next item, please. >> that would be item 6b, the commissioner's report. >> commissioners, anything to report? commissioner woo ho? >> no, i just -- i was just waving to say no, i'm on mute. >> ok. commissioner gilman? >> i don't have anythinging to report. thank you. >> no, i don't. thank you. >> ok. well, since there is nothing reported on the commissioner's report, i don't think we have to do public comment. next item, please. >> item number 7 is the consent calendar. there is one item on the consent calendar, item 7-a, which requests authorization to advertise a request for qualifications for two micro l.b.e. set-aside contracts for as-needed public relations, communications and media real estates services.

this is resolution number 20-43. >> thank you, carl. commissioners, can i have a motion to approve the consent calendar? >> so moved. >> second. >> we will open the phone lines to take public comment on consent calendar for members of the bhoubl . -the public who are joining us on the phone. >> operator: thank you, president brandon. at this time, we'll open the queue for nip on the phone who would like to make public comment on the consent calendar. please dial star 3 if you wish to make public comment. the system will het you know when your line is open. others will wait on mute until their line is open. comments will be limited to three minutes per person t. queue is now open. please dial star 3 if you wish to make public comment. >> thank you, jennifer. do we have anyone on the phone?

>> operator: yes. we have one caller on the line. >> thank you. please open the line to the first caller. >> operator: thank you. unmuting that line now. >> hello? hello? >> operator: the caller is there, but -- maybe we'll give them some time to call back. >> are there any other caller

on the line? >> operator: president brandon, there no caller on the line wishing to make public comment on this item. >> ok. has anyone called back? >> operator: caller, if you would like to make public xenl on this item, can you raise your hand again by pressing star 3. president brandon, it look like there are no hands raised at this time. >> thank you, jennifer. seeing no caller on the phone, public sxhenl closed. -- comment is closed. could we please have a roll call vote? [roll call]

>> thank you, carl. the motion passes family. resolution 20-43. next item, please. >> that would be item 8-a an informational presentation on mission rock community's facility district financing including the bond documents and preliminary official statement to partially fund phase one of horizontal

improvements at seawall lot 337. >> gfn, commissioners. this is phil williamson, senior project manager for the real estate and asset department. here to present an item that we are very pleased to bring before you, an informational item. next slide, please. federal election slide, please. thank you. so, today i'm going to be joined by wyatt donnelly landolt from port staff and presenting a project overview and an update on the project financing, leading up in our next meeting with you an action item meeting to the issue -- for your approval to issue bonds to the project.

very exciting time for the project. let me start with a project overview. you're very familiar with this project by now. we appreciate all of your support and encouragment and advice to date. next slide, please. so just by way of quick summary, to refresh memories, at full build-out, the project will be 2.7 to 2.8 million square feet of retail -- ground floor retail, i should say, office and residential uses. approximately 1200 howing units, 40% of which will be affordable at a wide range of area median incomes from 45% to 150%. so addressing a large need from all parts of the housing spectrum. 970 to $ .4 million square feet of office space. 240,000 square feet of retail production space, primarily on the ground floor of the

buildings on the sigh. and at some point down the road, pier 48 rehabilitation of approximately 240,000 square feet as well. next slide, please. so, phase one, which we're on the cusp of starting and today's an important milestone towards that happening, phase one is four buildings in total and you can see on the diagram here, phase one is shaded in blue and includes four buildings and includes china basin park on the north side of the project, new streets, sidewalk and utility infrastructure to serve the four phase one buildings. there are two housing buildings, residenceabler buildings totaling 537 units total. almost 200 affordable. the commercial buildings in this die sgram hard to tell, but partial a and partial f -- excuse me, b and g, excuse me,

i switched those around -- will be office buildings totaling 550,000 square feet. retail in phase one is approximately 65,000 square feet. the park, again, is 5.5 acre on the north side of the project. lots of new utilities, street lights. everything you would expect in a new neighbour will be put in phase one to make it productive and feasible and attractive to tenants and visitors alike. we're targeting completion for phase one in 2022. next slide, please. an important aspect of this project and all port projects is our effort to reach out to l.b.e. firms in san francisco and to utilize them as much as possible. this project had a preconstruction goal of utilizing 10% l.b.

participation and we're very happy and proud that we have accomplished that and then some. to date, we are at 18.5% of l.b. participation in the preconstruction work. we're looking ahead to construction starting in the next couple of week, hopefully. definitely in the next couple of months. and the goal increases to 20% l.b.e. participation and we feel very confident we'll meet or exceed that goal going to ward and i want to mention that i know next week, the project team will be meeting with commissioner brandon and adams to give a more detailed update on the efforts to date and just how productive we've been in meeting these goals. now i would like to con clues my project overview and update and i want to introduce wyatt. before doing so, just want to remind the commissioners that earlier this year, you approved

the phase budget and today you'll be hearing how it will be implemented and how important the bonds are to making that budget a reality and the four leases for phase one will be signed today or tomorrow. we signed one a few months ago. we signed the other three last week and we expect them to close this week. so, very exciting times for the project of four leases for four buildings with construction just around the corner and with that i'd like to introduce wyatt. >> hello, commissioners. wyatt donnelly. i work on the finance aspects of the development project at mission rock and pier 70. i'll go over the bond itself in just a general financing structure. if you can't hear me ok, please let me know. sox just a reminder on the funding structure, there are three sources to fund the project. the early stages and just looking at this graphic, starting at the bottom left, are developer and port equity. those are the early investments

to get started. in the middle termings those are replaced with the por's land value on the site. the prepaid leases for the vertical parcels and the final source are the c.f.d. and i.f.d., community facilities distribution and infrastructure financing districts. i'll talk about those a little later in more detail. but there are two tax mechanisms we use to fund the horizontal infrastructure on the project. so those go in to fund the roads, packs, sewers, electricity. so we can start vertical development and the developer earns 18% return on their investments. so, the port aims to limit this return and the c.f.d.-i.f.d. sources are the primary way that they're earning their return. next slide, please. so, just a reminder on the

phase one sbunl structured into costs and revenues and i'll go into the details of those line items in a second. but the costs are really three items. hard costs which are the actual infrastructure itself, soft costs including the management, planning, environmental review and then the final cost is the return on the developer equity for those improvements. the revenue side, which is what we're talking about here today, the first source is the four phase prepaid leases and we'll be closing on three of those this week and the second major source is public fingerprintsing sources so we'll have community facilities district bond proceeds and then pay as you go taxes, which is really just the regular taxes collected each year and now leveraged in a bond. and we'll get those from the community's facilities district and the infrastructure financing district. next slide, please. so just the high level overview

of the phase one budget approval from last year. it was $265 million total for both uses and sources. the. -this bond will fund approximately $35 million. because it is an early sour, t really key for reducing the return on a project and making sure that the project is on budget. this is one of really the two early mechanisms for funding the project with those prepaid early leases. next slide, please. so, to date, we've taken several public financing actions. the first was in february 2018, which was the creation of an infrastructure financing district. project area i., the port has an i.s.d. along the entire waterfront. it captures the tax increment which is the increase in property taxes on the site.

and allows us to use those for infrastructure on site. sox we actually use the taxes to pay for the roads and parks and sewers on site. the second key action was in september 2019. the port made amendments to the city's special tax law for by the board of supervisors to include certain items for pier 70 and mission rock. some of the key things were being able to pay for seismic improvements, waterfront projects, those items. and then the final one in may 2020 was the formation of the community facilities district, which is an additional tax assessment to fund the improvements on site. so, the c.f.d. and i.f.d. combined to provide the key sources for funding the horizontal infrastructure improvements. next slide, please. this bond specifically uses the

c.f.d. as its main source and there are four taxes in the c.f.d., the development tax which funds infrastructure and parks office tax, which funds infrastructure and parks as well. they're a similar uses there. but the office tax has more flexibility. the shoreline tax, which is for shoreline protection and then the services tax funds ongoing maintenance for the site. this is the earliest tax to kick in. it kicks in the fiscal year after the 24-month anniversary of the lease close. so, we will get those tacks in two years. however, there are early payments that the c.f.d. requires to fund this bond. next slide, please. the bond issuance itself is limited by two thing.

i mentioned earlier that the size of the bond and the amount of money they expect to get is $35 million. that is limited by the appraised value of the c.f.d. so, the c.f. sd. limited because that is the security for the bond and the city has a policy of only issuing c.f.d. debt with a 3-to-1 ratio. this is a city-wide policy put out by the controller's office, a conservative approach to make sure that we can always cover our dead service for these bonds and we anticipate $125 million valuation resulting in $40 million of bonds for the projects. the difference is thing of cost of issuance and reserve requirements for the bonds. and the second limiting factor is ongoing tax revenues. we have to have 110% debt service coverage. we have to have an extra 10% in taxes.

