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Full text of "Minutes"

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SAN FRANCISCO 
PUBLIC LIBRARY 

REFERENCE 
BOOK 

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SAN FRANCISCO PUBLIC LIBRARY 



223 05465 5536 



I 







I^AR 3 1 1997 

PUBLiC LIBRARY 



NOTICE OF CANCELLATION 



THE REGULAR^PORT COMMISSION MEETING SCHEDULED FOR 
TUESDAY, <iPElLJa,-iaaZ>AT a:00 P.M. 

IS HEREBY CANCELLED 



♦•♦•♦•♦ 



THE NEXT REGULAR PORT COMMISSION MEETING 
IS SCHEDULED FOR 



TUESDAY, APRIL 22, 1997 at 4:00 p.m 

in the Port Commission Room 

Suite 3100, Ferry Building 

San Francisco, CA 94111 

(415)274-0406 



C040897.igq i 



DISABILITY ACCESS 

The Port Commission office is located on the third floor of the Ferry Building, Suite 
3100. The Port office is wheelchair accessible. Accessible seating for persons with 
disabilities (including those using wheelchairs) will be available. The closest accessible 
BART station is Embarcadero Station located at Market and Steuart Streets. The 
closest accessible MUNI Metro station is Embarcadero station located at Market and 
Spear Streets. Accessible MUNI lines serving the Ferry Building are the 9, 31, 32 and 
71. For more information about MUNI accessible services, call 923-6142. 

There is accessible parking at the Ferry Building and at the public lot in the 
Embarcadero median in front of the Ferry Building. Assistive listening devices are 
available for use in the Port Commission Meeting. 

The following services are available on request 72 hours prior to the meeting. Please 
contact Kevin Jensen at (415) 274-0555. Late requests will be honored if possible. 

• American Sign Language Interpreters • The use of a reader during the meeting 

• A Sound Enhancement System • Minutes of the Meeting in Alternative 

• Large Print of the Agenda Formats 

In order to assist the City's efforts to accommodate persons with severe allergies, 
environmental illnesses, multiple chemical sensitivity or related disabilities, attendees at 
public meetings are reminded that other attendees may be sensitive to various chemical- 
based products. Please help the City accommodate these individuals. 

Know Your Rights Under the Sunshine Ordinance 

Government's duty is to serve the public, reaching its decisions in full view of the 
public. Commissions, boards, councils and other agencies of the City and County exist 
to conduct the people's business. This ordinance assures that deliberations are 
conducted before the people and that City operations are open to the people's review. 
For more information on your rights under the Sunshine Ordinance (Chapter 67 of the 
San Francisco Administrative Code) or to report a violation of the ordinance, contact 
the Sunshine Ordinance Task Force at 554-485 1 . 



3 1223 05465 5536 



/SAN FRANCISCO 
x5 ^ORT COMMISSION 



^M 



REGULAR MEETING 

4:00 P.M..v APRIL22, 1991 ^ 

FERRY BUILDING, SUITE 3100 DOCUMENTS DFPT. 

SAN FRANCISCO, CALIFORNIA - add i r iqq? 

A r* F IV "n A SAN FRANCISCO 

P^y^ l^\y\J I^ PUBLIC LIBRARY 

1. ROLL CALL 

2. APPROVAL OF MINUTES - March 25, 1997 Meeting 

3. EXECUTIVE 

A. Executive Director's Report 

B. Commendation for Commissioner Preston Cook. (Resolution No. 97-34) 

4. MARITIME 

A. Authorization to initiate the process to extend the Foreign Trade Zone by creating a 
subzone at Chevron Shipping Corporation's Long Wharf located at Richmond, CA 
(Resolution No. 97-33) 

5. REAL ESTATE AND ASSET MANAGEMENT 

A. Approval for the Executive Director to enter into Permit to Enter with Catellus 
Development Corporation and/or its agent, for Environmental and Geotechnical 
Investigations of Port property located at Mission Bay. (Resolution No. 97-32) 

6. FACILITIES & OPERATIONS 

A. Authorization to award Contract No. 2636, "Pier 48 fire damage repair and 
reconstruction." (Resolution No. 97-29) 

B. Approval of First Amendment, authorizing additional design services for Professional 
Services Contract No. SA 39760016, "New Maintenance Facility," with Kendall 
Young Associates/Beverly Prior Architects, a Joint Venture. (Resolution No. 97-26) 

C. Authorization to award the professional services contract for as-needed "Soil and 
Groundwater Characterization and Management Services" to Tetra Tech, Inc. 
(Resolution No. 97-30) 



A042297.igq 



D. Approval of a First Amendment, authorizing additional design services for 

Professional Services Contract No. SA3960018, "Pier 52 Public Boat Ramp, Bait 
Shop & Cafe and Public Access," with Arcus Architecture & Planning. (Resolution 
No. 97-31) 

7. PLANNING & DEVELOPMENT 

A. Informational presentation on the Pier 52 boat launch project. 

8. FINANCE AND ADMINISTRATION 

A. Authorization to enter into an Expense Reimbursement Agreement with China Basin 
Ballpark Company, and appropriation to pay expenses up to $477,000. (Resolution 
No. 97-25) 

B. Approval of 1997/98 Executive Director Compensation. (Resolution No. 97-27) 

C. Approval of Revisions to FY 1997/98 Operating Budget. (Resolution No. 97-28) 

9. CONSENT CALENDAR 

10. NEW BUSINESS / PUBLIC COMMENT 

11. EXECUTIVE SESSION 

A. CONFERENCE WITH REAL PROPERTY NEGOTIATOR - This session is 
closed to any non-Citv/Port representative. * 

1) Property : Port property located at Berry Street and Second Street (China Basin). 
Person Negotiating : Port representative: Douglas F. Wong, Executive Director 
*San Francisco Giants Representative : Larry Baer, Executive Vice President 

Under Negotiation: Price Terms of Payment / Both 

An executive session has been calendared to discuss real property negotiations 
between the Port and San Francisco Giants, regarding the proposed ballpark. 

This is specifically authorized under California Government Code Section 
54956.8. 

B. CONFERENCE WITH REAL PROPERTY NEGOTIATOR - This session is 
closed to any non-Citv/Port representative. * 

1) Property : Port property located at Pier 80 

Person Negotiating : Port representative: Douglas F. Wong, Executive Director 
*NorCal Representative : Mike Sangiacomo, President and Don Moriel, Executive 
Vice President 

1 9 45-:'26 SFPL: ECONO JRS 

A042297.igq "-'- 1 ^ ^O^^o ^!./.t,nn A-) 

107 SFPL 06/16/00 4/ 



Under Negotiation: Price Terms of Payment / Both 

An executive session has been calendared to discuss real property negotiations 
between the Port and NorCal, regarding the property located at Pier 80. 

This is specifically authorized under California Government Code Section 
54956.8. 

C. CONFERENCE WITH REAL PROPERTY NEGOTIATOR - This session is 
closed to any non-Citv/Port representative. * 

1) Property : Port property located at Mission Bay bordered by Illinois Street and 
Terry Francois Blvd. and Mission Rock Street 

Person Negotiating : Port representative: V. Fei Tsen, Director of Real Estate 
and Asset Management 

*Catellus Representative : Doug Stimpson, Vice President and CFO, Bay Area 
Development 

Under Negotiation: Price Terms of Payment / Both 

An executive session has been calendared to discuss real property negotiations 
between the Port and Catellus, regarding the property located at Mission Bay. 

This is specifically authorized under California Government Code Section 
54956.8. 

D. CONFERENCE WITH LEGAL COUNSEL REGARDING ANTICIPATED AND 
EXISTING LITIGATION MATTERS: 

1) Initiation of Litigation pursuant to subdivision (c) of California Government Code 
Section 54956.9 (1 case) 

(a) Red and White Fleet, Inc. (formerly Harbor Carriers, Inc., a subsidiary of 
Crowley Corporation) operating at Pier 4L 

2) Discuss significant exposure to litigation pursuant to subdivision (b) of California 
Govermnent Code Section 54956.9 (1 case). 

E. Vote in open session on whether to disclose Executive Session discussions 
(S.F. Admin. Code Sec. 67.14) 

12. ADJOURNMENT 

Public comment is permitted on any matter within Port jurisdiction, and is not limited to 
agenda items. Public comment on non-agenda items may be raised during New 
Business/Public Comment. Please fill out a speaker card and hand it to the Commission 
Secretary. If you have any questions regarding the agenda, please contact the 
Commission Secretary at 274-0406 

A042297.igq -3- 



PORT OF SAN FRANCISCO 



TO: 



FROM: 



MEMORANDUM 



April 16, 1997 



MEMBERS, PORT COMMISSION 
Hon. Michael Hardeman, President 
Hon. Denise McCarthy, Vice President 
Hon. Frankie G. Lee 
Hon. Preston Cook 
Hon. James Herman 



Douglas Wong, Executive Director 



,^' 




Ferry Building 

San Francisco. CA 94111 

Telephone 415 274 0400 

Telex 275940 PSF UR 

Fax 415 274 0528 

Cable SFPORTCOMM 

Writer 



SUBJECT: Resolution Awarding Commissioner Preston Cook the Order of Maritime 
Merit, with the Rank of Commander. 



DIRECTOR'S RECOMMENDATION: 



APPROVE THE AWARD 



Commissioner Preston Cook has served with distinction on the San Francisco Port 
Commission since his appointment in 1993 , including two years as president. 

The Port Commission has benefited greatly from his previous experience as a consultant 
for the California Senate Select Committee on the Maritime Industry and as a field 
representative for Senator Milton Marks. The Port has also greatly benefited from his 
business experience and acumen as a principal at TRI Realtors. 

He has provided the Commission with a strong strategic direction and knowledge at a 
critical juncture in the Port's history that resulted in a revitalized commercial energy and 
significant improvements in the Port's financial position. 

The Port Commission does hereby express its appreciation, best wishes and sincerest 
gratitude to Commissioner Preston Cook. To honor him for invaluable, unselfish and 
lasting contributions to the Port Commission and the waterfront community, staff 
recommends that he be awarded the Order of Maritime Merit, with the rank of 
Commander. 



Prepared by: Peter Dailey, Acting Maritime Director 



THIS PRINT COVERS CALENDAR ITEM NO. 3B 



PORT COMMISSION 
CITY AND COUNTY OF SAN FRANCISCO 

RESOLUTION NO. 97-34 



WHEREAS, 



WHEREAS, 



Preston Cook has served with distinction on the San Francisco Port 
Commission since his appointment in 1993; and 

The Port Commission has benefited greatly from his experience 
both as a consultant for the California Senate Committee on the 
Maritime Industry and more recently as a principal at TRI Realtors; 
and 



WHEREAS, 



WHEREAS, 



He has provided the Commission with a strong strategic vision and 
knowledge at a critical juncture in the Port's history that resulted 
in a revitalized commercial energy and significant improvement in 
the Port's financial position; and 

The San Francisco Port Commission recognizes Commissioner 
Preston Cook's invaluable, unselfish and lasting contribution to the 
Port Commission by conferring upon him the Order of Maritime 
Merit, with the rank of Commander. 



I hereby certify that the foregoing resolution was adopted by the Port Commission at 
its meeting of April 22, 1997 



Secretary 



PORT OF SAN FRANCISCO 



TO: 



FROM: 



MEMORANDUM 



April 10, 1997 



MEMBERS, PORT COMMISSION 
Hon. Michael Hardeman, President 
Hon. Denise McCarthy, Vice President 
Hon. Preston Cook 
Hon. James Herman 
Hon. Frankie G. Lee 

Douglas F. Wong MV 
Executive Director / 




Ferry Building 

San Francisco, CA 94111 

Telephone 415 274 0400 

Telex 275940 PSF UR 

Fax 415 274 0528 

Cable SFPORTCOMM 

Writer 



SUBJECT: AUTHORIZE THE EXECUTIVE DIRECTOR TO SUBMIT A 

SUBZONE APPLICATION FOR CHEVRON U.S.A. INC. TO THE 
FOREIGN-TRADE ZONES BOARD. 

DIRECTOR'S RECOMMENDATION: Authorize the Executive Director to submit a 
Subzone Application for Chevron U.S.A. Inc. to the Foreign-Trade Zones Board. 

Foreign-trade zones were established by the U.S. Congress in 1934 to stimulate economic 
development in communities by providing businesses with facilities for conducting 
international trade activities. Designation as a foreign-trade zone is granted by the 
Foreign Trade Zones Board within the U.S. Department of Commerce. Zones must be 
operated as a public utility and applications are granted to state or local government 
entities, port or airport authorities, economic development agencies and not-for-profit 
corporations. 

The Port of San Francisco, on March 10, 1948, received a Grant of Authority to establish, 
operate and maintain a foreign trade zone in San Francisco. As grantee for the Foreign- 
Trade Zone No. 3, the Port has been asked by Chevron Products Company, whose 
headquarters is in San Francisco, to sponsor a Foreign-Trade Subzone application for 
Chevron's Richmond, Ca. refinery to the Foreign Trade Zone's Board in Washington 
D.C. "Subzones" are a special purpose type ancillary zone authorized by the Foreign 
Trade Board, through grantees of public zones, such as the Port of San Francisco, for 
operations that cannot be accommodated within an existing zone when it can be 
demonstrated that the activity will result in a significant public benefit. Chevron has 
several subzones established in the U.S., including Hawaii and Los Angeles, where they 
refine, blend, store and transfer petroleum and petroleum derivatives and other related 
products and ship intermediate and finished products for export and domestic market 



THIS PRINT COVERS CALENDAR ITEM NO. 4 A 



Page 2 



consumption. The Bay Area subzone will be used for the same purpose and in doing so, 
will allow Chevron to realized economic benefits through tariff savings on the refining 
process, deferred duty for products in storage and duty elimination for exported products. 

Such benefits will increase Chevron's competitiveness with its foreign competitors and 
domestic refiners who already have or are pursuing subzone stams. Operating under 
subzone status will strengthen Chevron economically while furthering efforts to retain and 
potentially expand local jobs, thereby benefiting the local Bay Area economy. There are 
over 1,460 full-time refinery employees with additional staff located at Chevron's 
headquarters in San Francisco, California. 

Foreign or domestic merchandise may enter a foreign trade zone without a formal Customs 
entry or the payment of Custom duties or government excise taxes. While in the zone, 
merchandise may be sampled, relabeled, repackaged, assembled, processed or 
manufacmred. If the final product is exported from the United States, no U.S. Customs 
duty or excise tax is levied. If, however, the final product is imported into the United 
States, Customs duty and excise taxes are due only at the time of transfer from the foreign- 
trade zone and formal entry in the U.S. The duty paid is the lower of that applicable to 
the product itself or its component parts. Thus, zones provide oppormnities to realize 
customs duty savings by zone users. 

All legal documents, applications, and administrative reports pertaining to this sub-zone 
application will be prepared by Chevron at their expense. All costs associated with 
running and managing the zone will be assumed by Chevron. As grantee, the Port of San 
Francisco will receive an annual fee of $5,000, which is in accordance with Foreign Trade 
Zone Board's rules and regulations which state that fees charged by the grantee should be 
"the value of acmal services rendered by the zone grantee or operator and reasonable out- 
of-pocket expenses . " 



Prepared by: Peter Dailey, Acting Director of Maritime 



PORT COMMISSION 
CITY AND COUNTY OF SAN FRANCISCO 

RESOLUTION NO. 97-33 



WHEREAS, 



WHEREAS, 



WHEREAS, 



WHEREAS, 



WHEREAS, 



RESOLVED, 



the Port of San Francisco, on March 10, 1948, received a Grant of 
Authority to Establish, Operate and Maintain Foreign-Trade Zone 3 in 
San Francisco, California; 

Foreign Trade Zones were established to stimulate economic 
development in communities by providing businesses with facilities for 
conducting international trade; 

Chevron U.S.A. Inc., who employs more than 1,460 people in their 
Richmond, Ca. refinery on a full-time basis with additional staff at their 
headquarters in San Francisco, desires to have their refinery facility in 
Richmond, California designated as a Subzone Site of FTZ 3; 

Chevron U.S.A. Inc. refines, blends, stores and transfers petroleum and 
petroleum derivatives and other related products and the subzone will 
ship intermediate and finished products for export and domestic market 
consumption; 

Chevron U.S.A. Inc., a San Francisco based company, will realize 
economic benefits through "inverted tariff" savings on the refining 
process, deferred duty for products in storage and duty elimination for 
exported products which will benefit the region through a overall 
enhancement of the local economy while furthering efforts to retain and 
potentially expand local jobs and further increase the balance of trade: 
now, therefore, be it 

that the San Francisco Port Commission duly authorizes its Executive 
Director to submit a Subzone Application for Chevron USA Inc. to the 
Foreign-Trade Zone Board in Washington D.C.; and to take such further 
action, in consultation with the city Attorney, as is required by the 
Foreign Trade Zone Board to accept and process the Subzone 
Application. 



/ hereby certify that the foregoing resolution was adopted by the Port Commission at its 
meeting of April 22, 1997 



Secretary 



PORT OF SAN FRANCISCO 



MEMORANDUM 



April 17, 1997 




Ferry Building 

San Francisco. CA 94111 

Telephone 415 274 0400 

Telex 275940 PSF UR 

Fax 415 274 0528 

Cable SFPORTCOMM 

Writer 



TO: 



MEMBERS, PORT COMMISSION 

Hon. Michael Hardeman, President 
Hon. Denise McCarthy, Vice President 
Hon. Frankie G. Lee 
Hon. Preston Cook 
Hon. James Herman 



FROM: Douglas F. Wong Jih 

Executive Director-^ 

SUBJECT: Approval for the Executive Director to Enter into Permit to Enter for with 
Catellus Development Corporation and/or its agent, for Environmental and 
Geotechnical Investigations of Port Property located at Mission Bay 



DIRECTOR'S RECOMMENDATION: APPROVE RESOLUTION 

The Port and Catellus Development Corporation ("Catellus") are parties to the Port Land 
Transfer Agreement ("PLTA"), dated as of September 8, 1983. Under the PLTA, the 
Port agreed to transfer certain Port lands to Catellus in exchange for, among other things, 
the Western Pacific site located adjacent to Pier 80. Although Catellus terminated the 
Mission Bay Development Agreement in early 1996, the PLTA remains in effect. 
Catellus has expressed an interest in proceeding with the transfer under the PLTA. Under 
the PLTA, Catellus has the obligation to accept the Port property "as is," and to remediate 
the property to comply with applicable standards for the proposed uses. 

Catellus desires to conduct geotechnical and environmental studies of Port and City 
property located within the Mission Bay area, as shown on the attached diagram. These 
investigations are intended to assist Catellus in determining the environmental condition of 
the property to assess Catellus' potential remediation obligations. 

The Regional Water Quality Control Board ("RWQCB") is the state agency with 
jurisdiction over water quality issues, and would be the agency most involved with signing 



THIS PRINT COVERS CALENDAR ITEM NO. 5 A 



Page 2 



off on the investigation and remediation process. The RWQCB has expressed a great deal 
of interest in the Mission Bay site and supports Catellus' investigation program. The 
RWQCB has stated an intent to pursue various oil companies to locate responsibility for 
certain pipelines located on Port property within Mission Bay that could be a possible 
source of contamination. Catellus has requested the Port to assign to Catellus any rights 
the Port may have against these oil companies, or others, for investigation and remediation 
costs, in the event the land transfer occurs under the PLTA. Port staff believes that 
providing these permits is necessary for the Port land transfer to occur. 

The Port has used a form of entry permit in the past that requires a broad indemnity, 
mcluding coverage for damage to utilities and hazardous material investigations or 
remediation efforts mandated by other governmental agencies regardless of the fault or 
negligence of the permittee. In this case, the indemnity is limited in several respects. This 
is largely because Catellus has advised the Port that insurance is not available for such 
risks, particularly liability for pre-existing toxics due to no fault of Catellus or its agents. 
If Catellus decides not to proceed with the land transfer, or to accept only certain parcels 
of the Port transfer parcels, the Port will remain liable for the environmental condition of 
its property. The Port will bear ultimate responsibility for remediation of the property 
consistent with the RWQCB 's (or other applicable agency's) requirements if other 
responsible parties are not identified or fail to respond to requests or orders from 
applicable environmental agencies. 

Catellus has expressed a strong commitment in proceeding with the land transfers, as set 
forth in the Mayor's March 3, 1997 letter to Catellus summarizing the Mission Bay South 
principles of agreement (copy on file with the Secretary of the Port Commission for this 
item). The PLTA provides that Catellus will assume environmental remediation 
responsibilities upon transfer of the property to Catellus. 

The proposed Entry Permit for the Port will be in the same form as the Entry Permit 
entered into by the City with Catellus. Notable provisions of the Entry Permit include the 
following: 

■ Catellus will provide the Port with copies of all boring logs, sample and laboratory 
test results promptly upon receipt and copies of any reports prepared by them 
documenting the results of the work conducted pursuant to these permits. 

■ Catellus will carry comprehensive or commercial general liability insurance 
throughout the term of the permit, with limits not less than One Million Dollars 

■ Catellus will repair all damage to the Permit area and restore it to its former 
conditions 



Page 3 



In addition to the Port's standard indemnity, Catellus will indemnify the Port 
against all claims resulting from any release of hazardous materials to the extent 
that such release is directly created or is aggravated by the activities undertaken by 
Catellus, or from any handling or disposal of hazardous materials on the permit 
area; however, Catellus will not be responsible for any claims resulting from the 
discovery or disclosure of pre-existing environmental conditions on the permit 
area, or for claims that result directly from the City or Port's negligence or willful 
misconduct. 

Catellus will waive all claims and release Port from liability arising from the 
condition of the permit area or its use by Catellus, except to the extent such 
damage results from the City's or Port's negligence or willful misconduct. 



Prepared by: DOUGLAS WONG 
Executive Director 



I:\CATELLUS.MEM 



PORT COMMISSION 
CITY AND COUNTY OF SAN FRANCISCO 

RESOLUTION NO. 97-32 



WHEREAS, The Port and Catellus Development Corporation ("Catellus") are parties to 
the Port Land Transfer Agreement ("PLTA"), dated as of September 8, 
1983. Under the PLTA, the Port agreed to transfer certain Port lands to 
Catellus in exchange for, among other things, the Western Pacific site 
located adjacent to Pier 80. Although Catellus terminated the Mission Bay 
Development Agreement in early 1996, the PLTA remains in effect. 
Catellus has expressed an interest in proceeding with the transfer under the 
PLTA. Under the PLTA, Catellus has the obligation to accept the Port 
property "as is," and to remediate the property to comply with applicable 
standards for the proposed uses. 

WHEREAS, Catellus Development Corporation, or its agents (collectively, "Catellus"), 
desire to conduct geotechnical and environmental studies of certain Port 
properties within the area commonly known as Mission Bay, and these 
investigations are intended to assist Catellus in determining the condition 
and suitability of the property for its needs, and its potential remediation 
obligations; and 

WHEREAS, the Port desires to provide these permits to Catellus to assist it in 

investigating the Property which will help to facilitate the implementation of 
the land transfers under the PLTA; and 

WHEREAS, this permits does not commit the Port to issuance of any additional permits; 
and 

WHEREAS, the Port's standard entry permit requires a broad indemnity, including 
coverage for damage to utilities and hazardous material investigations or 
remediation efforts mandated by other governmental agencies regardless of 
the fault or negligence of the permittee. In this case, the indemnity is 
limited in several respects. This is largely because Catellus has advised the 
Port that insurance is not available for such risks, particularly liability for 
pre-existing toxics due to no fault of Catellus. If Catellus decides not to 
proceed with the land transfer, or to only accept certain parcels of the Port 
transfer parcels, the Port will continue to have liability for the 
environmental condition of its property. The Port will bear ultimate 
responsibility for remediation of the property consistent with the 
requirements of applicable environmental agencies if other responsible 
parties are not identified or fail to respond to requests or orders from such 
agencies. 



Resolution No. 97-32 
Page 2 



WHEREAS, Catellus has expressed a strong commitment in proceeding with the land 
transfers under the PLTA, and an intent to assume environmental 
remediation responsibilities once die transfers have occurred; now, 
therefore, be it 

RESOLVED, that the San Francisco Port Commission hereby authorizes the Executive 

Director to approve a permit to enter with Catellus or its agents, having the 
terms set forth in the memorandum to Port Conmiission for Calendar No. 
5 A, at its meeting of April 22, 1997, a copy of which is on file with the 
Secretary of the Port Commission for this agenda item; and be it further 

RESOLVED, that the Executive Director, in consultation with the City Attorney, is 
hereby further authorized to execute such other permits to enter having 
substantially the same terms as the Permit to Enter approved by this 
Resolution, necessary to facilitate further investigation of the Port's 
Mission Bay property subject to the proposed land transfers. 



/ hereby certify that the foregoing resolution was adopted by the Port Commission at its 
meeting of April 22, 1997. 



Secretary 




^ nOPQSXD UCSf BOfWGS 
^ PROPOSED CAmiJJS BORNOS 



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APPROXIMUE LOCATION Of FOMCfl USTs 

Af>f>M»IMATI LOCAIUM or "^TAIUS 
UNKNOWr OR CnSTIHC USTa 

vatPQiwn uOMTORwc <wi±s 



200 

inn 



GRAPHC SCALE 
2 00 40 



800 



6NVIRON 

5820 Shellmound St., Suite 700. Emeryville. CA 94606 



Sample Location Mop 
Catellus Mission Boy 
Son Francisco, California 



Drafter: RS 



Date: 4/2/97 



Contract Number: 03-5381L 



Approved: 



Revised: 



Flgii>; 



A-1 



PORT OF SAN FRANCISCO 




TO: 



MEMORANDUM 

April 16, 1997 

MEMBERS, PORT COMMISSION 

Hon. Michael Hardeman, President 
Hon. Denise McCarthy, Vice President 
Hon. Frankie G. Lee 
Hon. Preston Cook 
Hon. James Herman 



FROM: 



Douglas F. Wong /\; 
Executive Director 



y 



Ferry Building 

San Francisco, CA 94111 

Telephone 415 274 0400 

Telex 275940 PSF UR 

Fax 415 274 0528 

Cable SFPORTCOMM 

Writer 



SUBJECT: Authorization to award Contract 2636, 
Reconstruction" 



'Pier 48 Fire Damage Repair & 



DIRECTOR'S RECOMMENDATION: THAT THE COMMISSION AUTHORIZE STAFF 
TO AWARD CONTACT 2636, "PIER 48 FIRE DAMAGE REPAIR AND 
RECONSTRUCTION," E^J ACCORDANCE WITH THE ATTACHED RESOLUTION 

On November 26, 1996, a fire at the east end of Pier 48 destroyed the interconnecting wood 
frame structure and caused substantial structural damage to the steel frames, walls and roof 
at the easterly end of Sheds A and B on the pier. The fire caused significant deformation of 
steel trusses and caused pre-cast concrete wall panels that make up the exterior walls of the 
sheds to move from their original position. An emergency was declared and subsequently 
approved by the Port Commission on December 13, 1996. This emergency authorized staff 
to take several actions including hiring a consultant on an emergency basis develop a repair 
design for the building shell and to advertise for competitive bids for construction of the 
repairs. 

In January, 1997, the Port advertised Contract 2636 for competitive bids. This contract will 
address only the repair and reconstruction of the shells of the buildings. The interior repairs 
including new fire walls, coiling fire doors, a sprinkler system, light fixtures and a fire alarm 
system will be provided under a separate contract. 

On March 21, 1997, four (4) bids were received. A Summary of Bids is attached. The lowest 
responsive bidder was West Bay Builders, Inc./D. Stewart Thompson. Inc., a Joint Venture, 
with a low base bid of $2,529,768. D. Stewart Thompson. Inc. is a WBE firm with 51% of the 

THIS PRINT COVERS CALENDAR ITEM 6A 



I:\up5I\agd-p48b.cj 



Page 2 



work. Staff has reviewed the bid documents and the Human Rights Commission has reviewed 
and agreed that the subcontracting goals of 20% MBE and 5% WBE have been met. The 
contractor has 24% and 12% respectively. 

Staff recommends that the Commission authorize the award of the base bid and Additive 
Alternative No. A-1 of Contract 2622 to West Bay Builders, Inc./D. Stewart Thompson, Inc., 
a Joint Venture, for a total contract amount of $2,599,768. Additive Alternative No. A-1 for 
$70,000 is for Types A and B coiling doors and grilles along column line 63. It is also 
recommended that the Commission authorize a 10% contingency for possible Type I contract 
modifications and that the Executive Director be authorized to accept the work after it is 
complete. It is anticipated that insurance monies will ftand the entire cost of this contract. 



Prepared by : Cliff Jarrard, Chief Harbor Engineer 



I : \wp5 1 \agd-p48b . cj 



PORT COMMISSION 
CITY AND COUNTY OF SAN FRANCISCO 

RESOLUTION NO. 97-29 



WHEREAS, on November 26, 1 996, a fire at the east end of Pier 48 destroyed the 

interconnecting wood frame structure and caused substantial damage to the 
steel frames, walls and roof at the easterly end of Sheds A and B on the pier; 
and 

WHEREAS, through an emergency declaration with subsequent Commission approval on 
December 13, 1996 staff was authorized to advertise for competitive bids for 
Contract 2636; and 

WHEREAS, on March 21, 1997, four (4) bids were received; and 

WHEREAS, staff has reviewed the bid documents and determined that the lowest 

responsive bidder is West Bay Builders, Inc./ D. Stewart Thompson, Inc., a 
Joint Venture; and 

WHEREAS, the Human Rights Commission has reviewed the bids and determined that 
this contractor has met the MBE/WBE subcontracting goals and that the 
contractor qualifies for the bid preference; and 

WHEREAS, it is anticipated that insurance monies will fund the entire cost of this work, 
now therefore be it 

RESOLVED, that the San Francisco Port Commission hereby authorizes the award of 

Contract 2636, "Pier 48 Fire Damage Repair & Reconstruction," to West Bay 
Builders, Inc./D. Stewart Thompson, Inc., a Joint Venture to include the base 
bid and Additive Alternative No. A-1 at a cost of $2,599,768, and authorizes 
a 10% contingency for possible Type 1 contract modifications; and be it 
further 

RESOLVED, that the San Francisco Port Commission authorizes the Executive Director to 
accept the work after it is complete. 



/ hereby certify that the foregoing resolution was adopted by the Port Commission at its 
meeting of April 22, 1997. 



Secretarv 

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5 



PORT OF SAN FRANCISCO 




TO: 



FROM: 



MEMORANDUM 

April 15, 1997 

MEMBERS, PORT COMMISSION 
Hon. Michael Hardeman, President 
Hon. Denise McCarthy, Vice President 
Hon. Frankie G. Lee 
Hon. Preston Cook 
Hon. James Herman 



Douglas P. Wong 
Executive Director 



i,A 



Ferry Building 

San Francisco, CA 94111 

Telephone 415 274 0400 

Telex 275940 PSF UR 

Fax 415 274 0528 

Cable SFPORTCOMM 

Writer 



SUBJECT: First Amendment to the Professional Services Contract for "New Maintenance 
Facility" 

DIRECTOR'S RECOMMENDATION: APPROVAL OF FIRST AMENDMENT, 

AUTHORIZING ADDITIONAL SERVICES UNDER PROFESSIONAL SERVICES 
CONTRACT NO. SA3976G016, "NEW MAINTENANCE FACILITY," WITH KENDALL 
YOUNG ASSOCIATES/BEVERLY PRIOR ARCHITECTS ("KYA/BPA"), A JOINT VENTURE 

The Commission previously awarded a contract to KYA/BPA for the design of the New 
Maintenance Facility ("NMF") at Pier 48. Because the NMF will be located at Pier 50 instead of 
Pier 48, it is necessary to amend KYA/BPA's scope of services. Although much of KYA/BPA's 
work to date in designing shops and storage facilities will be used for the Pier 50 facility design, 
the change in location of the NMF does necessitate two changes in the scope of work. 

KYA/BPA's contract will be amended to redirect their original design services related to the NMF 
to Pier 50 instead of Pier 48. There is no cost impact for this change since the remaining contract 
balance of $235, 118 will be used to fund this work. This work includes shop design and layout, 
mechanical and electrical design, construction documents preparation, and construction support 
services. 

KYA/BPA's contract will also be amended to include limited additional services for the design of 
interior repairs to the fire damaged areas at Pier 48. The cost of the additional services is 
$72,644. The interior repairs will include new firewalls, new coiling fire doors, a sprinkler 
system, light fixtures, and a fire alarm system. KYA/BPA will prepare the necessary construction 
and bid documents for the Port to solicit bids to accomplish this work. It is anticipated that these 
additional services will be paid for by the fire insurance company. Accordingly, KYA/BPA will 
be authorized to proceed with these services only upon confirmation of fire insurance company 
coverage. 



Prepared by: Cliff Jarrard, Chief Harbor Engineer 
THIS PRINT COVERS CALENDAR ITEM NO. 68 



rl:cj:I;\COMM_MEM.WPD 



PORT COMMISSION 
CITY AND COUNTY OF SAN FRANCISCO 

RESOLUTION NO. 97-26 

WHEREAS, the Commission previously awarded a contract to Kendall Young 

Associates/Beverly Prior Architects ("KYA/BPA"), A Joint Venmre, for 
the design of the New Maintenance Facility ("NMF") at Pier 48; and 

WHEREAS, the NMF will be located at Pier 50 instead of Pier 48; and 

WHEREAS, although much of KYA/BPA' s work to date in designing shops and 

storage facilities will be used for the Pier 50 facility design, the change in 
location of the NMF does necessitate two changes in the scope of work; 
and KYA/BPA 's contract will be amended to redirect their original 
services related to the NMF to Pier 50 instead of Pier 48; and there is no 
cost impact for this change since the remaining contract balance of 
$235,118 will be used to fund this work; and 

WHEREAS, this work includes shop design and layout, mechanical and electrical 
design, construction documents preparation, and construction support 
services; and 

WHEREAS, KYA/BPA's contract will also be amended to include limited additional 
services for the design of interior repairs to the fire damaged areas at Pier 
48; and 

WHEREAS, the cost of the additional services is $72,644; and 

WHEREAS, the interior repairs will include new firewalls, new coiling fire doors, a 
sprinkler system, light fixtures, and a fire alarm system; and KYA/BPA 
will prepare the necessary construction and bid documents for the Port to 
solicit bids to accomplish this work; and it is anticipated that these 
additional design services will be paid for by the fire insurance company; 
and accordingly, KYA/BPA will be authorized to proceed with these 
services only upon confirmation of fire insurance company coverage; 
therefore be it 

RESOLVED, the San Francisco Port Commission hereby approves the First 

Amendment to the KYA/BPA Professional Services Contract No. 
39760016, "New Maintenance Facility," for redirecting NMF services to 
Pier 50 instead of Pier 48 and for additional services for $72,644. 

/ hereby certify that the foregoing resolution was adopted by the Port Commission at its 
meeting of April 22, 1997. 



Secretary 



PORT OF SAN FRANCISCO 



TO: 



FROM: 



MEMORANDUM 

April 15, 1997 

MEMBERS, PORT COMMISSION 

Hon. Michael Hardeman, President 
Hon. Denise McCarthy, Vice President 
Hon. Frankie Lee 
Hon. Preston Cook 
Hon. James Herman 

Douglas Wong /)JJ 
Executive Director 




Ferry Building 

San Francisco. CA 94111 

Telephone 415 274 0400 

Telex 275940 PSF UR 

Fax 415 274 0528 

Cable SFPORTCOMM : 

Writer 



SUBJECT: Professional Services Contract for Soil and Groundwater Characterization 
and Management Services, Authorization to Award. 

DIRECTOR'S RECOMMENDATION: AUTHORIZE STAFF TO AWARD THE 
PROFESSIONAL SERVICES CONTRACT FOR AS-NEEDED "SOIL AND 
GROUNDWATER CHARACTERIZATION AND MANAGEMENT SERVICES" TO 
TETRA TECH, ESTC. 

The Commission previously authorized Port staff to issue a Request for Proposal ("RFP") 
for providing as-needed soil and groundwater characterization and management services. 
On January 20, 1 997, the Port issued the RFP for environmental consulting services for 
this project. On February 13, 1997, the Port received 21 proposals. 

A selection panel reviewed and evaluated all proposals, and on February 28, 1997, issued 
a short list of four firms which were selected to proceed in the evaluation process. On 
March 19, 1997, a selection panel interviewed and evaluated four teams. Tetra Tech 
received the highest score following completion of the evaluations. The selection of Tetra 
Tech has been reviewed and approved by the Port's Human Rights Commission 
representative. 

Subsequently, the Port met with Tetra Tech to negotiate a schedule of fees. The Port and 
Tetra Tech have agreed to the attached schedule of fees for providing as-needed 
consulting services. Port staff requests that the Port Commission authorize award of this 
contract to Tetra Tech, Inc. 

Prepared by: Alex Lee, Director, Facilities and Operations 



THIS PRINT COVERS CALENDAR ITEM NO. 611 



PORT COMMISSION 
CITY AND COUNTY OF SAN FRANCISCO 

RESOLUTION NO. 97-30 



WHEREAS, the Commission previously authorized staff to issue an RFP for as- 

needed environmental consulting services; and 

WHEREAS, on January 20, 1997 the Port received proposals for this professional 

services work; and 

WHEREAS, a selection panel reviewed all proposals, and interviewed four 

proposers to select the best qualified consultant team; and 

WHEREAS, the selection panel selected Tetra Tech, Inc.; and 

WHEREAS, the contract will provide for professional envirormiental consulting 

services including underground storage tank site investigation, 
assessment of contaminated soil and groundwater, and remedial action 
planning; and 

WHEREAS, the Human Rights Commission has confirmed that this firm is 

responsive in accordance with Section 12D of the San Francisco 
Administrative Code; now, therefore be it 

RESOLVED, that the San Francisco Port Commission hereby approves the 

authorization to award the subject professional services contract for the 
"Soil and Groundwater Characterization and Management Services" to 
Tetra Tech, Inc., at a cost not to exceed $360,000. 



/ hereby certify that the forgoing resolution was adopted by the San Francisco Port 
Commission at its meeting of April 22, 1997. 



SECRETARY 



FEES 

Fees for labor and equipment shall be charged as specified in the attached schedule of fees, 
with the following additional terms and conditions: 

• Subcontractors will charged as proposed in the attached rate schedule with a 5% 
mark-up. 

• Rates for Tetra Tech labor and subcontractors will be valid for two years from the 
date of execution of this contract. 

Premium rates or other charges will not be paid without prior approval. 

Invoices to the Port will list dates and a description of activities for all labor and 
equipment charges, and include direct invoices for subcontracted services or other 
charges. 



APR-10-97 09:26 From: Tetra Tech San Francisco 4159745914 T-273 P. 03 Job-117 

April 9, 1997 
Page 2 

Tetra Tech - San Francisco 

Schedule of Fees 

Port of San Francisco 

April 1997 

Position Hourly Rate 



Principal/Senior Management 


$117 


Consulting Projea manager 


$92 


Technical Staff 




Senior 


$90 


Staff 


$72 


Technician 


$45 


Industrial Hygiene / Health and Safety 




Senior 


$S7 


Staff 


$55 


Drafting 


$45 


Word Processing 


$45 


Clerical Suppon 


$37 


Billing/ Accounting 


$40 


Additional Costs 


Markup 



Field Equipment Sc Misc. Equipment Charges 10% Handling 

(See Attached Table) 

Subcontractor/Laboratory Charges 5% Handling 

(See Attached Fee Schedules) 

Other Direa Costs 5% Handling 

Miscellaneous Expenses 

A) Meals and lodging expenses shall not be allowed without prior approval. 

B) Miscellaneous field supplies and other small equipment purchased for project work shall be subjea to a 
10% markup limit. 

C) Mileage shall be reimbursed ai a rate of $0.3 1 per mile for work performed outside the City of San 
Francisco; vehicle and mileage charges for work performed in the City and costs for transpomtion la 
and from the City shall not be approved. 

D) Fax and computer allocations^ communication fees and other flat rate adminiatrativc fee charges shall 
not be reimbursable. Overhead costs of communication computers, faxes and other office managemsni 
costs shall be assumed to be included in staff rates. 

E) Other direct cost to be reimbursed by the Pore include: 
Copies of documents in addition to the one copy provided to the Pon; 
Color copies: 

Oversized copies (larger than 11" x 17"); 
Express mail; 
Courier services; and 
Sample shipping. 



email: lnfOQItsfo.com TETRA TBCH, INC worid wide web: hno:/Mww.Hiio.mr\/rtslo 



APR-IO-97 09:26 From: Tatra TbcH San Francisco 



4159745914 



T-273 P. 04/1 4 Job-n7 



April 9, 1997 
Page 3 



Tetra Tecli - San Francisco 

Project Personnel 

Port of San Francisco 

April 1997 



Position 



Tecra Tech Personnel 



Principal/Senior Matiagemear 
Consulting Project Manager 



John King, CIH 
Brad Hall, RG 



Technical Staff 
Senior 



Staff 



Technician 



Bob Conon, RG, PE 

Mike Wopat, RG 

Tom Whitehead, RG, HG, REA 

Bill Bicknell 
Kathy Bishop 
Mike Guy 
Mary Holkenbrink 
Kns Kolassa 
Elizabeth Purl 

Yoshekia Evans 
Andrea Hatch 
Kevin Joyce 
Pat Ledesma 



Industrial Hygiene/Health Be Safety 
Senior 



Roy Roenbeck 



Staff 


John Bock 


Drafting 


Henry Chang 
Ted Hayden 
Mike Yakura 


Word Processing 


Jay Greenspan 
Helen Quan 
Randy Varney 


Clerical Suppon 


Susan Chew 
Elisa Lyons 


Billing/ Accounting 


Lisa Vu 



amsll: lnfoQnsfo.com 



TETRA TBCH. INC 



world wtde web: hnpJMwiv.nsio.cz.'n^fo 



APR-10-97 09:27 From: Tstra Tech San Francisco 

April 9, 1997 
Page 4 



4159745914 



T-273 P. 05/1 4 Job-117 



Terra Tech - San Francisco 

Equipment Charge Schedule 

Port of San Francisco 

April 1997 



ITEM 


DaUy 


Weekly 


General 




Tetra Tech Van & Rental Car 


$45.00 


$225.00 


Tetra Tech 4WDA/an 


$60.00 


$300.00 


Camera, 35mm 


$6.00 


$24.00 


Video Camera/Recorder 


$26.00 


$104.00 


Video Monitor (Television) 


$11.00 


$44.00 


Portable Computer 


$80.00 


5400.00 


Cellular Phone 


$10.00 


$40.00 


Metal Detector (Ferro-Trac) 


$10.00 


$40.00 


Transit (with, Tripod and Rod) 


$30.00 


$120.00 


Navigation System (GPS) 


$85.00 


$340.00 


Safety 




Level A 


$400.00 


— 


Level B 


$200.00 


— 


Level C 


$95.00 


— 


Level D (modified) 


$10.00 


— 


Level D 


$5.00 


— 


Eyewash Station 


$10.00 


$40.00 


Respirator Cartridge 


$3.00 


$11.00 


Respirator Canister 


$5.00 


520.00 


SCBA 


$75.00 


$300.00 


SCBA (Hip-Air Breathing Apparatus) 


$65.00 


$260.00 


Pumps 




Air, High and Low Row (Alpha and Gilian) 


$60.00 


$240.00 


Air, External ProgrBmmer (Alpha) 


$20.00 


$60.00 


Air, High Volume 


$45.00 


$180.00 


Draeger Pump 


$32.00 


$128.00 


Draeger Detector Tubes 


$10.00 each 


— 


Wattera Hand 


$6.00 


524.00 


Peristaltic 


$55.00 


$220.00 


Rotometer, High Flow (Gilian) 


~ 512.00 


Rotometer, Low Flow (SKC) 


$6.00 


$24.00 


Portable 2' Purge Pump 


$25.00 


5100.00 


Submersible (Grundfos, SLC) 


$20.00 


S80.00 


Submersible (Grundfos. Redi Flo) 


$160.00 


$640.00 


Bladder Air-Lift 


$110.00 


$440.00 



aimit: info@asfo.com 



TETRA TECH. INC 



worlo w/de web: hnpUMWM nsro coirvnsio 



APR-10-97 09:27 From: Tatra Tech San Francisco 

April 9, 1997 
Pages 



4159745914 



T-273 ? 03/14 Jcirn7 



Terra TecK - San Francisco 

Equipment Charge Schedule (cont.) 

Port of San Francisco 

April 1997 



ITEM 


Daily 


Weekly 


Meters 




Conductivity Probe (Whatman) 


$8.00 


$32.00 


Conductivity / Temperature Meter (YSI #33) 


$20.00 


$90.00 


Dissolved Oxygen {YSI-51B) 


$20.00 


$90.00 


pH/Temperature Probe (Whatman) 


$15.00 


$60.00 


pH/Temperature Probe (Orion SA-250) 


$20.00 


$90.00 


Radiation 


S30.Q0 


$120.00 


Soil Gas Probe (AMS) 


$12.00 


$48.00 


Turbidimotor (Hach) 


$26.00 


$100.00 


Data Logger, 2 channel 


$65.00 


$325.00 


Pressure Transducer (each) 


$35.00 


$175.00 


Water Quality System (YSI 3800) 


$200.00 


$800.00 


Air Monitors 




Aerosol (Miniram) 


$110.00 


$440.00 


CG/02/H2S 


$70.00 


$280.00 


CG/02 


$60.00 


$240.00 


Organic Vapor Analyser (OVA) 


$120.00 


$480.00 


PID (Micro Tip, 10.6 eV lamp) 


$100.00 


$400.00 


PIP (HNu with 10.2 eV lamp) 


$100.00 


$400.00 


PID (HNu with 11.7 eV lamp) 


$115.00 


$460.00 


Miscellaneous Sampling 




Bailer, Teflon 


$12.00 


$48.00 


Bailer, Stainless Steel 


$12.00 


S48.00 


Bailer, Disposable 


$10.00 each — 


Sediment Grab Sampler 


$20.00 


$80.00 


AMS Soil Sampling Kit 


$55.00 


$220.00 


Water Level Indicator 


$20.00 


$80.00 


OiiyWater Interface Probe (ORS) 


$40.00 


$160.00 


Stainless Steel Sleeve (2" x 6") 


$4.00 each — 


End Caps (2") 


$0,15 each 


— 



»moll: MoQnsfo.com 



TETRA TECH. INC 



worid wWe web: rtnpy/tvww ttsJo ccmrato 



SUPERIOR LPIBS 



otaio ^.<^o oo'tT 



Superior 



SAL 



Analytical Laboratory 



PRICE LIST FOR TETRA TECH 

PORT OF SAN FRANCISCO PROJECT 

Quote No. 97-02435 

5 day turn-around • Level II Reporting » Soil / Water/ Air 



f 


ORGANIC ANALYSIS 






METHOD 


TYPE OF ANALYSIS 


REPORTING LIMITS 


CONTALNERS | 


PRICE 


EPA Method 8010,601 


Chlorinated Hydrocarbons 


S: 5.0 ppb 
W: 0.5 ppb 


S: Brass tube 
W: 3 pres. VOAs 


60 


EPA Method 8015M 


Diesel 


S: 1.0 ppm 
W: 50 ppb 


S: Brass tube 
W: 1 Itr. amber 


60 


EPA Method 8015M 


Gasoline 


S: 1.0 ppm 
W: 50 ppb 


S: Brass tube j 
W: 3 pres. VOAs : 


50 


EPA Method 8015M 


TEPH Scan - IDQ 


S: 1.0 -100 ppm 
W: 50 -500 ppb 


S: Brass tube 
W: 1 Itr. amber 


70 


EPA Method 8015M/8020 


Gas/BTXE 


S: l.Oppra/S.Oppb 
W: 50 ppb/0.5 ppb 


S: Brass tube 
W: 3 pres. VOAs 


55 


EPA Method 8015M/8020 


Gas/BTXE/MTBE 


S: 1 ppm/5 ppb/5 ppb 
W: 50 ppb/.5 ppb/5 ppb 


S: Brass mbe 
W: 3 pres. VOAs 


60 


EPA Method 8020,602 


BTXE (Volatile Aromatics) 


S: 5.0 ppb 
W: 0.5 ppb 


S: Brass tube 
W: 3 pres. VOAs 


50 


EPA Method 8080,608 


PCB's only 


S: 30 ppb 
W: 1.0 ppb 


S: Brass tube 
W: 1 Itr. Amber 


65 


EPA Method 8080,608 


Pesticides only 


S: 5-100 ppb 
W: 0.1-10 ppb 


. S: Brass tube 
W: 1 Itr. Amber 


75 1 


EPA Method 8080,608 


PCB's & Pesticides 


S: 5-100 ppb 
W: 0.1-10 ppb 


S: Brass tube 
W: 1 Itr. Amber 


140 

■i 


EPA Method 8240,624 


VOC's (Mass Spectrometry) 


S: 5-500 ppb 
W: i-100 ppb 


S: Brass tube 
W: 3 pres. VOAs 


.25 1 


EPA Method 8260 


VOC's (Mass Spectrometry) 


S: 3-500 ppb 
W: 1-100 ppb 


S: Brass tube 
W: 3 pres. VOAs 


125 i 

; 1 


EPA Method 8270,625 


SVOC's (Mass 
Spectrometry) 


S: 300 ppb 
W: 10 ppb 


S: Brass tube 

W: 2 X 1 Itr. Amber 


250 


EPA Method 8310 


PAH'S (Polynuclear 
Aromatic Hydrocarbons) 


S: 5-200 ppm 
W: 0.05-2 ppb 


S: Brass tube 
W: 1 Itr. Amber 


160 


EPA Method 8330 


Explosive Residues 


S: 0.25-2.2 ppra 
W: 0.02-13 ppb 


S: Brass tube 

W: 2 X 1 Itr. Amber 


175 1 


EPA Method 418.1 


Total Recoverable 
Petroleum Hydrocarbons 


S: 20 ppm 
W: 1 ppm 


S: Brass tube 

W: 1 Itr. H2S04 pres. 


60 


Standard Method 5520 


Oil & Grease (Gravimetric) 


S: 50 ppm 
W: 5 ppm 


S: Brass mbe 

W: 1 Itr. H2S04 pres. 


1 «o i 


DHS-LUFT 


Organic Lead 


S: 2 ppm 

W: 4 ppm 


S: Brass tube 
W: 1 Itr. Amber 


45 



For quotes, bottle orders or laboratory arrangements, please call Kristen Zink at (800) 221-6655: 



SAL 



Superior 

Analytical Laboratory 





Wer CHEMISTRY ANALYSIS 




METHOD 


TYPE OF ANALYSIS 


REPORTING LIMITS 


CONTAINERS 


PRICE 


SW846 


Reactivity 


Cyanides: 2 mg/Kg 
Sulfides: 5 mg/Kg 


S: Brass tube 
W: 1 Itr. Amber 


60 


150.1/9045 


Corrosivity (pH) 


not applicable 


S: Brass tube 

W: unpreserved VGA 


5 


1010 


Igiiitability 


not applicable 


S: Brass mbe 

W: unpreserved VGA 


IS 


7196 


Hexavalent Chromium 
(24 hr. Hold on Waters) 


S: 0.1 ppm 
W: 0.1 ppm 


S: Brass tube 

W: 1 Itr. Unpreserved 


25 


160.1 


Total Dissolved Solids 


10 ppm 


W: 500 ml plastic 


15 


160.2 


Total Suspended Solids 


10 ppm 


W: 1 Itr. Plastic 


15 


300.0 


Anions by IC (Nitrate, Nitrite, 
Sulfate, Phosphate. Bromide, 
Fluoride, Chloride) 


S: 5-60ppb 
W: 5 - 60 ppb 


S: Brass tube 

W: 250 ml unpreserved plastic 


20 per anion 

or 100 per 

full run 



INORGANIC ANALYSES 



TYPE OF ANALYSIS 



Metals by ICP (200.7 / 6010 Series) 



PRICE 



10 per metal 



Metals by GFAA (7000 Series) (arsenic, selenium, lead, thallium) 



12 per metal 



Mercury by CVAA (Use 1 Itr amber glass pres. w/HN03) 



30 



17 CCR Metals (6000 & 7000 Series) (17 metals) 



160 



Priority Pollutant Metals (6000 & 7000 Series) (13 metals) 



120 



RCRA Metals (6000 & 7000 Series) (8 metals) 



80 



I 



All containers for metals analyses utilize Brass tube for soils and 250 ml. HNG3 plastic container for water. 

** For dissolved metals, filter before preservation.** 

EXTRACTIONS 



TYPE OF ANALYSIS 


PRICE 


TCLP Extraction (Semi-volaiiles and metals) (16 hour extraction) 


60 


ZHE Extraction (Voiatiles) (16 hour extraction) 60 


STLC Extraction (W.E.T.) (48 hour extraction) 


60 



RUSH SURCHARGE 

(From receipt of samples in laboratory^ 



SAME DAY 

200% 



1-DAY 
90% 



2-DAY 

70% 



3-DAY 

50% 



4-DAY 

20% 



5-DAY 
Standard 



Paee2of 3 



SAL 



Superior 

Analytical Laboratory 



ADDED VALUE SERVICES 

Prices Include: 

1. Assigned Project Manager 

2. Technical Consultation 

3. Sample Containers 

4. Standard 5 Day Reporting 

5. Courier Pick-up 

6. One Copy of Report, Level II Format 

7. Disposal of Samples Analyzed 

Available But Not Included: 

1. Summary Tables 

2. Contour Maps 

3. Electronic Data Deliverables 

4. Data Archiving 

5. Additional Copies of Reports / Extended Data Packages 

6. Rush Service 

7. Rush Courier Service 

Other Charges: 

1 . There is a $8.00 per sample hold / disposal fee for samples submitted and not analyzed. 

2. Composite of Samples - $5.00 per container 

3. Sample Filtration - $5.00 per container 

4. Copy of Chromatogram - $5.00 per analysis 

5. Moisture / Dry Weight / Water Content - $1 0.00 per sample 

6. Retroactive [>6 months since analysis] Copy of Chromatogram - $50.00/hr 

Terms and Conditions: 

1. This quotation/price list is valid through December 31, 1997 

2. Upon credit approval, payment terms are Net 30. A finance charge of 1.5% may be applied 

to past-due balances. 

3. Turnaround time begins at 8:00 a.m. the next business day for samples received after 3:00 p.m. 

4. No discounts will apply for samples with turnaround times greater than 5 days. 

Laboratory Contact: 

For bottle orders or laboratory arrangements, please contact Kristen Zink at (800) 221-6655. 



Page 3 of 3 



SUPERIOR ANALYTICAL LABORATORY FEE SCHEDULE 
PRICES VALID MARCH 26, 1997 THRU DECEMBER 31, 1997 



SCA 



Environmental, Inc. 

