completion of the muni bus plaza. we are working closely with our column cover subcontractor. we spent quite a lot of time with him yesterday. we have a supplementation plan ready if necessary, report further next month. column covers are fabricated, it's now the point getting them installed. we are also looking at possible supplementation on interior finishes at this point. i think that's going to be limited in scope, but we are continuing to monitor the progress of those trades and if necessary we are prepared to step in and bring in other subcontractors to keep that work on contract. thank you. >> thanks, steve. appreciate all the efforts towards mitigation. i think you all can appreciate

the tricky contractural straits he needs to navigate to deal with supplementation of subcontractors, so, and we are shoulder to shoulder to ensure that we get as much activity as soon as possible on the site, on the project site. i have seen a good uptick of electricians on evening and night shifts, encouraging to see, and again, you know, an uptick on concrete work and really focussing on cleaning up and buttoning up the perimeter of the site, and get the first bus running in december and then lean into the grand hall and the bus deck as well as keeping the roof park going, which is grading up very nicely. with that, i could take questions or actually, why don't i invite dennis, as he

mentioned, you know, there's a number of elements that we are struggling with, both inside and outside of the project's limits and been a lot of discussion and a bit of controversy around the merge around exit street and the off ramp on to the bus deck from the bay bridge, which is just outside of our project limits, but is a point of discussion that i think bears needing clarification, so, dennis has a good history and background on that, so he'll share that with you right now. >> good morning, directors. per request, i have four slides that will close out the construction update go through with the bus merges. as you see on this picture, it shows this is where the merge area is to get oriented, on the lower deck main line as you are heading back towards the east bay. this particular picture was

taken around 2009. this particular configuration after the mash-up and the reconfiguration, a.c. transit and essex ramps were used until the terminal was put in place and the old terminal was taken down, until about late, 2010. to put it into a plan view, this shows you where we are at, when you have the first and essex ramps, 1ststreet is the number one lane on the lower deck, essex is number two, which merges with the bus ramp merge, which is right there. as i would call it main line lower deck. this picture shows where the tjpa, the bus ramp scope stopped and conformed, on that lower area in the yellow oval, so the bus ramp, the bus ramp project

and the design plans reviewed stopped and conformed well short of this merge, so this merge was in place prior to the tjpa out there at all at this point. >> dennis, can you point out where the caltrans substation is? >> it's way back. i would put it, it's at least a couple hundred feet to the left of where that oval is. and that's, some of the items brought up, whether the busses were on the left hand or the right side, it's so far ahead of this merge that in some ways i think the current configuration takes it to the right and around gives more visibility to the merge, which, but it's almost 500 feet from the merge itself, so it's -- it's a very long distance between those two. but yeah, but -- and that was part of the bus ramp project. so, when, coming, you know, when we started to do the bus deck and the bus ramp testing, that

was done early part of 2017, so about, you know, what is that, nine months ago, we got information that there was concern about this particular merge. that came in around march time. we did the bus testing in april. and then after that, the team got together and determined there was concern. caltrans had some proposal, they proposed a flashing beacon with the loop detection activation. and other elements that related to the striping. there's been many elements that have come and gone that have been in or out of this particular issue. this is all that is in the plan and this is what we are moving forward with at this point. we have had commitment from the deputies of design and operations of caltrans this is

the plan. a.c. transit designer is working on this as well, and it really, it keeps it very straightforward with the flashing beacons activated with the loop as the bus comes close, the beacons will flash and with the striping, whether it's refreshing the, some chevrons or -- all those are implemented and at this point, this is what's going to be in the application to caltrans, and they have committed to expediting, so at this point with conversations between the team, the entire team, at this point i would look at caltrans, a.c. transit and tjpa, that's the plan, that's the scope of it. it will be submitted, moving forward with that design, commit to expediting and to complete it, tjpa will implement it under the construction, the bus

storage facility implement. also i'm working with a.c. transit staff to advance maybe some long lead items as well, too. control, cabinet, poles, maybe released early on from the design so we can procure sooner to ensure this is in place before full bus operations. >> here is what my bus drivers are telling me, because i -- pushing back on them, what's your problem, what's your problem. and they point out first of all that the station, the new station is a block, you know, further west than the exit from the old. so the whole ramp used to just sort of parallel essex. and so they were able, and the cars on essex, presumably, able to gauge the merge a long time in advance, and during rush hour it was important to figure out who was going to make that short, very short intersection

