innovative solutions is how we are going to create a city that is healthy and is thriving. i want to thank all of you for the work that you have done and will continue to do to get us to a better place with all of these leaders, all of these amazing people, all of these incredible minds. i know it's only a matter of time before we get to that better place that we deserve to be. thank you all so much for being here today. [ applause ]. [♪]

>> good morning, everyone. i will call to order the transbay director's meeting. can i get a roll call? >> director brinkman is joining us as an alternate. dr. haney is in on route. [roll call] mr. chairman, you do have a quorum. can i call you next item? >> yes please. >> item 30 is communications. i am not aware of any. seeing none, for -- item four, board of directors' new and old business. moving right along, item five, executive director's report. >> good morning. i'm pleased to provide you an update on the first three months of operating the transit center.

as you know, we open the transit center to the public on july 1 st and resumed full bus operations by august 12th. i'm happy to report that with close coordination and partnership with the transit operators has resulted in a good experience for transit riders. peak hours are being managed well and transit riders are now accustomed to the transit center and navigating the bus plaza. we will continue to work with partners to improve the experience of the transit riders , including improving wayfinding signage as appropriate. our security personnel and ambassadors have reported only minor issues and continue to be welcoming and reassuring to transit riders and the general public. another milestone for transit operations was receiving greyhound and moving operations onto the bus stick next week, september 18th. in addition, i'm happy to report will continue to see a steady

and growing use of pop up retail , specifically the food trucks and the bar on the rooftop park. it has been very vibrant up there. the rooftop park is well attended, especially during lunchtime on weekdays. as anticipated, we saw a slight dip in terms of one school started and on cold days. we have introduced a variety of programming that is attracting i diverse crowd to the park and everything from programming from infants, toddlers, and senior citizens. we have also greatly increase the number of variety of free tours throughout the center, which is attracting people from all over the bay area. in addition, we are working with the travel industry to continue our work to make sure the transit center is a tourist destination, as well. we would like to see increased usage of the park especially during weekends and after hours.

i would like to now update you on our work to the retail spaces on the transit center. we continue to see an increase in the retail spaces with the remaining 15 spaces having one or more interested parties. we currently have four leases encompassing five spaces and serious negotiations. i am pleased to present to you a major milestone for our entire retail leasing strategy, the leasing of the rooftop park restaurant. approval of this lease will result in the transit center being 60 9% least. it is consistent with our financing -- financial plan and will result in bringing more people to the transit center while bringing a variety of points for visitors and creating a healthy and vibrant night and weekly presence. we will discuss the terms of the lease later in the agenda.

moving on to phase two on the downtown extension, this past month, i visited our state delegation to update them on the reopening of the transit center and our plans to be shovel ready for the downtown extension in the next two to three years. our -- i visited senator scott weiner and assembly members. the update included our effort to complete the 30% design and update our cost strategy and risk assessment, value engineering, delivery method, budgeting, funding and our acquisition plan. we discussed, including the downtown extension in the bay area measure -- [indiscernible] -- all audiences were supportive everyone we talked to realized the downtown extension is a linchpin for bringing high-speed rail to san francisco and realizing the second crossing to fruition.

we conducted a peer review. the peer review is expected to be completed in the next few months or few weeks and resented to the board in october. i have already asked them to present the final report to the board in october or november when the report is completed. finally, i liked update you on our office move to the transit center. tjpa staff will be moving to new offices in the transit center above the bus plaza next week. the entrance will be from the beal street elevators. [indiscernible] there will be no impact to the public. please come and visit us. [laughter] finally, you have before you the quarterly financial report. when you come to visit us, please do it two at a time so we can honour the --

[indiscernible]. [laughter] this completes my report. >> next item. >> all right. moving to your next item, item six construction closeout update >> good morning, directors. i'm the director of design and construction for phase one. as you might have noticed, dennis did not join me today. our progress voters were beyond that. as i mentioned last month, we are winding out of phase one and trying to clays -- pays out the punchlist, as well as close at the contracts. just a quick update on the closeout status, one modification we have been reporting or following along the closeout of 47 subcontracts with web core.