if our annual payments are $1 million, we have to have $1.1 million to have a little buffer. the bond issuance here is in phase one which are foreign access of the $40 million bond issuance because this is not the limiting factor here. the c.f.d. is. however, once the project is complete in two-year, we will issue additional bonds using that extra value that's been completed through the horizontal improvements in the buildings. next slide, please. so the next step will be coming back next month with a future action item to approve the c.f.d.ens ifing including the bond documents and preliminary official statement for the p.o.f. and authorizing and directing the executive director to cause the package to be submitted to the board of supervisor and to work with the director of the office of

public finance, caused and distribution of the initial statement. this means that the port commission will be moving the port issuance forward. the board of supervisors is the body that approves the bond issuance. and just a timeline the port commission action item will come in october. we'll have a capital planning committee meeting after that. and we're looking to introduce legislation with the board of supervisors in october or november, depending on the timing. though hearings will be in november and december and we'll sell the bonds probably in early 2020. hoping for january, maybe february. that is all and i believe jack bear from the giants is on the line to give some quick comments from our partners. >> thank you. i don't know if everybody can hear me. but i just wanted to say a few

things. the coronavirus has had a major impact on all of us. this is certainly true of the port and the giants but also true like the real estate industry itself. we're very pleased that our project is strong and compelling enough to meet the challenges posed by covid. they were able to proceed despite strong headwinds that have stopped other projects. for the last several months, we've been very busy on the construction site. we've installed stone columns throughout the site. we expect to commence construction of the vertical buildings as early as late october or early november. and as phil has indicated, we also made good progress in identifying, rekrug and involving local business enterprises in the project, including those businesss that are women and minority-owned.

we look forward to giving regular updates on our progress for the port axising and the southern advisory committee and soon having to visit the site to see things for yourself. in closing, i would like to acknowledge the leadership of the port. your executive director elaine forbes and [inaudible] phil williamson and the entire team in helping us stay on track in a very challenging time. thank you. >> thank you, jack. thank you, phil and wyatt. now let's open i up to public comment. we will open the phone lines to take public comments on item 8a for members of the public who are joining us on the phone. jennifer will be our operator and we'll provide instructions now for anyone on the phone who would like to make public comment. >> operator: thank you, president. at this time, we'll open the quayle for anyone on the phone who would like to make public comment on item 8-a.

please dial star 3 if you wish to make public comment. the system will let you know when your line is open. others will wait on mute until their line is open. comments will be limited to three minutes per person. the queue is now open. please dial star 3 if you wish to make public comment. >> thank you, jennifer. do we have anyone on the phone? >> operator: president brandon, at this time we do not have any caller on the line wishing to make public comment on this item. >> thank you. seeing no callers on the phone, public comment is closed. commissioner woo ho? >> sorry. i was just unmuting myself. first of all, it is great to hear from jack, the progress that is made on the project before a comment particularly on any of the financing. but that is wonderful news to

hear that you are proceeding forward and i, unfortunately, have not been in the city for much because i have been sheltering in place in napa so i haven't gone by the site. but i will try to come down some time and look at the site and see the progress that you're making and i'm sure it will be wonderful to see that this is moving forward. and given that it is a very difficult real estate market because of so many different things at the moment. covid, everything, the wildfires, everything is a little bit up in the air and uncertainty this year. anyway, congratulations on that. i just wanted to make the comment and thank you for the assistance to staff for also keeping this objective. it is a long haul, but we're getting there. as i relates to the presentation on the c.f.d. financing, i just had some general questions because, i guess given that we -- i know we used this kind of structure before and we used it on some of our other core projects, but

i guess i want to know just because we're going back into asking to even put a fairly modest bond together, but just the overall structure, how many c.f.d. financings are there now, or i.f.d.s in the city at this point? i'm just wondering how many we had to use and i'm always worried that at some point we would be -- the window won't be as hope open -- open as it has been. i'd like to get a better context. >> sure. excellent question, commissioner. i can give some background and talk about the statewide market as well. there are c.f.d. financing at transday, the hunter's point shipyard development and one coming up soon for treasure island. we've discussed, you know, multiple -- having multiple

issuances with our unwriter and they're very confident. statewide, the market is very robust. we're seeing very low spreads for the interest rates and they are having extreme demand still. i think because of the guaranteed return on these and investors feel are pretty safe. there is strong demand and we have not had any indication from our underwriter that they're concerned about having too much in the market. at this point. [please stand by] [please stand by]

subtract, what are the costs of those buildings, but also what is the cost of all the infrastructure and the work that needs to get done just to make the site developable. so there is a difference in approach there. obviously some of the assumptions will be similar when you get into the nitty gritty details, but the top line figures will be different because you're not looking at the whole -- the whole site. and the appraisal is of the whole site, all 11 parcels on

the site, whereas individual is one building. >> so that also reconciles why you have 3 to 1 value approach if there is a delinquency, you have to look at the delinquency and foreclosure on the site. i understand that. >> yep. >> and the only reason i ask that question, given in this real estate market, just to understand that when you have this public financing structure in place, it does make it seem versus a private development, which does not use public financing and in our discussion which we're going to talk later today in terms of it is not -- it's also using a similar structure, but one of the proposals for pier 332 and seawall lot 330 was to use private financing. so i'm curious how to compare when you use different financing

vehicles from a developer point of view. of course, using public financing is to their advantage, but it also makes it a little more -- perhaps more expensive too in the long run. does that make sense? >> yes. >> because you're asking -- you're assessing more taxes. >> yes. and part of the structure here is the offset that reduces the cfd tax and that reduces the land value. that is one of the considerations that happened early on in the formation to increase the land value. and raises -- and that raises both appraisals value, both the value of the individual building and the cfd itself. >> there have been no cfd

delinquencies that we're aware of? i hate to look at the negative scenarios, but i want to know the full picture. >> i can't speak to the state, but not in san francisco. >> i just wanted to be -- we have to go in eyes wide open knowing the advantages and the disadvantages and worrying about anything we haven't thought about. i don't have any doubt or lack of confidence, and i hope that the market is not overflooded. the only issue is when the market is overflooded with issues. >> yep, all very important concerns and things we'll keep an eye on and work with our underwriter who has a good understanding of the state market. >> that's my comments, thank you. >> commissioner gilman: i just wanted to thank the staff fort update. it's exciting to see the project

moving forward. i don't have any technical questions, dr. woo ho provided a great lens. i'm looking forward to a site with 40% affordable on site. it's the gold standard we should be accepting. this concludes my remarks. >> commissioner adams: i agree with my fellow commissioners. i enjoyed the presentation from the staff and from everybody. it looks like things are tight and i'm looking forward to sustained support. thank you, president brandon. >> president brandon: thank you so much for the presentation. and that concludes that. four leases, that's incredible. that is so wonderful.

congratulations. and thank you for all of the equity work that the team is involved in and as we said, we're going to meet next week. i appreciate you guys taking the lead and really leading the way in this important work on this project. so thank you. next item, please. >> that would be item number 9a, informational presentation regarding the embarcadero seawall multi-hazard risk assessment, public engagement and seismic and flood measures for the embarcadero seawall. >> good afternoon, president brandon, vice president adams, commissioners, director forbes and members of the public. the waterfront resilience team is pleased to be before the commission today at a major milestone in the resilience

program which is the completion of the embarcadero seawall multi-hazard risk assessment. today we're going to share the findings of that work and some of the work that the team started on to develop seismic and flood measures to mitigate those risks. moving towards proposition a projects. next slide, please. so we just want to give a brief overview of all the work that is happening port-wide in the resilience program. so we have a number of initiatives that are port-wide. the army corps resiliency study is from aquatic park. as part of the planning efforts, we'll be producing an adapt plan

that is also port-wide. staff has been looking at how to flood-proof the piers. in the embarcadero area, we're focused on the embarcadero seawall program, primary funding sources, proposition a for that work. in the southern waterfront, we're also pursuing with the help of engineering division, the southern waterfront seismic vulnerability assessment. and in coordination with the planning department and the san francisco municipal transportation agency, we're studying adaptation around is muss creek which is heavily congratulated in the -- congregated in the area. there are projects we provide support to. foremost among them, the waterfront plan and the historic pier rehabilitation program.

next slide. so, initially when the program was founded, it was focused on the embarcadero seawall. we heard from the public and president brandon a need to expand efforts port-wide and we're grateful to have the resiliency study to help fund that work. we have a need to pursue even more dollars beyond the bonds and the army corps federal funding if we qualify for that. klamath. next slide, please. today, we're focused on the embarcadero seawall, the multi-hazard risk assessment. i mentioned the measures to

reduce risk. we've been out during this process of performing the risk assessment, understanding key priorities from community and stakeholder engagement. and we want to describe to the commission and the public next steps to develop proposition a projects. so as a brief overview of the embarcadero seawall program, it's from fishermen's wharf to mission creek. we're in the planning phase of the work through the end of 2021. our focus is seismic and flood risk associated with the seawall and proposition a is the funding source. along with proposition a, we submitted a seawall earthquake safety program bond report to

the capital planning committee and the board of supervisors, which outlined the need for the bond, mentioned the need to perform the multi-hazard risk assessment and really set forth these critical criteria for the program life, safety and disaster response which are going to guide our thinking as we develop proposition a projects. so these are the funding sources under that bond report. planning work like the multi-hazard risk assessment, earthquake improvement, mitigation measures and enhancement measures for doing major projects that provide an opportunity to provide public enhancement, those are eligible expenses.