when. and now that it's going, coming from further west and coming in and coming around, what they say is a building, the caltrans substation there, that blocks their view and of the people on essex from the busses, that's what's necessitates this, because the merge distance is the same, the short merge is the same, but don't have the ability to gauge what's happening on essex street until it's very late. and so it's -- that's the problem, but i don't think that's being communicated adequately. from these things, it seems like everything is the same. but what's the same is the last, you know, 40 yards or so is the same. up until then, it's very different ramp, and that's what the drivers are saying makes their job more difficult in

figuring out what's going to happen when they really do have to merge with essex. so i just, i was told to put that out there, so everybody would understand that there's genuine concern and that these guys do know their job and they do remember their job and they are not just belly aching for no reason at all here, and this will help. these loop things will make it a lot better. it's most dangerous, you know, they say, when the speeds on the bridge get up pretty high. ultimately both of them very quickly are having to merge with bridge traffic. >> it's the nonpeak. >> and the bus-essex accident there, things would jam up all the way back into san francisco so quickly. so, you know, i'm kind of in support of -- yeah, i'm glad they brought it up. and i'm glad it's going to be taken care of.

because from what they describe, and i have never driven it, of course, but they do, on ramps, everybody gets on an on ramp, judges the traffic from some time back and the longer they have to judge, you know, the better. we have 23rd avenue thing on 880 that is harrowing right now, you know, that on ramp is boom, you are there. and they say that that's, with the amount of busses that we want to pull out of this place, it's going to be -- it's important for essex street to understand that. >> that's why we are committed -- the whole team is committed to implementing the plan. >> and on the whole thing, with mr. patrick saying a.c. transit is dragging its heels. you have to understand from our standpoints that the building does not just have to be constructed, it has to work. and the other thing is that we have to commit way in advance of that time in which we know the

station will be, for us it's a terminal, it's not a bus stop, a terminal, when the terminal will be working for all intents and purposes so we can do it. that's why we have been saying and warning, look, we have a long training period we need to get our drivers familiar with. i'm glad it's being worked out. but sometimes the pictures on this thing, i was afraid, was giving the wrong impression that a.c. transit is just picked up on some issue that it shouldn't have because it's the same exact thing as it always was, and drivers tell me otherwise. >> thank you. question? >> yeah. >> two schedule questions. one is that we heard a number of mitigation efforts, which sounded good, bringing in a second electrical contractor in

particular. i guess my question is, does the schedule reflect those efforts, and i'm asking because the substantial, overall substantial for the transit center has not changed. so i'm wondering if these efforts are just what we are doing to not continue to lose ground or will a subsequent schedule show us bringing the substantial back? >> yeah, and the intent is to pull us back. thus far it's only so much is maintaining, you know. there's been some activities that kind of during the month pushed out and been pulled back in, so -- the intent is to pull it in as sooner rather than later. however, a pattern over the last few months, is just kind of treading water and holding where we are. i think now that we have kind of gotten through the latest round

of tussle between web core and fisk as to transfer of scope, i think we will see an uptick of rosen activity and expect some improvement on that. >> and just one suggestion, seeing the vertical transportation slip, i know one of the challenges that the industry is having because of all of the construction work is not just on the contractor side, but on the state inspector side, so, i'm sure you guys are already doing this, you may want to be in contact with the state early to kind of preschedule so they don't become on the critical path. >> yeah. >> of the transit side. >> they quite often are a bottleneck. the two agencies that get the bigge biggest gripes are elevator inspectors and p.g.e., and to be

honest, my experience with both have been rather good on all my projects. so, but they tend to always get -- get gripes. >> glad you are committing to bring your good luck to this project on those counts. and my final one, i guess, more of a comment than a question. i just wanted to -- seeing the sfmta, muni full service vertical on here, i was a little surprised at where it landed, and i just want to -- where i had left it with my staff directing them, that we will be ready as soon as tjpa is ready for us, and as greg said, we need certain infrastructure to be in place, amenities for employees and passengers to be in place, we need time for training, but i was last told but my staff that they were told from tjpa, now trending towards

