>> president brandon: meeting called to order. [roll call] >> president brandon: item 2, approval of minutes, september 11, 2018. >> so moved. >> second. >> president brandon: any public comment on the minutes? seeing none? in favor? minutes approved. >> clerk: public comment on executive session. >> president brandon: any public comment on executive session? seeing none -- >> no public. >> president brandon: all in favor. >> motion to go to executive

session. >> president brandon: all in item 6. pledge of allegiance. [pledge of allegiance] >> clerk: item 7 announcements. announcement of prohibition of sound producing electronic devices during the meeting. please be advised that the ringing and use of cell phones, pagers and similar sound-producing electronic devices are prohibited at this meeting. please be advised that the chair may order the removal from the meeting room for any persons

responsible for the ringing or use of a cell phone, pager or any other similar sound-add prowsing electronic device. announcement of time allotment for public comments. please be advised that a member of the public has up to 3 minutes to make pertinent public comments on each agenda item unless the port commission adopts a shorter period on any item. item 8, public comment on items not listed on the agenda. >> president brandon: any public comment on items not listed on the agenda. >> good afternoon, president brandon, vice president adams, commissioners, i'm corin woods. i'm here to talk to you about cove park today. i missed last week's meeting. i did watch it on tv.

i'm very concerned. we don't want to miss the deadline to move forward. i don't want to miss the bond deadlines. i don't want to waste our opportunity to use other people's money to build this park, which is so important. it -- it's not just about pier 70. and it's not just about being a park. this is part of the overall pier 70 project that we've been working on for what feels like forever, but probably isn't more than 15 years. if we miss this opportunity and can't followthrough with the obligations we've taken on for the voters of san francisco in approving the bonds, number one, i don't think we'll have much of a chance of getting on any other general obligation bond in the future.

and, number two, we have to make sure that the port follows through because we have the seawall bond coming up. that we have to get passed. so please move forward as soon as you can with the project. thank you. >> president brandon: thank you. any other public comment? >> good afternoon, commissioners. my name is katie ludell and i'm here in two capacities. first as co-chair of sea wag. and secondly as former president and current vice president of the south beach rincon bay neighborhood association. i'm worried, like corin is, very worried. i have been out of town and make sure that i was back today because i received so many phone calls and emails from sea wag

neighbors and members and other people who have expressed some trepidation about the hesitation of the port commission to move forward with acceptance of the bid for construction of phase one of the park. i don't understand -- the 10- or 15-year process has included at least 8 or 10 meetings, with every detail vetted. it's important to the port, the city and the entire region, but a critical element of the pier 70 project. the longer this project is delayed, the higher the costs will be. i understand that the phase one bid that the port received will expire if the commission does not take action very soon. rebidding will likely jeopardize any nonport funding deadlines. the sea wag, long before i even joined, has worked for many

years with port staff and community members, on the pier 70 project and planning for the park. it would be so disappointing to sea wag members, to community members, and to san francisco as a whole if the port fails to deliver on the promises made to the community for the park. so i'm here today to urge you to support this project now before bids expire and the project becomes more expensive. thank you. >> president brandon: thank you very much. is there any other public comme comment? come on up. >> hi. my name is catherine demini. i spoke to you a week ago. and i'm here today in support, member of the sea wag as well. as i mentioned before, i have lived three blocks from where

this park is to be located for more than 20 years. and it seems completely outrageous in so many ways that it took this long as it is, but to delay it even further, as we all know, the exceeding and rapidly growing costs of all construction in san francisco, seems though there's a lot of question as to how it is that we got here. foolish, because it's only going to go up unless there's some tragic fall in our economy. in the end, that would probably kill it, too. so now's the time. i understand from the presentations given at sea wag that the bids expire shortly. i have spoken to the leaders of both our community organizations surrounding the cost and the boosters association of potrero hill of which i'm a board member

and both are urgently requesting that this park be built. and i hope you do the -- whatever you need to do to make that happen sooner rather than later. >> president brandon: thank you. any other public comment? seeing none, public comment is closed. >> clerk: item 9, executive director's report. scom >> good afternoon, president brandon, the commission, members of the public and safe. i'm happy to announce that our engineering department received an award this morning. congratulations. this is a new award that d.p.w. has spearheaded along with other chapter 6 departments. we founded the san francisco collaborative partnering steering committee and we had the first annual awards ceremony this morning. this award is to recognize san francisco building and