so this is a high-level schedule for the program. the dotted line is today. we have completed our existing conditions analysis of all of the port assets. we've looked at city assets and services primarily along the embarcadero. transit services, transportation, utility infrastructure. we've already started work developing the seismic and flood measures. we'll talk a little bit about the bulkhead wharf today. that is current flood protection for the city. we've been looking as the sea level rises, is there an opportunity to elevate the wharfs, but the main focus is on getting to proposition a project selection. so the work this fall will be

taking everything we've learned and these measures we've developed to come up with a range of alternatives for the commission to consider as we move towards project selection. with a goal of being in construction by 2023 or 2024 and complete by 2027, we'll revisit the schedule when we've selected projects to make sure that it matches the projects that the commission selects. next slide, please. so we just wanted to represent fort commission the work going into developing this program. and you'll see here that the seismic hazard assessment work, all of them look at our

infrastructure, city infrastructure, disaster response, the public realm. that's really foundational for the program and this mhra is going to support for the decades to come as we build out this program over time. and it also leads through this alternatives process to environmental review and actual construction of proposition a projects. the first projects in the program. and so next slide, please. now i'd like to hand it off to stephen wheel, embarcadero seawall program manager to talk about the mrha. >> thank you, brad. good afternoon, president brandon, commissioners, executive director forbes, staff and members of the public. my name is stephen riel. i'm the program manager and i'm super excited to be here this pivotal step and to present the

multi-hazard risk assessment today. the multi-hazard risk assessment, mhra, is a detailed earthquake and flood assessment for the embarcadero seawall area from fishermen's wharf to mission creek. the study provides the knowledge for the overall program and supports evaluation of improvements, including the proposition a projects. the mhra uses a probable approach to define earthquake and flood hazards from frequent to very rare. and assesses the likely damage and consequences expected to occur over time if we do not act. the key component of the mhra is an extensive technical booring program. what is under the ground matters. both fort assessment and the

alternatives and this subsurface knowledge is a big first investment. key findings from the mhra. it projects we can expect up to $30 billion in damages and disruption from combined seismic and flood risk by 2100 if we do not act. earthquake risk is the near term problem. however, sea level rise will increase in the decades, resulting in flood damages and disruption to the port and adjacent neighborhoods in the next 30-50 years. focusing on the earthquake risk, earthquake instability of the seawall and lateral spreading is low to moderate south of the bay bridge, which is a good finding from the study. but it's high north of the bay bridge. in the former year, yerba buena

cove, deep mudz up to 100 feet thick caused this instability. moving north, we find it's caused by the sand under the seawall that causes a lower scape condition. the piles bulk head wharfs or marginal wharfs. these structures provide flood protection for the port and city as brad mentioned. of note is that the aging timber pile bulk head wharf and fisherman's wharf due to ground shaking and liquefaction in that area. the other key finding is that the fill throughout the

embarcadero is susceptible to liquefaction. the studies say it will occur in earthquakes in loma pre-eta. we'd expect to see the embarcadero liquify under this type of earthquake. so this slide shows the typical existing shoreline condition along the embarcadero. the seawall itself consists of a large rock dike up to 100 feet wide and 40 feet tall. it's capped by a pile supported bulkhead wall and the wharf. these elements containing the embarcadero and utilities and provide coastal flood and erosion protection fort waterfront and city. earthquakes cause ground shaking, which liquifies the fills in the embarcadero and

causes the rock to slide bay ward on the weaker. when this happens, the piles are pushed out and the ground behind can spread and crack called lateral spreading. it has occurred in many earthquakes. the bottom right photo shows lateral spreading during the 1906 earthquake near today's cruise terminal. the ground conditions out there are still the same today. next slide. a mixture of bulkhead wharfs also serve as protection. this was built 100 years ago and has served the city well, however, we have little flood free board left as areas have settled over time and sea levels have begun to rise. the right photo is king side, which is a foot higher than a normal tide. sea level rise science is

evolving and the port and city are using the latest projections from the ocean protection council updated in 2018. these projections include a likely scenario of 3.4 feet by 2100 and possibly 7 feet by 2100. the spread makes it a challenge to plan for investments on the waterfront, but that's the environment we're in. the graphic on the right shows the sea level rise impacts on our waterfront. as sea level rise increases, it increases all tides. so two feet of sea level rise will increase the low tide by two feet, the daily high tide by two feet, the 100-year extreme tide by two feet and the ground water two feet because the existing seawall is porous. how does this advance our understanding? first, the site-wide investigation testing of soils

provides a very good understand offing the engineering properties. this information was used to develop or define earthquake models of the seawall, predict behavior. the mhra includes estimates of earthquake and flood damage and loss to seawall dependent marine structures, buildings and infrastructure. these damage estimates were used to determine the likely economic, social and environmental consequences. finally, extremely importantly, we collaborated closely with the stakeholders during the process. we heard what is important to them and included this in the process. and lindy will expand on this later in the presentation. next slide. the mhra is fundamental knowledge for the resilience program and advances our approach to the projects in the following ways. earthquake instability of the seawall is high between rincon

park and fisherman's wharf. the pier 14 to pier 9 area is the most challenging due to deep young bay mud and solutions here may be different and more costly than areas to the north. bullhead wall and wharfs are high risk. improvements need to consider mid and long-term strategies. embarcadero is also at risk from seawall instability. and from liquefaction of the fill. improvement to both may be needed tore the embarcadero to serve as a resilient lifeline corridor. finally, the embarcadero waterfront is very sensitive to flood thresholds with major consequences by two feet of sea level rise. the area of fulsome to broadway is the highest risk zone.

in addition to completing the mhra, we've been hard at work developing measures to reduce seismic and flood risk. next i'll go over the seismic measure concepts developed. top row of measures are primarily to address instability of the seawall. on left is a near-shore buttress. this measure replaces the current bulkhead wharf with a bay ward seawall that buttresses the land behind. next is a landside buttress which improves the soil in embarcadero using techniques to create a stable zone. this requires reconstruction of the roadway and utilities as new techniques are extremely disruptive, but it provides a stable foundation for raising the area in the future if needed. next is the stabilization

measure using large drilled shaft 8 to 12 feet in diameter, drilled down to rock and installed just behind the bulkhead wall in the promenade area. these can stabilize the rock in a smaller footprint than the buttress, but they're not as effective in deep bay mud areas. existing bulkhead wall is replaced which has large diameter piles and is robust enough to stabilize the shoreline. this is similarly effective where the ground conditions are better and less effective where we have very deep mud. on the bottom, we have targeted measures. it includes liquefaction mitigation of the fill, using grouting techniques that minimize disruption of the utilities and roadway. this technique are less proven

and we're investigating the effectability. and finally, the retrofit of the wharfs, these are improve the assets. where we have high seawall instability, we would expect considerable damage, but these are more effective where we have lower instability. as we develop these measures we're determining the feasibility by . the embarcadero waterfront is vibrant and we will rebound from covid and we're going to need to find ways to remain vibrant during construction. it's important to consider these as we move through the process. we're also determining the

aeffectability along the waterfront. we expect a range of tools will be needed and compatibility with flood measures will be an important consideration. next, i'd like to introduce lindsey who will go over the stakeholder input. long-term considerations. >> thank you, stephen. good afternoon, president brandon, commissioners, executive director forbes and the public. while the seismic measures team was developing the seismic measures that stephen just presented to you, the flood team was identifying measures to address flood risk. flood measures include structural, which are also known as physical measures is levies,

raised red raise or flood walls. ecological measures include ecological seawalls. nonstructural measures include policies and site-specific approaches such as flood proving. once the measures were defined, for example, one of the measures that we looked at raised marine structures, are applicable from fishermans wharf. the next step was to identify compatible seismic and flood measures to address both risks. we have here an example of both a super bulkhead wharf and raised marine structure to address both the seismic and flood risk and the location where these measures could apply

together. next slide. while we have been working on developing actions and alternatives fort near and midterm seismic and flood risks, we also have been engaged in a long-term planning process to better understand those 2100 conditions that stephen was talking about, where we have a range of sea level rise scenarios that are included in those state and city guidance. the 3.4 likely curve and the 1 in 2 hundred medium to 100. envision examines the ways we can adapt the san francisco waterfront to be resilient to those 2100 conditions, including that range of flood scenarios i just described.

the envision process is building three concepts from technical analysis being conducted as well as the identification of public priorities that through our engagement process that we've been engaged in since 2017. the three concepts will inform our near, mid and long-term projects and planning processes, including those funded by proposition a, our army corps flood study alternatives and key findings for port adaptation overall. throughout the work, the team has been engaged in the opportunity and stakeholders at communities and advisory groups and at the waterfront resilience program community meeting series held in three locations. embarcadero, mission creek, mission bay, bayview. in the embarcadero area,

community feedback affirmed the priorities of life, safety and emergency response and identified critical assets and services that the community cared about, such as the ferry building, fisherman's wharf, including the jobs and fisheries and other marine infrastructure there. transportation and mobility along the embarcadero promenade. and the muni tunnel and portal. as the assets and services to preserve and enhance while we increase resilience along the waterfront. i'll now turn back to brad. thank you, everyone. >> thank you. so, director forbes, opened the meeting with a discussion about equity and the works that the

port is doing to advance equity throughout the organization. equity is just as much as an integral part of the waterfront resilience programs, mission goals and principles. and we're working closely to align program progress with strategic goals and planning for racial equity at the port and across city departments. today i'll share three updates. we have an update on participation on the c h2m planning environmental engineering contracts. and overview of the new workforce development and lbe support services effort, which is just getting started. and an update on lbe participation on the civic edge communications contract. next slide, please.