Engineonrvg and Environm«ntaJ CoruulUnts 



HOURLY RATE SCHEDULE 



TITLE 

Senior Consultant 
Consultant 

Industrial Hygienist III (CIH*) 

Industrial Hygienist II 

Project Manager 

Asst. Industrial Hygienist (IHIT"*) 

Junior Industrial Hygienist 

Industrial Hygiene Technician 

Professional Engineer (PE**) 
Construction Specialist 
Project Engineer 
Design Engineer 

Environmental Engineer Ifl 
Environmental Engineer II 
Environmental Engineer I 
Environmental Technician II 
Environmental Technician I 

Computer Scientist III 
Computer Scientist II 
Computer Scientist I 

Laboratory Analyst 

Administrative Manager 
Technical Editor 
information Specialist 
Drafter/Graphics Artist 
Word Processor 
Administrative Support 
Courier 



LEVEL 

Professional V 
Professional IV 

Professional ill 
Professional 11 
Professional I 
Professional I 
Technician III 
Technician II 

Professional III 
Professional I 
Professional I 
Technician I 

Professional III 
Professional II 
Professional I 
Technician II 
Technician I 

Professional III 
Professional II 
Professional I 

Professional 1 

Support Staff 11 
Support Staff II 
Support Staff II 
Support Staff I 
Support Staff I 
Support Staff I 



E££t 

$ 115 
S 115 

S 115 
S 95 
$ 70 
$ 70 



60 

50 



$ 115 
S 60 
S 60 
S 40 

$ 95 
$ 80 
$ 55 
S 55 
S 50 

$ 95 
$ 75 

$ 55 

S 50 

S 65 

$ 50 
S 45 
S 40 
S 40 

$ 40 
S 15 



Certified Industrial Hygienist 
Professional Engineer 
Industrial Hygienist-in-Training 

Premium time will be billed at the above rate plus 1 6% for field work over 8 hours/day and/or required 
after 6:00pm and before 7;00am on weekdays and all hours on weekends and holidays. 

Time spent on deposition or court appearances and their related activities will be billed at above rate 
plus 100%. 



PREClSiOFf SAMPLING 



Prepared for: 
Scope of work: 



Date: 

Project: 

Site: 

Rig: 

Days: 



Crew: 




Serviceis 



Enviro-Core* continuous soil c»ring, cased borehole 

Discrete groundwater profiDng, "Waterloo system" 

Sampling Services 

Overtime sampling (after 10 hours) 

Technician services 

Concrete Coring 

Mobilization 

Mobilize from PSI to site and return 



day 


$1,390.00 


0.00 


$0.00 


day 


$1,390.00 


0.00 


$0.00 


hour 


$139.00 


0.00 


$0.00 


hour 


$165.00 


0.00 


$0.00 


hour 


$40.00 


0.00 


$0.00 


inch 


$5.50 


0.00 


$0.00 



Waste Recycling 



Remove Irkisate and sot! samples 
Subsistence 



Per Die m (two man crew) 



lot 

day 

Jlax 



Chargeable Equipment 



SD-1 RIG Premium Charge 

Support Vehicle 

Concrete Coring Equipment 

Pressure! Washer^eam_CIeaner 

Consumable Materials 

stainless tubes & caps (6") 

Butyrate tubes & caps (3*) 

Borehole grouting and de-con 

In-situ groundwater sampling (Enviro-Core) 

In-situ groundwater sampling (probing) 

Waterloo discrete groundwater profiling 

WeM completions, (permanent) 

Pre Pack Well Screen {^. 25^x3/4") 

Tyvek Suits 

T Water Tight Well Cover 

5 Gallon DOT 17H Pail 

55-Gallon DOT 17H Drum 

Disposable Bailer 



day 
day 
day 
day 

each 

each 

foot 

foot 

foot 

foot 

foot 

foot 

each 

each 

each 

each 

each 



$0.00 



$200.00 



$165.00 



0.0 



$100.00 

$50.00 

$125.00 

$100.00 

$4.00 

$5.25 

$0.85 

$2.65 

$3.25 

$1.15 

$4.25 

$8.00 

$12.00 

$68.00 

$16.50 

$45.00 

$11.00 



0.0 

o.o 

0.0 
0.0 



















$0.00 



$0.00 



$0.00 



$0.00 

$0.00 

$0.00 

_$0J50_ 



$0.00 
$0.00 
$0.00 
$0.00 
$0.00 
$0.00 
$0.00 
$0.00 
$0.00 
$0.00 
$0.00 
$0.00 
$0.00 



$0.00 

$0.00 

$0.00 

_$0JL0_ 



JO.OO 



COST ESTIMATE TOTAL 



$0.00 
$0.00 



Predsion Sampling. Inc. 47 Louise St. San Rafael, CA 94901 tel: 415/466-9875 



AA-COST>:i_S 



Offices in Florida, Maryland, Northern and Souttiem California 



3.25/97 



Consulting Services 



FEE SCHEDULE FOR PROFESSIONAL SERVICES 

Engineering Hourly Rate 

Principal $110.00 

Senior Project Scientist $100.00 

Environmental Engineer (PE) $90.00 

Staff Scientist $60.00 

Field Technician $45.00 

CAD Operator $50.00 

Public Participation 

Principal $110.00 

Project Manager $100.00 

Program Manager $90.00 

Publication Manager $60.00 

Media Relations Manager $60.00 

Facilitation/Meeting Manager $60.00 

Designer $50.00 

Clerical & Support Staff $30.00 



442 Post Street 

8th Floor 

San Francisco, CA 94102 

415.989.3039 

Fax 415-732.7259 

315 Washington Street 
Suite 300 

Oakland. CA 94607 
510.530.1545 
Fax 510.530.3106 



PORT OF SAN FRANCISCO 




MEMORANDUM 



Ferry Building 

San Francisco, CA 94111 

Telephone 415 274 0400 

Telex 275940 PSFUR 

Fax 41 5 274 0528 

Cable SFPORTCOMM 

Writer 



April 22, 1997 



TO: 



FROM: 



MEMBERS, PORT COMMISSION 

Hon. Michael Hardeman, President 
Hon. Denise McCarthy, Vice President 
Hon. Frankie G. Lee 
Hon. Preston Cook 
Hon. James Herman 

Douglas F. Wong 
Executive Director ly 



SUBJECT: First Amendment to the Professional Services Contract for the "Design of 
Pier 52 Public Boat Ramp, Bait Shop and Cafe, and Public Access" 

DIRECTOR'S RECOMMENDATION: APPROVAL OF A FIRST AMENDMENT. 
AUTHORIZING ADDITIONAL DESIGN SERVICES UNDER PROFESSIONAL 
SERVICES CONTRACT NO. SA3960018, "PIER 52 PUBLIC BOAT RAMP, BAIT 
SHOP & CAFE, AND PUBLIC ACCESS," WITH ARCUS ARCHITECTURE & 
PLANNING. 

On November 15, 1995, the Port entered into a contract with Arcus Architecture & 
Planning (Arcus) to provide professional architectural and engineering services for the 
design of the Pier 52 Public Boat Ramp, Bait Shop & Cafe, and Public Access Project. 
During the conceptual design, the Port added project program components, studies, and 
estimates not included in the original contract, to the Arcus scope of work. These changes 
were required due to direction from the Port Commission, the Department of Public Work's 
Disability Access Coordinator, Port appointed Design Advisors, and the Citizen's 
Advisory. 

THIS PRINT COVERS CALENDAR ITEM NO. 6D 



I: WP51 AGD-P52A.WPD 



Additional program components include: 

1) a disability accessible gangway and guest dock, 

2) a new pile-supported double lane launch ramp, 

3) a 20 space boat trailer parking lot, 

4) a boat wash facility, 

5) the Parking Lot Geotechnical studies, and 

6) the unforeseen difficulty in soil boring data collection. 

These program element improvements have been added to the overall project design 
because disability access and parking amenities are necessary to meet the Department of 
Boating and Waterways grant funding criteria. Further, a double lane boat launch ramp 
will better serve the recreational boating community, since this is the only planned public 
boat launch in San Francisco. 

The additional design studies and cost estimates include: 

1) boat hoist alternatives, 

2) boat storage requirements, 

3) a fish cleaning facility, 

4) the maneuvering area at the top of the boat ramp, 

5) boat trailer parking alternatives, and 

6) an expanded site drainage analysis study. 

All of the project program components listed above need to be included into a contract 
modification with Arcus. Therefore, it is necessary to amend Arcus' contract scope of 
services, extend the completion date, and increase Arcus' compensation. Staff seeks the 
Commission's approval to increase the amount of compensation in the current concepmal 
design services contract from $235,000 to $322,337. This includes an additional $28,337 
for additional services provided in Phase I - Preliminary Design Study, and $59,000 for 
additional services provided to complete Phase II - Detailed Design. In addition, the 
consultant's completion date should be extended to January 30, 1998. 



Prepared by: Cliff Jarrard 

Chief Harbor Engineer 



1:WT51 AGD-P52A.WPD 



PORT COMMISSION 
CITY AND COUNTY OF SAN FRANCISCO 



RESOLUTION NO. 97-31 



WHEREAS, the Port Commission previously awarded a contract to Arcus Architecture & 
Planning for the design of the Pier 52 Public Boat Ramp, Bait Shop & Cafe, 
and Public Access Project; and 

WHEREAS, it is necessary to amend Arcus' scope of services to include additional 

services for the design of a disability accessible gangway and guest dock, a 
new pile-supported double lane launch ramp, a 20 space boat trailer parking 
lot, and a boat wash facility; and 

WHEREAS, Arcus Architecture & Planning will prepare the necessary construction and 
bid documents for the Port to solicit bids; and 

WHEREAS, Arcus Architecture & Planning 's contract will also be amended to extend the 
current contract duration and provide additional scope of services; therefore 
be it 

RESOLVED, the San Francisco Port Commission hereby approves the First Amendment to 
the Arcus Architecture & Planning Professional Services Contract No. 
3960018, "Pier 52 Public Boat Ramp, Bait Shop & Cafe, and Public Access 
Project," for additional services for $87,337. 



/ hereby certify that the foregoing resolution was adopted by the Port Commission at its 
meeting of April 22, 1997 



Secretary 



I:.WP5rAGD-P52A.WPD 



PORT OF SAN FRANCISCO 




TO: 



MEMORANDUM 

April 22, 1997 

MEMBERS, PORT COMMISSION 
Hon. Michael Hardeman, President 
Hon. Denise McCarthy, Vice President 
Hon. Frankie G. Lee 
Hon. Preston Cook 
Hon. James Herman 



Ferry Building 

San Francisco. CA 94111 

Telephone 415 274 0400 

Telex 275940 PSF UR 

Fax 415 274 0528 

Cable SFPORTCOMM 

Writer 



FROM: Douglas F. Wong A ^ 

Executive Director //^ 

SUBJECT: Informational presentation on the Pier 52 boat launch project 

DIRECTOR'S RECOMMENDATION: Informational presentation only; no action 
required 

Background 

The Pier 52 boat launch project has been reviewed by the Port Commission on numerous 
previous occasions, most recently at the October 15, 1996 Port Commission meeting. The 
project involves the following major components: 

Double lane boat launch; 

Gangway and floats providing disabled access; 

Shoreline improvements and public access; 

Landscaping lighting and site improvements; 

A cafe , bait shop and dining deck; and 

A 20 space trailer boat parking lot. 



The purpose of this presentation is to brief the Commission on the current status of the project, 
and make recommendations regarding the initial scope of the project to be put out to bid. 



THIS PRINT COVERS CALENDAR ITEM NO. 7A 



Informational presentation on Pier 52 boat launch project 
Page 2 

Status 

Permitting: The Port received approval for the project from the Bay Conservation and 
Development Commission ("BCDC") on January 16, 1997. The Port has also apphed for a 
permit from the Army Corps of Engineers which it expects to be issued shortly. 

Design and Funding: The design team led by Arcus Architecture has completed 60% design 
drawings on the project and has prepared a construction cost estimate. (A separate but related 
item is on the Port Commission agenda related to a contract modification to address changes 
in the design scope of the project). The current construction cost estimate exceeds the amount 
of funding currently available for the project. 

Project phasing 

Port staff recommends that the construction of the cafe\bait shop and dining deck be deferred 
until a later date. Staffs recommendation is based on the following factors: 

1) The current amount of funding available may not be sufficient to fund the entire project. 
The deferral of the cafe\bait shop and dining deck to a future phase will bring the project within 
the Port's current budget constraints. If bids come in lower than expected, staff recommends 
that these cost savings be set aside and allocated towards the provision of a bait shop facility. 

2) A concentrated effort has been made to design the structure to meet the needs of a typical 
restaurant operator. However, Port staff believes that the eventual restaurant operator should 
be involved in the final design of the building. The staff is proposing that an operator be 
selected prior to the construction of the restaurant building to ensure that it will meet their 
specific needs. 

3) The current demand for a new restaurant facility in this location is somewhat uncertain. 
However, the proposed development of the new ballpark and UCSF in Mission Ba\' should 
increase the potential for a restaurant dramatically. The Port anticipates this demand increasing 
in the next three to five years. The deferral of the restaurant until this time will coincide with 
the future potential development in the area. 

The staff recommends that the scope of the construction project to be put out to bid include the 
double lane boat ramp, gangway and floats providing disabled access, shoreline impro\'ements 
and public access, landscaping lighting and site improvements, and a 20 space trailer boat 
parking lot. Construction is anticipated to start late this summer or early fall. 

The design of the cafe/bait shop structure and dining deck will be completed now, but bid later 
as a second phase of the project after an operator has been selected and adequate funding has 
been identified and secured. 

Prepared by: 

Paul Osmundson. Director of Planning and Development 



PORT OF SAN FRANCISCO 




MEMORANDUM 



April 17, 1997 



Ferry Building 

San Francisco, CA 94111 

Telephone 415 274 0400 

Telex 275940 PSF UR 

Fax 415 274 0528 

Cable SFPORTCOMM 

Writer 



TO: 



FROM: 



SUBJECT: 



MEMBERS, PORT COMMISSION 
Hon. Michael Hardeman, President 
Hon. Denise McCarthy, Vice President 
Hon. Frankie G. Lee 
Hon. Preston Cook 
Hon. James Herman 



Douglas F. Wong'^IC' 
Executive Director 




V^J 



Authorization to enter into an Expense Payment Agreement with China 
Basin Ballpark Company, and supplemental appropriation to pay expenses 
of $477,000 



DIRECTOR'S RECOMMENDATION: APPROVE RESOLUTION. 



In March of 1996, the voters of the City and County of San Francisco approved 
Proposition B which authorized a proposed development on Port property for a new 
ballpark on an approximately 12.5 acre site in China Basin. On December 20, 1996, the 
Port Commission approved Resolution No. 96-138, endorsing the principles of a non- 
binding term sheet setting forth the basic agreements of the development. 

The term sheet includes a provision that CBBC may pay for certain costs to the 
City and Port relating to its assembly or delivery of the site or for City transaction costs 
up to $500,000, to be reimbursed to CBBC through certain rent credits. 

As part of its costs, the Port needs to fully vacate Pier 46 in order to deliver the site 
under the contemplated ground lease. This requires the relocation of the maintenance 
department from Pier 46B, on an accelerated scheduled, as well as the relocation of 
approximately 12 commercial tenants from Pier 46A. The Port has agreed to pay for certain 
moving costs associated with the relocation of the commercial tenants. In addition, the Port 



THIS PRINT COVERS CALENDAR ITEM NO. 8A 



Page 2 



needs to make improvements to Pier 48 and to Pier 50A, SOB and 50C in order to relocate 
tenants to these facilities. Improvements to Pier 48 include removal of hazardous material 
and design of tenant improvements. The improvements to Pier 50A, SOB and SOC include 
new roofs, sprinklers, and upgraded ADA accessible bathrooms. Pursuant to an October 
1996 memo, the fire Marshall has ruled that the Port must put sprinklers and demising walls 
into the sheds at Pier SO in order to meet current code. 

CBBC has now agreed that it will pay for certain of these Port transaction costs in 
the amount of $477,000 in advance of the proposed ground lease and other documents, 
subject to the terms and conditions of the Agreement. A copy of the Agreement is attached 
hereto. The material provisions of the Agreement include the following: 

■ CBBC will pay Port $95,400.00 on or before May 1, 1997, $143,100 on or before 
July 1, 1997, and $238,500.00 on or before October 31, 1997, for a total of 
$477,000 (the "CBBC Payment"). 

■ The CBBC Payment is non-refundable if the Port and CBBC fail to execute a 
binding ground lease for the premises. 

■ The Term Sheet will be modified to provide that if Port and CBBC enter into a 
ground lease for the ballpark project, then the Port will reimburse CBBC $125,000 
in rent credits against base rent on February 1, 2000 and $125,000 in rent credits 
against base rent on June 1, 2001, for a total rent credit amount of $250,000. 

■ The CBBC Payment and the Port rent credits payable under this Agreement replace 
in its entirety the transaction cost advance of up to $500,000.00 and the 
corresponding rent credits contemplated under the Term Sheet. 

As part of this Resolution, the Port Commission is also being asked to authorize the 
Executive Director to seek approval from the Board of Supervisors for a supplemental 
appropriation for $477,000, to be applied toward the cost of tenant relocation required for 
site delivery. 



Prepared by: Douglas F. Wong, Executive Director 



PORT COMMISSION 
CITY AND COUNTY OF SAN FRANCISCO 



RESOLUTION NO. 97-25 



WHEREAS, Section B 3.581 of the City Charter empowers the Port Commission of 
San Francisco (the "Commission") with power and duty to use, conduct, 
operate, maintain, manage, regulate and control the Port area of 
San Francisco; and 

WHEREAS, in March of 1996, the voters of the City and County of San Francisco 
approved Proposition B which established a special zoning district 
permitting a proposed development on Port property for a new ballpark 
for major league baseball on an approximately 12.5 acre site in China 
Basin; and 

WHEREAS, On December 20, 1996, the Port Commission approved Resolution No. 
96-138, endorsing the principles set forth in a non-binding term sheet 
setting forth the basic agreements of the development; and 

WHEREAS, The term sheet includes a provision that CBBC may advance payment for 
certain costs to the City and Port relating to its assembly or delivery of 
the site or for City transaction costs up to $500,000, to be reimbursed to 
CBBC through certain rent credits; and 

WHEREAS, the Port has estimated that in the near ftiture, it will incur significant 
costs relating to the relocation of Port tenants, because the Port must 
vacate Pier 46 to deliver the site contemplated by the ground lease which 
requires relocation of 12 commercial tenants and the Port's maintenance 
facility, on an accelerated schedule, including payment of relocation costs 
and construction of new improvements; and 

WHEREAS, CBBC has agreed that it will pay for certain Port transaction costs in 

advance of the proposed ground lease and other documents, subject to the 
terms and conditions of the Expense Payment Agreement, a copy of 
which is on file with the Secretary of the Port Commission for Item No. 
8A, for its meeting of April 22, 1997; and 

WHEREAS, the Port Commission must approve a supplemental appropriation, subject 
to approval by the Board of Supervisors, to expend the $477,000 payment 
from CBBC; and 



Resolution No. 97-25 
Page 2 



WHEREAS, the relocation of the Port's maintenance facility is categorically exempt 
from the California Environmental Quality Act ("CEQA") under Section 
15301 of the CEQA Guidelines, in that the relocation of the maintenance 
facility involves a move to an existing structure located at Pier 50, and the 
repair, maintenance, and minor alteration of Pier 50 for the maintenance 
facility involves negligible or no expansion of use beyond that previously 
existing, including restoration and rehabilitation of Pier 50 to meet current 
standards of public health and safety, and interior and exterior alterations 
involving interior partitions, plumbing and electrical conveyances; and 

WHEREAS, the relocation of the Port's tenants is categorically exempt from CEQA, 
under Section 15301 of the CEQA Guidelines, in that the Port is moving 
such tenants to existing Port structures that are undergoing minor interior 
or exterior alterations involving such things as interior partitions, plumbing 
and electrical conveyances, and involve negligible or no expansion of use 
beyond that previously existing; and 

WHEREAS, the relocation of the Port's tenants is also exempt from CEQA under 
Section Guidelines Section 15061(b)(3), which exempts activities for 
which there is no possibility that the activity in question may have a 
significant effect on the environment. The tenant relocations subject to 
expenditure under the supplemental appropriation authorized by this 
resolution do not involve physical changes to the relocation sites other than 
minor repairs, and do not involve substantial intensification of use. Such 
relocations fall within the Certificate of Determination of Exclusion from 
Environmental Review, issued on March 21, 1996, by the San Francisco 
Planning Department, Office of Environmental Review (a copy of which is 
on file with the Secretary of the Port Commission), which exempts from 
CEQA Port agreements with tenants who continue an existing land use, 
with no substantial physical changes to the site or substantial 
intensification of use, because for such projects it can be seen with 
certainty that there would be no significant environmental impacts; and 

WHEREAS, the relocation of the Port's tenants and the maintenance facility are also 
statutorily exempt from CEQA under Senate Bill No. 181, signed by the 
Governor on April 15, 1997, which exempted from CEQA the relocation of 
occupants or uses from real property of the Port of San Francisco to other 
real property of the Port of San Francisco if both the following criteria are 
met: (1) the real property is proposed to be used for an open air ballpark for 



Resolution No. 97-25 
Page 3 



WHEREAS, 



major league baseball, and is located in a special zoning district permitting, 
or conditionally permitting, that use, which zoning district was established 
pursuant to a ballot measure approved by the voters of the city and county 
in which the property is located, and (2) the relocation activities if 
considered independently of the proposed ballpark use of the property 
would be exempt from this CEQA; and 

as stated in the above recitals of this Resolution, the proposed relocation of 
Port tenants and the maintenance facility meet both criteria of SB No. 181; 
now, therefore, be it 



RESOLVED, 



RESOLVED, 



that the Port Commission authorizes the Executive Director to enter into 
the Expense Payment Agreement, substantially in the form on file with 
the Secretary of the Port Commission for Item No. 8 A, for its meeting of 
April 22, 1997, and to take such further action as is necessary to further 
the intent of the Expense Payment Agreement; and be it further 

that the Executive Director is hereby authorized to seek Board of 
Supervisor's approval of a supplemental appropriation for $477,000 to 
pay for relocation of Pier 46 tenants. 



/ hereby certify that the foregoing resolution was adopted by the Port Commission at its 
meeting of April 22, 1997. 



Secretary 



FORM 0. 1 (REVISED 1 - 1 2-92) 

REQUEST FOR SUPPLEMENTAL APPROPRLiTION 

Department: 39 Port of San Francisco DIVISION: Kxecutive DATE: April 8. 1997 

To the Mayor: Request is hereby made for supplemental appropriation from the following appropriation(s) or fund(s) in the amount(s) 
indicated: 



APPROPRLiTION 
NUMBER 


DESCRIPTION OF 
APPROPRIATION OR FUND 


AMOUNT 


FD/GROUP FD 5P/AAA/AAA 
DEPT-DIV-SEC PRT99 
INDEX 390000 


Expense Reimbursement 


$477,000 



to the credit of the following appropriation(s) or fund(s) in the amount(s) indicated: 



APPROPRIATION NUMBER 


DESCRIPTION OF 

APPROPRIATION OR 

FUND 


AMOUNT 
REQUESTED 


AMOUNT 

APPROVED - 

MAYOR 


FD/GROUP FD 5P/AAA/ACP 
DEPT-DIV-SEC PRT99 
INDEX 392601 
CHAR/SUB-OBJ 06029 


CPO647-02 Tenant 
Relocation Costs 


$477,000 





There are no surpluses in any of this department's appropriations available for transfer for the requested purpose(s). Complete detail as to 
the necessity for THIS appropriation is stated below: 

APPLICABLE BOXES MUST BE CHECKED. 

I I This request includes capital projects (s.o. 2020 or 2030); a separate copy has been sent to the Chair, Capital Improvement 

Advisory Committee 

These funds have not been previously requested. 

These funds were previously requested b y: | | Supplemental Appropriation or 

Budget Estimate and were Q reduced or | | denied by: Q The Mayor, or Q The Board of Supervisors 



CERTIFIED AS TO FACTS 
RECOMMENDED: 




AMOUNTS AS ABOVE STATED, AND 

//^ T 

(Department Head) 



APPROVED: 



Douglas f. 'Wong, Execu^ye Director 

(C.A.O., Board or Commission) 



Recorded Controller's Budget Division 



By: 



Date: 



Request No. 



FOR MAYOR'S USE 

To the Controller: 

The above request meets with my approval, as indicated above. You are hereby requested to prepare the necessary appropriation 

ordinance. 



APPROVED: WILLIE LEWIS BROWN. JR. By: 



Date: 



EXPENSE PAYMENT AGREEMENT 

THIS EXPENSE PAYMENT AGREEMENT ("Agreement") is entered into as of this 

day of April, 1997, by and between the City and County of San Francisco 

("City"), acting by and through its Port Commission ("Port"), and the China Basin 
Baliparl< Company, L.L.C. ("CBBC"), a limited liability company, based on the 
following facts, intentions and understandings of the parties: 



RECITALS 



A. Port and CBBC are in the process of negotiating a ground lease and related 
agreements appropriate to facilitate development and operation of an open air 
waterfront ballpark and complementary improvements, known as "Pacific Bell Park." 

B. The City and CBBC have entered into a term sheet dated as of December 
20, 1996 (the "Term Sheet"), which sets forth understandings of the parties related 
to the basic financial terms of a fair market value lease by the City, through its Port, 
to CBBC, of real property bounded generally by the easterly line of Third Street, the 
southerly line of King Street, the easterly line of Second Street and China Basin 
Channel. While the Term Sheet is the basis for the parties' good faith negotiations 
of the ground lease and related documents, it is not a binding agreement, and it is 
specifically recognized that any binding agreement is subject to the completion of the 
California Environmental Quality Act (CEQA) review process, other public review and 
hearing processes and all applicable governmental approvals. 

C. The Term Sheet provides that CBBC may advance payment for certain costs 
to the City and Port relating to its assembly or delivery of the site or for City 
transaction costs, up to $500,000 to be reimbursed to CBBC through certain rent 
credits. 

D. The Port will incur significant costs relating to the ballpark project. 

E. In consideration for the Port's diligent efforts and expenses incurred in 
connection with the ballpark project, CBBC has agreed that it will pay for certain Port 
transaction costs in advance of the proposed ground lease and other documents, 
further subject to the terms and conditions of this Agreement. 

NOW, THEREFORE, the parties hereto agree as follows: 



nhs\giants2.doc 



AGREEMENT 

1. Payments by CBBC. CBBC shall pay to Port $477,000.00, in the manner 
described in this Section 1 ("CBBC Payment"). CBBC shall pay Port $95,400.00 of 
the CBBC Payment on or before May 1, 1997. CBBC shall pay Port $143,100 of the 
CBBC Payment on or before July 1, 1997. CBBC shall pay Port the remaining 
$238,500.00 of the CBBC Payment on or before October 31, 1997. The CBBC 
Payment payable under this Agreement is non-refundable if the Port and CBBC fail to 
execute a binding ground lease for the Premises. 

2. Relationship With Term Sheet . The Term Sheet will be modified to provide 
that if Port and CBBC enter into a ground lease for the ballpark project, then the Port 
will reimburse CBBC for a total of $250,000 of the CBBC Payment, payable through 
rent credits against base rent as follows: Port will reimburse CBBC $125,000 in rent 
credits on February 1, 2000 and $125,000 in rent credits on June 1, 2001. Subject 
to Section 3 of this Agreement, the CBBC Payment and the Port rent credits payable 
under this Agreement replaces in its entirety the transaction cost advance of up to 
$500,000.00 and the corresponding rent credits contemplated under the Term Sheet. 

3. Negotiation of Lease . The parties acknowledge that the CBBC Payment 
does not commit the Port or the City to enter into the proposed ground lease or any 
related agreement, and is being provided by CBBC merely to facilitate and expedite 
the negotiations. No legal obligations will exist under Section 2 of this Agreement 
unless and until the parties have negotiated, executed and delivered mutually 
acceptable agreements following all required public review and hearing processes, 
including without limitation such review as may be required under CEQA, and subject 
to all applicable governmental approvals, as further described in the last paragraph 
of the Term Sheet. 

4. Attorneys' Fees In the event of any action or proceedings at law or in 
equity between the Port and CBBC to enforce any provision of this Agreement, the 
unsuccessful party to such litigation shall pay to the prevailing party all costs and 
expenses as determined by the court, including reasonable attorney's fees, incurred 
therein by such prevailing party; and if such prevailing party shall recover judgment 
in any such action or proceeding, such costs, expenses and attorney's fees shall be 
included in and as a part of such judgment. For purposes of this Agreement, 
reasonable fees of attorneys of the Office of City Attorney shall be based on the fees 
regularly charged by private attorneys with an equivalent number of years of 
professional experience (calculated by reference to earliest year of admission to the 
Bar of any State) who practice in the City in law firms with approximately the same 
number of attorneys as employed by the Office of City Attorney. 



nhs\giants2.doc 



5. Captions Used . Captions or titles utilized in the terms and conditions of 
this Offer are used for convenience of reference only and shall be disregarded in 
construing or interpreting any of its provisions. 

6. Time is of the Essence . Time is of the essence of each provision of this 
Agreement. 

7. MacBride Principles-Northern Ireland . City urges companies doing 
business in Northern Ireland to move towards resolving employment inequities and 
encourages such companies to abide by the MacBride Principles. City urges San 
Francisco companies to do business with corporations that abide by the MacBride 
Principles. 

8. Tropical Hardwood Ban . City urges CBBC not to import, purchase, 
obtain, or use for any purpose, any tropical hardwood or tropical hardwood product. 

9. Conflict of Interest . CBBC states that it is familiar with provisions of 
Section 8.105 of the Charter of City, and Section 87100 et seq. of the Government 
Code of the State of California, and certifies that it does not know of any facts which 
constitute a violation of said provisions. 



nhs\giants2.doc 



WHEREFORE, this Agreement was executed by the parties hereto on the date 
set forth hereinabove. 



"Port" 

CITY AND COUNTY OF SAN FRANCISCO 

acting by and through its 

Port Commission 



"CBBC" 

China Basin Ballparl< Company, 

L.L.C., a limited liability company 



By: Douglas F. Wong 
Executive Director 



By: 



Dated: 



Dated: 



Port Commission Resolution No. 



Approved as to Form: 
LOUISE H. RENNE 
City Attorney 

By: 



Deputy City Attorney 



nhs\giants2.doc 



PORT OF SAN FRANCISCO 




MEMORANDUM 



April 22, 1997 



Ferry Building 

San Francisco, CA 94111 

Telephone 415 274 0400 

Telex 275940 PSF UR 

Fax 415 274 0528 

Cable SFPORTCOMM 

Writer 



TO: 



FROM: 



MEMBERS, PORT COMMISSION 
Hon. Michael Hardeman, President 
Hon. Denise McCarthy, Vice President 
Hon. Frankie G. Lee 
Hon. Preston Cook 
Hon. James Herman 

Douglas F. Wong r/y''^ 
Executive Director 



SUBJECT: 



Approval of 1 997/98 Executive Director Salary 



DIRECTOR'S RECOMMENDATION: 



APPROVE THE 1997/98 
COMPENSATION FOR THE 
EXECUTIVE DIRECTOR 



Charter Section B3. 581(H) grants the Port Commission the exclusive authority 
to set the compensation (salary and benefits) of the Executive Director. 

In recent years it has been the Port Commission's practice to increase the 
salary and compensation of the Executive Director in accordance with the 
increases granted to officers and employees of the City and County of San 
Francisco who are represented by the Municipal Executives Association 
("MEA"), the organization that represents most of the City's department 
heads. The current agreement between the City and MEA is a three-year 
agreement expiring on June 30, 1998. The contract provides for an increase 
of $900.00 per year beginning July 1, 1997 for the Cafeteria Benefit Plan, 
bringing the total City contribution for the flexible benefits to $2,700 per year. 
The contract also provides that the City will pick-up an additional 2.5% 
effective July 1, 1997 which will result in the City paying the employee's full 
share of the cost of retirement benefits. 



THIS PRINT COVERS CALENDAR ITEM NO. 8 B 



The current agreement that did not provide for a general salary increase for 
MEA nnembers n Fiscal Year 1996-97, but additional monies for benefits were 
provided. The Executive Director's compensation was increased to provide 
the same benefit increase. 

The agreement with MEA further provided that salaries could be adjusted, 
retroactive to July 1 , 1 996, to reflect the findings of a Classification and 
Compensation study to be conducted as agreed upon by the City and the 
MEA, In the Port Commission action of June 25, 1996, provision was made 
to adjust the Executive Director's compensation in 1 996/97 in accordance 
with the adjustment for employees and officers represented by MEA. 

While the classification and compensation study has not been conducted, the 
arbitrator designated to review the contract has ruled for a 2% increase 
retroactive to July 1, 1996 for employees and officers represented by MEA. 
Comparable adjustment of the Executive Director's salary would result in an 
annual increase of $2,652, bringing the annual salary to $135,276. Since the 
current Port Director has not been employed for the full Fiscal Year, the salary 
increase would be effective as of his starting date with the Port, December 
23, 1996. 

Finally, the collective bargaining agreement between the City and the MEA 
provides for an additional Pay-For-Performance increase of 0-4%. It is 
anticipated that most increases will be approximately 2% and that is the 
amount that the staff has budgeted for such increases for employees and 
officers represented by the MEA. An additional 2% increase would result in a 
total salary effective July 1, 1997 of $137,982. 

In view of the above. It is recommended that the Port Commission adopt the 
following proposed changes in the compensation of the Executive Director: 

For Fiscal Year 1996-97: 

o 2% salary increase retroactive to July 1 , 1 996 

For Fiscal Year 1997-98 

o Additional retirement contribution of 2.5% effective July 1, 1997 

o $900 paid at $75 per month for the Cafeteria benefit plan effective 

July 1, 1997 
o 2% Pay-For-Performance increase effective July 1, 1997. 

The Controller's Office has informed the Port that the Port Commission must 
take action no later than this meeting to allow the Port's budget to be 
amended before it is transmitted from the Mayor's Office to the Board of 
Supervisors. 

Prepared by: Ben Kutnick 
-2- 



PORT COMMISSION 



CITY AND COUNTY OF SAN FRANCISCO 



RESOLUTION NO. 97 - 27 



WHEREAS, 

WHEREAS, 
WHEREAS, 

WHEREAS, 
WHEREAS, 

RESOLVED, 



section B3. 581(h) of the Charter grants the Port Commission 
with the exclusive authority to set the compensation (salary 
and benefits) of the Executive Director; and 

the Port has surveyed the salaries of the executive directors of 
eight west coast ports; and 

the average salary the eight port directors surveyed is 
$157,425, which is 18.7% greater than the Executive Director 
of the Port of San Francisco; and 

the current salary of the Executive Director of the Port of San 
Francisco is $132,624; and 

the Executive Director has traditionally received the same 
benefits that are granted to employees represented by the 
Municipal Executives Association; 

the Port Commission shall increase compensation for the 
Executive Director as set forth below: 

For Fiscal Year 1996-97: 

o 2% salary increase retroactive to July 1 , 1 996 

For Fiscal Year 1 997-98 

o Additional retirement contribution of 2.5% effective July 1, 

1997 
o $900 paid at $75 per month for the Cafeteria benefit plan 

effective July 1 , 1 997 
o 2% Pay-For-Performance increase effective July 1, 1997. 



/ hereby certify that the foregoing resolution was adopted by the Port 
Commission at its meeting of April 22, 1997. 



Secretary 



PORT OF SAN FRANCISCO 




MEMORANDUM 



April 22, 1997 



Ferry Building 

San Francisco, CA 94111 

Telephone 415 274 0400 

Telex 275940 PSF UR 

Fax 41 5 274 0528 

Cable SFPORTCOMM 

Writer 



TO: 



MEMBERS, PORT COMMISSION 
Hon. Michael Hardeman, President 
Hon. Denise McCarthy, Vice President 
Hon. Frankie G. Lee 
Hon. Preston Cook 
Hon, James Herman 



FROM: Douglas F. Wong ytO^ 

Executive Director 

SUBJECT: Revisions to FY 1997/98 Operating Budget 

The FY 1997/98 Operating Budget was approved by the Commission on February 11, 
1997. Staff recommends revenue and expense revisions for the FY 1997/98 operating 
budget summarized as follows- 





Feb 11 


Revised 


Increase/ 




Budget 


Budget 


Decrease 


Revenue 


$35,100,712 


$36,857,712 


$1,757,000 


Expense 


34.480.250 


36.441.340 


1,961,090 


Surplus 


$ 620.462 


$ 416,372 


$ f204.090^ 



These changes result in a revised FY 1997/98 Operating Budget as follows: 









Increase/ 






1996/97 


1997/98 


Decrease 


Percent 


Revenue 


$33,944,921 


$36,857,712 


$2,912,791 


8.6% 


Expense 


33,271,177 


36.441.340 


3,170,163 


9.5% 


Surplus 


$ 673.744 


$ 416.372 


$(257,372) 


(38.3%) 



THIS PRINT COVERS CALENDAR ITEM NO. SC 



Revenue Revisions 

Additional revenue of $1,757,000 has been projected for the FY 97/98 operating budget. 

Revised revenue is as follows: 

• Cargo revenue decreases $243,000 from $1,779,000 to $1,536,000 resulting from: 

• $125,000 decrease in wharfage revenue due to increased payments to SSA. 
Payments to SSA are made as a reduction of wharfage revenue. The SSA payment 
is projected to be $375,000 as compared to $250,000 previously estimated. This 
revision is based on payments made to SSA this fiscal year to date; 

• $118,000 decrease in cargo wharfage, demurrage, rent and crane rental revenue 
based on revised estimates of cargo volume experienced this fiscal year to date; 

• Commercial rent revenue increases $1.2 million from $22,577,000 to $23,777,000 due 
to a lease with the Giants; 

• Parking fine revenue increases $1.2 million from $3,424,000 to $4,624,000. Parking 
fme revenue is new in FY 97/98; 

• Marketing revenue decreases $400,000 from $625,000 to $225,000 resulting from: 

• $350,000 decrease in filming revenue due to the relocation of the Port's 
Maintenance department to Pier 50 Shed D; 

• $50,000 decrease in other filming revenue based on current year to date 
information. 

Expense Revisions 

Additional expense of $1,961,090 has been projected for the FY 97/98 operating budget. 

Revised expense is as follows: 

• City Wide Overhead increases $183,420 from $500,000 to $683,420 based on revised 
estimates from the Controller's Office; 

• Capital Outlay increases $436,500 from $205,752 to $642,252 resulting from: 

• $395,500 for 19 vehicles. These vehicles represent the third year of a seven year 
replacement schedule. The vehicles include: 



Vehicle 

Truck-mini pick-up 
Truck-mini pick-up 
Truck-mini pick-up 
Truck-mini pick-up 
Truck-mini pick-up 
Truck-mini pick-up 
Truck-mini pick-up 
Truck- 1/2 ton pick-up 
Truck-3/4 ton pick-up 



Cost 


Usage 


Existing Vehicle 


Mileage 


$12,500 


Maintenance 


1984 Chevrolet 


84,869 


12,500 


Maintenance 


1984 Chevrolet 


56,955 


12,500 


Maintenance 


1988 Chevrolet 


19,919 


12,500 


Maintenance 


1988 Chevrolet 


90,248 


12,500 


Maintenance 


1990 Ford 


105,546 


12,500 


Maintenance 


1984 Chevrolet 


76,844 


12,500 


Maintenance 


1984 Chevrolet 


77,259 


21,000 


Maintenance 


1975 Dodge 


96,485 


22,500 


Maintenance 


1978 Dodge 


96,485 



Truck-3/4 ton pick-up 


22,500 


Maintenance 


1985 Ford 


120,270 


Truck-3/4 ton pick-up 


22,500 


Maintenance 


1971 Int'l 


179,094 


Truck-3/4 ton pick-up 


22,500 


Maintenance 


1978 Dodge 


180,850 


Truck- 1 ton pick-up 


23,000 


Maintenance 


1970 Ford 


138,240 


Truck- 1 ton pick-up 


23,000 


Maintenance 


1984 Ford 


79,974 


Truck-boom 


75,000 


Maintenance 


1969 Ford 


74,357 


Auto-mid-size 


19,000 


Admin car pool 


1984 Ford 


36,050 


Auto-mid-size 


19,000 


Admin car pool 


1984 Olds 


49,561 


Auto-mid-size 


19,000 


Port Real Estate 


1988 Chevrolet 


81,358 


Auto-mid-size 


19,000 
$395,500 


Port Real Estate 


1982 Chevrolet 


52,869 



$41,000 for new equipment to be leased. A total of $178,770 of equipment will be 
leased for 5 years, assuming a 5% interest rate. Leasing will enable Port 
Maintenance to obtain this equipment that otherwise would remain unfunded. 
Leased equipment includes: 



Item 


Cost 


Aerial man lift 


$33,000 


Asphalt roller 


16,500 


Boom 


12,000 


Heavy-duty boat 


44,000 


Orbital Tool 


19,020 


Generator 


43,400 


Auto Diagnostic Equip 


10,850 




$178,770 



Justification 
Replacement lift for existing truck 
To replace 12 year old roller 
New boom required by BCDC to contain toxic spills 
Replacement for light-duty boat in need of repair 
New tool for quicker repair of under pier pipes 
Replacement trailer-mounted emergency generator 
New equipment to meet current smog standards 



• Debt Service increases $1.3 million from $7,411,841 to $8,711,841 for a Maintenance 
Facility Project loan; 

• Services of Other Departments increases $41,170 from $4,861,845 to $4,903,015 
resulting from: 

• $23,270 for additional work order expense for the Human Rights Commission; and 

• $17,900 for work order expense for the new Department of the Environment for the 
City-wide integrated pest management program. 

One additional revision to the expense budget that has no financial impact is for 
professional services. Professional services expense for janitorial service is projected to 
decrease $101,000. This is offset by a projected increase of $101,000 for increased 
security on the southern Waterfront. 



Prepared by: Benjamin A. Kutnick 



PORT COMMISSION 
CITY AND COUNTY OF SAN FRANCISCO 



RESOLUTION NO. 97-28 



WHEREAS, 

WHEREAS, 
WHEREAS, 

WHEREAS, 

WHEREAS, 

WHEREAS, 

WHEREAS, 

RESOLVED, 



the Port Commission approved the FY 97/98 operating budget on 
February 11, 1997; and 

staff has developed revised revenue and expense projections; and 

additional operating revenues are projected in the amount of 
$1,757,000; and 

additional operating expenses are projected in the amount of 
$1,961,090; and 

the revised operating budget includes projected revenues of 
$36,857,712; and 

the revised operating budget includes projected expenses of 
$36,441,340; and 

the revised operating budget includes projected surplus of 
$416,372; therefore, be it 

that the Port Commission approves the revised fiscal year 
1997/98 operating budget as presented by staff. 



/ hereby certify that the foregoing resolution was adopted by the Port Commission at its 
meeting of April 22 , 1997. 



Secretary 



CITY & COUNTY OF SAN FRANCISCO 

PORT COMMISSION DOCUMENTS DEPT. 

MINUTES OF THE MEETING OCT 3 1923 

APRIL 22, 1997 3A,yi pRANCiSCO 

PUBLIC LIBRARY 

1. ROLL CALL 

The meeting was called to order by Commission President Michael Hardeman at 4:06 
p.m. The following Commissioners were present: Michael Hardeman, Denise McCarthy, 
Frankie Lee, Preston Cook and James Herman. 

2. APPROVAL OF MINUTES - March 25, 1997 Meeting 

ACTION: Commissioner Cook moved approval; Commissioner Lee seconded the 

motion. All of the Commissioners were in favor; the minutes of the meeting 
were adopted. 

Commissioner Herman inquired if the Commission Room could be outfitted with 
microphone system/speakers as it is impossible to hear in the room. Mr. Kutnick replied 
that traditionally microphone is used only at the podium. Microphones can be provided 
for the Cormnissioners. Commissioner Herman suggested providing one for the 
Commissioners so that the audience and the Commissioners can hear each other. Mr. 
Kutnick replied that he will look into providing a microphone system for the Commission 
Room. 

3. EXECUTIVE 

A. Executive Director's Report 

Mr. Wong stated that he brings forth the resolution awarding Commissioner Cook the 
order of Maritime Merit with the rank of Commander. Commissioner Preston Cook 
has served, with distinction, on the San Francisco Port Commission since his 
appointment in 1993, including two years as its President. 

The Port Commission has benefited greatly from his previous experience as a 
consultant for the California Senate Select Committee on the Maritime Industry and as 
a principal at TRI Realtors. 

He has provided the Commission with a strong strategic direction and knowledge at a 
critical juncture in the Port's history that resulted in a rejuvenated commercial energy 
and significant improvements in the Port's financial position. 

The Port Commission and staff expressed their appreciation, best wishes and 
sincerest gratitude to Commissioner Preston Cook. To honor him for his invaluable, 
unselfish and lasting contributions to the Port Commission and the waterfront 



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community, staff recommends that he be awarded the Order of Maritime Merit, with 
the rank of Commander. Mr. Wong presented Commissioner Cook a medal and 
noted that a plaque is also forthcoming. 

B. Commendation for Commissioner Preston Cook. (Resolution No. 97-34) 

ACTION: Commissioner McCarthy moved approval; Commissioner Lee seconded 
the motion. All of the Commissioners were in favor; the resolution was 
adopted. 

Commissioner Cook indicated that he was surprised by the unanimous vote. He 
mentioned that being a Port Commissioner is a great experience. He has served the 
Port for the last four years, two of which as President. It has been a life time 
experience which he will always remember. He noted that what made it so great was 
a lot of things were done in the last four years. The leasing department was 
something that he took on because his interest lies in that field. There were 
tremendous amount of gains in the department. He has received a lot of feedback 
from the brokerage community and citizens who are happy with the way the Port has 
handled leasing ~ negotiated new tenants and renegotiated existing tenants. He was 
pleased that it has been done in an even and very professional way. He hopes that 
with Fei Tsen at the helm, it will continue in that form. 

Commissioner Cook stated that in the last few years, we have created an opportunity 
to bring this Port into the future and utilized our lands in a way that will benefit all of 
San Franciscans. The only negative comment he had was the our difficulty with 
cargo. Everyone has been disappointed that the cargo has not worked as well as it can 
work. He, however, thinks there is a future for some shipping in the City. The new 
Executive Director and the Commission are very supportive and the opportunities will 
arise for other shipping to arrive in the City in conjunction with some development 
that will occur in the northern waterfront. Along with that development, we have set 
the groundwork, through the Waterfront Plan, that everyone at the Port has been so 
involved with and so supportive to provide some development along with open space 
and the opportunity for more San Franciscans to use the waterfront. 

When he first joined the Commission, his goal was to ensure that it is a well-run 
organization. He thinks it is well run now than it was four years ago. The Port is 
making more money now than it has four years ago. The Port has a great staff. A lot 
of the older members that he has had a chance to work with namely Julie, Ben, Diane 
and many others have done an incredible job. He is proud of the employees of the 
Port for the amount of time and energy they put in to ensure things are done right. 
He then thanked everyone. 

Commissioner McCarthy thanked Commissioner Cook for his work not only at the 
Port, but the City in general. She also indicated that she will miss her partner in the 
Port Commission meetings. 

Commissioner Lee stated that when he first joined the Port Commission, 



M042297.igq 



Commissioners Cook and Halsted were his mentors. He worked very closely with 
Commissioner Cook as he was the Vice President the second year he joined the 
Commission. Commissioner Cook is most ethical, honorable man. He always puts 
the Port first and himself second. He sincerely believed that Conunissioner Cook is 
the reason the Port has turned around in fiscal management and in the leasing 
department. He enjoyed working him and they'll be friends from now on. 

Commissioner Herman indicated that he was a bit disappointed, given the sometimes 
adversary relationship between he and Commissioner Cook, that he didn't mention the 
joy he got from it. It brought life to the Commission as well as new ideas. The fact 
that he disagrees with most of them didn't matter at all. He thought that 
Commissioner Cook is an extraordinarily bright man and is not with total joy that he 
sees him leave but wishes him the very best of luck in whatever transpires in his life. 
He enjoyed the opportunities that he had to correct many of Commissioner Cook's 
errors and should the occasion arise again, on a friendly basis, he will pursue the 
same objective. He has great delight in the discussions they had, sometimes not so 
friendly but more often than not, they were. He shared the best wishes from 
everybody on the Commission to Commissioner Cook. He extended an invitation to 
Commissioner Cook, whenever he's bored, to come to the Commission and have a 
good discussion that will at least be, if not enlightening, entertaining. 

Commissioner Hardeman stated that Commissioner Cook is always representing the 
best interest of the Port. His expertise, particularly in real estate, was invaluable. 
Through the previous director, he has mentioned a couple of times that beyond the 
call of duty. Commissioner Cook has lent his expertise. He echoed Commissioner 
Lee's comments that Commissioner Cook's contribution to the Commission was 
invaluable. He thanked him for all his work. 

4. MARITIME 

A. Authorization to initiate the process to extend the Foreign Trade Zone by creating a 
subzone at Chevron Shipping Corporation's Long Wharf located at Richmond. CA 
(Resolution No. 97-33) 

Mr. Peter Dailey, acting Maritime Director, stated that the resolution before the 
Commission will authorize the Executive Director to initiate the process to submit a 
foreign trade subzone application for Chevron products company in Richmond, CA 
refinery to Foreign Trade Zone Board (FTZB) in Washington, D.C. The Chevron 
Products Company, a subsidiary of S.F. Bay Chevron Corporation, late last year 
approached the Port, grantee of the Foreign Trade Zone #3, to amend its zone plan to 
include a special process, subzone site for refining, storage transfer, petroleum and 
petroleum derivatives. Foreign Trade Zones were established by the U.S. Congress 
in 1934 to stimulate economic development in communities by providing businesses 
with facilities for conducting international trade activities. Designation as a foreign- 
trade zone is granted by the Foreign Trade Zones Board within the U.S. Department 
of Commerce. Zones must be operated as a public utility and applications are granted 
to state or local government entities, port or airport authorities, economic 

M042297.igq -3- 



development agencies and not-for-profit corporations. 

Foreign or domestic merchandise may enter a foreign trade zone without a formal 
Customs entry or the payment of Custom duties or government excise taxes. While in 
the zone, merchandise may be sampled, relabeled, repackaged, assembled, processed 
or manufactured. If the final product is exported from the United States, no U.S. 
Customs duty or excise tax is levied. Subzones are special purpose type ancillary 
zone authorized by the FTZB through grantees of public zones, such as the Port of 
San Francisco, for operations that cannot be accommodated within an existing zone 
when it can be demonstrated that the activity will result in significant public benefit. 
Chevron has several subzones established in the United States including Hawaii and 
Los Angeles, where they refine, blend, store and transfer petroleum and petroleum 
derivatives and other related products and ship intermediate and finished products for 
export and domestic market consumption. The Bay Area subzone will be used for the 
same purpose and, in doing so, will allow Chevron to realize economic benefits 
through tariff savings on the refining process, deferred duty for products in storage 
and duty elimination for exported products. 

For example. Chevron can import crude from Malaysia, bring it to their subzone in 
Richmond. Through the subzone apparatus, they can refine this crude oil into a jet 
fiiel or marine vessel fuel and then sell it to an airline or a shipping company at a 
lower cost, thus benefiting the Northern California marine and air transport industries. 
Such benefits will increase Chevron's competitiveness with its foreign competitors and 
domestic refiners who already have or are pursuing subzone status. Operating under 
subzone status will strengthen Chevron economically while furthering efforts to retain 
and potentially expand local jobs, thereby benefiting the local Bay Area economy. 
Chevron Corporation employs close to 10,000 people in the Bay area, with almost 
1,500 of those being full-time refinery employees in Richmond. 

All legal documents, applications, and administrative reports pertaining to this 
subzone application will be prepared by Chevron at their expense. All costs 
associated with running and managing the zone will also be assumed by Chevron. As 
grantee, the Port of San Francisco will receive an annual fee of $5,000 which is in 
accordance with Foreign Trade Zone Board's rules and regulations which state that 
fees charged by the grantee should be "the value of actual services rendered by the 
zone grantee or operator and reasonable out-of-pocket expense." 

Commissioner Herman inquired if Chevron Corporation have been appointed to 
operate the Foreign Trade Zone. Mr. Dailey replied that Chevron has not been 
appointed but rather Chevron has approached the Port to extend its foreign trade zone 
grant to their facility in Richmond, CA. This has nothing or very little to do with the 
foreign trade zone in the northern waterfront. This has no impact on their operation 
at the northern waterfront. Mr. Dailey indicated that the foreign trade zone grant #3 
on the northern waterfront will retain its current position. Subzone is a transaction 
where a manufacturing process has to take place in an area outside of its normal zone. 
It caimot receive petroleum products on the northern waterfront but it can at the 
Richmond refinery. Zones must be operated as a public utility and operate in the 



M042297.igq 



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general good of Northern California. As a San Francisco based company, Chevron 
came to the Port for help in obtaining this economic benefit for the region and for 
their company. 

Commissioner Herman stated that he is not convinced that Chevron does the Port any 
good or that the issue belongs here. He deferred the judgement to other 
Commissioners. 

Mr. Wong indicated that Mr. Ed Osgood will be meeting with staff to discuss the 
matter. Mr. Dailey interjected and indicated that Chevron USA will, at one point 
during this process, appoint an operator to operate and do most of the FTZ paperwork 
and report to Washington D.C. Chevron has indicated that the operator will most 
likely be Mr. Osgood and his company. They, however, have not yet entered into an 
agreement but are working together on this application. In response to Conmiissioner 
Herman's inquiry about Mr. Osgood's appointment, Mr. Dailey responded that it does 
not necessarily have to be them. Chevron does not even have to have an operator as 
they are able to operate it. They however, indicated that they are looking to enter into 
an arrangement with a company to take care of the paperwork for them with the 
Washington, D.C. Foreign Trade Zone Board. Commissioner Herman indicated that 
with 10,000 employees, they should be able to do it themselves or ask the Port to 
make the appointment since it is the territory of the Port of San Francisco under 
whose management the FTZ is handled. 

Commissioner Herman reiterated that Chevron has no business appointing a Foreign 
Trade Zone operator or the operator of the Foreign Trade Zone in San Francisco. 
The company that was appointed just simply abandon this Port without the courtesy of 
reporting to the Port. 

Commissioner McCarthy asked for an explanation of the process and whether the Port 
is restricted in the numbers it can give out. Mr. Dailey replied that the FTZ apparatus 
is somewhat cumbersome and difficult to explain. It operates under the idea that we 
try to generate economic benefit to the region. There are FTZ in Oakland, San 
Francisco, San Jose, Stockton and Sacramento. We have the ability to apply for a 
subzone application to the FTZ Board and are requesting to initiate the process. The 
FTZ Board in D.C, under the direction of the Department of Commerce, will review 
the status. The Port has only asked once before for a subzone. There is a seal in the 
amount that we can do but it has been used very limited in the past. The FTZ Board 
will do a thorough review and report back to the Port if they find that the operation 
does not generate enough economic benefit to the region to warrant the permit of this 
request. 

In response to Commissioner Lee's inquiry as to who receives the benefits, Mr. 
Dailey replied that Chevron will obviously receive the economic benefits. They will 
have tariff savings, deferred duty and elimination of some duty in certain exported 
products. However, according to the FTZ application, since economic benefit will 
be realized by Chevron, they have to show to the Board that economic benefit to the 
region will also be derived. If they cannot do so, their application will not be 



M042297.igq 



approved. There is, however, an economic benefit to fuel buyers e.g. imported crude 
that is refined and put on a foreign airplane or ship that could be sold to marine or air 
companies at a lesser price. According to Chevron, they would be able to retain and 
potentially expand the local job base. They have one of the bay area's largest 
employees. Commissioner Lee hen inquired about the benefit to the Port. Mr. Dailey 
replied that the monetary rewards to the Port are slim. 