infrastructure project where city staff partners with construction firms to resolve issues and deliver construction projects, hopefully on time and on budget. there are 18 projects, city projects submitted, from six departments for consideration. our award came from the pier 23 and 19 1/2 project team. this project also won inter national partnering institute award earlier in the year. two awards, one project. the project included removal and replacement for roof materials, hazardous material abatement, restoration of the beautiful, historic windows at pier 23. our port staff negotiated a reasonable price with pioneer construction to increase the scope to increase roof prepares at 19 1/2, which you all approved september 12, 2017. not only was this a really

important objective for maintaining our historic pier, but 2/3 of the project was completed by certified l.b.e. firms. the partnering consultants identified issues quickly and resolved them nethoroughly. they had big issues that came forward in the project and all of them was resolved. the total construction cost was $3,078,000 and all change orders were within the 10% project contingency. without the can-do attitude and partnering, you likely would have seen the project in front of you for change orders above 10%. i want you to recognize the port team. if you can stand, please, so we can clap for you. congratulations. [applause]

very, very well done. congratulations to the engineering team. our next item is fleet week. it's upon us. it's october 1-8. this is when we pay tribute to the men and women in our nation's armed forces. it includes many exciting events, including ships, tours, military displays, airshows, etc. what is behind the scene is it offers an important opportunity for us to test preparedness training and response exercises and this year is a good example of the testing that we will be doing. we will be at pier 96 monday, october 1, with all of our partners, testing a full scale earthquake emergency. the department of defense will be there to do communications testing, point-to-point logistics, with the concept of bringing fuel and goods in after

a catastrophic earthquake. we're excited to do that testing. also to note the humanitarian assistance village is an interacti interactive show and i encourage everyone to enjoy the humanitarian village. there will be free ship tours throughout the week on piers 15, 17, 30, 32, 35 and 50, so pay attention. it's a really fun event. check out fleetweeksf.org for more information on the website. also, we had our pier 70 trust closeout on september 17. this is the second public trust land exchange that the port has done. it's a major milestone in the pier 70 project and comes after 17 years of planning. it would not have happened

without a lot of collaboration with the state lands commission. and that trust swap, it supports all the pier 70 projects. kudos. this started so long ago. it was carried by then-assembly member and transpired into wonderful projects at pier 70. so congratulations to our entire pier 70 team, who brought this across the finish line. kudos to you. we also had the largest ship ever come to the port of san francisco in october, or will come october 3. it will be at pier 27, arriving at 9:00 a.m. it's the norwegian bliss. it is 1,000 feet in length, carrying 4,990 passengers and

1,700 crews. we're excited to welcome it to our port and also excited to see ships of larger volume, of course, it helps our passenger facility charge, which the finance team is thrilled for, and it brings more and more people to enjoy our shoreline and our cruiseship terminal. on a sad note, i would ask that we close the meeting in honor of veronica sanchez. veronica was an employee of the port for 11 years, from 1990 to 2001. she was our government affairs manager. after leaving the court, she worked on many port projects. she was a representative of many of the labor unions.

she was kind, dogged, and wonderful to work with. she was highly responsive and always kept her clients front of hand. she was reasonable to work with and she helps us to move many projects across the finish line. at her time at the port, she worked very hard on the fish processing facility at 45. she worked on the dry-docks and got the ship repair business up and going. the second pier iteration at 70, she worked on the china basin, downtown ferry terminal, pier 80, and public access projects at pier 7 and fishermen's wharf. veronica loves the maritime portfolio. when she left the port, she continued to work hard on our maritime portfolio. she peacefully passed away september 20. she is survived by her husband and their son. she started some time ago a

volunteer organization to help women in her hometown in nicaragua. her family is asking that donations be made for the organization in lieu of flowers, www.ncfkids.org or do so through her, veronica sanchez scholarship fund. we offer sympathies to veronica and her family. she will be deeply missed. that concludes my report. >> president brandon: thank you. >> memorial service is september 28, 4:00 p.m.delancy street fountain hall. thank you, corin. >> president brandon: any public comment on the executive director's report? i would like to ask -- i know that the port is a sponsor of fleet week. can you share with the

commission what the sponsorship activities may be? you don't have to do it right now -- >> in the future? yes, we are a sponsor and there is a website that posts all activities, but i will share specifically what the port's sponsorship activities are. i will do that in writing. thank you. >> president brandon: thank you. no public comment. >> clerk: item 90, port commissi commissioners report. >> vice-president adams: i have two things to report. first of all, i would like to start off with sister veronica sanchez. as a worker, i speak with the common tongue and i wrote a few words. when the death of sister veronica was announced, it struck in our lives, resounding far and wide. i believe we're captains of our own soul.

