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tv   Port Commission 101116  SFGTV  October 16, 2016 12:30am-3:16am PDT

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impact to the region. in fact, the time we rolled the program out was during the recession. this has h a major positive impact and certified over 150 firms in the rejen and collectively awarded $50 million in contracts, and because of the lbe certification it open many opportunities to work with sfpuc. and, i significantly helped the business. it is one of the major contributors to our success. >> commissioner supervisor kim. >> here.
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kounalakis. >> here. >> commissioner. >> here. >> motion for the minutes of the september 21, 2016 and september meeting. >> there was one thing in the agenda under -- oh gosh. i don't know the page number. i'm sorry. never mind. thank you. or second. >> okay. we have a motion and a second. all in favor of the minutes of september 27 and
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september 27 say aye. >> aye. >> opposed? >> item 2, public comment on executive session. >> is there any public comment on executive session? seeing none public comment is closed. >> number 4 executive session. >> so moved. >> second. >> all in favor say aye. >> aye. >> i move to reconvene in open session. >> second. >> all in favor say aye. >> aye. >> opposed? >> i move not to disclose anything discussed in closed session. >> second. >> all in favor say aye. >> aye. >> opposed? madam secretary. >> pledge of allegiance. >> i pledge allegiance to the flag to the united states of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all.
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>> please be advised that the rolling of phones and pagers and sound producing electronic devices are prohibited at this meeting. please be advised that the chair may ask removal of anyone in the room for use of a cell phone pager or similar sound producing electronic devices. please be advised that a member of the public comment has up to three minutes to make public comments on each agenda item unless the board commissioner adopts a shorter period on any item. >> is there any public comment on anything not listed on the agenda? going once, going twice. public comment is closed. i would like to announce before we get into the agenda when we get to item 12 planning and development we will take c before we take b and a so take item c first and then item a and item b. madam secretary. >> 9a, executive director's report.
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>> good afternoon president adams, vice president brandon, members of the commission and port staff. i will elaine forbes the interim port director. on thursday september 29 at pier 35 the port and the city the bay types newspaper and holland america held a ceremony to welcome olivia coastal cruise among their van zan dam and hundreds of lesbians arrived at the port that morning for the olivia port of call. it's a san francisco business and has been in san francisco since they began. port commissioner leslie katz presented proclamations along with district 6 supervisor jane kim on behalf of the mayor lee and the entire board of supervisors. the founders are
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judy delack and rachel wabba. this is a very historic lgbt business that was first founded in 1974. in 1990 the business shifted to olivia travel and has transported more than 250,000 lesbian, gay, bisexual, -- bez bee ans and they took a risk of forming the company but the result is a safe space for vacation which say involve service indeed for the lgbt community. thanks to staff for coordinating this special event. coming up this october 22 is the fisherman's wharf fest. in collaboration
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with the fisherman's wharf's community benefit district the port of san francisco of sponsor the annual wharf fest at fisherman's wharf again october 22 from 11:00 a.m. to 5:00 p.m.. the event features all things fisherman's wharf. it takes place in the central hub of the district near the iconic fisherman's wharf crab wheel sign at jefferson and taylor street on two blocks of embarcadero between taylor and powell. the setting is fabulous and over looks the san francisco bay and the promenade. thousands of people attended the wharf fest last year i encourage you to be one of them this year. it features a chowder cook off and music performers and the port is an ongoing sponsor of this family fun event. please join the fun and visit the
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restaurants and enjoy yourself and for more details go to wharf the national trust for historic preservation has named san francisco historic embarcadero district to the 2016 list of america's 11 most engangered places. this annual list spotlights the nation's architectural and cultural heritage and spotlights those resources that are at risk of destruction or irreparable budget. more than 260 sites have been on the list over the 29 history of that list and in that time fewer 5% of the sites have been lost. we aim for the embarcadero district district among those that survive. the national trust for historic
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preservation a privately funded non-profit organization works to save america's historic places. can you learn more about the organization at www, saving this list is really highlighting that our embarcadero historic district has two major threats it's facing, earthquake and sea level rise. the district is incredibly important as the front door to san francisco and offers a unique experience for visitors and locals alike and defines our beloved san francisco bay. it of course is an enormous economic engine for our region and city and we realize this risk of course requires all of us to pay attention and be involved in a solution to the future of our embarcadero historic district. i would like to thank mark paez for all the work he's done related to this and we also
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have mark beuller from san francisco heritage and anthony vendor camp from the national trust and i would like to invite both up to briefly address the commission. >> good afternoon commissioners. my name is mike beuller and president and ceo of san francisco heritage. our group was founded in 1971 with a mission to preserve and enhance san francisco unique architectural and cultural identity. we have a long history at the port involving port historic resources including our collaboration with the port in the late 90's and 2000's nom naming them to the register and with the port city and based on the nomination of the port district. san francisco heritage is the party who nominated the historic district for the 11 more endangered list
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and i just wanted to explain what motivated us to do so. as alluded by director forbes we wanted to spotlight the dual threats and the urgency faced by the historic resources along the waterfront and also given the daunting issues that they present wanted to elevate this issue to a national profile and bring in expertise of an organization like the national trust to provide initial expertise based on work across the country and challenges posed by sea level rise. we hope ultimately the endangered listing will evolve and become a national treasure designation by the national trust which will enable the trust to dedicate resources and staff over long-term to the issue. we're lucky to have one of the experts here in san francisco anthony
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who i will introduce momentarily. we go back about 20 years now and he's a great friend and colleague and i would like to introduce him to explain a little bit more about the 11 most endangered listing and the trust's potential contribution for creative solutions to these issues. thank you. >> thank you mike and good afternoon commissioners. thanks for allowing me to speak briefly about our decision to list the embarcadero historic district on our annual list of engangered places. just want to say a little more about why it was that we selected this resource on our list. we recognize climate change and sea level rise has unprecedented threats to our cultural heritage but san francisco faces the additional threat as we all know of
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earthquakes and it's the dual threats that really require this community, this port of san francisco, and the city of san francisco to take action and not kick the can on threats that can't be avoided. we are looking for to assist in making sure that these solutions taplet expertise of the port and the city has demonstrated in the realm of historic preservation and the expertise you've demonstrated on sustainability and resilience planning. i want to highlight the planning we're in now, the ferry building was awarded a historic preservation trust award for the adapted use of the facility which is a great model for the country so we're hoping to see planning and implementation for the embarcadero historic district but likewise becomes a model for the rest of the country. we understand that everyone needs
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to apply creativity to unprecedented threats, but want to underscore the centrality of the historic significance of the port and planning going forward and believe we can protect this asset while addressing these threats so we look forward working with the city and the port and the community moving forward to make sure that the community recognizes the investment that is required both for our culture and for the safety and economy of the community. thank you very much. >> thank you both so much. that common cludes my report. >> is there comments on the executive director's report? seeing none that is closed. madam secretary next item. >> item 9b port commissioners' report. >> colleagues anybody have anything? >> no thank you. >> not that i wasn't invited
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to the olivia ceremony i was invited to the maiden ceremony at the new amsterdam last friday and if anyone drove along the embarcadero you would see the passenger ship that is absolutely beautiful and i with interim director forbes, peter daly, mike niewrny, our wonderful volunteer greelters and other distinguished guests there was a plaque ceremony where metro, the port and holland america exchanged plaques, and we were then hosted by stein cruise, the ceo of holland america group, and the ship's captain and executive staff to a wonderful lunch and it was just the perfect setting to watch the blue angels practice. it was such a beautiful day and during fleet week it was a wonderful event so i just want to thank elaine,
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peter but especially mike because he has a wonderful relationship with our cruise partners and i think we retreated over and over how much we wanted more cruise calls into in san francisco, right mike? [laughter] thank you. >> okay. madam secretary next item please. >> okay. item on the consent calendar of one position and development agreement and construction lease for the conkriewkz of san francisco bay water emergency transportation authority and three, schematic drawings, all in connection with e pangsz of downtown san francisco ferry terminal located between the ferry building and pier 14 in the ferry building including adoption of the california environmental quality act findings and specific mitigation measures as stated in the mitigation monitoring and
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reporting program. >> is there a presentation? no. >> [inaudible] [off mic] >> being oo. is there any public comment? >> so moved. >> second. >> seeing none. public comment is now closed. colleagues all in favor of resolution 16-39 say aye. >> aye. >> opposed? resolution 16-39 passed. next item. >> item 11 a informational presentation regarding the final report to the mission creek sea level rise adaptation study. >> good afternoon commissioners. interim director forbes and members of the public. i am brad benson and in charge of special projects for the port. i am here with a team of folks who took a look at sea level rise and one of the lowest lying areas of the port, the
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mission creek area. i have with me laura tam who is the sustainability director with spur and peter wiessman who is vice president ofar kaidace. spur project managed this study for the through laura's work and peter's team put together the study. this was a collaboration that started in 2013. bcdc brought the opportunity to the port for grant funds through the dutch government. there was an $80,000 commitment that went along with their engineering services and the city ended up putting in $150,000 through a variety of city departments, san francisco public works, the public utilities commission,
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the city administrator's office and the planning department and the port, and it was really a first effort of city departments to get together, work together, with stakeholders in the area. we worked with corine woods who is here and participated in the project, and to think about what to do with the shoreline in the event of significant sea level rise. i'm going to turn over the mic pretty quickly but i will say why we chose mission creek. the port conducted a urs sea level rise risk assessment just looking with different levels of sea level rise , what areas of the shoreline would be subject to flood risk, the maps that were produced part of that study showed a problem hot spot in the mission creek area with
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interesting hydro dynamics and have mission bay not connected to the sewer system so stormwater is flowing to mission creek and the confluence of that with sea level rise and storm surge in the creek and potentially really difficult problem. this is meant to be a thought study. we're not seeking a specific solution to sea level rise in the mission creek area. it's really meant to be more of an imagination exercise to think about what the shoreline could be, what the creek could be, without recommending a specific alternative, and we think that this is the kind of dialogue that we're going to have to have more and more. how we envisioning the shoreline in san francisco with sea level rise on the horizon? so i would like to turn it over to laura first. >> thank you. great. thank you. thank you so much
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commissioners and everyone who is here today. it's a real pleasure to get to talk to you about the study we have been working hard on for the last many months and it's been a really wonderful collaboration, public, private, across city departments and the state with bcdc's involvement and of course with our dutch research partners and engineers who did a great job preparing the report so i'm going to talk a little bit about the work that we did in pulling together the study, what we found and then i will turn it over to peter to talk about some of the design alternatives that we're laying out in the study that show where the waterfront could be or what it could maybe look like in the future with some adaptation to sea level rise built in mind, so as brad said many partners have been involved in this project. there were five city department funders. there was of course the delta alliance of the netherlandss and bcdc that i mentioned and the dutch
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consultants and the dutch research institute were involved and of course we had collaborators from other city departments and win the mission bay community. this is the outline of the study and it's online and published about a week, two weeks ago. we talk about the history of mission creek and we won't talk about that today but there is more to read in the study and quite a lot of in-depth exploration of the area, the assets in the area and their potential exposure to future flooding so the goals the ambition as brad said was to explore the design ideas for holding the line against flooding in what we know is a rapidly growing and dynamic neighborhood within our city. we also sought to bring together city stakeholders to advance the idea of shoreline flood planning and work through ways of doing it and at the time when we convened the project in 2013 and (encoder dropped)
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and through collaborative design charette, working together with colleagues from the netherlands and california to discuss what is possible and what the bay area can learn from the dutch on flood resilience. the dutch has been planning for this for more than a thousand years so we have something to learn from them so i would like to talk about the two scenarios that we looked at and sea level rise and the stud of course. we know sea level rise is going to go up and for
