the dda. there is a delay and no escalation in the rents by c.p.i.. from the end of the venue leases to the beginning of the longer-term leases. >> i will take the first one. on pier 26 and 28, they negotiated that options so they could take stock on whether or not they will use -- move forward with using those in the interim. one of the options is interim leases at 26 and 28. they're motivated to keep those locations to burn off their rent credits for the dollars they spent. while we did not have a firm agreement now, it is something that we think there is a self reenforcing dynamic that would allow those to be kept by the event authority if anticipating long term of bell -- developments at those sites. >> as to 26 and 28 in the starting rents, 26 and 28, we had them assessed in terms of their current value and prospectively, our judgment from that analysis and from our engineering staff are twofold. one is the valuations that we derive from a real-estate economists supported by a team of his

is this binding, the language that the resolution refers to in the dda, the dda refers to this. with this be binding in making sure we carry out the goal of the local hiring as pertains to the america's cup? >> the dda incorporates the workforce development plan into the actual documents to a becomes part of the dda and the -- becomes an enforceable document. the remedies are those specified in the applicable underlying ordinances or those to which the authority has agreed in its negotiations with the mayor's office. supervisor avalos: i am assuming those negotiations, the agreements are in this document. that is my ultimate question. >> that would be my understanding as well. supervisor avalos: thank you. supervisor chu: thank you. we have gone through a number of the adams. let's return to you, mr. rose. >> good afternoon. in terms of a brief overview of the document presented by mr. martin in terms of the response to the recommendations, we have three of our nine recommendations we did not see in the documents i want to call that out to you. one of them was the intent was cha

the dda. i suggested a hard cap of $75 million without peer 39. i think that is a good goal to aspire to, to see if we can minimize the cost and picture we're talking about the real needs and the most cost- effective construction to ensure that we make the improvements that we need to make. next, clear language on the mou schedule with the organizing committee is important. that should come along prior to was approving the dda, and i think we need stronger language. i don't think any side is at fault, given the tentative language that was put in place around endeavors and the polls. i think we need to make clear the outcomes that we can commit to ensure the risk with the of that authority. i think i have some very clear reservations about our general funds being used to fund this event when we have some in the service needs and gaps already existing in the city. some of them were discussed earlier today at the budget committee, but we continue to get cuts from the federal and state of all. i d

it would remove the open space water basin from the dda. having that struck, i don't believe that it is proposed in terms of marina uses, as conforming use currently planned for the open space for the opiate -- for the area. commissioner chu: thank you. if i could ask the port or the oewd to respond to that item? this is removing the open water basin from the dda. >> brad benson of support staff. as you know, the mayor negotiated the relocation of one marino right, the rain, water basin -- therincon -- the rincon water basin. we thought that was great improvement to the underlying deal. we had discussed the arrangement of marinas with staff. they understood that that was the improvement the committee would make. under the dda, the port would enter an exclusive negotiating agreement. the authority would be obligated to get all of the permission to build a marina in this location, including permission from bcdc. staff explicitly addressed this point and said that the proposal going forward or to build a marina in that location, there would be

the dda, we're going to ask this day in committee. we are ready. we love boats. we are excited about the race. but opportunity does not just a trickle down without having equity components. when it comes to jobs, the community local hiring policy is the ultimate a "tool. i have got a son. he is 4 months old. i am looking forward to the time when i can walk with him and look and say this is the legacy. we all come together to do the right thing to enforce and put into the dda the local hiring policy. we have prevailing wage. we have a partnership between community and labor to do that. hopefully with the authority, we can get the language we want, the community labor agreement, which would be truly historic. moreover, i am really taken by this idea that from the beginning, december 31, 2010, america's cup said they would comply with mandatory local hiring programs pursuant to chapter 6.22. i have a copy here for the board and everyone who wants that reminder. thank you. chairperson chu: this will be the last speaker unless there are ot