we track progress toward more equitable outcomes for small businesses. we were pleased over the past year to see that c h2m increased its participation for lbes since 2019. the rate over that last year was 27.2% of contract payments. when we were at the port commission in september of 2019, we were at 12%. so this additional participation has increased our total rate to 17.1%. we have a ways to go to reach our goal of 22.9%. we've started working with other key port staff, including the

port's new diversity, equity and opportunity manager, tony autry, to discuss opportunities for increasing participation by minorities on businesses. we're consulting with stefani tang. so as i mentioned, we've initiated a new task under the c h2m contract focused on workforce development and lbe support services. this is to ensure and enhance economic opportunities in future resilience program contracting opportunities. and then i -- on the civic edge contract, contract participation is currently at 35.4% lbe participation as of july 20 with a goal of 36%. so, diving a little more into

the c h2m contract, you'll see year one, year two lbe participation. this is part of the geo engineering work and there were fewer lbes qualified to do the streams of work. in year 3, we have been doing robust public engagement up until the start of covid. also conducting planning work where there are more -- engagements. this specific is expended to take the time between now and when we issue new contracting opportunities to work with underserved san francisco residents and businesses and make sure they're well

positioned for the work that is upcoming in the program. this is the time to start this task because we're just moving into alternatives development. and we really need to have a handle on what we are likely going to be building with proposition a projects in order to position people for those opportunities. we've added a number of subcontractors, all minority owned sub-krattecontractors to task. the island group is the task lead. we added davison associates and arty j. enterprises was already in the base contract to support the work. the first part of the work is a baseline assessment of existing conditions and developing the overall strategy which will happen between now and february of 2021. and then we'll pursue a program development with integrated

strategies so we maximize opportunities for lbe bidders and for san francisco residents who are trained in entry level and other positions and this program will continue throughout the resilience program. i want to end the lbe and equity update with a focus on the civic edge contract. we've spent approximately $1.3 million to date. that is 76% of contract funds. in this case, it does not count toward lbe participation when the prime has 51%. 35% of the other payments have gone to lbe subcontractors. next slide, please. so to close the presentation with next steps for the embarcadero seawall program.

next slide, please. so you've heard from lindy and steve, all of the work that we've done understanding the risks, the assets and services, what they mean for people along the waterfront and some of the measures to address seismic and flood risk. we know public priorities. we've been engaging with our city partners. that's the information that we're going to use is this fall to develop a range of alternatives to address seismic and flood risk for consideration by the commission. and we want to come up with a range of project alternatives to assure you and the public that we, at the end of the day, will recommend the most efficient alternative for proposition a spending. as we move through the fall, we want to be back in front of the port commission to talk about

the framework of proposition a spending to make sure that we're aligned with the commission's goals in terms of the evaluation criteria, design guidelines and funding guidelines that we are recommending for proposition a project selection. and this is our expected high level schedule for commission engagement. we hope to be back in october to talk about the army corps focus. we want to present draft alternatives from the alternatives process i just mentioned, including that decision-making framework. our target is to be in front of the commission by january, 2021, with recommendations for proposition a projects. and we hope to get an endorsement of those projects or commission priorities by the end of march 2021 so that we can

start design and environmental review. next slide, please. that concludes our presentation today. we thank you so much. we're available to answer any questions. >> thank you, brad, stephen and lindsay for a wonderful report. a lot of work. let's open it up to the [inaudible] -- members of the public who are joining us on the phone. jennifer will be the operator and will provide instructions now for anyone on the phone who would like to provide public comment. >> thank you, president brandon. at this time, we'll open the queue for anyone on the phone who would like to make public comment on item 9a. please dial star 3 if you wish to make public comment. the system will let you know

when the line is open. comments are limited to three minutes per person. the queue is now open. please dial star 3 if you wish to make public comment. >> president brandon: thank you, jennifer. anyone on the phone? >> yes, president brandon. we have three callers on the line. >> good afternoon. this is the presidency of pier 39. i just wanted to comment and congratulate you on this important milestone for this great work and actually acknowledge, brad, stephen and lindsay for their excellent work on the resilience program and

being so proactive in working with tenants and their outreach and helping tenants understand the project, communication during the project and post work after sort of understanding what the risks are in ways that the tenants can approach those risks. it's a significant milestone and really important work. again, congratulations. >> president brandon: thank you. >> okay, opening the next line now. >> hi. this is susan. san francisco resident. thank you so much for presenting this work about the current status of resiliency for the waterfront. i very much appreciate the fact that you have an office that is looking at overall resiliency

for issues as varied as earthquake and flooding, because we can get those at the same time. we can get them during a pandemic, hey, all kinds of bad things can happen at once. it would be wonderful if you could also include biodiversity as one of the things that is important to the overall resilience of the -- resiliency of the city. both the city of san francisco and the state of california have a biodiversity resolution and it would be wonderful if every plant the city put in the ground, including everything at the port, were a local native san francisco plant. i appreciate the fact that you have ecological measures, including structures and features, if all of those could be local native plants, that would be wonderful. this will help increase our biodiversity resilience and the plants that evolved here are already resilient to sea level rise, fall and climate change. thank you very much. that concludes my comments.

>> president brandon: thank you. >> opening the next line now. thank you. >> good afternoon, president brandon, vice president adams, commissioners gilman and woo ho. i'm senior vice president with the san francisco giants and chair over the san francisco spur and think tank. i want to applaud the port director and staff for your leadership on the embarcadero seawall and resilience program. it's my perspective that you all are quite frankly, leading the region and the state in this work. i particularly would like to commend the team fort inclusive nature of your approach. you've designed an interagency cross sector team of stakeholders to address this challenge together. and these certainly are sobering results, especially when you see

them all at once. it will take all of us working together to address these challenges, but i'm optimistic in our future with the port's steady leadership at the helm. thank you for your commitment to doing that work that will protect the entire city. thank you. >> president brandon: thank you. any other callers? >> president brandon, it looks like one other caller on the line. unmuting that line now. >> am i on now? hello? >> yes. >> hi, this is pier 23 cafe. good afternoon. can you hear me? >> yes, we can hear you. >> oh, good. i just wanted to say that i've written a letter to the commissioners, which i didn't realize amy had retired.

so don kavanaugh has it and he can share it with all of you. i want to say thank you for the extensive research on the problems that we look forward to with the possible sea level rise and the earthquake that could come at any time. i was here in the 1989 earthquake at pier 23 cafe, so i'm aware of the power of these events. but i just wanted to mention that i care that the color that is part of pier 23 cafe as well as fisherman's wharf and pier 39 is not compromised too much by the necessary construction that will have to be done. and that is my main concern. and i hope that the letter gets to all of you. thank you so much.

and thank you, brad. that's it. >> president brandon: thank you. any other comments? >> president brandon, at this time there are no other members of the public on the phone wishing to make public comment on this item. >> president brandon: thank you. public comment is closed. commissioner gilman? >> commissioner gilman: i first want to thank the staff brad and lindsay for the report, it was incredibly extensive. i have a couple of reflections and then i have just one question. my reflection is, i want to commend you. it was stated by the public comment, for all of the community outreach. this is very complex environmental issues, risk mitigation issues, but i think sometimes can seem incredibly theoretical. i think now that we're all

living through a pandemic, a once in a hundred year event, our public and stakeholder will realize these events can happen. i want to commend you on the community outreach and the diligence for the work and creating and identifying what stakeholders feel are the most important assets for them on the waterfront. i appreciate this support and the extensiveness of it. and also moving forward, ensuring that our prop a funds are used to the best of their ability. they are just a drop in the bucket of what the overall cost will be in the long haul. i appreciate that and who is participating with us in the work. thank you. the one question i had, doing all this work leading up to the study and analysis, have we come up with any mitigation efforts in the event we do have a major earthquake before we actually

get to commence any of these projects or work? have we learned any lessons that will help mitigate risk or have us respond in a more timely fashion to a catastrophic event before we complete this work? >> commissioner gilman, that is a great question. i think where we've focused most on that question is in thinking about disaster response. the embarcadero is a key corridor for disaster response for the city, access to the weta downtown ferry terminals is key to moving people in and out of the city. we don't have recommendations yet for pre-project, moves that the port could take. one of the things we're hoping to do -- but it has been complicated a little bit by

covid -- is to do a tabletop exercise with emergency managers in the city with the result of the multi-hazard ri risk assessment. so that the city's response is better positioned if we haven't built improvements in an area. of course, all of the emergency managers have their hands full right now in terms of the city's oec and the -- eoc and the like. so we're looking for the first opportunity to have that engagement and that's where i see the most opportunity for learning things that we could recommend pre-event. >> commissioner gilman: thank you so much. i think that we should be aware, i think if we all asked 24 months ago we would be living through a worldwide pandemic,

that's absurd, that will never happen. that has shown us these events do happen and are possible. and to be as resilient and plan as much as possible is important. thank you so much. that concludes my question and reflections. >> president brandon: thank you. >> commissioner woo ho: can you hear me? >> yes. >> commissioner woo ho: first i want to commend them. this is like an encyclopedia that i read. first i felt like it was too much to digest, but your presentation today pulls it all together and i think presenting it in one full sweep is idea, rather than parsing it out. it was very comprehensive as i guess has been mentioned already. i think that it is a building block approach. it's like touching the elephant