the last few months of sister veronica sanchez's life, she walked with death, as if it was a companiocompanion. in the end, death came as a friend. veronica called me a few months ago and discovered she had lung cancer. never smoked a day in her life. 59 years old. veronica was instrumental in the james harmon cruise terminal, working with local 34 and sean farley to get that thing when you first go in about jimmy herman. she was very, very close to jimmy herman and she cared about working people and had that spirit that she could beat this awful disease that we call cancer. 59 to me is very, very young. i was really struck when i found

out that she had passed. i know in her life, she tried to do as much good as she could for as many people. m.m.p., i.o.w., working people, she had that connection to ordinary people. she held a lot of 55 different jobs in the city. madam chair, i ask that we have a moment of silence with your okay for sister veronica and then i would like to go into my other part. >> president brandon: can we please have a moment of silence? doipz >> president brandon: thank you. >> vice-president adams: thank you it, madam president. my second one is, to sister

eileen o'malley, we have a saying that goes, "nobody likes us and we don't care." [laughter] and so right now, i'm not as adequate as the rest of my commissioners. i'm rough around the edges. what i do want to say is that -- and i know i'm out of protocol and i don't care, but i just want to say, we owe you a debt of gratitude. i'm choked up about you leaving and there are people that talk to hear themselves talk, but you are a quiet champion that goes about every day. you don't want any recognition and it's always about the team. you put yourself above everybody else and you are that person that sacrifices and puts herself out there. you deserve that. the six years i've been on commission, i've called on you several times for advice and you

have guided me and you will be sorely missed. when i got here, you were here with mo'nique moyer and then inspector forbes and byron and the new team. thank you for all the ups and downs, the victories, but i know sometimes we go through a place in our life where we have to move on and needless stress in our life. we've want to try something different. so i will not wait until a memorial service to memorialize you. [laughter] and you deserve to hear it now and get your flowers now. and i'm going to be quiet because the rest of my commissioners up here have something to say. but i always considered you a friend. i honor you and thank you so much for being a giant, because so many giants walk among us and they don't say a word, but their actions speak for themselves and clearly you are a giant and clearly you will be missed at the port of san francisco.

i wish you the best at city hall. i hope that you keep us as we continue to struggle and do what we do here and we will continue to keep moving forward. we know a good person will replace you. thank you very much. [applause] >> president brandon: any public comment on that? [laughter] does anybody want to say anything? commissioners? >> i think commissioner adams has put it very appropriately. i think that among the three of us, eileen is quiet, but very solid and we know that she keeps us on the straight and narrow. she's nice about it. she does it in a nice way. we will miss you. when i first joined the

commission, we had many legal issues. over the years, they've gotten less and less. the fact that we haven't heard as much from you in terms of issues that have to be resolved and you obviously work as a team, but you are coordinating with the city attorney's office and speaks to the fact that the work gets done. we come out of it well. and we don't have any history at this point where most of the closed sessions were about litigation and it's disappeared and that's a credit to you going forward. the key message today is that you should feel very proud that you've left a very strong legacy here at the port and thank you for that. >> i wanted to wish you, eileen, good luck. it's been a brief 5 months, but you were helpful and patient with me in walking me through

everything. thank you and good luck at city hall. >> president brandon: eileen, thank you very much. i have had the opportunity to work with three deputy city attorneys. and you have been wonderful. you definitely keep us in line and we have so many projects going on during your tenure here that i don't know how we would have gotten through them without you. you have been so phenomenal and we're going to miss you. and this is just a token of our appreciation that we want to give to you. let's all take a picture with eileen, so we can remember this wonderful person.