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a long time even if we stop climate change tomorrow. we chose two scenarios flooding in 2050 and 2100 to pick places to design around recognizing that 11 inches of sea level rise which is the 2050 estimate and the 2100 estimate may not be accurate but they're planning points to look forward so this is our map of our indication map for 2050 that shows 11-inches of sea level rise plus a 100 year storm which is addition of 41 inches on top of that so it's kind of an extreme flood that we could anticipate possibly happening in 2050 and what we found in this map is there are two low points on the shoreline, really just two areas within the study area that could be bolstered to protect against
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this sea level rise. one is on the north shore of mission creek and the channel pump station and one is in the middle of the shoreline near mission bay boulevard i think in the middle of the mission bay shoreline, so we also -- there's a couple of red points on the map. we choose a couple of specific assets to highlight and to do a vulnerability of assessment in-depth in the report. in 2100 we found that the entire shoreline to too low to guard against potential sea level rise 36 inches and plus a 100 year storm so in the study and design thinking we concluded we needed a district scale to the design and not just the assets that we profiled so i want to comment that the indication maps took a very long time to get perfectly right. our team worked with ocii and many others to get
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accurate grading information for mission bay and include a factor of future settlement and did the map to compare to crown level elevations in those two times and it's dynamic and changing and future ground elevations more accurate for sea level rise so we think we have the most accurate maps for the area that there are but from here we turn to what to do about so i guess to illustrate this we wanted to show a photo of the 30 street bridge from two years ago and what it looks like with 11-inch sea level rise, with a 36-inch sea level rise and then a 77-inch sea level rise which is the 36 plus 100 year storm that would completely over top the bridge and really flood the neighborhood. so in our design
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concepts which peter is going to present shortly we sought not to select any alternatives as preferred. we wanted the public to imagine what a future with sea level rise would look like and envision the waterfront as a changing place and one not worsened by flood protection but possibly made even better, enhanced and designed for multiple benefits and then because of the district wide nature of the potential indication in 2100 we wanted all the concepts to look at least that far out in terms of future adaptability and the main research question iteration question in the study is why should we hold the line on sea level rise? sea level rise? as you know it doesn't reflect the shoreline made and different from today and where we held the line we decided to stop filling the bay and save the bay and it
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wasn't the future we wanted so there's something historic but there's something we can play with in where the line is as we think about what we wanted waterfront of the future to be so what if we hold the line future in or further out? this study plays with that idea a bit and attempts to be honest with the pros and cons of each of the approaches because they all have pros and cons. they're all going to have trade offs. we present the study in the spirit of honoring the trade offs and having a public conversation that contemplates them over time, so without further adieu i will turn it over to peter to tell us more about what the detail concepts entail. >> thank you laura and good afternoon commissioners, director and members of the public. i am very honored to speak to you today on highlight some of the outcomes of the study but i also wanted to say
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it's interesting this is a dutch american collaboration and it seems common theme in this commission meeting because holland america line is a dutch american collaboration and was started to bring dutch immigrants to the united states from rodder dam, a town they grew up in to new york and still a vibrant business today and shows the economic ties between the netherlands and the u.s. so for this particular study i think the collaboration also showed that san francisco is not on its own as it relates to sea level rise and how to make the waterfront more resilient. there are many cities around the world, coastal cities, delta cities that are grappling with very same issues and working together to envision what your
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waterfront could look like with sea level rise is in this particular exercise helpful to learn from these areas and you will see we drew from new york and we drew from amsterdam and holland city and germany and most of them are proven concepts so let me go into the details. for mission creek we came up with basically three different alternatives. the first one was to provide a perimeter protection that would line mission creek with a levy or a seawall along the waterfront. obviously that's a very line of defense so the second concept we came up and highlighted here is to construct a tidal barrier across the inlet of mission
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creek and of course there's quite an intrusive measure. it is a concept that is applied in other places, for example the londons temps barrier, the city of rotterdam to protect the port and other places but what it does it significantly shortens the line of defense and rotterdamn lining the creek and shut it off at the mouth and a tidal barrier can basically be in its open position at all times and at extremely high tide or a storm event you lower the doors of the barrier to protect the city from flooding. now, of course there are some down sides to this and one of them it would require more frequent operation as sea level rises. there is a
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risk if it doesn't close because of operational failure and there's a high tide or a storm that you will see ununeidation and of course it's intrusive on the landscape. if we look at a cross section of the little design bubbles up front and the one on the left shows the closed position and on the right shows the marina in singapore and they created a fresh water lake behind the barrier so it's a permanently closed barrier but what they also did they created a visitor center right next to the barrier because it's such a proud piece of infrastructure that people want to visit it and it's actually become a major tourist attraction. to further build on the mission creek concept this is the first concept we came up
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with is called "mission lake" in rodderdamn a tidal barrier depicts a permanent barrier or levy across mission creek and what this does it creates a lake behind the levy, and of course this significantly alters the tidal flow within the creek. will also have impacts on water quality and these concepts need to be further studied, whether there should be some connection through aside or a different way through the bay so there is sufficient movement in the water but what it does it allows you to close off mission creek, not have to put up walls or levies all the way up and down the creek, and what it also does
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given that you have more of a controlled water height within the creek it allows to you create new recreational amenities and make mission creek more of a destination than it is currently. of course the puc has the out fall at the beginning of the creek so major infrastructure url changes would have to be made to that system as well as well as the mission bay drainage system in order to accommodate it. this idea is something that we actually got from not too far away where we draw the comparison with lake merritt in oakland which is under a similar type of management. then turning to san francisco bay and the bay shoreline of mission bay we came up with four concept, the
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traditional levy or wall along the waterfront, a larger levy that would allow new development on top so basically a land mass like the san francisco giants are currently proposing, and then the third concept which is depicted here is what we call "elevated third street" and what it basically does it changes the line of the fence where you protect the city from the water so rotterdam right at the waterfront. third street is the high point or line of defense and what it does is creates a living with water type of approach. when it comes to sea level rise or flood protection we often think we need to hold the water at all costs but there are precedences
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around the globe maybe from time to time some inidation is okay if we plan for it and this is around the world and rodderdamn building barriers around the waterfront and do this and create a society that is used to temporary inunidation and you would need to modify third street and transit modifications but it's a trend in the global sea level rise adaptation where people are looking at new ways to accommodate some water to come into the city, and it also will change people's mind set in terms how they live with water and their understanding and
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appreciation that yes we are living in a world with sea level rise. then the fourth and final bay concept is what we call "new waterfront." so rather than modifying the existing waterfront look at opportunities to actually create a new waterfront out into san francisco bay. it is something that would be extremely complicated, not just from a technical perspective but from a regulatory perspective but it's something that is not unprecedented. san francisco has done it before, this very location we are today of course once was san francisco bay, but also other cities are contemplating a similar approach. for example, new york city is looking at this post hurricane sandy. are there ways to pull in the private sector
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to develop new lands in new york city in the east river and hired and part of the private development is able to pay for the infrastructure improvements that you need to upgrade your shoreline, and so here's a conceptual drawing of what it could potentially look like, and you create new opportunities by new recreational amenities that might be available along the waterfront, potential for water storage. san francisco in part under the sea level rise scenarios will be a sea below sea level so you will need to have more interior stormwater storage because you cannot all pump it out during high storm and high bay water events and
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also potential for new ecological development. with all these concepts and the report that we put out and i think the small presentation that we gave today might not do the report full justice, but what we wanted to show is that there's so many viable options and that we don't the to poller rise the discussion to the one or two options available. there are different ways that san francisco can makes it waterfront more resilient and we did not a preferred alternative. we present these alternatives as all being equal to create this public debate. the alternatives also show there are so many benefits, not just the flood protection benefit, but it's truly an opportunity for new
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recreational opportunities, new ecological opportunities, new social cultural opportunities of how to attract more people to the waterfront. it also shows that we can anticipate and plan for sea level rise now and hopefully it will significantly reduce the cost because we are forward thinking, and last these alternatives help spurs debate within the city about what is viable? what would people like to see and provide a basis to further evaluate them and with that thank you very much. >> okay. is there any public comment on 11a, mission creek sea level rise adaptation study? i don't have any card. if anyone would like to hit the mic please do so. seeing none 11a
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is closed. kounalakis. >> well thank you very much for your work on this. there is another coincidence of course and we just heard from the gentleman from the national trust who is saying he is interested from a federal level in raising awareness for the future of the san francisco waterfront. i think we can safely say we're aware and you can see staff is already working diligently and has been for a while to determine what we're going to do about it and it's very complex, and so i think this is a terrific report as we begin that conversation and i agree there are models like amsterdam, places that had to deal with sea level rise already, and they're things that we can do and the earlier we plan the better result we will get so thank you very much for working on this. i know we have a long ways to go, and by the way we might be looking to the federal government for some help so your designation is probably
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going to help us there too. >> commissioner commissioner woo ho. >> i want to say great when we commissioned the study and want sure what we were going to get and frankly the report is richer in results of what we expected in terms of possibilities so i would like to complement everyone involved to give us all of the different alternatives. i think they're all very interesting. i guess my questions are really not about the alternatives because i think we do want to generate public comment and debate and also obviously there are different price tags and costs associated within what is feasible and realistic in terms of what we need to do. i guess the question is brad if you could describe what happens next? >> so while we were working on this as laura indicated the city you know got together through the mayor's sea level rise committee and produced the sea
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level rise action plan that was presented to not only the port commission but the planning commission and other city commissions, and i think that that action plan calls for a next step of a design competition looking at resiliency by design as learning from the post sandy experience. when there is sufficient fundraising for that competition to get off the ground i think design teams would be brought in to look at not just the san francisco shoreline but around the bay area and do very similar thought experiments about what could be done to address sea level rise, flood risks and how do you involve a local community you know residents, other stakeholders, business owners, and government officials in that
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thinking about a new shoreline? so that's one next step. the city's plan also calls for coming up with shoreline adaptation plan which i think is several years away at least, but you know this was for us a really rewarding experience of looking at a unique geography and realizeing that the solutions are different for the shoreline area. >> for mission bay has there been conversations with the citizens advisory group or have they seen it or are we seeing it for the first time? >> you're seeing for the first time. the report was released a week ago. we could go to that advisory group and present. we want to take this show on the road because it's really to educate people get people thinking about this issue. i have worried for some time now we have been talking about the risk of sea level rise and the
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fact it's happening and we're not really talking with the public about potential solutions, and so even though these are just ideas. they're not real solutions. they're not design proposals i think the public is thirsting to engage in the conversation. >> thank you. >> commissioner brandon. >> thank you for a wonderful report. i think it's great that we did this study and it's hard to believe we have to do this for the entire waterfront, and so have we started? i know we know that there's a problem. i know there are several solutions or different ways we can go, but have we started about funding at all? >> well, i think the commission has heard from the seawall team, the seawall project manager and this is an issue that the seawall has to grapple with.