in the room from difference angles. you have the seismic, the sea level rise. you could have just flooding which is not related to either, it's just the tide as we've experienced. so i think that my question is to understand -- and i think we need to approach this and it's more a suggestion as how we communicate. as i recall, when we positioned proposition a we talked about it was to protect the city and the waterfront and downtown, but in this report, we sort of narrow it -- i understand why, because the port is responsible for 7.5 miles of waterfront, but we sort of narrow the focus very much to that part of the city whereas you know, if we did have such a catastrophic event, it would certainly spill over way beyond the embarcadero. so i think we need to widen our lens in terms of when we communicate what the impact of

such events are, as much as we're trying to mitigate the part we manage and control. so that is a little bit of that is the way you communicate and position this. this also raises questions for me as far as what i read in this, the seawall today, if it was hit by an earthquake would collapse quickly. i think you probably know technically what level earthquake. i want to know from the other end of the spectrum, commissioner gilman said what happens if something happens in between before this is shored up? what we're doing with all these different measures you pointed out. you have choices to make. you have not made a final decision on a lot of those things. but there will be choices to make in terms of shoring up the seawall and what will it with stand? what level of catastrophe or

earthquake will it be projected to withstand? i think we should get a better sense of what the $5 billion that we currently say is the price tag to really shore it up, so that right now, i'm not sure. i see that we're building the blocks. each one is very important as we keep going. it's going to get better and better, but it's looking at it from the other way, in terms of understanding what we're going to be able to withstand. there may be difficult choices to be made that we cannot afford to have a perfect resilience. we'll have to have some perfection because we can't predict exactly what the event might be, but we can perhaps mitigate it up to a certain sense. i'm not sure i understand that given the information, even though what you presented is excellent. i'm not criticizing it, it's just more of a learning. the other question i have, maybe watching too many of these movies, what if we are hit by a

tsunami, which is an earthquake somewhere else in the world and it's not an earthquake off the shore of california. and so that kind of impact. what happens to us? and how would we be -- i guess the seawall is important in that sense because it would supposedly help to block to a certain extent i'm assuming, but i don't know the technical answer. i think there are things, since we're presenting to the public that we are shoring up this to ensure any major damage to the city and how far the damage would go, i think we need to widen how we discuss this and not say what we're addressing -- what we're addressing is along the embarcadero, i understand that, but the impact is actually probably wider. and i don't think that comes across in this report to understand. and perhaps part of that is also because we need to link -- i know you're talking to them, but it hasn't been included here what the other city agencies are doing in their preparation for

an earthquake. as i recall, you know, in 1989 -- because my husband was in the mayor's office, deputy mayor dealing with the earthquake at that time, and there were lots of different areas of the city that were impacted. so i think we need to tie them together. i remember the concerns in the marina. i remember the concerns in chinatown. it was all over in terms of the impacts and it wasn't just the waterfront. so we need to think about holistically and make sure we're linking into the resiliency of the whole city because it will require the whole city to be resilient against such an effort. who would have thought the pandemic would hit so much of the world? not just one city, one country, but the whole world. i think we have to have that -- i think you laid out a great landscape. you picked the forest and the trees and even branches we're going to work on and that is great. that's absolutely necessary.

i applaud you for the approach, but i think we need to look back the other side and flipping it over to see whether we see on the bigger scale how this all links together. so it's just a question of filling in more of those over time. and i think so we can understand and also help to communicate that better as we will go back to ask for more financing or whatever. and i say this because we just earlier in this meeting approved in our consent calendar money allocated for communications and marketing to explain what it is that the port needs to communicate in our messaging in what we need to do and how we need the public engagement and the community support. so i think these messages have to come through a little bit broadly. as i said, don't take it as a criticism. it's to build on it, but it's

taking a wider lens. does that make sense to all of you, brad, any reaction? >> i think that is very good feedback. it's very important to put it in the broader context of what the city is responding to in some of these larger events. the city administrator office, the city's chief resilience officer, is certainly taking that view and we're sharing our results with him and other departments. all of your other points. very good things to consider. >> i would like to know if we're going to spend $5 billion for a seawall, what earthquake is that going to protect us against. i think it's important to know. just so that we also don't mislead people and we just know

what kind of risk we're trying to mitigate. as i said, we will not be perfect, but at least we're addressing the bulk of it. elaine, do you have any comments? >> yes. thank you for the comments. it's very important as we go through the process to identify the overall risk and as you said, describe where we're intervening to reduce the risk and be transparent about the risk that still stands. as you appropriately pointed out, these are really the building blocks. they provide all the building blocks to understand those risks from a utility perspective, from a emergency response perspective, from the public values and put them together. so the comments you're making will be what the team will be coming forward to you to discuss and discuss it in ongoing ways with the public. also internally to the team, there has been conversation and long-term development, concept

of -- as we move through improvements to prop a that exactly show what risk the program is mitigating and this would be a risk to look at port-wide risk as well and what other efforts are mitigating and resolving risk over time. so we keep our eye on the ball getting to the most urgent things next. you're right. we have to be prepared to assume some level of risk because we do not have an entire program funded nor do we anticipate having an entire program funded. so there will be ongoing risk as we move through efforts to make the waterfront more resilient. >> commissioner woo ho: i think part of it, i will just end with this, saying, we're the gateway for an earthquake or the sea level rise or tsunami, but it is going beyond the waterfront, so we want people to understand we

are the guardians of the gate, but it is going to pass through us. we're going to do your best. we're worried about the tenants and everybody facing it most directly, but it's not like it's going to stop in the -- even x number of feet away from the embarcadero. that will not happen. that's not how nature works. so i think we have to be prepared to explain we feel the burden perhaps more than any other i guess agency in the city, but what we're responsible for. and we should be. and we're accountable for it. but it is going to spill over. we just need to be -- we're the ones on -- i guess on guard here to do what we think is best and to help the city and obviously all the residents of san francisco accordingly. thank you. >> if i can just -- one aspect

of the comments. one of the staff -- study is that the tsunami risk is low. so we can follow up and share more information with the commission about that from the mhra. >> commissioner woo ho: that would be good to know. thank you. >> thank you. >> commissioner adams: stellar report. the one question i have and i want to thank my fellow commissioners for their thoughts. i want to know about contracting. it does sustain as far as contracting there is an equal

playing field. i would hope that this is a port not of two tales, not of exclusion, but one of inclusion. can you tell me, brad, how many african-american firms and what is it looking like? because there needs to be balance. >> sure. i also wanted to invite carlos cologne to help me out with a response on this. if you go to the staff reports for this item, the commission report on page 18 includes the ethnicity of our various contractors and you're asking specifically about the african-american contractors.

there are three african-american subcontractors. the island group that is leading this new workforce development and lbe support services task which is so critical to this work going forward. hollands consulting which provides scheduling services to the program vital to keep the whole program on track and rdj enterprises supporting the public outreach and engagement. we've had a pause in that due to covid-19. we're starting up online. and then on the next page, page 19 goes over the civic edge firms, lbe firms, including ethnicity. and there are four african-american firms that are on that contract as lbe

subcontractors. three of whom were recently added on our communications, rdj enterprises was on the original contract. >> commissioner adams: can you tell me how much money they're getting compared to the other vendors and contractors? >> so we would have to add that up and report back. we're reporting here on a line-item basis. so if you're open to it, we could report back to the commission the percent of the total contract going to african-american firms and the other ethnicity, where we have it. >> commissioner adams: all right. i will -- president brandon, i yield to you and i might have more questions. go ahead.

>> president brandon: thank you. brad, stephen, lindsay, director forbes, thank you for such a wonderful report. a lot of great work has gone into this. a lot of community input. and commissioner woo ho and gilman asked great questions. i really want to thank you for having that third slide of the diagram of the overall project so it focuses on what we're talking about. because this is a lot. and i think, like commissioner woo ho said, it's like an encyclopedia reading this. reading this and the other report is a lot. so for us as a commission to keep it top of mind, i really think that we need to have more -- on this as we go. because we're getting to a critical piece where we're going to have to start making decisions on how do you -- how

to use them to get the best bang for our buck. so hopefully, we can maybe quarterly start briefing just to keep us top of mind and up to date. because coming back every six months to a year, it's like we have to start from the beginning and come forward, where if we're consistent, we can move this along because it's an urgent need. thank you so much for this and for the report. i really appreciate it. regarding the contracting and where we are and how we are really trying to look at everything from an equity lens, i think it's hard to talk about contracting if we don't talk about minority contracting. as i -- [ ♪ ] [music playing]

>> president brandon: thank you. as i started looking at the contracting and looking -- because you know this is near and dear to my heart. i've been involved from the very beginning. from the very beginning i said this is a huge project. this project is for all of san francisco and we have to make sure that we engage the entire city, every community within the city, to make sure that everybody is aware of what we're doing. and that we start putting our workforce, our training programs, everything together now, three years ago, so that we are prepared for everyone to participate in this $5 billion+ project. so when i start looking at our contracting knowledge and how they've gone out, i went back to conversations we've had in the

past and said, wait a minute, we should be working with these firms because we made commitments to work with these firms. i went back and found an informational presentation. we have a list of minority firms that we committed to working with. and then i look at these dollars going out now and i don't see those firms listed. so then it gave me cause for concern. when i started looking at what dollars have actually been spent, when i look at our minority contractors, they are getting paid far less than our lbe partners. so it's really cause for concern to me that when i look at this, the firms that we originally said would be a part of this, who are not on this list -- and some who are on the list have

gotten paid more. or they've got $150,000 contract and been paid $7,000. so before i say i think there is any bias going on here, i would like for us to have a hearing, a presentation, on where we started, where we are and where we're going. i really appreciate you saying that those firms, r.b.j., allen group, were going to look at using them going forward. but we had that conversation over a year ago and they should have been part of this existing contract. so i really need to feel comfortable that we are really looking at these contract dollars through an equity lens. i really forward to you guys coming back and reporting. also when i was going through the mhr assessment report from c

h2m and the picture that we're put under environment of the space and land use. i did not see one minority. we have to let san franciscans know they're welcome. director forbes, i would just like to make sure that maybe our next meeting or one of the meetings in october, we can really delve into what we're doing with our contracting dollars and if they are equitable or if we need to make changes. and also keep us up to date on what we're doing with this overall project because there is so much to it and it's so critical. thank you, brad.