[applause] >> president brandon: eileen, do you want to say anything? >> i would like to very briefly say what an honor and a privilege it's been to serve on the port council and witnessed how much has been accomplished and the benefit for the citizens

of san francisco. as a real estate attorney, you hope you can be involved in one mega project in your career and i've had an abundance of riches at the port with so many exciting projects as well as other challenges and issues. and it's also been a real pleasure to witness firsthand so many people that are very dedicated to the waterfront and just very passionate about the waterfront and it starts with you guys as commissioners and then port director and port staff and all the many, many community stake holders and people like veronica and corin and then most of all, my co-deputy city attorneys on the port legal team who are so talented and hardworking and dedicated and just thank you for all you have done these past six

years. i wish you all best of luck on all that you've done on the head of the port. thank you. >> president brandon: thank you. [applause] commissioners, any other? >> i'll say something. i just -- because we did have two members of the public, values members of the public, talk about one of the previous topics at a commission meeting and i will hand the mike over in a bit to commissioner brandon, but i just want to say that, i think there is no question that we are going to do the park. we had some questions about how the money would be spent and what it will be spent on and how much money do we have, but i

want to just tell you, we are 100% supportive. our communication, even though i read the minutes and i don't know how the public got the impression that we're not behind the park. we are definitely behind it. i think i speak for all the commissioners, and commissioner brandon will speak more in detail about that. it's near and dear to our hearts. i didn't want it to go without saying. we had some questions about where we will be spending the money, but the park will be done and we will not miss that opportunity. i wanted to say that on record. thanks. >> president brandon: i concur with commissioner woo ho. the commission from our statements two weeks ago is 100% behind the development of crane

cove park. we've want to be sure it's done in a fiscally responsible way, which is why we're asking questions now and not later. we have a certain budget that we can work with and we want to make sure that we can provide a crown jewel of the park within that budget. there is no doubt in our minds that that park is going to happen there are still questions that can be answered before we move forward. thank you. commissioners, any other -- anything else to report? commissioner adams? >> vice-president adams: i would like to follow up with president brandon and what commissioner woo ho said. this commission is very well aware that this park is the people's park. it belongs to the community, not the commission. it belongs to the people. we will get it done. as commissioners, we have to do our duty and we'll do that to make sure that everything gets right. we know this park will have all

the bells and whistles, but we also have to make sure that things get done right. so if we seem to be looking at things, this is our responsibility. this is why we were appointed by the mayor to do our fiduciary responsibility to the community. it will get done, but we're 200% in. thank you. >> clerk: item for consent calendar. 10a, request authorizization to enter into grant agreement with successor agency to the former san francisco redevelopment agency for the port to accept and expend $9, 760,000 in successor agency for the bond proceeds for construction of mission bay ferry landing project. 10b, request authorizization to modify construction contract 2783, pier 31, utility and restroom project to extend the completion date. >> president brandon: can i have a motion?

>> vice-president adams: so moved? >> president brandon: any public comment? seeing none, all in favor? approved. >> clerk: item 11, request approval of first amendment for exclusive negotiation agreement with tzk broadway lease and development of 180-200-room hotel and dinner theater and 14,000 square foot public open space and ancillary uses at seawall lots 323/324 and portions of unimproved vallejo and davis street right-of-ways on the west side of embarcadero at vallejo street. >> good afternoon. i'm with the real estate and development commission of the port. i'm here to request your approval to the exclusive negotiation agreement between the port and tzk broadway l.l.c.

recently on august 14, we came before you to give you an update on the development and we discussed the d.n.a., as indicated on this slide. and we discussed some of the conditions. we had the e.n.a. to discuss and the few that are remaining to be achieved and we indicated that in true compliance with the e.n.a. and indicated that the development costs have increased to $135 million. and we indicated that the e.n.a. has extend ed the authorization

provided on the e.n.a. will expire on november 4, unless there's a request for extension. as indicated on this slide, this is showing the benchmarks that developed to date. on the e.n.a., as i indicated, it's a one-year term. the reason it's taken this long, many of this was achieved back in 2016, was the entitlement process and a number of development tasks that need to be completed. given the nature of the site and given its location in a unique,

urban setting. the embarcadero promenade, waterfront district and gateway location, it took a while to get a consensus on what we call project description, win is the basis of what needs to be done. they're making progress, but all the issues have taken longer than anticipated. that was the reason for the extensions provided to the developer. the remaining to be developed the key benchmarks. it's 90% completed and projection is that you will get it done by march, 2019, included in the strategies is finding financing, as well as meeting

