that's something very important. finally, this license agreement does allow for potential

adjustments to the boundaries of the agreement or license area to accommodate adjacent projects. i mentioned agriculture building, which we would like to renovate in the near term as soon as we can. the seawall project. if needed, we will come together with wita and work that out. that'that basically concludes my presentation. i need to point out two changes to the resolution. on the second page of the resolution, which is page 8 of the staff report, there are two paragraphs that need to be struck. just simply 38ed i.

-- 38, deleted. top of age 8 it's a paragraph that appears on the bottom of page 7. we'll delete that paragraph. about in the middle of page 8, there's a whereas clause that begins, whereas any motion to approve that is another redundant clause. it's redundant that one that appears second to last whereas clause. we're going to strike that part. just a little clean up there that i need to let you know about. we have here today representatives from wita. we're here to answer any

questions. we're seeking your approval of both of these documents to allow this facility to be operated long into the future. and excited to reach this point. thank you very much. >> entertain a motion? >> so moved. >> second. >> is there any public comment on 11a? is there any public comment? seeing none. public comment is closed. commissioner woo ho. >> i want to understand on the last picture, those are just three new? the last picture you showed us, the last slide? >> this slide here. which is also on the title slide. yes, this is a view. e, f and g. >> i understand we're not asking for any -- how much will they be

investing in the project? >> the project is correct me if i'm wrong, $65 million of investment. >> can you come up plaza? >> construction cost of the project $65 million. over all cost is $79 million. >> if we had nonwita vessels. they can come to any of these? is it restricted to certain piers? >> they can come to any of these facilities. wita will charge them a fee that the agreement is explicitly

allows them to charge a fee to cover their direct costs. then the port is able to charge a fee on top of that. >> other question is, you say on one of your slide ownership of control is transported from wita. >> other two will be constructed by wita. >> you're saying down the line, when they are constructed, then we'll transfer ownership. >> we'll never own those. currently we own gate e, f and g do not exist currently. we need to give them control of gate e which we currently have. >> gate e we are going to come up with 20%? >> correct. >> that's roughly -- >> that's roughly about $300,000 based on a total project cost

for of $1.5 million. >> that is currently in the capital budget? >> yes. we have that funded within our capital budget. >> okay. thank you. that's all my questions. >> commissioner katz. >> asked a couple of questions. this one little more ewill be ration in terms of the use of the license on a nonexclusive basis. logistically how is that going to work. water taxes will be allowed to have landing here? >> the lease is an exclusive area. wita has exclusive rights to the lease

>> it's not exclusive to land side but on the piers it's exclusively for wita? >> correct. they do have the ability to -- they decide they want to allow landings of nonwita vessels. which could include water taxi. i'm not sure these facilities would be appropriate for that. 0 or designed for that. they could do that. they would be able to charge a fee to recover their costs associated with those landings and the port can also charge a fee. >> then, just as we talk about sea level rise, that has somewhat been accounted for here. as we found the projections of sea level raise -- rise has

changed since first provided to us. i have to confessed i thought they were overly ambitious at the time. has any thought been given to floating piers? >> the project is designed to allow for some adaptation beyond the sea level rise measures that are built into the project. which includes building that new please and the new promenade structures. three feet above the current elevation. it will adapt the gang ways and the floats and the connections to the land in the future depending on what happens to sea level.

>> just add to little specificity what he said. the project is designed for, expected life of 50 year life. which brings 2070. it needs to go about another foot above that. that takes and is handled by a curb on the promenade which is 12 inches tall. the gates could be adjusted upward. the site enjoys some protection and there's a break water and part of the impact sea level ride is the wave action. yes, it does take into account the possibility to adapt for further end of the future than

2070. >> thank you for the presentation. can you give me an example of a nonwita vessel? >> sure. dinner cruise, run by horn blower for example. if for some reason they wanted to use these facilities they would have the ability to do that. >> what is a wita vessel? >> i might have mike come back up here. [laughter] they have operating operating agreements with blue and gold. those will be considered wita vessels. i believe they have vessels they operate by their own agency. i will have mike explain that a little bit better.