Commissioner Lee inquired if the Port is giving Chevron an unfair advantage to their 
competitors. Mr. Dailey replied that this will not give Chevron an unfair advantage 
because he believed that a lot of the competitors are looking for the same subzone 
status in different areas. They compete against other international businesses. This 
will put them on a level playing field with those competitors as there are five other 
subzones in the Bay Area. Commissioner Lee inquired if all of Chevron 's 
competitors in the Bay Area are already enjoying the benefit of the subzone. Mr. 
Dailey replied that he does not know how many of them have but if they haven't they 
will soon be. Commissioner Lee inquired if this was offered to other entities. Mr. 
Dailey replied that this has not been offered to anybody. This request came to the 
Port late last year. The Port holds this grant for the public good. Commissioner Lee 
stated that he has a strong distrust of big oil companies. He wanted to ensure that we 
are not giving Chevron an advantage. 

Commissioner Herman commented that the Port of San Francisco has never had 
Chevron or any other company before and it shouldn't have tliem now. Given the 
treatment received from the company who has just about left, he believes that the 
proposal should be rejected and proceed with some system of having a foreign trade 
operator selected by the Port. 

Mr. Dailey indicated that the Port currently has a contract with the Foreign Trade 
Zone Management Company in the northern waterfront, which has another year left in 
its lease. There are outstanding issues pertainmg to real estate transactions and the 
operation of the foreign trade zone. He agreed with Commissioner Herman's 
comments that the foreign trade zone has a lot of room for a lot more energy and 
vitality in San Francisco. Sooner or later, the Commission will have the opportunity 
to vote on the determination of the foreign trade zone apparatus on the waterfront. 
However, this is somewhat of a different issue. He understood and shared the 
Commission's concerns about foreign trade zone operation. It has been an issue of 
much discussion in recent months. He recommended that if the operation does not 
generate any good for the public, vote nay; but, if it does generate public good and 
employment, vote yes. 

Commissioner McCarthy inquired if there is a time constraint with the application. 
Mr. Dailey replied that this request was made by Chevron late last year. They have 
been very patient in asking for the Port to work with them throughout the process. 
Staff is asking to initiate the process to submit the application. Commissioner 
McCarthy inquired if we are doing something that we will eventually be limited to do 
and wondered if is this going to open the doors without us having to work out how we 
want to deal with the foreign trade issue. Mr. Dailey replied that this will not 

M042297.igq -6- 



preclude us for future aggressive dealings in zone matters. There a number of things 
we can do and this will not hurt our ability to do that in the future. 

Commissioner Cook stated that this is a simple issue. It does not benefit the Port very 
much but it does help the San Francisco headquartered company. They have been a 
good corporate company in San Francisco. They have approached the Port, which 
diey didn't have to. As a public body, the Commission has the responsibility to vote 
affirmatively and supply a little bit of help to a company that is headquartered in San 
Francisco. It benefits a neighbor, the shipping industry, along with the airlines. He 
noted that he will vote favorably on this resolution since he does not see any 
downside; even though there's not much of an upside. 

Commissioner Herman stated that the downside is that without notifying the Port of 
San Francisco, they started moving. Secondly, they owe the Port of San Francisco a 
significant amount of money. 

Commissioner Lee clarified that two different issues are being discussed. Mr. Dailey 
concurred and stated that the foreign trade zone #3 was given to the City in 1948. 
The FTZ Management was appointed to operate the zone and that company is 
currently in a dispute with the Port regarding real estate related issues. The City 
Attorney and staff are on daily discussion regarding resolution of the problem. There 
is a connection in that Chevron and the FTZ Management Company may enter into an 
arrangement. It is the Port's desire to have an operator in that zone in the near term 
that will enthusiastically work hard towards generating economic benefit to San 
Francisco. It is an issue that will come on the horizon for the Commission about the 
status of foreign trade zone in the City limits. 

Commissioner Hardeman inquired if Chevron has any other business at the Port. Mr. 
Dailey replied that other than supplying marine fuels to some of the shipping 
companies that call at the Port and supplying lubricants to marine services company 
that supply the fleet of the bay, indirectly yes. But he does not know if they directly 
pay the Port any money. Commissioner Hardeman inquired if Mr. Dailey still 
recommends the adoption of the resolution after hearing all the comments. Mr. 
Dailey replied to the affirmative. 

Commissioner Lee inquired if a Chevron representative is present to answer questions 
from the Commissioners. If the Commission votes affirmatively on the resolution, 
Commissioner Lee inquired about the estimated annual economic earnings that would 
be realized by Chevron. Mr. Marko Oksanen, FTZ Specialist from Chevron, replied 
that the duty savings to the Richmond refinery would be in the neighborhood of 
$800,000. Commissioner Lee then inquired how much of the $800,000 will be passed 
on to the customer. Mr. Oksanen replied that they have no figures as to how much of 
the $800,000 will be passed on. However, this will generate several benefits to the 
Bay area such as keeping employment in the area. The application shared with Port 
staff clearly indicates that public benefit. As far as how much of the $800,000 will be 
passed on the consumers in terms of lower fuel costs to airlines or vessels going 
overseas, he does not have the figure available. They will however give the best 



M042297.igq 



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possible price to air couriers that buy their jet fuel as well as marine fuels. 

ACTION: Commissioner Lee moved approval; Commissioner McCarthy seconded 
the motion. Three of the Commissioners were in favor; Commissioners 
Lee and Herman cast the dissenting votes. The resolution was adopted. 

5. REAL ESTATE AND ASSET MANAGEMENT 

A. Approval for the Executive Director to enter into Permit to Enter with Catellus 
Development Corporation and/or its agent, for Environmental and Geotechnical 
Investigations of Port property located at Mission Bay. (Resolution No. 97-32) 

Ms. Fei Tsen, Director of Real Estate and Asset Management, indicated that Catellus 
has requested a Permit to Enter Port property located in Mission Bay to conduct 
geotechnical and environmental testing of those sites. The property is part of the Port 
Land Transfer Agreement (PLTA) which calls for the Port to transfer certain Port 
parcels in Mission Bay with the Western Pacific site. This item is being brought to 
the Commission to make them aware of the ramifications of the testing and the Port's 
ultimate responsibility if Catellus does not proceed with the land transfer. Previously, 
Catellus had plan to test the site after the transfer occurred and when they had 
determined the final use for those parcels. In the last few months, Catellus, in 
reviewing their overall plan for Mission Bay, has decided to proceed with the testing 
throughout the Mission Bay area and is requesting from both the City and the Port 
permission to enter to conduct their investigation. The proposed entry permit is in the 
same form as the City's and the staff report outlines those provisions. However, this 
form of entry permit differs from the Port's standard form and it will have limited 
indemnity by Catellus. Normally, the Port requires a broad indemnity, which 
requires, among other things, for the permittee to be responsible for all remediation 
efforts for any hazardous materials discovered on site during the testing, regardless of 
whether the permittee is responsible for it or not. Catellus is requesting that this 
broad indenmity provision be limited to the release of hazardous materials to the 
extent that the testing is directly created or aggravated by Catellus or from its 
handling of disposal of the hazardous materials. 

Under the PLTA, Catellus has agreed to accept the Port properties in an as-is 
condition and to remediate those properties up to the standards required for the 
proposed uses. However, should Catellus decide not to proceed with the land transfer 
after the results of the testing are known, the Port will bear the ultimate responsibility 
for the remediation. The Port, in either case, intends to pursue the various oil 
companies and users of the properties to recover any cost for investigation and 
remediation. If Catellus does not investigate the site, the Port would eventually be 
required by the Regional Water Quality Control Board to conduct the investigation 
and to pursue remediation efforts. 

ACTION: Commissioner Cook moved approval; Commissioner McCarthy 

seconded the motion. All of the Commissioners were in favor; the 
resolution was adopted. 

M042297.igq -8- 



7. PLANNING & DEVELOPMENT 

A. Informational presentation on the Pier 52 boat launch project . (Heard out of order) 

Mr. Paul Osmundson, Director of Planning and Development, indicated that this 
project has been presented to the Commission several times over the last couple of 
years. The Pier 52 boat launch project involves the following major components: 
(1) double lane boat launch; (2) gangway and floats providing disabled access; 
(3) shoreline improvements and public access; (4) landscaping lighting and site 
improvements; (5) a cafe, bait shop and dining deck; and (6) a 20-space trailer boat 
parking lot. 

The Port received approval for the project from BCDC on January 16, 1997. The 
Port has also applied for a permit from the Army Corps of Engineers which it expects 
to be issued shortly. The design team led by Arcus Architecture has completed 60% 
design drawings on the project and has prepared a construction cost estimate. 
However, the current construction cost estimate exceeds the amount of ftjnding 
currently available for the project. 

Port staff recommends that the construction of the cafe/bait shop and dining deck be 
deferred until a later date. Staff's recommendation is based on the following factors: 

1 . The current amount of funding available may not be sufficient to fund the entire 
project. The deferral of the cafe/bait shop and dining deck to a future phase will 
bring the project within the Port's current budget constraints. 

2. A concentrated effort has been made to design the structure to meet the needs of a 
typical restaurant operator. However, Port staff believes that the eventual 
restaurant operator should be involved in the final design of the building. Staff 
proposes that an operator be selected prior to the construction of the restaurant to 
ensure that it will meet the specific needs. 

3. The current demand for a new restaurant facility in this location is somewhat 
uncertain. The proposed development of the new ballpark and UCSF in Mission 
Bay should increase the potential for a restaurant dramatically. 

Commissioner McCarthy commended staff for making a good decision. 

Ms. Corrine Woods, resident of Mission Creek Harbor, Secretary of the Bay view 
Boat Club and also on the Mission Bay Citizens Advisory Committee, agreed with 
Mr. Osmundson's recommendation to go forward with the Pier 52 project. Given the 
current situation at Pier 52, she cannot visualize how anybody can profit from a cafe 
or a bait shop. She indicated that it makes more sense to get the ramp running and 
have it available for users than having a cafe/bait shop. 

The other issue Ms. Woods was concerned about was the Giants Ballpark EIR. If the 
Giants ballpark has the 5,000 dedicated parking spaces and if, as mitigation for those 

M042297.igq -9- 



5,000 parking spaces, Terry Francois Boulevard is turned into 4 lanes of traffic access 
for ballpark parking, the use of the Pier 52 boat launch ramp would be wiped out as 
would the Bay view Boat Club, the Mariposa Hunters Yacht Club, and the boat storage 
facilities along the area. All of the maritime uses would not be effectively used. The 
Port should respond to the Draft Environmental Impact Report because it impacts the 
tenants and the Pier 52 project. They hope that the Commission will support the 
waterfront uses and not encourage the Giants to put the parking there or use Terry 
Francois Boulevard for parking access because they feel it would ruin what the Port is 
trying to do with Pier 52. 

Ms. Woods indicated that because she is on the Mission Bay Citizens Advisory 
Committee, they have been working with Catellus on this project. They know that if 
UCSF goes in, the southern part of Mission Bay is going to be developed sooner than 
expected. One of the problems with the ballpark parking is using Terry Francois 
Boulevard. The CAC recommended that, if there has to be parking for the ballpark, 
Illinois Street should be improved at least on a temporary basis to take away some of 
the impacts on the waterfront. 

Mr. Jeff Brown, indicated that he was invited to be on the Citizens Advisory 
Committee to help develop the guidelines for the Pier 52 project. When the 
committee heard that the project is in trouble because it didn't have enough money for 
construction, the popular response was to leave the building out and make this facility 
for boaters, rowers and power boaters. He concurred with Ms. Woods comments 
regarding the ballpark parking. The mitigation that the Giants are jproposing for the 
parking will severely impact this project as well as the other existing maritime uses on 
Terry Francois Blvd. He hopes that Seawall Lot 337 is not one of the lots that the 
Port is looking at swapping with Catellus at this time as it will impact this project as 
well as Terry Francois Blvd. 

Commissioner Herman indicated that there are two speakers on this subject matter and 
each has a negative point of view. He wondered how we can proceed in the face of 
that or do we ignore what they say. Commissioner Hardeman replied that the two 
speakers are in favor of doing the boat ramp first and hold off building the restaurant 
because of lack of funds. Their other issue relates to the future traffic impact at Terry 
Francois Blvd. 

Commissioner Herman stated that the traffic presents a significant problem. He 
wondered if there is a proposition before the Commission to vote for or against it. 
Commissioner Lee clarified that this item is informational. The Commission will get 
another opportunity to vote. Commissioner Hardeman concurred that this item is 
informational and no Commission action is required at this time. 

Mr. Osmundson reiterated that this is an informational item on the scope of the Pier 
52 project. He indicated that his staff has also reviewed the ballpark draft EIR. They 
have met with the Giants and Catellus to discuss their concerns about the mitigation 
that both the speakers were referring to. Staff will work with the Mayor's office, 
Giants and Catellus to address the issue. Commissioner Herman inquired if there will 

M042297.igq -10- 



be some notation to the effect that a preliminary review is required and that these 
issues must be addressed as a condition of us going forward. Mr. Osmundson 
indicated that in recent discussions with the Giants and Catellus, it was pointed out 
that the existing specific plan for the Mission Bay area, an element in the City's 
General Plan, does identify a roadway with Terry Francois Blvd. and any changes to 
that would have to be dealt with in the approval of the ballpark project. It will be 
addressed in the "responses to comments" as part of the EIR process for the ballpark 
project. 

With regard to the traffic issue, Commissioner Lee concurred with both of the 
speakers. He indicated that it does not make any sense to spend millions of dollars 
when the public/boaters cannot utilize the pier during the weekends. The boat ramp 
should be built first and when funds become available, the other amenities could then 
be built. Mr. Osmundson stated that one of the design elements of the boat ramps was 
to allow enough maneuvering room at the top of the ramp so that regardless of what 
happens to Terry Francois Blvd. there is enough room for boats to maneuver at the 
top of the ramp. He offered to work with the design team and the Port's engineering 
staff to look at this project carefully and come back to the Commission with a report 
on the traffic movements at the top of the ramp and how it would be affected by future 
traffic on Terry Francois Blvd. Commissioner Herman inquired how long it would 
take for the Commission to get a proposal so that the Commission is conversant about 
the whole proposition. Mr. Osmundson replied that staff will return at the next 
meeting with a complete briefing on both the existing and proposed traffic movements 
for this project and Terry Francois Blvd. Staff will clearly lay out the physical issues 
and have the necessary information for the Commission's consideration. 

Commissioner Herman made a motion to hold in abeyance further discussion until the 
information is presented to the Commission so that it can make a wise and prudent 
decision. After fiirther discussion. Commissioner Hardeman reiterated that staff will 
have the necessary information presented at the next meeting to address Commissioner 
Herman's concerns. Mr. Osmundson indicated that if we proceed with the design of 
the boat ramp project, any decision related to the roadway will be made around the 
design of the boat launch project. He reiterated that staff is confident that the design 
and alignment of the boat launch is what was agreed upon and there can be no major 
changes made to it. The issue of traffic flow to the ballpark parking is a matter of 
fiimre consideration for the Commission and the rest of the City. 

Commissioner Lee clarified that the Commission has already approved the design of 
the boat ramp project. Item 6D is an amendment to the contract. 

6. FACILITIES & OPERATIONS 

A. Authorization to award Contract No. 2636. "Pier 48 fire damage repair and 
reconstruction." (Resolution No. 97-29^ THIS ITEM WAS PUT OVER TO THE 
NEXT MEETING 

B. A pproval of First Amendment, authorizing additional design services for Professional 

M042297.igq -H- 



Services Contract No. SA 39760016. "New Maintenance Facility." with Kendall 
Young Associates/Beverly Prior Architects, a Joint Venture. (Resolution No. 97-26) 
THIS ITEM WAS PUT OVER TO THE NEXT MEETING 

C. Authorization to award the professional services contract for as-needed "Soil and 
Groundwater Characterization and Management Services" to Tetra Tech. Inc. 
(Resolution No. 97-30) 

Mr. Lee, Director of Facilities & Operations, requested Commission's approval to 
award the as-needed contract for professional services for soil and groundwater 
characterization and management services to Tetra Tech. In January 1997, the 
Commission authorized staff to advertise and receive Request For Proposals for tiiis 
work. Staff received 21 proposals, which was short listed to 4 firms. Tetra Tech was 
the lowest responsive bidder and was confirmed by the Human Rights Commission. 

ACTION: Commissioner Lee moved approval; Commissioner Cook seconded the 
motion. All of the Commissioners were in favor; the resolution was 
adopted. 

D. A pproval of a First Amendment, authorizing additional design services for 
Professional Services Contract No. SA3960018. "Pier 52 Public Boat Ramp. Bait 
Shop & Cafe and Public Access." with Arcus Architecture & Planning. (Resolution 
No. 97-31) 

Mr. Alex Lee, Director of Facilities and Operations, requested that the contract be 
amended from $235,000 to $322,337 to complete the design of the boat ramp project. 
During the conceptual design, the Port added project program components, studies 
and estimates not included in the original contract. These changes were required due 
to dkection from the Port Commission, the Department of Public Work's Disability 
Access Coordinator, Port appointed Design Advisors and the Citizen's Advisory. 
CalBoating has also indicated that additional funding would be available if the Port 
provide parking for trailers and trucks. During the investigation phase of the 
geotechnical work, our consultant found that a fill supported ramp cannot be used and 
recommended the use of a pile supported ramp at an additional design cost. DPW's 
ADA Coordinator also required a disability access to this facility which requires 
additional redesign. The item before the Commission is for the modification of this 
contract to complete the Pier 52 boat ramp project. 

Commissioner Lee indicated that he has received a briefing from staff and understood 
that the latest estimate for the project exceeds the available fiinds. Mr. Alex Lee 
concurred and indicated that staff intends to build the ramp first and some of the 
amenities and have the dining deck built when funds become available. 

Commissioner Cook commented that the best course of action is what staff is 
recommending. He agreed with Commissioner Herman's remarks to ensure that this 
is a working facility. This is for boaters and should be open for boaters. If this 
means that Terry Francois Blvd is closed off for all but maritime and boating traffic 



M042297.igq 



■12- 



during games, he supports it. He encouraged staff and the Commission to take a 
closer look at this issue and make it very clear that this is a priority and the use of the 
facility is for boaters and not for people going to the game. 

Commissioner Hardeman concurred that this project is to build the boat ramps for 
boaters' use. He reiterated that all of the Commissioners are in favor of building it. 
The other issues will be discussed when it becomes necessary. 

ACTION: Commissioner Lee moved approval; Commissioner McCarthy seconded 
the motion. All of the Commissioners were in favor; the resolution was 
adopted. 

8. FINANCE AND ADMINISTRATION 

A. Authorization to enter into an Expense Reimbursement Agreement with China Basin 
Ballpark Company, and appropriation to pay expenses up to $477.000. (Resolution 
No. 97-25) 

Mr. Ben Kutnick, Director of Finance & Administration, stated that the Port 
Conmiission endorsed a term sheet with the Giants for a lease subject to CEQA 
approval. As part of the term sheet of the lease, the Giants agreed to loan the Port up 
to $500,000. The Giants requested the Port to accelerate the relocation schedule and 
have agreed to pay the Port $477,000 for that purpose. The material provisions of the 
agreement include the following: (1) CBBC will pay the Port three equal installments 
starting May 1, 1997; (2) The payments are non-reftindable if an agreement is not 
finalized with the Giants; (3) The term sheet will be modified to provide a rent credit 
to the Giants of two equal installments of $125,000 beginning February 2000; (4) The 
CBBC payment and the Port rent credits payable under this agreement replace in its 
entirety the transaction cost advance of up to $500,000 and the corresponding rent 
credits contemplated under the Term Sheet. A supplemental appropriation will be 
submitted to the Mayor and the Board of Supervisors to appropriate the $477,000 for 
relocation cost of tenants and Port staff. Staff has received from OER a certificate of 
exemption for CEQA for the tenant and maintenance relocation project. 

ACTION: Commissioner Lee moved approval; Conmiissioner Herman seconded 
the motion. All of the Commissioners were in favor; the resolution was 
adopted. 

B. Approval of 1997/98 Executive Director Compensation. (Resolution No. 97-27) 

Mr. Kutnick indicated that staff has surveyed the salaries of eight West Coast ports. 
The average salary of executive directors of those eight ports is $157,000. In the last 
three years, the Port Commission has recommended salary increases for the executive 
director consistent with those received by management employees of the City, 
including their department heads as represented by the Municipal Executive 
Association. The following is recommended: 2% salary increase retroactive to 
December 23, 1996 (the Executive Director's starting date); 2% salary increase 

M042297.igq -13- 



beginning July 1 , 1997 and an additional $75 a month for Cafeteria benefit plan and 
2.5% retirement pick-up . 

ACTION: Commissioner McCarthy moved approval; Commissioner Lee seconded 
the motion. All of the Commissioners were in favor; the resolution was 
adopted. 

C. A pproval of Revisions to FY 1997/98 Operating Budget. (Resolution No. 97-28) 

Mr. Kutnick stated that in February 11, 1997, the Commission approved the 97/98 
Operating Budget. At that time, he indicated that staff will remm to the Commission 
at a later date for approval of items that were not originally included on the budget. 
The revenue and expense items for Conmiission's approval are outlined on page 2 of 
the staff report. It will adjust the Port's projected surplus from $620,000 to 
$416,000. The budget was done conservatively. We would like to finish the year 
with revenues higher than projected and expenditures lower than projected. This was 
accomplished in the last three years. In 1994/95, we budgeted a $1.4 in surplus; and 
ended the year with $3.2 million in surplus. In 1995/96, we budgeted $733,000 in 
surplus and ended the year with $2.9 million. This year, we had budgeted $673,000 
and will end the fiscal year with $1.3 million in surplus. Based on the last three 
years, he expects that the Port's surplus for the next fiscal year will be higher. 

Commissioner McCarthy inquired about the status of the SSA agreement. Mr. 
Kutnick replied that in June 1996, staff requested the Commission's approval for an 
agreement with the terminal operators at Pier 94/96 to subsidize their operation in an 
amount not-to-exceed $750,000 to maintain their operation. Port staff is currently 
looking at the proposal received from SSA and is performing an analysis and will 
present a proposal to the Commission in June. It is anticipated that the proposal, 
subject to Port Commission approval, would require a continuation of the subsidy. 
The two things that would affect the amount of subsidy are: (1) the Port's ability to 
negotiate a better deal with the terminal operator and (2) the Port's ability to increase 
cargo volumes. In his conversation with the Port's maritime staff today, over the last 
two years, cargo volumes have doubled but unfortunately, costs have gone up as well. 
Staff will return to the Commission within sixty days with a plan, including a 
marketing plan. He stated that the Port needs to keep the terminal open to attract 
additional shipping lines. 

Commissioner McCarthy reiterated her concern that the Port gets the best deal 
possible. She requested that a marketing strategy plan be provided to the Commission 
so that they are well apprised of the situation before it comes back to the Commission 
for a vote. 

In reviewing staffs report. Commissioner McCarthy noticed that the Port will pay 
$17,900 for work order expense to the new Department of Environment. Since the 
Port is paying for the work orders, she wondered if the Port has any MOU's or 
agreements with those departments and if the Port has a system in place to monitor or 
manage the work. Mr. Kutnick acknowledged Commissioner McCarthy's concern and 



M042297.igq 



■14- 



assured her that an agreement will be in place before the Port sends the new 
Department of Environment any money. He indicated that this department is brand 
new. The money is intended to be used for a City wide pest control management plan 
that the Port is asked to contribute. The Port obtains work order services from 29 City 
departments and the Port only has a few MOUs in place but will have staff look into 
developing the MOUs. 

Commissioner Lee echoed Commissioner McCarthy's comments. He inquired if the 
Port maintains an audit or monitoring system to ensure that the departments are 
performing the services they agreed to. Mr. Kutnick replied that each year, the 
Mayor's office require that both departments agree, in writing, as to the amount and 
scope of services by the performing and requesting departments. Before a payment is 
made, the performing department submits to the Port, for approval, a request for 
services. Back-up documents are provided to support those charges. A Port Manager 
is responsible for overseeing those services before the Accounting department 
transfers the cash and records the expenditure. However, a standard procedure has 
not been established. Mr. Kutnick indicated that he will meet with his staff and fellow 
directors to develop MOUs and define the responsibilities, expectations and reporting 
requirements. Commissioner Lee stated that this is a good idea since the Port is 
paying for the services. The Port should be able to monitor and control the services 
and be able to inform them if they are not performing the job properly. He 
volunteered to work with Mr. Kutnick on this issue and Mr. Kutnick accepted his 
offer. 

Commissioner Hardeman indicated that he, too, was concerned when he found out 
that the Port work orders services from 29 City agencies but was assured by Mr. 
Kutnick that he will investigate and bring back his findings to the Commission. 
He was delighted that Commissioner Lee is willing to assist Mr. Kutnick. If 
Commissioner Hardeman's schedule permits, he too would like to be involved. He 
then thanked Mr. Kutnick for the briefing provided to the Commission. 

ACTION: Commissioner Cook moved approval; Commissioner Lee seconded the 
motion. All of the Cormnissioners were in favor; the resolution was 
adopted. 

9. CONSENT CALENDAR 

10. NEW BUSINESS / PUBLIC COMMENT 

Mr. Fink raised an issue regarding Carriage Charter on Pier 33. He indicated that they 
have been a good neighbor and he does not understand why they will be out of business. 
He mentioned that Mr. Creedon faxed a document to the Commission regarding this 
matter. He requested the Commission wait another thirty days before evicting him. Mr. 
Wong indicated that this has been an ongoing litigation case and Mr. John Rakow has been 
handling this matter. On behalf of John Rakow, Legal Counsel Julie Van Nostern stated 
that the Carriage Charter matter has been ongoing for well over a year and is currently in 
litigation and matters in litigation are not discussed in open session. However, it was her 

M042297.igq -15- 



understanding that from reviewing the file the Port went forward on an unlawful detainer. 
A motion and summary judgement was filed but the Port prevailed. A motion for 
reconsideration also was filed but, again, the Port prevailed. It is her further 
understanding that there are sums due to the Port by Carriage Charter. As well, it is the 
business decision on the part of the Port not to retain this tenant. It would be in the Port's 
best interest to go forward with the eviction, which is to take place tomorrow. Mr. Jenkel 
has been represented by counsel and he has had due process. 

Commissioner Hardeman recalled that when he first joined the Port Commission, 
Commissioner Cook was a gentleman, very friendly and never used his knowledge to 
abuse him and for that he was thankful. He appreciated his attimde and the way he treated 
him when he came on the Commission. 

11. EXECUTIVE SESSION 

At 5:50 p.m., the Commission Secretary announced that the Executive Session has been 
canceled. 

Commissioner Hardeman adjourned the meeting at 5:55 p.m. 



M042297.igq -16- 



I ^AN FRANCISCO 

PORT COMMISSION 



DOCUMENTS DEPT, 

PMY 1 1997 



V PUBL/CUBRARY 

f^^ ^ I SPECIAL MEETING 

MAY 5. 1997. 2:00 P.M. i-4-Please note the date & time of the meeting 

FERRY BUILDESfG, SUITE 3100 
SAN FRANCISCO, CALIFORNIA 



AGENDA 

1. ROLL CALL 

2. FINANCE AND ADMINISTRATION 

Authorization for the Port to enter into a ten-year loan for $12 million to finance 
the Maintenance Facility Relocation Project and the CalTrans Acquisition Project 
and related closing costs; authorization for the Executive Director to negotiate an 
interest rate cap agreement to mitigate interest rate risk on the loan, and, 
authorization for a Supplemental Appropriation to appropriate loan proceeds for 
these two projects. (Resolution No. 97-38) 

3. NEW BUSINESS/PUBLIC COMMENT 

Public comment is permitted on any matter within Port jurisdiction, and is not 
limited to agenda items. Public comment on non-agenda items may be raised 
durmg New Business/Public Comment. Please fill out a speaker card and hand it 
to the Commission Secretary. Each speaker is limited to three minutes. 

4. ADJOURNMENT 



A050597.igq 



DISABILITY ACCESS 

The Port Commission office is located on the third floor of the Ferry Building, Suite 
3100. The Port office is wheelchair accessible. Accessible seating for persons with 
disabilities (including those using wheelchairs) will be available. The closest accessible 
BART station is Embarcadero Station located at Market and Steuart Streets. The 
closest accessible MUNI Metro station is Embarcadero station located at Market and 
Spear Streets. Accessible MUNI lines serving the Ferry Building are the 9, 31, 32 and 
71. For more information about MUNI accessible services, call 923-6142. 

There is accessible parking at the Ferry Building and at the public lot in the 
Embarcadero median in front of the Ferry Building. Assistive listening devices are 
available for use in the Port Commission Meeting. 

The following services are available on request 72 hours prior to the meeting. Please 
contact Kevin Jensen at (415) 274-0555. Late requests will be honored if possible. 

• American Sign Language Interpreters • The use of a reader during the meeting 

• A Sound Enhancement System • Minutes of the Meeting in Alternative 

• Large Print of the Agenda Formats 

In order to assist the City's efforts to accommodate persons with severe allergies, 
environmental illnesses, multiple chemical sensitivity or related disabilities, attendees at 
public meetings are reminded that other attendees may be sensitive to various chemical- 
based products. Please help the City accommodate these individuals. 

Know Your Rights Under the Sunshine Ordinance 

Government's duty is to serve the public, reaching its decisions in full view of the 
public. Commissions, boards, councils and other agencies of the City and County exist 
to conduct the people's business. This ordinance assures that deliberations are 
conducted before the people and that City operations are open to the people's review ; 
For more information on your rights under the Sunshine Ordinance (Chapter 67 of the 
San Francisco Administrative Code) or to report a violation of the ordinance, contact 
the Sunshine Ordinance Task Force at 554-4851. 



A050597.igq . -2- 



PORT OF SAN FRANCISCO 




MEMORANDUM 



Sarf:5^c■scz.CA94^:^ 
Te:ecncr.s415 274 04C0 
Teex 275940 =SF UR 
Fi/ 415 274 C523 
Cade SFPOP'COMM 



April 30, 1997 



TO: MEMBERS, PORT COMMISSION 

Hon. Michael Hardeman, President 
Hon. Denise McCarthy, Vice President 
Hon. James Herman 
Hon. Frankie G. Lee 

FROM: Douglas F. Wong^Ji(J 

Executive Direct^ir^ 

SUBJECT: Authorization for the Port to enter into a ten year loan for $12,000,000 to finance 
the Maintenance Facility Relocation Project and the CalTrans Acquisition 
Project and related closing costs; authorization for the Executive Director to 
negotiate an interest rate cap to mitigate interest rate risk on the loan, and, 
authorization for a Supplemental Appropriation to appropriate loan proceeds for 
these two projects. 

DIRECTOR'S RECOMMENDATION: Approve Resolution. 

The proposed transaction would authorize the Port to enter into a ten year loan for approximately 
$12,000,000 to finance two separate projects, the Maintenance Facility Relocation Project and 
the CalTrans Acquisition Project, which are more fully described below. 

Maintenance Facility Relocation Project 

In early 1996 the Port determined that the Port's maintenance facility located on the ground floor 
of the Pier 46B and was not designed for the operation of a modem maintenance facility and 
lacked adequate office space for the maintenance department needs. Accordingly, the Port hired 
Parsons Infi-astructure and Technology Group Inc. to evaluate potential relocation sites. Parsons 
agreed that a new facility was required and recommended that moving to either Pier 48 or 
Pier SOD was the most cost effective option. 

In December 1996 the Commission initially authorized staff to retain the Kendall Young 
Associates and Beverly Prior Associates ("KYA/BPA"), a joint venture, to design a new 



THIS PRINT COVERS CALENDAR ITEM NO. 2 



maintenance facility at Pier 48. However, due to a fire at Pier 48 and receipt of more detailed 
cost estimates from the design firm, the Port revisited its decision to relocate the maintenance 
facility to Pier 48. Based upon that analysis the Port concluded that it could reduce its overall 
costs substantially by moving the facility from Pier 46B to Pier 50. Accordingly, the KYA/BPA 
contract was modified to reflect that decision. 

The maintenance department is responsible for repair and maintenance of all facilities in the 
Port's jurisdiction, including substructure, decks, buildings, utilities, container cranes, streets, 
streetlights, and parking meters. The Port's current maintenance facility is housed on the ground 
floor of a multi-story reinforced concrete building constructed in the 1920s. The Port moved the 
maintenance department to Pier 46B in the early 1970's. Pier 46B was never designed for the 
operation of a modem maintenance facility. A new facility will improve operating efficiency by 
incorporating a new warehousing system, upgraded tooling, and other features described below. 

The Port intends to fully vacate Pier 46. This requires the relocation of the maintenance facility 
at Pier 46B as well as the relocation of approximately 12 commercial tenants at Pier 46A At its 
April 22, 1997 meeting, the Port Commission adopted the Certificate of Determination of 
Exemption/Exclusion from Environmental Review that determined that the relocation of the 
maintenance facility and tenants firom Pier 46 to Pier 50 and the Port building located at 
555 Illinois Street is exempt fi"om CEQA 

CalTrans Acquisition Project 

Section 2.6 of Chapter 1333 of the Statues of 1968 (the "Burton Act"), which was added by 
Chapter 1 1, Statutes of 1984 of the California Legislature (AB 84), gives the City, acting by and 
through its Port, the right to negotiate with the California State Department of Transportation 
("CalTrans") for the purchase of property. The Port intends to acquire a 3 acre parcel (Assessor's 
Block 3794), which is adjacent to Pier 46, from CalTrans. 

The proposed purchase by the City remains subject to completion of an environmental impact 
report and the approval of the Port Commission, Board of Supervisors and Mayor, in their 
discretion. The loan funds allocated to this project would not be drawn unless and until all of 
these approvals are in place. 

Project Costs 

The Port is 1) requesting authorization to enter into a loan to fund the estimated $12,000,000 in 
costs and improvements associated with the Maintenance Facility Relocation Project and the 
CalTrans Acquisition Project; and 2) is requesting approval to appropriate the funds for these 
two projects as follows: 



Project Components 


Estimated 
Loan Amount 


Maintenance Facility Relocation Project 
Design and Constmction of new Maintenance Facility site 
Maintenance Facility Relocation Costs 
Improvements to new site locations for relocation of tenants 
Tenant relocation costs 

Subtotal Maintenance Relocation Project 

Cal Trans Acquisition Project 
Acquisition of parcel 
Tenant relocation costs 
Closing costs 

Subtotal CalTrans Acquisition Project 
Costs of Loan Issuance 

Total Project Costs 


$4,062,775 

405,450 

2,381,255 

200,520 


$7,050,000 

$3,600,000 
500,000 
350,000 


$4,450,000 
500,000 


$12,000,000 



Pier SOD Improvements 

Relocation of the maintenance facility to Pier 50D requires utility and sewer upgrades, 
construction of demising walls for shops, fire safety improvements which include sprinklers, and 
related renovations. The Port hired Kendall Young Associates/Beverly Prior Architects 
("KYA/BPA"), an MBEAVBE joint venture, to provide the required architectural and 
engineering services for the new maintenance facility. Construction of the facility will be 
accomplished using both contractors and Port employees. Relocation of the maintenance facility 
will be handled primarily by Port employees. 

Tenant Relocation 

The Port needs to make improvements to Pier 48 and to Pier 50A, 50B and 50C in order to 
relocate tenants into these facilities. Improvements to Pier 48 include removal of hazardous 
material and design of tenant improvements. The improvements to Pier 50A, 50B and 50C 
include new roofs, sprinklers, and upgraded ADA accessible bathrooms. Pursuant to an October 
1996 memo, the fire Marshall has ruled that the Port must put sprinklers and demising walls into 
the sheds at Pier 50 in order to meet current code. 

Tenant relocation costs consist of the cost of moving a radio antenna that is attached to the roof 
of Pier 46 to a new location at Pier 70 in addition to the improvements noted above. 

CalTrans Acquisition 

On January 29, 1997 the California Transportation Commission ("CTC"), which has authority 
for dispositions of CalTrans property, approved an agreement in principle on the basic terms of 
the purchase of the CalTrans parcel by the City, including the purchase price of $3,600,000. In 
addition, as a condition to the acquisition, the Port has agreed to pay a portion of the costs related 



to relocating tenants currently occupying the parcel, not to exceed $500,000. The Commission 
endorsed the execution of the non-binding agreement at its meeting on March 11, 1997. Other 
costs related to closing this transaction include escrow fees, recording fees, title insurance and 
legal expenses estimated to be $350,000. 

Loan Issuance Costs 

Costs of the loan issuance, estimated at $500,000, include the loan fee, a cap fee, printing costs, 
financial advisor fees, bond counsel fees, city attorney fees, and other legal expenses associated 
with the negotiation of the loan. (See below for further detail.) 

Loan Terms and Conditions 

On February 7, 1997 the Port issued a request for proposals ("RFP") for a subordinated loan to 
be drawn down over a one year construction period, and repaid over twelve years. This loan 
would be subordinated to all bonded debt paid by the Port. On March 10, 1997 three bids were 
received and evaluated. Canadian Imperial Bank of Commerce ("CIBC", Inc.) was selected by a 
panel based on evaluation criteria included in the RFP. 

The following financial terms and conditions have been negotiated with CIBC, Inc. 



Loan Amount: 
Draw Period: 
Repayment Period: 



Prepayment Penalty: 



$12,000,000 

One year draw period 

Ten year term in equal quarterly principal payments 

commencing after the draw period (see schedule 

attached) 

None if repaid on an interest payment date. 



Fees: 

Loan Fee 
Commitment Fee 

Bank Closing Fees 



$42,000 (35bp on the total commitment) 

50bp on the undrawn commitment during the one 

year draw period based on the actual draw amount 

$42,500 



Interest Rates: 

Interest Rate during Draw Period 

Interest Rate on Term Loan 

Default Rate 



LIBOR + 75bp spread or Base Rate + 25bp spread 

(at Port option) 

LIBOR + 80bp spread or Base Rate + 40bp spread 

(at Port option) 

Base Rate + 2.00% 



Interest Rate Mitigation: 



Port to purchase interest rate cap estimated to be 
fixed between 8.5% and 9.5% which is estimated to 
cost between $200,000 and $400,000. 



Prepayment 

In order to avoid prepayment penalties if the Port wishes to prepay or refinance the loan, the 
negotiated loan rate is a floating rate tied to either LIBOR, a standard loan index, or the Base 
Rate (sometimes called the Prime Rate). The loan will not be subject to prepayment penalty in 
the event of prepayment or refinancing, provided that the payment is made on an interest 
payment date. There is an interest payment date at least once every 3 months. 



Fees 

Costs of the loan issuance include a loan fee to be paid at closing to the lender equal to 35 basis 
points times the committed amount (0.35% x $12,000,000 = $42,000.00), and a commitment fee 
equal to 50 basis points times the undrawn portion of the loan during the one year draw period. 
Total costs of loan issuance are estimated as follows: 

Loan Fee $42,000 

Financial Advisor 10,000 

Bond Counsel 7,500 

Bank Legal Fees 42,500 

City Attorney Fees 10,000 

Printing and Advertising 8,000 

Estimated Cost of Interest Rate Cap 380.000 

Total Costs $500,000 



UBOR Index 

At the Port's option at the time of draw, staff may select 1 month, 2 month, 3 month and 6 month 
LIBOR. Staff will watch interest rate trends and select accordingly. For the past three years 
3 month LIBOR has averaged around 6%. As an example, the 3 month LIBOR rate as of 
April 29, 1997 is 5.86%. See the attached graphs for a 7 year history of 3 month LIBOR rates. 



Default Rate 

In the event the Port is in default under the agreement, the interest rate will automatically convert 
to Base Rate plus 2.00%. Events of default include non-payment of principal and interest, 
non-payment of other bank fees, bankruptcy, and failure to cure any covenant breach after a 
60 days of receiving written notice that the Port is in breach of a covenant. The loan is 
subordinate to all Port bonds, and the payment can not be accelerated by the bank unless the 
bond debt has been accelerated by the Trustee under the bond Indenture. 



Indemnity 

The agreement contains a provision under which the Port agrees to indemnify the Bank only for 
claims or costs associated with the Bank's enforcement or preservation of its rights under the 
agreement. The indemnity is payable only from the Port's net revenues. 



Interest Rate Mitigation 

In order to mitigate the interest rate risk associated with a floating rate, the Port intends to buy a 
"cap." The Port is requesting approval under this resolution for the Executive Director to 
negotiate a cap, currently estimated to be between 8.5% and 9.5%, at a price not to exceed 
$400,000. 

A cap is analogues to buying insurance in that it protects the Port from paying high rates by 
fixing the maximum rate the Port is willing to pay. For example if LIBOR plus 80bp spread 
exceeds the cap rate, the interest over the cap rate will be paid on behalf of the Port by the cap 
provider. An example follows: 

LIBOR rate 8.0% 

Spread 0.8% 

All in cost 8.8% 

Port cap rate 8.5%> 

Paid by cap provider 0.3%> 

The cap still has value to the Port in the event that the Port prepays or refinances the loan. The 
Port could either sell the cap or continue to receive any payments due under the agreement. 

Based on current market conditions the Port estimates fixing the cap rate at 8.5%. The Port does 
not anticipate market conditions to change significantly prior to the anticipated closing date of 
May 14, however, all factors will be reexamined prior to fixing the cap rate at the time of the 
loan closing. At the date of this memo, the borrowing rate for the loan is estimated to be 
approximately 6.6%. The maximum rate the Port would pay would be cap rate fixed at closing, 
currently anticipated to be 8.5%. 

Commercial Loan 

Staff has elected to fund these projects with a commercial loan for the following reasons: 

1. Loan draw would be available for CalTrans acquisition immediately upon final approval of 
the acquisition. 

2. Port v^ll only repay the amount drawn on the loan, therefore if costs are lower or the 
CalTrans acquisition does not go through Port will not have already borrowed money it 
doesn't need. 



3. Only the maintenance facility costs ($4,589,552, or, 38% of the total loan) are eligible for tax 
exempt financing. The remaining portion of the loan is taxable financing. This is not a cost 
effective amount for the issuance of bonds. 

4. Taxable revenue bonds with a ten year amortization for the Port would cost approximately 
7.8% if sold today. The total amount would have to be drawn up fi^ont, resulting in an 
interest loss during the construction period of approximately 1.45% based on the current city 
pooled interest rate of 6.25%. The loan will only be drawn as needed. 

5. The Port has more flexibility with regard to prepaying or refinancing the loan than it would 
with revenue bonds which generally restrict the timing and ability of the issuer to prepay or 
refinance. 

The loan documents which are attached in substantial final form, have been reviewed by the 
Port's financial advisor, the Port's Bond Counsel, and by the City Attorney. 



PORT COMMISSION 
CITY AND COUNTY OF SAN FRANCISCO 



RESOLUTION NO. 97-38 



WHEREAS, Section B 3 . 5 8 1 of the City Charter empowers the Port Commission of San 

Francisco (the "Commission") with power and duty to use, conduct, operate, 
maintain, manage, regulate and control the Port area of San Francisco; and 

WHEREAS, the Port has decided to move its maintenance facility from its existing 

location at Pier 46B to Pier SOD; and 

WHEREAS, the Port intends to fliUy vacate Pier 46 which requires the relocation of 

approximately 12 commercial tenants from Pier 46A, in addition to the 
relocation of the maintenance department from Pier 46B; and 

WHEREAS, the Port must make improvements to future sites to be occupied by the Port's 

maintenance operation and its tenants, and pay for certain relocation costs 
(the "Maintenance Facility Project"); and 

WHEREAS, the Port Commission adopted Resolution #96-101 authorizing the Executive 

Director to issue a request for proposal necessary to facilitate the 
Maintenance Relocation Project at the Port Commission meeting held on 
September 24, 1996; and 

WHEREAS, Section 2.6 of Chapter 1333 of the Statues of 1968 (the "Burton Act"), 

which was added by Chapter 1 1, Statutes of 1984 of the California 
Legislature (AB 84), gives the City, acting by and through its Port, the right 
to negotiate with Caltrans for the purchase of property; and 

WHEREAS, at its meeting of March 1 1, 1997 the Port Commission endorsed the 

execution of a non-binding agreement to purchase Assessor's Block 3794 
from the State of California, Department of Transportation (the "CalTrans 
Acquisition Project"); and 

WHEREAS, the proposed purchase by the City remains subject to completion of an 

environmental impact report and the approval of the Port Commission, 
Board of Supervisors and Mayor, in their discretion; and the loan funds 
allocated to this project would not be drawn unless and until all of these 
approvals are in place; and 

WHEREAS, the Port requires $12,000,000 in outside financing to fund the Maintenance 

Facility Project and the CalTrans Acquisition Project; and 



WHEREAS, 
WHEREAS, 
WHEREAS, 



WHEREAS, 



WHEREAS, 



WHEREAS, 



WHEREAS, 



RESOLVED, 



RESOLVED, 



the Port issued its request for proposals for subordinated loan on February 7, 
1997. On March 10, 1997 three (3) proposals were received; and 

the Port selected Canadian Imperial Bank of Commerce ("CIBC") based on 
evaluation criteria included in the RFP; and 

the Port has negotiated an agreement which is attached in substantial final 
form, which includes the terms and conditions as set forth in the 
Memorandum to the Commission for Agenda Item 2 for the May 5, 1997 
special meeting; and 

Port staff recommends purchasing an interest rate cap to mitigate interest 
rate risk over the term of the loan as set forth in the Memorandum to the 
Commission for Agenda Item 2 for the May 5, 1997 special meeting; and 

approval of a supplemental appropriation is required to spend the loan 
fijnding as set forth in the Memorandum to the Commission Agenda Item 2 
for the May 5, 1997 special meeting for the Maintenance Facility Project 
and the CalTrans Acquisition Project; and 

the agreement agrees to indemnify the Bank only for claims or costs 
associated with the Bank's enforcement or preservation of its rights under 
the agreement, such claims to be payable only from the Port's net revenues. 

the Port Commission has considered the Certificate of Determination of 
Exemption/Exclusion fi"om Environmental Review, dated April 21, 1997, 
issued by the Department of City Planning, Office of Environmental Review 
(a copy of which is on file with the Port Commission Secretary), and found 
that the relocation of the Port's maintenance facility and Port tenants fi"om 
Pier 46 is categorically exempt from the California Environmental Quality 
Act ("CEQA") under Section 15301 of the CEQA Guidelines and S.B. 181, 
signed by the Governor on April 12, 1997; now, therefor be it 

on April 22, 1997 the Port Commission adopts the findings set forth in the 
Certificate of Determination of Exemption/Exclusion from Environmental 
Review, dated April 21, 1997, issued by the Department of City Planning, 
Office of Environmental Review (a copy of which is on file with the Port 
Commission Secretary), and finds that the Maintenance Facility Project is 
categorically exempt from CEQA; and be it further 

that the Commission hereby awards a contract for a $12,000,000 
subordinated loan to CIBC, Inc., as set forth in the Memorandum to the 
Commission for Agenda Item 2 for the May 5, 1997 special meeting to flind 
the Maintenance Facility Project and the CalTrans Acquisition Project; and 
be it further 



RESOLVED, 

RESOLVED, 
RESOLVED, 



RESOLVED, 



RESOLVED, 



that the Commission agrees to indemnify the Bank only for claims or costs 
associated with the Bank's enforcement or preservation of its rights under 
the agreement, such claims to be payable only from the Port's net revenues. 

that the Executive Director is hereby authorized to enter into the Credit 
Agreement in substantially the form attached hereto; and be it further 

that the Commission Executive Director is hereby authorized to negotiate 
and execute an interest rate cap agreement, as set forth in the Memorandum 
to the Commission for Agenda Item 2 for the May 5, 1997 special meeting, 
at a cost not to exceed $400,000, in order to mitigate interest rate risk over 
the term of the loan; and be it further 

that the Commission hereby approves the supplemental appropriation 
required to spend the loan funding for the Maintenance Facility Project; and 
be it further 

that the Commission hereby approves the supplemental appropriation for the 
CalTrans Acquisition Project, subject to completion of an environmental 
impact report by the Port Commission and the Board of Supervisors. 



/ hereby certify the foregoing resolution was adopted by the Port Commission at its meeting of 
May 5, 1997. 



Secretary 



PORT COMMISSION OF SAN FRANCISCO 

Maintenance Facility and CalTrans Acquisition Loan 



Estimated Debts 


ervice Schedule 


Fucal 


Principal 


Interest 


Total Debt 


Year 


Pavment 


Payment 


Service 


1997 




26,800 


26,800 


1998 





731,500 


731,500 


1999 


1^00,000 


876,000 


2,076,000 


20OO 


U00,000 


780,000 


1,980,000 


20O1 


U00,000 


684,000 


1,884,000 


20O2 


i;20o,ooo 


588,000 


1,788,000 


20O3 


1^00,000 


492,000 


1,692,000 


20O4 


1^00,000 


396,000 


1,596,000 


20O5 


i;20o,ooo 


300,000 


1,500,000 


20O6 


i;20o,ooo 


204,000 


1,404,000 


2007 


U00,000 


108,000 


1,308,000 


2008 


uocooo 


18,000 


1,218,000 




12.000,000 


5,204,300 


17,204,300 



Interest rate during draw period estimated to be 7.00% 
Interest rate during draw period includes 0.5% Commitment fee 
Interest rate during term period estimated to be 8.5% 






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Estimated Schedule for Approval of Subordinated Credit Facility 



1. Special Commission Meeting 

2. Send Resolution to Finance Committee for approval 

3. Finance Committee Approval of Resolution 

4. Board approval of Resolution 

5. First Reading of Ordinance for Supplemental Appropriations 

6. Mayor Signs Legislation 

7. Close Credit Facility 

8. Second Reading of Ordinance for Supplemental Appropriations 

9. Mayor Signs Legislation 

10. First draw on Credit Facility 



Monday, May 5 
Wednesday, May 7 
Wednesday, May 21 
Tuesday, May 27 
Tuesday, May 27 
Friday, May 30 
Monday, June 2 
Monday, June 2 
Tuesday, June 3 
Tuesday, June 3 



LIMITED SUBORDINATE CREDIT FACILITY 

dated as of May , 1997 

between 
PORT COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO 

and 

CANADIAN IMPERIAL BANK OF COMMERCE 

acting through its New York Branch 



(JUNIOR AND SUBORDINATE TO ALL SENIOR LIEN BONDS, INCLUDING, 

WITHOUT LIMITATION, ALL OUTSTANDING BONDS AND FUTURE BONDS 

HEREINAFTER ISSUED PURSUANT TO THE INDENTURE OF TRUST, DATED AS 

OF JUNE 1, 1994, BETWEEN THE PORT COMMISSION OF THE CITY AND 
COUNTY OF SAN FRANCISCO AND UNION BANK, AS TRUSTEE AS SET FORTH 

HEREIN) 



N:\SPCLPR0AVCASTILUPORT\SUBORDIN AH - ifUfT: 



TABLE OF CONTENTS 



Page 



ARTICLE ONE - DEFINITIONS 1 

Section 1.1 Definitions 1 

ARTICLE TWO - THE CREDIT FACILITY AND RELATED TERMS AND CONDITIONS 9 

Section 2.1 The Facility 9 

Section 2.2 Procedures for Borrowing 9 

Section 2.3 Interest Rates 1 1 

Section 2.4 Repayment 1 1 

Section 2.5 Prepayment 12 

Section 2.6 Fees on the Facility 13 

Section 2.7 Default Interest 13 

Section 2.8 Computation of Interest and Fees 13 

Section 2.9 Bank's Records 14 

Section 2.10 Subordinate Pledge of Net Revenues 14 

Section 2.11 Limitation on Commission's Obligation 14 

Section 2.12 Additional Costs 15 

Section 2.13 Reimbursement for Funding Losses 16 

Section 2.14 16- 

ARTICLE THREE - REPRESENTATIONS AND WARRANTIES 17 

Section 3.1 17 

ARTICLE FOUR - CONDITIONS PRECEDENT 18 

Section 4.1 Required Delivery 18 

ARTICLE FIVE - COVEK^^TS 18 

Section 5.1 Payment of Principal and Interest 18 

Section 5.2 Covenant to Maintain Net Revenue Coverage 1 8 

Section 5.3 Operation and Maintenance of Port Area 19 

Section 5.4 Maintenance of Powers; Retention Assets 19 

Section 5.5 Insurance 20 

Section 5.6 Financial Records and Statements 20 

Section 5.7 Adoption of Maintenance and Operation Budget 20 

Section 5.8 Revenue Bonds 20 

Section 5.9 Regulation U 20 

Section 5.10 Affirmation of Representation and Warranties 20 



N:\SPCLPR0J\VCASTlLL\PORTSLB0RDtN AH - J/24y^: 



Page 

Section 5.1 1 Modifications to Other Documents 21 

Section 5.12 Incurrence of Indebtedness 21 

Section 5.13 Further Assurances 21 

ARTICLE SIX - BANK REPRESENTATION, WARRANTIES AND COVENANTS 21 

Section 6.1 Representation and Warranties 21 

Section 6.2 Rating Downgrade 22 

ARTICLE SEVEN - EVENTS OF DEFAULT 22 

Section 7.1 Events of Default 22 

ARTICLE EIGHT - DISCHARGE OF OBLIGATIONS 23 

Section 8.1 Discharge of Obligations 23 

ARTICLE NINE - GENERAL PROVISIONS 24 

Section 9.1 Notices 24 

Section 9.2 Binding Effect 24 

Section 9.3 Amendments and Waivers 24 

Section 9.4 Rights Cumulative 25 

Section 9.5 Unenforceable Provisions 25 

Section 9.6 Governing Law 25 

Section 9.7 Accounting Terms 25 

Section 9.8 Prohibited Interests 25 

Section 9.9 Assignment 25 

Section 9.10 Commission Acting in Proprietary Capacity Only 26 

Section 9.11 Consent 26 

Section 9.12 MacBride Principles 26 

Section 9.13 Tropical Hardwood Ban 26 

Section 9.14 Drug-Free Work Place 26 

Section 9.15 Burma (Myanmar) Business Prohibition 26 

Section 9.16 Captions 27 

Section 9.17 Equal Employment Opportunities and Equal Benefits 27 

Section 9.18 Participations 27 

Section 9.19 Benefits of Agreement 27 

Section 9.20 Binding Effect 27 

Section 9.21 Entire Agreement 28 

Section 9.22 Severability 28 



11 



N:\SPCLPR0J\VCASTILL\PORT\SUBOftDIN AH - 4/J4/V7 



LIMITED SUBORDINATE CREDIT FACILITY 



THIS LIMITED SUBORDINATE CREDIT FACILITY is made as of May _, 1997 
between the PORT COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO 
("Commission") and CANADIAN IMPERIAL BANK OF COMMERCE, acting through its 
New York Branch ("Bank"). 

BACKGROUND 

A. The Commission has entered into an agreement dated as of January 24, 1969 (the 
"State Agreement") pursuant to which the State of California has transferred ownership of the 
Port of San Francisco to the Cit>" and County of San Francisco; and 

B. Under the Charter of the City and County of San Francisco, the Commission has 
under its management, supervision, operation and control all real and personal property 
transferred under State of California Statutes 1968, Chapter 1933, and of all other properties 
wherever situated as it may acquire or which may be placed under its management, supervision 
or control; and 

C. The Commission desires to finance certain projects located within the Port Area 
(as defined hereinafter); and 

D. On February 7, 1997, the Commission issued a Request for Proposals for 
Subordinate Credit Facility to finance these projects; and 

E. The Commission selected Bank to provide the requested credit facility; and 

F. Now, the Commission and the Bank agree as follows: 

AGREEMENT 

ARTICLE ONE 

DEFINITIONS 

Section 1.1 Definitions . The definitions appearing in this Agreement or am' 
supplement or addendum to this Agreement, shall be applicable to both the singular and plural 
forms of the defined terms: 

"Act" means the San Francisco Harbor Revenue Act of 1951 (formerly Sections 3300 
etseq. of the Harbors and Navigation Code of the State of California, now repealed); and the 
Charter of the City and Coimty of San Francisco, as supplemented and amended, all enactments 
of the Board of Supervisors adopted pursuant thereto, and all laws of the State of California 
incorporated therein by reference. 