june. and this is showing april, may, again, we will be ready and if you guys can create the space for us to be ready even sooner, we'll be ready sooner, so i just want to continue to be sure it's clear, we will be ready when y'all are. >> and we have had some good discussions with john katz along those lines, april, may, holding a tie of no further separation between a.c. transit and muni being about two-week separation and stand-up. that's driving the may right now. and you know, across the board we are all trying to get to the right place and get the most enriched readiness as possible. unfortunately, you know, some of the activities are pushing us into june and they do kind of

focus on some of the training and testing activities. you know, we still need to get electrical and mechanical in place, so it's a true statement. we are either getting pushed or pulled to june, and as soon as i entered that, people kind of locked on to june. but i'm trying to reinforce to keep our eye on march and drive towards that. >> ok. and just be mindful of the -- i understand the gap in time between the full muni service and a.c. transit being a factor, but also the time between the partial muni service and the full muni service. so we will have our five fulton and five rapid fulton starting in different places during this period, which is not great for our riders, and also our hopeful, or expecting that our riders who are starting to use the center in december won't

feel they are being dropped off on a construction site. so, hoping, expecting the site will be ready and decent for the folks and the operators. >> with security, lighting, the perimeter, that's why we are putting so much focus on buttoning up the perimeter, not only at the plaza but also along all the other streets and trying to, you know, keep the follow on, or the continual construction as much as possible internalized to start reducing the impact to the streets. >> ok. thanks. and great the way you have put together all the schedule elements and the presentation, makes it very easy. >> thank you, good support on that front. >> director gee. >> thank you. backing on director -- thank you the entire team for putting this all together. it becomes clear where some of the issues may be and where they may be lurking. also emphasizes how complicated

this project is and as everyone pushes towards, whether it's march, partial service, whatever the different milestones are, for me, as illustrates that you, i'm sure you are working on this already, but to minimize disagreements downstream is have agreements of when we take control of certain parts of the facility and when the warranty period starts on certain elements. i can imagine probably dozens of different warranty start periods for different pieces of this project, and that is going to be very complicated to come to agreement who is in charge, who takes over what, when, and when the one-year warranty period starts. >> yeah, and that's why i'm grateful that we have online kind of a full and enhanced commissioning program which lends some sanity to all that. and some rigor to it. >> it's going to be complicated.

>> yeah. >> no question about it. good job, thank you. >> thank you. >> questions? ok. go to the next. >> item ten, facility readiness update. >> martha valez will present this item. >> good morning. facility manager. so the areas i'm going to cover are the lincoln tenant provements, lincoln facility maintenance, p.r.i. retail transit and sydney will cover security. so these are just a few progress updates as we move towards construction of the focus areas in late march. to let you know that the teams have started discussions on finishes and selections, meeting with d.b.i. was held last month to work out the permitting process, to enable lincoln to directly pull perimeter starting

with the retail areas. the follow-up is going to be either an amendment of the existing agreement or creation of a new intergovernmental agreement. operational areas, meeting on the layout were held, in particular, equipment, this impacts electrical and the selection of the general contractor was discussed earlier and i'll give you more detail on the information on the r.f.p. on a subsequent slide. so, on facility maintenance, the primary update is not directly related to maintenance but getting the project started, the purchase of domain names. aside from salesforce transit center retail.com, also purchased salesforce transit center.org, .net, and .com, and will be used and working the

appropriate expert to build site specific website. examples of the information on the website for brv, schedule of the park programming, activities that are open to the general public, information on how to sponsor an event, information how to book an event, similarly for pearl, it will contain information about advertising opportunities for the retailers, store hours, events, sales, and then for the tenants, an access, portal access to the work order system. finally, it will also include links to colliers and p.r.i. websites and you'll be hearing from p.r.i. later this morning. this needs to happen soon because meeting, already meeting with potential partners and add ties -- advertisers so we need a site to point them to for information. as we move through each month, this slide will change when contracts are completed.

last month we talked about the architect selected, but this is the financial information on, informing you of the competitive pricing. so m.b.h., commenced work and are moving quickly on amtrak and greyhound. apples to apples pricing comparison was based on a provision of that limited scope, plus a comparison of hourly rates. the second one is the general contractor. it is close to being completed. because each individual construction job will be put out to bid by the general contractor, the price comparison is based on hourly rates, fees, general conditions over a two-month period, with both the architect and the general contractor, the highest rated bidder in terms of quality was also the lowest bidder in terms of price. this is the contract that lincoln has in the pipeline.