it came to my attention there were actually two relocation utility contracts that were also -- we should be following so we are up to a total of 49 subcontracts that we are pursuing to get to closeout status. where we sit right now is that 22 trade groups are at various stages of final, whether it is in with review with our folks, but it has been submitted and requested, and through the review and approval process. thirteen trade groups are expected to go to dispute resolution. we should be stepping into our first dispute resolution advisor meeting in the 1st week of october with mcguire and hester and web core to discuss the situation around the path and associated claims that have

developed around that. so i'm glad we are starting to see a little bit of momentum towards marching through the dispute resolution. as i mentioned, there's 13 trade groups in that category, and we have actually closed out 14 completely behind us. with respect to -- [indiscernible] -- we have a fairly good momentum in the last month with closeout of -- closeout of status. we did nine and finals last month. i failed to mention that earlier and then the remainder of the 22 are in the final closeout review and sign off. the contingency tracking, most

of the spin down on contingency, the 1.5 of construction contingency and the zero-point to million of contingency is pretty much a byproduct of closing out and resolving issues most of the field work is done except for punchlist items. this is just catching up or closing up issues that have been going on with review and closeout. no good moves there. the -- nothing new. along with the budget status overview, a little bit of movement on the overall. we saw that the current budget remains.

the expanded amount sits at 2.16 , and we saw a little bit of movement of contingency to address legal costs with the extended time that we mentioned last month, as well as a little bit of 301 mission, saw some movement of money, but the bottom line current budget does remain as it has been with the estimated at completion of having a program reserve of 22.3 that's pretty much it. we have been striving to close out the punchlist by the end of september. it wouldn't surprise me to see a little bit of activity leading into october, but that effort is winding down, and then i think in the next couple of months,

mostly activity will be all around getting through d.r.a. and closing out those projects, and the ones that don't go through the d.r.a. will have a longer path and we have yet to see where that takes us, but thus far we have had very positive, or at least not too contentious of of a back-and-forth with trying to resolve issues and taking a very bit -- very business approach to it, and sort through the issues. with that, i can take any questions. >> i have a quick one. >> the closeout, does not include all the work that has happened with -- [indiscernible] -- is that all wrapped into this >> yes. >> everything is included? >> some of the change orders have been unilateral credit to account for what was expended for the effort, and those are

all in the mix now. if you recalled before, we're isolating and identifying those that were associated with the girder and now those are all in the mix towards closeout. >> thank you. >> thank you. >> i can call your next item. >> yes, please. >> item seven is the facility operations update. >> good morning, directors. i am the tjpa facility manager. i will give you a general operations update. sydney will provide a security update and then i will finish up with the retail improvement update. on this slide, i was going to highlight a couple of things. the lincoln administrative team

moved into the transit center this last month. they are located on the b1 level adjacent to the security operations center. they are now colocated with the cleaning team, the engineering and maintenance team and security personnel. what this does is makes for a robust on-site presence and collaborative managing of situations. and of course, when we move in, we will all be together. greyhound has informed us that they are moving back into the transit center on september 18 th, next wednesday. we are happy to welcome them back. with regard to amtrak, my understanding is the negotiations continue and that they are a couple of weeks away from wrapping up. there was some insurance information that the tjpa needed to provide and that was provided a few weeks ago. at this point, i don't have a date. and i think i may have mentioned

this last month, but the temporary terminal is currently now fenced off with the exception of block two. with the digital media, pro continues to look for additional revenue sources other than digital advertising. this last month lincoln was presented with a list of recommendations to review and act upon. examples are using one of the vacant spaces as a white box for pop up retail use. they proposed adding another digital screen to the grand hall , and they are currently working with be r.v. on what they are calling watch parties at the at the theatre for major sports or other events and they continue to collaborate closely. we are expecting lincoln will be coming back to -- with recommendations on moving forward on these within the next month or so. with the park, activity remains