1 



N:\SPCLPR0J\VCASTILL\P0RT\SUB0IID1N Al 3 -1/24/?'! 



"Additional Bonds" means any bonds issued, at any time, by the Commission in 
compliance with and pursuant to Section 2.09 of the Indenture. 

"Agreement" means this Limited Subordinate Credit Facility, as it may be amended or 
supplemented from time to time. 

"Annual Debt Service" means in any Fiscal Year, the principal and interest scheduled to 
become due and payable on the Subordinate Note. 

"Authorized Commission Representative" means the Executive Director of the 
Commission, or the respective successors to the powers and duties thereof, or such other person 
as may be designated to act on behalf of the Commission. 

"Bank" shall mean Canadian Imperial Bank of Commerce, acting through is New York 
Branch. 

"Base Rate" shall mean, for any day, the rate of interest per armum equal to the higher of 
(i) the rate most recently determined and announced by the Bank at its New York Branch as its 
prime commercial lending rate, or (ii) the sum of the Federal Funds Rate in effect for such day 
plus 0.25%. Each change in the interest rate on Loans bearing interest at the Base Rate shall be 
effective as of the effective date of change in the Base Rate. 

"Base Rate Loan" means an extension of credit under this Agreement accruing interest 
at a rate equal to the Base Rate plus the Base Rate Margin. 

"Base Rate Margin" shall mean one quarter of one percent (0.25%) during the Funding 
Period and four-tenths of one percent (0.40%) during the Term Period. 

"Board of Supervisors" means the Board of Supervisors of the City and County of 
San Francisco, as duly elected, appointed and qualified from time to time in accordance with the 
provisions of the Charter. 

"Business Day" means any day except Saturday, Sunday or a day which is not a day for 
trading in dollar deposits by and between banks in the London Interbank Eurodollar market and 
which is not a day on which banks in New York and California and are required to be open. 

"Charter" means the Charter of the City and County of San Francisco, as supplemented 
and amended, and any new or successor Charter. 

"City" means the City and County of San Francisco, a chartered city and county and 
municipal corporation duly organized and existing under and by virtue of the Constitution and 
laws of the State of California. 



N:\SPCLPR0AVCAST1LL\P0RTVSUB0RDIN All -1^4/V7 



"City Bonds" means the general obligation bonds issued by the City for the acquisition, 
construction, repair or extension of the Port Area or of any of the facilities used in connection 
with the Port Area. 

"Closing Date" means the date of this Agreement. 

"Commission" means the Port Commission of the City and County of San Francisco as 
duly constituted from time to time under the Charter, and all commissions, agencies or public 
bodies which shall succeed to the powers, duties and obligations of the Commission. 

"Commitment" shall mean Twelve Million Dollars ($12,000,0000) as reduced 
automatically by the amount of any available principal not borrowed by the Term Loan Date. 

"Enterprise Fund" means the San Francisco Harbor Trust Fund created pursuant to the 
Charter and held by the Treasurer, and any successor to such fund. 

"Event of Default" means any one or more of those events set forth in Section 7.1 
hereof. 

"Facility" means the credit accommodation being provided to the Commission under the 
terms and conditions of this Agreement or any supplement to this Agreement, which credit 
accommodation is the Term Loan as more fully described in Article 2 . 

"Federal Funds Rate" means, for any day, the rate per annum (rounded upward, if 
necessary, to the nearest 1/100 of 1%), as determined by the Bank equal to the weighted average 
of the rates on overnight Federal fimds transactions with members of the Federal Reserve System 
arranged by Federal funds brokers, as published for any day of determination (or if such day of 
determination is not a Business Day, for the next preceding Business Day) by the Federal 
Reserve Bank of New York, or, if such rate is not so published for any day which is a Business 
Day, the average of the quotations for such day on such transactions received by the Bank from 
three Federal funds brokers of recognized standing selected by it. 

"Federal Securities" means (a) direct obligations of the United States of America. 
(b) obligations fully and unconditionally guaranteed as to timely payment of principal and 
interest by the United States of America, (c) obligations frilly and unconditionally guaranteed as 
to timely payment of principal and interest by any agency or instrumentality of the United States 
of America when such obligations are backed by the frill faith and credit of the United States of 
America, or (d) evidences of ownership of proportionate interests in future interest and principal 
payments on obligations described above held by a bank or trust company as custodian, under 
which the owner of the investment is the real party in interest and has the right to proceed 
directly and individually against the obligor and the underlying government obligations are not 
available to any person claiming through the custodian or to whom the custodian may be 
obligated. 



N:\SPCLPROJ\VCASTILL\PORTVSU80RDIN AH -UiVT' 



"Fiscal Year" means the one-year period beginning on July 1 of each year and ending on 
June 30 of the succeeding calendar year, or such other one-year period as the Commission shall 
designate as its Fiscal Year. 

"Funding Period" has the meaning ascribed to that term in Section 2.2ra') hereof. 

"GAAP" means generally accepted accounting principles and practices consistently 
applied modified for government auditing standards. 

"Indenture" means the Indenture of Trust, dated as of June 1 , 1 994, by and between the 
Commission and the Trustee, as supplemented by the First Supplement to Indenture of Trust, 
dated as of June 1, 1994, and may be further amended or supplemented pursuant to the terms of 
the Indenture. 

"Interest Period" " means, as to any Libor Rate Loan, the period commencing on the 
funding date of such Loan, and ending on the date one, two, three or six months thereafter as 
selected by the Commission in its Request for Disbursement (as defmed in Section 2.2 hereof); 
provided, however, that: 

(i) if any Interest Period would otherwise end on a day that is not a Business 
Day, that Interest Period shall be extended to the following Business Day unless the result 
of such extension would be to carry such Interest Period into another calendar montL in 
which event such Interest Period shall end on the preceding Business Day; 

(ii) any Interest Period pertaining to a Libor Rate Loan that begins on the last 
Business Day of a calendar month (or on a day for which there is no numerically 
corresponding day in the calendar month at the end of such Interest Period) shall end on 
the last Business Day of the calendar month at the end of such Interest Period; and 

(iii) no Interest Period shall extend beyond the Termination Date. 

"Libor Rate" means, for any Interest Period, with respect to Libor Rate Loans 
comprising part of the same borrowing, the rate of interest per annum (rounded upward to the 
next 1 /1 000th of 1 .0%) determmed as follows: 

Libor Rate = Libor 

1.00 - Eurodollar Reserve Percentage 

Where, 

"Eurodollar Reserve Percentage" means for any day for any Interest 
Period the maximum reserve percentage (expressed as a decimal, rounded upward to the 
next 1/1 00th of 1 .0%) in effect on such day (whether or not applicable to the Bank) under 
regulations issued from time to time by the Board of Governors of the Federal Reserve 
for determining the maximum reserve requirement (including any emergency. 



N:\SPCLPROAVCASTILL\POR1\SUBORDIN AIJ -1/24.N7 



supplemental or other marginal reserve requirement) with respect to Eurocurrency • 
funding (currently referred to as "Eurocurrency liabilities"); and 

"Libor" means the rate of interest per annum (rounded upward to the next 
1/16 of 1%) determined by Bank as the rate of interest at which United States dollar 
deposits in the approximate amount of the Loan to be made or continued as. or converted 
into, a Libor Rate Loan and having a maturity comparable to such Interest Period would 
be offered by Bank's applicable lending office to major banks in the London interbank 
market at their request at approximately 1 1 :00 a.m. (London time) two (2) Business Days 
prior to the commencement of such Interest Period. 

The Libor Rate shall be adjusted automatically as to all Libor Rate Loans then 
outstanding as of the effective date of any change in the Eurodollar Reserve Percentage. 

"Libor Rate Loan" means an extension of credit under this Agreement accruing interest 
at a rate equal to the Libor Rate plus the Libor Rate Margin. 

"Libor Rate Margin" means three quarters of one percent (0.75%) during the Funding 
Period; and eight tenths of one percent (0.80%) during the Term Period. 

"Lien" means any voluntary or involuntary security interest, mortgage, pledge, claim, 
charge, encumbrance, title retention agreement, or third party interest, covering all or any part of 
the property of the Commission or any other Person. 

"Loan" means a Base Rate Loan or a Libor Rate Loan. 

"Loan Documents" means, individually and collectively, this Agreement, any written 
amendment to this Agreement executed by both parties, the Subordinate Notes, security or 
pledge agreement(s) and all other contracts, instruments, and documents executed from time to 
time in cormection with this Agreement or the extension(s) of credit which is the subject of this 
Agreement; Loan Documents shall not include any interest rate caps, hedge instruments, interest 
rate swaps or other similar products entered into by the Commission and the Bank. 

"Maintenance Facility Relocation Project" means the (1) design and construction of a 
maintenance facility, (2) relocation costs and (3) other costs related to the Project.. 

"Maximum Annual Debt Service" shall mean the maximum amount of annual debt 
service to be paid by the Commission on the Term Loan and the proposed indebtedness to be 
incurred in any 12-month period commencing with the 12-month period beginning with the date 
of calculation and each subsequent 12-month period thereafter to the final payment date on such 
indebtedness. For the purpose of calculating the maximum annual debt service on the Term 
Loan, it shall be assumed that the unpaid principal amount accrues interest at the Base Rate plus 
the Base Rate Margin regardless of whether the Term Loan is accruing interest, in whole or in 
part, at the Libor Rate plus the Libor Rate Margin. For the purpose of calculating the maximum 
annual debt service on any other indebtedness for any period in which the interest rate on such 



N:\SPCLPROJ\VCASTnj. JORT\SfBORDIN AI3 -in*/91 



indebtedness is not fixed, it shall be assumed that such indebtedness shall accrue interest at a rate 
which is equal to ninety percent (90%) of the average Bond Buyer Revenue Bond Index ("RBI") 
or comparable index, or, if no comparable index can be obtained, eighty percent (80%) of the 
interest rate on actively traded United States Treasury obligations. Notwithstanding the 
foregoing, to the extent the Commission has entered into an interest rate cap for any 
indebtedness, it shall at no time be assumed that such indebtedness shall accrue interest at an 
interest rate in excess of such interest rate cap; provided that any provider of any such interest 
rate cap shall have a long-term rating of at least "A2" by Moody's and "A" by Standard & 
Poor's. To the extent the Commission enters into an interest rate swap in connection with any 
indebtedness, no amounts payable under such interest rate swap agreement shall be included in 
the calculation of maximum annual debt service unless the sum of (i) interest payable on such 
indebtedness, plus (ii) amounts payable by the Commission under such interest rate swap 
agreement, less (iii) amounts receivable by the Commission under such interest rate swap 
agreement, is greater than the interest payable on such indebtedness, then, in such instance, the 
amount of such payments to be made by the Commission that exceed the interest payable on 
such indebtedness shall be included in such calculation; provided that any provider of any such 
interest rate swap agreement shall have a long-term rating of at least "A2" by Moody's and "A" 
by Standard & Poor's. Any indebtedness incurred by the Commission for the purpose of 
discharging or paying the Term Loan shall be disregarded for the purposes of Section 5.12. 

"Moody's" means Moody's Investors Service, a corporation existing under the laws of 
the State of Delaware, its successors and assigns, and, if such corporation shall no longer perform 
the functions of a securities rating agency, "Moody's" shall mean any other nationally 
recognized rating agency designated by the Commission. 

"Net Revenue" means Revenue less (i) Operation and Maintenance Expenses and (ii) all 
amounts required for payments of the State Bonds. 

"Obligation" means such obligations of the Commission evidenced by the Loan 
Documents. 

"Operation and Maintenance Expenses" means, for any period, all expenses of the 
Commission incurred for the operation and maintenance of the Port Area, as determined in 
accordance with generally accepted accounting principles. Operation and Maintenance Expenses 
shall not include: (a) the principal of, premium, if any, or interest (including capitalized interest) 
on any Senior Lien Bonds or general obligation bonds issued by the City for Port Area purposes; 
(b) any allowance for amortization, depreciation or obsolescence of the Pon Area; (c) an>- 
expense for which, or to the extent to which, the Commission is or will be paid or reimbursed 
from or through any source that is not included or includable as Revenue, including, but not 
limited to. Special Facility Revenue; (d) any extraordinary items arising from the early 
extinguishment of debt; (e) any costs, or charges made therefor, for capital additions, 
replacements, betterment, extensions or improvements to the Port Area w-hich. under generally 
accepted accounting principles, are properly chargeable to the capital account or any reserves for 
depreciation; (f) any losses from the sale, abandonment, reclassification, revaluation or other 
disposition of any Port Area properties; and (g) extraordinary items that are unusual or unrelated 



N:\SPCLPROJ\VCASTlU\PORT\SUBORXIIN Mi -4/2 W! 



to the Commission's ordinary activities and would occur infrequently. Operation and 
Maintenance Expenses shall include the payment of pension charges and proportionate payments 
to such compensation and other insurance or outside reserve funds as the Commission may 
establish or the Board of Supervisors may require with respect to employees of the Commission, 
as now provided in the Charter. 

"Person" means any individual or entity. 

"Port Area" means all ports, together with facilities and property, which are owned, 
controlled or operated by the Commission or over which the Commission has management, 
supervision or control, or which the Commission deems to be of benefit to the Port. 

"Project" means (l)the Maintenance Facility Relocation Project and (2) the Site 
Acquisition Project and (3) other additional or substitute projects approved by the Bank in 
writing. 

"Qualified Self-Insurance" means either (a) a program of self-insurance, or 

(b) insurance maintained with a fimd, company or association in which the Commission shall 
have a material interest and of which the Commission shall have control, either singly or with 
others, and in each case which meets the requirements of Section 5.5 hereof 

"Regulatory Change" has the meaning ascribed to that term in Section 2.12 hereof. 

"Revenue" means all revenue earned by the Commission from or v^th respect to its 
management, supervision, operation and control of the Port Area, as determined in accordance 
with generally accepted accounting principles. Revenue shall not include: (a) interest income 
on, and any profit realized from, the investment of the proceeds of any Special Facility Bonds or 
Senior Lien Bonds; (b) Special Facility Revenue and any interest income or profit realized from 
the investment thereof, unless such receipts are designated as Revenue by the Commission; 

(c) grants-in-aid, donations and/or bequests, which by their terms would be restricted to uses 
inconsistent with the purposes provided herevmder; (d) insurance proceeds which are not deemed 
to be Revenue in accordance with generally accepted accounting principles; (e) the proceeds of 
any condemnation award; (f) the proceeds of any sale of land, buildings or equipment, to the 
extent such sale is extraordinary' or non-recurring; (g) interest income on, and any profit realized 
from, the investment of monies in (i) the Revenue Bonds Construction Funds or Deliver,' Costs 
Funds or any other construction fimd funded from proceeds of Refunded Bonds (each such 
capitalized term not defined herein as defined in the Indenture), Senior Lien Bonds. Special 
Facility Bonds, or any Subordinate Bonds, (ii) the Revenue Bonds Debt Service Fund (as defined 
in the Indenture) which constitute capitalized interest, to the exient required to be paid into the 
Revenue Bonds Debt Service Fund, or (iii) the Revenue Bonds Reserve Fund (as defined in the 
Indenture) if and to the extent there is any deficiency therein; and (h) any revenue as may have 
been impounded or deposited in the India Basin Sinking Fund created pursuant to Chapter 407, 
Statutes 1909; the Second San Francisco Seawall Sinking Fund created pursuant to Chapter 320, 
Statutes 1909; the Third San Francisco Seawall Sinking Fund created pursuant to Chapter 602, 
Statutes 1913; the Fourth San Francisco Seawall Sinking Fund created pursuant to Chapter 835, 



N;\SPCLPR0AVCASTILL\i>0RT\SUB0RDIN.AI3 -W4/«7 



Statutes 1929; or the Harbor Bond Sinking Fund created pursuant to Chapter 103, Statutes 1958 
1st Ex. Sess.; until and unless all of the State Bonds and the interest thereon are and have been 
paid in full. 

"Revenue Bonds" means any revenue bonds (including Additional Bonds and 
Subordinate Bonds) issued pursuant to the Indenture. 

"Senior Lien Bonds" means Revenue Bonds, State Bonds and City Bonds. 

"Site Acquisition Project" means (1) the acquisition of certain real property owned by 
Cal-Trans, (2) the relocation cost for existing Cal-Trans tenant and (3) other project-related cost. 

"Special Facility" means any existing or planned facility, structure, equipment or other 
property, real or personal, which is at the Port Area or a part of any facility or structure at the 
Port Area and which is designated as a Special Facility pursuant to Section 2.14 of the Indenture. 

"Special Facility Bonds" means any revenue bonds, notes, bond anticipation notes, 
commercial paper or other evidences of indebtedness for borrowed money issued by, or 
certificates of participation executed on behalf of, the Commission to finance a Special Facility, 
the principal, premium, if any, and interest with respect to which are payable from and secured 
by the Special Facility Revenue derived from such Special Facility, and not from or by Net 
Revenue. 

"Special Facility Revenue" means the revenue earned by the Commission from or with 
respect to a Special Facility and which is designated as such by the Commission, including, but 
not limited to, contractual payments to the Commission under a loan agreement, lease agreement 
or other written agreement with respect to the Special Facility by and between the Commission 
and the person, firm, corporation or other entity, either public or private, as shall operate, occupy 
or otherwise use the Special Facility. 

"Standard & Poor's" means the Standard & Poor's Corporation, a corporation 
organized and existing under the laws of the State of New York, and its successors and assigns 
and, if such corporation shall no longer perform the functions of a securities rating agency. 
Standard & Poor's shall mean any other nationally recognized securities rating agency 
designated by the Commission. 

"State Agreement" shall have the meaning given such term in Paragraph A in the 
Background section. 

"State Bonds" means any of the bonds heretofore authorized to be issued by the State of 
California pursuant to Chapter 407, Statutes 1909; Chapter 320, Statutes 1909; Chapter 602, 
Statutes 1913; Chapter 835, Statutes of 1929; Chapter 103, Statutes 1958 1st Ex. Sess.; and now 
outstanding. 



N:\SPCLPR0AVCAST1LL\P0RT\SUB0RDIN A13 -l/24rt7 



"Subordinate Bonds" means any evidences of indebtedness for borrowed money issued 
from time to time by the Commission pursuant to Section 2.10 of the Indenture, including, but 
not limited to, bonds, notes, bond anticipation notes, commercial paper, lease or installment 
purchase agreements or certificates of participation therein. 

"Subordinate Notes" means any promissory note in form and substance attached hereto 
as Exhibit A executed by Commission to evidence the Term Loan or any portion thereof. 

"Supplemental Indenture" means an indenture supplementing or amending the 
provisions of the Indenture which is adopted by the Commission pursuant to Article EX of the 
Indenture. 

"Term Loan" shall have the meaning given such term in Section 2.1 hereof. 

"Term Loan Date" shall mean the first day immediately following the end of the 
Funding Period. 

"Term Period" shall mean the Term Loan Date through the tenth anniversar\^ of Term 
Loan Date. 

"Termination Date" means the earlier of (a) , , 



(b) the date Bank terminates extending credit pursuant to the rights of Bank under Article Seven; 

(c) the date of a prepayment in full of the Term Loan pursuant to Section 2.5 or the date of 

(d) repayment in full of the Term Loan. 

ARTICLE TWO 

THE CREDIT FACILITY AND RELATED TERMS AND CONDITIONS 

Section 2.1. The Facility . 

(a) Term Loan and Subordinate Note . Bank agrees to make a term loan in 
an original principal amount not to exceed the Commitment ('"Term Loan"), the proceeds of 
which shall be used for the Project. The Term Loan shall be disbursed in accordance \\ith the 
procedures set forth in Section 2.2 below. The Term Loan shall be evidenced by one or more 
Subordinate Notes. All disbursement, payments and prepayments made on the Term Loan shall 
be recorded by the Bank on the schedule attached to the Term Loan. However, the failure by the 
Bank to make any such endorsement or any error therein shall not affect the obligations of the 
Commission under the Loan Documents with respect to disbursements or payments made on the 
Term Loan. The Commission may elect to borrow less than the full Commitment without 
penalty or additional charge except for the Commitment Fee due and payable in accordance with 
Section 2.6(b) hereof. 

Section 2.2. Procedures for Borrowing . 



N:\SPCLPROA VCASTILL\PORT\SUBORX>1N AI.1 -JCJ'V" 



(a) Funding . The Term Loan shall be made and disbursed over a three 
hundred and sixty-five (365) day period commencing on the date of this Agreement ("Funding 
Period"). Upon receiving an irrevocable request for disbursement from the Commission in the 
form attached hereto as Exhibit B ("Request for Disbursement"), Bank shall disburse to the 
Commission an amount equal to the requested disbursement amoimt, which amoimt shall be 
$250,000 and integral multiples of $100,000 thereof for all Loans. A Request for Disbursement 
for a Base Rate Loan must be received by the Bank at least one (1) Business Day prior to the 
requested disbursement date; and a Request for Disbursement for Libor Rate Loan must be 
received three (3) Business Days prior to the requested disbursement date. In both cases, the 
Request for Disbursement must be received by [11:00 a.m. San Francisco time]. Each Request 
for Disbursement shall specify the following information: 

(i) the disbursement date of such Loan; 

(ii) the disbursement amount; 

(iii) whether the Loan is to be a Libor Rate Loan or a Base Rate Loan; 
and 

(iv) with respect to a Libor Rate Loan; the duration of the Interest 
Period applicable to such Loan. 

The total disbursements under this Agreement shall not exceed the Commitment unless expressly 
approved by the Bank, the Commission and the Board of Supervisors of the City in writing. 

(b) Credit of Commission's Account . On the disbursement date specified in 
the Request for Disbursement, Bank shall wire transfer or credit to the Commission's account at 
[Bank - Account Number], the total amount of such Loan. The Commission may designate a 
different accotmt or provide alternative wire instructions by providing Bank with a written notice 
thereof. 

(c) Conversion of Loans . The Commission may convert a Base Rate Loan 
into a LIBOR Rate Loan at any time by sending an irrevocable written notice to the Bank by 
[1 1 :00 a.m. San Francisco time] at least three (3) Business Days prior to the proposed conversion 
date. The Commission may convert each Libor Rate Loan at the end of each Interest Period by 
sending an irrevocable written notice to the Bank at least one (1) Business Day prior to the last 
day of the Interest Period of the Libor Rate Loan being converted. Such notice must specify the 
following information: 

(i) the Loan to be converted and, if applicable, the last day of the 
Interest Period for such Loan; 

(ii) if the Loan (all such conversions to be for Loans in the amounts of 
$250,000 and integral multiples of $100,000 thereof) is going to be converted into multiple 
Loans, then the amount of each new Loan; 



10 



N:\SPCLPR0AVCASTILL\P0RTVSUB0RDIN.A13 -W4«1 



(iii) whether the new Loan is to be a Libor Rate Loan or a Base Rate 
Loan; 

(iv) with respect to a Libor Rate Loan, the duration of the Interest 
Period applicable to such Loan; and 

(v) the proposed conversion date. 

(d) Continuation of Libor Rate Loans . The Commission may continue each 
Libor Rate Loan at the end of each Interest Period by sending an irrevocable written notice to the 
Bank by [11:00 a.. San Francisco time] at least three (3) Business Days prior to the last day of 
the Interest Period of the LIBOR Rate Loan being continued. Such notice must specify the 
LIBOR Rate Loan to be continued and the last day of the Interest Period for such Loan (it being 
agreed that all continued Loans shall be in amounts of $250,000 and integral multiples of 
$100,000 thereof); 

(e) Automatic Continuation of Loans . If the Commission has not made an 
election under subsection (c) at least three (3) Business Days prior to the last day of the Interest 
Period, the Loan shall automatically be continued as a Libor Rate Loan with the same Interest 
Period. 

(f) Maximum Number of Libor Rate Loans . At no one time shall there be 
more than five (5) Libor Rate Loans outstanding unless otherwise agreed to by the Bank. 

Section 2.3. Interest Rates . The principal balance of all Loans outstanding shall 
accrue interest at one or more of the Base Rate or the Libor Rate, in accordance with the t\"pes of 
Loans selected by the Commission as set forth below: 

(a) Base Rate Loans . Each Base Rate Loan shall accrue interest on the 
outstanding principal amount thereof, for each day from the date of disburserhent until repayment 
in full, at a rate per annum equal to the Base Rate plus the Base Rate Margin. 

(b) Libor Rate Loans . Each Libor Rate Loan shall accrue interest on the 
outstanding principal amount thereof, for each Interest Period applicable thereto, at a rate per 
annum equal to the Libor Rate plus the Libor Rate Margin. 

(c) Highest Lawful Rate . Anything herein to the contrar\' notwithstanding, if 
during any period for which interest is computed hereunder, the applicable interest rate, together 
with all fees, charges and other payments, which are treated as interest under applicable law. as 
pro\ided for herein or in any other Loan Document, would exceed the maximum rate of interest 
which may be charged, contracted for, reserved, received or collected by the Bank in connection 
with this Agreement under applicable law, the Commission shall not be obligated to pay, and the 
Bank shall not be entitled to charge, collect, receive, reserve or take, interest in excess of such 
maximum rate, and during any such period the interest payable hereunder shall be limited to such 
maximum rate; provided that the obligation of the Bank to make available any Loan shall 



11 



NASPCLPROJWCASTILUPORTVSUBORDIN AH -</J4/97 



terminate to the extent it does not receive the interest rates specified in this Agreement due to 
operation of any such law. 

Section 2.4. Repayment . 

(a) Principal . No principal shall be payable during the Funding Period. The 
Commission shall repay principal on the aggregate principal amount of disbursed Loans over the 
Term Period. Such repayment shall be made in equal quarterly installments payable on 
(February 1, March 1, August 1 and November 1] of each year during the Term Period. The 
Commission's first principal payment shall be due and payable on [August 1, 1998]. To derive 
the quarterly payments, the aggregate principal amount of such Term Loan shall be di\ided by 
the number of quarterly payments in the Term Period. 

(b) Interest . The Commission shall pay interest on the unpaid principal 
amount of the Term Loan from the date hereof to the Termination Date in arrears at the follo\\Tng 
times: 

(i) interest on each Base Rate Loan shall be payable quarterly on 
[February 1, March 1, August 1 and November 1], commencing with the first such date 
following the date of disbursement of such Base Rate Loan, except in the event of prepayment or 
conversion of a Base Rate Loan, in which case all interest that has accrued through such 
prepayment or conversion date shall be payable on such prepayment or conversion date: 

(ii) interest on each Libor Rate Loan shall be payable on the last da>' of 
each Interest Period for such Libor Rate Loan except as hereinafter provided: 

(1) If a Libor Rate Loan is prepaid or converted on a day other 
than the last day of the Interest Period, then all interest that has accrued through such prepayment 
or conversion date shall be payable on such prepayment or conversion date; and 

(2) In cormection with a Libor Rate Loan with a six-monih 
Interest Period, Commission shall pay accrued interest on such Loan ninety (90) days following 
the date of disbursement of such Loan, with the remaining interest payable on the last day of the 
six-month Interest Period; and 

(iii) Should an above interest payment date fall on a day other than a 
Business Day, then interest shall be payable on the first Business Day following the interest 
payment date and interest shall continue to accrue. 

(c) Non-Specific Payments . Notwithstanding Section 2.5 hereof, if the Bank 
receives any funds from the Commission which are not specifically designated as an interest 
payment or a principal payment or as being credited to any specific Loan, the Bank shall 
immediately apply such funds as follows: (1) to any amounts due and payable on the date 
received (other than those amounts described in clauses (2) and (3) below), if any, (2) to interest 
owing on any principal amount, and (3) then to any outstanding principal amount regardless of 



12 



N;\SPCLPROAVCASTILL\PORT\SUBOiU>IN AI5 -l.:*>)7 



whether such amount is due and payable; provided, however, such prepayment shall not cause 
the Commission to incur a breakage fee for a Libor Rate Loan or if such breakage fee would be 
incurred the Bank may hold such funds without applying same as set forth above until it receives 
further written instructions from the Commission. Any amounts prepaid may not be reborrowed. 

Section 2.5. Prepayment . Subject to the provisions of Section 2.12 . the Commission 
shall have the right at its option to prepay at any time any Libor Rate Loan or Base Rare Loan 
without premium or penalty, in integral multiples of One Hundred Thousand Dollars (5100,000) 
or in full, together with accrued interest as of the date of such prepayment on the amount prepaid. 
The Commission shall send written notice to Bank of its intent to prepay. Such notice should 
specify the amount of the prepayment and the Loan(s) to be prepaid. The prepayment notice for 
a Base Rate Loan must be received by the Bank by [1 1 :00 a.m. San Francisco time] at least one 
(1) Business Day prior to prepayment date; and a prepayment notice for a Libor Rate Loan must 
be received by [ILOO a.m. San Francisco time] three (3) Business Days prior to the prepayment 
date. To the extent the Commission fails to select a Loan, then such prepayment shall be first 
applied to the Base Rate Loans and then to Libor Rate Loans in inverse order of maturity, 
provided that prepaying such Libor Rate Loan does not cause the Commission to be liable for 
any breakage fee or if such breakage fee would be incurred the Bank may hold such funds 
without applying same as set forth above imtil it receives further written instructions &om the 
Commission. Any amounts prepaid may not be reborrowed. 

Section 2,6. Fees on the Facility . 

(a) Upfront Fee . The Commission shall pay to Bank no later than the 
Closing Date a one time, non-refundable fee equal to 0.35% times the total amount of the 
Conmiitment specified in Section 2.L 

(b) Commitment Fee . During the Funding Period, the Commission shall pay 
Bank a Commitment Fee equal to one-half of one percent (0.50%) per armum on the imdisbursed 
amount of the Term Loan. Any disbursement occurring on the same day as the last day of any 
calendar quarter shall not be deemed undisbursed for purposes of calculating the Commitment 
Fee. The Commitment Fee shall be payable quarterly in arrears on the last day of each calendar 
quarter ending after the date hereof to and including the last day of the Funding Pence. An)- 
Commitment Fee paid is non-refundable. 

(c) Reimbursement Closing Fees and Expenses . Commission shall pay the 
Bank an amount not to exceed $42,500 as reimbursement of other fees and expenses related to 
closing this Loan, including, without lirnitation, legal fees and expenses. No fees or expenses 
shall be paid or reimbursed imtil the Bank submits an invoice for such fee or expense for which it 
seeks to be paid or reimbursed. 

(d) Disbursement. Conversion or other fees . Bank shall not charge any fee 
or charge in connection with any disbursement of a Loan or the conversion of any Loan. Except 
as expressly provided for in this Agreement, the Commission shall not be charged any additional 
fees, charges or assessments in connection with the Loan Documents. 



13 



N:\SPCLPR0JWCASnLL\P0R'nSUBOi.r(N AP -1/24/S' 



Section 2.7. Default Interest . Upon the occurrence of any Event of Default, to the 
extent permitted by law, interest on any Loans and any other overdue Obligations shall bear 
interest for each day from and including the date payment was due to but excluding the date of 
actual payment at a rate per annum of two percent (2%) above the Base Rate. 

Section 2.8. Computation of Interest and Fees . Interest on Base Rate Loans and 
Commitment Fees shall be computed on the basis of a year of 365 days (or 366 days in a leap 
year) and paid for actual days elapsed. Interest on Libor Rate Loans shall be computed on the 
basis of a year of 360 days and paid for actual days elapsed, which results in higher interesi 
payments than if a 365 day year were used. 

Section 2.9. Bank's Records . 

(a) Bank's Records . Principal, interest, and all other sums owed Bank under 
any Loan Document in respect of any Obligations shall be evidenced by entries in records 
maintained by Bank for such purpose. Each payment on and any other credits with respect to 
principal, interest and all other sums outstanding under any Loan Document in respect of any 
Obligations shall be evidenced by entries in such records. Bank's records shall be conclusive 
evidence thereof. 

Section 2.10. Subordinate Pledge of Net Revenues . 

(a) The Term Loan and all other Obligations shall be secured by a lien on and 
security interest in the Net Revenue, which lien and security interest shall be junior and 
subordinate in all respects solely to the liens and security interests in the Net Revenue for the 
Senior Lien Bonds. For the benefit of the Bank, the Commission hereby grants a lien on and 
security interest in amounts constituting Net Revenues junior and subordinate in all respects to 
the liens and security interests in such Net Revenues for the Senior Lien Bonds. 

(b) Such lien on and security interest in the Net Revenue shall be irre%ocable 
until the Term Loan and all outstanding Obligations have been paid in full and the Bank has no 
further Commitment, which shall be determined by Bank's giving written notice to such effect to 
the Commission (which notice shall be given promptly by the Bank upon the terminarion or 
expiration of the Bank's Commitment). Such lien and security interest shall be valid and binding 
from and after the date hereof and all Net Revenue as and when received by the Commission, 
shall immediately be subject to such lien without any physical delivery thereof or further act. and 
such lien and security interest shall be valid and binding as against all parties having claims of 
any kind in tort, contract or otherwise against the Commission. 

(c) The repayment of the Term Loan and the Obligations shall be junior and 
subordinate to the full and timely repayment of principal, premium, if any, and interesi on the 
Senior Lien Bonds. The Loan Documents are subordinate to the Indenture as set forth in this 
Agreement. 



14 



N:\SPCLPROJ\VCASTlLL\PORT\SUBORr>iX A15 -UliW 



Section 2.11. Limitation on Commission's Obligation . 

(a) The Bank expressly understands and agrees that the Commission has no 
taxing power whatsoever, and nothing herein contained shall be deemed to require the 
Commission to advance any monies derived from the levy or collection of taxes by the City for 
the payment of principal of or interest on the Term Loan. Neither the credit nor the taxing power 
of the City is pledged for the payment of the principal of or interest on the Term Loan, and the 
General Fund of the City is not liable for the payment of the principal of or the interest on the 
Term Loan. Bank cannot compel the exercise of the taxing power by the City or the forfeiture of 
its property or the property of the Commission. 

(b) The principal of and interest on the Term Loan and any premiums upon 
the prepayment of any thereof are not a debt of the Commission nor a legal or equitable pledge, 
charge, lien or encumbrance upon any of its property or on any of its income, receipts or revenue 
except the Net Revenue and other funds that may be legally applied, pledged or otherwise made 
available to their payment as provided herein. 

(c) Neither the Commission nor any officer thereof shall be liable or obligated 
for the payment of the principal of or interest on the Term Loan or for any payment agreed to be 
made or contemplated to be made pursuant to any of the terms of this Agreement, save and 
except solely and exclusively from Net Revenue. Nothing herein contained shall prevent the 
Commission from making advances of its funds howsoever derived to any of the uses and 
purposes in this Agreement mentioned, provided such funds are derived from any source legally 
available for such purpose and may be used by the Commission for such purpose without 
incurring indebtedness. 

Section 2.12. Additional Costs . 

(a) Change in Law . If after the date hereof, the adoption of, or any change 
in, any applicable law, rule or regulation, or any change therein, or any change in the 
interpretation or administration thereof by any governmental authority charged with the 
interpretation or administration thereof (a "Regulatory Change"), or compliance by the Bank 
(or its lending office) with any request, guideline or directive (whether or not having the force of 
law) of any such governmental authority shall impose, modify or deem applicable any reserve, 
special deposit or similar requirement (including any such requirement imposed by the Federal 
Reserve Board, but excluding with respect to any Libor Rate Loan any such requirement 
included in the calculation of the Libor Rate) against assets of, deposits with or for the account 
of, or credit extended by, the Bank's lending office or shall impose on the Bank (or its lending 
office) or on the United States market for the applicable interbank eurodollar market an\ other 
condition affecting its Libor Rate or Libor Rate Loans, and the result of any of the foregoing is to 
increase the cost to the Bank (or its lending office) of making or maintaining any Libor Rate 
Loan, or to reduce the amount of any sum received or receivable by the Bank (or its lending 
office) under this Agreement with respect thereto, by an amount deemed by the Bank to be 
material, then from time to time, within 15 days after demand by the Bank, the Commission shall 



15 



N:\SPCLPROJN VCASTlLL\POR'nSUBORI>IN,AI,l-l/I4.V7 



pay to the Bank such additional amounts as shall compensate the Bank for such increased cost or 
reduction. 

(b) Capital Requirement . If the Bank shall have determined that any 
Regulatory Change regarding capital adequacy, or compliance by the Bank (or any corporation 
controlling the Bank) with any request, guideline or directive regarding capital adequacy 
(whether or not having the force of law) of any governmental authority, has or shall have the 
effect of reducing the rate of return on the Bank's or such corporation's capital as a consequence 
of the Bank's obligations hereunder to a level below that which the Bank or such corporation 
would have achieved but for such adoption, change or compliance (taking into consideration the 
Bank's or such corporation's policies with respect to capital adequacy), by an amount deemed by 
the Bank to be material, then from time to time, within fifteen (15) days after demand by the 
Bank, the Commission shall pay to the Bank such additional amounts as shall compensate the 
Bank for such reduction. 

(c) Requests . Any such request for compensation by the Bank under this 
Section shall state enough detail relating to the compensation sought so that the Commission 
may independently calculate the requested amount. In the absence of error, the Bank's 
calculations shall be conclusive and binding for all purposes. The Commission retains the right 
to establish that the Bank has erred in its calculation. In determining the amount of such 
compensation, the Bank may use any reasonable averaging and attribution methods. 

(d) Illegality . If the Bank shall determine that it has become unlawful, as a 
result of any Regulatory Change, for the Bank to make, convert into or maintain Libor Rate 
Loans as contemplated by this Agreement, the Bank shall promptly give notice of such 
determination to the Commission. Such notice shall provide sufficient detail and explanations as 
to the events and facts supporting the Bank's determination. Upon receiving such notice, the 
obligation of the Bank to make or convert into Libor Rate Loans shall be suspended until the 
Bank gives notice that the circumstances causing such suspension no longer exist. Furthermore, 
the Bank shall have the right to convert any outstanding Libor Rate Loans at expiration of the 
applicable Interest Rate Period or, if earlier, on such date as may be required by the applicable 
Regulatory Change. Bank shall include a request for conversion in its written notice. Any such 
determination shall, in the absence of error, be conclusive and binding for all purposes. The 
Commission has right to establish that the Bank has erred in its determination. 

(e) Funding Assumptions . Solely for purposes of calculating amounts 
payable by the Commission to the Bank under this Section, each Libor Rate Loan made by the 
Bank (and any related reserve, special deposit or similar requirement) shall be conclusiveh 
deemed to have been funded at the interbank rate used in determining the Libor Rate for such 
Libor Rate Loan by a matching deposit or other borrowing in the London interbank eurodollar 
market for a comparable amount and for a comparable period, whether or not such Libor Rate 
Loan is in fact so ftmded. 

Section 2.13. Reimbursement for Funding Losses . If the Commission makes any 
payment or prepayment of principal bearing interest at the Libor Rate on any day other than the 



16 



N:\SPCLPRO^VCAST1LL\PORTSUBORDIN All -t/24,1- 



last day of an Interest Period applicable thereto, then the Commission shall reimburse Bank upon 
its demand for any loss or expense incurred by Bank, including without limitation any interest 
paid by Bank to lenders of funds borrowed by it to make or carry a Loan and any loss incurred in 
obtaining, liquidating or employing deposits from third parties, but excluding loss of margin for 
the period after any such payment; provided that Bank shall have delivered to the Commission a 
certificate as to the amoimt of such loss or expense, and setting forth in reasonable detail the 
calculation thereof. 

Section 2.14. 

(a) No Reduction of Payments . The Commission shall pay all amounts of 
principal, interest, fees and other amounts due under the Loan Documents free and clear of. and 
without reduction for or on account of, any present and future taxes, levies, imposts, duties, fees, 
assessments, charges, deductions or withholdings and all liabilities (exclusive of penalties or 
punitive charges which are a result of Bank's negligence or misconduct) with respect thereto 
excluding, (i) in the case of the Bank, income and franchise taxes imposed on it by the 
jurisdiction under the laws of which the Bank is organized or in which its principal executive 
offices may be located or any political subdivision or taxing authority thereof or therein, and by 
the jurisdiction of the Bank's lending office and any political subdivision or taxing authority- 
thereof or therein and (ii) any present and future taxes, levies, imposts, duties, fees, assessment, 
charges, deductions or withholding imposed by the City and County of San Francisco (all such 
nonexcluded taxes, levies, imposts, duties, fees, assessments, charges, deductions, withholdings 
and liabilities being hereinafter referred to as "Taxes"). If any Taxes shall be required by law to 
be deducted or withheld from any payment, the Commission shall increase the amount paid so 
that the Bank receives when due (and is entitled to retain), after deduction or withholdings 
applicable to additional sums payable under this Section), the full amount of the payment 
provided for in the Loan Documents provided it is permissible under law. 

(b) Deduction or Withholding: Tax Receipts . If the Commission makes 
any payment hereunder in respect of which it is required by law to make any deduction or 
withholding, it shall pay the full amount to be deducted or withheld to the relevant taxation or 
other authority within the time allowed for such payment under applicable law and promptly 
thereafter shall furnish to the Bank an original or certified copy of a receipt evidencing pa\Tnent 
thereof, together with such other information and documents as the Bank may reasonabh" 
request. 

ARTICLE THREE 

REPRESENTATIONS AND WARRANTIES 

Section 3.L Except as otherwise provided in Section 3A(h) hereof the Commission 
represents and warrants as follows on the Closing Date, the dates any Loan is advanced during 
the Funding Period, and the last day of the Funding Period. 



17 



N:\SPCLPR0AVCASTILL\PORT\SUB0IUXN AIJ -W4«7 



(a) Due Organization . The Commission is duly constituted public 
commission of the City and County of San Francisco organized and validly existing pursuant to 
the State Agreement and the Charter of the City and County of San Francisco. 

(b) Authorization . The Loan Documents executed by the Commission are 
within the Commission's powers, have been duly authorized by the Commission and the Board 
of Supervisors of the City. The Loan Documents have been duly executed and delivered by the 
Commission. 

(c) No Conflict or Violation . The Loan Documents do not conflict with or 
violate the Charter or other applicable State or local law. 

(d) Valid and Binding . The Loan Documents constitute valid and binding 
obligations of the Commission, enforceable in accordance with their terms, except insofar as 
enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or 
similar laws affecting the enforcement of creditors' rights and remedies generally, and by general 
principles of equity, whether applied by a court of law or equity and by limitations on legal 
remedies against public agencies in the State of California. 

(e) Other Agreements . The Commission is not a party to any agreement 
which would prohibit the Commission from entering into the Loan Documents or incurring or 
performing the obligations under the Loan Documents. 

(f) Defaults . The Commission is not in default on any agreement or other 
instrument for borrowed money. 

(g) Event of Default . No Event of Default or event or condition which with 
notice or lapse of time or both would constitute an Event of Default has occurred and is 
continuing. 

(h) Disclosure . The representations and statements made by the Commission 
herein or in any Loan Document, or made by the Commission in any other document furnished 
to the Bank by the Commission in connection herewith or therewith are accurate as of the date of 
this Agreement. All financial statements of the Commission furnished to the Bank v^ere 
prepared in accordance v-ith GAAP applied on a consistent basis throughout the periods 
involved. Since the date of the most recent financial statements referred to in the preceding 
sentence, no material adverse change has occurred in the business, operations or conditions of the 
Commission or the management or operation of the Port which might impair the abilit\' of Port to 
meet its obligations under this Agreement. 



18 



N 'SPCLPROr\r.\SnLL\J>ORrSLBORDIN A13 -irum 



ARTICLE FOUR 

CONDITIONS PRECEDENT 

Section 4.1. Required Delivery . The obligation of Bank to extend credit hereunder on 
the Closing Date is subject to: 

(a) the execution and delivery to the Bank by the Commission of this 
Agreement and the initial Subordinate Note. 

(b) the filing of a UCC-1 financing statement evidencing the subordinate lien 
on the Net Revenues. 

(c) delivery to the Bank of opinion(s) of legal counsel. 

(d) the payment of all fees and expenses of the Bank provided for in this 
Agreement. 

(e) delivery to the Bank of a Request for Disbursement 

ARTICLE FIVE 

COVENANTS 

Section 5.1. Payment of Principal and Interest . The Commission covenants and 
agrees that it promptly v^ll pay or cause to be paid the principal of and interest on the Term Loan 
and all other Obligations hereunder at the place, on the dates and in the manner provided herein. 
but solely from the sources pledged to such payment. 

Section 5.2. Covenant to Maintain Net Revenue Coverag e. The Commission 
covenants and agrees that it will maintain its business operations and establish and maintain at all 
times rentals, rates, fees and charges for the use of the Port Area and for services rendered by the 
Commission in connection with the Port Area so that Net Revenue less the annual debt service 
on the Revenue Bonds and the City Bonds in each Fiscal Year will be at least equal to one 
hundred fifteen percent (115%) of aggregate Annual Debt Service for such Fiscal Year. 

Section 5.3. Operation and Maintenance of Port Area . 

(a) The Commission covenants that it will operate and maintain the Port Area 
as a revenue producing enterprise in accordance with the Act. The Commission will make such 
repairs to the Port Area as shall be necessary or appropriate in the prudent management thereof 
The Commission covenants that it will operate and maintain the Port Area in a manner which 
will entitle it at all times to charge and collect fees, charges and rentals in accordance with Port 
use agreements, if any, or as otherwise permitted by law, and shall take all reasonable measures 



19 



N;\SPCLPRO/\VCASTILL\POR-nSlJBORDlN AIJ -4a4/>)7 



permitted by law to enforce prompt payment to it of such fees, charges and rentals when and as 
due. 

(b) The Commission will, from time to time, duly pay and discharge, or cause 
to be paid and discharged, any taxes, assessments or other governmental charges lawfully 
imposed upon the Port Area or upon any part thereof, or upon the revenue from the operation 
thereof, when the same shall become due, as well as any lawful claim for labor, materials or 
supplies which, if unpaid, might by law become a lien or charge upon the Port Area or such 
revenue, or which might materially impair the security of the Bank. Notwithstanding the 
foregoing, the Commission need not pay or discharge any tax, assessment or other governmental 
charge, or claim for labor, materials or supplies, if and so long as the Commission shall contest 
the validity or application thereof in good faith. If a final unappealable judgment has been 
entered against the Commission, then the Commission shall pay the amounts required by said 
judgment. 

(c) The Commission will continuously operate the Port Area so that all lawful 
orders of any governmental agency or authority having jurisdiction in the premises shall be 
complied with, but the Commission shall not be required to comply with any such orders so long 
as the validity or application thereof shall be contested in good faith. 

Section 5.4. Maintenance of Powers; Retention Assets . 

(a) The Commission covenants that it will use its best efforts to maintain the 
powers, functions, duties and obligations now reposed in it pursuant to law, and will not at any 
time voluntarily do, suffer or permit any act or thing the effect of which would be to hinder, 
delay or imperil either the payment of the indebtedness evidenced by the Term Loan or any other 
Obligation secured hereby or the performance or observance of any of the covenants or other 
agreements contained in the Loan Documents. 

(b) The Commission covenants that it will not dispose of material assets 
necessary to operate the Port Area in the manner and at the levels of activity required to enable it 
to perform its covenants contained in the Loan Documents. 

Section 5.5. Insurance . Subject in each case to the condition that insurance is 
obtainable at reasonable rates from responsible insurers and upon reasonable terms and 
conditions, the Commission shall procure or provide and maintain, at all times while any of the 
Bonds shall be outstanding, insurance or a self-insurance program on the Port Area against such 
risks as are usually insured by other ports which are similar in their operations to the Pon Area. 
Such insurance or self-insurance program shall be in an adequate amount as to the risk insured 
against as reasonably determined by the Commission. The Commission need not carry insurance 
or maintain self-insurance program against losses caused by land movement, including, but not 
limited to, seismic activity. 

Section 5.6. Financial Records and Statements . The Commission shall maintain 
proper books and records; full and correct entries shall be made in accordance with GAAP, of all 



20 



N:\SPCLPROAVCASTlLL\PORTVSUBORDIN A13 -tQVr 



its business and affairs. The Commission shall have an annual audit made by an Independent 
Auditor and shall within one hundred eighty (180) days (but in any event, as soon as publicly 
available) after the end of each of its Fiscal Years furnish to Bank a copy of the audited financial 
statements of the Commission for such Fiscal Year. 

Section 5.7. Adoption of Maintenance and Operation Budget . In order to assure 
the efficient management and operation of the Port Area, the Commission covenants and agrees 
that it will each year prepare a preliminary budget for monies in the Enterprise Fund wixh respect 
to all Operation and Maintenance Expenses (the "Operation and Maintenance Expense 

Budget"). Such Operation and Maintenance Expense Budget shall be exclusive of expenditures 
with respect to capital expenditures. Such Operation and Maintenance Budget shall be prepared 
in tentative form on or before June 1 of each year to cover the ensuing Fiscal Year. Such 
preliminary budget shall be subject to amendment and final adoption, and shall be finally 
adopted by action of the Commission, and when finally adopted shall become the final budget of 
the Commission and shall be submitted to the Board of Supervisors of the City for approval. 

Section 5.8 Revenue Bonds . The Commission may issue Revenue Bonds provided 
that all the conditions and requirements for the issuance of such Revenue Bonds contained in the 
Indenture are met. Any Revenue Bonds hereinafter issued shall be Senior Lien Bonds for the 
purpose of the Loan Documents. 

Section 5.9 Regulation U . The Commission shall not request or obtain any Loan 
for the purpose of purchasing or carrying any margin stock (within the meaning of Regulation U 
of the Federal Reserve Board); the Commission is not engaged and shall not engage in the 
business of extending credit to others for such purpose; and no part of any Loan will be used to 
purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or 
carrying any margin stock. 

Section 5.10 Affirmation of Representation and Warranties . The Commission 
shall deliver a certificate reaffirming the representation and warranties contained in Article Tliiee 
when the Commission delivers its audited financial statements to the Bank. 

Section 5.11 Modifications to Other Documents . The Commission may not amend 
Section 2.09 of the Indenture, any of the defined terms set forth therein, or any of the loan 
documents relating to the Cal-Boating Loan without the Bank's prior written consent in each 
instance. 

Section 5.12 Incurrence of Indebtedness . The Commission may not incur any 
additional indebtedness with a pledge, lien or security interest on par with the lien granted to the 
Bank hereunder unless the Net Revenues in the most recent Fiscal Year are at least equal to one 
hundred fifteen percent (115%) of the Maximum Annual Debt Service on the Term Loan and the 
proposed indebtedness to be incurred. The foregoing limitation does not apply to (i) any Senior 
Lien Bonds or (ii) any indebtedness with a pledge, lien on or security interest in Net Re\enues 
which are junior and subordinate to the Term Loan. The foregoing calculation shall be done by 



21 



NASPCLPROJ\VCASTlLL\PORT\SUBC«D(N A15 -4/JJyV7 



an independent certified public accountant selected by the Commission and reasonably 
acceptable to the Bank; and such calculation shall be conclusive. 

Section 5.13 Further Assurances . The Commission shall, at the Bank's request, 
take such further action as is reasonably requested by the Bank in connection with the 
performance of the Commission's obligations under the Loan Documents. 

ARTICLE SIX 

BANK REPRESENTATION, WARRANTIES AND COVENANTS 

Section 6.1. Representations and Warranties . Bank represents and warrants as 
follows: 

(a) Bank is duly organized and validly existing in good standing under the 
laws of the State of . 

(b) The execution, delivery and performance of all Loan Documents executed 
by Bank are within Bank's powers, have been duly authorized and are not in conflict with the 
terms of the organizational documents of the Bank or any laws affecting the Bank; all such Loan 
Documents are valid binding obligations of the Bank, enforceable in accordance with their terms, 
except insofar as enforcement may be limited by applicable bankruptcy, insolvency, 
reorganization, moratorium or similar laws affecting the enforcement of creditors' rights and 
remedies generally, and by general principles of equity, whether applied by a court of law or 
equity. 

(c) Bank is and shall be throughout the Funding Period, a national bank 
association, a corporation subject to registration with Board of Governors of the Federal Reserve 
System under the Bank Holiday Company Act of 1956 or other domestic corporation, whose 
unsecured obligations or uncollateralized debt obligations have been assigned a long-term debi 
rating of at least "A2" by Moody's and an "A" by Standard & Poor's, respectively. 

Section 6.2. Rating Downgrade . Bank agrees to immediately notify the 
Commission should either of its ratings fall below the requirements specified above in 
Section 6.1(c) during the Funding Period. 

ARTICLE SEVEN 

EVENTS OF DEFAULT 

Section 7.1. Events of Default . 

(a) Events of Default . The following events shall constitute an event of default 
under this Agreement: 



22 



N:\SPCLPROA VCASTILUPOR'nSUBORDIN AH — 1/24«7 



(i) Commission shall fail to make any payment of principal or interest 
when due under this Agreement and such failure continues for more than three (3) Business Days 
after Bank gives written notice to the Commission of the delinquency; provided, that, any 
principal amount not paid when originally due (irrespective of any grace period hereunder) shall 
accrue interest at the default rate described in Section 2.7 from the due date until paid. 

(ii) Commission shall fail to make any payment of any fees or other 
charges when due and such failure continues for more than ten (10) days after any fees or other 
charges are due. 

(iii) Commission shall fail to perform any obligation other than as 
described in clauses (i) and (ii) above under any Loan Document and such failure continues for 
more than sixty (60) days after the Bank gives notice to the Commission of such failure provided 
that any non-performance of obligations under Sections 5.2, Section 5.8 and Section 5.12 shall 
be immediate Events of Default without any grace period or requirement of notice. 

(iv) Any material representation or warranty made, or financial 
statement, certificate or other document provided, by Commission shall prove to have been false 
or misleading in any material respect. 

(v) Coimnission shall fail to pay its debts generally as they become due 
or shall file any petition or action for relief under any bankruptcy, insolvency, reorganization, 
moratorium, creditor composition law, or any other law for the relief of or relating to debtors; an 
involuntary petition shall be filed imder any bankruptcy law against Commission which petition 
is not dismissed v^thin sixty (60) days of the filing, or a custodian, receiver, trustee, assignee for 
the benefit of creditors, or other similar official, shall be appointed to take possession, custody or 
control of the properties of Commission. 

(b) Remedies . The occurrence of any of the events described above shall 
(1) terminate any obligation of Bank to make any further disbursement under this Agreement; 
and shall, at Bank's option; (2) make all sums of interest, principal and any other amounts owing 
under any Loan Documents immediately due and payable without notice of default, presentment 
or demand for payment, protest or notice of nonpayment or dishonor or any other notices or 
demands subject to subsection (c) below; and (3) give Bank the right to exercise any other right 
or remedy provided by contract or applicable law. In connection with an action against the 
Commission in which the Bank is the prevailing party, Bank shall be entitled to recover its 
reasonable cost incurred in such action, including reasonable attorneys fees and expenses. 

(c) Limited Acceleration Right . Notwithstanding anything to the contran.' in 
the Loan Documents, Bank may not elect to accelerate the amounts due and owing hereunder 
unless and until an acceleration of the Senior Lien Bonds has occurred under Section 7.02 of the 
Indenture. No limitation is intended hereunder with respect to the Bank's ability to exercise any 
of its other rights or remedies under the Loan Documents or at law. 