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first there are seismic risk but there needs to be an adaptation strategy associated with the seawall. both of our master plan development partners the giants and the city has been creative how they're thinking about sea level rise for those areas of the waterfront looking to elevate dealing with 55 to 66 inches of sea level rise in both of those locations. i know we have to look at the southern waterfront, pier 80, what is happening in those areas, so i don't -- in terms of funding you know the seawall project is the one we're going to be tackling that funding question first. we will be looking at all levels, local, state and federal, you know, the main federal source of funding to deal with flood risk is through the army corps of engineers so we will be back to you and report more on the funding options available to
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address this. >> thank you. >> i just want to say i think this is a very good presentation and this really excites me because you're getting out front and i was in rodderdamn last year to visit the port and the automation and saw in holland what we're doing and very proactive and almost everybody rides bicycles and the government puts money into the infrastructure and get out in front and brad you're going to the netherlands and i look forward to the report you will bring back to this commission but one of the things i know people want to talk about when talking about funding, but we know that funds some time from the federal and state level can be scarce but sooner or later really we're going to have the conversation and say it a couple of times and uncomfortable with people. we need to talk about a bond measure. we need to protect this city for everything that is going to happen for future generations. sometimes
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we need to bite the bullet but we're investing in our own city. there's a lot of money, private money in the city but sometimes you need to do a bond measure and getting out front and i hope people talk about that and at the end of the day how do we pay for it? and i think a bond measure is something to think about. i say we have the conversation. san francisco is a city with a lot of hot political debate which is good and for and against but at the end of the day this is something we have to deal with it. it's not when it's going to happen. it's going to happen so let's get out front on it and i looking forward when you come back brad reporting to the commission. i appreciate your input on the study. it's very thorough but at the end of the day we need to come through with solutions. i think the public wants to say okay this is where we're going and what we're going to do and people can shoot it down and come up with something better but i think we're off to a good start so thank you very much. >> madam sect next item
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please. >> item 12 request approval of the first amendment and amended and restated exclusivive negotiation agreement between the port of san francisco and seawall lot 337 associates llc for the lease and development of saw saw lot 337 pier 48 and china basin channel and 30 street and mission rock street san francisco bay adjacent to at&t park. >> thank you president and commissioners. i am here to request approval for the amendment to the exclusivive negotiation agreement between the part and seawall lot 337 associates affiliate of the san francisco giantses and represented by their staff. we're available after the brief presentation if you have questions. thank you for taking this item out of order. i appreciate that and just to get quickly into the matter at
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hand. after executing the initial agreement in september 2010 for the development of seawall 337 and pier 48 the giants port and city staff negotiated a non binding term sheet for the development of the site, lease and development of both 337 and pier 48. the port commission and board of supervisors subsequently endorsed that term sheet unanimously in 2013. as described in the term sheet the port and the giants propose a mixed use neighborhood in the area to create a vibrant walkable neighborhood with parks and public spaitses and based on the last item the project as brad mentioned as a proposal to address sea level rise and raise the site out of harm's way if you will. at your november 15 meeting, your next meeting the project team will be excited to provide you with a detailed informational and project update and look forward to that. the
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initial agreement was amended in 2012 and 2013 and in 2014 to extend deadlines because of the voter mandated approval of the proposition and voters passed it and requires voter approval of existing height limits on port property. the giants through proposition d garnered 70% approval for the project height and density. since then in the last ten months the giants support and city staff has been working on regulatory approval for state and city agencies and transition documents are currently being negotiated. an environmental clearance of course in conformace with ceqa, the california environmental quality act, resulting in a final eir, environmental impact report and over the coming months you will see all of the documents for review and
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consideration. the 2014ena agreement has conflicting definitions what constitutes termination of it and they go into detail of the language. the body of the ena reb -- and the date the eir is certified and key benchmarks [inaudible] 12 months after the later of the height limit adoption in the final eir and to go into detail about those dates. they are specific. the height limit adoption followed the approval of proposition d in the december 11, 2015. the final eir is described in the ena as a hard date of december 16, 2018 so the ena as it is proposed to be amended would allow 12 months
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after the dates, the later of those dates to conclude our negotiations. it now requires an amendment to align the performance benchmarks and attachment and corresponding definitions and acknowledges that conclusion of the ceqa process is a responsible standard of measurement for determining the success or failure of the project. by amending the expiration date the text will align with the performance benchmarks and the dates that i just mentioned actually move up the termidation date by what is currently in the existing ena and with that port staff recommends that the port commission approve the ena and thank you for the time and support for the project and available to answer questions that you have also representatives of the giants. thank you. >> i will entertain a motion. >> so moved. >> second. >> okay. is there any public
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comment on 12c? i don't have any cards so if you have anything to say on 12c please hit the mic. seeing none. public comment is now closed. commissioner woo ho. >> i have no comments. i am fine. >> commissioner kounalakis. >> well sometimes you go into extra inings you know and things go late and your kids are exhausted in the morning. [laughter] no, i have no comments on this, but just if i could get like -- because i haven't seen any of these -- the proposals in the past. i don't think i have seen the elevations and things and see them on the site at some point that would be great. thank you. >> vice president brandon, but. >> there is no "but." no, thank you for the report. what when i was reading it it was hard to understand the dates and
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i didn't see a date in the amendment. i didn't see a december 16, 2018 date so i just couldn't understand what we're approving or amending. >> yes, thank you for that. that date is in the existing amended ena. >> it's not attached to this? >> it's not attached but it remains a valid date. >> okay. so then what are we changing? >> again somewhat technical in that the body ena referenced one date and it was in contrast to a date in the performance benchmark which is has been guiding the project. we wanted to make sure the two were a lined so everyone recognizes the termination date is tied to the eir. >> what was the other date? >> activities earlier the eir or 12 months after the adoption. >> thank you. >> that's it. good presentation. i am supportive.
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colleagues all those in favor of resolution 16-41 say aye. >> aye. >> opposed? resolution 16-41 passes. madam secretary next item please. >> item 12 a informational presentation regarding the mix use development plan for the forest city pier 70 waterfront site bordered generally by 20 etstreet michigan street 22nd street and the san francisco bay and the proposal for the pier 70 special use district. >> good afternoon commissioners, interim port director elaine forbes and members of the public. i am brad benson with special projects and with the broader pier 70 team working on pier 70 mix use development and revitalization. we have been working on pier 70 for quite a while. the master plan for pier 70 was endorsed in 2010. in
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2013 the port commission endorsed a term sheet for the 28-acre waterfront site. four cities is our development partner for that site. the board of supervisors also endorsed the term sheet and since that time we have been working with forest city on really flushing out their vision for the waterfront site and creating a special use district that would be the rezoning that would enable future development to happen in that area. forest city went to voters in 2014 to get the increase and voters overwhelmingly approved since that time we have been working on environmental review for the project and forest city is working on design and the purpose of this presentation is to give you an update where the project stands in advance of publication of the draft eir
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which we're expecting will happen later on this year. to give you some context we have staff from the office of economic development and workforce development to give you a overview of the strategy for the development projects, just a few slides and then we will turn it over to our partners jack and kelly from forest city. >> commissioners are saa with the office of economic development. we wanted to take a few minutes here at the beginning of the pier 70 presentation to give some context given this project is part of the southern bay front strategy. you heard about the strategy in may and since that time port staff and departments
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have been working to further developments across this project and the southern bay front to improve the waterfront and the adjacent neighborhoods. as a refresher the yellow segments along the southeastern portion of the waterfront is what we call the southern bay front while the other portions of the waterfront are unlikely to change in the future and they're dominated by protected open space and the north and northeastern part we expect to continue to it thrive as a waterfront. the section in yellow is where we expect to see change and what we're hoping to address. right now there are 11 development projects ranging in various stages from early conception faces bike the pg&e site in the bay view to projects nearing entitlement like pier 70 and under construction like candlestick point and the
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shipyard. the southern bay front focuses the new investment that will come with all of the projects so it will benefit the district as a whole and work across the neighborhoods and that makes sense obviously with a lot of thyself things. we have been talking a lot about sea level rise and transportation and on the project and district scale. as you can see here the six key areas are housing, jobs, open space, transportation, sustainability and sea level rise that we're focusing on. you will hear about concrete strategies for each of the areas and forest city's presentation. some things you heard noted today the project will achieve 30% affordability within the area. it will contribute 40 to 50 million in transportation improvements for new buses for local area bus lines and the waterfront site will be protected against sea level rise well beyond projected levels up
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to 66 inches. of the southern bay projects moving forward in the next two years pier 70 is the next before you and the board of supervisors. mikz rock as well that you just looked at is another one happening right about the same time. they're really important pieces of the southern bay front strategy so we're hoping providing the briefing with pier 70 project will get you comfortable with the projects and the district strategy and with that i will turn it over to forest city. >> good afternoon commissioners, president adams. my name is jack and i work for forest city. i have the honor and the respond of working on what we think is the best project -- we're biased, best
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project in the city and forest city's portfolio and we have some pretty good projects. we're very excited to be here. it's been a little while since we have been in front of you and we actually have been working. we have been making great progress with the leadership from the port, the mayor's office on economic development and the many other city agencies involved and what we wanted to do today, what we thought would be useful -- there's going to be more detail that we need to get into is sort of bring you back up to speed, remind you of the process that we've been through over the last -- well, we over the last five years but really the process has been going on for nine years, the planning for pier 70. talk about -- hit on some of the key points of some of the planning progress that we
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have been making, the community benefits component, the discussions we have been having around business terms, finding a way to structure those so they work for both parties, and at the end talk about how we're really leaning into the implementation of the project in a way that i don't think anybody has seen for a master development project in san francisco. so as brad mentioned, as sara mentioned, not to beat a dead horse but this has been a very thoroughly vetted planning process. the port really laid the foundation with the neighborhood, with the regulatory agencies from 2007 to 2010 where they produced a master plan. we were then selected, picked up the ball and engaged in what we really worked hard to reach as many people as
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possible in ways that were not necessarily your traditional public planning land use outreach, and at the same time also working with the city agencies we brought a term sheet to you all that you endorsed, the board of supervisors subsequently endorsed in the middle of 2013, and then when proposition b was passed and the need for a ballot measure to clear the way for a height increase what is today 44 height limit at the site we passed that in november 2014. those three things, the port's master planning -- master plan, the term sheet and the ballot measure, really laid the foundation, almost the skeleton of the project, and what we have been doing over the last almost two years now is really getting
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into fleshing out the details starting to turn these things into strategic plan documents that ultimately we will come to you and ask for your blessing. >> >> the planning commission, the board of supervisors. one of the things that we're very proud of and we have been able to do this with tremendous support from you all and port staff is engage the community in ways that are quite unique. this slide that we have here, the number at the bottom keeps growing as we have more and more events out on the site, and some of these events are just you know great fun things for people to come experience. the first event we had was in august 2013 after [inaudible] return left the site. we had an open air