robust with clear patterns as to favourites developing. anything with make music is popular, the bar is extremely popular, especially on days like today. exercise classes. this week, be r.v. reported there were over 100 participants in one of the exercise classes. toddler tuesdays remain popular. aside from that, they report that they received daily inquiries into use of the park for film shoots and rentals. these are all followed up on -- some will turn into revenue-generating programs. these inquiries are also shared with pearl on a weekly call to review which one of them have synergies for potentially tying them together into digital advertising. with the pop-ups, it continues to be an evolving program. we have two new vending machines in the grand hall. one is gourmet chocolate and

benefit cosmetics. the concept is to supplement the permanent retail, which is mostly food, with easily accessible products that are conducive to filling commuter needs. you can imagine people running to and from their buses, they occasionally have to pick something up and we want to be able to support that. with the shoeshine vendor, the individual with whom we already have a license agreement with is coming back. he is working on staffing and we hope to have him back in the grand hall within a couple of weeks. and then something new this last month, lincoln piloted having a guitar player in the grand hall. it went well so we will continue to seek soft entertainment to enhance the commuter experience. >> good evening -- good morning, directors. these are some of the security metrics that we track. as you know, we follow federal regulations and permits only

service animals on the park. dogs or pets on the park have decreased greatly due to increased signage and also to target training for the park and bassett does to inform visitors that pets are not allowed. we know average four dogs per day on the park. we also track vehicle incursions on the bus ramp. thus far 100% of the vehicles have been turned back at the midpoint of the bus ramp. we only had one unpermitted drone this past month. commercial drone operations are permitted on a case by case business by our park operator and they can call the f.a.a. regulations. >> i will move ahead on the retail leasing. >> can i ask a question? initially when we were putting together the plan, we have a

part with the san francisco police department. how is that working? is everything going okay? >> it is going okay. they fully integrated with the security operation and we are fully integrated with them. anything i've talked about here they have responded to, as well as security. >> things are going as planned. >> yes. >> if i could, i appreciate you reporting on the vehicle incursions. i appreciate your stopping them all, but we are we studying? is there signage or something? >> yes, in fact, dennis, if you will speak to that. >> a very timely question because just an hour ago, i received the plan from cal transfer for additional signage at the fremont ramp. >> thank you. >> i'm going to go ahead with -- excuse me.

the interest remains very high. i will talk a little bit about it on the map slides which are following. they are all in various stages of negotiation, and we are targeting to bring one or two leases to the board this next month. the table is the status update on the lease signings to date. it includes the rooftop restaurant lease, which brings total percentage of square footage, which there are leases to 69%. this is the ground floor. the purple shaded spaces are those in which there are lease commitments with the logos of the businesses indicated. the green are those with interest on various stages of negotiation. note that the ground floor is now over 50% and in terms of the

number of spaces least, so we have 11 spaces that are leased as compared to eight spaces unleased. on the second level, we continue to have interest from medical services. the one that is interested in the location that is labelled medical is a consultation office , and that one is moving ahead pretty well. hopefully we will be bringing that one to you soon, too. this is on the park level. i will talk about the pad. although there are interested parties, the popularity of the pop-up bar creates a vibrant, open ambience, so we are going to leave it alone for now, and then revisit this in the next few months or so to make final decisions. as far as the restaurant, this

is a new lease that will come to you for approval a little bit later this morning. i will be discussing it in greater detail at that time, but briefly, it will be styled as california japanese, and name and opening date for the restaurant will follow in early 2020. with regard to tenant improvements, last month i reported that the kitchen exhaust system needed reworking in order to have the correct configuration and capacity for type one tenants. those were the tenants that generate smoke and grease. for example, per diem and charlie's. but to take a step back, our general understanding and why this work is necessary at this time is it is to think about the transit center and having been designed over ten years ago, with that the original thinking that the second floor would be a food court with retailers on the