all the city department requirements like utilities. evaluation is essentially completed. before we come for approval, there are a few things that need to be done, including approval from historic preservation and planning with the conditional use requirement. this project is moving on multiple tracks. and it includes the ldda and the lease as well as the transactions that are required, as indicated on the slides, 85% completed and we're hoping around february, it will be 100% completed. we'll come to you for approval of the documents in the so

supervisor's approval of the lease the proposal before you is a request to provide additional 6-month extensions on prior conditions. we're hoping that the developer would be able to complete it by may next week, which would be the six-month extension. however, entitlements and many of the issues that are not completely within the control of the developer. it's the reason that the developer is requesting one additional six months to the six months we're recommending. so total of two six-month extensions so we can get the project going without having to come back and ask for a six-month extension the fee for the extensions remain the same.

and the schedule will reflect the bench marks and the intentions of the e.n.a. would be the same. on this slide here, looking at the intention to get done within the six months. based on the reasons i provided, that the developer will being moving very quickly. on that, this is recommending approval of the two six-month extensions that we're requesting. thank you. the developer is here to answer any questions you have.

and, of course, our legal counsel is here, as well as mike martin, deputy director, guiding us through this. thank you. >> president brandon: can i have a motion? >> vice-president adams: so moved. >> president brandon: second? >> second. >> president brandon: any public comment on this item? seeing none, commissioner gilman. >> commissioner gilman: i want to remind the commission that i need to discuss that jaywalk jay wallace, who is a principal, served on the committee that employees me. thank you for working with the developer, at least for me and my frame, this is per-par. i've seen so many projects that are moving toward ceqa and take

years to accomplish. i'm very supportive of approving the extension and a second, so there is no further delay coming back to this commission. i think as many people know, building in san francisco is hard. getting through ceqa and planning is hard. to me, this seems typical. for me, it raises no concerns. >> president brandon: thank you. >> commissioner woo ho: no further questions. >> commissioner makras: no questions. i support the motion. >> vice-president adams: check. >> i just want to say one thing. your words about veronica were beautiful. i've known veronica as anybody as long as anyone.

and the fact that you are leave, i remember you from many projects. thank you for veronica and eileen's words, because sometimes we forget in the battle that we find ourselves in too often that they're really people's lives involved and veronica sanchez was a beauty. i mean, it was one hell of a lady. thank you so much for that. >> vice-president adams: tell us what is going on. i'm supportive, but i want it hear from you. sometimes developers come and staff makes a presentation, but you are a developer, i would like to hear from you. >> absolutely. thank you very much for the time, commission and commissioners. we have been working hard. i want to first of all say that the port staff has been extremely helpful and the delays, if you want to call them that, are not at the foot of the port staff. it's really planning has taken an awfully long time to do the necessary work that's required under the california environmental quality act, ceqa.

we sit in an historic district, northeastern waterfront. we had a lot of historic work that we needed to accomplish. transportation is an issue. we have an extensive transportation study that's been done -- noise, air, cultural resources, archaeological, 10 different studies we needed to do. it's culminated last -- i don't know -- friday, we submitted what we hope is our final version of the initial study and declaration to planning staff. they've reviewed it three times. they gave us their final comments in their third revise, which we've implemented every one of them. the results of the initial study and preliminary mitigated declaration, which we hope will be published in the next 5, 10 days, is that the project does not have a significant impact on the environment, if we implement a few mitigation measures, like

construction noise, construction dust. theres with not one single mitigation measure we were required to do in order to qualify for the mitigation that was unusual in san francisco. every project along the waterfront and throughout the city, has the same requirements. so long and short of it is, we are right on the cusp of having our publications, so that once we get the initial study preliminary mitigated declaration published by the planning department, then there's a 30-day comment period. planning has to respond to the comments. if there is no appeal, we go straight to the historic preservation commission for approval of a certificate of appropriateness. if there is an appeal it, has to go back to the planning commission. we would hope they would deny that. and then we would go to the

historic preservation commission. long and short of it, we're hopeful that every 30, 45, 50 days, there will be another vote, as we go through, march through the process. that's the normal. noticing periods and so on and so forth. once we get the study published, we have a track that we can say, okay, planning, you have 30 days for the comment period. and 15 days to answer. and 30 days thereafter and then sending it over to the next body that has to hear it. it will come to you february time frame. we're not in control of that. so we're really excited. we brought in, as we told you at the last meeting, commissioner adams, you were not here, but we told the rest of the fellow commissioners, presidio hotel group here with us. very experienced, local group of folks, get the dynamics of