>> thank you so much. >> this is carlos cologne. i was having technical difficulties, but i can answer commissioner adams questions regarding how the breakdown of spending. so to date -- this is through july 2020, which is the last invoice received. we have spent out of the $3.5 million to lebs, $2 million has gone to minority businesses, with 1.5 going to nonminority businesses. of the tasks we've authorized to date for the lbe, we authorized $4.4 million with 2.5 going to minority-owned lbes.

>> thank you. you may have missed we're going to do a report coming up. we'll look at some of these issues and prepare for a presentation. >> president brandon: i would like each portion broken out. >> yes. absolutely. >> president brandon: commissioners, any other questions or comments? thank you. thank you for all the hard work. thank you for the great report. this is great. and i can't wait to see what we're actually going to do. as we put this plan into action. thank you. >> next item. >> item 10a, informational presentation regarding a proposed lease with bay area council for the mooring of the historic fer boat klamath to be

located at pier 9 south at embarcadero and broadway for a term of 15 years with two five-year options. >> hi, good afternoon, president brandon, commissioners, director forbes, members of the public. i'm with the ports maritime division. for today's presentation i'm joined virtually by the maritime director andray coleman and john grub, keith and alan are representing bac. today i bring before the commission for your consideration and direction, a proposal that would return the klamath back to the san francisco waterfront. the bac has been a driving force since 1945 and this year celebrate their 75th anniversary. area council mission is to engage business and civic minded leaders to solve the regional

issues to ensure the bay area is the most inclusive area in the world. the work includes informing and mobilizing business, civic and political leaders on the most critical issues and opportunities facing the region. bca is an association that include many maritime stakeholders as members. the proposal is preparing the ferry boat klamath and moore in pier 9. it will allow the klamath to become an important historic meeting place and regional destination for leaders, and the broader community. office space would be available to rent to priority to maritime tenants. this shows the facility as it is today. as you can see, the gate is

locked. the b.a.c. would open significant public access to close pier and all levels of the vessel, including to the roof deck, which would provide spectacular views of the bay and the san francisco skyline. the plan includes a museum exhibition space, likely dedicated to the klamath and the history of ferry service on the bay. the council would provide vent tours with maritime education with historic points of interest on the vessel. this slide shows an illustration of the same facility with the klamath at berth. the project would require dredging for the moore alongside pier 9. electrical, water and other connections to landside utilities will be improved as part of the proposal. this project react evacuates evacuates -- reactivates the

waterfront. between 1850 and 1939, there were 120 ferry boats in operation on san francisco bay at one time or another. as george harland wrote, cherished vessels profoundly influence the bay area and affected the daily lives of the people who worked in the community. they marked a glorious period in our history as they carried cars, trains, livestock, agricultural and all manner of other items. the completion of the golden gate bridge and oakland bay bridge was the eventual end of the era. one by one, these stately boats were scrapped, destroyed or lost

to time. by 1979, only 14 could be accounted for in various locations in the united states. since then, nine more have been lost leaving just five historic ferry boats left. since retiring from ferry service, the klamath has housed great local companies. b.a.c. has purchased the klamath and plans to overhaul the vessel to share and extend the incredible history of the klamath and the old ferry boats of the bay. in 2005, the port commission adopted a historic vessel policy which recognizes historic vessels as an important part of the san francisco maritime legacy and guidelines in considering the berthing of historic ships at the port. the klamath satisfies all the eligibility criteria.

given the unique nature of the opportunity, port staff has determined that a competitive solicitation is not necessary. the bay area council proposes to rehabilitate the exterior of the klamath to an appearance similar to the appearance in 1924 and to moor and maintain the klamath an pier 9 under lease with the port. a key public trust objective as per our waterfront update is to foster activities that draw public to the waterfront for recreation and enjoyment and to experience san francisco's maritime history in architecture, especially in the embarcadero pier facilities. the klamath would sit 500 yards from one of her former ferry slips. we feel she would visually balance the broadway open water

basin which features the historic ferry body santa rosa as pier 3. council is seeking a longtime maritime lease with the port. the proposed lease is space for nonexclusive use. to be included in addition to tenant monthly based rent and annual cpi, tenants shall pay on a monthly basis a percentage of rent and all special event revenues. on august 27, 2020, the san francisco planning department issued ceqa addendum 3. the addendum concluded that

mooring the klamath at pier 9 no new mitigation measures would be necessary. the work within the embarcadero district is consistent with the secretary of the interior standards or the treatment of historic properties. this commission adopted resolution 8904 in 2006 requiring all work in the embarcadero historic district comply with the secretary standards and supports the port's stewardship of the historic district. a permit authorizing new bay fill and army corpse of engineering will be required. all regulatory agency approvals are the responsible of b.a.c. they have sought and anticipate the approval of aemendment to te

special area plan. it includes a balance of revised public benefit and revised development entitlement with strict consideration of health, safety and welfare of the entire bay area. key benefits of the proposed improvements are, one, providing ada compliance and enhancement to the pier 9 in the heart of the embarcadero corridor and the water basin. two, the klamath will provide a visitor destination bringing more foot terrific to the pier 9 and the associated businesses in the vicinity of the improvements. and number 3, the utilities infrastructure upgraded to

improve longevity, vibrant and marketability of the future. thank you. the proposed maritime lease is expected to contribute in a substantial way to meeting multi-objectives of the strategic plan, including evolution by transforming the waterfront to changing port needs. productivity by attracting and retaining tenants that build an economically viable port. equity, by ensuring ports activities advance equity and public benefits and attract diversity of people to the waterfront. and engagement by increasing the public's awareness of the port's function and activities. port staff has determined that the proposed lease with bay area council, the proposed capital improvements and associated lease term meet the criteria and the historic vessel policy. the port staff has evaluated the

proposed use and revenue projections as viable and answered that the capital improvements will generate a long-term gain that the port would not otherwise receive. in summary, port staff concludes the proposed location would activate a maritime berth facility that has long stood vacant, create public access, infrastructure improvements, financial stability and favorable conditions for recovery in a post covid economic climate. the return of the historic ferry boat for use as the headquarters of the bay area council brings focus and attention to our gateway of our city and port, providing increased revenue generating opportunities, securing a location that can be used for public education and inspiration while improving views and enhanced public experience along the embarcadero. finally the proposed new lease term is reasonable in relation to the size of the operation and

the need amortize the investment over a manageable period. it's been written the evolution of the water front from the beginning to the present reflects san francisco's col color -- colorful

and colorful and wonderful and beneficial. so i think i'll leave it at that. i'm happy to take any questions or, you know, my team is here as well. >> thank you, jim. thank you dominic for the wonderful report. now let's open up for public comment. we will open the phone lines to take public comment on items 10a for members of the public who are joining us on the phone. dennis will be the operator and

will provide instructions now for anyone on the phone who would like this provide public comment. >> thank you, president brandon. at this time, we will open the queue for anyone on the phone who would like to make public comment on item 10a. please dial star 3 if you wish to make public comment. the system will let you know when the line is open. others will wait on you until their line is open. comments will be limited to three minutes per person. the queue is now open. please dial star 3 if you wish to make public comment. >> president brandon: thank you, jennifer. do we have anyone on the phone? >> yes, president brandon, we have one caller on the line at the moment. >> thank you. i am unmuting their line now. >> good afternoon. this is alice rogers. i live in the area and i served on the waterfront land use

update plan group. and i would very much like to see you support this proposal. as the proponent said, it's really a win-win for the waterfront to have this ferry boat come back. it's been here before. and the iteration as i understand it was -- it's going to be even more spectacular in terms of offering new ways for people to engage on the waterfront. so, please, support this plan. thank you. >> president brandon: any more callers? >> thank you, president brandon. it looks like there are no further callers on the phone wishing to make public comment on this item.

>> president brandon: thank you. seeing no more callers on the phone, public comment is closed. >> commissioner woo ho: yes. i had some trouble trying to open up the staff report, so i would just like to ask, since i think we've had this item before, can you summarize any changes since the last time the commission discussed this item or had information on the terms? i just would like to know if there were updates or changes. >> thank you, commissioners. this is dominic. at this time i don't believe there was any changes to the terms agreed upon by commission's recommendation. >> commissioner woo ho: okay. >> i'm sorry, i can clarify for you. that was a closed session last time we were in closed session. there is no changes to the terms as discussed at that point. >> commissioner woo ho: okay. i have no further questions then.

i am supportive. >> president brandon: thank you. >> commissioner gilman: thank you so much for the staff report. i, too, have no questions. i'm very excited this is moving forward. it's going to be a great asset to the waterfront. i'm looking forward to being on the klamath. this is great fort waterfront. thank you. >> commissioner adams: at first i was kind of lukewarm to the idea. and the more that i keep hearing about it, the more i like it. and i appreciate the presentation made by dominic. and it sounds like it's going to be a great thing. so i know alice from the community and alice's voice goes a long way with me. so i'm good, thank you. >> president brandon: thank you.