23 



N;VSPCLPR0J\VCASnLL\PORT>SUBORDIN AH -4/24«7 



(d) Automatic Conversion of Libor Loans and Default Rate . Upon an Event 
of Default, all Libor Rate Loans shall automatically convert into Base Rate Loans at the end of 
the applicable Interest Period and shall accrue interest at the default rate. 

ARTICLE EIGHT 

DISCHARGE OF OBLIGATIONS 

Section 8.1. Discharge of Obligations . 

(a) Subject to the effect of Section 2.12, the Commission, at its sole option, 
mav elect to either: 



(i) prepay any or all outstanding Loans, in whole or in part, pursuant 



to Section 2.5 : or 



(ii) deposit with a trustee or escrow agent for the exclusive benefit of 
Bank, sufficient monies or Federal Securities, the principal of and the interest on which securities 
when due will provide monies sufficient to pay all principal and interest on any or all outstanding 
Loans to the prepayment date or dates so specified by the Commission, provided that the Bank 
shall have received the report of an independent certified public accountant or firm of such 
accountants or others in a form and substances satisfactory to Bank to the effect that the amount 
deposited is sufficient to make the payments specified herein with respect to the payment of 
Loans to be prepaid, 

(b) Upon the Commission satisfying either (i) or (ii) in subsection (a) above, 
and so long as all other Obligations have been paid and Bank has no further Commitment, the 
subordinate pledge of and lien on Net Revenues provided herein shall terminate and all right, title 
and interest of the Bank herein and the obligation of the Commission hereunder with respect to 
Loans to be prepaid, as applicable, shall thereupon cease, terminate, become void and become 
completely discharged and satisfied. 

ARTICLE NINE 

GENERAL PROVISIONS 

Section 9.1. Notices . Unless otherwise expressly specified or permitted by the term 
hereof, all notices, consents or other communications required or permitted hereunder shall be 
deemed sufficiently given or served if given in writing, mailed by first class mail, postage 
prepaid and addressed as follows: 



24 



NXSPCLPRO/WCASTILUPORTSUBORDIN Al? -uliff 



To Commission: 

San Francisco Port Commission 
Ferry Building, Suite 3100 
San Francisco, C A 94111 
Attn: Finance Manager 

Phone: ( ) - 

Fax: ( ) - 



with copies to Port's General Counsel 
To Bank: 



Attn: Manager, Loan Section 

Phone: ( ) - 

Fax: ( ) - 

Each party may change the address to which notices, requests and other communications are to 
be sent by giving written notice of such change to the other party. 

Section 9.2. Binding Effect . The Loan Documents shall be binding upon and inure 
to the benefit of Commission and Bank and their successors and assigns; provided, however, that 
Commission and Bank may not assign or transfer their respective rights or obligations under any 
Loan Document without the other's prior written consent. 

Section 9.3. Amendments and Waivers . No amendment to any provision of this 
Agreement and the other Loan Documents shall be effective unless it is in writing and has been 
signed by the Bank and the Commission, and no waiver of any provision of this Agreement or 
any other Loan Document, or consent to any departure by the Commission shall be etfecti\e 
unless it is in writing and has been signed by the Bank and the Commission. An>- such 
amendment, waiver or consent shall be effective only in the specific instance and for the specific 
purpose for which given. All amendments and waivers require approval of the Bank. 
Commission and Board of Supervisors. 

Section 9.4. Rights Cumulative . All rights and remedies existing under the Loan 
Documents are cumulative to, and not exclusive of, any other rights or remedies available under 
contract or applicable law. 

Section 9.5. Unenforceable Provisions . Any provision of any Loan Document 
which is prohibited or unenforceable in any jurisdiction, shall be so only as to such jurisdiction 



25 



NASPCLPR0J\VCASTILL\POR'nSUBORDIN A13 -•.■24rt7 



and only to the extent of such prohibition or unenforceability, but all the remaining provisions of 
any such Loan Document shall remain valid and enforceable. 

Section 9.6. Governing Law . Except as may be otherwise expressly stated therein, 
the Loan Documents shall be governed by and construed in accordance with, the laws of the 
State of California. Both parties agree that any actions to enforce the provisions hereof must be 
brought in a state or federal court of competent jurisdiction only within the State of California. 

Section 9.7. Accounting Terms . Except as otherwise provided in this Agreement, 
accounting terms and financial covenants and information shall be determined and prepared in 
accordance with GAAP. 

Section 9.8. Prohibited Interests . Bank states that it is familiar with provisions of 
Section 8.105 of the Charter of the City of San Francisco, and Section 871(X) et seg. of the 
Government Code of the State of California, incorporated herein by reference and made a part 
hereof, and certifies that it does not know of any aspects of its business or personal practices that 
constitute a violation of said sections. No member of the Board of Supervisors of the City and 
County of San Francisco, officer or employee of the City and County of San Francisco during 
his or her tenure or for one year thereafter shall have an interest, direct or indirect, in this 
Agreement or the proceeds thereof. No officer, director, or employee of Bank, nor any member 
of a Bank officer's, director's, employee's or family, shall serve on a City board or committee, 
or hold any position that either by rule, practice or action nominates, recommends, or supervises 
Bank's operations, or authorizes funding to Bank. 

Section 9.9. Assignment . The Commission shall not have the right to assign its 
rights and obligations under the Loan Documents or any mterest in the Loan Documents without 
the prior written consent of the Bank not to be unreasonably withheld if assigned or transferred 
to the State of California. The Bank shall not sell, assign or transfer all or any portion of the 
Bank's rights and obligations under Loan Documents during the Funding Period without the 
prior written consent of the Commission not to be unreasonably withheld. After the Funding 
Period, Bank may sell, assign or transfer all or any portion of the Bank's rights and obligations 
under Loan Documents to any party that can comply with all the terms and conditions in the 
Loan Documents, provided that such sale or transfer is not a "public offering" as defined in the 
Securities Act of 1933. In connection with the foregoing assignment. Bank must provide the 
Commission prior written notice. 

Section 9.10. Commission Acting in Proprietary Capacity Only . Commission 

understands and agrees that the Commission is entering into this Agreement in its proprietary 
capacity and not as a regulatory agency with police powers. Nothing in this Agreement shall 
limit m any way Commission's obligation to obtain any required approvals from City 
departments, boards, or commissions havmg jurisdiction over this matter. 

Section 9.11. Consent . If consent or approval of Commission is required, such 
consent or approval must be given by the Executive Dnector of the Commission. The giving of 



26 



N:\SPCLPR0J\VCAST1LL\P0R1\SUB0RDIN AIJ -tntm 



consent or approval in any one or more instances shall not be deemed to limit or excuse the need 
for such consent or approval in any other or subsequent instances. 

Section 9.12. MacBride Principles . The City urges companies doing business in 
Northern Ireland to move towards resolving employment inequities and encourages such 
companies to abide by the MacBride Principles as expressed in San Francisco Administrative 
Code Section 12F.1 et seq. The City also urges San Francisco companies to do business with 
corporations that abide by the MacBride Principles. Contractor acknowledges that it has read 
and understands the above statement of the City concerning doing business in Northern Ireland. 

Section 9.13. Tropical Hardwood Ban . The City urges companies not to import, 
purchase, obtain or use, for any purpose, any tropical hardwood or any tropical hardwood 
product. 

Section 9.14. Drug-Free Work Place . If Bank is required by its performance under 
this Agreement to comply with the Drug Free Work Place Act of 1988 (Pub. L. 100-690, Title 
V, Subtitle D), Bank shall abide by all applicable terms and conditions of that Act. 

Section 9.15. Burma (Myanmar^ Business Prohibition . 

(a) Bank is not the government of Burma (Myanmar), a person or business 
entity organized under the laws of Burma (Myanmar) or a "prohibited person or entity" as 
defined in Section 12J.2(G) of the San Francisco Administrative Code. The Commission 
reserves the right to terminate this Agreement for default if Bank violates the terms of this 
Section 9.15 . 

(b) Chapter 12J of the San Francisco Administrative Code is hereby 
incorporated by reference as though fiilly set forth herein. The failure of Bank to comply with 
any of its requirements shall be deemed a material breach of this Agreement. In the event that 
Bank fails to comply in good faith with any of the provisions of Chapter 12J of the San Francisco 
Administrative Code, Bank shall be liable for liquidated damages for each violation in an amount 
equal to Bank's net profit under this Agreement, or 10% of the total amount of the contract, or 
$1,000, whichever is greatest. Bank acknowledges and agrees that the liquidated damages 
assessed shall be payable to the City upon demand and may be set off against any moneys due to 
the Contractor from any City contract. 

Section 9.16. Captions . All the captions contained in this Agreement are for 
convenience in reference and are not intended to define or limit the scope of any provision of this 
Agreement. 



'■b^ 



Section 9.17. Equal Employment Opportunities and Equal Benefits . 

(a) Bank agrees to comply fully with all provisions of Chapters 12B and 1 2D 
of the San Francisco Administrative Code, as amended from time to time (the "Administrative 



27 



N:\SPCLPROJ\VCASTILL\POR'nSUBORDIN AI3 -4/J4rt7 



Code"). Such provisions are incorporated herein by reference and made a part of this Agreement 
as though fully set forth herein. 

(b) In the event Bank willfully fails to comply with any of the provisions of 
Chapter 12D, Bank shall be liable for liquidated damages for each contract in an amount equal 
to Bank's net profit on the contract, or ten percent (10%) of the total amount of the contract, or 
one thousand dollars ($1,000), whichever is greatest. The amount of liquidated damages 
imposed will be determined by the Director of the Human Rights Commission ("HRC") after 
investigation pursuant to Section 1 2D. 14(c). By entering into this Agreement, Bank 
acknowledges and agrees that any liquidated damages assessed by the Director of the HRC shall 
be payable to City upon demand. Bank further acknowledges and agrees that any liquidated 
damages assessed may be withheld from any moneys due to Bank on any contract or agreement 
with City. 

(c) Pursuant to Section 12B.2(h) of the Administrative Code, a penalty of fifty 
dollars ($50) for each person for each calendar day during which such person was discriminated 
against in violation of the provisions of this Agreement may be deducted from payments due to 
Bank. 

Section 9.18. Participations . Bank shall not participate or assign any portion of the 
Term Loan in a public offering as defined in the Securities Act of 1933 without the prior written 
consent of the Commission. 

Section 9.19. Benefits of Agreement . The Loan Documents are entered into for the 
sole protection and benefit of the parties hereto and their successors and assigns, and no other 
Person shall be a direct or indirect beneficiary of, or shall have any direct or indirect cause of 
action or claim in connection with, any Loan Document. 

Section 9.20. Binding Effect . This Agreement shall become effective when it shall 
have been executed by the Commission and the Bank and thereafter shall be binding upon, inure 
to the benefit of and be enforceable by the Commission, the Bank and their respective successors 
and assigns. 



'to-' 



Section 9.21. Entire Agreement . The Loan Documents reflect the entire agreement 
between the Commission and the Bank with respect to the matters set forth herein and therein 
and supersede any prior agreements, commitments, drafts, communication, discussions and 
understandings, oral or written, with respect thereto. 

Section 9.22. Severability . Whenever possible, each provision of the Loan 
Documents shall be interpreted in such manner as to be effective and valid under all applicable 
laws and regulations. If, however, any provision of any of the Loan Documents shall be 
prohibited by or invalid under any such law or regulation in any jurisdiction, it shall, as to such 
jurisdiction, be deemed modified to conform to the minimum requirements of such law or 
regulation, or, if for any reason it is not deemed so modified, it shall be ineffective and invalid 



28 



N;\SPCLPROJWCASTlLL\POR'nSUBORDIN AI3 -imm 



only to the extent of such prohibition or invalidity without affecting the remaining provisions of 
such Loan Document, or the validity or effectiveness of such provision in any other jurisdiction. 

Section 9.23. Survival . All covenants, agreements, representations and warranties 
made by the Commission in any Loan Documents shall, except to the extent otherwise provided 
therein, survive the execution and delivery of this Agreement, the making of the Loans, and shall 
continue in full force and effect so long as the Bank has any Commitment, any Loans remain 
outstanding or any other Obligations remain unpaid or any obligation on the part of the 
Commission to perform any other act under any Loan Document remains unsatisfied. 

Section 9.24. Indemnity . The Commission hereby agrees to indemnify the Bank from 
and against any and all claims, damages, losses, liabilities, costs or expenses whatsoever 
(including, without limitation, reasonable attorneys' fees and expenses) incurred by reason of or 
in connection with the enforcement or preservation of the Bank's rights hereunder or under any 
other Loan Document; provided, however, that the Commission shall not be required to 
indemnify the Bank for any claims, damages, losses, liabilities, costs or expenses to the extent 
caused by the Bank's gross negligence or willful misconduct. Notwithstanding any other 
provision of this Agreement or any of the other Loan Documents, the Commission's obligation 
to make payment pursuant to this Section 9.24 shall be payable only from the Net Revenues of 
the Port. 



29 



N:\SPCLPR0J\VCAST1LL\P0RT\SUB0RDIN All -WA^" 



IN WITNESS WHEREOF, Commission and Bank have executed this Agreement as of 
the date set forth in the preamble. 



CANADIAN IMPERIAL BANK OF 
COMMERCE, New York Branch 



Approved as to form and legalit}' this 
day of , 1997 

LOUISE H. RENNE 
City Attorney 



By:. 



By:_ 
Name: 
Title: 



PORT COMMISSION OF SAN FR--\NCISCO 



By:_ 

Name: 
Title: 



Deputy City Attorney 



30 



N:\spcLPRonvcAsnu. ronrsLBOKDW A 1 1 -1/24™- 



EXHIBIT A 



FORM OF SUBORDINATE NOTE 



N:\SPCLPROI\VCASTIU. J>ORT\SUBORDIN AH - 4/llt«1 



EXHIBIT B 



FORM OF REQUEST FOR DISBURSEMENT 



N:\SPCLPROJ\VCASTlLL\POR'nSUBORDIN AI3 - i/MWn 



SAN FRANCISCO 
PORT COMMISSION 



MAY 5, 1997 

MINUTES OF THE SPECIAL MEETING 



MEMBERS, PORT COMMISSION 

HON. MICHAEL HARDEMAN, PRESIDENT 
HON. DENISE McCARTHY, VICE PRESIDENT 
HON. FRANKIE G. LEE 
HON. JAMES HERMAN 



DOUGLAS F. WONG, EXECUTIVE DIRECTOR 



DOCUMENTS DEPT. 

OCT 8 1399 

SAN FRANCISCO 
PUBLIC LIBRARY 



CITY & COUNTY OF SAN FRANCISCO 
PORT COMMISSION 

MINUTES OF THE SPECIAL MEETING 
MAY 5, 1997 



1. ROLL CALL 

The meeting was called to order by Commission President Michael Hardeman at 
2:07 p.m. The following Commissioners were present: Michael Hardeman, Denise 
McCarthy, Frankie Lee and James Herman. 

2. FINANCE AND ADMCSflSTRATION 

Authorization for the Port to enter into a ten-year loan for $12 million to finance 
the Maintenance Facility Relocation Project and the CalTrans Site Acquisition 
Project and related closing costs: authorization for the Executive Director to 
ne gotiate an interest rate cap to mitigate interest rate risk on the loan, and, 
authorization for a Supplemental Appropriation to appropriate loan proceeds for the 
Maintenance Facility Relocation Project. (Resolution No. 97-38) 

Mr. Ben Kutnick, Director of Finance and Administration, stated that minor 
changes were made to the original memorandum and extensive changes were made 
to the resolution. The most significant of which is staff recommends deleting the 
$4.5 million from the supplemental appropriation for the funding of the CalTrans 
purchase at this time. Staff will seek approval from the Commission at a later time 
once the negotiation is close to being finalized. Staff also requested the 
Commission to authorize the Executive Director to make non-material changes to 
the loan and cap agreement if they do not increase the cost or obligations or 
liability of the Port. 

Mr. Kutnick mentioned that this is for the purchase of the CalTrans site and the 
relocation of the Port's Maintenance Department to Pier 50D Shed. Several 
improvements have to be made to Pier 46. Mr. Doug Wong and Alex Lee were 
able to reduce the overall cost of the project from its original estimate of in excess 
of $17 million to $12 million. This was accomplished by having the Port 
maintenance personnel perform the work rather than hiring contractors. As well, 
significant improvements to Pier 50D were also made by the Port's maintenance 
personnel. The total cost for the Maintenance Relocation Project is $7,050,000. 
The total cost for the CalTrans Site Acquisition Project is $4,450,000 although 
these funds will not be appropriated at this time. The cost of the loan issuance is 

M050597.igq -1- 



$500,000. 

Port tenants will be relocated from Pier 46B to Piers 50, Sheds A, B and C. A 
cost benefit analysis, comparing the cost of the improvements to those facilities 
with the revenue, was conducted by staff. The overall payback period is estimated 
to be 2-V2 years. The overall return investment is 28,6 percent. 

The CalTrans site is $3.6 million. The Port has conmiitted up to half a million 
dollars for tenant relocation. There is approximately $350,000 in closing cost 
associated with the deal. 

Loan Terms and Conditions: Staff proposed to borrow up to a ceiling of $12 
million. There is a one-year draw period, which means funds have to be drawn 
down from the bank within 12 months of closing the loan. The repayment period is 
a ten-year term to be made in equal quarterly principal payments. There is no 
prepayment penalty if the debt is repaid on an interest payment date. The loan fee 
will be $42,000. The conmiitment fee will be 50 basis points on the undrawn 
commitment during the one year draw period based on the actual draw amount. 

Commissioner Lee asked if the Port has to pay for the commitment fee for the 
amount that is not being used during the year. Mr. Kutnick replied to the 
affirmative because the bank has committed to the availability of the funds. It was 
his understanding that this is a standard provision for commercial loans. After one 
year, the draw period is over and there is no conmiitment fee. We simply pay for 
interest on the balance of the loan. 

Mr. Kutnick reiterated that staff is requesting Commission's approval of the $12 
million loan. However, staff at this time is not requesting approval for the 
supplemental appropriation authorizing the expenditure of these funds for the 
CalTrans project. Commissioner Lee asked why not. Legal Counsel Julie Van 
Nostem replied that the process of environmental review has not been completed. 
Until such time that the environmental review process has been completed and the 
Port Commission and Board of Supervisors take final action, which will all 
culminate at the time of the lease process, we would not be in a position to go 
forward with the sale. The Commission cannot approve an expenditure of those 
funds associated with the acquisition of the CalTrans site. Ms. Van Nostern 
indicated that is specifically stated in the first "WHEREAS" and the last 
"RESOLVED" on page 3 of the resolution. 

Commissioner McCarthy inquired if this is going to be a problem with the yearly 
draw-down. Mr. Kutnick replied that this will not pose a problem. Mr. Kutnick 
indicated that the interest rate during the draw period is LIBOR +75 basis points 
(bp) or base rate + 25bp spread. The interest rate on the term loan is LIBOR 4- 



M050597.igq 



80 bp or base rate + 40bp spread. The default rate is base rate + 2 percent. 

Commissioner Lee inquired about the definition of LIBOR rate. Mr. Kutnick 
replied that LIBOR rate is an international index that is used in the market to set 
rates. The majority of the fees for the loan is for the estimated cost of interest rate 
cap. The cost is very low in comparison to a regular bond deal. With regard to the 
LIBOR Index, the Port has a choice of setting interest rates on each period using a 
one-month, 2-month, 3-month or 6-month LIBOR. Events of default would include 
non-payment of principal interest, non-payment of any other bank fees, bankruptcy, 
failure to cure any breach of a covenant within 60 days of receiving written notice 
that the Port is in breach of a covenant. 

Commissioner Herman stated that he has always been perplexed concerning interest 
payment, which is a negotiated amount and an added penalty if the interest is paid 
in advance. He thinks this is a double whammy and he knows that it is conunonly 
practiced or it is practiced with some regularity. He inquired if the Port is free to 
use those monies for some other purposes, independent of what you got the loan 
for, as long as you meet the deadline for repaying it? Mr. Kutnick replied that if 
the Port were to prepay the loan, the lender wouldn't have a whole lot of concern 
as to how the money will be spent. However, the Commission, the Board and the 
Mayor would have more concern than the lender if the Port had a change of mind 
on how to expend the proceeds. If the Port prepays the principal on the loan, 
there is no longer an interest and the lender then should not care. 

Commissioner Lee interjected that the report states that there is no prepayment 
penalty as long as you pay the principal. Commissioner Herman inquired if this 
could be reviewed again because if the Port borrows X number amount of dollars 
and because of the Port's due diligence accumulates the money in advance of the 
target date, it seems that a penalty for showing good faith is incomprehensible. 
Mr. Kutnick replied that there are no penalties. The Port has exclusive authority, 
independent of the bank, to refinance and prepay them. The only restriction is 
interest payment dates are every 90 days. As long as you make the prepayment on 
that interest payment dates, there is no prepayment penalty. 

Mr. Kutnick indicated that staff is recommending to buy the interest "cap" to 
protect ourselves against increases in interest rates on a variable rate loan. He also 
requested Commission's approval to delegate to the Executive Director the 
authority to enter into "mterest rate cap" agreement and some parameters, i.e. the 
cap would be between 8.5% and 9% and the cost would be no more than $400,000. 
Staff expects that this item will be heard at the Finance Committee on May 21st. 

Ms. Julie Van Nostern clarified that what the Commission is approving is the 
revised resolution. 



M050597.igq 



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In response to Commissioner Lee's inquiry if the City & County of San Francisco 
has ever done any commercial loan, Mr. Kutnick replied that this is the first time. 

Mr. Kutnick commended Stephanie Downs, the Port's Finance Manager, for all her 
work in putting the document together as well as Julie Van Nostern, John Rakow 
and Victor Castillo of the City Attorney's office. Katherine Payer, standing in for 
the vacationing Victor Castillo, also contributed a lot of time on this document. 

For public information, Commissioner Lee asked for an explanation of why the 
Port is doing a commercial loan instead of the traditional bond. Mr. Kutnick 
indicated that: (1) a commercial loan is less expensive; (2) it takes less time to put 
the documents together; (3) most of the financing items could not be considered for 
municipal tax exempt debt, half of the project would have been taxable; (4) interest 
is paid only against what is drawn down; and (5) it is significant cost savings and 
gives us a lot of flexibility. 

In response to Commissioner Lee's inquiry of why other agencies are not using this 
approach, Mr. Kutnick replied that most agencies are subject to voter approval. 
The City Charter exempts the Port and the Airport from voter approval on debt 
issues. 

Commissioner McCarthy thanked Mr. Kutnick and his staff for the thorough, 
excellent briefing provided her. Commissioner Herman complimented everyone 
for their good work. Commissioner Hardeman echoed Commissioner McCarthy's 
comments of a thorough briefing they have received. He commended 
Commissioner Lee for asking questions so that the public is aware. 

ACTION: Commissioner Lee moved approval of the revised resolution; 
Commissioner McCarthy seconded the motion. All of the 
Commissioners were in favor; the resolution was adopted. 

The meeting was adjourned at 2:40 p.m. 



M050597.igq 



SAN FRANCISCO 
PORT COMMISSION 



SPECIAL JOINT MEETING 



with the WATERFRONT PLAN ADVISORY BOARD 
>^ MONDAY/^AY 12. 1997^4:30 P.M. [Please note meeting date & time] 
^ FERRY BUILDING, SUITE 3100 

SAN FRANCISCO, CALIFORNIA 



'^^hi 



^AGENDA 

DOCUMENTS DEPT. 

1. PORT COMMISSION ROLL CALL f^ cf^ 

MAY 7 1997 ,,^ ^.1.4 

2. EXECUTIVE DIRECTOR'S REPORT SAN FRANCISCO V/V-f/ 

PUBLIC LIBRARY 

3. PLANNING AND DEVELOPMENT 

Update on the Status of the Draft Waterfront Land Use Plan; The staff presentation will 
include a briefing and public comments on the Draft Waterfi"ont Design & Access Element 
of the Waterfront Land Use Plan, proposed schedule for Plan adoption, and status report on 
conforming amendments to San Francisco Planning Commission and Bay Conservation and 
Development Commission planning documents. 

4. NEW BUSINESS/PUBLIC COMMENT 

Public comment is permitted on any matter within Port jurisdiction, and is not limited to 
agenda items. Public comment on non-agenda items may be raised during New 
Business/Public Comment. Please fill out a speaker card and hand it to the Commission 
Secretary. Each speaker is limited to three minutes. 

5. ADJOURNMENT 



Note .'Copies of all reports and analyses, and minutes for all Waterfront Plan Advisory Board 
meetings are maintained at the Port's offices and at the Civic Center Main Library. If you would 
like to obtain any of these materials, be added to the mailing list, or have questions about the 
Waterfront Plan project, please call the Waterfront Plan hotline, (415) 274-0354 and state your 
concern. Port staff will respond promptly to all messages received. 

In accordance with the Americans with Disabilities Act (ADA), measures are being taken and 
services are available to ensure that all public meetings at the Port are accessible to persons with 
disabilities. See the reverse side for a list of services and phone number contacts to make 
advance arrangements for their availability. 

H \wlupvwpagd\agd5- 12.97 



DISABILITY ACCESS 



The Port Commission office is located on the third floor of the Ferry Building, Suite 3100. The 
Pon office is wheelchair accessible. Accessible seating for persons with disabilities (including 
those using wheelchairs) will be available. The closest accessible BART station is Embarcadero 
Station located at Market and Steuart Streets. The closest accessible MUNI Metro station is 
Embarcadero station located at Market and Spear Streets. Accessible MUNI lines serving the 
Ferr}' Building are the 9, 31, 32 and 71. For more information about MUNI accessible 
services, call 923-6142. 

There is accessible parking at the Ferry Building and at the public lot in the Embarcadero 
median in front of the Ferry Building. Assistive listening devices are available for use in the 
Port Commission Meeting. 



"■s- 



The following ser\ices are available on request 72 hours prior to the meeting. Please contact 
Ke\in Jensen at (415) 274-0555. Late requests will be honored if possible. 

• American Sign Language Interpreters • The use of a reader during the meeting 

• A Sound Enhancement System • Minutes of the Meeting in Alternative 

• Large Print of the Agenda Formats 

In order to assist the City's efforts to accommodate persons with severe allergies, environmental 
illnesses, multiple chemical sensitivity or related disabilities, attendees at public meetings are 
reminded that other attendees may be sensitive to various chemical-based products. Please help 
the City accomjnodate these individuals. 

Know Your Rights Under the Sunshine Ordinance 

■ ■■ €? — " " 

Go\'ernment's duty is to serve the public, reaching its decisions in full view of the public. 
Commissions, boards, councils and other agencies of the City and County exist to conduct the 
people's business. This ordinance assures that deliberations are conducted before the people 
and that City operations are open to the people's review. For more information on your rights 
under the Sunshine Ordinance (Chapter 67 of the San Francisco Administrative Code) or to 
report a violation of the ordinance, contact the Sunshine Ordinance Task Force at 554-4851. 



SAN FRANCISCO 
PORT COMMISSION 



MAY 12, 1997 

MINUTES OF THE SPECIAL MEETING 



MEMBERS, PORT COMMISSION 

HON. MICHAEL HARDEMAN, PRESIDENT 
HON. DENISE McCARTHY, VICE PRESIDENT 
HON. FRANKIE G. LEE 
HON. JAMES HERMAN 



DOUGLAS F. WONG, EXECUTIVE DIRECTOR 

DOCUMENTS DEPT. 

OCT 8 t3S9 

SAN FRANCISCO 
PUBLIC LIBRARY 



CITY AND COUNTY OF SAN FRANCISCO 
PORT COMMISSION 

MINUTES OF THE SPECIAL JOINT MEETING 
with the WATERFRONT PLAN ADVISORY BOARD 

MAY 12, 1997 



1. ROLL CALL 

The meeting was called to order by Commission President Michael Hardeman at 
4:40 p.m. The following Commissioners were present: Michael Hardeman, Denise 
McCarthy, Frankie Lee and James Herman. 

Commissioner Hardeman acknowledged the members of the Waterfront Advisory 
Committee. Jim Eschen, Nan Roth, Jane Morrison, Bob Tibbits, Denise Conley, 
Julia Viera, Toby Levine, Stan Moy, Peter Moylan, Bob Tufts. 

2. EXECUTIVE DIRECTOR'S REPORT 

Mr. Douglas Wong indicated that the Waterfront Plan is in the final stages of 
review and conmient prior to be considered for final adoption by the Port 
Commission. Consistent with the periodic project status reports, which staff has 
prepared for the Port Commission and the Advisory Board, staff will discuss the 
Waterfront Land Use Plan (WLUP) particularly focusing on the design and access 
element which sets forth policies and design criteria for public access and open 
space, waterfront views and preservation of historic resources on future waterfront 
projects. Staff will also review the proposed schedule for plan adoption and answer 
any questions that may arise. As the completion of this intensive public planning 
effort approaches, he expressed his appreciation to the Waterfront Plan Advisory 
Board and the Technical Advisory Board. Although most of the work occurred 
before his arrival, he is aware of the countless hours of volunteer time that both the 
committees have made for the future of the Port and San Francisco's waterfront. 
He pointed that their conamitment has been extraordinary. He fully supports the 
waterfront plan's design and access element. It is a blueprint for future waterfront 
projects which balances the Port's diversed maritime, public access, conmiercial, 
enviromnental and operational responsibilities in a manner which will further 
enhance public enjoyment and appreciation of this spectacular waterfront. 

3. PLANNING AND DEVELOPMENT 

Update on the Status of the Draft Waterfront Land Use Plan: The staff presentation 
will include a briefing and public comments on the Draft Waterfront Design & 



M051297r.igq 



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Access Element of the Waterfront Land Use Plan, propos ed schedule for Plan 
adoption, and status report on conforming amendments to San Francisco P lanning 
Commission and Bay Conservation and Development Commission planning 
documents. 

Ms. Diane Oshima indicated that the waterfront advisory board and the 
Commission have spent a great deal of time to produce the Waterfront Land Use 
Plan (WLUP). It is a document available to the public. An environmental impact 
report for the WLUP was completed in January. During the time that the EIR was 
produced, a separate, follow-up plaiming process to develop the urban design 
guidelines was established, which is a major component of the overall WLUP and 
one of a number of implementing features of the Plan. The WLUP provides the 
land use policies which will guide revitalization of the waterfront, including 
policies for maritime, commercial and recreation uses for each of the Port's piers 
and upland sites. The Waterfront Design and Access Element provides design 
criteria for each of the Port's piers and upland sites and includes a special focus on 
public access and open space, historic preservation and views. Discussions and 
joint working efforts were held with BCDC and the City Planning staffs to develop 
amendments to the planning documents. Staff has also been in negotiations on a 
number of policies and regulatory items. A draft concept agreement was developed 
in December by BCDC, Port and Save San Francisco Bay Association. A number 
of those provisions were incorporated into the Design and Access Element because 
it pertains to where public access, pier removals and historic preservation should 
take place. She noted that the discussion and conclusion of all the required details 
in order to implement that concept agreement are still in progress. The negotiation 
process may still result in some refinements to the provisions as they are presented 
in the design and access elements, in which case, public hearings will be scheduled. 

Mr. Dan Hodapp discussed the Technical Advisory Committee (TAC) and public 
review process. He noted that development of the Waterfront Plan Design and 
Access Plan took more than a year to accomplish. Members of the committee 
representing City organizations with expertise in waterfront design and public 
access and planning issues. The members of the Committee are: Sylvia Kwan 
(AIA), Vince Latanzio (ASLA), Jeff Heller (SPUR), Stewart Martin (Landmarks 
Advisory Group and Heritage), Toby Levine, Marc Hohnes (Save San Francisco 
Bay Association), Joe LeClair (BCDC), Eva Liebermann (City Plaiming) and John 
Kriken (Skid Owings and Merrill). The TAC met once a month, reviewed 
opportunities and constraints for all sites along the waterfront. They looked at the 
types of open spaces, views and historic resources that exist along Port property. 
They established goals and policies for open space, views and historic resources 
and developed design criteria for each site along the waterfront. They also met 
with various groups such as BCDC design review board, SPUR, AIA, Urban 
Design Historic Preservation subcommittees and the Landmarks Board and 



M051297r.igq 



Heritage foundation and they intend to continue with the public review and process. 

Eva Liebermann, City Planning and also a member of the TAC Committee, 
believed that working on the committee was most gratifying and it was a 
productive process because the group had different view points. They benefited 
from the wide variety of professions represented. The successful process was also 
due to the staff's preparation before every session. The issues were clearly laid 
out. He gave high praised to Dan Hodapp of the Port and Evan Rose from the 
Planning Department who did a fabulous, solid research. She also thanked Diane 
Oshima, Anne Cook and Kate Nichol. The resulting document is readable and 
beautiful. 

Toby Levine, representing the Waterfront Advisory Board, stated that they did 
have many, long hours of good work. The members of the TAC were very 
cooperative. The whole process moved forward in a very smooth, thoughtful 
manner. She and the TAC committee are satisfied with the document as an 
implementation tool of the WLUP. The members of TAC were very talented and 
brought the right kinds of expertise and know-how, which was extremely helpful. 
Another important step was keeping in mind the other existing plans that have an 
effect on this effort such as the downtown plan, the plan for the South Beach 
Rincon Point and the Fisherman's Wharf Plan. They were also treated to a very 
good presentation of the architectural historic resources by Kate Nichol, which was 
extremely helpful. Staff was always ready to assist. The overall effect and 
outcome in the end, when it happens, will be an enormous benefit to the City and 
particularly to the Port of San Francisco. 

Mr. Hodapp indicated that the design and access element is an element of the 
WLUP. The WLUP addresses uses along the waterfront and the Design and 
Access Plan identifies the physical form. It also picks out open spaces and views 
along the Embarcadero, shows which ones exist, and how the new ones will be 
developed. It also looks at historic resources and identifies the existing historic 
resources and plans for protection. The committee looked at the qualities that give 
San Francisco its very unique urban waterfront identity and strengthened those 
types of factors and weaved it into the design criteria. The following three goals 
were carried throughout the policies: 

(1) Reunite the City with the waterfront, which is an overarching goal of the 
WLUP. 

(2) Create a continuously accessible waterfront from Aquatic Park to Pier 70. 

(3) Recognize the unique identity of the waterfront districts. 

This plan covers design and access criteria for Fisherman's Wharf through Pier 70. 
The criteria in the design and access plan looks at preserving the character of the 



M051297r.igq 



neighborhoods where necessary and strengthening it where necessary. 

The Port's public access and open space plan reflects four primary policies: (1) a 
continuous public access and open space program that encourages people to explore 
the entire waterfront; (2) a sequence of significant open spaces occurring at 
frequent walkable intervals; (3) a variety of public access and open spaces to 
experience the waterfront's many activities and (4) public access and open spaces 
which provide connections between the City and the Bay. 

To ensure maximum public enjoyment, new public access and open spaces should 
also meet qualitative criteria that address placement of the open space within a 
project, microclimate conditions, area identity, site improvements, and other 
qualities. 

The following three view policies were developed: (1) view sites - establish new 
views at specific points or areas that afford exceptional view of the Bay and the 
waterfront; (2) street views - streets connecting to the waterfront should have views 
of the Bay, historic structures, or architecture that provides a waterfront identity; 
(3) view intervals - provides views of the Bay and maritime activities at frequent 
intervals along the Embarcadero Promenade. 

Several historic preservation policies were established. The general policies listed 
in the plan were: (1) to formally recognize buildings that may be applicable to the 
National Register of Historic Places; (2) to preserve and adaptively reuse the most 
significant historic resources, provided by the Secretary of Interior's Standards for 
Rehabilitation and Guidelines for Rehabilitating Historic Buildings, which is the 
highest recognized standards used in the country. Piers 9, 15, 17, 19, 23, 29 are 
also protected in the second policy where the Port commits to retaining and reusing 
those piers. They also include language to further evaluate the way in which they 
will be preserved to ensure that the character and the defining elements remain and 
that they are adaptable to the new uses. They ended up with a commitment to 
preserve all the historic bulkhead buildings along the waterfront. 

The back half of the plan looks at criteria for how Port property could be developed 
and tries to identify the most significant architectural criteria that need to be taken 
into account. One additional concept rings true, i.e., every development on the 
land side of the Embarcadero should take on the character of its adjacent 
neighborhood, so we have the ability to identify it as a waterfront structure. 

Aime Cook stated that in the coming weeks and months, there will be many public 
meetings and hearings to discuss the Waterfront Plan and Design & Access 
Element. The upcoming meetings are: 



M051297r.igq 



May 15 - SPUR Waterfront Committee Meeting from 4-6 p.m. 

May 22 - Planning Commission briefing by staff and Technical Advisory 

Committee on Design & Access Element and Project Schedule 
May 28 - SPUR will be hosting a brown bag presentation at 12:30 p.m. 
June 5 - Planning Commission public hearing to receive conmients on 

Design & Access Element (tentative schedule) 
June 10 - Port Commission public hearing to receive conmients on Design & 

Access Element (tentative schedule) 
June 24 - Port Commission public meeting to consider final adoption of 

Waterfront Land Use Plan and Design & Access Element (tentative 

schedule) 

Staff also intends to schedule meetings with other interested conmiunity groups. 
She will be setting a meeting at Fisherman's Wharf for Port tenants and the 
Fisherman's Wharf Association. Dan Hodapp is also scheduling a meeting with 
ALA. She clarified that the SPUR Waterfront Committee meeting will be held on 
May 15 instead of May 22, as was previously noticed and the Planning 
Commission hearing has been moved to May 22. She suggested that the conmiittee 
pick up a revised copy of the schedule. 

Commissioner Hardeman thanked Diane Oshima, Dan Hodapp and Anne Cook, 
Eva Liebermami and Toby Levine for their conaments/presentation and all their 
hard work. 

4. NEW BUSINESS/PUBLIC COMMENT 

Meg Reilly, representing the Dolphin Swimming and Boating Club and Friends of 
Aquatic Park, indicated that a copy of a memorandum regarding the Draft 
Waterfront Design and Access Element was provided to the Conmiission. They 
applaud the efforts of Port staff, the Waterfront Plan Advisory Board, the 
Technical Advisory Committee and others who provided guidance for the 
Waterfront Urban Design and Public Access Element. However, there are two 
critical omissions from the Design and Access Element: (1) natural resource 
protection and (2) water contact recreation as a waterfront recreational use. She 
asked the Commission and staff to institutionalize the answer to the following 
questions and have them incorporated into the WLUP and Design and Access 
Element: (1) Is it Port policy to recognize the bay as a natural resource and to place 
high priority in protecting bay water quality? (2) Along the Port's 7-mile 
waterfront, will the design and operating considerations include water quality 
protected features to address water quality impact on water-contact recreation, 
particularly in Aquatic Park? 

Redmond Kernan indicated that he was involved on Prop H, which gave rise to this 



M051297r.igq 



planning process. He complimented staff for their hard work. He admired the 
tenacity and persistence of everyone involved. However, this does not excite the 
water enough since the ships are no longer there. He suggested putting out an RFP 
for water-related activities. There should be some activities in the water to 
stimulate people's interest and give access to the water through that interest. He 
suggested making this process user friendly. 

Ernestine Weiss suggested eliminating the square blocks around Pier 7 in order for 
people to have a peaceful enjoyment of the waterfront. She suggested relocating 
the skateboarders, bicyclists some place else and hopes that in the fmal design, this 
problem will be resolved. 

Jeffrey Leibovitz indicated that we are one of the few neighborhoods in San 
Francisco that does have a view of maritime activity, i.e., the view down Second 
Street looking southwardly, view of Pier 48 and Pier 50. There is constant change 
of scenery. That part of San Francisco is a historic warehouse district and hopes 
that the Commission and staff keep this in mind when development along that 
portion of the waterfront is contemplated. 

Joe Boss commented on the South Beach Pier 40 element of the design. He hopes 
that the Port, BCDC, Redevelopment Agency and the Giants can focus on this part 
of the plan and moves forward and get things done in a quick fashion. 

Peter Moylan asked if anyone has looked at the water quality issue and whether it is 
compatible for a heavy maritime usage of any kind and water quality for 
swimmers. He asked how the Port is going to address this issue. 

Ms. Oshima responded that discussion of this issue did come up on a number of 
occasions. At the time, it was in the context of some development standards that 
are in the WLUP regarding the water quality regulation standards that should be 
upheld to improve or maintain water quality. There had been a debate going on at 
the time as to whether there should be standards that essentially reinforce the 
existing water quality regulations that are carried out by a myriad of local, state and 
federal agencies vs. coming up with new language that would tend to infer that 
there should be different set of standards that the Port should be operating its 
facilities above and beyond those existing water quality standards. At the time that 
the advisory board concluded, the Port Conmiission was still be in support by 
virtue of the fact that they passed on the WLUP that those existing water quality 
standards imposed by the Environmental Protection Agency (EPA), Regional Water 
Quality Control Board (RWQCB) and the Health Dept. would be the guiding factor 
for maintaining or constructing new facilities in the water. Since the Advisory 
Board proceedings, an advisory group has been set up among the Port's 
Environmental Management staff. Dolphin Club, South End Rowing Club to 



M051297r.igq 



identify what measures should be in place to ensure that the water quality issues are 
specifically addressed in the aquatic park area. 

Anne Cook stated that when the actual approval processing for the specific projects 
is done, an environmental review will also be done. The WLUP EIR is a general 
program and deals with the general types of land uses discussed in the plan. Each 
project that comes before the Port will have its own environmental review. There 
will be opportunities then to study the impacts of those projects. 

Commissioner Hardeman acknowledged the other members of the board who came 
in after the introductions: Dick Millett, Paul Sedway, Arthur Bruzzone. 

Mr. Millett, from Potrero Hill, indicated that Ms. Reilly made some good 
comments. He understands that a public boat launch has been designed, fmanced 
and approved. It is his further understanding that the project has been road blocked 
and inquired about the status of the project. Mr. Paul Osmundson replied that the 
Pier 52 boat launch project has been in design and has been funded. However, the 
design has been recently revised to bring it within the amount of funding available. 
An advisory group has been set up to speed up the project. When the Draft EIR 
for the Giants ballpark came out, an issue was raised with respect to the impacts of 
traffic and circulation aspect at the public boat launch area and staff will address 
these issues at tomorrow's Commission meeting. The completion of the design of 
the boat launch project was delayed until the traffic impacts and circulation 
questions were satisfactorily addressed. Another public boat ramp is being planned 
in the Candlestick Point recreation area. 

Julie Viera stated that the boat ramp will be built by DPW on Islais Creek. It is 
going to cost $285,000. It will be handicap accessible and it will be designed for 
canoes and kayak users. A 700 ft. promenade, which is going to have a public 
access and a mini museum, will also be built. 

Bob Tufts thanked staff for all their work. In setting the schedule of hearings, he 
thought it was a good idea to coordinate some of the meetings with BCDC and 
bring them in on a joint basis. He mentioned that the joint BCDC and Port 
Commission meeting held recently was successful. Continuing that kind of joint 
meeting and coordination between the two agencies is a good idea. He suggested 
perhaps bringing in the Planning Commission in the meeting and ensuring that their 
comments are brought into play in connection with the final approved products. 

Having been at the Budget hearing before the Port Commission, Bob Tibbits 
inquired whether the Executive Director has any plans to add staff now that we are 
ready to move forward. Mr. Osmundson responded that the Port's proposed 
budget for next fiscal year has the same number of staff as this year. He will, 



M051297r.igq 



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however, look at reallocating its existing staff to perform the implementation aspect 
of some of the projects. He is confident that with the outstanding staff working on 
the development RFP, the implementation process will be handled as well. In 
terms of an implementation plan, when staff brings the plan to the Port Commission 
for adoption, specific recommendations on which projects to pursue will be included. 

Jane Morrison indicated that she's pleased to see that open space is featured in the 
plan and hopes that we achieve maximum success. She thinks that the Port should 
give more attention to the number one priority, maintaining maritime and water- 
related uses. She agreed with the Mr. Kernan that the Port should do everything it 
can to have more water-related uses. She was also disturbed by the interim uses 
provisions that might keep the Port from acting quickly to accept maritime clients. 
She inquired if the Port has any plans of preserving the Chma Basin Channel and 
the national wildlife. Ms. Oshima responded that page 106 of the Design and 
Access Element deals with the portion of the south side channel, an area which will 
be kept an open space which would allow for the natural resources to be enhanced 
and the protection for the habitat area. 

Toby Levine added that there is a short section on natural areas and new open 
water on page 30. One could debate whether the Mission Creek is a natural area. 
It is certainly an area where mammals and birds do forage for food and in some 
cases, nesting activities. Following up on Jane's comments, she believes that it is 
worthwhile to have another area for foraging and nesting besides Islais Creek and 
Pier 98. 

Jane Morrison followed up on one of the suggestions on maritime and asked for 
more details about the plans around the southern waterfront. Anne Cook stated that 
you cannot look at the urban design and access element alone. The important thing 
to remember is this has to do with the design criteria, public access and open space 
and historic resources and views. The land uses are covered in the WLUP. The 
design and access element is an element of the land use plan. With regards to the 
maritime uses, you have to go back to the land use plan to ensure that the uses you 
want designed are allowed by the WLUP and meet this criteria. 

Commissioner Hardeman indicated that Mayor Brown, in his initial address to the 
Commission, was emphatic that if we are to error we are to error on the side of 
maritime. He wants the Commission to do everything in its power to attract 
maritime to the Port. 

Nan Roth commented that she was upset that the historic resources data base did 
not include the fish alley area at Fisherman's Wharf. She met with Kate Nichol 
and Vincent Marsh and Mr. Marsh found this area of great interest. Despite her 
constant comments and urging, this important area is still overlooked. 



M051297r.igq 



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She also indicated that the section dealing with Seawall Lots 303 and 302 is not 
accurate. It describes it as an area with restaurants, shops and warehouses. It does 
not mention the fishing industry oriented activities and would like to see this 
corrected. 

She observed that there are repetitious architectural guidelines in the plan. The 
area down Hyde Street and the area opposite the triangle are very different m 
character and would like to see this spelled out more specifically in the architectural 
guidelines. She emphasized that those few blocks close to the cannery and the 
Hyde street pier represent what they call the "old work. " 

She stated that the document indicates that the service access provisions (garbage 
cans) for the fish alley area should be made from the interior alleys or streets. She 
found this disturbing and suggested that attention should be given in the document 
how this is handled and where these things are stored and it is screened from public 
eyes. She suggested that during the permit process, contractors/owners have to 
spell how the garbage will be handled and it must be done in such a way that it is 
acceptable to everybody. 

Anne Cook stated that Nan Roth will be pleased with the May 7th version of the 
plan. After their site visit to the fish alley, provisions were made to the document 
for SWLs 303 and 302. A description about historic fish uses in the interior block 
of the fish alley was added. A particular design criteria was also added to 
inventory those buildings in the area and encourage efforts to retain them for 
fishing industry use. A language concerning the use of screens around the trash 
facility was also incorporated into the plan. 

Nan Roth further commented that consultants were retained and research was done 
regarding a garage in the triangle Fisherman's Wharf lot. During their Waterfront 
Advisory Board process the garage was largely shunned but the Port had a change 
of heart and supported the garage. However, it is somewhat of a reduced form. 
She is concerned that the Port's version is smaller and financing will be structured 
in a different way than the Fisherman's Wharf Citizens Advisory Committee had 
envisioned. The CAC was assisted by the consultants for the design as well as the 
financing of the garage. She would like to see these efforts brought together. She 
was appreciative of what the Port has done so far. She hopes that the Port takes 
another opportunity to consider the original plan. 

The document lacks a language that would give protection to Piers 43 and 43-*/2. 
She hopes that someday the Franciscan Restaurant could relocate into one of those 
buildings on Jefferson to allow for complete open access to the water. 

She was concerned about the proposal made for Pier 30/32. It incorporated a 



M051297r.igq 



bridge across the Embarcadero and a large sphere and another sculpture way above 
the height limit of the area. The waterfront should not become everybody's choice 
for a place for a monument. We should have some control and someway to deal 
with it when it comes up. The Port is negligent if it does not include a language in 
the design plan to cover this topic. 

Mr. Art Bruzzone inquired about the clause on page 7 of the document which states 
. . . amendments will be necessary to Port, Planning Department and/or BCDC 
documents to ensure such consistency. He was curious how this will be done, 
when will it be done and when will an RFP be issued. 

Ms. Oshima replied that the notion of the joint design review process recommended 
by the advisory board was embraced by every single Conmiission mvolved (BCDC, 
Port & Planning). Everyone understands the need for a coordinated review process. 
We will be proposing how that joint design review process will take place in 
context of proposed changes to the City Planning Code. We are proposing that 
there would be an amendment allowed for the joint review process to be applied to 
waterfront projects of certain types as specified in the code amendments. The joint 
review process is intended to implement the design policies in the documents. We 
are working very hard to incorporate general plan-based design policies as well as 
those design principles that are important to BCDC. Mr. Bruzzone asked when the 
process will be completed. Ms. Oshima replied that the proposed schedule is still 
somewhat vague but staff is planning to go before the Planning Commission as 
early as July for public hearings on the amendments to the general plan and 
planning codes and presently working with BCDC to get amendments together for 
this special area plan for the San Francisco waterfront, which would address that 
issue as well as many items on the draft concept agreement. For BCDC approval 
process, over the course of the summer and into the fall, we will be continuing the 
implementation of these regulatory changes to bring consistency amongst all these 
agencies. 

Mr. Bruzzone inquired if the Port's policy is not to issue RFP unless there is 
consistency among the three agencies. Ms. Oshima replied that we don't have any 
specified policy on this issue. The seawall lot properties on the City side are not 
subject to BCDC review but a coordinated planning process would be undertaken. 
Staff does not have a time line for developing RFPs for projects on the waterside of 
the Embarcadero but rather for the ferry building restoration project, which was 
exempt froni Prop H. Although the details for the joint design review process have 
not been set up nor do we have the project review process set up, we have put into 
play the project review implementation process that is in the draft WLUP into the 
ferry Building project. 

Eva Liebermann, in response to Nan Roth's comments, indicated that Planning 



M051297r.igq 



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Department staff has carefully read and analyzed the latest May 7 draft. They, in 
turn, have drafted a staff report wherein they will point out that this plan differs 
from the general plan. The issues that Nan Roth mentioned were included. 

Toby Levine expressed one last concern, i.e.. Seawall 337, which is the large 
property in front of Pier 48 and 50. She stated that the Port should be very aware 
and analyze this area very carefully because the Port may wind up having parking 
for 5,000 cars for the next 50 years. 

Commissioner McCarthy thanked everyone for their diligence and hard work. She 
noted that it is important to remember that the plan is to provide us with guidelines. 
She thinks that everyone (including commissioners and members of the advisory 
board) should be continuously involved in this process. She was somewhat surprise 
that there has been very little public input in recent months concerning some 
important issues. She reminded the group and the public to continue to be vigilant 
especially during RFP time and when developments are actually proposed. She 
looks forward to having them testify. 

Jane Morrison inquired about the open space that might be planned around the 
Terry Francois Blvd. and the southern waterfront. Ms. Oshima replied that on 
page 109, Seawall Lot 337 is the site that was included within the previously 
approved Mission Bay Plan. The Catellus revised proposal for Mission Bay has 
excluded this site from the Mission Bay Plan. While we were going through our 
waterfront planning process, we presumed the uses that were approved in the 
Mission Bay development agreement. It was designated for long-term open space 
for that site. Now that Catellus has taken it out of their project area, the Port is in 
a transition process of re-evaluating that site. This is a huge waterfront area and 
changes are constantly happening. When the TAC reviewed this site and its 
proceedings, it saw that it had a great potential in terms of open spaces. For that 
purpose we have identified TAC's recommendation on page 109 for open space 
which could be incorporated into whatever its ultimate long-term use will be. As 
the Port continues to evaluate this site, which will require some monitoring as to 
the status of the revised Mission Bay Plan, we would to like ensure that TAC 
recommendation is documented, included and considered along other uses. 

Bob Tibbits inquired about the commencement of an active study for Piers 15 and 
29. Diane Oshima replied that there is no specific time line as of yet but this will 
be discussed further. From the Port's perspective, the following needs to be 
addressed with respect to the Piers 15 and 29 areas: (1) look at the needs of 
maritime operators occupying those facilities and how the Port would ensure that 
the needs of those operators are going to be accommodated. This is the lynchpin in 
figuring out when the planning process could take place. (2) look at historic 
preservation policies, particularly as it relates to pier sheds. The Port is 



M051297r.igq 



•11- 



committing to carrying out further research development information that it 
currently does not have to be able to figure out which of these piers or pier sheds 
would be reconunended for historic preservation. It is an amalgam of community 
input and technical & planning information that needs to be done together to 
determine the process. 

Commissioner Hardeman indicated that Aime Cook is passing out additional 
documents provided by Carl Maletic. 

Jane Morrison commented that the voters approved the development of Pier 52 long 
before the Giants were on the ballot and she thinks that it should proceed and the 
Giants should adapt to it. 

Peter Moylan, on behalf of their committee, welcomed Douglas Wong. He stated 
that the press has been writing a lot of stories about new and different efforts to 
attract the maritime industry back to the Port of San Francisco, yet what he reads in 
the detail is very similar to all the predecessors' ideas. He wondered if the Port is 
now doing something substantially different from all the predecessors or has 
something changed in the environment. 

Mr. Wong reiterated Conrniissioner Hardeman's comments that when the Mayor 
first came aboard, his mandate was to bring maritime back to San Francisco. He 
noted that the Port is doing things that are much more creative than what his 
predecessors has done. There are things that he is not at liberty to discuss but 
indicated that staff is in discussions with major shipping lines. The trip to the Far 
East was very successful and he hopes to report something positive very soon. 

Ernestine Weiss asked if the members of the advisory board have considered the 
Third Street Rail and whether it will have any impact to the waterfront. Paul 
Osmundson replied that third street right rail project is under environmental review 
process. The Port has been involved in the early planning stage of the project. 
However, it does not have any specific relationship to the design and access plan. 
The Port fiilly supports the extension of the light rail down at Third Street. Port 
staff will be working very closely with MUNI and all the other citizens group 
(Hunters Point, Bay view and the entire range of entities involved in the project). 
Port staff is very involved in the implementation of the Embarcadero revitalization. 

Jane Morrison indicated that the MUNI Third Street Rail will bring more people to 
the waterfront. 

Douglas Wong thanked everyone for being patient in the last six years and for 
working very hard on this document. When he was a Port Commissioner, he 
remembered that this was going to be a six-month process, but it mrned out to be 



M051297r.igq 



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six years. He acknowledged all the hard work done by not only Port staff but the 
advisory board and Bob Tufts. He looks forward to the adoption of the plan on 
June 24. 

Conmiissioner Hardeman indicated that in his own real life he always hire the very 
best people, pays them good money and listens to them. He thinks that this 
committee has worked very hard. He is amazed how this committee has come a 
long way and was able to compromise. After six years, he commended them all 
for sticking it out and a look forward to the Commission voting on this next month. 
He then thanked everyone for their participation. He acknowledged the work put 
forth by Diane Oshima, Anne Cook and Dan Hoddapp. 