>> largest newest vessel in the bay. it's a term we defined in the lease agreement. any vessel owned by wita or a vessel leased by wita that's in wita surface. it, boats we owned or leased through a contract operator. >> gate e, what is the current revenue? >> i didn't bring those exact figures. i can tell you, i mentioned in the presentation that we currently have negative net revenues to the tune of about $125,000 a year. revenues that we do collect are less than the cost that we incur associated with that facility by

$125,000. >> for gate e. >> for gate e and similar situation with gate b. the two of them together, the net loss or the net subsidy is $250,000 a year based on a five year history of those cost in revenues. >> okay. thank you. >> commissioner kounalakis. >> this is really exciting. i see in the staff report, there's expectation construction will start soon? >> yes. in fact, these occupants have been approved by the wita board as of last thursday at their board meeting. this is the final approval needed. i mentioned the construction lease and the llda which have been approved by both agencies. that was done in the fall. construction is expected to

begin i think construction fence you'll start see going up this weekend or monday i think. then construction can begin probably three weeks after that. we do have a ground breaking ceremony scheduled. hopefully it made its way on your calendars for thursday may 11th. >> that's really exciting. i do have some questions for you. it's really mostly just related to the costs that we may incur and what the responsibilities of the port are. there clearly will be a line. i'm looking at the public access map. it kind of shows the perimeter pretty clearly. all of those purple areas, are they going to be maintained by wita over time? >> are you referring to the license agreement?

>> i'm referring to the license agreement. but then the map that i'm using is the one in your handout. >> within the license area, shown in the staff report, in the presentation, also in the staff report as wita exhibit b, that's all pile support of deck that will be constructed by wita. they have responsibility for certain sort of ferry terminal specific improvements that will be located within that license area. that includes the -- i didn't show it part of the presentation, i think you can see these canopy structures.

i've got a slide here kind of depicting the canopy structure. panels on top and they'll be used for weather protection for ferry passengers. they may have signage into them. those will be maintained by wita. there's a potential for kiosk to be located. like ticketing kiosk to be located within the license area. that -- otherwise the port will have responsibility. it will basically be for cleaning, pour washing for trash removal. >> in this public access areas where you have the grand of plaza and east promenade, all those areas in terms of maintaining them keeping them clean, that's the responsibility of the port?

>> correct. >> do we have any estimate then of what all of this is going to cost us with the huge increase in pedestrian use of these areas? >> we did estimate basically of the number of labor hours. number of person hours it would take to perform the various duties associated with maintaining these facilities. trash removal and cleaning of the surfaces. there's a small storm water drainage planter area that will be need to be watered. we estimate number of hours. we worked with tom carter to kind of come up with how many hours and what does that mean in salaries. it's estimated about .5fte.

20 hours a week. >> in terms of the delta what it cost us now versus what it will cost us later. hard to believe it's just 20 hours of work. you're going to have people waiting in line. maybe going to be more trash. you've got this amphitheater. they will bill amphitheater and pieces break and things need to be repaired. aren't we going to be responsible fixing that? >> we will be responsible for example the sub structure. yes, beyond the warranty period of the improvements, we will be responsible for making repairs should they be rared. this is going to be designed and built to state-of-the-art central structure standard.

very high quality materials. >> there's no estimate done what the ongoing maintenance of all of these things will be built that the port will be responsible for? >> beyond sort of operating the impact on the apriling budget -- operating budget, we estimate $75,000 a year. that's not all net new costs. we haven't tried to estimate what happens if something gets broken. we don't expect that to happen. over the life of the agreement, yes, the port will incur some costs. the port incurs costs today associated with this area. >> it's not amphitheater. >> it's a raised plaza. i'm not sure it could call it amphitheater. you have seating steps that you can sit on to enjoy your lunch.

but it's flat. it's a flat please structure with steps on two says. >> the granite plaza, will we control the use of that for special purposes? >> yes. we will be able to as i mentioned. to program it occasionally for special events for farmers market. we have limitations on the number of events we can do. that will be the port's discretion. as long as those events do not interfere with wita ability to operate the ferry. >> okay. it will be really exciting to see all the construction beginning out there.