>> thank you, commissioner. >> president brandon: thank you, dominic, for the presentation and thank you, jim, for your work. i have the same question as commissioner woo ho, if there has been any changes, because i think we heard it a couple of times in the fall session. i want to thank the bay area council for really stepping up and bringing klamath back to the waterfront. it's going to be great. we look forward so seeing this item for approval at the next meeting. >> thank you, president brandon. >> president brandon: next item. 11a, request approval of lease number 4-16698 for a lease with andrey boudin bakery for the chowder hut located at seawall lot 301 at the embarcadero and taylor street for a term of 10 years with a five-year option.

>> good afternoon. it's real estate and development. just wanted to provide a moment of introduction before jay edwards launches into the great work and details on this approval item. you might remember or maybe you don't, because february feels like a lifetime ago. you saw this lease in an informational item back in february. since that time, of course, we've all been experiencing this incredible economic and health disruption, so just as a little bit of introduction, since february, we took a pause. then we reengaged with boudin bakeries regarding the chowder hut lease. we're gratified that the terms have held out. what is before you today is a approval of 15-year lease with the tenants and you'll also recall that in august we took

you through the rent forgiveness program. we're now bringing that forward to the board and that is up for approval with the board. this tenant, chowder hut, should you go forward with the lease, will be allowed to participate in that program. you might recall that the way restaurants participate in the program, they're able to have their bay front forgiven as they operate for a number of days and provide the port percentage of rent. i want to state that context. i want to thank jay edwards, rona sandler and mark bird for putting this lease in for execution and consideration by the commission. jay? >> thank you, becca. good afternoon, commissioners. jay edwards, senior property manager. i'd also like to acknowledge vicki lee. she is a real estate staff member and she is available for questions later on in the

presentation. this is an overview of what we're going to present today. boudin has operated the chowder hut as its known for the octagon building, due to its unusual shape, since 2011. lease expired in 2019 and he operated on a month to month basis since then under the leasing terms and conditions. they are a productive partner for the port, generating $4 million sales revenue. in 2019, and the restaurant provides a few casual outdoor dining and beverage services we have available on the wharf.

the chowder hut is the forefront. the flagship is on the right. this is a view from taylor street. okay. [laughter] thinks the premises map. it didn't quite come out exactly as i thought, but in any event, what you're looking at is the existing premises that the chowder hut has now. proposes the same premises in the light grey area surrounding the building is the outdoor dining area and the public rest rooms are in the white area in the middle. port adopted the retail leasing policy for existing retail tenants who may qualify for lease extension based on the criteria described in the staff report and shown on the slide.

port staff with the assistance of the consultant believes the proposed capital improvements and lease terms meet the criteria as outlined in the retail leasing policy and, therefore, justify exemption that is allowed under the policy. this is the terms remain consistent with the february 11 staff report and we have now finalized the lease for execution. as you can see, it's a 10-year lease an 5-year option. base rent is going up substantially. percentage rent remains at 9% which is on the high end. we've increased our transportation fee. and the lease contains all

current city ordinances and requirements and will require the port commission to approve. there are mutual obligations regarding the public rest rooms shown on the premises map. this is a highly unusual situation which boudin has agreed to take on some of the -- take on the janitorial for the public rest rooms as well as reimburse the port up to $25,000 for fixtures and repairs, replacements and hire a city approved plumber if emergency repairs are required. so it's an obligation that most of our tenants don't take on and they have done so. port return will provide all the

utilities for the public and they serve the wharf visitors. they receive a credit against the rentnd this month was determined as a minimum, the port would extend for similar janitorial services. all the obligations are agreed upon specifications. so boudin will construct a glass atrium that will have a retractable roof. the improvement will cost $800,000 and must be performed within the initial three years of the lease. based on projection from boudin and the analysis, it will generate revenue especially during the non-peak season. in the staff report there is

analysis showing tables how this is all projected. that's our opinion that it's really going to drive revenue during those rainy months. or even when the conditions are not ideal for sitting outdoors. providing more comfortable dining experience for the public. that's the existing exterior. the bar around the corner. that is the atrium. so to put a little bit of financial analysis. the top table represents the annual sales on per square foot basis of the chowder hub compared to restaurants on the port. they are number one in receipt and sales per square foot. the second table is the chowder

hut extension as compared to a competitive bid scenario. this analysis was completed pre-covid and we have a section coming up next where we updated for covid, but under the circumstance, we believe this gap between the lease extension and the proposed bid could exceed the $2 million in added value that we perceive by stepping the lease. -- extending the lease. here's the update that we prepared. basically, we reviewed all our projections, capital improvements, the terms. really everything. and reconfirmed that the improvements and lease terms are competitive and do deliver numerous benefits to the port

and the public. you can see some of those up in the slide. becca talked about the rent relief. next slide, please. so our recommendation is we're really pleased we're able to craft a new lease and add value added improvements to the restaurant, improve the dining experience, improve the rest rooms, and contribute toward the port's objective and hopefully fisherman's wharf's economic recovery. kindly request your approval for resolution 2044 and lease number l16697. thank you, that concludes my presentation. >> president brandon: thank you. commissioners, can i have a motion? >> so moved.

>> second. >> president brandon: thank you. now let's open up for public comment. we'll open the phone lines to take public comment on item 11a. so members of the public who are joining us on the phone. we will provide instructions now for anyone on the phone who would like to provide public comment. >> thank you, president brandon. at this time we will open the queue for anyone on the phone who would like to make public comment on item 11a. please dial star 3 if you wish to make public comment. the system will let you know when your line is open. others will wait on mute until their line is open. comments will be limited to three minutes per person. please dial star 3 if you wish to make public comment. >> president brandon: thank you. can i ask that everyone mute, please? thank you. do we have anyone on the line?

>> president brandon, at this time there are no members of the public on the phone wishing to make public comment on this item. >> president brandon: thank you. seeing no callers on the phone, public comment is closed. >> commissioner gilman: thank you for the report. i'm reading through the staff report and your presentation, i concur with staff that extending this lease and doing a no bid that we show that we met our criteria for moving forward in a no-bid situation and that's a benefit to the port. it's substantial -- and to the public. and particularly in this time where outdoor dining is sort of where we're going to see a lot of our restaurants need to go despite if they could open later in the month, i think it's a huge benefit driving foot traffic and tourism to the

wharf. this kind of venue is what tourists come to do. i'm very supportive of the item and excited to see the improvements and hope it's possible they could be speeded up. do not take two years. i know they have two years in the lease to get the improvement up and running, but i hope they're able to expedite them and make that venue more attr t attractive on the waterfront and drive business toward it. i'm supportive of the item. >> commissioner woo ho: yes, i'm supportive of the item. i think they've been a good tenant and i have actually been out there with jay. i guess when we went to the main boudin facility. i think he pointed out to me the possibilities for chowder hut and this would be a good idea and given the circumstances right now, they have a good chance to obviously get themselves back on the -- you know, back on their feet and i

think this lease can help them and help us in the long run and help that whole area. there is a little activity somewhere, it will helping the neighboring -- the whole area. i hope that's the case. with the boudins when they open up their main facility, or open today with limitations, i think it's a good idea. this lease will help to reactivate the area and i'm supportive. thank you. >> president brandon: thank you. >> commissioner adams: i'm supportive of the items. jay, a good report. >> thank you. >> president brandon: thank you so much for the report. can you refresh my mind and tell me what the obligation is now? >> it's similar, president

brandon, in that they do provide janitorial services. they do get a monthly rent credit. we maintain the rest rooms, meaning repair them. we do make repairs. clogged drains. so it really is a carryover of what we've had with some refinements and improvements, i think. if that answers the question. >> was it the same, $4,000? >> no, it was $2,000 and that was set in 2011. so we went back and got a quote from janitorial services on what it would cost for us for minimum services and that's where the $4,000 came from.