local hiring including veterans must be written into the dda. it would help funding efforts to say they could receive tax benefits for hiring each and every veteran, a vietnam vets or younger bets coming back from iraq and afghanistan. the veteran research center is repaired and ready to go. they have computers and the staff over there now. what i would like to see and what the community would like to see is to write specific sent to this local hiring program that include hiring veterans. veterans it helps in the fundraising, and helps cushion the deficit problem that you talked about earlier, supervisor, and in addition, is good business to hire veterans. there are more than 100 jobs in the military that translate into civilian life, and that includes the trades. i would like you to really consider this and not pass it by. you have to write this amendment and make it very specific, otherwise it will not work. it is not enough to say it is a local hiring policy. you have to say veterans in the program itself. thank you very much. supervisor kim:

from my point of you about the additional resolution language that pulls up the same language in the dda, that does not seem to be problematic. i want to hear from you. in terms of the issue about the general fund levels, i think i would be interested to hear what you have to say about it. supervisor chiu mention there might be opportunities where we actually want to have a different financing mechanism. can you speak to them? >> i think a couple things. based on the resolution and restating the reimbursements, the finite but it makes sense and i support that. -- bucket makes sense and i support that. i would suggest using the language that we can read into the record that talks about, no one can force the general fund or harbor fund to do any of these things. that discretion is left with those bodies. we have those options under the reimbursements frame we are talking about. commissioner chu: supervisor avalos, its sounds like the port is in agreement with indicating the language that was part of the recommended lang -- recommended action. then, with regards to the issue of the general

what i understand is it was come back out. >> this was the dda -- it did not have that provision. we worked hard with our partners to negotiate. they have provided this compromise and this is what is in the proposal before you. supervisor chu: thank you. supervisor campos. supervisor avaloscampos: what t board of supervisors approved in december 2010 and i think it is specifically section 7.3 hi, how the 1% sale of any condominium constructed on seawall lot 30 with the exception of the first sale. where understanding is it would mean the second sale. mike understanding is that what the board approved in december 2010 included the language. i wanted to confirm? from the budget and legislative analyst. >> that is correct. on page 4 of our report in the summary, we stated reinstate the provisions included in the foot -- host and venue previously approved by the board of supervisors on december 14, 2010. to require a transfer fee equal to the resale price after initial sale constructed on seawall lot 50. and the next item which has not been addressed in this response as i understand i

that being said, there is the new dda which is similar to the presentation that we made. this government and limits the way that the work is reimbursed. if they do this work, this would be about $80 million an improvement. these sources are reimbursed with a limited order of repayment and that is a really important point, that has been improved and a host of agreements. the deal is $55 million of improvement for the sale and a no cost police. after that, and there is pierced 30, 32, at interim -- and if necessary, potentially long-term rights at pier 29 including a 66-yong term lease and improvement. if they do not pay them back at that point, the authority has a right to claim 50% up to the station rents and a form for a subsequent leaks. we presented this orally on december 16th and has not changed since then. this has a limited order of repayment options, whether they choose to perform that to be reimbursed, it starts off with long-term leases. thus began at $6 per square foot. this is the next source of repayment and this goes beyond the 66 year lease. in this case, t

is not part is notd -- it is not part of the dda. i wanted to touch on -- it is not in your packet. i will give you one. president chiu: thank you. we we know how much work and how difficult. i want to state that at the outset and let you know the questions i have had nothing to do or are in no reflection of the intensity and the energy with which you have pursued fundraising. i finally got a chance to look at the sponsorship agreement. is the events -- the advance based on real commitments or is that in advance of what they anticipate the commitments to be? >> it is in advance. it's as an advance on our commission. we have sold the rights to local markets and the funds will be raised going forward from january 1, 2012 and they are advancing us the first 10%. president chiu: we are getting money ahead of time based on what we think will happen. >> where helping them across a number of efforts. we have taken them to over 90 companies now and encouraged by the momentum especially with companies that are headquartered here and the interests. those companies are starting to reflect and

we would get reimbursed based on actual costs and we are exposing the city to a lot of risk with the dda that is moving forward. it would make me feel more comfortable that there was a cushion for general fund in terms of how we're protecting that. i would like to see the mou hammered out before we move this out. before it comes to the full board. supervisor farrell:. as a non committee member i have been given a number of the documents here. i imagine it is a last minute for one year. in terms of working on the committing with these folks. i spent a lot of time here. we are really lucky to have kerry running this and have someone like mark buell chairing the committee. some of the press has been taking people to task that we do not have $12 million. i hope the board does not lose the forest through the trees picture. the fact that it is hard to raise $32 million or whatever the number is we're trying to raise here, not to say it will not get done or get down on time. -- get done on time. money does not fall out of trees here. this is private money. this is not something that is obligate