5. NEW BUSINESS/PUBLIC COMMENT: 

Jeffrey Leibovitz commented that at last week's meeting, the Port Commission 
committed $12 million to the San Francisco Giants for relocation and demolition 
costs and an additional $5.2 million in interest. Last January or February, the Port 
committed another $1.2 million annually to either the demolition of buildings or the 
toxic clean up for the relocation of Port tenants. There are 33 small businesses that 
currently occupy and pay rent in the dilapidated dump. The Redevelopment 
Agency is asking for an additional $9 million from CalBoating at this time and they 
will be kicking in an additional $9 million for underground garage that is to be built 
at the South Beach site. There is also an additional $15 million in tax increment 
financing, which adds up to $51.4 million in taxpayers subsidies to the San 
Francisco Giants. Seven MUNI buses, sidewalk improvement, street improvement, 
police and fire, parking control officers, and a new sewer, etc. were all called out 
for in the EIR. Larry Baer, Vice President of the San Francisco Giants, claimed 
that $1.2 million will be paid back to the Port in annual rents. These costs are 
going to be exorbitant and it will take 40 or 50 years before the City ever sees a 
dime from the San Francisco Giants. 

Jennifer Clary, San Francisco Tomorrow, thinks that the public access element is a 
pretty good document. She hopes that there will be a little revision of the Mission 
Bay Plan so that the general concepts of the Mission Bay Plan will reflect the 
importance and uniqueness of Mission Creek Channel. As it is currently written, 
it talks about either side of the channel but the channel is the center of the whole 
development. It is going to be a major recreational and open space area and it 
should be reflected specifically in the opening comments. 

Meg Reilly indicated that water quality can be compatible with maritime uses as 
long as the Port holds the position that someone will enforce the water quality laws. 
The Port is the manager of the 7-mile waterfront but it is someone's else job to 
enforce water quality. As long as the Port holds that position, we have a problem. 



M051297r.igq 



■13- 



They are asking the Port, to adopt as policy, to recognize the bay as a natural 
resource and to place high priority of protecting the bay water quality. Adopt it as 
an overarching policy so we can implement it on a case-by-case, project-by-project 
basis. As long as that policy does not exist, then we can't have compatibility 
between water quality and anything that the Port does on the waterfront. The 
Commission neglected to adopt that policy. The second policy they ask for is that 
design and operation include water quality protection features to take into account 
use of the bay for water contact recreation. 



The meeting was adjourned at 6:30 p.m. 



M051297r.igq -14- 



^/3/f7 



SAN FRANCISCO 
PORT COMMISSION 

REGULAR MEETING 

4:00 P.M.,a^AY13iJl99^ 

FERRY BUILDING, SUITE 3100 
SAN FRANCISCO, CALIFORNIA 



AGENDA 



DOCUMENTS DEPT, 

MAY 1 2 1997 

SAN FRANCISCO 
PUBLIC LIBRARY 



1. ROLL CALL 

2. APPROVAL OF MEVUTES - April 22, 1997 Meeting 

3. EXECUTIVE 

A. Executive Director's Report 

4. MARITIME 

A. Report on Port of San Francisco's 1997 Cruise Season and Projections for future 
business growth. (Information Only) 

5. REAL ESTATE AND ASSET MANAGEMENT 

6. FACILITIES & OPERATIONS 

A. Authorization to award the Professional Services Contract for the "Hyde Street 
Harbor Waterside Facility" to Concept Marine Associates, Inc. (Resolution No. 
97-39) 

B. Approval of First Amendment, authorizing revision of the required and additional 
services under Professional Services Contract No. SA 39760016, "New Port 
Maintenance Facility," with Kendall Young Associates/Beverly Prior Architects, a 
Joint Venture. (Resolution No. 97-36) 

7. PLANNING & DEVELOPMENT 

A. Presentation on the traffic and circulation aspects of the Pier 52 boat launch project 
and Terry Francois Boulevard. (Information Only) 

8. FINANCE AND ADMINISTRATION 

9. CONSENT CALENDAR 



A051397.igq 



-1- 



^ 10. NEW BUSINESS / PUBLIC COMMENT 

11. EXECUTIVE SESSION 



I 



A. CONFERENCE WITH REAL PROPERTY NEGOTIATOR - This session is closed 
to an\ non-Citv/Port representative. * 

1) Property : Port property located at Berry Street and Second Street (China Basin). 
Person Negotiating : Port representative: Douglas F. Wong, Executive Director 
*San Francisco Giants Representative : Larry Baer, Executive Vice President 

Under Negotiation: Price Terms of Payment / Both 

An executive session has been calendared to discuss real property negotiations 
between the Port and San Francisco Giants, regarding the proposed ballpark. 

This is specifically authorized under California Government Code Section 
54956.8. 

B. CONFERENCE WITH LEGAL COUNSEL REGARDING ANTICIPATED AND 
EXISTING LITIGATION MATTERS: 

1) Initiation of Litigation pursuant to subdivision (c) of California Government Code 
J Section 54956.9 (1 case) 

(a) Red and White Fleet, Inc. (formerly Harbor Carriers, Inc., a subsidiary of 
Crowley Corporation) operating at Pier 4L 

2) Discuss significant exposure to litigation pursuant to subdivision (b) of California 
Government Code Section 54956.9 (1 case). 

C. Vote in open session on whether to disclose Executive Session discussions 
(S.F. Admin. Code Sec. 67.14) 

12. ADJOURNMENT 



Public comment is permitted on any matter within Port jurisdiction, and is not limited to 
agenda items. Public comment on non-agenda items may be raised during New 
Business/Public Comment. Please fill out a speaker card and hand it to the Commission 
Secretary. If you have any questions regarding the agenda, please contact the 
J Commission Secretary at 274-0406. 



A051397.igq 



PORT OF SAN FRANCISCO 



TO: 



FROM: 



MEMORANDUM 

May 13, 1997 

MEMBERS, PORT COMMISSION 

Hon. Michael Hardeman, President 
Hon. Denise McCarthy, Vice President 
Hon. Frankie Lee 
Hon. James Herman 

Doug F. Wong >J(tu 
Executive Director 




Ferry Building 

San Francisco, CA 94111 

Telephone 415 274 0400 

Telex 275940 PSF UR 

Fax 415 274 0528 

Cable SFPORTCOMM 

Writer 



SUBJECT: Authorization to award the Professional Services Contract for the "Hyde 
Street Harbor Waterside Facility" to Concept Marine Associates, Inc. 

DIRECTOR'S RECOMMENDATION: AUTHORIZE STAFF TO AWARD THE 
PROFESSIONAL SERVICES CONTRACT FOR THE "HYDE STREET HARBOR 
WATERSIDE FACILITY" TO CONCEPT MARINE SERVICES, INC. 

On November 12, 1996, Resolution No. 96-120, the Port Commission authorized Port 
staff to issue a Request For Proposals ("RFP") for Architectural/Engineering ("A/E") 
services for the design of the $1 .4 million Hyde Street Harbor Waterside Facility. The 
project is funded by a loan from the State of California's Department of Boating and 
Waterways. The project A/E services include programming, design development, cost 
estimating, and construction and bid document development for the following items: 
disability accessible gangway, concrete walkway floats, concrete support floats for sixty 
(60) fishing berths, dredging, floating debris barrier, utilities, including electrical and 
water services, and bilge and sewage pumpout services. The project scope also includes 
construction support services during the construction phase. 

On January 24, 1997, the Port issued the project RFP. On February 28, 1997, the Port 
received proposals from five (5) consultant teams. On March 18, 1997, a Port selection 
panel interviewed and evaluated three (3) teams. Concept Marine Associates ("CM A") 
received the highest score from the selection panel. The Human Rights Commission 
confirmed that CMA is responsive to the requirements of the San Francisco Administrative 
Code Section 12D. 

Subsequently, the Port met with CMA to negotiate the fee. The Port and CMA agreed to 
not-to-exceed fee of $240,300 to provide the required A/E services as outlined above. 

Prepared by: Cliff Jar rard, Chief Harbor Engineer 



THIS PRINT COVERS CALENDAR ITEM NO. M 



PORT COMMISSION 
CITY AND COUNTY OF SAN FRANCISCO 



RESOLUTION NO. 



97-39 



WHEREAS, 

WHEREAS, 
WHEREAS, 
WHEREAS, 
WHEREAS, 

WHEREAS, 

RESOLVED, 



on November 12, 1996, Resolution No. 96-120, the Port Commission 
authorized staff to issue an RFP for the design of the Hyde Street Harbor 
Waterside Facility; and 

on February 28, 1997, the Port received proposals for this professional 
services work; and 

a Port selection panel reviewed all proposals and interviewed three 
proposers to select the best qualified consultant team; and 

the selection panel selected the team of Concept Marine Associates, Inc.; 
and 

the contract will provide for services that include programming, design 
development, bid and construction document preparation and 
construction management support; and 

the Human Rights Commission has confirmed that this firm is responsive 
in accordance with Section 12D of the San Francisco Administrative 
Code incorporated into the RFP; now, therefore, be it 

that the San Francisco Port Commission hereby approves the 
authorization to award the subject professional services contract for the 
"Hyde Street Harbor Waterside Facility," to Concept Marine Associates, 
Inc., at a cost not-to-exceed $240,300. 



/ hereby certify that the foregoing resolution was adopted by the Port Commission at its 
meeting of May 13, 1997. 



Secretary 



F:\HYDEST.WPD 



PORT OF SAN FRANCISCO 



TO: 



FROM: 



MEMORAr«)UM 

May 7, 1997 

MEMBERS, PORT COMMISSION 
Hon. Michael Hardeman, President 
Hon. Denise McCarthy, Vice President 
Hon. Frankie G. Lee 
Hon. James Herman 



Douglas F. Wong 
Executive Director^ 



>' 




Ferry Building 

San Francisco, CA 94111 

Teieplione 415 274 0400 

Telex 275940 PSF UR 

Fax 415 274 0528 

Cable SFPORTCOMM 

Writer 



SUBJECT: First Amendment to the Professional Services Contract for "New Port 
Maintenance Facility" 

DIRECTORS RECOMMENDATION: APPROVAL OF FIRST AMENDMENT, 
AUTHORIZING REVISION OF THE REQUIRED AND ADDITIONAL SERVICES UNDER 
PROFESSIONAL SERVICES CONTRACT NO. SA39760016, "NEW PORT MAINTENANCE 
FACILITY," WITH KENDALL YOUNG ASSOCIATES/BEVERLY PRIOR ARCHITECTS 
("KYA/BPA"), A JOINT VENTURE 

The Commission previously awarded a contract to KYA/BPA for the design of the New 
Maintenance Facility ("NMF") at Pier 48. Because the NMF will be located at Pier 50 instead of 
Pier 48, it is necessary to amend KYA/BPA's scope of services. Although much of KYA/BPA's 
work to date in designing shops and storage facilities will be used for the Pier 50 facility design, 
the change in location of the NMF does necessitate two changes in the scope of work. 

KYA/BPA's contract will be amended to redirect their original design services related to the NMF 
to Pier 50 instead of Pier 48. There is no cost impact for this change since the remaining contract 
balance of $235,1 18 will be used to fund this work. This work includes shop design and layout, 
mechanical and electrical design, construction documents preparation, and construction support 
services. 

KYA/BPA's contract will also be amended to include limited additional services for the design of 
interior repairs to the fire damaged areas at Pier 48. The cost of the additional services is 
$72,644. The interior repairs will include new firewalls, new coiling fire doors, a sprinkler 
system, light fixtures, and a fire alarm system. KYA/BPA will prepare the necessary construction 
and bid documents for the Port to solicit bids to accomplish this work. It is anticipated that these 
additional services will be paid for by the fire insurance company. Accordingly, KYA/BPA will 
be authorized to proceed with these services only upon confirmation of fire insurance company 
coverage. 



Prepared by: Cliff Jarrard, Chief Harbor Engineer 
THIS PRINT COVERS CALENDAR ITEM NO. 6B 



I:\COMM MEM.WPD 



PORT COMMISSION 
CITY AND COUNTY OF SAN FRANCISCO 

RESOLUTION NO. 97-36 

WHEREAS, the Commission previously awarded a contract to Kendall Young 

Associates/Beverly Prior Architects ("KYA/BPA"), A Joint Venture, for 
the design of the New Maintenance Facility ("NMF") at Pier 48; and 

WHEREAS, the NMF will be located at Pier 50 instead of Pier 48; and 

WHEREAS, although much of KYA/BPA 's work to date in designing shops and 

storage facilities will be used for the Pier 50 facility design, the change in 
location of the NMF does necessitate two changes in the scope of work; 
and KYA/BPA 's contract will be amended to redirect their original 
services related to the NMF to Pier 50 instead of Pier 48; and there is no 
cost impact for this change since the remaining contract balance of 
$235,118 will be used to fund this work; and 

WHEREAS, this work includes shop design and layout, mechanical and electrical 
design, construction documents preparation, and construction support 
services; and 

WHEREAS, KYA/BPA' s contract will also be amended to include limited additional 

services for the design of interior repairs to the fire damaged areas at Pier 
48; and 

WHEREAS, the cost of the additional services is $72,644; and 

WHEREAS, the interior repairs will include new firewalls, new coiling fire doors, a 
sprinkler system, light fixtures, and a fire alarm system; and KYA/BPA 
will prepare the necessary construction and bid documents for the Port to 
solicit bids to accomplish this work; and it is anticipated that these 
additional design services will be paid for by the fire insurance company; 
and accordingly, KYA/BPA will be authorized to proceed with these 
services only upon confirmation of fire insurance company coverage; 
therefore be it 



RESOLVED, 



the San Francisco Port Commission hereby approves the First 
Amendment to the KYA/BPA Professional Services Contract No. 
39760016, "New Maintenance Facility," for redirecting NMF services to 
Pier 50 instead of Pier 48 and for additional services for $72,644. 



/ hereby certify that the foregoing resolution was adopted by the Port Commission at its 
meeting of May 13, 1997. 



Secretary 



CITY AND COUNTY OF SAN FRANCISCO 
PORT COMMISSION 

MINUTES OF THE REGULAR MEETING DOCUMENTS DEPT. 

MAY 13, 1997 

OCT 8 1999 

1 uniT rATi SAN FRANCISCO 

1. ROLL CALL PUBLIC LIBRARY 

The meeting was called to order by Commission President Michael Hardeman at 4:09 
p.m. The following Commissioners were present: Michael Hardeman, Denise McCarthy, 
Frankie Lee and James Herman. 

2. APPROVAL OF MINUTES - April 22, 1997 Meeting 

ACTION: Commissioner McCarthy moved approval; Commissioner Lee seconded the 
motion. All of the Commissioners were in favor; the minutes of the meeting 
were adopted. 

3. EXECUTFVE 

A. Executive Director's Report : 

1) The Black and White Ball was held on Saturday, May 10, 1997 from 9:00 p.m. to 
2:00 a.m. and comprised music and dancing in nine separate locations with 
approximately fifteen stages and approximately fifty musical groups. The venues 
included the Hyatt Regency, One Market Restaurant, Embarcadero Four, Justin 
Herman Plaza, and the Port's parking lots from Mission to Broadway in the 
Embarcadero median. In addition, the Ball used Pier 29 for staging of the La 
Compagnie Malabar (circus performers), as well as a light installation on the 
Ferry Tower that projected the Ball's logo on the Ferry Tower. Approximately 
12,000 people attended. It's the most successftil Symphony fiind raiser in the 
United States. The Port received a $10,000 fee toward cost recovery. Port staff 
coordinated the relocation of 300 parking tenants to Port parking meters for one 
week, issued a License to Use Property, Port building permit and coordinated 
several meetings over a three-month period. 

2) The 14th Annual Port Whaleboat Race will be held on Wednesday, May 13 at the 
Port promenade from 10:30 a.m. to 1:00 p.m. The Port will compete in all 
divisions - men's, women's and co-ed. He invited the Commission to watch the 
whaleboat race. 

3) Sharon Rogers who worked for the Department of City Planning but worked 
closely with the Port on Port projects for many years, died on April 27 from 
leukemia-related complications. Sharon was respected and well liked by her 
peers at City Planning as well as by Port staff with whom she worked most 



M051397.igq 



-1- 



closely. He requested that the Port Commission adjourn today's meeting in 
Sharon Rogers' honor. He noted that he will send a personal note to Sharon's 
family expressing the Port's gratitude for her contributions and extend our 
sympathy for their loss. 

4. MARITIME 

A. Report on Port of San Francisco's 1997 Cruise Season and Projections for future 
business growth. (Information Only) 

Ms. Veronica Sanchez, Manager of Governmental Affairs, presented this item in 
conjunction with the Maritime Division because the short- and long-term cruise 
marketing efforts have been a joint project by both divisions. The cruise season for 
the Port is here. Next Monday, the Crystal Symphony will sail passed the Ferry 
Building en route to San Francisco Drydock where she will be worked on for ten 
days. This will produce six hundred jobs for blue collar workers. This is a 
tremendous success not only for our yard but also for the tourism industry in San 
Francisco because the Crystal Symphony will be home ported in San Francisco for six 
cruises this summer. 

She introduced Gerry Roybal, Cruise Marketing Representative. She indicated that it 
is important that the Conmiission sees first hand the work that Mr. Roybal is doing to 
build an economic model of what the economic impact of our industry is to the City. 
This is the first time that this model has been produced. Mr. Roybal 's work is so 
exceptional that the California Tourism Commission actually used this model in their 
report to analyze the cruising industry in California and the presentation compiled 
here has also been presented in many other California cities and the East Coast. 

Mr. Roybal indicated that in 1996, the Port saw an exceptional growth over the prior 
years. In 1996, the Port experienced 47 visits by passenger ships, bringing almost 
53,000 visitors to San Francisco. Tourism expenditures (such as ground operation, 
bus tours, taxis, limos, hotels, restaurants, T-shirts, etc.) last year generated 
approximately $7 million. Shoreside labor generated $1.5 million. Vessel Services 
generated approximately $8.1 million. Last year, three ships entered the San 
Francisco Drydock, generating a total of $1.5 million and sixteen full time 
employment were created. 

1997 will be a banner year. This is the best year that the Port will experience since 
1985. 53 visits by passenger cruise ships are expected and will bring more than 
90,000 visitors, an 81 % increase in revenue to the Port. The Port will realize an 
overall 42% increase in the impact of total dollars that vessels spend and a 67% 
increase in tourism expenditures. The local impact this year should be in excess of 
$27 million. More than 13,000 long shore labor hours should be generated this year, 
which will employ seven people full time, all year round. 

Worth noting, however, are the majority of our eggs are in the Alaska basket. 90% 
of the visitors who call on San Francisco come for the purpose of visiting Alaska. 

M051397.igq -2- 



The Alaska homeport vessels are the impact of our core business. 43% of our visitors 
are brought by homeport vessels. It is critical to understand that only two lines are 
generating this level of business. Crystal Cruises will have the greatest economic 
benefit. Princess Cruises has been dedicated to San Francisco for 28 years now. It is 
important to point out the significance of our core business because it determines our 
strategy to develop this industry. There are 38 large cruise ships on order to be built 
over the next three years. A majority of those will enter the United States market. 
Every time a larger, newer ship comes in, there will be a dramatic increase in the 
impact of each individual port call. It no longer will be important to simply monitor 
the number of calls. It would be significant to understand how many passengers come 
as a result of those calls. 

The passenger cruise industry is going mainstream. In order to help this industry 
grow, Port staff is looking at business retention and relationship building. To help the 
Port climb out of its dependency on Alaska, staff's interim strategy is to develop hew 
product and itinerary sales. Staff has designed new ideas for cruises such as a 11 -day 
cruise (known as two-nation vacation) which is a round trip from San Francisco to 
Mexico that would also allow stops at off ports such as Santa Barbara and Monterey. 
Staff is also thinking of implementing a discounting scheme for ships that come in 
over night. The second day would be free or discounted, whereby it would allow 
ships to come in and give their passengers more time to enjoy the sites and sounds of 
San Francisco. One of the key stone for Customer and Consumer satisfaction is to 
continue the focus on infrastructure upgrades and efficiencies. This year, the Port has 
spent more than $2 million in implementing greater efficiencies in the passenger 
cruise terminal such as installation of escalators and elevators. The ships are getting 
bigger, which create operational idiosyncracies that the Port needs to deal with. It is 
important to have a budget to be able to deal with this so we can continue to be a 
major cruise port of call. 

Ultimately, staff is looking at the long-term strategy which would give the Port 
explosive growth. This long-term strategy is the waiver of the Passenger Services Act 
which would allow the Port to open up a whole new market and make more cruise 
products accessible to the mamstream. This will create a new concept in the United 
States such as regional cruising. This means that you no longer have to fly to Miami 
to catch a cruise ship, you can go to your local port and catch your ship there. It 
would give you the oppormnity to take a three or four-day cruise, something that 
cannot be done unless the law is changed. If this law were to change, the growth 
numbers would be astronomical. He expressed that the numbers can be accomplished 
if only seven ships were deployed anywhere from three to nine months in the Pacific. 
Instead of 53,000 cruise passengers last year, there would be an additional 144,000; 
almost 200,000 passengers a year can come to San Francisco. The total impact would 
be an additional $26 million in vessel expenditures and additional $18 million in 
tourism and creation of more than 36,000 hours of work for longshoremen. 

Ms. Sanchez indicated that last year the Commission passed a resolution in support of 
changing the PSA. In the past year, staff has been working with other ports to 
prepare a legislation, known as the United States Cruise Tourism Act of 1997. The 



M051397.igq 



legislation will be coauthored by Senator Thurmond of South Carolina and Senator 
Murkowski of Alaska. The legislation is for job creation and job protection. She 
reiterated that the legislation protects the Jones Act; it has no threat to the Jones Act. 
It also protects the existing American operator in Hawaii. It allows them to continue 
to operate without any competition by any foreign flag vessels. The objective is to 
create new jobs and not put any American jobs at risk. It protects smaller cruise 
companies, excursion vessels and ferries. It also protects future American ocean 
going cruise vessels. 

The intent of the legislation is to provide a temporary license to a foreign flag cruise 
ship to enter the domestic itinerary without having to touch a foreign port. It allows 
the Secretary of Transportation to grant the permit. The PSA will still remain on the 
books. It just says basically if a foreign cruise line wants to enter a domestic itinerary 
it would get a waiver or a temporary license from the Dept. of Transportation to 
operate where there is no cruise ship operating in a coastal trade like San Francisco to 
Monterey. It must provide full luxury accommodation. It cannot compete directly 
with any existing US flag ship. Most importantly, any ocean liner that would go into 
coastal itinerary would have to have their ship repair work done in the US yard. The 
legislation is scheduled for introduction and it is our hope to have a hearing on the bill 
some time in the summer. Mayor Brown has written Senator Feinstein a letter asking 
for her support on the bill and to have her co-author the legislation. 

However, there are union concerns regarding the bill with regards to the Jones Act. 
Staff will continue to articulate its intent to preserve the Jones Act and to work with 
co-authors. Other union issues that have been raised will be worked through the 
process. We look forward to a hearing that would give us an opportunity to express 
our point of view and the importance of this industry. 

Commissioner McCarthy asked for a briefing on the operation of the terminal. Mr. 
Roybal indicated that our current operator is working on a 30-day month-to-month 
tenancy. The RFP that was put out two years ago was unresolved. The current 
operator has new management in the terminal and the enhancements have been 
noticeable and positive. In fairness to both our cruise customers and to our operator, 
we owe it to them to work out the current season and the status quo and sit down with 
them at the end of the year and figure out what preparations and equipment upgrades 
they are ready to undertake in exchange for long-term agreement. Commissioner 
McCarthy asked who monitors the operations at the terminal. Mr. Roybal replied that 
Charlie Mitchell, the Chief Wharfinger, oversees the operations at the terminal. Mr. 
Roybal 's function is one of communicating and connecting with the lines. 
Conmiissioner McCarthy indicated that she was on board the Galaxy last week and 
she was concerned about the equipment that was used. It was difficult for the 
passengers in wheelchairs as well as elderly people. She raised the issue because she 
believes that Mr. Roybal has done an admirable job, especially with the whole 
strategy but the Port has to put a great deal of emphasis on infrastructure if this Act 
should change. It is important for the Port to continually monitor the facility to 
ensure that it is adequate to help out the passengers. 



M051397.igq 



.4. 



Commissioner Herman indicated that he genuinely appreciates Mr. Roybal's unfailing 
support he has given to all seafarers' union. There is, what he hopes, a momentary 
dispute with seafarmg unions. Unfortunately, the ILWU lighted on the wrong side 
because of the intensity of the disagreement over the impact and application of the 
Passenger Services Act (PSA). There is no question, without looking at the PSA 
objectively, that one will agree that the law is obsolete. It came into being in order to 
accommodate Canadian ships. Now, Canadian ships seem to have captured most of 
the work. For the ILWU, the amount of work is significant. It is time to come into 
the new century. It is ironic that in arguing this legislation one would talk about one 
or two or seven or eight jobs, a woefully inadequate number considering the plight of 
the maritime industry. 

He noted that their union supports the seafaring unions in almost every respect, except 
a difference of opinion around the validity of maintaining the PSA. He hopes that the 
Act is altered so as to give the longshore workforce that amount of work that they are 
entitled to that other American longshoremen and people employed in transportation 
have and were complimented by the presence of the activism of Veronica Sanchez, 
who leaves no stone unturned in raising this question militantly, vigorously and 
accurately wherever she has an opportunity to visit. He hopes that an effective 
coalition is formed. He recognizes the serious difficulty that the American seafarers 
are in and are prepared and committed to doing everything possible to alleviate the 
difficulties that American seafarers have. 

He took note of Commissioner McCarthy's observation where safety leaves much to 
be desired. There recently was a fire on one of the American passenger ships because 
it did not live up to code. It is in the shipyard now and it will come out and will live 
up to code that will be admirable and will be enthusiastically supported. There is no 
real argument that can be advanced to tie the PSA into the Jones Act. They are 
irrelevant one to the other. For West Coast longshoremen, the number of jobs is 
significant. An alteration or change in the PSA was not supported by members of 
their union, by convention vote, because they were confused around the issue. He 
made an assurance that when this issue comes up again, they will support legitimate 
amendments to the PSA. They are appreciative of the unqualified support that was 
given to all seafarers, longshoremen and their yearning for more employment, for 
safer employment and for all legislation necessary in order to make the jobs more 
attractive and to share the jobs more equitably among all seafaring personnel not only 
for this issue but for all the years that ILWU has been around. Together with the 
American seafarers, they enthusiastically support the preservation of the Jones Act. 
They believe that there should be a more rationale look at their position on 
amendments to the PSA. He hopes that it would come to pass soon and he thanked 
Mr. Roybal for his help. He also thanked Ms. Veronica Sanchez, who is assigned full 
time to this project, so as to create jobs and make legitimate changes that will be safe, 
will encourage more seafaring passenger traffic that will reinstate all the work that at 
one time had on American passenger ships. 

Commissioner Lee thanked Gerry and Veronica for all their hard work. He indicated 
that it is time to seriously look at a brand new cruise terminal. Staff has spent a lot of 



M051397.igq 



time and money to upgrade the current facility but it is not working sufficiently. Port 
staff should develop it or put out an RFP if there's interest in developing it. 

Mr. Wong commented that during their trade mission to Asia, many different shippmg 
lines were interested in seeing what the possibilities are at the Port. They are closely 
monitoring what's happening with the PSA. The Mayor is very attuned and very 
supportive of PSA. If it passes, we would be very attuned to bringing our passenger 
terminal into real international standards. Much of this depends upon what happens 
with the PSA. From the development standpoint, if the PSA passes, the response will 
be very positive. If the result is not positive this year and we have to go out again 
next year, the response might not be as favorable. Staff will monitor this closely and 
report back to the Conmiission. 

Commissioner Hardeman echoed Commissioner Herman's statements that there were 
concerns from the labor union that were addressed. When the Commission voted to 
approve amendments to the PSA last year, some strings were attached. However, as 
shown on the graphs today, the areas of concern were addressed and complimented 
Ms. Sanchez and Mr. Roybal for all their work. 

5. REAL ESTATE AND ASSET MANAGEMENT 

6. FACILITIES & OPERATIONS 

A. Authorization to award the Professional Services Contract for the "Hyde Street 
Harbor Waterside Facility" to Concept Marine Associates. Inc. (Resolution No. 
97-39^ 

Mr. Alex Lee, Director of Facilities and Operations, indicated that the item before the 
Conmiission is to authorize staff to award llie Professional Services Contract for the 
Hyde Street Harbor Waterside Facility to Concept Marine Associates. On November 
12, 1996, the Port Commission authorized staff to issue a Request for Proposal for 
architecmral/engineering services for the design of the $1 .4 million Hyde Street 
Waterside Facility. The project is funded by a loan from the California Boating and 
Waterways. The Project is estimated to cost $1.4 million. The project will include 
accessible gangways, concrete support floats for sixty fishing berths, floating debris 
barrier, lighting, utilities and sewer, water and bilge pumpout station. The Port 
issued an RFP in January and received five proposals in February. The selection 
panel interviewed three and Concept Marine Associates (CMA) received the highest 
score. The Port and CMA agreed to a not-to-exceed fee of $240,300 to provide the 
required A/E services. 

Commissioner McCarthy asked for the time line of this project. Mr. Cliff Jarrard, 
Chief Harbor Engineer, replied that the project is broken up into two phases. The 
first phase would be 45 days. The consultant, in conjunction with the community, 
will develop a concept. After approval of the concept and layout, staff will give the 
consultant authority to move into the second phase, which is approximately a four- 
month process. Staff hopes to get the consultant on board within three weeks after the 



M051397.igq 



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Civil Service approval is sought. Commissioner McCarthy asked if the general layout 
is based on the old plan. Mr. Jarrard replied that the general layout, at the onset, will 
be based on the old layout. It will be the starting point so that the consultant will have 
a general idea. The final layout will depend upon the community's input. 

Commissioner Lee inquired about the status of the Fisherman's Wharf lighting 
project. Mr. Lee replied that staff is working with the architectural firm to locate 
some of the lighting standards at Fisherman's Wharf area. Placement of the standards 
will have to be changed at some locations. Once it is finalized, construction will 
commence. 

Ms. Meg Reilly, representing the Dolphin Swimming and Boating Club, indicated that 
the Port's Fisherman's Wharf Environmental Quality Advisory Conmiittee was not 
able to participate in designing the original RFP but were able to include some 
changes, which were incorporated into an addendum, which resulted into a vastly 
improved RFP. Included were: (1) a credential requirement that the firm selected 
have water quality credentials; (2) the project was to be highly protective of water 
quality; (3) identify that an EIR has been done on the project and designate it as a 
required reading for the selected consultant. They then asked to participate in the 
selection committee but were denied the opportunity. She indicated that they have not 
seen the professional services contract; therefore, it is hard to support the contract. 
She made it clear, however, that the Dolphin Club does not object to the project. 
They have observed that the project is disintegrating and it has been divided into three 
or four parts (waterside, landside, the dredge portion). None of the landside 
amenities (such as showers, plumbing, lights) appeared in the drawings. No one 
thought about the storage areas for spill containers or designated areas for bilge water 
and pumpout. The fuel stock was left out of the landside drawing. They did not get 
any clear answers as to the amount of fill that would removed and added. They don't 
believe that the project should be divided up. The time and the pace and coordination 
of the various parts need to happen at the same time. 

Mr. Alex Lee stated that the professional services contract with CMA will include 
both the landside and waterside concept in the design of the utility system (mechanical 
and electrical system). They do not foresee additional work being contracted to 
another A/E firm. The rest of the work will be done by Port staff or DPW 
Engineering. 

ACTION: Commissioner McCarthy moved approval; Commissioner Lee seconded 
the motion. AH of the Commissioners were in favor; the resolution was 
adopted. 

B. Approval of First Amendment, authorizing revision of the required and additional 
services under Professional Services Contract No. SA 39760016. "New Port 
Maintenance Facility." with Kendall Young Associates/Beverly Prior Architects, a 
Joint Venmre. (Resolution No. 97-36) THIS ITEM WAS PUT OVER TO THE 
NEXT MEETING 



M051397.igq 



7. PLANNING & DEVELOPMENT 

A. Presentation on the traffic and circulation aspects of the Pier 52 boat launch project 
and Terry Francois Boulevard. (Information Only) 

Mr. Paul Osmundson, Director of Planning and Development, stated that this is an 
informational presentation on the traffic and circulation aspects of the Pier 52 boat 
launch project. At the April 22, 1997 Port Conmiission meeting, he made a 
presentation regarding the scope of the project, the available funding and a 
recommendation regarding deferring the construction of the restaurant bait shop and 
dining deck to a subsequent phase. Several questions were raised by members of the 
public at that meeting regarding the impacts of the proposed China Basin Ballpark 
project on traffic and circulation for the Pier 52 boat launch project. 

The project involves a double lane boat launch, gangway and floats, providing 
disabled access, shoreline improvements and public access, landscaping and site 
improvements and a 20-space trailer boat parking lot. Port staff has conveyed to both 
the Giants and the Office of Environmental Review the boat club's concerns regarding 
the impact of the traffic on Terry Francois Boulevard. One of the ballpark EIR's 
mitigation measures involved striping Terry Francois Boulevard to provide four lanes 
of traffic. What is not clearly identified is whether how those lanes would be 
managed. Staff will be working with the Giants, Dept of Parking & Traffic, the boat 
clubs to determine the management of those lanes. 

Mr. Osmundson then showed the Commission a drawing of the roadway alignment 
between the two boat clubs immediately adjacent to the boat launch. The existing 
roadway width in this area is a total of 66 feet to provide four travel lanes. In its 
existing condition, Terry Francois Blvd. can accommodate the required traffic lanes. 
The drawing showed the proposed geometry of the boat launch along the waterside- 
four travel lanes in the boat parking lot. The current curb line on the waterside of 
Terry Francois Blvd and the curb line for the boat launch project is approximately 20 
feet. The reason the ramp is designed in that fashion is twofold: (1) to minimize the 
amount of fill in the bay; and (2) it reduces the cost. 

In terms of circulation in and out of the boat launch, Mr. Osmundson indicated that it 
has been designed to allow for right turns from northbound to Terry Francois Blvd. 
One of the requirements of the CalBoating grant for the project is to have sufficient 
room to maneuver and turn around a boat with a trailer completely off street. Staff's 
design does allow for that to happen and that aspect of the circulation can be 
accommodated. The second option involves moving the curb line back towards the 
water in order to provide additional right of way width on Terry Francois Blvd. to 
provide for bike lanes between Mariposa/Hunters Point Boat Club and the Bayview 
Club or on the alternate, the additional 8 feet could provide a curb side parking lane 
that could be used for parking of vehicles or boat with trailers temporarily while they 
load/unload. 

Lastly, he pointed out that some of the concerns expressed were related to access to 

M051397.igq -8- 



the waterfront for the boat clubs on weekends and evenings. Staff has looked at the 
Terry Francois Blvd, south of the Bay view Boat Club and believed that there is 
enough roadway width to provide for parking along both the north and south bound 
lanes. Further, in discussion with members of the boat clubs, renting parking spaces 
to them will be considered so that they can be ensured access to the waterfront during 
a ball game so that they can continue to use the facilities. 

Commissioner McCarthy stated that there is room for one boat and a trailer to come 
in, turn around and back in. This process, however, takes a long time and wondered 
what happens if several people want to do it at the same time in the morning. Mr. 
Osmundson replied that they would have to wait and queue up on the roadway in 
order to allow the previous user to get out of the way. 

Commissioner Herman wondered if it is possible for a boat that is towing a trailer to 
get a single berth where they would be able to park reasonably close to the harbor, go 
out and then take a minimal amount of space temporarily, allowing for more space for 
trailer access. Mr. Osmundson replied that they could either park in the lot across the 
street or utilize the option he described wherein the curb side lane adjacent to the boat 
ramp would be reserved for boat related activity. That location would be available for 
someone to park a trailer on a short term basis. The location of the parking lot 
directly across from the boat ramp was intended to make it as conveniently as possible 
for the boaters' trailers. Commissioner Herman asked how many boats would be 
acconmiodated. Mr. Osmundson responded it can acconraiodate about 20 small boats, 
but on a very busy day, the area would not be adequate. There will be additional 
needs beyond what can be accommodated in the area. 

Commissioner Lee indicated that at the last meeting the concern was access to the area 
during a ballgame. He noted that there will be a lot of traffic diverted into Terry 
Francois Blvd and will be interfermg with boating activities. He asked if Option 1 or 
Option 2 is the solution to mitigate the concern. Mr. Osmundson responded that 
physically we can accommodate some space to address the concerns. There are other 
issues that relate to how we manage those traffic lanes and how we manage the curb 
space along the water. 

Commissioner McCarthy inquired if BCDC is the driving force in making the 
decision. Mr. Osmundson indicated that Carleen Ho, the project manager, has spoken 
to BCDC staff about relocating the curb line. BCDC does not have any significant 
concerns about it. He believes that the relocation of the curb line would be a good 
solution. 

Commissioner Hardeman stated that boaters who are not baseball fans could probably 
work around the schedule so as to alleviate congestion. Mr. Osmundson indicated 
that we want to do everything we can to provide space and mechanism. He stated that 
an advisory group was set up to address the boat clubs and the community's concerns 
They will continue with those efforts. Commissioner Hardeman commended staff for 
domg an excellent job. 



M051397.igq 



8. FINANCE AND ADMINISTRATION 

9. CONSENT CALENDAR 

10. NEW BUSINESS / PUBLIC COMMENT 

Daniel Cassidy, Director of the Irish Studies Program at New College of California, 
indicated that it is with some dismay that he comes to address the Commissioners. He was 
shocked to discover that the Port Commission seems to be cooperating with the British 
government, which he considers a shameless public relations campaign, a campaign that is 
covering up war crimes, human rights violations, colonial deprivation that's been ongoing 
for years. It is a history that continues today, a history that is littered with one human 
rights violation after another. He asked the Commission to explain to the Irish American 
conmiunity, to the labor community and to all people who are in favor of human rights 
and democracy, why the Commission is acting as a shield for the British government. He 
asked why the British banners are located up and down the Embarcadero. He believes that 
if those signs do not come down in the next week, they will be personally taken down. He 
asked the Commission for their cooperation. 

John Fogarty, Regional Vice President for Human Rights for the Irish American Unity 
Conference, stated that the purpose of Britain Meets the Bay escapes him. In 1994, he 
was in England on a fact-finding mission on behalf of their organization and met with their 
Fair Employment Commission. They came away from the meeting saddened by what they 
saw. The Conmiission absolutely does nothing to achieve fair employment. He pointed 
out that the British government is Europe's most convicted nation in the world court for 
human rights violation. Consequently, many Irish and Irish Americans do not see the 
British signs as a fitting symbol on the Embarcadero. The Commission would have been 
aware of the situation had there been a public conmient. He urged the Commission to pay 
attention to the his and Mr. Cassidy 's concerns. Those signs are offensive to the people 
who live in San Francisco. He hopes that the Commission would do the right thing. 

Commissioner Hardeman asked the Executive Director to give a background on the 
matter. Mr. Wong stated that the banners are not only located along the waterfront but 
also all around the City. The Department of Public Works approached the Port for a 
permit. This is a City wide promotional program. Britain by the Bay also has a 
promotional program with the Port's largest cruise operator. Princess Cruises, and is 
advertised on the banners. He reiterated that this is a City wide program that the 
Department of Public Works asked for a permit and the Port granted permit. 

Commissioner Hardeman indicated that the Commission and the Executive Director will 
take notes of the conaments. 

Owen Marron, Executive Secretary of the Central Labor Council of Alameda County, 
gave the Commission a copy of a resolution passed by their council. The resolution was 
adopted by the 2 million member of the California Labor Federation and the 13 million 
member AFL/CIO. He echoed Mr. Cassidy's and Mr. Fogarty's comments. He urged 
the Commission to follow their request. It is very clear that there's a great deal of 



M051397.igq 



■10- 



injustice done. Justice must be done on behalf of the Irish people who have been exploited 
by the British. He does not believe that Mr. Wong's response is adequate. He asked the 
Commission to revoke the permits and have the banners removed. He urged the 
Commission to remove the banners or, if not, work out a compromise. 

Commissioner McCarthy inquired how long will the banners be up. Mr. Roybal replied 
that the Britain by the Bay's series of events is slated at the end of June. The banners will 
be taken down before that. The Conference of Mayors banners would be put up in their 
place sometime the second week of June. Commissioner McCarthy commented that there 
are an awful lot of banners. Mr. Wong stated that DPW got the permit from the Port and 
had their contractor put up the banners. Staff will provide the Commission what the time 
line is and what the permit process was. Commissioner McCarthy pointed out that this 
issue was never brought to the Commission for approval. 

Commissioner Herman stated that the presence of such offensive signs does represent a 
wrath of all but San Franciscans the history of the Irish struggle, the brutality that was 
visited and still remains. The Commission should not be tolerant, patient or 
accommodating to this free expression that is really a fact of a frightftil history. He knows 
that the Executive Director and the Commission will cooperate in whatever way that it can 
to see to it that the signs are removed and cooperate with those who are engaged in this 
legitimate effort. He then complimented them for bringing this matter to the 
Commission's attention. 

Peter Gaine stated that the Liverpool dock workers is a situation that has been going on for 
over a year and a half where over 500 Liverpool dock workers were unceremoniously 
dumped for honoring a picket line of much smaller group. They realize what is going on 
in Britain. They are insisting on going back to the old shape-up system, ultimately to 
break the unions completely. What makes it even more damning is the British government 
is a part-owner of the Mercy side docks. He wanted to bring this up as another example 
why we should be outraged with the British signs in our City. 

Ms. Meg Reilly suggested some action items: (1) The Commission should take a tour of 
the Fisherman's Wharf area with the Environmental Water Quality Advisory Committee. 
(2) Veronica Sanchez or someone as skilled as she is would be put to work to find some 
money for the Hyde Street Harbor project. The CalBoating loan went into place long ago 
well before the environmental water needs of this project were recognized. There is 
money out there, evidenced in her conversations with EPA, CalBoating and Coastal 
Conservancy. They will not accept an answer that there is no money budgeted for the 
environmental aspect of this project. (3) The Port should adopt the water quality policy. 
In addition, once this project is built, the Port might consider putting the management of 
the entire harbor area out to a contractor. History tells us that the Port has not manage 
this area well. Perhaps, an outside contractor could manage it better. 

She then showed pictures of the water at Fisherman's Wharf area and pictures of the 
disastrous fish alley area. She provided the Port with copies of EPA's best management 
practices, both for urban areas and management measures for marinas and recreational 
boating. They include 14 best management practices but has not gotten anybody to take 



M051397.igq 



-11- 



ownership of these materials. There are a flotilla of 30 proposed new laws relating to 
water quality and coastal management which the Port will be subjected to. The Port should 
be looking for money and needs to get serious on this matter. 

Mr. Tom Creedon, Scoma's Restaurant, shared Meg Reilly's concerns. He noted that Ms. 
Reilly is speaking about things that haven't been addressed. It hurts to find out that 
funding is available for things that should have been implemented a few years ago such as 
a bilge pumping station that should have been installed at the fiiel docks. He urged the 
Commission to take a step forward now. 

Commissioner McCarthy commented that after the lengthy discussions about the fishing 
industry and the conditions at Pier 45, the project was completed and as a result a modem 
facility was constructed. What Ms. Reilly and Mr. Creadon talked about today should be 
taken to heart. Ms. Sanchez is very good at obtaining grants. If the research is correct, 
there may be some money for these projects. She realizes how frustrating it is for Ms. 
Reilly and Mr. Creedon and at the same time, understands staff's point of view. She, 
however, would like to see forward action on this and would appreciate to get a report on 
this matter. 

Commissioner Hardeman adjourned the public session in Sharon Rogers' honor. 

11. EXECUTIVE SESSION 

At 5:50 p.m., the Commission Secretary announced that the Commission will withdraw to 
executive session to discuss the following: 

A. CONFERENCE WITH REAL PROPERTY NEGOTIATOR - This session is closed 
to any non-Citv/Port representative. * 

1) Property : Port property located at Berry Street and Second Street (China Basin). 
Person Negotiating : Port representative: Douglas F. Wong, Executive Director 
*San Francisco Giants Representative : Larry Baer, Executive Vice President 

Under Negotiation: Price Terms of Payment / Both 

An executive session has been calendared to discuss real property negotiations 
between the Port and San Francisco Giants, regarding the proposed ballpark. 

This is specifically authorized under California Government Code Section 
54956.8. 

B. CONFERENCE WITH LEGAL COUNSEL REGARDING ANTICIPATED AND 
EXISTING LITIGATION MATTERS: 

1) Initiation of Litigation pursuant to subdivision (c) of California Government Code 
Section 54956.9 (1 case) 

(a) Red and White Fleet, Inc. (formerly Harbor Carriers, Inc., a subsidiary of 

M051397.igq -12- 



Crowley Corporation) operating at Pier 41. 

2) Discuss significant exposure to litigation pursuant to subdivision (b) of California 
Government Code Section 54956.9 (1 case). 

C. Vote in open session on whether to disclose Executive Session discussions 
(S.F. Admin. Code Sec. 67.14) 

At 6:33 p.m.. Commissioners Hardeman, McCarthy, Lee and Herman returned 
from executive session and convened in public session. 

ACTION: Conmiissioner McCarthy moved approval to not disclose any 

information discussed in the executive session; Commissioner Lee 
seconded the motion. All of the Commissioners were in favor. 

The meeting was adjourned at 6:35 p.m. 



M051397.igq "13- 



/SAN FRANCISCO 
PORT COMMISSION 



^ 



SPECIAL MEETINGl 



3:00 P.M.,^MAY275j^97j4-<-PLEASE NOTE THE TIME OF THE MEETING 

FERRY BUILDING, SUITE 3100 
SAN FRANCISCO, CALIFORNIA 






AGENDA 



1. ROLL CALL 



W/iy 2 3 1997 

^^UBL/C L/BRARy 



2. NEW BUSINESS/PUBLIC COMMENT 



Public comment is permitted on any matter within Port jurisdiction, and is not limited to 
agenda items. Public comment on non-agenda items may be raised during New 
Business/Public Comment. Please fill out a speaker card and hand it to the Commission 
Secretary. Each speaker is limited to three minutes. 



3. EXECUTIVE SESSION 

A. CONFERENCE WITH REAL PROPERTY NEGOTIATOR 
to any non-Citv/Port representative. * 



This session is closed 



1) Property : Port property located at Berry Street and Second Street (China Basin). 
Person Negotiating : Port representative: Douglas F. Wong, Executive Director 
*San Francisco Giants Representative : Larry Baer, Executive Vice President 



Under Negotiation: 



Price 



Terms of Payment / Both 



An executive session has been calendared to discuss real property negotiations 
between the Port and San Francisco Giants, regarding the proposed ballpark. 

This is specifically authorized under California Government Code Section 
54956.8. 

B. CONFERENCE WITH REAL PROPERTY NEGOTIATOR - This session is closed 
to any non-Citv/Port representative. * 

1) Property : Port property located at Pier 80 

Person Negotiating : Port representative: Douglas F. Wong, Executive 

Director 

*Recycle Central. Inc. Representative : Mike Sangiacomo, President and Don 

Moriel, Executive Vice President 



A052797.igq 



^ 



Under Negotiation: Price Terms of Payment / Both 

An executive session has been calendared to discuss real property negotiations 
between the Port and Recycle Central, Inc., regarding the property located at 
Pier 80. 

This is specifically authorized under California Government Code Section 
54956.8. 

C. CONFERENCE WITH LEGAL COUNSEL REGARDING EXISTING AND 
ANTICIPATED LITIGATION MATTERS: 

1) Discuss existing litigation matter pursuant to subdivision (a) of California 
Government Code Section 54956.9 

a. Caputo V. CCSF : San Francisco Superior Court Case No. 979843. 

b. C hez Laura Enterprises. Inc.. dba Lou's Pier 47 v. CCSF : United States 
Bankruptcy Court Case No. 97-301 11 -DM- 11 

2) Initiation of Litigation pursuant to subdivision (c) of California Government Code 
Section 54956.9 (1 case) 

I 

a. Red and White Fleet, Inc. (formerly Harbor Carriers, Inc., a subsidiary of 
Crowley Corporation) operating at Pier 41. 

3) Discuss significant exposure to litigation pursuant to subdivision (b) of California 
Government Code Section 54956.9 (1 case). 

D. Vote in open session on whether to disclose Executive Session discussions (S.F. 
Admin. Code Sec. 67.14) 



4. ADJOURNMENT 



( 



A052797.igq 



SAN FRANCISCO 
PORT COMMISSION 



MAY 27, 1997 

MINUTES OF THE SPECIAL MEETING 



MEMBERS, PORT COMMISSION 

HON. MICHAEL HARDEMAN, PRESIDENT 
HON. DENISE McCARTHY, VICE PRESIDENT 
HON. FRANKIE G. LEE 
HON. JAMES HERMAN 



DOUGLAS F. WONG, EXECUTIVE DIRECTOR 



DOCUMENTS DEPT. 

OCT 8 ISS9 

SAN FRANCISCO 
PUBLIC LIBRARY 



CITY & COUNTY OF SAN FRANCISCO 
PORT COMMISSION 

MINUTES OF THE SPECIAL MEETING 
MAY 27, 1997 

1. ROLL CALL 

The meeting was called to order by Commission President Michael Hardeman at 3:02 
p.m. The following Conmiissioners were present: Michael Hardeman, Denise McCarthy 
and Frankie Lee. Commissioner James Herman was not present. 

2. NfEW BUSINESS/PUBLIC COMMENT 

3. EXECUTIVE SESSION 

At 3:03 p.m., the Commission Secretary announced that the Commission will withdraw to 
executive session to discuss the following: 

A. CONFERENCE WITH REAL PROPERTY NEGOTL\TOR - This session is closed 
to an\ non-Citv/Port representative.* 

1) Property : Port property located at Berry Street and Second Street (China Basin). 
Person Negotiating : Port representative: Douglas F. Wong, Executive Director 
*San Francisco Giants Representative : Larry Baer, Executive Vice President 

Under Negotiation: Price Terms of Payment / Both 

An executive session has been calendared to discuss real property negotiations 
between the Port and San Francisco Giants, regarding the proposed ballpark. 

This is specifically authorized under California Government Code Section 
54956.8. 

B. CONFERENCE WITH REAL PROPERTY NEGOTIATOR - This session is closed 
to any non-Citv/Port representative. * 

1) Property : Port property located at Pier 80 

Person Negotiating : Port representative: Douglas F. Wong, Executive 

Director 

*Recycle Central. Inc. Representative : Mike Sangiacomo, President and Don 

Moriel, Executive Vice President 

Under Negotiation: Price Terms of Payment / Both 

An executive session has been calendared to discuss real property negotiations 
between the Port and Recycle Central, Inc., regarding the property located at 
Pier 80. 

A052797.igq "l" 



This is specifically authorized under California Government Code Section 
54956.8. 

C. CONFERENCE WITH LEGAL COUNSEL REGARDING EXISTING AND 
ANTICIPATED LITIGATION MATTERS: 

1) Discuss existing litigation matter pursuant to subdivision (a) of California 
Government Code Section 54956.9 

a. Caputo V. CCSF : San Francisco Superior Court Case No. 979843. 

b. Chez Laura Enterprises. Inc.. dba Lou's Pier 47 v. CCSF : United States 
Bankruptcy Court Case No. 97-301 11 -DM- 11 

2) Initiation of Litigation pursuant to subdivision (c) of California Government Code 
Section 54956.9 (1 case) 

a. Red and White Fleet, Inc. (formerly Harbor Carriers, Inc., a subsidiary of 
Crowley Corporation) operating at Pier 41. 

3) Discuss significant exposure to litigation pursuant to subdivision (b) of California 
Government Code Section 54956.9 (1 case). 

D. Vote in open session on whether to disclose Executive Session discussions (S.F. 
Admin. Code Sec. 67.14) 



At 4:15 p.m, Commissioners Hardeman, McCarthy and Lee returned from executive 
session and convened in public session. 

ACTION: Commissioner McCarthy moved approval to not disclose any information 

discussed in the executive session. Commissioner Lee seconded the motion. 
All of the Commissioners were in favor. 

The meeting was adjourned at 4: 16 p.m. 



A052797.igq 



-2- 



A 



■-7/? 7 



SAN FRANCISCO 
PORT COMMISSION 

REGULARJdEETING 
4:00 P.M.,( MAY 27, 1997 ^ 

FERRY BUILDING, SUITE 3100 
SAN FRANCISCO, CALIFORNIA 



AGENDA 



DOCUM&MTS DEPT. 

mr 2 3 1997 



1. ROLL CALL 



2. APPROVAL OF MINUTES 



- May 5, 1997 Special Meeting 

- May 13, 1997 Regular Meeting 



3. EXECUTIVE 



A. Executive Director's Report 

4. MARITIME 

A. Approval of lease with Westar Marine Services Company for a portion of Pier 50, 
Shed C. (Resolution No. 97-40) 

5. REAL ESTATE AND ASSET MANAGEMENT 

A. Approval of Exclusive Right to Negotiate with Recycle Central, Inc. regarding 
property at Pier 80 (eastern foot of Cesar Chavez Boulevard - nee' Army Street). 
(Resolution No. 97-43) 

B. Approval of Exclusive Right to Negotiate with James V. Kelly on behalf of South 
Beach Resort Partners, a California Limited Liability Partnership, for lease of 
Mission Rock Resort Restaurant located at 817 Terry Francois Blvd. (Resolution No. 
97-42) 

C. Approval of Exclusive Right to Negotiate Agreement with Hornblower Yachts, Inc. 
for leases at Piers Vi and 3. (Resolution No. 97-41) 

6. FACILITIES & OPERATIONS 

A. Approval to award Contract No. 2636, "Pier 48 Fire Damage and Repair and 
Reconstruction." (Resolution No. 97-29) 



A()52797.igq 



-1- 



B. Authorization to advertise for competitive bids for construction contracts for the new 
maintenance facility and other facility improvements at Pier 50. (Resolution No. 
97-44) 

C. Approval of First Amendment, authorizing additional services under Professional 
Services Contract No. SA 39760016, "New Maintenance Facility," with Kendall 
Young Associates/Beverly Prior Architects, a Joint Venture. (Resolution No. 97-36) 

7. PLANNING & DEVELOPMENT 

8. FINANCE AND ADMINISTRATION 

9. CONSENT CALENDAR 

10. NEW BUSINESS / PUBLIC COMMENT 

Public comment is permitted on any matter within Port jurisdiction, and is not limited to 
agenda items. Public comment on non-agenda items may be raised during New 
Business/Public Comment. Please fill out a speaker card and hand it to the Commission 
Secretary. If you have any questions regarding the agenda, please contact the 
Commission Secretary at 274-0406. 

11. ADJOURNMENT 



A052797.igq "2" 



i , 



PORT OF SAN FRANCISCO 



TO: 



FROM: 



MEMORANDUM 



May 20, 1997 



MEMBERS, PORT COMMISSION 
Hon. Michael Hardeman, President 
Hon. Denise McCarthy, Vice President 
Hon. Frankie G. Lee 
Hon. James Herman 

Douglas F. Wong ^^ 
Executive Director -^ 




Ferry Building 

San Francisco, CA 94111 

Telephone 415 274 0400 

Telex 275940 PSF UR 

Fax 415 274 0528 

Cable SFPORTCOMM 

Writer 



SUBJECT: Approval of lease vi^ith Westar Marine Services for a portion of 
Pier 50, Shed C. 