>> president brandon: and the rent covid, is that offered to -- the rent before covid, is that offered to all of our new tenants? >> all of our percentage rent tenants, including the tenants that would renew leases. they're an existing tenant. they're renewing their lease under these dire times. we're extending them the same program because it's really a renewal of an existing lease. that's the way we're viewing it, commissioner, hopefully that's the way you're viewing it. >> president brandon: okay. so, this is for renewing tenants. i guess i'm just asking, is this option open to all retail tenants or just existing? >> no, this would be just --

yes, existing tenants only. >> president brandon: okay. >> thank you. >> president brandon: and how has their business been over the summer during covid? >> thank you for asking. they've been struggling as everybody has, but fortunately, because of their outdoor dining, they've been able to attract a higher percentage -- we get percentage for the reports. they're on the high end. it's still 60% off, but it's on the high end of what is reported for outdoor dining establishments and double in some cases. so i think they're doing good business under the circumstances, commissioner. >> president brandon: that's great to hear. thank you. >> you're welcome. >> roll call vote? on resolution 2045, president

brandon. >> president brandon: yes. >> commissioner adams: yes. >> commissioner gilman: yes. >> commissioner woo ho: yes. >> president brandon: motion passes unanimously, resolution 2044 is adopted. >> thank you. next item. >> that would be 11b, which request authorization for port staff to enter into negotiations for an exclusive negotiating agreement, e.n.a., with strada trammell crow company partners, the highest scoring respondent for the piers 30-32 and seawall lot 330 request for proposal located generally on the embarcadero between bryant and beale street.

resolution number 20-45. >> president brandon, so i'm -- i need to recuse myself and make a statement before we launch into this item. so thank you, president brandon. in december of 2019, i consulted with strada investment group on a non-port related project and must recuse myself from the discussion or acting as a port commission action involving strada investment group through the remaining calendar year of 2020. so as this being the last agenda item on our agenda for the evening, i'm going to be leaving the meeting. i look forward to seeing all of my colleagues at our next commission meeting. thank you, president brandon. >> president brandon: thank you, commissioner gilman. >> okay. >> hello, commissioners. rebecca from real estate and development. i hope you can hear me.

before peter launches into his excellent presentation, i wanted to give a note as introduction on the item. first i wanted to just say thank you to so many of the respondents and members of our advisory groups. we were gratified to receive such great responses. support commission heard the responses in the last meeting, but peter and others, david and others from the team have presented to the northern advisory committee. you'll hear about their comments today as well as the maritime and commerce advisory committee. so we'll be integrating their comments into the report. i also wanted to mention that is what is before you is an action item which would essentially affirm the r.f.p. scoring panel score. the scoring panel scored strada tcc as the highest respondent. if you take action today, you would be directing staff to work

with strada to write and develop the negotiating agreement and then we would come back to the commission to execute. and you'll remember from the other development projects, that the ena is the multiyear governing government, the contract between the port and developer to work on the proposal and to work on the design. so what we're looking at today are proposals that were responsive to the r.f.p. they're not in any way shape or form a done proposal. there is a lot of work to be done in terms of refining the proposal. just a little time line to put in your brains. i looked back at a couple of our recent projects that have gone from developer selection all the way through approval just to give you a sense of how long these things take. the historic core at pier 70 from selection to approval was about two years. square footage wise it was half the size of this project.

88 broadway, the affordable housing site from port commission approval took about three years. that was just one building. the pier 70 site and the mission rock took between 6-8 years. we're hoping this project is in the middle, not the 6-8 year period. i wanted to put a fine point on the action and the fact this is the beginning of the process and we have a lot of work to do in terms of community outreach. and what we have before us are from the developer, they said they were done with their team in the vacuum. if we move forward with the ena, that starts the process of opening things up and doing a lot of community work to make sure the proposal works for all of the stakeholders. wanted to put that in your brains as you're considering this action. now i turn it over to peter albert for the excellent information he can provide on

what we've been doing in the last two weeks. >> thank you, rebecca. commissioners, i hope you can hear me. president brandon, commissioners, executive director forbes, peter albert. when i talk today, you're going to see the same slides we saw september 8. but it's helpful to take those steps again, because i know we're being joined by a lot of people for the first time. it's a good chance to check in on the strategic plan and how it appliances with the develop -- aligns with the development. the r.f.p. process, a little bit on strada ttc partners. they're here on the call as well just as resource for you, commissioners. if you'd like to ask questions of the strada team. we have the financial consultant who helped with the scoring

panel. and now the next steps. for how redevelop the r.f.p., we wanted to make sure that the this is an opportunity to develop vacant parcels on one side of the embarcadero and the next in a way that is consistent with the strategic goals of the waterfront plan and support. we want to have a sustainable development. meaning not only the impact on the bay, but the development itself, the transportation serving the development. resiliency is a criteria here and part of what we did in the rfp, meaning we emphasize the seismic strength of the piers. whether that's a rebuild or

rehabilitation. and looking at flood protection and sea level rise. then engagement was always a big part of shaping the r.f.p. you'll hear how we worked with different communities groups, advisory committees, but that helped shape it down to the paint of the famous community values we'll reference through this. equity emerged more importantly this year as ever as a quality. it was always important to the r.f.p. development, something that resonated with the community as well. a real interest in making sure we're looking at activities open to all san franciscans and that whether there is a residential component, a commercial component, institutional component, there are no barriers for the city or region to enjoy this. there is financial strength coming out of this proposal. it addresses the deferred

maintenance needs at the port. supports the public activities we want to see and we want a productive waterfront. the piers are limited in what they're able to do. the same with the seawall. this is helping to restore full utility to the assets and support the embarcadero historic district with the improvements to come out of this and the revenue. real quick overview of the offering. these are huge pieces of property. we don't get the opportunity to develop property of this size on a pier and across the street. but we've got pier 30-32, it's zoned m2 which is an industrial zoning. but the structure conditions are in such compromised shape, it can only be used partially as pa parking facility.

but it still functions as a deep water berth with a very limited access plan to that berth. it does not include the -- as it was designated, this is something you'll see in the strada proposal. it's zoned for south beach downtown residential. half of the site is used for the temporary navigation center. the remaining part of the site is used as a parking lot for 289 spaces. so in shaping the r.f.p., we wanted to start with the waterfront plan. it was helpful that the plan was going on at the same time, because it helped us update the plan to focus on diversity and equity for the users and the beneficiaries of this development. and real clear understanding that we need a mix of public oriented uses and revenue generating uses to help sustain

those public uses. the r.f.p. was sharped by the goals of the waterfront plan, but it was also shaped by the south beach subarea goals and the acceptable land uses proposed on the waterfront plan, because this is both a regional resource, a city-wide resource and a neighbor to the south beach reconpoint area. the resilience programs of the seawall shaped the r.f.p. those are the criteria you see we evaluated the proposals with. with the meetings we had with then known as sea wag, these -- c wag, these meetings shaped about 29 community values, emphasizing priorities on financial stability, equity access, values, as a cultural asset. the deep water berth an important priority. and real questions about the

residential character of the seawall. as a result of the meetings and the meetings with the written conbay and mission communities, we did develop the values. those are part and parcel of the r.f.p. and every respondent responded to those values. before covid, we had the r.f.p. issued on february 3rd. we had the -- february 18th, we had the pre-bid meeting and then we had shelter in place in march. so we extended the deadline for the submittal out to june 26. by that time, we got five proposals. three of them were deemed responsive, meaning they met the qualifications and supplied all the requirements. those advanced to the scoring panel. scoring panel was convened from july 21 to august 13. five members of the community with various skill sets and facets of the community along

the lines of you, the port commissioners. the panel convened to score the submittals and the scoring was done -- i'll talk about that later -- but they did it written and oral and they've gave the scores based on that. you heard on september 8, the scoring results. you also heard the scoring by the proposal overviews of the three top storing proposals. we'll talk about that later, but in the meantime, between the 8th and today, we did meet with the northern advisory committee and the maritime commerce visually committee just on the 16th and 17th of september. which have feedback for you on the slide. but the options that we have today are to either authorize port staff to enter into ena with the top-scorer. these are the options spelled out in the r.f.p. or terminate the r.f.p. process and direct staff to pursue other actions. the scoring criteria were broken

into two elements. the 100 point for the written and 30 point for the oral. you see the breakdown here. the emphasis on quality, design, development and the strength of the financial proposal, the financial capacity of the respondent and their economic viability, the experience, organization and representation of the team. that totalled 100 points. to help with that, we did prepare the technical memos, the memo that is done by the kaiser marsen and we also had port engineering do the engineering review proposals as well. following the scoring of the written submittal, the panel has heard the interviews. there were 30 points possible. it was important for them to hear the team, each individual team as an entity and how they handled describing the quality of the design and the development, the experience and the organization of the team.

out of those efforts, we have the scoring as such. the strada tcc led with 39 points. 75 points out of 130. all three of the proposals have strengths that the panel has recognized. all of them were impressive and some panels were excited we got the response in the very constrained circumstances we're in. the highest and low scores of the criteria were eliminated, so this is more of a moderated assessment of the scores without the extremes on either end. so we have an image here. on the image on the left is a fairly recent photograph. it's pre-sales force, but what you see is how limited the deck of the piers is used right now. there is only a fraction of the space used for parking.

there is access for heavy vehicles. across the street, the watermark tower and the parking lot. the image to the right is strada's proposal showing the rebuild. this is not berehabilitation of the piers. it's a rebuild to a 45% smaller footprint. the development across the street of mixed, affordable and market rate housing, seawall lot 30. it's not for you to have to read the points, but the highlights are on the left is the residential component. 850 units, 25% affordable, there is open spaces available to the public. it's sort of in the court area. through the pedestrian pathways through the site. allowing there to be transparency to the waterfront.

there is a community room offered in the proposal fort community. across the street, you have two piers that resemble the historic format. the two-story structures. what is notable is the water room, which is the floating pool plus the basin that has room for personal watercraft, floating wetlands and access to the bay on south side. on the eastern edge, the deep water berth included access diagram how to get to the deep water berth in the embarcadero is part of the proposal. and loading an unloading and provisioning of the boats. the program here is what strada tcc proposed. the 13-acre site on the piers, they proposed 376,000