this slide will change as contracts are completed. the one in the pipeline right now is the waste and recycling vendor. this one is time sensitive because we need to complete it in order to start working out the logistics of the trash removal equipment in that it has a long lead time. this slide is familiar to you, it's again this will change every month as the, as we get through the issuance of r.f.p.s. the one thing i want to highlight though, lincoln decided to extend the due dates on some of the first batch to november 16th for various reasons. additionally, lincoln is rethinking its small business outreach at the tjap encouragement, so some of that is extending the dates a bit, to make sure we are doing the appropriate outreach. so with b.r.b., the roof park,

focus on a few points. as of yesterday, b.r.v. has identified more than 130 potential sponsor partners. they have contacted more than half of them and have conducted a handful of tours. of these, their experience is about one-third of them turn into actual partners and the list continues to grow every day. some of the tours were in partnership with pearl, colliers and p.r.i. i'm not going to broadcast the names but would be recognizable. over the last month the communication between b.r.v., pearl and colliers and p.r.i., formally structured through monday afternoon transition meetings so that they can share information on the prospective sponsors and retail tenants. this has led the teams to conduct joint tours as warranted, so an example would be a bank interested in putting

an a.t.m. at the transit center, this naturally lends itself to discussing sponsoring park programming, as well as placing ads on the digital screen. in parallel, b.r.v. is refining the programming plan. similar to collier's, detail planning follows the general vision. five main areas of activation have been identified and segmented. they have been mapped. they have been measured. each area was then further sliced into what b.r.v. called nodes, and each has a main activity like arts and culture. this was followed by drafting a programming calendar that indicates activities all day and every day, and they have also drafted an equipment budget which we need to review and then decide how we are going to move forward. on pearl media, i find this one

challenging to talk about. their work is so very technical. i sat in a meeting yesterday where probably only comprehended about 50% of what was being discussed. additionally, to b.r.v. and colliers, they have been conducting tours while wrapping up the sales package and they continue to spend a considerable amount of time on refining the content of the transit information as well as way finding and then making sure the equipment will work and i stated earlier that the expectation is that they will be ready to test in january. the notes on the slide are a few highlights, and i wanted to take this opportunity to recap where we have been and where we are going because we are at a juncture, moving into a

different phase. segmented into four phases to discuss with you. the first is develop, the second is prep, the third phase blast to the market and marketing, and then the fourth phase would be tenants. so just to remind everyone that we had a merchandising vision that was developed. the emphasis is on local with varying price points. the merchandising plan was completed and approved. this entailed the general layout of the spaces and the types of retailers conducive to those spaces. for example, on the first floor, conducive to grab and go. the second floor, conducive to destination businesses. phase two prep, so we got the approval for the lease template, the letter of intent. collier did many tours doing what are called test fits. they bring a business to the center and ask that business

what's going to work and what's not going to work, to drill down into the details of the merchandising plan. all the spaces were professionally measured by the architect, and then line drawings, it's a one dimensional view of the space itself so the prospective tenant can envision what it's going to look like. creation of a website, collier's, transit center retail was activated, gone through two iterations, so more information now than there was a couple weeks ago. there was creation of a video, that's also on the website. also development of a work flow process to inform the tenant of the steps involved. rent parameters, term, tenant improvements, going to talk about later, and the creation of a marketing plan and budget.

so now we are in what i called phase three, which is blast to the market and marketing. what that means is that all the prep work is done and now we are outreaching, or collier's is outreaching to the various markets, the brokerage community, the 85 inquiries in the pipeline, they have to go back and reach out to those. online newspaper publications for advertising. so what's next? what's next is tenants. so, in the -- expectation, we will start to see this soon, generation of lease deals and ongoing conversations with the tjpa and with the board, as deals and inquiries solidify. the expectation starting next month, specific details on that activity in the report through the executive director.