DIRECTOR'S RECOMMENDATION: APPROVE LEASE 

Background 

Since 1976 Westar Marine Services (Westar) has been providing tug, barge, water taxi and 
other harbor services to the Northern California maritime community from their Port location 
at Pier 46b. Currently Westar operates under Port Licenses to Use Space Non-Exclusive No. 
10621 and 10630. Pursuant to these licenses, Westar has been paying a monthly fee of 
$1,320 per month for 8,000 sq, ft of shed space ($0.16 per sq. ft.), which is below the 
minimum leasing parameters for this space. Westar also pays $214.00 per month for 
berthing area at Pier 46b, as well as $1,000 per month for an additional berthing space at Pier 
48. Annual revenues generated to the Port by Westar's rental of these properties were 
approximately $30,500.00 in the last fiscal year. 

Westar, which is a women owned business enterprise, has a staff of 32 people and a fleet of 
six tugs, four water taxis and numerous barges. They require a larger facility to handle their 
growing business and they will need to relocate for the proposed ballpark. Port staff therefore 
has negotiated the following a lease with Westar in which they would relocate and consolidate 
their operations to a portion of Pier 50, Shed C as well as the north apron. Rent levels in the 
first two years of this lease, while significantly higher that Westar's current license with the 
Port, will be less then the minimum provided by the leasing parameters preapproved by the 
Port Commission. However, beginning in the third year through the remaining eight years 
of the lease, Westar's rent will meet the leasing parameters preapproved by the Port 
Commission. 



THIS PRINT COVERS CALENDAR ITEM NO. 4A 



I: WP5r'WESTAR2.\VPD 



Agenda Item No. 4 A 
May 20, 1997 
Page Two 



Proposed Lease No. L-12440 

1.) Premises; 20,956 sq, ft. of shed space inside Slied C at Pier 50 for office storage 
and maintenance uses directly related to the operation of Westar's marine service 
operations and 1,300 linear ft./42,000 sq. ft. of apron and water space on the north 
side of Pier 50 for berthing of Westar's vessels, as shown on the attached 
site plan. 

2.) Term: Ten years, commencing on June 1, 1997. 

3.) Use: Operation of tug boat, barge and water taxi service. Mooring and service to vessels 
and craft. Service to water taxi passengers and storage and handling of equipment and 
supplies for vessels and crafts. 

4.) Base Rent: 

Year 1: $4,191.20 for shed space ($0.20 per sq.ft.) 

4.200.00 for apron space ( 0. 10 per sq.ft.) 
$8,391.20 total per month 

Year 2: $5,239.00 for shed space ($0.25 per sq.ft.) 

4.200.00 for apron space ( 0.10 per sq.ft.) 
$9,439.00 total per month 

Year 3-10: $6,286.80 for shed space ($0.30 per sq. ft.) 

4.200.00 for apron space ( 0. 10 per sq.ft.) 
$10,486.80 total per month 

Base rents will also be subject to annual CPI Base Rent adjustments 

5.) Maintenance: 

Heating system: The gas line which serves the heating system inside the offices of the 
premises is currently not operational. The Port is attempting to repair the line, but if the 
Port cannot place the heating system in an operating condition within 90 days after the 
commencement date, the tenant may make the necessary repairs and the Port shall give the 
tenant a rent credit for such documented reasonable repairs. 

Fender System: The fendering system at Pier 50 is in serious disrepair. In order for 
vessels to safely berth at this pier, the Port will replace the existing fendering system 



I: WP51AVESTAR2.\VPD 



Agenda Item No. 4 A 
May 20, 1997 
Page Three 



located on the premises using eucalyptus pilings. When these pilings next require 
replacement due to deterioration and normal wear and tear, Westar will provide or pay the 
Port for all replacement material necessary and the Port will furnish the labor and 
equipment to replace the pilings. 

The City Planning Department Office of Environmental Review has determined that this project, 
as part of the relocation of Port tenants from Pier 46B, is categorically exempt under the 
California Environmental Quality Act. A copy of the Categorical Exemption, dated April 21, 
1997, is on file with the Port Commission Secretary for this item. 



Prepared by: Peter A. Dailey, Acting Maritime Director 



I: WP51',WESTAR2.\VPD 



PORT COMMISSION 
CITY AND COUNTY OF SAN FRANCISCO 



RESOLUTION NO. 97-40 



WHEREAS, Charter Section B3 .581 empowers the Port Commission with the power and duty 
to use, conduct, operate, maintain, manage, regulate and control the Port area 
of San Francisco; and 

WHEREAS, under Charter Section B3. 58 1(g) leases granted or made by the Port Commission 
shall be administered exclusively by the operating forces of the Port 
Commission: and 

WHEREAS, Port Commission approval is being sought for lease No. L- 12440 with Westar 
Marine Services, the terms of which are set forth in the Memorandum of Agenda 
Item 4A at the Port Commission meeting on May 27, 1997; now therefore , be 
it 



RESOLVED, 



that the Port Commission hereby approves Lease No. L-12440, which 
incorporates the business terms set forth in the Memorandum for Agenda Item 
4A of the Port Commission Meeting on May 27, 1997, and that the Executive 
Director, or his designee, is hereby authorized to execute Lease No. L-12440 
on behalf of the Port in such final form as is substantially in the form on file 
with the Secretary of the Port Commission for said Agenda item and in such 
final form as is approved by the City Attorney. 



/ hereby certify that the foregoing resolution was adopted by the Port Commission at its meeting 
of May 27, 1997. 



Secretary 



I:WP51\WESTAR2.\VPD 




PLANNING DEPARTMENT ~'^>^ V^^ 

City and County of San Francisco 1660 Mission Street San Francisco^ CA 94103-2414 

#<ie\ eeo.£)7il PLANNING COMMISSION ADM]>nS71tATI0N CUSUISNT PtANNINC/ZONXNC LONG SANCE PLANNING 
l*X3>330-W/0 FAXSSfrMW FAX:S5W426 PAX:55«.M0» fAX:SS»-«26 



CERTIFICATE OF DETERMINATION 
OF EXEMPTION/EXCLUSION FROM ENVIRONMENTAL REVIEW 

Project Title : Relocation of Port of San Francisco Maintenance Farilitv and commercial tenants 
Location: Pier 50. Bavward of Tetrv A. Francois Boulevard south of China Basin channel 
City and County : San Francisco 

Description of Nature and Purpose of Project : 

Relocation of the Port of San Francisco's existing maintenance facility and approximately six commercial 
tenants from Pier 46B on the north side of China Basin channel lo existing structures at Pier 50 and an 
existing building at 555 Illinois Street, south of China Basin channel. The maintenance facility employs 
94 penons and utilizes approximately 100 vehicles (cars and small trucks). The commercial tenants are 
primarily small-scale, non-intensive light industrial and maritime uses. The piers would undergo minor 
structural, utility and safety improvements and repairs. All uses are permitted by existing M-2 (Heavy 
Industrial) zoning. 

Name of Person.'Board. Commission or Department Proposing to Carry Got Project ; 
Port of San Francisco (Contact: Kari Kilstrom, 274^536). 

EXEMPT STATUS : 

JSL if Categorical Exemption (State Guidelines, Section- 15300-15329; Public Resources Code, Section 
21085). State Class Number: 1 fStare Guidelines Section 1 5301. 15302) 

REMARKS : 

Categorical Exemption Class I "consists of the operation, repair, maintenance, or minor alteration of 
existing public. .strucmres, facilities, mechanical equipment, or topographical features, involving 
negligible or no expansion of use beyond that previoosly existing..." Pier 50 historically has been used as 
a bulk cargo terminal and is currently mostly vacant. 555 Illinois Street is an existing building. The 
proposed tenant and code-compliance improvements to accommodate the new uses are minor, clearly 
falling within the intention of Class 1 activities. All of the activities to be relocated currently operate ai 
Pier 45B and their relocation nearby would not change the intensity of uses in the general area. 

There are no unusual circumstances or potential significant impacts that would preclude Categorical 
Exemption of the project. None of the structures are historic or potentially historic. Minor substructure 
work could be required. Facility improvements within the 100-foot shoreline band would require Bay 
Conservation and Development Commission approval. The vacated Pier 46B would become part of the 
site for the proposed S.F. Giants ballparic. currently undergoing environmental review. Pursuant to S.B. 
181, signed by the Governor April 12, 1997, tenant and use relocation from Pier 46B to other Port propeny 
may be considered independently from the ballpark use if such relocahon would otherwise be exempt. 



Contact Person: Paul Deutsch 



558-6383 



Date of Determination: 

cc: Robert Passmore 
Sponsor 
Bulletin Board 
M.D.F. 
Exemption/Exclusion File 



I do hereby certify that the above determination has been made 
punuant to State and Lo/al y^Ouirei 




itelman 

Review Officer 



PORT OF SAN FRANCISCO 




MEMORANDUM 



May 15, 1997 



Ferry Building 

San Francisco, CA 94111 

Telephone 415 274 0400 

Telex 275940 PSFUR 

Fax 415 274 0528 

Cable SFPORTCOMM 

Writer 



TO: 



MEMBERS, PORT COMMISSION 

Hon. Michael Hardeman, President 
Hon. Denise McCarthy, Vice President 
Hon. Frankie Lee ~ 

Hon. James R. Herman 



FROM: Douglas F. Wong 

Executive Director 



,j^ 



SUBJECT: Approval of Exclusive Right to Negotiate with Recycle Central, Inc. regarding 
property at Pier 80 (Eastern foot of Cesar Chavez Boulevard - nee' Army Street) 



DIRECTOR'S RECOMMENDATION: 



APPROVE EXCLUSIVE RIGHT TO 
NEGOTIATE 



BACKGROUND 

Recycle Central, Inc. ("Recycle Central") a subsidiary company of Norcal Waste Systems, Inc. 
has approached the Port with a proposal to lease up to 105,000 square feet of shed space in Transit 
Shed A and approximately 400,000 square feet of paved yard space for a waste paper/dry fiber 
(cardboard, news print, sheet paper), plastics and metal recycling and maritime transhipment 
facility. 

The proposed thirty (30) year lease would generate $630,000.00 in rental revenue to the Port 
during the first lease year; $885,000.00 during the second lease year and $1,290,000.00 after the 
fifth lease year (if Recycle Central exercises an option to expand into the balance of the Transit 
Shed A space). These rates are consistent with the minimum rental rates previously approved by 
the Commission. 

Recycle Central anticipates investing over $32 Million in fixtures and equipment and in strucmral 
and infra-structural improvements to the facility. 



THIS PRINT COVERS CALENDAR ITEM NO. 5 A 



Agenda Item No. 5A 
Page 2 



Over 250 jobs will be created at the Pier 80 facility, over a hundred of vi^hich will be incremental 
to Recycle Central and Norcal's current work force. 

The need for this recycling and maritime transhipment center is accentuated by the State of 
California mandate (A.B. 939) that the City and County of San Francisco achieve a fifty percent 
(50%) recycling recovery ratio for waste products generated within its jurisdiction by the year 
1999. Norcal Waste Systems, Inc., the corporate parent of Recycle Central, through its subsidiary 
companies. Western Scavenger, Sunset Scavenger and Golden Gate Scavenger has the exclusive 
right to collect garbage and trash in the City and County. Accordingly, Recycle Central is the 
only feasible operator of a recycling and maritime transhipment center designed to achieve the 
State's recycling mandates. 

Pursuant to Port Commission Leasing Policy adopted August 22, 1979 and as subsequently 
amended by subsection 10 of Resolution 80-95 adopted on September 10, 1980, the Port may enter 
into exclusive negotiations with a prospective tenant without competitive bid when competitive bid 
is impractical or impossible and when the property is to be used for maritime purposes. 

The facility would receive pre-sorted deliveries of "dry" recyclables from Norcal Waste Systems 
Inc.'s subsidiary company's commercial and curb side recycling programs. These recyclables 
would be further sorted and compacted in Transit Shed A where they would also be loaded into 
20 and 40 foot ocean shipping containers. 

Given availability of space on cargo vessels calling at Port of San Francisco Container Terminals 
(Piers 80, 94 and 96), these loaded containers would be shipped to the recycling process centers 
in the Far East and, possibly to North and South American Ports, including some United States 
domestic ports. To the extent that space is not available on container cargo ships calling at the 
Port of San Francisco, these loaded containers will be transferred by barge or other vessel from 
Pier 80 to other Bay Area ports for shipment to their ultimate destination. 

In both instances, the containers will be loaded on cargo vessels utilizing stevedores, 
longshoreman and clerks working at the Port of San Francisco. 

To ensure that a significant portion of the containers loaded in the Pier 80 facility actually are 
loaded aboard cargo vessels at Port of San Francisco container terminals, the agreement will call 
for severe economic penalties if minimum container through-put numbers are not achieved. The 
agreement also will provide for economic incentives if Recycle Central achieves container 
through-put movement in numbers well beyond the minimum number of "required" moves. 



Agenda Item No. 5A 
Page 3 



Port staff believes that the proposed use of the Transit Shed A and Paved Yard portions of the Pier 
80 Northern Container Terminal to be affected by the proposed lease will not have a significant 
negative impact on the Port's ability to use Pier 80 as a container handling facility. Additionally, 
Port staff believes that the sourcing of containerized base cargo on Port property may enhance the 
Port's ability to attract cargo carriers serving recyclable processing centers in the Far East. 

Over 75,000 TEU's (twenty foot equivalent container units) of recyclable waste paper was 
exported through West Coast ports in the three month period, January - March 1996 (Source: 
Journal of Commerce . June 10, 1996. This number represented a precipitous decline from 1994 
and 1995 numbers due to a softening of market demand in Asia. However prices and exports have 
been rising slowly since June of 1996. While acknowledging that the demand for recyclable waste 
paper is cyclical, even the ebb numbers represent a significant portion of United States foreign 
exports. In fact, recyclable waste paper and fiber represents the United States' single largest 
export commodity in terms of the number of metric tons and container units. West coast ports 
handled nearly 2.8 million metric tons of waste paper exports in 1995. 

Substantially all the terms and conditions of the proposed lease have been negotiated and are 
discussed in greater detail below. This Exclusive Right to Negotiate will provide Recycle Central 
and Norcal Waste Systems, Inc. with the time needed to secure all of the governmental permits 
and regulatory approvals that must be in place before Recycle Central is prepared to enter into a 
formal lease agreement. No Lease approval will occur until completion and consideration by the 
Port Commission of environmental review of the project to the extent required by the California 
Environmental Quality Act (CEQA) and other regulations. 

The terms of the Exclusive Right to Negotiate and the basic terms of the proposed lease agreement 
are discussed below: 

PROPOSED EXCLUSIVE RIGHT TO NEGOTIATE: 

1. Exclusive Negotiation Period: Six (6) months 

2. Commencement Date of Negotiating Period June 1, 1997 

3. Termination Date of Negotiating Period November 30, 1997 

4. Exclusive Right Fee $143,000.00 

5. Options to Extend Negotiating Period: Six (6) option periods of one (1) 

month each 



Agenda Item No. 5A 
Page 4 



Option Fee: 



$25,000.00 per option period 



Obligations of Recycle Central: 



During Negotiating Period Recycle 
Central will secure all permits and 
regulatory approvals required to 
operate the recycling facility. 



G:\WP51\AGENDAS\NORCAL2.MEM\ND\jeAMay 22, 1997 



PORT COMMISSION 

CITY AND COUNTY OF SAN FRANCISCO 

RESOLUTION NO. 97-43 



WHEREAS, 



WHEREAS, 



WHEREAS, 



WHEREAS, 

WHEREAS, 
WHEREAS, 



WHEREAS, 
WHEREAS, 



Charter Section B3.581 empowers the Port Commission with the power and 
duty to use, conduct, operate, maintain, manage, regulate and control Port 
area of the City and County of San Francisco; and 

Recycle Central, Inc., a wholly owned subsidiary of Norcal Waste Systems, 
Inc. ("Recycle Central") has proposed to develop a waste paper/dry fiber, 
plastics and metal recycling, sorting, loading and maritime transhipment 
facility at the Pier 80 Northern Container Terminal on property to be leased 
from the Port Commission; and 

Recycle Central's corporate parent, Norcal Waste Systems, Inc. through its 
other operating subsidiaries, has the exclusive right to collect San 
Francisco's garbage and trash from which the recyclable products to be 
loaded and shipped are sorted. 

The proposed use of the Pier 80 Northern Container Terminal as a waste 
paper/dry fiber, plastics and metal recycling, sorting, loading and maritime 
transhipment facility is consistent with the Seaport Plan; and 

Port staff has negotiated substantially all of the terms and conditions of a 
proposed lease; and 

Recycle Central has requested a six (6) month Exclusive Right to Negotiate 
the final terms and conditions of leases of a lease and to secure all permits 
and regulatory approvals and environmental review required under the 
California Environmental Quality Act ("CEQA"); and 

the approval of the Exclusive Right to Negotiate does not commit the Port 
to entering into a binding Lease; and 

it is the determination and finding of the Pon Commission that Recycle 
Central is the only feasible operator of a waste paper/dry fiber, plastics and 
metal recycling, sorting, loading and maritime transhipment center at the 
Pier 80 Northern Container Terminal and for the reasons set forth in the 
Memorandum of Agenda Item 5A for the May 27, 1997 Commission 
meeting, a request for proposals for a similar use would prove impractical 
and impossible, and 



Resolution No. 97-43 
Page 2 



WHEREAS, 



RESOLVED, 



it is the finding of the Port Commission that Recycle Central's use of the 
Pier 80 Northern Container Terminal facility to be affected by and lease 
would be maritime in nature; now therefore be it 

that the San Francisco Port Commission, hereby approves an Exclusive 
Right to Negotiate Agreement between the Port and Recycle Central, Inc. 
for a waste paper/dry fiber, plastics and metal recycling sorting, sorting, 
loading and maritime transhipment facility at the Pier 80 Northern 
Container Terminal upon final terms and conditions to be approved by the 
Port Commission, which terms and conditions are set forth substantially and 
in preliminary form in the Memorandum of Agenda Item 5A for the May 
27, 1997 Port Commission Meeting. 



/ hereby certify that the foregoing resolution was adopted by the Port Commission at its meeting 
of May 27, 1997. 



Secretary 



G:\WP51\AGENDAS\N0RCAL2.MEM\ND\jef\May 22, 1997 



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PORT OF SAN FRANCISCO 



TO: 



MEMORANDUM 



May 21, 1997 



MEMBERS, PORT COMMISSION 

Hon. Michael Hardeman, President 
Hon. Denise McCarthy, Vice President 
Hon. Frankie Lee 
Hon. James R. Herman 




Ferry Building 

San Francisco, CA 94111 

Telephone 415 274 0400 

Telex 275940 PSF UR 

Fax 41 5 274 0528 

Cable SFPORTCOMM 

Writer 



FROM: Douglas F. Wong 

Executive Director,^ 



rO^U 



SUBJECT: Approval of Exclusive Right to Negotiate Agreement with James V. Kelly on 
behalf of South Beach Resort Partners, a California Limited Liability Partnership, 
for lease of Mission Rock Resort Restaurant located at 817 Terry Francois 
Boulevard 



DIRECTORS RECOMMENDATION: 



APPROVE EXCLUSIVE RIGHT TO 
NEGOTIATE 



BACKGROUND 

On April 23, 1996 , the Port Commission adopted Resolution No. 96-33, which authorized 
Port staff to issue a Request for Proposals ("RFP") for lease of the Mission Rock Resort restaurant 
( Attachment A) . The RFP was issued on May 13, 1996, amended September 25, 1996 and further 
amended on November 5, 1996. 



Responsive proposals were received on November 14, 1996 from three offerors: James V. 
Kelly on behalf of South Beach Resort Partners ("SBRP"); Mission Rock Resort (817) Partners 
("MRR Partners"); and The Shipyard at Mission Rock ("Shipyard"). Two Non-Responsive 
proposals were received. The determination of responsiveness was made by Port staff with review 
by the City Attorney's office. 

The three responsive proposals were evaluated by a panel consisting of four members, two 
from Port staff and two from outside the Port. The panel members have expertise in property 
management, development, planning and restaurant operations. The composition of the panel was 
approved in advance by the Port's Human Rights Commission representative and by the Port's 
EEO Specialist. 

THIS PRINT COVERS CALENDAR ITEM NO. 5B 



Agenda Item No. 5B 
Page 2 



Each proposal was read and analyzed separately by the panel members before oral 
interviews were held. All three proposers made oral presentations to the panel. At the end of all 
the interviews, the panel completed grading the proposals in accordance with the scoring criteria 
set forth in the RPP. The maximum potential score was 147 points. 

The selection criteria included base rent, capital investment, cash flow projections, 
experience and qualifications in restaurant operations, financial ability to fund the improvements, 
appropriateness of the proposed use, operations, atmosphere, and responsiveness in the oral 
interviews. Using these criteria. South Beach Resort Partners received the highest score from the 
panel. The panel concluded, and Staff agrees, that SBRP proposed the best concept for the 
restaurant site, demonstrated the best restaurant experience, menu, design plans and improvement 
schedule, was the most likely to run a successful establishment (and thus provide a strong revenue 
stream to the Port) and had the best financial backing. James Kelly, the managing general partner, 
has an established track record as a successful restaurateur, having founded and operated Pat 
O'Shea's Sports Bar on Geary Blvd. for many years. The panel considered the Port's objective 
in having the site renovated and brought up to code. SBRP's capital investment of $533,755 will 
be made all in the first year to upgrade the restaurant for immediate operation. This amount will 
adequately fund repair of code violations and allow for installation of other improvements which 
will enhance the restaurant site. The results, taken as an average of all four panel members' 
scores, were as follows: 

South Beach Resort Partners: 123.38 points 

Mission Rock Resort (817) Partners: 105.63 points 

The Shipyard at Mission Rock : 56.50 points 

The Port and SBRP then met and negotiated the terms set forth in the Exclusive Right to 
Negotiate Agreement. 

PROPOSAL 

The Port has prepared an Exclusive Right to Negotiate Agreement with James Kelly ("Attachment 
B) commencing May 28, 1997 for a six-month, two-day period to: (1) allow the parties to finalize 
all the terms and conditions of a proposed lease with South Beach Resort Partners, an entity to be 
created in the form of a California Limited Liability Partnership, with James Kelly as Managing 
General Partner, for premises located at 817 Terry Francois Boulevard, commonly known as the 
Mission Rock Resort Restaurant; and (2) allow the project to undergo review by the City Office 
of Environmental Review under the California Environmental Quality Act ("CEQA"). Once 
CEQA review is completed, and the parties have successfully negotiated the lease agreement, this 
transaction will be calendared for Port Commission consideration. The terms and conditions of 
the proposed new lease are summarized below and are contained in an Exhibit 1 attached to the 
Exclusive Right to Negotiate Agreement. 



Agenda Item No. 5B 
Page 3 



Tenant : 



Premises : 



Marina : 



Uses : 



A new entity will be created, South Beach Resort Partners, a California 
Limited Liability Partnership ("SBRP"), of which James V. Kelly will be 
the Managing General Partner. 

The site located at 817 Terry Francois Boulevard, San Francisco, presently 
known as the Mission Rock Resort Restaurant, consisting of a building 
comprising approximately 3,500 square feet on two levels; approximately 
2,500 square feet of deck area; and approximately 4,000 square feet of 
paved land adjacent to the building. 

The marina will not be part'^of the Premises, but SBRP will have a right of 
first refusal to re-construct and operate the marina. 

The Premises will be used for the operation of a public restaurant offering 
full service dining, casual dining, entertainment and retail space for sale of 
souvenir items. 



Lease Term : 
Base Rent: 



Percentage Rent: 



Rent Abatement; 



Fifteen (15) years; plus two five-year options 

Monthly Annual 

$9,888.00 $118,656.00 

Base Rent will be adjusted annually by the CPL On the 5th and 10th 
anniversary dates, it will be adjusted to the greater of (i) an amount which 
equals sixty percent (60%) of the average monthly Rent paid during the 
previous 36 months, or (ii) the annual cost of living increase according to 
the CPL During the option periods. Base Rent will be adjusted to the then 
current full fair market rental value, as determined by a survey of rental 
rates for comparable S.F. restaurants. 



Full service dining: 
Casual Dining: 
Retail/Other Sales: 



7.0% of gross receipts 
9.0% of gross receipts 
9.0% of gross receipts 



During the option periods. Percentage Rent will be adjusted to the then 
current full fair market rental value, as determined by a survey of 
percentage rental rates for comparable S.F. restaurants. 

Tenant shall be entitled to abate the Base Rent for six (6) months at the 
beginning of the Term for the purpose of installing improvements. 



Agenda Item No. 5B 
Page 4 



Tenant 
Improvements : 



Tenant is obligated to make certain improvements to the restaurant facility 
and to expend a minimum of $533,755.00 for these improvements, in 
accordance with plans and specifications approved in advance by Port. 



Hazardous Materials 



Remediation; 



Utilities, Services 
and Taxes : 



As per Sections III.H. and IV.A. of the RFP, which, in brief, states, that 
if the cost to remediate hazardous materials in the soil exceeds $65,000, 
either party may terminate the lease; if the cost is $30,000 or less. Port and 
Tenant will split the cost equally; if the cost is between $30,000.01 and 
$65,000, Tenant's share will not exceed $15,000, and the Port will be 
responsible for the remainder; total cost of remediation to be paid initially 
by Tenant with reimbursement given through rent credits over term of lease 
until paid. 



Tenant will be responsible for all utilities, services and possessory interest 
taxes. 



Security Deposit : 



ANALYSIS 



$19,776.00. Sum is forfeited if Tenant fails within six months after lease 
commencement to substantially complete construction of the improvements 
or to invest the amount required. 



In approving the Exclusive Right to Negotiate with SBRP, the Port receives the following benefits 
from this proposed transaction: 

(1) the Port will maximize its revenue potential for the Mission Rock Resort site. It is 
anticipated that SBRP will pay percentage rent in excess of the Base Rent from the 
beginning of operation. 

(2) the Port will have an experienced restaurant operator as a tenant which will re-vitalize the 
facility, offer new menu items and entertainment and attract new and more patrons to the 
Site; 

(3) the restaurant facility will be brought up to code and greatly improved with new 
improvements; 

(4) Base Rent will be substantially increased over the current Base Rent being paid by the 
existing tenant. 

Prepared by: Jennifer Sobol, Commercial Property Manager, Leasmg 

I:\WP51\SBRPEXRT.MRR 5/21/97 



WHEREAS, 



WHEREAS, 



WHEREAS, 



WHEREAS, 
WHEREAS, 



WHEREAS, 



WHEREAS, 



WHEREAS, 



RESOLVED, 



PORT COMMISSION 

CITY AND COUNTY OF SAN FRANCISCO 

RESOLUTION NO. 97-42 

Charter Section B3.581 empowers the Port Commission with the power and 
duty to use, conduct, operate, maintain, manage, regulate and control the 
Port area of San Francisco; and 

under Charter Section B3. 58 1(g) leases granted or made by the Port 
Commission shall be administered exclusively by the operating forces of the 
Port Commission; and 

the Port issued a Request for Proposals for lease of premises located at 817 
Terry Francois Boulevard commonly known as the Mission Rock Resort 
Restaurant (the "Site") and three proposals were submitted, and South 
Beach Resort Partners ("SBRP") received the highest score by an 
independent selection panel; and 

Port staff has determined that SBRP and James V. Kelly ("Kelly") are the 
best qualified proposer; and 

Port staff and SBRP, an entity to be created in the form of a California 
Limited Liability Partnership, by and through its Managing General Partner 
James V. Kelly, have negotiated substantially all of the terms and 
conditions of the proposed lease for the Site; and 

Kelly has requested a six-month, two-day exclusive right to negotiate the 
final terms and conditions of a lease for the Site and to have the project 
reviewed under the California Environmental Quality Act ("CEQA"), in the 
form indicated in Attachment B hereto; and 

the Port Commission has determined that, based upon the facts set forth in 
the Memorandum of Agenda Item 5B for the May 27, 1997 Port 
Commission meeting, said exclusive right to negotiate with Kelly is 
appropriate; and 

no lease approval or binding commitment to enter into a lease will occur 
until completion and consideration by the Port Commission of 
environmental review of the project to the extent required by CEQA: now 
therefore, be it 

that the Port Commission hereby awards to James V. Kelly on behalf of 
South Beach Resort Partners, a California Limited Liability Partnership, the 
exclusive right to negotiate; and be it further 



Resolution No. 97-42 
Page 2 



RESOLVED, that the Port Commission hereby approves an Exclusive Right to Negotiate 

Agreement between the Port and Kelly for the Site as indicated in 
Attachment B hereto, and the Port Commission authorizes the Executive 
Director of the Port, or his designee, to execute said Exclusive Right to 
Negotiate Agreement. 



/ hereby certify that the foregoing resolution was adopted by the Port Commission at its meeting 
of May 27, 1997. 



Secretary 

I:\WP51\SBRPEXRT.MRR 5/20/97 




J\Me\ma^:^ 



EXCLUSIVE RIGHT TO NEGOTIATE 

THIS EXCLUSIVE RIGHT TO NEGOTIATE ("Exclusive Right") is entered into as of 
this 21st day of May 1997, by and between the City and County of San Francisco ("City"), 
acting by and through its Port Commission ("Port"), and James V. Kelly ("Kelly"), an 
individual, upon the following facts, intentions and understandings of the parties: 

A. Pursuant to a Request for Proposals ("RFP"), issued by Port on May 13, 1996, 
James V. Kelly ("Kelly"), on behalf of South Beach Resort Partners ("SBRP"), a California 
Limited Liability Partnership, submitted a proposal for the lease, remodeling and operation 
of a restaurant (presently known as Mission Rock Resort) located at 817 Terry Francois 
Boulevard, located in the City and County of San Francisco (the "Site"). A selection panel 
rated Kelly's proposal the highest of all proposals submitted. 

B. Pursuant to the RFP, Port and Kelly desire to enter into an agreement by which 
SBRP, an entity to be created in the form of a California Limited Liability Partnership, of 
which Kelly will be the Managing General Partner, will have an exclusive right to negotiate 
a lease. 

C. The purpose of the lease is to grant SBRP the right to remodel and operate the 
Site under the general terms agreed upon by Port and Kelly herein and subject to all 
required permits and approvals being obtained by Kelly and/or SBRP. 

D. The parties now desire to enter into this Exclusive Right to set forth the terms 
and conditions upon which Port and SBRP will enter into lease negotiations and seek to 
complete a written lease document for Port Commission approval. 

NOW, THEREFORE, the parties hereto agree as follows: 

1. Term . The term of this Exclusive Right shall commence on May 28, 1997, and 
shall expire on November 30, 1997, unless extended in accordance wtih Section 3 below. 
The term of this Exclusive Right, including any extensions, is hereinafter referred to as the 
"Exclusive Negotiation Period." During the Exclusive Negotiation Period, the Port will not 
solicit or consider any other proposals or negotiate with any other developer with respect 
to the development of the Site. 

2. Negotiation Fee . Upon execution of this Exclusive Right, Kelly shall pay to Port a 
lump sum, by cashier's cash, receipt of which hereby is acknowledged, in the amount of 
Nineteen Thousand, Seven Hundred Seventy-Six and No/100 Dollars ($19,776.00) as a 
non-refundable fee ("Negotiation Fee") for the right to negotiate exclusively with the Port 
during the Exclusive Negotiation Period. Port shall credit the Negotiation Fee against the 
Security Deposit due from SBRP if Port and SBRP enter into a lease for the Site. 

Port shall return the Negotiation Fee to SBRP in full, without interest if the Port 
Commission or the Board of Supervisors refuses or fails to approve the Lease prior to the 
expiration of the Exclusive Negotiation Period, or any extension thereof, after SBRP has 
obtained all necessary approvals and permits, and has provided Port with evidence 

Attachment B 1 



satisfactory to Port of its ability to finance the improvements. Port, at its sole discretion, 
may extend such period of time. 

3. Extension of Negotiating Period . 

a. Option Period . Kelly shall have three (3) one-month options (each an "Option 
Period") to extend the Exclusive Negotiation Period, commencing on December 1, 1997. 
Kelly shall exercise each option to extend by written notice of the exercise of such option 
delivered with cash, check or money order payment of One Thousand Five Hundred Dollars 
($1 ,500.00) per Option Period (each an "Option Payment") to Port at the address for 
notices set forth in Section 9 below, not less than ten (10) days prior to the 
commencement of the next Option Period. 

b. Option Pavment Non-Refundable . Each Option Payment shall be non-refundable; 
provided, however, that Port shall credit any Option Payment against rent due by SBRP in 
the event that Kelly or SBRP delivers an Optiori Payment for a subsequent Option Period 
and the Port Commission approves a lease for the Site with SBRP before the 
commencement of that subsequent Option Period. Kelly's failure to exercise any Option 
Period in accordance with this Section 3, at Port's sole option, shall extinguish all future 
Option Periods and shall terminate this Exclusive Right as of the last date of the Term or 
the applicable Option Period. 

4. Negotiation of Lease . During the Exclusive Negotiation Period, Port and Kelly 
shall seek to complete a lease between Port and SBRP for the Site, which lease shall be 
subject to Port Commission approval. Both parties hereto agree to negotiate the terms of 
such lease in good faith. 

The lease shall be in substantial conformity with the terms set forth in the term 
sheet attached hereto as Exhibit 1 . which terms have been agreed upon by the parties; 
provided, however, that the terms set forth in Exhibit 1 are subject to change by mutual 
agreement of the parties. The parties acknowledge that the terms of Exhibit 1 merely 
purport to set forth general principles upon which the parties have agreed; any binding 
lease shall be subject to review and approval by the parties, their respective legal counsel, 
the San Francisco Port Commission and the San Francisco Board of Supervisors. Port shall 
have no obligation to enter into a Lease unless it has received from Kelly evidence 
reasonably satisfactory to Port of SBRP's ability to finance the proposed tenant 
improvements. 

The parties further acknowledge that certain regulatory approvals are required for 
the use of the Site (collectively "Regulatory Approvals"), including, but not limited to, all 
necessary approvals from the Bay Conservation Development Commission ("BCDC") and 
environmental review by the Office of Environmental Review ("OER") pursuant to the 
California Environmental Quality Act. Environmental review by OER shall be completed 
prior to the approval of any lease by Port. The effectiveness of any such lease shall be 
conditioned upon Kelly and/or SBRP obtaining all other Regulatory Approvals subsequent to 
the Port Commission's approval of any such lease. 



Attachment B 



5. Regulatory Approvals. Submittals, and Disclosures . 

a. Kellv/SBRP's Obligations . Kelly agrees that: 

(i) he shall diligently and in good faith pursue all Regulatory Approvals; 

(ii) he shall be solely responsible for obtaining all Regulatory Approvals, and 

shall not seek any Regulatory Approval without first obtaining the approval of 

Port; 

(iii) he shall bear all costs associated with or complying with any necessary, 

Regulatory Approval except those costs incurred by Port in complying with 

subsection 5.b below; 

(iv) he will pay and discharge any fines or penalties imposed as a result of 

the failure of Kelly and/or SBRP to comply with the terms and conditions of 

any Regulatory Approval, and Port shall have no liability, monetary or 

otherwise, for said fines and penalties. 

(v) to the fullest extent permitted by law, Kelly and SBRP agree to 

indemnify and hold City, Port and their officers, agents and employees 

harmless from and against any loss, expense, cost, damage, attorneys' fees, 

penalties, claims or liabilities which City or Port may incur as a result of 

Kelly's or SBRP's failure to obtain or comply with the terms and conditions of 

any Regulatory Approval. 

(vi) he shall submit to Port, OER, BCDC and any other regulatory agency 

having approval over the project, all specifications, descriptive information, 

studies, reports, disclosures and any other information required to satisfy the 

application filing requirements of those agencies. 

b. Port's Obligations . Port agrees that it will cooperate with Kelly and SBRP in 
filing for, processing and obtaining all Regulatory Approvals, and to the extent required by 
any regulatory agency issuing a Regulatory Approval, it will join with Kelly and SBRP as co- 
applicant in filing, processing and obtaining all Regulatory Approvals necessary for the 
permitted uses specified in Exhibit 1 attached hereto. Nothing contained herein shall be 
deemed to limit or otherwise constrain Port's discretion, powers and duties as a regulatory 
agency of the City with certain police powers. 

6. Non-Assignment . The parties acknowledge that Port is entering into this 
Exclusive Right on the basis of the special skills, capabilities and experience of James V. 
Kelly. This Exclusive Right is personal to James V. Kelly and is not assignable except to 
South Beach Resort Partners, a California Limited Liability Partnership to be created, of 
which James V. Kelly will be the Managing General Partner. Any attempted assignment of 
this Exclusive Right to an entity other than SBRP, or the re-structuring of SBRP such that 
James V. Kelly does not become or no longer remains the Managing General Partner of 
SBRP, shall be considered an event of default under this Exclusive Right and shall 
immediately and without opportunity to cure give rise to Port's remedies provided in 
Section 7 (Default) below. 



Attachment B 



7. Default . 

a. Event of Default . The occurrence of any of the following shall constitute a 
default by Kelly after notice of the default and the expiration of the applicable cure period, 
if any: 

(i) Failure to pay any sums due hereunder when due. 

(ii) Failure to perform or abide by any other provision of this Exclusive Right 
if such failure is not cured within twenty (20) days after notice has been 
given to Kelly. If the default cannot reasonably be cured within 20 days, 
Kelly shall not be in default of this Exclusive Right if he commences to cure 
the default within the 20-day period and diligently and in good faith 
continues to cure the default. 

(iii) Either (a) the filing by Kelly of a petition to have Kelly adjudicated 
insolvent and unable to pay his debts as they mature or a petition for 
reorganization or arrangement under any bankruptcy or insolvency law, or a 
general assignment by Kelly for the benefit of creditors; or (b) the filing by or 
against Kelly of any action seeking reorganization, arrangement, liquidation, 
or other relief under any law relating to bankruptcy, insolvency, or 
reorganization or seeking appointment of a trustee, receiver, or liquidator of 
Kelly or of any substantial part of Kelly's assets. 

b. Port's Remedies . In the event of default. Port, at its option, may terminate this 
Exclusive Right upon written notice to Kelly, sent in accordance with Section 9 (Notices) 
below. This remedy is not exclusive, but shall be cumulative with any remedies now or 
later allowed by law. 

8. Attornev's Fees . In the event of any action or proceedings at law or in equity 
between Port and Kelly to enforce any provision of this Exclusive Right to protect or 
establish any right or remedy of either party to this agreement, the unsuccessful party to 
such litigation shall pay to the prevailing party all costs and expenses as determined by the 
court, including reasonable attorneys' fees, incurred therein by such prevailing party; and if 
such prevailing party shall recover judgment in any such action or proceeding, such costs, 
expenses and attorney's fees shall be included in and as a part of such judgment. For 
purposes of this Exclusive Right, reasonable fees of attorneys of the Office of City 
Attorney shall be based on the fees regularly charged by private attorneys with an 
equivalent number of years of professional experience (calculated by reference to earliest 
year of admission to the Bar of any State) who practice in the City in law firms with 
approximately the same number of attorneys as employed by the Office of City Attorney. 

9. Notices . Any notice given under this Exclusive Right shall be in writing and 
given by delivering the notice in person, by commercial courier or by sending it by 
registered or certified mail, or Express Mail, return receipt requested, with postage prepaid, 
to the mailing address listed below or any other address notice of which is given. For the 
convenience of the parties, copies of notices may also be given by telefacsimile, to the 



Attachment B 



telephone number listed below or such other numbers as may be provided from time to 
time. 



Port: 



Kelly/SBRP: 



Commercial Property Manager 
Port of San Francisco 
Room 3100, Ferry Building 
San Francisco, CA 941 1 1 
Facsimile: (415)274-0578 
Telephone: (415)274-0510 

South Beach Resort Partners, L.L.P. 

c/o William M. Lofton, Esq. 

Lofton, DeLancie & Nelson, Attorneys at Law 

505 Montgomery Street, Suite 1 550 

San Francisco, CA 941 1 1 

Facsimile: (415)772-1909 

Telephone: (415)772-1900 



with a copy to: Mr. James V. Kelly 

1 32 Ripley Street 
San Francisco, CA 94110 
Facsimile: (707) 829-5319 
Telephone: (707) 829-6832 

Any mailing address or facsimile number may be changed at any time by giving 
written notice of such change in the manner provided above at least ten (10) days prior to 
the effective date of the change. All notices under this Exclusive Right shall be deemed 
given, received, made or communicated on the date personal receipt actually occurs or, if 
mailed, on the delivery date or attempted delivery date shown on the return receipt. A 
person may not give official or binding notice by facsimile. The effective time of a notice 
shall not be affected by the receipt, original, of a facsimile copy of the notice. 

10. City Requirements 

a. Non-Discrimination . Kelly shall not, in carrying out his obligations hereunder, 
discriminate against any person or group of persons solely because of race, color, creed, 
national origin, ancestry, age, sex, sexual orientation, gender identity, disability or acquired 
immune deficiency syndrome (AIDS) or AIDS related condition (ARC). The provisions of 
Chapters 12B and 1 2C of the San Francisco Administrative Code, relating to 
nondiscrimination by parties contracting with the City and County of San Francisco, are 
incorporated herein by this reference and made a part hereof as though fully set forth 
herein. SBRP agrees to comply with all provisions of such Chapters 128 and 1 2C that apply 
to tenants and licensees of the City and County of San Francisco. 

b. MacBride Principles-Northern Ireland . City urges companies doing business in 
Northern Ireland to move toward resolving employment inequities and encourages such 



Attachment B 



companies to abide by the MacBride Principles. City urges San Francisco companies to do 
business with corporations that abide by the MacBride Principles. 

c. Tropical Hardwood Ban . City urges Kelly not to import, purchase, obtain, or use 
for any purpose, any tropical hardwood or tropical hardwood product. 

11. Captions Used . Captions or titles utilized in the terms and conditions of this 
Exclusive Right are used for convenience of reference only and shall be disregarded in 
construing or interpreting any of its provisions. 

12. Time is of the Essence . Time is of the essence of each provision of this 
Exclusive Right. 

/// 
/// 



Attachment B 



WHEREFORE, this Exclusive Right to Negotiate was executed by the parties hereto 
on the last date set forth hereinbelow. 



"Kelly" 



JAMES V. KELLY 



Dated: 



"Port" ~ 

CITY AND COUNTY OF SAN FRANCISCO by and through its 

Port Commission 



By 

V. Fei Tsen 

Director, Real Estate & Asset Management 



Dated: 



Approved as to Form: 
LOUISE H. RENNE 
City Attorney 



By: 



Deputy City Attorney 



Dated: 



F:\WP51\MRR\EXRTSBRP.DT1 5/20/97 



Attachment B 



SOUTH BEACH RESORT PARTNERS, L.L.P. 



PROPOSED LEASE TERMS AND CONDITIONS 



Tenant: 



Entity to be created: South Beach Resort Partners, a California Limited 
Liability Partnership, of which James V. Kelly will be the Managing 
General Partner 



Premises: 



The site located at 817 Terry Francois Boulevard, San Francisco, 
presently known as the Mission Rock Resort Restaurant, consisting 
of: 

(1) a building comprising approximately 3,500 square feet on two 
levels 

(2) approximately 2,500 square feet of deck area adjacent to the 
building 

(3) approximately 4,00& square feet of paved land adjacent to the 
building 

(4) The Premises will include a license for access from the street to 
the marina (exact location to be determined) for access to the docks 
at all times by boat berthers and by the general public. 



Marina: 



The marina will not be part of the Premises. If Port decides to re-build 
and operate the marina, or to lease it to a third party for re- 
construction and operation. Port will first offer the opportunity to 
lease and re-build to SBRP. SBRP acknolwedges Port's right to re- 
build the marina. Port shall submit any design plans to SBRP for its 
review and SBRP may request revisions to address any impact such 
plans may have on its business operations. 



Uses: 



Term of Lease 

Initial Term: 



The Premises will be used for the operation of a public restaurant 
offering full service dining, casual dining, entertainment and not more 
than 400 square feet of retail space to be used for sales of in-house 
signature items (approved list of items to be attached as exhibit to 
lease), and for no other purposes. "Full service dining" and "casual 
dining" are defined in the RFP. Tenant agrees to allow the public to 
use the first floor restrooms during the restaurant's operating hours. 

Fifteen (1 5) years commencing one day after issuance of a permit by 
BCDC, or one day after the date the Lease is executed by the Port, 
whichever is later. The Lease will be executed by the Port after the 
Mayor signs the Board of Supervisors' Resolution approving the 
Lease. The effectiveness of the Lease may be delayed if Port cannot 
deliver possession on the required date, in which case the lease will 
become effective at such time as possession of the Premises can be 
delivered to Tenant. 



Attachment B 



EXHIBIT 1 



Options : 



Base Rent : 

Initial Term : 

Option Periods : 



Percentage Rent: 



Initial Term: 



Option Periods : 



Two options for five (5) years each, exercisable in writing at least six 
(6) months prior to the expiration of the term then in effect. 



Monthly 
$9,888.00 



Annual 
$118,656.00 



At the beginning of each 5-year option period, the monthly Base Rent 
will be adjusted to the then current full fair market rental value, as 
determined by the Port Commission based on a survey of rental rates 
for comparable restaurants in San Francisco. In no event shall the 
Base Rent during the option periods be less than that of the Initial 
Term or of the previous option period. 

Percentage Rent will be due monthly and will be calculated as a 
percentage of gross receipts, offset by the Base Rent. "Gross 
Receipts" is defined in the_ RFP. If the Percentage Rent does not 
exceed the Base Rent, only the Base Rent will be payable to Port for 
that month. Percentage Rent will be calculated in accordance with 
the following schedule: 



Full service dining: 
Casual Dining: 
Retail/Other Sales: 



7.0% of gross receipts 
9.0% of gross receipts 
9.0% of gross receipts 



At the beginning of each 5-year option period, the Percentage Rental 
rates will be adjusted to the then current full fair market rental value, 
as determined by the Port Commission based on a survey of 
percentage rental rates for comparable restaurants in San Francisco. 



Periodic Base Rent Adjustment : 



Initial Term: 



The monthly Base Rent will be adjusted annually by the Consumer 
Price Index. On the 5th and 10th anniversary dates, the Base Rent 
will be adjusted to the greater of (i) an amount which equals sixty 
percent (60%) of the average monthly Rent (Base Rent plus 
Percentage Rent in excess of Base Rent) paid during the previous 36 
months, or (ii) the annual cost of living increase according to the 
Consumer Price Index 



Option Periods : 
Rent Abatement: 



As set forth above under Base Rent. 

At the beginning of the Initial Term, Tenant shall be entitled to abate 
the monthly Base Rent in full for six (6) months for the purpose of 
installing Tenant Improvements. There shall be no abatement of 
Percentage Rent. Tenant shall be entitled to abate rent for 
remediation of hazardous materials in the soil, in accordance with 
Section III.H. of the RFP. 



Tenant 



Attachment B 



EXHIBIT 1 



Improvements : 



Regulatory 
Approvals : 



Tenant is obligated to make certain improvements to the restaurant 
facility and to expend, within six (6) months after the commencement 
of the Lease, a minimum amount of $533,755.00 for said 
improvements, in accordance with plans and specifications approved 
in advance by Port; Tenant shall repair all building code violations and 
comply with all applicable building codes; Tenant is required to 
improve the restaurant facility to the design and standards proposed 
in its proposal; design is subject to the approval of Port's Design 
Advisors; items which may be included in the cost of improvements 
are defined under "capital investment" in Section I.E. of the RFP; 
failure to substantially complete construction of the improvements or 
to invest the amount required by the stated timetable will constitute a 
material breach of the Lease and potential Lease termination by Port. 

Construction work must conform to all applicable building codes and 
regulations; Tenant must comply with all fire and life safety 
requirements, with the Americans with Disabilities Act and with Title 
24 of the California Building Code; Tenant is responsible for obtaining 
all necessary permits and licenses, including, but not limited to, a Port 
Building Permit, S.F. Health Department permits, a permit from BCDC, 
a license from the Department of Alcoholic Beverage control, etc. 



Hazardous Materials 

Remediation : As per Sections III.H. and IV. A. of the RFP. 



Maintenance 
of Premises: 



Utilities, Services 
and Taxes: 



Tenant shall be responsible for all maintenance, repairs and operating 
expenses except that Port shall be responsible for the maintenance 
and repair of the seawall. 

Tenant will be responsible for all utility installations and charges (gas, 
water, sewer, electricity, telecommunications, etc.); for payment of al 
services (janitorial, garbage and trash collection, recycling, 
extermination, security, etc.); and for payment of any possessory 
interest taxes assessed on its leasehold interest. 



Security Deposit : $19,776.00 in cash, presently on deposit with Port. 

The Negotiation Fee submitted with the Exclusive Right to Negotiate 
will become the Security Deposit under the Lease and remain on 
deposit with the Port during the Term of the Lease; no interest is 
payable to Tenant; as Base Rent is increased, the Security Deposit wil 
be increased by two times the amount of the monthly increase. The 
Security Deposit will be forfeited if SBRP fails, within six (6) months 
after the commencement of the Lease, to substantially complete 



Altachment B 



EXHIBIT 1 



Insurance: 



Bond: 



construction of the improvements or to invest the amount required for 
improvements. 

General Liability (in amount to be determined by City's Risk Manager); 
Worker's Compensation; Property Insurance on the Premises; 
Automobile Liability; Personal Property; Business Interruption; 
Builder's Risk; and any other insurance required by law. 

Tenant will be required to furnish the Port with a Materialman's 
Completion Bond issued by a responsible surety company, satisfactory 
to the Port in the Port's reasonable discretion, licensed to do business 
in California, in an amount not less than the value of the 
improvements proposed to be constructed. 



Minority Participation Goals : 



(a) For Construction of Capital Improvements 

Tenant is required to comply with the following subcontracting goals: 
25% of the cost of the improvements (excluding architectural and 
engineering services) must be allotted to MBE firms; 2% to WBE 
firms. 

(b) For Contracting of Services and Supplies 

Tenant shall use good faith efforts to contract with certified MBE and WBE 
firms for the contracting of services and supplies for the daily operation of 
the restaurant, in accordance with S.F. Administrative Code Chapters 
12B, 12C and 12D. The lease will contain appropriate MBE and WBE 
participation goals, to be negotiated with Port's HRC representative. 

(c) Hirinc Goals 

Tenant shall be required to implement an Affirmative Action Plan to 
ensure equal opportunity in employment, in accordance with Chapters 
1 2B and 1 2C of the S. F. Administrative Code. 



City Requirements : 



Tenant is required to comply with the non-discrimination provisions of 
Chapters 12B and 12C of the S.F. Administrative Code, including the 
provisions which prohibit discrimination in the provision of benefits 
between employees with registered domestic partners and employees 
with spouses; Tenant agrees not to do business with the government 
of Burma, and to abide by the other City requirements set forth in the 
standard lease. 



Attachment B 



EXHIBIT 1 



PORT OF SAN FRANCISCO 




MEMORANDUM 



May 20, 1997 



Ferty Building 

San Francisco, CA 94111 

Telephone 415 274 0400 

Telex 275940 PSFUR 

Fax 415 274 0528 

Cable SFPORTCOMM 

Writer 



TO: 



MEMBERS, PORT COMMISSION 

Hon. Michael Hardeman, President 
Hon. Denise McCarthy, Vice President 
Hon. Frankie Lee _ 

Hon. James R. Herman 



FROM: Douglas F. Wong ,kj 

Executive Director 

SUBJECT: Approval of Exclusive Right to Negotiate Agreement with Homblower Yachts, Inc. 
for leases at Piers Vi and 3 

DIRECTOR'S RECOMMENDATION: APPROVE EXCLUSIVE RIGHT TO 

NEGOTIATE 



BACKGROUND 

Hornblower Yachts. Inc and Ferryboat Santa Rosa Partners. Ltd. 

Hornblower Yachts, Inc. ("Hornblower"), whose corporate headquarters are located at Pier 3, 
has operated dining yacht excursions from Port property since 1980. During the 1995/96 Fiscal 
Year, Homblower generated gross sales of $6,281,590 from the excursions that it operates under 
agreements with the Port, and. paid $469,120 of total rent to the Port, including $245,068 of 
percentage rent in excess of base rent. Hornblower is thus the second highest volume excursion 
operator on Port property (after Red & White Fleet). It also produces the 3rd highest revenue 
to the Port among its existing maritime businesses (after San Francisco Drydock and Red & White 
Fleet) and the 12th highest revenue among all businesses on Port property. 



THIS PRINT COVERS CALENDAR ITEM NO. 5C 



Agenda Item No. 5C 
Page 2 



In addition, Hornblower, which also operates excursions in Berkeley, Oakland, San Diego, 
Newport Beach, Marina del Rey, and Lake Tahoe is recognized as the highest volume dining 
excursion operator in the Western United States. Hornblower is also involved with ferry service 
and excursion operations outside of the Western United States in New York, Connecticut, Florida, 
Indiana and Mississippi. 

Despite being one of the top revenue producers for the Port, Hornblower has only been a month- 
to-month tenant of the Port, occupying spaces spread out from Pier 33 to Pier 26 under 6 different 
tenancy agreements, which are outlined in the following table: 



Port Facility 


Type of 
Tenancy 


Document No. 


Sq. Ft. 


Monthly 
Base Rent 


Use/Comments 


Pier 31/33 


MTM License 


11165 


43,927 


$17,089.20 


Excursion berthing and operations 
and parking 
Percentage rental lease. 


Pier 33 


MTM License 


10940 


522 


104.50 


Shed 


Pier 33 


MTM License 


11053 


1,402 


280.40 


Shed 


Pier 3 


MTM Lease 


L- 12348 


7,607 


2,966.73 


Shed 


Pier 1 


MTM Lease 


L-12255 


410 


287.00 


Office 


Pier 26 


MTM Lease 


L- 11 820 


1,827 


740.17 


Shed 


Total 






55,695 


$21,468.00 


. 



Among the premises demised in the above existing agreements, Hornblower only berths passenger 
vessels and loads and unloads passengers from the premises it leases at Pier 31/33 under License 
11165. However, because of the limited landing berth capacity at Pier 31/33, Hornblower also 
loads and unloads passengers at Pier Va, Pier 1, and South Beach Marina, which results in reduced 
revenues to the Port. (For comparison, Hornblower has only two landing berths on premises it 
leases from the Port, while Red & White Fleet has seven berths. Blue & Gold has four berths, and 
Pacific Marine Yachts at Pier 39 has four berths.) 

The owner of Hornblower is also the principal of Ferryboat Santa Rosa Partners, Ltd. ("FSRP"), 
which owns the Ferryboat Santa Rosa that is berthed at Pier 3 under Port Lease No. L- 1 0421 
("Santa Rosa Lease"). This lease, which is for 10,000 sq. ft. of open pier space plus adjacent 
water space, has a remaining term of approximately 15 years, expiring October 31, 2012. The 
current monthly base rent is $3,056.70, versus 10% of gross revenues received from sub-tenants. 
The permitted uses are offices, museum uses, and meeting and banquet facilities. Currently, the 



Agenda Item No. 5C 
Page 3 



only sub-tenant is Homblower, which uses the Ferryboat Santa Rosa for its offices, and the gross 
revenue received by FSRP (which is at or above market) results in no percentage rent being due 
the Port in excess of base rent. FSRP also leases 1,200 sq. ft. of additional space on Pier 3 for 
$296.26 per month for parking under month-to-month Lease No. 11481. 

The total base rent paid to the Port by Hornblower and FSRP therefore equals approximately 
$22,016 per month, or $264,187 per year. With percentage overage rent, the total rent paid to 
the Port by Hornblower and FSRP currently amounts to approximately $509,255 per year. 