ground level. since then, things have changed. the market changed. as such, we're working to reconcile what was delivered, to what is actually needed. back to the exhaust system, in the last month, there was clarity on understanding that the east and west sides need different approaches. the line of demarcation between east and west is sure ally. the businesses closest to secont side. on the east side, the path to reconfiguration of the system is clearer, so work is moving ahead with finalizing design and moving into engineering. a schedule on completion of this work will be forthcoming in the next couple of weeks, at which point we'll be able to figure out build out schedule impacts, if any. i say if any because while lincoln is working through addressing the exhaust system reconfiguration, tenants are in parallel working on design of their spaces and hiring contractors, et cetera. additionally, once construction

is completed with landlord and tenant, tenants are not immediately occupying the space. some time is taken to hire staff and set up the space. an example, even though they are not a type one tenant, his on-site dental. the construction is complete at the end of october, however their opening date is december. as such, the schedule will be clearer this is the last slide. it is intended to be a snapshot of targeted store openings based on what we know today. the top box is the current fiscal year. it rolls into the bottom box which is the 2021 fiscal year. this is a work in progress. again, some of which will become clearer over the next couple months as stated. the store openings this fall are not impacted by kitchen exhaust work, and note that all the stores are shown open by the end

of the 2020 calendar year. that is my report. any questions? >> no questions. that is good news. >> next item. >> next item is item h., the system -- the citizens advisory committee update. i don't see derrick. there he is. hello. >> good morning, directors. i'm. holt -- i'm. holt. one question -- one second. [laughter] thank you for continuing to hear

updates from the tjpa community advisory committee. we appreciate the updates from the tjpa staff, including chris and martha, sidney, dennis, and others. you're probably like the, members and myself. like us, we have taken a stroll through the transit center, bus deck, and rooftop -- rooftop park. you're probably note is clear and increasing quality of good signage, increasing numbers of writers that are -- they know where they are going to get on the buses. the transit center staff and ambassadors are answering questions. the transit center security personnel, or even an occasional san francisco police officer walking around ensuring that things are safe and secure. the rooftop parkas being utilized by community members and nearby employees of companies surrounding the transit center. signage indicates upcoming scheduled activities as well as rules and policies regarding the

use of the policy -- of the transit center. things are going great. things are smooth, efficient, professional, and secure, and there is significant progress with retail leasing. overall, the c.a.c. and members on the public have a lot of positive comments about what they are seeing and hearing, and with a few constructive remarks that were well received and noted by the tjpa staff on our meeting on tuesday evening. we so want to make sure the appropriate parties are held responsible for the delays, but we are glad the transit center is moving forward, and san francisco is a significant regional base for transportation in northern california. overall, the c.a.c. concludes there is significant transit center momentum. the transit center reopens and they are moving forward. they are increasing political alignment. a study had positive results and the in the e.i.r. study was completed.

we appreciate the messenger. we had a spirited and impassioned discussion by the c.a.c. members and concerned members of the public that attend ever c.a.c. meetings. as you can imagine, the topic is moving forward with voter approved d.t.x. i think last month i was out of town and we heard from our vice chair. you probably heard his genuine passion based on his experience commuting from the san jose regional area to the san francisco area for work. what he said in his feelings, his thoughts and experiences are real. not only his experiences, but the experiences of his family members, his friends, his coworkers. so this affects the whole region , not just san francisco, with people but people from all over. this challenge that the d.t.x. would alleviate affects commerce

, and the ability for everybody to enjoy the san francisco and all that this region has to offer. the d.t.x. project contributes contribute to the goals of vision zero. based on increased use of public transportation. there will be fewer 20 pedestrian industries by cars and trains. the c.a.c. believes the d.t.x. can help san francisco shine brighter and as a city being a good steward of the environment and taking care of the residents in multiple ways. we are the c.a.c. we are aware there's escalating and rising significant costs and the time goes by without progress on the already voter approved development for the d.t.x. it is kind of frustrating. that is what i'm hearing from the c.a.c. members and the public. if there is a way to make up for that lost time, we would certainly want to hear about it and see the details. i think there was an allusion to that.