working in san francisco. our relationship with the unions remains super strong. our relationship in the community. haven't seen anything. it takes too long in san francisco, if i may say so, unfortunately. we spend a lot of time analyzing things. boy, i was talking to corin out in the hallway. she and i were on the waterfront land use plan together in '89 or whenever that was. to hear that crane cove is still going on? it's a beautiful project. >> that did not start in the '80s. [laughter] >> must have been early '90s. >> no. >> maybe not. it's been a long, long, long time. so that -- we're excited. we're keyed up and ready to go.

there's not one moment of hesitation, there never has been a moment of hesitation. it just takes a long time to get the work done. >> vice-president adams: thank you. appreciate it. >> thank you. >> president brandon: any comments? >> vice-president adams: i'm supportive. i just wanted to hear from the developer. i'm good. >> president brandon: the reason we didn't go over the overview is because we did it at the august 24 meeting. so this is just -- everything is the same except for at the august 24 meeting, you asked for a six-month extension and now you want a year. [laughter] but because everything does take a long time here -- except at the port -- i think we all agree that two six-month extensions are in order just in case.

with that, all in favor? resolution 1853 has been approved. >> clerk: item 11b, request award of restaurant opportunity at pier 33 1/2 located at bay street and embarcadero to anchor hospitality group l.l.c. and authority to enter into exclusive negotiations with anchor for a lease subject for commission approval. >> jay edwards, senior property manager. i'm here today to follow up on our august 14 presentation, where we made in our staff report where we completed the r.f.p. and heard a presentation from the respondent. they will be available to answer

questions, if need be. so we are here today to request authorization to award this restaurant opportunity at pier 33 1/2 to anchor hospitality group l.l.c. and obtain the exclusive negotiations for a new lease. as you recall, this is the site, it's been an ongoing, operating restaurant from many, many years and we're hoping to continue the same use for the site and we've conducted an extensive review of the site and it will require significant capital investment, which anchor hospitality has been prepared to do. and that's in order to not only just get open, but to croat the vision for the new restaurant, which i believe will be called maya. so this was the request proposal

that the commission authorized back in may, may, 2017. and we prepared a comprehensive r.f.p. that covered all the topics that you see in front of you, as well as the opportunity to overhear the site, site information, key lease terms, submission requirements, evaluation of word process and condition of necessary approvals. so we went through a selection process, which initially, we were going to use and utilize an advisory panel, because we had one good response, not multiple. did not convene a panel and instead engaged century urban to conduct its due diligence of meeting all the requirements in the r.f.p.

so they prepared an extensive report that is attached to our staff report and went through the findings that i have here in the next slide. so based on the review of the information provided, by century and port staff, we've joined the conclusion that the minimum requirements ha of been satisfied. the proposed capital budget of $1.8 billion should be sufficient to cover the project costs. century urban believes the tenant has demonstrated capacity to fund project costs. the tenants submitted 5-year pro forma and expense assumptions that have been adjusted by century urban to reflect their estimates and

assumptions, so we brought them in line to vet what they're proposing here and feel it's a good proforma. as you can see on this chart in front of you, this graph, that the 10 and the will -- tenant will be paying base rent, but based on sales projections from anchor, there will be significant percentage rent coming to the port as well. so in addition to being a qualified proposal, the staff believes that the design, financial investment and commitment to develop a robust plan represents an attractive addition to the port. so these were in the r.f.p. it's been agreed to by the

respondent and this is the basis of a new lease. we've out lined a schedule here to move this forward, based on approval today here of the award and that we would, of course, be back here for the lease approval here in november and then we go to the board of supervisors shortly thereafter. with that, it concludes our presentation. thank you, commissioners. >> president brandon: thank you. can i have a motion? >> so moved. >> second. >> president brandon: is there any public comment on this item? seeing no public comment. >> commissioner makras: i'm supportive of the motion. i have no questions.