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market. amazingly we were enprepared and didn't have enough bathrooms or food trucks and 5,000 people showed up and a testament how people want to experience this incredible place, this incredible asset. over the last years on halloween or pier 70 partners who does a great job with promoting and producing these events has been doing a family friendly halloween day and large scale art, kids activities. it draws in families from all over the eastern side of the city from mission bay to the mission to pot porterrow down to the bay view. another opportunity when the bay view opera house was closed for a while does there was a group doing a pop up community market so in the summer of 2014 we on
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a weekly basis had the market out there. it was a great way to introduce pier 70 to folks who didn't know about it. continue testing way to activate the site. one of the i think really important things about this is it's not just a way for people to have fun and experiencing the site, but it's actually been a way for us to collect impressions and feedback and questions and thoughts from a very broad range of san franciscans and so we actually asked them "what is it that you want to see here? what is it that you want come do?" have them to see the concept plans for the site and it's been a way to continue informing the land use planning that we've done, and i think one of the reasons we have been able to have a really productive relationship with the neighborhood, with key stakeholders, because this is a project that has evolved out of
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community input, so what you see here are some of the key design principles that were established through the port's master plan that got carried through when we were first working with folks in the neighborhood. you will hear them again and again because they really do emerge from the site itself. obviously celebrating the industry, the industrial heritage and the history of the site and finding a way what will is going to be new development to continue to respect that to celebrate it. extending the dog patch character. people love the dogpatch and when they come and experience the mix of makers, retail, arts components and so for us actually extending that down to the waterfront is
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really a tremendous opportunity. creating a network of -- basically a new waterfront park is really what an opportunity; right? like we are one of many projects in the last 20 years that is redefining the waterfront of san francisco, much of it on port property, and we think that pier 70 is a really unique character and can serve and can have a look and feel that distinguishes it, and then of course actually providing people access to the waterfront which you know one of the things we learned very early on is the people in the neighborhood feel very conducted to their waterfront there. they have been not been able to access it for 80 years, so quite an opportunity, so what i would like to do is turn this over to kelly pretswrer, one of our
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stars managing this project and she will go into a little more detail on some of the different aspects of the project that we're really excited about. it's going to be fairly quick overview. we're very happy to come back and dig into more detail on things like infrastructure or transportation or design guidelines but we thought this would be a good place to start. >> good afternoon commissioners, president adams, thank you jack. so as jack mentioned the design principles really perm ate everything we worked on in the pier 70 project and this slide here shows all the key project documents for . >> >> the pier 70 project and there's quite a few and the eir and the process and approving the project. we have been working on it literally the day after the 2014 election and
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think it will be published later this year. we have the design standards for the future building at the site, the infrastructure, transportation and sustainability and utility plans and key descriptions of the key areas and the key documents that do this and project entitlements. working with the partners at the port as well as staff at the office of economic development workforce development and puv and sfmta and we made pier 70 a truly special place and asset for the community at large. i will touch briefly on some of the key areas. this land use concept is something you seen quite a bit over the years. this shows the same general approach to land use with smaller scale residential buildings along the park with slightly taller buildings to the north and the south along with the
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rehabilitation of buildings two, 12 and 21 at the site. as our land use planning as matured we continued the vision to cluster retail and activating uses along park frontages providing greater activity and utilization in the places. we continued our commitment to include light industrial, maker and arts and cultural facilities uses that make san francisco and neighborhoods what they are and need support from new development. these uses are prioritized on the ground floor as well as buildings 12, 21 and the new building e4 which is right on the waterfront with two frontages along the park. this rendering here shows buildings e4 prominently fronting the park and the waterfront and creating a experience that will enlighten the entire site. i want to note that the rendering is showing building massing and not architecture so don't take all of the white sasads literally.
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this is hot off the processes. this is the world premier of this rendering on maryland street. you can see building 12 rehabilitated to the left and you can see we're focused on the grond floor of the building and active place that draws visitors and residents alike. we did work with the landscape architect and james corner field operations and reflects the character of pier 70 and scbrawft as it is unique we think that the waterfront park at pier 70 will be unlike anything in the bay area. a critical component of the park design is of course extending the trail blue greenway down 20th street and along the waterfront. when there is a ship in dry dock we think it will be one of the spectacular views along the bay. another view south you see the
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waterfront promenade. we envision this to be a lively area with food and beverage and retail options and e4 with arts and cultural activities. one of the key tenants of the term sheet and something that continues today that the parks are self funded and assessment across the special use district area to fund ongoing upkeep and maintenance of the parks as well as street sweeping n partnership with the urban design firm we did a comprehensive study and analysis of the existing buildings at pier 70 and how their form might influence new construction at the site. this analysis lead us to create what we think are some of the most innovative guidelines in san francisco and challenging given the context of a historic district and the imperative to maintain compatibility with and integrity of the district. and you can see where we drought inspiration. the buildings at
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pier 70 might not be complex forms and large unbroken boxes but the quality of material, the texture and variety are what make the buildings so spectacular and they're the inspiration which we drew the design guidelines and construction at the site. what resulted is a three prong design regime. there are rules established with buildings with particular adjacencies to a historic building making sure that the construction respects that and historic building near by as well as site wide standards to ensure compatibility overall and there are standards that focus primarily on the pedestrian scale and ground floor presence and the third category are locations specific strategies that are focused on architecture. in essence they're compelling designers to create new knowledges with the texture, the material and patterns that make the old buildings so loved and spending time on those strategies we
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created a tool kit if you will and large scale moves which are massing. medium scale which is modulation and facade moves which we're refer to as materiality. within the tool kits buildings must need design strategies. this arrangement allows for the flexibility to design interesting buildings while prioritizing investment on the things that make the things at pier 70 so special today. with regard to infrastructure we will of course build new streets and utilities but we're pushing the envelope and trying new things. as you imagine infrastructure planning at this scale with existing uses near by that rely on some of the infrastructure at pier 70 is complicated and working through the details with the partners at with the port and the city and working with the staff for recycled water system that protects california's proficiency resources, water.
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the system would supply non potable demand and working alongside the puc and the first of kind system for a large mixed use development in san francisco. keeping with the theme of today's meeting and sea level rise we know that one of the port's priorities is protection and long-term management with sea level rise. with the consultants we have designed a shoreline that protects the building to the most conservative 2100 estimate, the 66-inches and the bay trail to the conservative 2050 estimate while still allowing access as close to the bay as feasible today. this diagram here is representing the total amount of grading that would need to happen at the site, quite literally lifting up portions of the sites to protect the floor from sea level rise and this slide here is a section along the shoreline. one of the key features of our plan allow
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maximum connection to the water as a safe and technically feasible today so while it's not terribly legible we pushed the trail back and protected to the long-term 2050 sea level rise but in the short term we have a trail or path way close to the water and let people have the proximity in the short term and one day it might not be there and retreat might be necessary but access it in the near term and have adaptive management strategy over the long-term. transportation has been a topic of extensive conversation and planning and we're eager to get the commission and community members feedback. we started with a series of project goals that helped establish what a successful transportation network and program would achieve at pier 70. as sara mentioned pier 70 is one project in a much larger context and
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our proposed program is intended certainly to mitigate the impact of the project itself and in addition we want to coordinate with other southern bay projects for needs and sara mentioned project scale and district scale and we're excited to be part of it. another hot off of the press rendering we did a lot of thinking around innovative streets and roadway s and the ways we can make them feel more inviting and welcoming to pedestrians and cyclists emphasize safety. we've also done a lot of thinking around paving materials and having raised streets with flushed curbs to make sure pier 70 meets the requirements of agencies. we're investigating the retention of the building 15 structural frame which say is a
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grand entry into the site along 22nd street. we pushed the envelope with street design and convey with vehicles this area pier 70 is pedestrian and bicycle priority and there are precedentses for maryland street and the street along building level. as i mentioned earlier our plan extends the blue greenway and trail. it includes class two and three bicycles facilities within the site. finally we committed to the establishment of a transportation management agency or tma who is responsible for all transportation management demand strategies across the site including the operation of a shuttle to connect visitors, workers, residents of pier 70 to regional transit and with they would like to pass this back to jack. thank you. >> so you know we live here in
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san francisco. we have for a long time. projects -- the scale of the projects that the city works at becomes hearts of the community and for that reason we're very aware and supportive of the place that is being created at pier 70 needs to be part of the community and part of that is having a public or community benefits package that is wide ranging and deep. much of this was set in place in the term sheet and in the ballot measure and we continue to work to add to continue to flush out the components of it. the restoration of the historic buildings are obviously an important goal for the port and actually removes capital needs from the port's balance sheet as well as building new infrastructure, entirely new infrastructure and parks. kelly talked about the arts cultural
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and light manufacturing space which is something the city really needs and you know for us it's not just about providing space that the city needs. it's about providing space that makes for a great neighborhood. ultimately it's going to make a place that has more value in the long-term. waterfront site resiliency and adaptive management is the minimum that is needed to make this happen as well as the transportation component. one of the things that we've talked about around the arts and pdr there is an existing artist community out at pier 70 in the niewnin building. we are committed to preserving and providing new space in that. we have to come up with a more exciting name than the e4 building but our intention they will have that space at affordable rents there working
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with a non-profit that we're really excited about working with. affordable housing obviously is in today's age is a really important piece of delivering a new district in san francisco. we think that we found a way to do that that really is kind of cost neutral to the overall land proceeds of the project. the other thing we're really excited about is there's an opportunity to partner with the public housing rebuild that is happening on potrero hill and provide transitioning housing for the families either permanently or temporary it gets affordable housing housing built early in phase one at pier 70 and supports one of the city's priorities in the public housing rebuild. we have obviously as well been working on work force training, hiring programs. it's something we have a local hire. we will do a pla. we're also
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doing research into how do we attract or create space for or support diverse small businesses at the site? something that we're going to need to come back to you with, and then something that i imagine you're talking about with staff many of the business issues which we think really that the foundation is in place and we have been working really hard over the last 18, 24 months with staff to find ways to add pieces into the business terms that -- say for instance create a long-term annuity for the port or find a way to increase the special taxes that the project may generate to support infrastructure at the site or other port projects, so these are things that we know you will be working with staff on but we're really excited about having found ways to what
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we would consider part of the public benefits which is the port's bottom line. what i alluded to earlier and something we're really excited about because we're excited not just to be working on the plans and the drawings but actually to be building something. typically what happens in a project like this is that at the project approvals or the entitlements infrastructure is at a concept level design. none of the buildings have really had any design. it's really just the design guidelines. forest city is really excited about this project. they're committed to it. we believe there's a market -- there's a window in the market, and so we have been working with the port, the mayor's office, the puc, dpw, all of -- there's actually quite a few agencies, so that we are actually designing the first