as we acknowledge the concept of a regional champion or champions , we feel like the leaders have been the city and the leaders within this project, perhaps some of you might be in a position to identify one or two people who could be that regional champion for this project. so as i close, i guess i would say that the tjpa and c.a.c. members would like to encourage you to help identify somebody who could be, or those who can be champions for this project, and we are asking that you help secure the release of the funds for the the design build portion of the project. those are our c.a.c. comments. >> any questions? thank you for a great report. >> your next item is public comment. an opportunity for members of the public to address the authority on matters that are not on today's calendar and we do have jim patrick with us.

i think he is the only one. >> thank you. i am jim patrick. i would like to amplify a little bit about what the report she just heard about, particularly about what is going on at the transportation committee here in san francisco. we have had this report. the report was going to be due in june, then september, now it is october. i did attend one of the meetings where they had a briefing of early on what it is going to say one of the things it said, or i believe will say, is this project, in the pennsylvania avenue approach, whatever you choose to call it, needs a leader. i didn't expect that to come out of that report. i consider this report to be a boondoggle and essentially delay this thing by a year.

nonetheless, we do need a leader i think we have a governor from san francisco. i'm trying to think of his name. newsome, i remember now. we have elected representatives, we have a mayor in san francisco , we have a mayor in oakland, we have mayors up and down the peninsula. we will all benefit from this. i'm reaching out to you, the board of directors. you have these contacts. i don't talk to gavin newsom, you talk to him. let's get a leader. let's make this thing happen. i think we are being sandbagged by san jose and what is going on with bart and everything. we're letting this money slip out of our hand. so we need a leader. my challenge to this board is to find that leader and let's get going. thank you. >> that concludes members of the public they wanted to address you under that item. we can move into your regular

calendar. item ten, approving the fiscal year 2018-2019 capital budget amendment number four. >> good morning. i am the chief financial officer in your package you have the capital budget amendment number four. throughout the year, we have amended the capital budget three other times under the executive director's authority. he has the ability to move 10% of the total budget between the various lines. the capital budget was $169 million. in your quarterly reports, there's a budget to actual. we have only spent 50% of this year's capital budget. this amendment is just moving dollars between lines, not exceeding the total capital budget. the reason for this capital budget is there are costs due to the closure they needed to be covered. so we're just rearranging some

of the lines to cover those costs. we anticipate most of those cops costs to be recovered. some of which have already been recaptured and luna rattled -- unilateral fallbacks. the difference that you see here is what will go through the other dispute processes. >> i will move to approve. >> second. >> okay. >> i hear a first in a second. any members of the public wanting to comment on the item? [roll call] item ten is approved. item 11 is authorizing the executive director to execute a lease agreement for about 4,468 square feet of interior commercial we do space in the park level of the transit center for a 15 year term. >> good morning, again. i am the tjpa facility manager. i am happy to bring to the board

today the lease agreement for the rooftop park restaurant, already executed by the tenant. the tenant is jss k. group. it is a restaurant management and hospitality venture. as mark mentioned earlier, it will be home to a chef and his partner who owns the restaurant group. the future cuisine is described as california japanese. it is a style of food not imported from japan, but created for the bay area, as such it will be unique, but familiar. the group plans and extensive investment to improve the interior space. as you can see, it is, in essence, a cold shell. additionally, they will be activating and improving the outdoor terrace era -- area to create a lounge. that is the area on the second level also part of the agreement

is access to the outer area which remains open to the public this is with the tjpa's prior and sole approval. as i mentioned earlier, and name and an opening date has not yet been determined. that will be early next year. this slide lays out financial terms of the agreement. the interior spaces 4,468 square feet and exterior terrace is 5,133 square feet. the financial information is based on the 446 -- 4,468 square feet because it is not customary to charge for exterior space. this is a 15 year lease with 25 year options to renew. the landlord is not contributing to base building improvements, however, is providing an allowance, about $1.2 million. at the end of the 15 years, with

the landlord contributing the $120 million and tenant improvement allowance, and inclusive of rent abatements detailed in the staff report, and annual increases, the net proceeds are over $3 million. with this deal, the transit center has leased out 60 9% of the space. lastly, as a general note, the net proceeds on the key elective transactions to date are over performing, using tenure terms is the point of comparison, the net proceeds are over performing by about $2.4 million. are there any questions? >> questions from board members? >> just a quick one. can you elaborate -- he talked about the 4,468 square feet.