this you have seen before, i don't have a change on this slide. and some of this was discussed earlier. the transit aspect. so the lease for the bus plaza is in progress. completion was slowed with the decision made for ssmta to take the entire plaza and sublease from a.c. transit, on the earlier timeline we showed a completion in about the january time frame. so a.c. transit is now working directly with sfmta for a sublease on the bus deck, along with greyhound and amtrak. greyhound has a draft sublease, amtrak has not, and there is a call this afternoon to figure out what's going on with that. so for the second floor last month, reported the greyhound

lease was completed. we are working with amtrak, they are moving at a slower pace with the initial comments due back to the tjpa this month, and also completion of their lease is going to hinge on the progress between a.c. transit and amtrak sublease, because amtrak would ideally like to present the whole package to their board. and sydney is going to do security. >> earlier i presented the security readiness tasks and timeline and these are currently my highest priority tasks. security guard r.f.p. negotiations are underway, bring it to the board in december. and law enforcement in progress, bring it to you in december. transit center code of conduct is being formulated and i anticipate we will issue the roving security and good will ambassador r.f.p. later this

month. that concludes my briefing. >> questions? thank you. next item. >> item 11 is the presentation by p.r.i. of the proposed public retail program for the salesforce transit center. >> eric -- sorry. derek kravitz will present this item. >> so, good morning. debra kravitz, and thank you for seeing me today, directors. i am the owner and founder of problem resources inc., combined we are p.r.i. been in business 25 years, actually a little bit more. and we are a national and international firm. we have over 25 employees nationally. we have offices in santa monica,

and in denver. under resource, we own and operate the largest ped cart program on the 3rd street promenade in santa monica, we won through r.f.p. in 2004, and denver international airport, the largest airport cart kiosk and pop-up retail program we won through city and county of denver. additionally, we operate as consultants for shopping center, hybrid centers, transit stations, airports, and cities. so, we have done some business improvement districts as well. we are a california disadvantaged business enterprise since the year 2000, and the first acdbe, in the state of california. additionally, we have an s.e.e.

northern california area, a fairly deep penetration. we have worked with, we are working currently, actually with city center, the bishop ranch, brand-new project. worked on jack london square, bay street at emoryville, and a small cart program customized for each merchant but did 15 artisan units. so scattered throughout the project, 15 local artists who got the opportunity to participate in santana row for their grand opening. additionally, we do a lot of platform training. worked with larger companies like westfield and general growth and training there. what we call specialty retail leasing, now pop-up programs, how to do that. yes. so, why a pop-up program? especially here at the salesforce transit center. one of the reasons is to establish a sense of place.

so, we want to create a daily shopping, eating, dining, service opportunities for not just the commuters, but also for the local consumers and residents. we want to attract food vendors and some new retail ideas. we want to do incubation and development of small local businesses and local concepts. become the place to test and launch some new ideas. we want to offer some of the local artists, some opportunities to showcase and sell their wares, and we want to give some of the merchants the opportunity perhaps to go from pop-up, or short-term retailers, to become permanent retailers through colliers. we are going to add excitement to the common area and the exterior areas and create an activation on grand opening day. so how do we do that? obviously partners. with collier's, they are looking at the long-term, permanent

leasing, identifying and negotiating retail spaces, restaurants and services. b.r.v. is doing site events and programming and creating their destination in the park. pearl media is the partnership marketing and interactive brand representation, and for us, we are working on the short-term activations, pop-up and incubation retail, food, beverage and services. so, how does this work? so, we are going to give you an example. savvy natural is a homemade lotion, potion and soap concept. "shark tank" winner in 2016, and they are a bright, relatively new retailer. they sell their products wholesale in other retailers, but are looking to be a retailer. so, for us we are going to try to bring them in as a pop-up or incubation retailer. hopefully they will then advertise their services and

their wares with pearl. with any luck, they will become a permanent tenant when they are ready, with collier's. they have a sophisticated product line advertising and promotions so we think they are sort of ready but not there yet. and then with b.r.v., they are interested in doing a soap making, interactive, whether it's with the children and the children's plaza, or arts and crafts venue. so, how do we create the dining destination, we think is very critical. first with food trucks. three day-part dining, breakfast, lunch dinner and hopefully afterwards as well, with the brew pubs and wine tasting also as pop-ups. we also hope to have mobile vendor units with packaged food, that's something for the park. and perhaps even on the bus deck. that's a true grab and go, perhaps on a single day part. retail units, a lot of brand