i will note, as you are aware, the dda has a change, and it is coming back to the board of supervisorsthe end of this month, and whether this continues to be a source of repayment from the event of 40 or whether they in turn was this cost into our budget is under discussion, so i would leave it to the committee about to handle this item on the 2 million you could reserve, and until the dda has approved. i could come back. you could sever this from the supplemental. it is really the committee's preference how to resolve this, but the other portion of the supplemental, the over $5 million, we do need to move forward because we need the cash for the project, and there is a delay on ordnances, etc., so we would prefer that. the rest of the funds. we would like to think a budget analyst for their report, and we support the recommendation to come back to you with a full report on the phase two funding and the debt financing and how we will resolve that before we issue what makes up the balance of the sources in this project, and i am here with my budget person to answer any questions. thank

i want to make sure that local hiring and prevailing wage go into the dda. i would like to submit that your friend for looking at this agreement not be that san francisco has won the right, but that the america's cup has won the right to host the event here, in this beautiful city. thank you. chairperson chu: thank you. if there are other members of the public who would like to speak, please come forward. otherwise, this will be the last speaker. >> are you saying you saved the best for last? manny flores, carpenters' local 22. we are in support of the workforce development plan. we have been working diligently with the event authority, especially with good progress. we have straightened up the language. we have an addendum to what is already in the workforce development plan -- the apprenticeships, prevailing wage, and covered work. we are in a positive direction there. recently, we just presented them with a basic craft agreement. that is an agreement with a few of the trades -- the laborers, the operating engineers, and carpenters. what it creates is labo

this is a comment i have for the dda. in other development agreements, when a developer agrees to build this many units, it forces a risk in terms of their return on investment. here, i just do not see that. >> should i go to the rest of the risk factors? have you gotten your questions addressed? thank you. supervisor kim: you were going to respond? >> i was just going to articulate another response to supervisor kim's observation. there are defined repayments sources in the agreement, and the authority is only able to get repaid most of its cost if it gets approved as a long-term lease. that is a discretionary decision by ceqa and the board of supervisors. there are other approvals required as well, including the port commission, acting in a discretionary capacity. ifd, which is the next major source of revenue, is dependent on that happening. there is significant risk on the development side that does not address the general fund risk. supervisor kim: would you like to add to that, in terms of development risk? >> there

any cost containment is essentially achieve as a practical matter in the dda. that is the construction risk at the bottom. there are other risk factors we discussed with the port commission. the first is entitlement risk. i touched on this earlier. the way they are reimbursed, for the most part, is through development rights. seawall lot 330 is a piece of property with a certain appraised value that is part of the host agreement. that is relatively certain. in other cases, it is steps -- is that the real value of reimbursement for the real costs that will occur in 2012 was a future development value, based on what they can get improved and built. the entitlement risk is high. we acknowledge they have not yet come up with a plan. we do not know if it is something they can get approved, or will really make enough money to meet the estimates we have put up there today. supervisor kim: in terms of the development rights for the sea wall lot 330 -- is it 330? there is something that are building and a risk there will not get their costs back through the sale of the

important for us to note that procedurally, while we as a body are not able to change or amend the dda, it is important to underscore that we as the board have to improve adda. we have to give approval and we as a body have every right to amend the document that has the approval. mine understanding and i wanted to be very clear is that even though we're not allowed to amend the dda, we are allowed to amend that resolution and include conditions for our approval. if i may ask the city attorney that question through the chair. supervisor kim: -- >> you described the board is not authorized to make amendments to an underlying contract. that is before approval. what you're describing is the board establishing a document, resolution that approves an underlying agreement and sets out the terms under which the board is authorizing or approving the agreement. the best example i can give is it is as if the board is pre- approving an agreement that contains uncertain terms and if the department is able to get those terms from the person their contrasting with, as approval and a portion -- author