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phase of the infrastructure. we will have 100% construction drawings at the point the project is approved. that means us spending dollars at risk. it also means we actually can start construction on the first phase 12 to 18 months earlier than what you typically see for a project like this. one of the great things about that also there is mind numbing detail in things like a master utilities plan and a streetscape plan. what we have learned from other projects in the city is because they haven't gotten to the detail the time the project is approved when they actually went back and did the construction drawings they found what they thought had been agreements were not actually agreement with city agencies and it affected both kind of the scope of work or cost and the time it took to get into the ground, so we will also be starting to do some of the design of the vertical buildings
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which i think will help test the design guidelines and open buildings at the same time we're finishing the first phase of the infrastructure, so that is you know depending on the building that some time end of 2019, early 2020, as opposed to starting construction on the first phase if we weren't doing this would probably be -- we will say about that timeframe, maybe a little bit earlier so we're really excited about that. what you see here is what we conceiving of is the first phase which has two market rate residential buildings. one is the rehab of historic building two. another is a new construction residential apartment building. there's a new condo -- condominium parcel. we think that good communities have both for sale and rental opportunities. building 12 where we have been having the
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events is really the heart of the site. that's the place where we're working with sf made to create what we're calling a "makers market hall." think of as a pier 70 dogpatch of the building and european market hall experience but behind the retail frontage something is actually making the bags, making the chocolate, making the furniture. nothing like this exists and sf made is excited to provide new space for the users. we're excited not just for that reason but also this could be a really wonderful attraction to the site and create some of that place early that adds value in attracting anchor office tenants. what you see here is
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phase two. a couple more buildings and then phase three builds out the rest of the site. the other thing i should mention in phase one we have a project in washington, d.c. that i mentioned to staff that has many similarities to pier 70. it's a historic district. it's got buildings that are eerily similar in look. one thing they did was build the waterfront park in the beginning and it's been a huge amenity and value creator so we think for the stainling of the waterfront park we can't do the whole thing in the first phase but we actually are building a piece of the waterfront park in the first phase even slightly out of sequence from the adjacent development because we think it's something that will add value for us for the port and for the community. so i think i
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already mentioned but we are basically at this point doing things that typically would be done after project approval doing the master utility plans and the streetscape plan which is really exciting. we are -- this is becoming more and more real every day, and so we're pleased to have been able to share this -- share our work with you so far, and we're excited to come back to you to talk in more detail as needed as well as going to the many organizations in the neighborhood to central water water advisory group. you're sort of the beginning of this presentation as we issue the draft eir i think at this point it's december so with that i am happy -- we're happy to answer any questions. >> thanks. is there any public comment on 12a, pier 70,
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mix use development plan? if you want to hit the mic go ahead. i don't have any cards. seeing none. public comment is now closed. commissioner kounalakis. >> thank you for the presentation and thank you for the tour a few months ago and every time i see the projects i think i understand a little better but can you tell me where on the map is your trailer? the trailer that you are using out there. >> the trailer? >> isn't there -- >> there might be -- >> or where is there a trailer or brad can you tell me? >> we can get a map. >> okay. the historic core. all right. that makes sense. >> it's right behind where you see the words "historic core". >> i see. it's way off there. i am still trying to -- yeah, i just have one question for you and might not -- i don't know
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if this would be easy for to you answer or not but i am trying to get a handle how these public private partnerships between the port and developers are working, and if you can maybe try to explain what your time pressures are? how sensitive is your investment to delays? >> very, very. you know time is probably the thing that is the biggest risk here, particularly at the beginning of a project, right. we're now five years into a process. we're hopeful that next summer that the project will be approved. that will be six years that we have been incurring costs. it will also be six -- >> but how does that compare
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to the pro forma and you budgeted for in terms how long it would take? >> well, when i took the job the talk we would be done in three years. the reality is that that -- that's just how these projects have gone in san francisco. they're so complicated. it's not an individual building where you buy the parcel or option the parcel and do the design and working with the planning department. we're negotiating a transaction structure. we're subject to changing political climates and prop b, et cetera. >> but we're your partner. >> absolutely. >> and from my understanding of this part of the cost of delays is also taken out of the land. >> i mean the way i would character rise it is a public private partnership; right? we are bringing private risk
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capital to the table. the port is bringing some jurisdictional capacities. there's public financing components. the project is going to incur costs up to a point and then it will start generating revenues and we're mutually invested in minimizing cost and time as much as possible because that means the revenues go farther, so whether or not they are the land revenues at the end of the day we share the goal of moving as quickly as possible within what is reasonable, and maximizing revenues. >> and so what is your timeline at this point? does our staff have access to that? >> yes. yeah, we have a shared schedule that i should have
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spent a little more time talking on. >> [inaudible] >> in the last six weeks we solidified our ceqa schedule which is really the driver of -- usually the long pole in the tent and processes. >> and the draft eir is quarter four so that is coming. >> exactly. that will come out in december and our hope is that in may we are able to be in front of the planning commission and you all for approval, certification of the eir and actual actual the transaction documents and then we would go to the board of supervisors with. did i answer your question? >> you know you started to but i really am interested in how the mechanics of our partnership is affected by delays and so it's something i am just going to be asking a lot more questions about and staff knows that too so thank you. >> commissioner woo ho.
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>> thank you jack. i think we have come a long way since we first heard about this project and it's very interesting to hear all the different perspectives you put into it and i have to complement you on the community outreach activities since the beginning. you have all done a tremendous amount and i think everybody is looking what will happen to pier 70 and the public wants it sooner just as you want it sooner. i guess from the port and commissioner kounalakis mentioned some of the questions about timeline and where we are and sounds like we're not where we thought we would be at the beginning of the project and there are things along the way and propositions and others that created delay, not of your making but from all the interested stakeholders in the city and i guess in the staff report we talk about with the zoning, the development program that could either maximize residential or
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commercial and within the residential you have now i have a caveat or driver in terms of the affordable housing percentage. how are you going to resolve how you're going to balance out the commercial versus the residential composition of this knowing within the housing you have another component to fulfill so what are your thoughts on working with us to find out and obviously we're obviously interested in balancing out the right public benefits for the project that we should and realize that the port is here to sustain itself financially and fiscally? >> it's a great question. you know there's a mantra in real estate. the one that everybody hears is "location, location, location." well this is a great location. the other is flexibility so if you look at south of market much of the land
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there is zoned to be either residential or commercial, and what you find is that often the markets are not strong at the same time. residential is much more consistently a strong development market in san francisco. office actually goes through cycles where land just stops trading. it doesn't keep going down and down and down, so what we've i believe structured with the port and the mayor's office is something that allows the project to be responsive to what is actually happening in the market and on the ground. we believe that pier 70 is going to be a great market for a great location for office space you know central soma is up zoning. we may find that actually residential even with the 30% affordability requirement may
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actually be a better long-term use at the site. the other thing i should say is that the 30% affordable doesn't mean -- it's not like an individual parcel in south of market where you have to do 30% of those units in that market rate building which those of you have been following what has been going on in the city they have been doing an analysis of what level of affordability can be sustained by a market rate parcel. our strategy is work with the mayor's office of housing to access state and federal funding sources that would actually build half of the affordable housing, so you know i think what is baked into the plan is the flexibility to make the determination at the point that we have the best information. i think it would be -- we have the notions of kind of a mixed plan about half residential and half office.
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we think that's a good balance, but we think it's in everybody's best interest not to prejudge what that exactly looks like. >> when at some point you need to make a line in the sand? when is that? >> right. we would do that at the beginning of each phase so as we're developing the first phase what i showed had about 300 -- actually that's not true, 600 units of residential including a couple of condo parcels and 300,000 square feet of office. i think right now with where the market is that's a good balance. in the second phase we would then propose to the extent that it has parcels that could be flexibly zoned -- sorry, either office or residential. tpt we do our phased submittal to you all we
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think that the right use here is office or residential. there are some parcels that they can only be one thing; right? the parcels adjacent to the ship repair can only be office. there are other uses we thought were only appropriate for residential so we're talking about four, five development parcels and the idea at the time we're moving forward in that phase we would have the information to make the choice that is best for the project. >> okay. thank you. >> commissioner brandon. >> thank you jack and kelly for a wonderful presentation. it's amazing how far this project has come. i think it's absolutely wonderful. i think a lot of thought has gone into it and i think it's great that we're creating a new community and how much community outreach that you have done to get us to this point and incorporate the local neighbors and everyone,
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and while housing and commercial sites are really important for this project i also think that creating jobs is important, so i think that i would really love to see you know your local hiring plan, your lbe plan and hopefully it's one of your key project developments and hopefully next time we can really understand that so hopefully we can create jobs with all of this growth. thank you. >> jack, kelly great job. i have tell you have nerves of speech and patience because in this city you need patience. >> >> question, the way you reached out to the community is spot on. you have taken your time. you have brought the community along. we know the
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term sheets and changed and in a car you missed the turn off and have to renavigate again and go another direction and you have been doing that. you have prop b but jack right now are you comfortable with you want to be? because this thing is like a helicopter. it has a lot of moving parts to it and this thing is just like a masterpiece. it's like conducting an orchestra and make sure everything is in sync as a director and just looking at this. this is massive so are you at where you should be right now, the patience. is everybody comfortable as we move along? because sometimes we get inpatient and impatience is sometimes a good thing and remain calm and can you tell me that? >> sure. it's fair to say we wish the eir process in san
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francisco was different and moved faster and i was thinking of my response to commissioner kounalakis and how i thought it was going to be three years. i should have known better. i worked on treasure island and that took 15 years to get the project approved so the reality is there is just complex. there's a lot to figure out. you need to go to decision makers and check in on the right point. are we on the right path and point and balancing priorities? so i think we feel really good about the direction that we're headed. we have a lot of work in front of us you know from here to when the project is approved for us to get to 100% construction drawings it will take a lot of work on our part and our consultant's part and the city agencies part but the fact we're leaning into that is an indication we feel good about
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the direction we're headed so we will keep doing our best and you know working through the issues with you all and staff. >> and one other thing too. do you see the market getting soft at all? is that something you really thought about, the real estate market getting soft in the economy? >> yeah, we think about that. we're constantly talking to people in the market whether it's brokers, land sellers, tenants. i would say that our view is things definitely peaked and they have if not softened leveled off and it's not a bad thing. that staying like this for a while or even softening slightly is probably good in the long-term. it may actually allow us to avoid a big drop.