retail to capture new customers and for e-commerce to test brick and mortar opportunities. typically they are going to be bringing their own units. as you know, no capital expense, dollars for the salesforce transit center to build the unit so we are looking at the merchants to bring their own. a lot of the pop-up brand retail will be experimenting. how does that differ from what pearl does? typically it will overlap a great deal, but if the merchant wants to sell the product, not just show and tell, probably come through us and work with pearl as well on the media marketing side. brand activation, product launches, and we will determine their footprint, we will make sure none of them are overscaled. fashion trucks, one of the new hot things, it's a way for the entrepreneur to bring their

wares for short-term or long-term. if you look at the picture on the top right, that's actually a fashion truck converted to a permanent retail opportunity. so a lot of these merchants are a step-up from a quick pop-up, and almost ready to become permanent merchants. what we are looking at, and this is just some examples, is for a lot of the pop-up merchants that we find in fairs and festivals, they do not have a set-up yet. they don't know what they are going to look like here. we have been trying to find them some inexpensive but cute and mobile units that they can -- a barrier to entry still stays low. something they can afford, something they can fixture, something they can make their own. company in the process of manufacturing these and we are looking at perhaps some of our merchants able to utilize them. automated retail, we see being a very big component here. everything from make-up, if you

look at the machine with the checkerboard, that's actually unique glow, the store chain and they are selling their $50, $69, i believe it is now, puffer jackets out of a machine. so, you find out it's cold in san francisco and you are surprised? you get off the bus and you are a little chilly, this is an opportunity to purchase an actual retail product. obviously we don't want to do havianas in the winter, but we would something like that in the summer. and then the souvenir concept, if you have flown out of oakland airport, a concept from oakland, and we are talking to them about customizing something for here in san francisco. another immediate customer need and want or even commuter need and want, on the left is something we find very needed and wanted for women who have accidentally trekked through with their high heels. these are roll a soles. they roll up into a pouch and

ballet slippers and you can put them on and walk the rest of the way home or jump on the bus. a lot of the snack machines we are looking at, obviously, are healthy snacks. and that's been a big focus in the automated retail community. they understand the need to kind of replace pringles with something that's a dehydrated carrot chip. and then electronics. you have forgotten your charger, you want a pair of earphones, automated retail is a way former chants to pop up very quickly. amazon has a new concept, it's the amazon treasure truck and they have been taking it to different locations and cities. and we are hoping to get on their list fairly quickly. we have the amazon locker system as well. entertainment, everything from karaoke machines, to virtual reality booths, to photo booths, to charging stations. both sponsored, so in this case, if this is a charging station and a vendor says i want to be a

sponsor, we are going to turn it over to pearl, hopefully we can also charge them rent. farmers market, we think of farmers market can be an integral part of the salesforce transit center in attracting a consumer every single day. they can buy their groceries on their way home. they can find it convenience in front of them as they board the bus. so, next steps for us, we have been in the process of identifying locations, where can we put some of this, where do we have electricity, what's appropriate from a building standpoint, from egress, etc. canvassing area locales, we have been doing a grid canvas. we work with predominantly small local retailers and food and beverage businesses and also done a fairly large push for national and regional merchants so they understand that there's an opportunity perhaps for them as well. meeting with prospects and that's been ongoing.

taking those tours. engaging the local partners, working with b.r.v., pearl media, and of course with collier's, obviously collier's is going to get calls from merchants that are not yet ready for a permanent location, and that's an opportunity for us. and then stage for opening. our goal is on grand opening, whatever day that turns out to be, that we will have as much, in march, i promise, as much pop-up as possible. and then obviously our last page is the schedule, so we have been in process with administration, everything from applications to deal sheets, license agreement, template, canvassing and prospecting. [please stand by]

we will have a much better idea of what will and won't be successful. so you see two activations one is grand opening and we put in ongoing activation because we do anticipate that on an ongoing basis there will always be evolution to this. and then our contract information. >> director, if i could add something, debra promised if we gave her this space, she would populate it. she is convinced she can populate the whole center by march, if we give her this space. >> don't offer her that [chuckles] >> santa barbara and denver. >> thank you for your