>> good presentation. i remember the last one you gave, changed from cruise terminal last year. maybe somebody from wita can come up. i agree with the commissioner kounalakis. this is going to be a full time job. 20 hours a week. we'll have all kind of people down there. this is not a part time down there at that plaza and keeping up the may not unanimou maintenance. don't you agree? >> we do know. we have an estimate? we work with tom carter to perform an estimate. we're subsidizing to the tune of $250,000 a year. the new cost we're taking on are substantially less than our current subsidy. i know that's not a perfect answer. we have new big belly trash cans that will alert us when they are

full and not full. we have scheduled trash pick up. which is very efficient because we know in those trash containers are open. we sweep before there's anyone out there in the we hour. we sweep in the morning and evenings. that cycle will not change. we haven't done estimate of the capital cost of the facility in ages over the amphitheater. the question that commissioner kounalakis was asking about. we do estimate operating pensions half fte. >> would you like -- is there anything you like to interject? this is a project with the port and wita work hand in hand? >> absolutely. thank you president adams and commissioners. i'm excited to be here today too. can't wait for construction. we've been working on this for eight years together in partnership. the way i look at it, we're

taking what you started here and we're going to construct the next phase of it. really take responsibility for that water side for that ferry side that financial responsibility by upgrading and refurbishing gate e which needs it and needed for years. then expanding on it and taking responsibility for managing and maintaining and rehabilitating. it's a true partnership. we really appreciate your executive director of forbes and all of your support over the years. we're excited to -- this will be the hub of our regional ferry system expansion services. we already operate alameda, oakland and services here and look forward to expanding to treasure island and possibly redmond city and berkeley and other places over the years. thank you.

>> napa. >> i had a question. i appreciate all of the discussion on terms of the amount of increase pedestrian traffic. since we're refurbishing first. what the plan for terry -- ferry traffic. since we know the number issue in san francisco is traffic. congestion. when will we see some relief as more capacity comes on with ferries and how many more people will you take on? i imagine it's in phases. this project is in phases. >> it all depends on how quickly we're able to roll out services. >> at least your estimate. there's lots of approvals. what you terms hope to achieve. >> we currently carry 10,000.

and another 20. it depends on which year you're talking about. >> when will we start to see that release? >> once we build the facilities. >> what's the schedule for construction and completion? >> for the new terminal? it will happen over the next two years. >> okay. if we get progress reports, i suggest you give us fill us up. so we can seat the benefits coming to the city. we're all excited. this is something we look forward to. it would be nice to say that we're seeing how that contribution that come through the increase ferry service. >> our first new ferry service is from rich monday --

richmond. that will be the first add of service that will come into san francisco. that's going to start nexu next summer for fall. it will depend on how much money we have and can put together to expand terminal in other places. >> how much of your federal money that you referenced in your deck, how much do you still have to secure? >> we have the full funding to build this gate f and g. >> colleagues anything else? >> no. just that i am just so excited to see this come under construction. it's really going to change the face of this party of the water front. it's it will allow more people who want to get around by ferry to do so.

i was here after the game. we walked down to get something to 8 at the ferry building. there was a long line of people waiting to get on that alameda ferry. there was no shelter. they didn't know. i said to my husband, it's the line probably moves fast. if you're at the end of t you don't know if you're going to get on. increasing the capacity for more people to know that it's a reliable mode of transportation for them. one of the things that i've been hearing, there's not -- the way that people are looking at dealing with traffic in san francisco is not about increasing capacity on the roadways. you really can't do that. it's about finding completely different alternatives for how people get around the bay area.

there used to be a lot more ferry traffic. even 50 or 60 years ago in the bay. than there is now. it's a really pleasant way to get around if you're not a person prone to sea sickness. it's really a way that people used to enjoy getting around. it's just wonderful under utilized opportunity but with this project, it can really have the ability to entirely change the way that people are moving from different parts of the bay area and to do it in a way that is really pleasant and find is beautiful. i think it's terrific. i certainly rely on our executive director's assurances that relative to incurring additional cost for the port, this has been examined and it's clear that there are cost savings for us associated with it. so thank you.

whatever additional new kinds of costs fully understood and we're prepared to take them on. again, thank you for being here for the great presentation and i look forward to being there for the big ground breaking. >> the 11th. >> colleges anything else? seeing none. thank you. colleague all in resolution number 17. aye, resolution 17 passes. >> item 12 new business. >> i have jotted down that we are going to schedule for down the road progress report on ferry ridership and capital improvements. for the next calendar, ideo will be continued and real estate staff will provide more detailed information about the current rates, parameter rents, schedule and will provide validation for the proposal based on market conditions.

that's all i've got. >> i move to reconvene in closed session. >> second. >> all if favor say aye. >> aye. >> oppose. we are now in closed session. thank you. >> i move to reconvene open session. >> second. >> all if in favor say aye. >> all if favor say aye. >> opposed. >> i move to adjourn. >> public comment. >> motion to adjourn. all if favor say aye. >> opposed. we are adjourned 5:35.