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you know what we're seeing we're definitely seeing rents have decreased slightly. condo sales have definitely -- you hear a lot of news about how that market has been impacted. i think the type of product that will get built at pier 70 is not the luxury high rise condos that have been really impacted. the office market for a while it seemed like it was starting to tail off a little bit. we have been seeing some indications that sublease spaces actually are getting snapped up and growth continues to be good, so i think you know we don't -- we don't see a downward trend at this point, but we don't have a crystal ball you know, but we feel like it's the up side is there. that the economy feels
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stable here and in san francisco supply is constrained and demand is high. people really want to be here so we're feeling like it's worth moving forward this first phase partly to give ourselves a better chance of catching this market. >> jack, we would like to see you a little more often so we hope you can come back. you can see this commission is like a dog with a bone. we see meat and have a lot of questions and it's a good thing and get back as often as you can and update us and a lot of questions for commissioner kounalakis and all of the commissioners and commissioner woo ho and commissioner brandon and commissioner katz is not here and has questions and we're curious and supportive of the project and get back as much as you can and update us as you can. >> we will be here as much as you like.
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>> madam sect next item please. >> item b request approval of the resolution of support for the vision zero, the san francisco municipal transportation agency's zero traffic death initiative. >> hello. good afternoon commissioners. it is an honor to be here today. i am norma guzman from the planning and development division here at the port and i am joined today by anna harkman and she's from mta and vision zero is an mta policy to end pedestrian and all traffic deaths in the future and anna can provide more information today after the presentation. and so today i
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want to talk about vision zero. i want to provide some background on the policy and also talk about different effort at the port that have taken place that support vision zero and the outcome of this today's presentation is to ask for your consideration of a res of support. so you're asking what is vision zero? vision zero is an ambitious policy with the goal to end all traffic deaths by the year 2024 in san francisco. by traffic deaths we're referring to deaths that happen inside of motor vehicles using the roadway and also to any pedestrians or users outside of motor vehicles. there are five core principles of vision zero. the first two are tratraffic deaths are preventible and safety is i
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highest priority in the city. to carry out this ambitious goal mta is asking all agencies and departments to help in anyway they can and have a action strategy of five categories of improvements. the first one is engineering which includes a lot of design treatments, policy evaluation, enforcement and also education. i would like to call out engineering because design improvements are something that we all interact with every day as we move about the city. they're the most visible and we're the biggest engineering goals of vision zero is to improve 13 miles of roadway every single year through the year 2024 and as you can see one of the targeted improvement areas that is part of the high jury network of vision zero is the embarcadero.
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and you begin to see why vision zero seems like a critical policy for safety throughout the city and as you can see in this picture the port is a very popular place. 32 million people use the port in some capacity every year and arrive here in a variety of modes. vision zero supports two of the port strategic plans objectives and supports engagement and also livability. and so the port is already under taken several projects on our streets that do support vision zero strategies and just to name a couple. the embarcadero enhancement project is the largest street improvement project taking place at the moment on port property. it's spans 3 miles from fisherman's wharf to the ballpark and one of the goals of this project is to continue to invite the
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32 million users a year to the property by making the roadways safer and comfortable for all modes and user s. the second project is cargo way so cargo way one of the most notable features of the street it has the first cycle track in the city and this cycle track is highlighted throughout the country for being a best practice for one of the best designs or safest designs of traffic safety. and another example of an effort at the port that does align with vision zero policies is our waterfront plan and so as you may know the waterfront plan update is currently under part two policy discussion and there will be a transportation sub-committee that will discuss pedestrian safety and traffic safety issues
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and by endorsing the vision zero pedestrian safety and traffic safety policy today it would help to secure a stronger voice for pedestrian safety in the plan and so to summarize today the adoption of a resolution of support would help to continue staff participation in vision zero strategy. it would continue collaboration with mta on projects and it would continue the port's work with our development partners on transportation demand management on large projects and it would also help to improve safety and improve evaluation of safety and parking and loading zones throughout port property and this concludes my presentation. >> [inaudible] [off mic] >> she's available to answer questions if you have any
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questions on vision zero. >> thank you. is there any public comment on 12b? i have no cards. seeing none. public comment is now closed. commissioner woo ho. >> so moved. >> second. >> okay. thank you very much for your report. clearly i mean it's a great policy and it was interesting to understand this was first a do theed in sweden. i hadn't realized the history of this so this isn't something new we're inventing here in san francisco although we like to invent things in san francisco and we support that and i support the policy and we have seen some unfortunate accidents but i think -- i don't have any issues with the policy but i do think that in order for the policy to be effective that there are other things that the city and not just the port has to do with education on training and i think there are things
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that i find sometimes with bikers in particular. it's very nerve wracking for drivers of cars and bikers and seems like there should be better protocol and training how to observe the rules so everyone can coexist together because if we don't we obviously end up with accidents and secondly i think that you know sometimes in this city you get road rage because people are sitting at lights that don't change so there's a lot of things that happen why we have accidents and i hope -- i'm not going on the soap box for too long but i hope the mta looks into why people expose themselves in situations so the goal here absolutely is admirable and i think we all support it and particularly now with more traffic congestion but everybody -- there are reasons why people all of a sudden will take risks when they shouldn't and then an accident happen and we see that happen whether the
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buses or the cars or the bikers, whatever so there has to be something that addresses the core issues and hopefully we look at those root causes and not just address it symptom matically and we believe in the policy and the policy by itself will work and i don't think it will. >> yeah, those are good points and i know anna is going to take some notes. >> [inaudible] [off mic] >> i will go next. >> you will go next? >> yes, and i think this is wonderful and i support this but what does it civil mean for the port? what do we have to reach this goal by 2024? >> i think there is a list in the staff report so vision zero is not asking the port for money per se, want that was your question but vision zero really wants to formalize all of the city agencies' support for
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pedestrian safety and just traffic safety and make that into formal language into a formal policy and make sure it remains a priority, that safety remains a priority throughout the city and by having core principles and formal license it's a way for us to -- language that we remember to move throughout the city safely and it's necessary for everyone that uses all city streets whether our freight or trucks, heavy trucks or whether it's a pedestrian or someone joking or walking their dog so the requirements are more so we pledge support and whenever we do build a large development project or to improve a street that we do think about a comprehensive set of tools that we can use. >> great. thank you. >> okay. so i turned to the staff report and i see a whole bunch of things, so you have the
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embarcadero enhancement planning project, embarcadero interim improvements jefferson street, blue way, all kinds of things, so are we voting to these specific actions or something else? >> these projects are -- they're to illustrate -- >> what we're already doing? >> things we're all right doing and things. >> >> already doing and things that vision zero wants us to do and expand in the future. >> if i could add those projects are city projects. >> okay. >> so jefferson street was ante -- mta project. they're city funded efforts. norma's report and powerpoint presentation pointed out projects where we deployed
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vision zero strategies like the cargo projects but on the list they're city projects. >> and the five key areas that include actions. elaine is any of this new? >> no. so vision zero was adopted several years ago and we have already been collaborating very closely with the mta to ensure that any project we roll out on the streets especially along the embarcadero which is one of the high risk areas deploys the best practices in safety. what is new here is the mta is asking every governing body in the city to sign on to vision zero so the city is one voice in achieving these goals but basically what we have been doing to date will continue to look very much like we do in the future. >> okay. >> i just wanted to tell you thank you. very good job. very supportive of this. anything
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to cut down on the death of civilians. i myself i walk everywhere. i don't have a car but i seen people run over and bikes and even as a pedestrian i have to pay attention and not walk out there because i could hit too in the city i agree with commissioner woo ho it's like the wild west how people drive in the city and i stand in support. colleagues no further comment. all in favor of this resolution say i. >> aye. >> opposed? >> >> the resolution passes unanimously. madam secretary next item please. >> (low audio) [inaudible] for fiscal year 2015-16.