>> that is the first level. >> and then there was ancillary spaces that were not included. >> the terrace on the second level is not included in the financial calculations. >> so the net gain, the 3 million is over the 15 years? >> yes. >> i think, martha, if you go back to that slide, i think over the term of the lease, we are collecting more rent then perform a, even though we have an abatement for rent. >> this is the net. this is what is left. >> the entire deal is good. we're not contributing to landlord billed out. we are given -- giving the space

as is and contributing $1.2 million, but the tenants will spend between seven and $8 million in tenant improvements and landlord work. overall, it is a very healthy deal. it is a win-win situation. >> a quick question. i think it is great to have the rooftop restaurant hopefully operating soon because that is a marquee space for the whole center. just to better understand the way that the abatement is structured, if this was a tenant improvement cost, or a base building cost, it would come out of our capital budget. >> that is exactly right. it is a shifting of funds in

essence. >> given that we are relieving a bit of the capital that we would otherwise have put in, is there a way, if we were to go through the entire leasing process and there's some capital left over, and we put that into operations at that point? >> can you put back the slide? i think director lipkin, they will have to spend between seven and $8 million in tenant improvements. our budget would never accommodate that kind of amount. we would never come close to even paying 50% of that. i think what we would do is we will use whatever savings from the capital budget to account for any changes we may need.

it was designed and basin have having a foodcourt on the second floor. now we have s.f. fitness on the second floor, but we have retail we just don't know whether the cost of these adjustments will call us to increase the capital budget needs are not. >> i will move the item. >> second. >> all right. >> with a first and a second and no members of the public wanting to comment on the item... [roll call] item 11 is approved. item 12 is approving the minutes of the august 8th, 2018, meeting. no members of the public have indicated they wanted to comment on the item.

>> i will move the minutes. >> thank you. >> second. >> all those in favour? >> aye. >> the minutes of august eighth are approved. and we are scheduled to go into closed session at this time. we do have a member of the public the wants to address you on that. >> hello, jim patrick. closed session, according to the paper, there are about 150 lawyers working on this problem. now if each lawyer makes $500 an hour, that is $75,000 an hour we're talking about here. these are mega, mega dollars. number two, if a member of the public -- as a member of the public, i find it reprehensible that you don't share what is going on on these negotiations.

supersecret, supersecret. i say to that, nonsense. we need to know what is happening. number three, i don't believe we should settle this case. let me correct that, if we are going to pay $100,000, i think it is a good deal to settle it. i don't have any idea what the proposal is. if we're going to pay $100 million, we are shooting ourselves in the foot. so i thank you will maybe evaluate a lot of this and see what the approaches to try to get this case settled. i'm not at all worried about going to trial because i think the tjpa has done a good job of designing, building, and constructing and monitoring the development of the millennial tower. so we don't need to take a backseat. we need to take an aggressive position, so i hope we don't fold our hand, and i think my observation of the construction projects, which i have limited

knowledge, is everyone sort of sues one another and gets in a big room and tries to work this out. you have to be able to take your position and supported and go after it. we have done a good job and we should take a good, aggressive position, and go after it and supported until these 144 lawyers to go get ready for court. thank you. >> that concludes members of the public they wanted to address you on the item scheduled for >> in regard to item 19, there's nothing to report. directors, that concludes your agenda for today. thank you.

[gavel] good morning. the meeting will come to order. this is september 4, 2019, regular meeting of the budgets and finance committee. i am sandra lee fewer, chair of the budget and finance committee. i'm joined by supervisors katherine stefani and rafael manldsleman is on his way. i'd like to thank samuel williams and carmen cooley from sfgov tv for broadcasting this. do you have any announcements? >> yes.