presentation. i'm just curious, about opening march 20th but i'm curious about the sensitivity to the vendors who may be here, i think they are expecting people to go through this transit center, if we don't make that date, if we are off a week or two weeks before busses are flowing through and passengers, what is the nimbleness or sensitivity of our pop-up vendors to be there, but no one is there, can we adjust two weeks and things like that? >> actually, director gee, that's a perfect request because we do this all the time. our grand opening dates are ever evolving in every probability -- property we work with. we are extremely up front with the merchants, unless there's a hard fast grand opening date we are clear what it is, if they are hiring staff and purchasing

inventory, those are our two concerns. we don't want them sitting on inventory that puts them in a cash strait, right. we are clear if it's an evolution towards a date. and depending on who they are. for the food truck folks we don't want to reserve their trucks and have them sit there for two weeks with nowhere to go. so we will be in constant conversation with all the different layers of merchants and retailers and services about where that date goes, so they are clear how that will work for them. at the same time, these are merchants who tend to make decisions, frankly, very late. it's one of the things we have tried to warn everyone, but warnings don't usually work well. we don't get license agreements back from these merchants until we are very close to opening. they don't want to give us a deposit, they don't want to commit. it works both ways.

they hedge their bets because many have been through this before and we make sure they are very well aware of what the situation is. as we talk to them now, we give them the march date. we don't wink when we do it but we give them the march date. as this progresses, we will be very clear with them what that looks like. >> vice >> vice chair j. gee: thank you. >> is that too much, my wink? >> thank you for your presentation. question? go ahead. >> i take it, your contract will be with lincoln? >> it is, sir, yes. >> the compensation for your company will be based on like a leasing commission? >> no. so we are a consulting company. and we only get a retainer. and our retainer includes everything we do. expenses included. so we set a price based on what we need to do for a client and that's that. the reason we do that, frankly,

these are small vendors we are dealing with. our goal is to be an advocate for the property and maximize your revenue but at the same time we have to be very careful we are also not putting merchants in a situation where their ability to succeed is jeopardized in any way. we want to be an honest ombudsman. this is how we have worked for 25 years. we are not a broker in this sait waigs. -- situation. we are truly the advocate for this property and the vendor. we may come with deals that are extremely high value and say to the landlord or lincoln, this is why we think this merchant can pay this, and we are comfortable with it, at the same time if it's a small local merchant we want to give them an opportunity and they have to buy and build the unit we say look, they have to spend $3,000, this is how we want to offset that and this is where

we think their sales will be. >> can you speak to what the potential is for this kind of retail at the bus, the ground floor bus plaza level. and i guess on the perimeter of the building, particularly, i guess it's the east end where the bus plaza will be. >> obviously the bus plaza itself is kind of a tight area. we think the opportunity there will be predominantly automated retail based on serving the commuters. we haven't isolated locations over there for anything at this point, but that's our next step. >> i guess maybe i would encourage us to think about the perimeter of the building, particularly at the end where the ground floor bus plaza is. some of those folks will never really be going into the building but there will be a lot of folks moving in and out of the bus plaza, out onto

beel street and the surrounding streets. there will be a lot of foot traffic. >> and we are looking at the exterior areas as well. the interest level has been very high, frankly. so as many opportunities as we can capture, we shall. >> and we will call that first foot traffic will be december, not march. >> chair m. nuru: thank you for your presentation. next? >> item 12, authorizing the executive director to request approval to use interim financing from the cost of base building improvements and market share of the cost and improvement, necessary for retail intercommercial leasing. >> directors, chief financial officer will present this item.

>> good morning, directors, sarah deboard. i will provide you a summary of the staff report we provided you with. so we collaborated with colliers to get information on projected cash flow for base building improvements as well as timing of paying out allowances for tenant improvements. and you can see that split into, over the course of the next three fiscal years. the estimate for base building improvements which are things that are necessary before the tenant spaces could be built out is just over $21 million and the assumption for a 50% tenant allowance is a little over $14 million. as we stressed in the staff report this is not guarantying a particular tenant allowance to any particular tenant but that's what a budget would be for an average of a 50% allowance. we then took a look at different funding options.