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>> hello. good afternoon commissioners. my name is tiron navarro with the finance group within the real estate division. i am accompanied by dimeet rademarrow who is on the team and going to comment on our parking. also available for comments is mark, the assistant deputy director of the real estate division. this is an informational presentation on our real estate revenue portfolio overview for fiscal year 2014 -- 15-16. and this is an overview that's specific to real estate and with plan to make this a routine presentation to provide a goal of allowing
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greater insight and more assumption as to the performance of our real estate portfolio on a routine basis so we welcome feedback or comments that we can incorporate into our next presentation. with that i just thought i would show you this graph as a representation of the port's portfolio which consists of 20 million square feet of space. it generates approximately 76 million in revenue this fiscal year and approximately 74% of the port wide revenue. as you can see on this graph 96% of our space represents 76% -- i'm sorry, 74% of our revenues. while 4% of our space represents 26% of our
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revenues, so it's an interesting thing to note in the composition of our revenue base. this is -- this slide is to demonstrate the revenue composition for four of our major revenue lines. as you can see we have the commercial rent percentage rent and we broken out parking to have parking rent and on-street parking, so the commercial rent as you probably are familiar are our standard rents, leases that comprise monthly and annual revenues. it's kind of our base of revenues, and then there's the percentage rents which are probably the more known revenue sources of restaurants, retail, developments, master leases,
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ground leases, and then in our parking we broke it out because our parking lots represent a strong base within parking, and are managed by third party operators through leases where we share in participation rent as per the leases, and then our on-street parking is through a partnership through mta and kind of accord with sf park and other transit issues as we move forward. so this is a snapshot of our operating revenue for fiscal year 2015-16. i won't go through all the lines but obviously there are variances and a couple of negative
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variances that we will review in a moment but i want to bring your attention to overall. we have $4.2 million increase over budget for last fiscal year and then compared to the previous fiscal year it's $2.5 million increase from the previous fiscal year, so we did have some low variances, but overall we are doing fine in our revenues. i wanted to demonstrate our year over year performance for the real estate revenues. to demonstrate the stability of our port revenues which really rely on our leases, our fixed rate leases and our percentage rate leases. they continue to grow and represent about 2/3s of the
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revenues and the foundation of the our revenue base. we have also there a projection and it's based on a modeling method that we have that we conducted last year considering current growth, one time revenues we did expect from market rate adjustments and other rate adjustments are incorporated through the various bases. we also factored into this assumptions of continuous stability and fixed rent of about 2.5% growth and the lower percent 1.5 percentage and sensing this is a -- percentage rents are more sensitive to the market. and then i just want to note that our parking has continued to grow and has represented now nearly 1/3 of our revenues, so i thought we
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would break that out and give a little bit more information on our parking programs. i will turn it over to demetra. >> good afternoon commissioners. [inaudible] [off mic] >> you have to go to the mic. >> thank you. our parking revenue consists of four major lines. the first and largest of which is parking lots. we have six parking lot operators at the port that operate 23 lots and along the waterfront and 16 in the northern waterfront and seven in the southern waterfront. those operators are responsible for generating approximately $13 million in revenue annually and varies with the seasonality of parking and attractions in the waterfront. the second is parking meters. we have 1100 or so marking meters throughout the waterfront which represent 1300 parks spaces. those parking meters generate approximately $5.4
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million of revenue annually and again that is seasonally based based on the visitor counts to the waterfront. our first category is the parking fines and enforcement. this is a category that is made up of enforcement officers that we have through the sfmta. they patrol the waterfront and issue fines for port regulations and have deductions for mta and other local agencies and receive the net revenue after the legal deductions. that equals 3.1 million dollars annually and based on the regulatory and safety enforcement direction that has been given to the force officers. our final and smallest category is parking stalls directly managed by the port of san francisco. we have 12 facilities along the waterfront largely based in the southern waterfront for the industrial tenants and generate half million dollars a year
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and single sole proprietors on the water. all together told that revenue represents 21.$4 million in annual revenue and about a third of the real estate budget. it's the most volatile of the revenue lines largely between parking lots the enforcement and the parking meters we have nearly all of the lines are managed by a third matter operator or agency so we only have oversight ability on the revenues so we moved to a parking working group in real estate to get a handle on more of the issues directly and planning to incorporate the vision zero policies and the transportation demand management policies that mta is working to develop over the last years. with that i will hand it back over. >> thank you. so moving now
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to our vacancies and to the utilization of our spaces, of our assets. we overall for fiscal year 2015-16 had a vacancy rate of 8.6%. and in our offices it was -- i'm sorry, 9.3% but and in our sheds, our industrial with 9.7%. however, in this year there's some major leasing plans going on for some of our piers. for pier 19, 23, 29, 31 and the beltway line building that will change this drastically. they're just not ready for lease for releasing, but our like to come on line this fiscal year later or next
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fiscal year, so if you were to you know take those out and as outliers we would have effective vacancy rate in office space of -- vacancy would be 2.5 and in our vacancy rate for warehouse would be 4%, so there is some plans for about 60-point 8% of that gap in. >> >> 6.8% gap in office space and 5.7% in our sheds. and this is just to demonstrate the top tennesseeants -- tenantings in real estate. they're in the top 20 revenue generating tenants overall. as you can see it's pretty
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balance. the top tenant it is total 38% of the overall real estate revenue and the larger tenant is comprises 9% of the overall real estate revenues so you can see it's a pretty diverse group of tenants, diverse mix of businesses or industries, and i think this kind of goes to our overall portfolio that is pretty well leveraged and balanced against different economic swings. and finally just looking ahead we do -- looking ahead for this fiscal year in 2016-17 we will exceed again projections -- our projections are to exceed last fiscal year that i just reviewed. we're currently on track with our budget and for sure exceeding
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with the sale of the pier's project, the recent sale of the pier's project and two market rate adjustments that are upcoming in the next calendar year, this fiscal year. we will be you know looking at how growth continues similar to previous speaker. there's seem a leveling off of the revenues so we will continue to monitor that and really keep track and our adjustments and everything up-to-date, and we are see changes in our parking. they are volatile and they dropped and in fact we had a decrease in our fine revenue that was a little bit surprising but we relate that to some of the technological changes of one
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credit cards were used for payment and remotely pay by phone or the computer to feed the meter remotely and we will remain vigilant over the current economic indicators but overall our base revenues are trending up and we still plan for that especially if we can bring the new spaces, new assets up for leasing, and we continue to get a lot of interest in our portfolio. the turn around for our spaces is pretty quick that are all available so we continue to be a point of interest to lease space here at the port so with that i am concluding my presentation. thank you. >> is there any public comment on 13a, presentation real estate division revenues and
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portfolio? seeing none. public comment is now closed. commissioner brandon. >> thank you so much for such a detailed report. it's great and always good to get an update so thank you very much. >> you're welcome. >> yeah, i think we may have asked for this based on some of the information we have recently and it's comprehensive, simply put together and helpful. thank you. >> thank you. >> i am saving the best for last commissioner woo ho because she requested that the item be brought up. >> thank you. i think it's great information and i appreciate the detail and i guess it also confirms some perhaps supervisions or assumptions as you said 4% of the space contributes 15% of the revenue so that is obviously an opportunity for us to and that means you don't have to put out a lot of space because we all know what our primary mission is and this is not including
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maritime and just real estate but we can be better off figuring out where the rental revenue is generated the most and we know is off of commercial and the only thing i think in pealing the onion more on the real estate portfolio is some sense and i know we approve parameter rents once a year and align ourselves with the market, but to understand as some of the leases come up in terms of the older leases what opportunities are there to sort of keep improving the terms of what we have on our leases and understanding the age of the portfolio? because i imagine some of the very old, old leases, and they don't show up on here in terms -- in the northern waterfront probably, some restaurant leases were probably done in a time when they weren't done with the market rents and favorable terms and we nee to know where the --
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need to know where the up side is coming and it's a great snapshot of the history but it's a question where can the opportunities be generated moving forward in and this also gives urgency to understand that we need the pier 29 and 30's and we're generating out of that and the space envelope is limited and unless we wait for pier 70 and mission rock to create more real estate revenue opportunities but those are within the large projects but the existing space envelope is somewhat -- well, we have pier 38 and we haven't figured out and it's defined and that is the revenue pie and how much can we look at the least on the real estate side. i know we're
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looking at other opportunities. i am looking at this how to leverage for the future where the opportunities have been best and where we can continue to go to generate more revenue in i guess in conforming to our mission and to our strategic plan and so obviously we're balancing everything. we're not just all about money all the time but obviously it's important as you know. >> absolutely and i think one of the places we can have this conversation in our five year financial forecast and you provided -- commissioner woo ho that 100 million, 125 million revenue goal and in that five year forecast there are often real estate objectives. here is -- [inaudible] reposition properties. there are certain properties while our envelope is set how we position those properties is up for
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conversation and creativity, and so that's a really good opportunity in that five year financial forecast to see what our opportunities are in our real estate portfolio and how the revenue for projections change if we hit the mark in our goals. >> thank you. >> tyrone great job. dimeet tree. i have tell you this is the first time i heard you speak and articulate and i am glad you're getting exposure. this is good and i think you heard from the commissioners what we would like to see in the future and i like the transparency and short and sweet and thank you both. i appreciate it. madam secretary. >> i'm sorry. just with the one point if you bring it back to us that commissioner woo ho made and where you feel within
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the portfolio things are leased at under market. >> all right. >> okay. thank you. >> thank you. madam secretary next item please. >> item 14 a informational presentation on the policy for the port of san francisco. >> good afternoon commissioners. megan wallace. court procurement manager and while we're in all money all the time mode i thought i would give you an update on the municipal debt policy. so this is an informational item, but this gives you an opportunity to consider potential questions and changes to the policy. this item will be back up before you on november 15. today i'm going to go over you how the municipal debt policy helps support our strategic objectives and give a history of port debt and how the policy was established. talk
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about the proposed updates to the policy as well as upcoming opportunities for future debt issuances. so first of all the debt policy really supports our sustainability and renew annual and resilience objectives. in addition to having conservative policies how we issue the debt it considers traditional as well as innovative solutions for capital investments. i will talk more about those later. for renewal you know historically we've funded historic improvements to historic facilities such as most recently in the northern historic waterfront, and creating new vibrant neighborhoods for residents, commercial, industrial, pdr. i think that is think going the four cities and the mission rock that we're creating the new
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areas and public financing is a critical part of that work and really the history of the debt we've issued supports our efforts to maintain the integrity of our maritime goals and finally resiliency. looking ahead we have to think about if financing solutions to address the needs to the improvements to the seawall. so this table helps highlight debt issuances from the time that the port was transferred from the state to the city and county of san francisco in 1969 to 2009 when the first debt policy was established by the port commission. the first two lines here general obligation bonds and port revenue bonds were real investments in our maritime facilities. there was a lot of disrepair as well as a need to modernize the facility so i don't have a lot of pictures in this presentation but i want you to visualize the southern waterfront and think of the
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last terminal over looking at park, the creation of that facility and the cargo industrial area there as well as pier 80, the establishment of buildings that are mostly not there anymore and just have remnants of the facilities but really the cranes. that's when we were investing these funds in the cargo industrial maritime -- sorry, our maritime uses down in the southern waterfront. we did take advantage of refunding bonds between 1994 and 2400 to improve our interest rates and get more benefit out of the debt that we've issued. and as you can see we had three loan types that put at&t park into place and hud street harbor and efficiency projects so while in total we issued close to 187 million in debt due to the refunding we netted
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about 116.9 million in new debt. so in 2009 we decided to unify our approach to issuing debit and prior times there wasn't a policy to unify the effort and want two weeks after -- not two weeks after payments to the prior debt issuances the commission put a new policy to guide future issuances and shortly thereafter we did enter into the port revenue bond. the port policy really strives and provides guidelines staff the debt and practical low cost of borrowing and weighing risks and preserving the credit quality of the port's debt and pain -- maintaining the enhance quality of the port's debt and