>> commissioner gilman: similar. i'm supportive of the motion and don't have any questions at this time except i'm happy to see the space activated since it's a dead zone right now between the alcatraz landing and pier 39. so it will be exciting it see it get up and running. >> commissioner woo ho: same here. i'm supportive. i don't have any further questions. >> vice-president adams: i'm very supportive. i used to go to the butterfly and we got pier 27 down there with the cruise terminal and we got queens down in there and we had a new restaurant coming in and we need to have that life, especially with the city with over 30 million visitors and tourists a year. we need those kind of restaurants and want that action and want a lively waterfront. is i'm glad someone is venturing out with courage and vision and

being bold and i am very, very supportive of it. it will add more flavor to what we need and we need a really, really good restaurant down there that people can get off the cruise terminal and walk down, boom. anyway, i'm supportive. >> president brandon: thank you. this is exciting that we'll have a new restaurant on the waterfront. can you tell me -- what is the investment in this facility? >> there would be investment to bring into code compliance. it's a complete redo of the existing restaurants. there was a numerous noncode compliance through time and through wear and tear if you will that requires a significant investment for a new layout, commissioner, where we'd have -- where they would propose to have, i think, last time they spoke about changing the bar area to the front and really just changing the whole concept and vision as you walk in.

and, unfortunately, in this day and age, it requires significant financial investment. >> president brandon: approximately how much will be invested? >> $1.8 million. >> president brandon: and then there's -- that's just -- and there are no credits? >> there is a rent credit for construction time but not additional work. >> president brandon: so no rent for the first 12 months -- >> up to 12 months. the earlier the restaurant opens -- >> president brandon: what is the base annual rent? >> the annual rent is roughly $200,000, i believe is what the slide had. >> president brandon: it has per square foot. >> roughly $16,000 a month. i will tell you exactly.

$203,730 is the annual base rent. >> president brandon: great. okay. those are my questions. commissioners, all in favor? resolution 18-54 has been approved. >> clerk: item 12a, update on material changes to the port's biennial prauting and capital budgets for fiscal year 2018-19, 2019-20. >> good afternoon, commissioners and director. i'm margaret doyle budget analyst. and i'm here to present the update to the final approved budget for 2018/2019, and

2019/'20. this item showing changes made to the budget since last approval in february. in february, the port commission approved the port's face y'all year 2018/2019 and 2019/2020 operating budget. and then that was presented to the mayor's office. in may, the mayor's office presented the budget to the board of supervisors and the board of supervisors budget and finance committee reviewed the budget. on august 1, the budget was approved by the board of supervisors and the mayor. so as you can see here, overall, there were some changes in both fiscal years to the budget. in fiscal year 2018/'19, there was a reduction to $191.3

million. and in 2019/'20, reduction of $1.7 million, from $161.3 million to $159.6 million. so this shows the overview of the source and changes. all of the changes were in ongoing sources, on the sources side. so our operating revenues increased. this is work order recoveries. our calculation decreased in fiscal year 2018/'19 and $1.9 million in 2019/'20. it represents changes to our final adjustments. and our south beach harbor revenue increased by $100,000.

while there were no net changes to our sources, there were some changes within the budget in the first fiscal year. so our request for general support, general fund support, was rediscussed by $1.5 million. and we requested $6.5 million for seawall funding and received $5 million. this reflects a new $250,000 work order recovery from the capital work order process from jefferson street, which there will be a presentation on after me. and this is reflected as an expense line in the budget. the budget reflects a $650,000 anticipated grant from the conservancy to support park improvements. additionally, the budget reflects $735,000 in bond interest earnings from port revenue bonds and general

obligation bonds. the changes on the operating side are equal, so we see a $1.3 million reduction in fiscal year, 2018/'19, and $1.7 million reduction in 2019/'20. we see a reduction of $475,000 in 2018/'19. and so this reflects $700,000 decrease in operating expenses in fiscal year 2018/'19 and $1.5 million in operating expenses in 2019/'20. and this is cuts made by the board of supervisors. the board of supervisors cut $100,000 in our programatic project. lastly, spending projected to increase $400,000 in 2018/'19.

next, our capital spending, is projected to increase $700,000 in fiscal year 2018/'19, with no change in '19/'20. this represents a $500,000 increase in port capital appropriations, $1.2 million reduction in citywide investments. that's general funds and work order recovery. again, $650,000 grant from coastal conservancy and $735,000 in interest earnings and funding on port projects. lastly, the port's capital and reserve decreased by $1.6 million in '18/'19 and $500,000 in