and whether or not, one how those funding options would affect operator contributions and whether or not those options could meet the merchandising plan. options 1 and 2, they build out the base building improvements and they offer the full tenant improvement allowance, the 50%. it's just the funding sources that differ. so the rents are not affected between option 1 and option 2 and the merchandising plan should be achievable. when you look at options 3, 4, and 5, basically each option you are lowering the amount of tenant improvement allowance until you get to option 5, you are offering no tenant improvement allowance and colliers doesn't believe the merchandising plan is achievable under that scenario. so then we took a look, we flowed through the dollars through operating projections. option 1 is obviously most beneficial to the transit

operators because it uses city financing for the full amount, both the base building improvements and the tenant improvement allowance. that allows naming rights revenue to be used to offset operating expenses and consequently lowers the transit operator contributions. so an estimate of the total for a four fiscal year period is $11 million for a.c. transit and $4 million for m.t.a. option 2, those contributions go up because the naming rights revenue has been used for tenant or base building improvements. and then option 3, yet up again, and option 3, the rents have been reduced because we are offering less of a tenant improvement allowance, so that, in turn, needs to be offset. we are prepared at your direction to go to the cost review committee next week and

ask for authorization to use city financing for both the base building and tenant improvement allowance and should the cost review committee not agree to that, to ask them to, at minimum, cover the base building improvements and t.j.p.a. would use naming rights revenue to offset tenant improvement allowance. second option. >> remind me, when we had the discussion earlier, city financing was something we said wer going to use? >> we have always hoped to be able to use the city financing for at least a part of these costs. and i believe the city will be amenable to covering at least part of the cost. >> yes, director? >> can you explain, is the idea the more we ask the tenants to

pay for their t.i.'s, is it a delay in when the revenues come in? or depression of the overall, kind of a long-term viability of the retail? i guess i'm trying to understand, is this a one-time issue or ongoing issue in terms of the future revenue potential? >> we have someone from colliers here i can ask to come up. but i think, in general, in particular with option 5, if you aren't offering any tenant improvement allowance, we don't expect we will attract the small local businesses, we would be looking at national big-box type retail. >> so the less you offer in terms of t.i. allowance the less of the local mix we will have and the more it will become like a mall. >> like a mall. >> but you are also, the m.p.v. is dropping significantly as well. and that's based on what?

>> based on having to offer free rent. so you are stretching out the revenue stream further out. >> okay. so there's two dynamics going on. one is just pushing out when we start generating revenue. and then the second, what you are calling the merchandising plan, you are really talking about the mix? >> correct. yes. i would heartily support option 1 for a lot of reasons. do they all then potentially stabilize to the same operator contribution, over time? if it's kind of a one-time ramp up issue in terms of free rent offering to the horrible big boxes we don't want there in the first place? playing out that case scenario? do they stabilize to the same amount of annual --

>> once you -- let's take a look at it from the merchandising plan. if you are having to bring in, if you are populating the transit center with national chains, because they are the ones who can afford to be there, they are building out their spaces in a particular way. so that will impact the second generation space. so you may already have a built-out space but you are changing the nature of what the transit center is. is that your question? >> i think in talking to folks whose approval we need for this, i think it will be helpful to understand if the choice that we are making today affects, how it affects the long-term revenue generating capacity. >> director reiskin, we can show numbers for 10 years. because what you want to see, how much you are losing at the very beginning and whether you recover later on and stabilize,

a ten-year period. >> e. reiskin: i think it makes sense, not just because of the burden on the operators. there's a case to be made there and i want to make sure you all are making the case as strongly as you can to this committee to hopefully get the favorable -- >> yeah, we can expand on that and show the net present value for more years, yeah. we expect the results to be the same, but i think it's good just to show that. >> e. reiskin: is there anything, depending on where other board members are, if there is anything we can do to be helpful in this process, please don't hesitate. >> you are going to pass a resolution directing me to go option 1 so, we will reach out to you. >> e. reiskin: i would move for that. >> i'm really glad to see this finally quantified.

i knew these type of relationships existed. and when i'm trying to get a.c. transit to do is to, as fully satisfy the pent-up demand for transbay services out there. so the more i can get them to say no, put it into the busses, put it into the drivers, because we have to satisfy that demand. which we can't do now because of the streets of san francisco. it just can't be done. but with the new terminal, it can be done. and the idea is that, if we can come out of the chute with a lot of service, and build it up after that, and just keep going, then we can say, okay, we can start a spiral here where we feed the retail, and we start contributing to everything. and if we can get the right tenant improvement mix, for the right retailer, then we can start a spiral, an economic spiral,