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all of this by having the policy in a public forum is promoting transparency and the port's debt issuance and practices. after the policy was passed the commission approved 97 million of new debt and that came in the form of two port revenue bond issuances first in 2010 and 2014 as well as certificates of participation that the city issued on our behalf but we actually do pay the debt service, and really as you may recall quite clearly those funds were used to know costruck the james r herman cruise thermal, implement improvements to the waterfront and america's cup and make general repairs and improvement to facilities so generally we're going to try to update the policy every five years so it is definitely time to bring the policy up-to-date
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to current times and in order to do that we really tried to pull together a comprehensive team. in addition to port staff with expertise in managing our debt portfolio we pulled in the city attorney, our financial advisor, the controller's office, and public policy finance, and the office of economic and workforce development and a lot of those partners -- actually all of the partners are really critical to the next phase as i would say of the port's debt issuances and comes to the key points of focus preparing for upcoming special debt issuances and reflecting current laws including foreclosure obligations. so preparing for upcoming special area district issuances so since 2009 the city and state have both made significant movements towards abling the port to create infrastructure financing districts as well as community
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facilities districts. and the policy is now updated to reflect the current laws and also clearly differentiate between which debt is actually paid for by the harbor fund versus these special area districts so thinking how are tax incrementment from forest city supporting the debt issued through the ifds and cfds and there are various laws that have since happened since the economic downturn include improved training for staff and commissioners, and just regular annual disclosures. so i want to go ahead and talk about upcoming opportunities. really for future revenue bonds we're at a limited capacity from a budget standpoint to increase our debt service which is
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really sort of the limiting factor for future revenue bonds. we're favoring surplus revenues more towards our pay go program for capital so as we have talked a lot about how our capital budget is increasing every year. we're investing that directly into the capital infrastructure opposed to debt service. refundings i will talk a little bit about in the next slide, but we think that the nearest window for potentially essentially refinancing our debt is in 2020. south beach harbor has potential to set up a special facility bond to be able to do various capital improvements and of course with community facility districts and infrastructure financing districts those are really going to be critical as you know to the pier 70
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projects as well as mission rock and there's really potential benefit there for the seawall resiliency project as well, and staff is talking with city's capital planning committee as a possibility of doing a general obligation bond for the seawall. so to really hone in on where there are possibilities for refunding bonds and how can we restructure the current debt to improve benefits for the port? can we achieve greater savings and refinance the debt and pay less in interest rates? can we restructure the debt rate schedule? certain various benefits. the key options before us is really in the 2010 issuances, so this table highlights that we have two
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issuances, one is tax exempt and one is taxable. in green the taxable came in various forms. the main thing to highlight is the interest rates that can see there's some variety there in the interest rates we have for each of these, and i want to highlight the timing for refunding of all of these is in 2020. one of the key criteria laid out in -- a criterion in the policy is that we can achieve a minimum of 3% savings from our outstanding principal and just a rough calculation would say -- again this is very rough, but if we could refinance our debt and achieve the amount of savings identified here that might call us to enter into refunding bonds. so this is really for more for your information and to absorb it. i am more than happy to discuss it with you. i find this all very
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exciting strangely because this is how we're implementing the great work of the items that came ahead of me so i would love to have a conversation with you and at the very least this item will be back before you november 15. >> thanks megan. is there any public comment on 14a, the municipal debt policy for the port of san francisco? seeing none. public comment is now closed. commissioner woo ho. >> thank you megan. i enjoyed reading the staff report and also i did read the policy and i will get into detailed question later but just on the refinancing given that we're in this interest rate environment right now and we know that the rate environment we have been waiting and waiting but it's going to go up, so this guideline of having to be 300 basis points differential. it seems like it's arbitrary. can you tell me more why we have -- i also understand within the
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bond issues themselves what is the call feature that we can call on if we want to refinance? are we restricted? >> well, i think we're restricted in terms of timing. there needs to be a ten year window -- >> we can't refinance for ten years? is that correct? >> yes. >> so that's a restriction but the other one you mentioned we wouldn't want to unless it was 300 basis points and you look at the environment and in 2020 we're not in the same rate environment as today. >> that's where the standards is actuallily based upon savings in debt service and calculated on the -- the savings is calculated on outstanding principle so comparatively -- >> i am wondering why we need such a straight laced guideline. if we think it makes sense to refinance at that time and the rate is favorable and for the
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staff to see if it's worth it. >> absolutely. >> and just a business decision versus you need to follow this particular guideline. >> yeah, right. that is just a guideline. i think there are a variety of factors we would look at for refinancing and restructure the debt. that is part of achieving some of the savings but there maybe elements where perhaps the covenant needs to reflect the port. there's a variety of business considerations and we go into it and the policy states under the guidance of the finance director and the financial advisers -- >> yeah, i am suggestinga if we're looking at revising the policy i am more flexible in that regard because it sounds like you need to do 300 points differentiable and i don't know why it has to be -- >> if i may. i think the time the policy was adopted the
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financial advisor did the math and thought the 300 points would be the cost of doing the refunding so we put the math in the policy but i agree with you wholeheartedly and just make the decision on a cost basis it's a good decision -- >> you could reword the policy saying if the refinancing is going to save -- >> save money. >> save money period. >> period and then you can all make that decision when we would present something for you. >> yes. okay. >> if i may my colleague lawrence brown who has a history with the prior issuances would like to make a comment as well. >> i am from finance. let me give you background on where this number came from so the 3% amount of the -- it's not of the initial issuance. it's the amount to be refunded. that is consistent with the city's
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refunding guidelines so we taken the city's position there and that's where the number came from. also we need to be cognizant of the fact that in any refunding, any debt issuance, the port commission has the approval authority to do the refinancing and the refunding, but the refunding does go -- would go to the board and the board does have appropriation authority, so if we were for instance quite a bit different than the city's policy then we would have to have a good explanation. that's all. the 3% came from the city -- [inaudible] >> then i will go back and elaine will remember when we asked for some change in terms of -- was it the contractor's previous performance and you were able to initiate some change. i don't mind that if
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it makes sense and i think it needs to be more flexible whether it's us -- >> i also think there are different provisions with city and port debt and we will look at this provision and how important it is to conform and now i understand the policy differently from mr. brown's comments. i think what they're trying to prevent small refundings that the value gets offset by the cost of issuance or you're not bundling or just bad decision making in doing something to save a penny but being pound foolish so to speak. i think that is the intent but we will look at and to what extent -- >> we have intelligent staff and commissioners. the next one talks about equipment leases up to 300,000 and i am wondering where the number came from?
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again it seems like a arbitrary restriction. >> i would say it's likely standard of not wanting to have the value from issuing the debt -- >> well this, is equipment leasing saying this is a limit of 300,000 and i am just wondering where that came from and is it necessary? i understand it approval should be submitted for approval at different levels. the higher it is -- just like our leases over a certain amount or certain tenure go to the board of supervisors or what the port commission or executive director can approve but just to say any -- you can't do it -- equipment leasing for 300,000 seems like it's out of no where and being who we are we might having to lease equipment that could have value more than 300,000. it's not out of the question in my mind that would be necessarily. >> if i may --
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>> seems like an arbitrary. since we're looking at the policy -- >> no, that's great. >> i'm going to look at the policy -- [inaudible] >> so what i will do is include a response to the question in the follow up packet. >> thank you. commissioner kounalakis. >> i just have one question and first of all another great informative report tonight. thank you all. why are some of these bonds taxable bonds? >> they're taxable if there's private use so tax exempt debt we either fall under public use for public access apron -- >> i understand. >> or the maritime provisions. >> so we sold bonds to help out with the ferry terminal? is that what made it -- >> the cruise ship terminal it good amount of debt and we were under a management agreement.
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is that correct? yes. >> just to elaborate slightly so of course the taxable debt is if choosing -- the rules are selected by the irs and as director forbes alluded to if we have private use it's defined by the irs it's taxable so if we're taking out debt for any of our regular tenants are going to be in that we're getting lease revenues from for example pier nine and we're not funding any aprons or public access or funding maritime then that that's a private use. we can -- >> i know the difference between public and private use but i was surprised we're issuing bonds for private use so that's part of our policy too. >> yes. >> we do a lot of our own
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capital works for like pier 31 is an example and we're redoing the roof and substructure and lease the facility out. a lot of the bonds funded the northern waterfront for leasing. landlord types of responsibility type of work but the revenues goes to the balance sheet and improve the overall outlook so we absolutely do taxable debt for private use. >> right. there's quite a bit of our facilities are used by tenants who are leasing for real estate so a lot of the real real estate income comes from facilities that have private use. >> brandon. >> thank you megan. excellent report and very enlightening. and the staff is working with the -- [inaudible] (low audio)
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sea level rise resiliency or just -- >> seawall resiliency yes. this is unusual and i didn't include the go ones and the didn't include the parks bond but i wanted to make sure it's on your radar that we're having regular conversations about trying to get this calendared. >> and at this point what is our bonding capacity? >> well, we have about seven times coverage however it's really related to our ability to cover the debt service and i know that has to be updated. >> [inaudible] [off mic] >> so approximately 100 million if you were just looking at our debt coverage but we will include that in our follow up. >> thank you. >> i have one question -- i'm
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sorry, on the park bonds that we did and got 35 million. now we're not -- is the city repaying -- >> the city repays 100%. >> so we're not repaying the 35 million? >> that's right. >> that is like the first general obligation bonds in the first table and city go bonds but paid out of the harsh fund. >> i wanted to add one thing relative to debt capacity and i know megan and lawrence will look more at this in the follow up meeting. we have a very nice calculation for coverage, bonding coverage in our indenture and it would allow us to issue $100 million more of debt. we will update the number to figure out exactly what number is and putting away 25% for the pay go program and
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funding the other works of the port so what is holding us back from debt issuance is the budget at this point, not budget capacity. to the extent we can find projects that generate revenue and pay them off in a good term we have the ability to issue debt so we're looking for those kinds of projects. >> commissioner kounalakis. >> i am still confused about this taxable debt because it seems to me if we use bond -- our bonding capacity to improve the finger piers that is in the public interest, and so why -- we're not a municipality but we're a public government entity. >> so whether we use taxable or tax exempt is a bond council question and what we can do when we come back for your approval of the policy is show you specifically in those taxable
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what projects they funded and it's our bond council that looks carefully at the use plan and basically if it's leased under long-term its private use but they have many other criterias they look at. >> even if we use the profits and proceeds to build the blue greenway -- >> no. >> okay. this is good discussion colleagues. megan good job. look forward to see you on the 15th and i think some good feedback from the commissioners and a lot of things to think about so thank you for a good presentation. >> thank you. >> madam secretary next item please. >> item 15 new business. >> colleagues anything you want put on the floor calendar? >> no, i don't have anything other than what elaine did you calendar anything? >> i have more frequent updates from forest city and i think we're working on those anyway because of the calendar of approvals that when we come
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back with the real estate update which sounds like the commission wants to hear more routinely we will include properties leased under market or urn parameter and in the five year forecast leases opportunities to see what the up side is and that's what i wrote down. thank you. >> elaine can i have one amendment on that? if we had a sense of how many leases will come up next year that are repriced and we know repricing is another way to look at revenues, not just the normal adjustments but actually the term of expiration. >> yeah, i would like to ask through the chair that the port think about doing a diversity study, and also i would like an update on the art work for the gate way. where are we?
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>> we will give you an update. >> colleagues anything else? i will entertain a motion to adjourn. >> so moved. >> all in favor say aye. >> aye. >> opposed? 6:05 p.m. tv. [gavel] thank you.