Homblower desires to consolidate its operations closer to the Financial District at Piers Vi and 
3, and to commit to a longer term tenancy, similar to that of FSRP. This consolidation will 
enable Hornblower to enhance and expand its operation and to be positioned to better serve its 
market, which is not based upon tourists, but rather local businesses, conventions, and Bay Area 
residents. In addition, the America One syndicate—the America's Cup challenge sponsored by the 
St. Francis Yacht Club-desires to incorporate its racing sailboat compound into this consolidated 
Hornblower facility, including utilization of the Ferryboat Santa Rosa. 

Port's Excursion Policy 

On October 28, 1992, the Port Commission approved the Policy for Accommodating Additional 
Excursion Boats at the Port of San Francisco (Resolution No. 92-112). This policy established 
rental guidelines for Port staff to negotiate excursion vessel leases, including percentage rents 
equal to 5% to 7% of gross receipts. This policy also identified Piers 3 and 9 as suitable locations 
for accommodating excursion vessel facilities, and allowed for the direct negotiation of leases with 
excursion operators. The policy also directed Port staff to announce the availability of leases for 
basing and operating excursion vessels. This announcement was made, including extensive 
outreach to potential tenants, but only Homblower expressed interest. Another outreach program 
pursuant to this policy was conducted in 1995 to excursion operators both currentiy operating from 
Port property and from other sites on the West Coast, and again only Homblower responded with 
interest for such a Central Waterfront location. 

Pier 3 

Pier 3 was built in 1915, and it is now a Category II Pier, meaning that its substmcmre is 
significantly deteriorated. Because of the pier condition, much of its shed stmcmre has been 
removed. It is now primarily used for berthing the Ferryboat Santa Rosa and for support facilities 
for the Ferryboat Santa Rosa and for Homblower operations. It is also now used temporarily for 
general parking, but pursuant to the BCDC permit for Pier 3, this general parking must be 
eliminated upon completion of the Waterfront Transportation Project. Alternative uses for this 
pier are very lunited because most changes of use would trigger seismic upgrade requirements, 
whose cost would be prohibitive due to the poor condition of the substmcture. Excluding the 
bulkhead office buildings, the current monthly revenue is $14,700.62, comprised of $6,733.42 



Agenda Item No. 5C 
Page 4 



from leases (96% of which is from Homblower and FSRP), and $7,970.20 from monthly parking. 
Horablower and FSRP propose to lease all of Pier 3 except the bulkhead office buildings. 

Pier Vz 

The Port's public ferry landing is currently located at Pier Vr. The planned Downtown San 
Francisco Ferry Terminal, whose construction is currently scheduled to commence in 1998, will 
create two (North and South) public ferry landings. The North Landing will be located south of 
the existing Pier '/2 landing, and the existing float and ramp at Pier Vi will be relocated to this 
North Landing. As a result, the existing fmger pier and walkway at Pier Vi will no longer be 
needed as a public ferry landing site, and Hornblower proposes to lease these facilities and 
adjacent water space for berthing the 183' California Hornblower and for originating dining 
excursions. This use has been reviewed with the Port's Maritime Division and with the Pier Vi 
Advisory Committee (which is made up of the ferry operators using the public ferry landing), and 
they indicate that this use will not interfere with the operation of the new public landings. 



PROPOSAL 

By consolidating its facilities and operations at Piers Vi and 3, Hornblower will be able to better 
serve its customers and expand its business. This consolidation would also give it additional 
excursion berthing capacity, accommodating a greater number and variety of excursion vessels. 
It would also provide operational efficiencies from having all support facilities in proximity to its 
excursion berths, including catering facilities, storage, and administrative, ticketing and operations 
offices. 

A fundamental component of this coiisolidation is berthing the California Hornblower at Pier Vi , 
where it would be very visible and accessible from The Embarcadero and the Financial District, 
which would achieve important goals of Hornblower and the Port. A second fundamental 
component would be the provision of parking at Pier 3 to support this maritime activity, replacing 
the parking Homblower currently has at Pier 31/33. A third fundamental component is the ability 
to combine maritime excursions from Pier 3 with the banquet and meeting facilities on the 
Ferryboat Santa Rosa. A final fundamental component is the creation of an exciting venue for the 
America One America's Cup challenge on Pier 3, which would depend upon the utilization of the 
Ferryboat Santa Rosa and the improvements to be made to the pier by Hornblower. 

To achieve this consolidation, Hornblower has proposed that the Port grant Hornblower an 
Exclusive Right to Negotiate Agreement (Attachment A ) commencing May 27, 1997 for a 126-day 
period to: (1) allow the parties to finalize all the terms and conditions of proposed leases with 
Homblower for premises at Pier Vi and Pier 3; and (2) allow Hornblower to undergo California 
Environmental Quality Act (CEQA) review by the City Office of Environmental Review. Once 
CEQA approval is obtained, and the parties have successfully negotiated said lease agreements, 



Agenda Item No. 5C 
Page 5 



this transaction will be calendared for Port Commission consideration. The terms and conditions 
of the proposed new leases are summarized below, which will be incorporated as Exhibit 1 to the 
Attachment A agreement. The proposed revisions to the Santa Rosa lease and the proposed terms 
of a new interim lease at Pier 31/33 until Hornblower relocates to Pier Vi are also summarized 
below. The boundaries of the proposed premises at Pier Vi and Pier 3 are shown on Attachment 
B. 

Leases for Piers V2 and 3 

The proposed leases for Piers Vi and 3 constitute a single transaction, but would take the form of 
a separate lease for each facility because the terms and conditions regarding the two facilities differ 
somewhat, as outlined in the following table. Combining the transaction into one document would 
therefore be cumbersome and difficult to administer. 



Leasing Parameter 
Lease No. 
Premises 



Term Commencement 
Date 



Term Expiration Date 



Proposed Pier V2 Lease 

L-12391 

Approximately 5,074 sf of open pier 
space and 66,471 sf of water area, 
plus a revokable license for 4,532 sf 
of open pier space. Tenant shall have 
exclusive possession of the finger pier 
portion of the open pier space, but 
possession of rest of the open pier 
space shall be non-exclusive and be 
available for public access. 

Term shall commence on the first day 
of the calendar month after all of the 
following have occurred: (1) Port 
relocates float and ramp from 
Premises; (2) issuance of BCDC 
permit; and (3) issuance of building 
permit. Lease terminable if Port does 
not remove float and ramp by 
1/1/2000, or if conditions (2) and (3) 
not satisfied within 180 days of 
condition (1). 

October 31, 2012 (same expiration 
date as for Santa Rosa Lease). 



Proposed Pier 3 Lease 

L-12175 

Approximately 71,669 sf of open pier 
space, 11,044 sf of open shed space, 
and 98,695 sf of water area 



Term shall commence on the first day 
of the calendar month after both of the 
following have occurred: (1) issuance 
of BCDC permit; and (2) issuance of 
building permit. Lease terminable if 
conditions not satisfied by 2/1/1998. 



Same 



Agenda item No. 
Page 6 



5C 



Leasing Parameter 
Base Rent 



Percentage Rent 



Permitted Uses 



Other Use Requirements 



Proposed Pier Vi Lease 

$17,089.00 (same as for existing 
License No. 11165 for Pier 31/33), 
with annual CPI increases. 



(1) 7% of gross receipts for boat 
rental, tickets, beverage, and food; 
and (2) 10% of all commissions on 
ticket sales for excursions not operated 
by Tenant and not originating from 
Premises. 



(1) Passenger loading and unloading 
and berthing passenger vessels, limited 
to types of maritime excursion 
operations and common carrier ferry 
service and support facilities permitted 
by law as of the lease date; and (2) 
ticket office for operations of Tenant 
and subtenants of Tenant. 



A minimum of one passenger vessel 
shall be home berthed at Premises 
which has a certified capacity of at 
least 1 ,000 passengers 



Proposed Pier 3 Lease 

$11,647.00 ($0.14 per sf based upon 
pier and shed area, which is the same 
as for existing uses on Premises), with 
annual CPI increases. 

(1) 6% of gross receipts for boat 
rental, tickets, beverage, and food; (2) 
10% of all commissions on ticket sales 
for excursions not operated by Tenant 
and not originating from Premises; (3) 
66% of parking receipts after parking 
taxes; and (4) 9% of retail 
merchandise sales. . 

(1) Passenger loading and unloading 
and berthing passenger vessels, limited 
to types of maritime excursion 
operations and common carrier ferry 
service and support facilities permitted 
by law as of the lease date; (2) ticket 
office for operations of Tenant and 
subtenants of Tenant; (3) compound or 
compoimds to be utilized by racing 
sail boats; (4) ceremonial berthing of 
sail boats and historic vessels; (5) 
catering uses; (6) maritime offices; (7) 
sale of retail merchandise directly 
related to maritime activities located 
on the Premises; (8) special events 
(subject to Port approval in each 
instance); and (9) parking to support 
maritime operations and activities. 

A minimum of one passenger vessel 
shall be home berthed at Premises 
which has a certified capacity of at 
least 500 passengers. Tenant shall 
accommodate the reasonable space 
needs of at least one America's Cup 
challenge syndicate, and Tenant shall 
accommodate monthly parking 
Monday - Friday to extent it does not 
interfere with parking in support of 
maritime operations and activities. 



Agenda Item No. 5C 
Page 7 



Leasing Parameter 
Maintenance and Repairs 



Improvements and 
Alterations 



Insurance 



Assignment and 
Subletting 



Parking on Pier 1 



Emergency Use 



Port Right to 
Temporarily Relocate 
Tenant 



Proposed Pier Vz Lease 

Tenant responsible for all maintenance 
and repairs including pier 
substructure. 



Tenant accepts in "as is" condition, 
except Port to remove float and ramp. 
Tenant shall construct berthing 
improvements, and shall be granted a 
rent credit for 50% of the cost of 
berthing improvements. Said rent 
credit shall not exceed $500,000, and 
may be taken on a monthly basis 
against die portion of Percentage Rent 
in excess of 6% of gross receipts. 

Tenant shall maintain Protection and 
Indemnity Insurance (Watercraft 
Liability) with a limit of not less than 
$5 Million. 

Port shall be due 75 % of any profits 
that Tenant receives from any 
subletting. 

Subject to certain conditions and 
certain termination rights of the Port 
Tenant to have the non-exclusive right 
to use Pier 1 for customer parking 
during non-peak hours, administered 
either by Port parking concessionaire, 
or by Tenant under a licenses for 
specific dates whereby Port will 
receive fee equal to 66% of parking 
receipts after parking taxes. 

Tenant shall cooperate to make 
landing facilities available for common 
carrier service in the event of an 
emergency requiring use of Premises. 

Subject to certain conditions, if the 
Port undertakes the development of 
Pier '/2, Pier 1 or the Ferry Building, 
the Port shall have the right to 
temporarily relocate Tenant to anodier 
pier north of Pier '/z . 



Proposed Pier 3 Lease 

Tenant responsible for all maintenance 
and repairs except pier substructure. 
Neither party responsible for pier 
substructure, but either party may 
make pier substructure repairs. 

Tenant accepts in "as is" condition. 
By January 1, 2001, Tenant shall 
construct berthing improvements, and 
shall be granted a rent credit for 50% 
of the cost of berthing improvements. 
Said rent credit shall not exceed 
$500,000, and may be taken on a 
monthly basis against the portion of 
Percentage Rent in excess of 5 % of 
gross receipts 

Same. 



Same. 



Same. 



Same. 



Not applicable. 



Agenda Item No. 5C 
Page 8 



Leasing Parameter 


Proposed Pier Vi Lease 


Proposed Pier 3 Lease 


Port Right to 


Subject to certain conditions, if the 


Not applicable. 


Permanently Relocate 


Port undertakes the development of 




Tenant 


Pier 1 , the Port shall have the right to 
temporarily or permanently relocate 
Tenant to another pier north of Pier 

'/2. 




Termination Rights of 


(See Term Commencement Date 


Port to have right to ten 


Port 


above.) 


upon occurrence of any 



Termination of Tenancy 
at Pier 31/33 



City Requirements 



The parties acknowledge that the Port 
intends to terminate Tenant's tenancy 
at Pier 31/33 following the substantial 
completion by Tenant of berthing 
improvements at Premises. 

Comply with all city requirements, 
including Burma, non-discrimination 
and domestic partners ordinance. 



following: (1) By January 1, 2001, 
Tenant fails to either construct 
berthing improvements, commence 
passenger loading and imloading 
passenger vessels at Premises, or 
home berth one 500 passenger vessel; 
or (2) Port Lease No. L-12391 for 
Pier Vi is terminated. 
( Also, see Term Commencement 
Date above.) 

Not applicable. 



Same 



Santa Rosa Lease Amendment 

Concurrent with this transaction, Port staff proposes to amend the Santa Rosa Lease to clarify and 
update some economic provisions and to update certain legal provisions. The proposed 
amendments to the economic provisions are as follows: 

(1) Revise the boundaries of the Premises so that they coincide with the space actually used 
by FSRP and the boundaries of the proposed new lease with Hornblower for Pier 3, as 
shown on Attachment B. 



(2) Revise the Percentage Rent so that it is calculated based upon 10% of sublease revenues 
for office and museum uses, and 6% of gross receipts from boat rental, tickets, beverages, 
and food. However, rental from office space used by Tenant or an affiliate involving 
maritime activities on Port property may be excluded from sublease revenues. 



Agenda Item No. 5C 
Page 9 



(3) Expand the permitted use of the Premises to consist of: (a) museum; (b) maritime offices 
and general office uses; (c) meeting room and banquet facilities, including sale of food and 
beverages; (d) catering uses; (e) passenger loading and unloading and berthing passenger 
vessels; and (f) sale of retail merchandise directly related to maritime activities located on 
Premises or adjacent pier. 

(4) Add that failure to continue berthing the Ferryboat Santa Rosa on the Premises shall allow 
Port to terminate the Santa Rosa Lease. 

In terim Lease for Pier 31/33 

Port staff and Hornblower have negotiated an interim lease for the premises that Homblower 
currently occupies at Pier 31/33 under License No. 11165, which will be dependent upon 
Homblower and the Port entering into the proposed Leases Nos. L- 123 91 and L- 12 175 for Piers 
Vi and 3 during the negotiation period established in the Exclusive Right to Negotiate Agreement. 
The fundamental provisions of this new lease, as compared to the existing license would be as 
follows: 



Leasing Parameter 

Document 

Term 



Base Rent 
Percentage Rent 



Current License No. 11165 

License 
Month-to-month 



$17,689.20, with annual CPI 
adjustments 

7% of gross receipts from boat rental, 
tickets, beverages, and food; 75% of 
gross receipts from parking after 
parking taxes, less a $4,000 per month 
credit for operating expenses 



Proposed Lease 

Standard Port Lease 

Five-years; provided however, Port 
shall have the right to terminate 
following substantial completion by 
Tenant of Berthing Improvements at 
Pier Vi Premises (pursuant to 
proposed Lease No. L- 12391) 

Same 



6% of gross receipts for boat rental, 
tickets, beverages, and food; 66% of 
gross receipts from parking after 
parking taxes 



Analysis 

The Port will receive the following benefits from this proposed transaction: 

(1) It converts from a month-to-month tenancy to a longer term lease commitment the maritime 
business which produces the 3rd highest revenue to the Port among its existing maritime 
businesses and which produces the 12th highest revenue among all businesses on Port 



Agenda Item No. 5C 
Page 10 



property. This longer term will enable Hornblower to amortize the costs to improve its 
facilities, and to secure financing to acquire new vessels. 

(2) It consolidates and expands the operations and facilities of Hornblower so that it can 
operate more efficiently and can better serve its customers, which will enable Hornblower 
to expand its business, producing more revenue for the Port. Based upon the business plan 
prepared by Hornblower, the percentage rent generated by Hornblower and FSRP at the 
consolidated Pier '/a and Pier 3 facilities is projected to increase by $300,000 - 350,000 per 
year within three years after completion of its improvements, representing a 59 - 69% 
increase in revenues to the Port from Hornblower. 

(3) It creates a compound for San Francisco's America's One America's Cup challenge. 

(4) It protects the existing base rent from Pier 3. When the Waterfront Transportation Project 
is completed, the BCDC permit for Pier 3 requires that it no longer be used for general 
parking purposes, which currently constitutes 55% of the Port revenue from Pier 3. Based 
upon the condition of the pier, there are very limited uses available for this pier. 

(5) The Pier Vz finger pier will be vacated when the Port relocates the public ferry landing to 
the Downtown San Francisco Ferry Terminal. The base rent currently being paid by 
Hornblower at Pier 31/33 will then be transferred to Pier Vi, and this facility near 
Fisherman's Wharf would then be available to rent to a new user. 

(6) The proposed uses conform with the general goals stated in the Waterfront Plan and with 
the specific uses proposed in this plan for Piers Vi and 3. Due to the poor condition of 
Pier 3, the proposed uses also represent the most intensive feasible use of this pier. 



Prepared by: Ku-k W. Bennett, Sr. Property Manager, Northern Waterfront/Fisherman's Wharf 

G:\WP51\AGENDAS\H0RNBL0W.KB\ibn\May 20, 1997 



PORT COMMISSION 

CITY AND COUNTY OF SAN FRANCISCO 

RESOLUTION NO. 97-41 



WHEREAS, 

WHEREAS, 

WHEREAS, 

WHEREAS, 
WHEREAS, 



WHEREAS, 
WHEREAS, 



WHEREAS, 



RESOLVED, 



Charter Section B3.581 empowers the Port Commission with the power and 
duty to use, conduct, operate, maintain, manage, regulate and control the 
Port area of San Francisco; and 

under Charter Section B3. 58 1(g) leases granted or made by the Port 
Commission shall be administered exclusively by the operating forces of the 
Port Commission; and 

Hornblower Yachts, Inc. ("Homblower") has proposed to lease premises 
at Piers Vz and 3 (collectively the "Site") for maritime excursion 
operations; and 

Port staff has negotiated substantially all of the terms and conditions of the 
proposed leases for the Site; and 

Hornblower has requested a 126-day exclusive right to negotiate the final 
terms and conditions of leases for the Site and to undergo the environmental 
review under the California Environmental Quality Act ("CEQA"), in the 
form indicated in Attachment A hereto; and 

Homblower is a distinctive maritime operation with unique leasing needs, 
and it is therefore impractical and unfeasible to bid these leases; and 

the Port Commission has determined that, based upon Port Resolutions 80- 
95 and 92-112 and the facts set forth in the Memorandum of Agenda Item 
5C for the May 27, 1997 Port Commission meeting, said exclusive right to 
negotiate with Hornblower is appropriate; and 

the Port Commission will not enter into a binding commitment for or 
approve a lease for the site without first reviewing and considering the 
environmental review document prepared by the City's Office of 
Environmental Review; now therefore, be it 

that the Port Commission hereby approves an Exclusive Right to Negotiate 
Agreement between the Port and Hornblower for the Site as indicated in 



Resolution No. 97-41 
Page 2 



Attachment A hereto, incorporating as Exhibit 1 the business terms outlined 
in the Memorandum of Agenda Item 5C for the May 27, 1997 Port 
Commission meeting, and the Port Commission authorizes the Executive 
Director of the Port, or his designee, to execute said Exclusive Right to 
Negotiate Agreement. 



/ hereby certify that the foregoing resolution was adopted by the Port Commission at its meeting 
of May 27, 1997. 



Secretary 



G:\WP51\AGENDAS\HORNBLOW.KB\ibn\May 22, 1997 



EXCLUSIVE RIGHT TO NEGOTIATE 



THIS EXCLUSIVE RIGHT TO NEGOTIATE ("Exclusive Right") is entered into 

as of this day of May 1 997, by and between the City and County of San 

Francisco ("City"), acting by and through its Port Commission ("Port"), and 
Hornblower Yachts, Inc., a California corporation (referred to hereinafter as 
"Hornblower") upon the following facts, intentions and understandings of the 
parties: 

A. Hornblower desires to obtain an exclusive right to negotiate leases for a 
maritime excursion operation at Piers Vz and 3, located in the City and County of 
San Francisco (collectively, the "Site"), under the general terms agreed upon by 
Port and Hornblower herein and subject to all required permits and approvals being 
obtained by Hornblower. 

B. Pursuant to Port Commission Leasing Policy adopted August 22, 
1979, and subsequently amended by Resolution 80-95 on September 10, 1980, 
subsection 1 0, the Port may enter into negotiations with a tenant without 
competitive bid when competitive bid is impractical or impossible and the property 
is proposed to be used for maritime purposes. 

C. Pursuant to Port Commission Policy for Accommodating Additional 
Excursion Boats adopted October 28, 1992 by Resolution No. 92-1 12, direct 
negotiation of excursion vessel leases for Piers 3 and 9 is authorized after a 
solicitation. 

D. Because the nature of the proposed project is maritime in nature and 
because competitive bid of this type of proposal would be impractical, competitive 
bid of this Exclusive Right is not required under Port policy or under the San 
Francisco Charter or Administrative Code Section 2.6-1. 

E. Because Hornblower is the second highest volume excursion operator 
at the Port of San Francisco, and Hornblower was the only excursion operator who 
expressed interest in a site on the Central Waterfront for operating maritime 
excursions in response to two solicitations. 

F. The parties now desire to enter into this Exclusive Right to set forth the 
terms and conditions upon which Port and Hornblower will enter into lease 
negotiations and seek to complete written lease documents for Port Commission 
approval. 

ATTACHMENT A 



NOW, THEREFORE, the parties hereto agree as follows: 

1 . Term . The term of this Exclusive Right shall commence on May 27, 
1997, and shall expire on September 30, 1997, unless extended in accordance 
with Section 3 below. The term of this Exclusive Right, including any extensions, 
is hereinafter referred to as the "Exclusive Negotiation Period." During the 
Exclusive Negotiation Period, the Port will not solicit or consider any other 
proposals or negotiate with any other developer with respect to the development of 
the Site. 

2. Negotiating Fee . Upon execution of this Exclusive Right, Hornblower 
shall pay to Port a lump sums by cash, check or money order in the amount of Five 
Thousand and No/100 Dollars ($5,000.00) as a non-refundable fee for the right to 
negotiate exclusively with the Port during the Exclusive Negotiation Period; 
provided, however, the Port shall credit said negotiating fee against rent due from 
Hornblower in the event the Port approves leases for the Site before the expiration 
of the Exclusive Negotiation Period, or Option Periods. 

3. Extension of Negotiating Period . 

a. Option Period . Hornblower shall have two (2) two-month options 
(each an "Option Period") to extend the Exclusive Negotiation Period, commencing 
on October 1, 1997. Hornblower shall exercise each option to extend by written 
notice of the exercise of such option delivered with cash, check or money order 
payment of One Thousand Dollars ($1,000.00) per Option Period (each an "Option 
Payment") to Port at the address for notice set forth in Paragraph 10 below, not 
less than ten (10) days prior to the commencement of the next Option Period. In 
the event that the parties have been unable to execute leases prior to the expiration 
of the original term of this Exclusive Right (or the preceding Option Period, if 
applicable) due solely to the failure of the San Francisco Department of City 
Planning Office of Environmental Review ("OER") to complete its environmental 
evaluation in time for execution of a lease on or before September 30, 1 997, Port 
shall waive its rights to the appropriate Option Payment. This waiver shall not 
apply if Hornblower creates a delay by its failure to comply with requests for 
information or other OER requirements. 

b. Option Payment Non-Refundable . Each Option Payment shall be 
non-refundable; provided, however, that the Port shall credit any Option Payment 
against rent due by Hornblower in the event that Hornblower delivers an Option 
Payment for a subsequent Option Period and the Port Commission approves leases 
for the Site with Hornblower before the commencement of that subsequent Option 
Period. Hornblower's failure to exercise any Option Period in accordance with this 
Section 3, at Port's sole option, shall extinguish all future Option Periods and shall 



terminate this Exclusive Right as of the last date of the Term or the applicable 
Option Period. 

4. Negotiation of Lease . During the Exclusive Negotiation Period, Port and 
Hornblower shall seek to complete leases for the Site which will be subject to Port 
Commission approval. Both parties hereto agree to negotiate the terms of such 
leases in good faith. 

The leases shall be in substantial conformity with the terms set forth in 
Exhibit 1 attached hereto which have been agreed upon by the parties; provided, 
however, such terms are subject to change by mutual agreement of the parties. 
The parties acknowledge that the terms of Exhibit 1 merely purport to set forth 
general principles upon which the parties have agreed; any binding leases shall be 
subject to review and approval by the parties, their respective legal counsel, and 
the San Francisco Port Commission. 

The parties further acknowledge that certain regulatory approvals are 
required for the use of the Site (collectively "Regulatory Approvals"), including, but 
not limited to, all necessary approvals from BCDC and environmental review by 
OER pursuant to the California Environmental Quality Act. Environmental review by 
OER shall be completed prior to the approval of any lease for the Site by the Port. 
The effectiveness of any such lease shall be conditioned upon Hornblower obtaining 
all other Regulatory Approvals subsequent to the Port Commission's approval of 
any such lease. 

5. Regulatory Approvals, Submittals, and Disclosures . 

a. Hornblower's Obligations . Except as provided in subsection 5.b 
below, Hornblower agrees: 

(1) It shall diligently and in good faith pursue all Regulatory Approvals; 

(ii) It shall be solely responsible for obtaining all Regulatory Approvals, 
and Hornblower shall not seek any Regulatory Approval without first 
obtaining the approval of Port; 

(iii) It shall bear all costs associated with or complying with any 
necessary. Regulatory Approval except those costs incurred by the 
Port in complying with subsection 5.b, below; 



(iv) It will pay and discharge any fines or penalties imposed as a result 
of the failure of Hornblower to comply with the terms and conditions 
of any Regulatory Approval, and Port shall have no liability, monetary 
or otherwise, for said fines and penalties. 

(v) To the fullest extent permitted by law, Hornblower agrees to 
indemnify and hold City, Port and their officers, agents and employees 
harmless from and against any loss, expense, cost, damage, attorneys' 
fees, penalties, claims or liabilities which City or Port may incur as a 
result of Hornblower's failure to obtain or comply with the terms and 
conditions of any Regulatory Approval. 

b. Port's Obligations . Port agrees that it will cooperate with 
Hornblower in filing for, processing and obtaining all Regulatory Approvals, and to 
the extent required by any regulatory agency issuing a Regulatory Approval, it will 
join with Hornblower as co-applicant in filing, processing and obtaining all 
Regulatory Approvals necessary for the permitted uses specified in Exhibit 1 
attached hereto. Nothing contained herein shall be deemed to limit or otherwise 
constrain Port's discretion, powers and duties as a regulatory agency of the City 
with certain police powers. 

c. Submittal of Information . Hornblower agrees to submit to Port, 
OER, BCDC and any other regulatory agency having approval over the project, all 
specifications, descriptive information, studies, reports, disclosures and any other 
information required to satisfy the application filing requirements of those agencies. 

6. Non-Assignment . The parties acknowledge that Port is entering into this 
Exclusive Right on the basis of the special skills, capabilities and experience of 
Hornblower. This Exclusive Right is personal to Hornblower is non-assignable. Any 
attempted assignment of this Exclusive Right shall be considered an event of 
default under this Exclusive Right and shall immediately and without opportunity to 
cure give rise to Port's remedies provided in Section 7 hereof. 

7. Default . 

a. Event of Default . The occurrence of any of the following shall 
constitute a default by Hornblower after notice of the default and the expiration of 
the applicable cure period, if any: 

(i) Failure to pay any sums due hereunder when due. 

(ii) Failure to perform or abide by any other provision of this Exclusive 
Right if such failure is not cured within twenty (20) days after notice 



has been given to Hornblower. If the default cannot reasonably be 
cured within 20 days, Hornblower shall not be in default of this 
Exclusive Right if Hornblower commences to cure the default within 
the 20-day period and diligently and in good faith continues to cure the 
default. 

(iii) Either (a) the filing by Hornblower of a petition to have 
Hornblower adjudicated insolvent and unable to pay its debts as they 
mature or a petition for reorganization or arrangement under any 
bankruptcy or insolvency law, or a general assignment by Hornblower 
for the benefit of creditors; or (b) the filing by or against Hornblower of 
any action seeking reorganization, arrangement, liquidation, or other 
relief under any law relating to bankruptcy, insolvency, or 
reorganization or seeking appointment of a trustee, receiver, or 
liquidator of Hornblower or of any substantial part of Hornblower's 
assets. 

b. Port's Remedies . In the event of default. Port, at its option, may 
terminate this Exclusive Right upon written notice to Hornblower, sent in 
accordance with Section 10 below. This remedy is not exclusive, but shall be 
cumulative with any remedies now or later allowed by law. 

8. Attornevs Fees In the event of any action or proceedings at law or in 
equity between the Port and Hornblower to enforce any provision of this offer to 
protect or establish any right or remedy of either party to this agreement, the 
unsuccessful party to such litigation shall pay to the prevailing party all costs and 
expenses as determined by the court, including reasonable attorneys' fees, incurred 
therein by such prevailing party; and if such prevailing party shall recover judgment 
in any such action or proceeding, such costs, expenses and attorney's fees shall be 
included in and as a part of such judgment. For purposes of this Exclusive Right, 
reasonable fees of attorneys of the Office of City Attorney shall be based on the 
fees regularly charged by private attorneys with an equivalent number of years of 
professional experience (calculated by reference to earliest year of admission to the 
Bar of any State) who practice in the City in law firms with approximately the same 
number of attorneys as employed by the Office of City Attorney. 



9. Notices . Any notice given under tfiis Exclusive Right shall be in 
writing and given by delivering the notice in person, by commercial courier or by 
sending it by registered or certified mail, or Express Mail, return receipt requested, 
with postage prepaid, to the mailing address listed below or any other address 
notice of which is given. For the convenience of the parties, copies of notices may 
also be given by telefacsimile, to the telephone number listed below or such other 
numbers as may be provided from time to time. 

Port: Commercial Property Manager 

Port of San Francisco 
Room 3100, Ferry Building 
San Francisco, CA 941 1 1 
Facsimile: (415)274-0578 
Telephone: (415)274-0510 

Hornblower: Hornblower Yachts, Inc. 

Pier 3, Ferry Boat Santa Rosa 
San Francisco, CA 941 1 1 
Facsimile: (415)394-8444 
Telephone: (415)394-8900 



In the event that Hornblower must be legally served, Hornblower's agent for 
service is John Domingos, Esq., 351 California Street, Suite 600, San Francisco, 
CA 94104. 

Any mailing address or facsimile number may be changed at any time by 
giving written notice of such change in the manner provided above at least ten (10) 
days prior to the effective date of the change. All notices under this Exclusive 
Right shall be deemed given, received, made or communicated on the date personal 
receipt actually occurs or, if mailed, on the delivery date or attempted delivery date 
shown on the return receipt. A person may not give official or binding notice by 
facsimile. The effective time of a notice shall not be affected by the receipt, 
original, of a facsimile copy of the notice. 

10. City Requirements 

a. Non-Discrimination . Hornblower shall not, in carrying out its 
obligations hereunder, discriminate against any person or group of persons solely 
because of race, color, creed, national origin, ancestry, age, sex, sexual orientation, 
disability or acquired immune deficiency syndrome (AIDS) or AIDS related condition 
(ARC). The provisions of Chapters 12B and 1 2C of the San Francisco 
Administrative Code, relating to nondiscrimination by parties contracting with the 



City and County of San Francisco, are incorporated herein by this reference and 
made a part hereof as though fully set forth herein. Hornblower agrees to comply 
with all provisions of such Chapters 1 2B and 1 2C that apply to tenants and 
licensees of the City and County of San Francisco. 

b. MacBride Principles-Northern Ireland . City urges companies doing 
business in Northern Ireland to move toward resolving employment inequities and 
encourages such companies to abide by the MacBride Principles. City urges San 
Francisco companies to do business with corporations that abide by the MacBride 
Principles. 

c. Tropical Hardwood Ban . City urges Hornblower not to import, 
purchase, obtain, or use for any purpose, any tropical hardwood or tropical 
hardwood product. 

1 1 . Captions Used . Captions or titles utilized in the terms and conditions 
of this Exclusive Right are used for convenience of reference only and shall be 
disregarded in construing or interpreting any of its provisions. 

12. Time is of the Essence . Time is of the essence of each provision of 
this Exclusive Right. 



WHEREFORE, this Exclusive Right to Negotiate was executed by the parties 
hereto on the last date set forth hereinbelow. 



"Port" 

CITY AND COUNTY OF SAN FRANCISCO 

acting by and through its 

Port Commission 



"Hornblower" 

HORNBLOWER YACHTS, INC., 

a California corporation 



By: V. Pel Tsen 

Director, Real Estate & Asset Management 




By: Terry Ma^cRae 



Its President 



Dated: 



Dated: 



Approved as to Form: 
LOUISE H. RENNE 
City Attorney 



By: 



Deputy City Attorney 



Dated: 



G:\WP51\LEASES.0RG\H0RNBL0W.EXC\KB\Mav 19, 1997 



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PORT OF SAN FRANCISCO 



TO: 



MEMORANDUM 

May 21, 1997 

MEMBERS, PORT COMMISSION 

Hon. Michael Hardeman, President 
Hon. Denise McCarthy, Vice President 
Hon. Frankie G. Lee 
Hon. James Herman 




Ferry Building 

San Francisco, CA 94111 

Telephone 415 274 0400 

Telex 275940 PSF UR 

Fax 41 5 274 0528 

Cable SFPORTCOMM 

Writer 



FROM: Douglas F. Wong jl' 

Executive Director 

SUBJECT: Authorization to award Contract 2636, "Pier 48 Fire Damage Repair & 
Reconstruction" 

DIRECTOR'S RECOMMENDATION: THAT THE COMMISSION AUTHORIZE STAFF 
TO AWARD CONTACT 2636, "PIER 48 FIRE DAMAGE REPAIR AND 
RECONSTRUCTION," IN ACCORDANCE WITH THE ATTACHED RESOLUTION 

On November 26, 1996, a fire at the east end of Pier 48 destroyed the interconnecting wood 
frame strucmre and caused substantial structural damage to the steel frames, walls and roof 
at the easterly end of Sheds A and B on the pier. The fire caused significant deformation of 
steel trusses and caused pre-cast concrete wall panels that make up the exterior walls of the 
sheds to move from their original position. An emergency was declared and subsequently 
approved by the Port Commission on December 13, 1996. This emergency authorized staff 
to take several actions including hiring a consultant on an emergency basis develop a repair 
design for the building shell and to advertise for competitive bids for construction of the 
repairs. 

In January, 1997, the Port advertised Contract 2636 for competitive bids. This contract will 
address only the repair and reconstruction of the shells of the buildings. The interior repairs 
including new fire walls, coiling fire doors, a sprinkler system, light fixmres and a fire alarm 
system will be provided under a separate contract. 

On March 21, 1997, four (4) bids were received. A Summary of Bids is attached. The lowest 
responsive bidder was West Bay Builders, Inc./D. Stewart Thompson. Inc.. a Joint Venture, 
with a low base bid of $2,529,768. D. Stewart Thompson, Inc. is a WBE firm with 51% of the 

THIS PRINT COVERS CALENDAR ITEM 6A 



[:\wp51\agd-p48b.cj 



Page 2 



work. Staff has reviewed the bid documents and the Human Rights Commission has reviewed 
and agreed that the subcontracting goals of 20% MBE and 5% WBE have been met. The 
contractor has 24% and 12% respectively. 

Staff recommends that the Commission authorize the award of the base bid and Additive 
Alternative No. A-1 of Contract 2622 to West Bay Builders, Inc./D. Stewart Thompson, Inc., 
a Joint Venture, for a total contract amount of $2,599,768. Additive Alternative No. A-1 for 
$70,000 is for Types A and B coiling doors and grilles along column line 63. It is also 
recommended that the Commission authorize a 10% contingency for possible Type I contract 
modifications and that the Executive Director be authorized to accept the work after it is 
complete. Insurance monies will fund the cost of this contract. 



Prepared by : Cliff Jarrard, Chief Harbor Engineer 



I:\wp51\agd-p48b.cj 



PORT COMMISSION 
CITY AND COUNTY OF SAN FRANCISCO 

RESOLUTION NO. 97-29 



WHEREAS, on November 26, 1 996, a fire at the east end of Pier 48 destroyed the 

interconnecting wood frame structure and caused substantial damage to the 
steel frames, walls and roof at the easterly end of Sheds A and B on the pier; 
and 

WHEREAS, through an emergency declaration with subsequent Commission approval on 
December 13, 1996 staff was authorized to advertise for competitive bids for 
Contract 2636; and 

WHEREAS, on March 21,1 997, four (4) bids were received; and 

WHEREAS, staff has reviewed the bid documents and determined that the lowest 

responsive bidder is West Bay Builders, Inc./ D. Stewart Thompson, Inc., a 
Joint Venture; and 

WHEREAS, the Human Rights Commission has reviewed the bids and determined that 
this contractor has met the MBE/WBE subcontracting goals and that the 
contractor qualifies for the bid preference; and 

WHEREAS, insurance monies will fund the cost of this work, now therefore be it 

RESOLVED, that the San Francisco Port Commission hereby authorizes the award of 

Contract 2636, "Pier 48 Fire Damage Repair & Reconstruction," to West Bay 
Builders, Inc./D. Stewart Thompson, Inc., a Joint Venture to include the base 
bid and Additive Alternative No. A-1 at a cost of $2,599,768, and authorizes 
a 10% contingency for possible Type 1 contract modifications; and be it 
further 

RESOLVED, that the San Francisco Port Commission authorizes the Executive Director to 
accept the work after it is complete. 



/ hereby certify that the foregoing resolution was adopted by the Port Commission at its 
meeting of May 27, 1997. 



Secretary 



I:\wp51\agd-p48b.cj 



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PORT OF SAN FRANCISCO 




TO: 



MEMORANDUM 

May 21, 1997 

MEMBERS, PORT COMMISSION 

Hon. Michael Hardeman, President 
Hon. Denise McCarthy, Vice President 
Hon. Frankie G. Lee 
Hon. James Herman 



Ferry Building 

San Francisco. CA 94111 

Telephone 415 274 0400 

Telex 275940 PSFUR 

Fax 41 5 274 0528 

Cable SFPORTCOMM 

Writer 



FROM: Douglas F. Wong kj 

Executive Directory 

SUBJECT: Authorization to advertise for competitive bids for construction contracts for 
new maintenance facility and other facilitSy improvements at Pier 50 

DIRECTOR'S RECOMMENDATION: THAT THE COMMISSION AUTHORIZE STAFF 
TO ADVERTISE FOR CONSTRUCTION CONTRACTS RELATED TO THE 
MAINTENANCE FACILITY RELOCATION TO PIER 50 IN ACCORDANCE WITH THE 
ATTACHED RESOLUTION 

The Maintenance staff and Port tenants are scheduled to move completely out of Pier 46B into 
Pier 50 by August 1, 1997. Port staff and an outside consultant have developed the designs 
for the improvement construction on Pier 50. In order to meet the schedule for the move, 
it is necessary to begin certain construction work as soon as possible. It is proposed that the 
improvement work include electrical lighting; a fire alarm system; security system; a heating 
system with sheet metal ducts; fire water supply; potable water supply; fire sprinkler system; 
sanitary sewers; interior walls; roofs; elevator; a wash area containment, separator and sewer 
line; and a parking shelter. It may be more efficient to perform this proposed construction 
under more than one contract. Staff requests authorization to advertise for one or more 
contracts to perform the construction improvements at Pier 50. 



Prepared by Cliff Jarrard, Chief Harbor Engineer 
THIS PRINT COVERS CALENDAR ITEM NO. 68 



PORT COMMISSION 
CITY AND COUNTY OF SAN FRANCISCO 

RESOLUTION NO. 97-44 



WHEREAS, 



the Port Maintenance staff and tenants are scheduled to move 
completely out of Pier 46B into Pier 50 by August 1, 1997; and 



WHEREAS, 



in order to meet the schedule for the move, it is necessary to begin 
certain construction work as soon as possible; and 



WHEREAS, 



it may be more cost efficient to perform this proposed construction 
under more than one contract; now therefore be it 



RESOLVED, 



that the San Francisco Port Commission hereby authorizes staff to 
advertise one or more contracts to perform the construction 
improvements to Pier 50, at a total estimated cost of from 
$6,000,000 to $7,000,000. 



/ hereby certify that the foregoing resolution was adopted by the Port Commission at its 
meeting of May 27, 1997. 



Secretary 



PORT OF SAN FRANCISCO 



TO: 



FROM: 



MEMORANDUM 

May 21, 1997 

MEMBERS, PORT COMMISSION 
Hon. Michael Hardeman, President 
Hon. Denise McCartliy, Vice President 
Hon. Frankie G. Lee 
Hon. James Herman 

Douglas F. Wong ^Aj 
Executive Directory' ; 




Ferry Building 

San Francisco, CA 94111 

Teleplione 415 274 0400 

Telex 275940 PSFUR 

Fax 41 5 274 0528 

Cable SFPORTCOMM 

Writer 



SUBJECT: First Amendment to the Professional Services Contract for the "New Maintenance 
Facility" 

DIRECTOR'S RECOMMENDATION: APPROVAL OF FIRST AMENDMENT, 
AUTHORIZING ADDITIONAL SERVICES UNDER PROFESSIONAL SERVICES 
CONTRACT NO. SA39760016, "NEW MAINTENANCE FACILITY," WITH KENDALL 
YOUNG ASSOCIATES/BEVERLY PRIOR ARCHITECTS ("KYA/BPA"), A JOINT VENTURE 

The Commission previously awarded a contract to KYA/BPA for the design of the New 
Maintenance Facility ("NMF") at Pier 48. Because the NMF will be located at Pier 50 instead of 
Pier 48, it is necessary to amend KYA/BPA's scope of services. Although much of KYA/BPA 's 
work to date in designing shops and storage facilities will be used for the Pier 50 facility design, 
the change in location of the NMF does necessitate two changes in the scope of work. 

KYA/BPA's contract will be amended to redirect their original design services related to the NMF 
to Pier 50 instead of Pier 48. There is no cost impact for this change since the remaining contract 
balance of $235,118 will be used to fund this work. This work includes shop design and layout, 
mechanical and electrical design, construction documents preparation, and construction support 
services. 

KYA/BPA's contract will also be amended to include limited additional services for the design of 
interior repairs to the fire damaged areas at Pier 48. The cost of the additional services is 
$72,644. The interior repairs will include new firewalls, new coiling fire doors, a sprinkler 
system, light fixtures, and a fire alarm system. KYA/BPA will prepare the necessary construction 
and bid documents for the Port to solicit bids to accomplish this work. These additional services 
will be paid for by the fire insurance company. 



Prepared by: Cliff Jarrard, Chief Harbor Engineer 
THIS PRINT COVERS CALENDAR ITEM NO. 6C 



I:\COMM MEM.WPD 



PORT COMMISSION 
CITY AND COUNTY OF SAN FRANCISCO 

RESOLUTION NO. 97-36 

WHEREAS, the Commission previously awarded a contract to Kendall Young 

Associates/Beverly Prior Architects ("KYA/BPA"), A Joint Venture, for 
the design of the New Maintenance Facility ("NMF") at Pier 48; and 

WHEREAS, the NMF will be located at Pier 50 instead of Pier 48; and 

WHEREAS, although much of KYA/BPA 's work to date in designing shops and 

storage facilities will be used for the Pier 50 facility design, the change in 
location of the NMF does necessitate two changes in the scope of work; 
and KYA/BPA 's contract will be amended to redirect their original 
services related to the NMF to Pier 50 instead of Pier 48; and there is no 
cost impact for this change since the remaining contract balance of 
$235,118 will be used to fund this work; and 

WHEREAS, this work includes shop design and layout, mechanical and electrical 
design, construction documents preparation, and construction support 
services; and 

WHEREAS, KYA/BPA 's contract will also be amended to include limited additional 

services for the design of interior repairs to the fire damaged areas at Pier 
48; and 

WHEREAS, the cost of the additional services is $72,644; and 



WHEREAS, 



RESOLVED, 



the interior repairs will include new firewalls, new coiling fire doors, a 
sprinkler system, light fixtures, and a fire alarm system; and KYA/BPA 
will prepare the necessary construction and bid documents for the Port to 
solicit bids to accomplish this work; and these additional design services 
will be paid for by the fire insurance company; therefore, be it 

the San Francisco Port Commission hereby approves the First 
Amendment to the KYA/BPA Professional Services Contract No. 
39760016, "New Maintenance Facility," for redirecting NMF services to 
Pier 50 instead of Pier 48 and for additional services for $72,644. 



/ hereby certify that the foregoing resolution was adopted by the Port Commission at its 
meeting of May 27, 1997. 



Secretary 



SAN FRANCISCO 
PORT COMMISSION 



MAY 27, 1997 

MINUTES OF THE REGULAR MEETING 



MEMBERS, PORT COMMISSION 

HON. MICHAEL HARDEMAN, PRESIDENT 
HON. DENISE McCARTHY, VICE PRESIDENT 
HON. FRANKIE G. LEE 
HON. JAMES HERMAN 



DOUGLAS F. WONG, EXECUTIVE DIRECTOR 



CITY AND COUNTY OF SAN FRANCISCO 
PORT COMMISSION 

MINUTES OF THE REGULAR MEETING 

MAY 27, 1997 



1. ROLL CALL 

The meeting was called to order by Commission President Michael Hardeman at 4:16 
p.m. The following Commissioners were present: Michael Hardeman, Denise McCarthy 
and Frankie Lee. Commissioner James Herman was not present. 

2. APPROVAL OF MINUTES - May 5, 1997 Special Meeting 

- May 13, 1997 Regular Meeting 

ACTION: Commissioner McCarthy moved approval; Commissioner Lee seconded the 
motion. All of the Commissioners were in favor. The minutes of the 
meetings were adopted. 

3. EXECUTIVE 

A. Executive Director's Report : 

1) Passenger Services Act - Since the last Commission meeting when staff made a 
presentation on cruise marketing efforts, legislation was officially introduced this 
past Friday in the United States Senate to change the Passenger Services Act. 
Senate Bill 803 was introduced by Senators Thurmond (South Carolina) and 
Murkowski (Alaska) and contains the provisions that were presented by staff. 
Along with other California ports and travel industry, staff is still working with 
Senator Feinstein & Boxer's office to get them to co-sponsor the bill. 

2) Crystal Symphony : The Crystal Symphony will complete its 10-day maintenance 
job tomorrow. The ship has been worked on round the clock. The 400 workers 
on the job and the materials purchased (in excess of $1 million) show the dramatic 
impact that maritime industries stimulate our local economy. Even the taxi 
industry has benefited from Crystal's dry docking because cabs are lined up 
outside the gates of Pier 70 waiting to take the crew into our tourist areas. 

Mr. Carl Hanson, General Manager, proudly reports that the Crystal Symphony 
will be completed on time! It is scheduled to sail out of the dry dock from Pier 70 
to Pier 35 tomorrow at 6:00 p.m. Cruise ships sailing under the Bay Bridge is an 
incredible sight and invited the Commissioners to come out to the waterfront to 
see it. 

He complimented the management and metal trade workers at San Francisco 

M052797.igq "l" 



Drydock who worked extremely hard to meet the tight schedule for the Crystal 
Symphony. San Francisco Drydock is breaking new ground in establishing itself 
as a premier yard for maintenance and refurbishment of cruise ships. This is so 
important for the hundreds of ship yard workers in the area who have 
disproportionately felt the impact of base closures. The Port is very proud of San 
Francisco Drydock! 

On Thursday, May 29, after a luncheon with the Mayor, Port Commissioners and 
other dignitaries, the Crystal Symphony will begin its season of six Alaska 
cruises. 

3) 14th Annual Whaleboat Race , held on May 14, was extremely successftil. The 
Port of San Francisco finished third in the co-ed division. The event attracted 
hundreds of spectators. He thanked the Navy band for their participation. 

4) TemNwogu, Port employee, had a 9.5 lb. baby boy on Friday, May 23. Both 
mom and baby are doing well. 

5) Todd Petersen . Senior Storekeeper at Pier 46B, passed away on Friday, May 23, 
1997. Memorial service will be held on June 3 at Zion Lutheran Church in 
Piedmont at 7:00 p.m. 

4. MARITIME 

A. Approval of lease with Westar Marine Services Company for a portion of Pier 50. 
Shed C. (Resolution No. 97-40^ 

Mr. Peter Dailey, Acting Maritime Manager, indicated that since 1976 Westar Marine 
Services has been providing tug, barge, water taxi and other harbor services to the 
Northern California maritime community from their Port location at Pier 46B. 
Westar, a woman-owned business enterprise, has a staff of 32 people and a fleet of six 
tugs, four water taxis and numerous barges. They currently lease from the Port 
approximately 8,000 sq.ft. of shed space and berthing space at Pier 46B and additional 
berth at Pier 48. They currently pay $.16 per sq.ft., which is below the minimum 
leasing parameters for that location. Due to their growing business and the need to 
relocate for the proposed ballpark, they require a larger facility for which Port staff 
has negotiated a lease where Westar will relocate and consolidate their operations to a 
portion of Pier 50, Shed C, as well as the north apron. Rent levels in the first two 
years of this lease, while significantly higher than Westar' s current license with the 
Port, will be less than the minimum provided by the leasing parameters pre-approved 
by the Port. However, beginning in the third year through the remaining eight years 
of the lease, Westar's rent will meet the leasing parameters pre-approved by the Port 
Commission. 

This proposed lease covers nearly 21,000 sq.ft. of shed space inside Shed C at Pier 50 
for office storage and maintenance uses directly related to the operation of Westar's 
marine service operations and 1,300 linear ft./42,000 sq.ft. of apron and water space 



M052797.igq 



-2- 



on the north side of Pier 50 for berthing of Westar's vessels. For the shed space, 
Westar will pay: $.20 per sq. ft. in year one; $.25 per sq.ft. in year two; $.30 per 
sq.ft. in years 3-10. These base rents will also be subject to annual CPI Base Rent 
adjustments. 

The fendering system at Pier 50 is in serious disrepair. The Port will replace the 
existing fendering system located on the premises using eucalyptus pilings. When 
these pilings next require replacement due to deterioration and normal wear and tear, 
Westar will provide or pay the Port for all replacement material necessary and the 
Port will ftimish the labor and equipment to replace the pilings. 

Port staff is proud of this maritime lease that signifies an expansion of one of the 
Port's key maritime customers. He acknowledged two of the co-owners of Westar - 
Mary McMillan and Wendy Morrow. 

ACTION: Commissioner Lee moved approval; Commissioner McCarthy seconded 
the motion. All of the Commissioners were in favor; the resolution was 
adopted. 

5. REAL ESTATE AND ASSET MANAGEMENT 

A. Approval of Exclusive Right to Negotiate with Recycle Central. Inc. regarding 
property at Pier 80 (eastern foot of Cesar Chavez Boulevard - nee' Army Street). 
(Resolution No. 97-43) 

Ms. Fei Tsen, Director of Real Estate and Asset Management, indicated that Recycle 
Central, Inc. is a subsidiary company of Norcal Waste Systems, Inc. They are 
proposing to lease approximately 105,000 sq.ft. of shed space in Transit Shed A and 
approximately 400,000 sq. ft. of paved yard at Pier 80 for recycling and maritime 
transhipment facility. In addition to 105,000 sq.ft. in Shed A, Recycle Central, in a 
second phase, desires to lease the remainder of Shed A should it become available, for 
a total of 202,000 sq.ft. of shed space. The exclusive right to negotiate is for a 6- 
month period. Recycle Central requires this amount of time to secure its permit and 
regulatory and environmental approval. The fee for this exclusive right to negotiate is 
$143,000 and is non-refundable. 

San Francisco is required to meet a State mandate of achieving a 50 percent fill of 
recycling waste generated in this City. Norcal has a contract, through its subsidiaries, 
to collect the garbage and trash in the City. In order to meet the 50 percent State 
mandated goals, Norcal must expand its recycling facility and has established its 
subsidiary. Recycle Central, in order to consolidate its recycling activities. Recycle 
Central is proposing to lease Pier 80 as its primary facility for recycling waste paper 
and eventually consumer plastics and metal wastes. The recyclables will be sorted 
and compacted and loaded onto ocean shipping containers to be shipped to the Far 
East and other ports. Recycle Central has agreed to guarantee that by the end of the 
fourth year, a minimum of 3,000 TEU containers per year will be shipped by 
container ship, bulk carrier or barge. By the end of the sixth year, 7,500 TEU 

M052797.igq -3- 



containers per year will be shipped from the Port of San Francisco. If Recycle 
Central does not meet the minimum maritime commitment, it will be assessed a 
financial penalty of twice to three times the amount of wharfage and claimed rental 
fees that they would otherwise have paid. The amount of penalty will be tied to the 
level of deficiency. In summary, several attributes of this lease transaction should be 
noted: 

1 . Shed A is currently vacant, except for a portion of the shed which is used by the 
School District for storage. The lease of Shed A to Recycle Central will generate 
$858,000 in annual revenues for the first year and $1,290,000 for the second 
year. 

2. Unlike other maritime tenants. Recycle Central will pay both the rent for the land 
facility and the dockage and wharfage fees for the use of the terminal. At 
minimum, the wharfage and dockage fees would generate an additional $168,000. 
The rent payments are adjusted to market rate every five years. Recycle Central 
will use Pier 80 for maritime container shipment. The balance of the pier, 
including approximately 170,000 sq.ft. of Shed D, which BREDA currently 
occupies, will be available in February 2020. There are 38 acres on the rest of 
the pier, which are currently vacant and available for other cargo container 
activities. The container terminal at Piers 94/96 is currently operating at 5% 
capacity. To the extent that there is an increase in the Port's cargo container 
activities, the Maritime Division anticipates that there is sufficient capacity at 
Piers 94/96 and the balance of Pier 80 to accommodate any anticipated increases. 
The Port retains the ability to move the entrance gate and scales at the expense of 
Recycle Central if the Port desires to separate their facility from the rest of Pier 
80. 

3. Recycle Central will generate 250 jobs of which 100 will be new jobs created for 
the operation at Pier 80. Recycle Central employs union labors and has agreed to 
use the Port's stevedores, longshoremen and clerks to handle all container 
shipping. They will invest approximately $32 million in fixtures and equipment 
and in structural and infrastructure improvements to the facility. 

She acknowledged Don Gamblin's presence who will be presenting Recycle Central's 
plans. She added that Nic Dempsey, the Port's Commercial Property Manager, is also 
available to answer any questions. 

Don Gamblin stated the Recycle Central project at Pier 80 will benefit all parties 
involved. The Port will be provided assistance in the revitalization of the Port 
maritime industry. It will receive a long-term maritime tenant at Pier 80, 
containerized cargo for direct vessel loading at Pier 80 and Shed A is returned to a 
maritime use. The City of San Francisco would get a world-class recycling facility 
and recycling capacity that would meet the State-mandated requirements. As well, 
San Franciscans would get cost efficiencies and local economic benefits. 

Recycle Central is a unique project. He knows of no other recycling project or 



M052797.igq 



facility located at a port or a pier, perhaps due to the fact that no other facility like 
Pier 80, with its historic warehouse and modern container terminal capacity, is 
available elsewhere or because prior to Recycle Central's proposal no one has 
recognized the beneficial union of materials recovery or recycling facility in a fully 
equipped maritime shipping terminal. Recycle Central's two 80-year old San 
Francisco sister companies. Sunset Scavenger and Golden Gate Disposal & Recycling, 
haul more than 1400 tons of recyclable materials- materials that are commonly traded 
on the world market. With Recycle Central's project, these materials can be 
recovered and prepared for dnect shipment through Pier 80 to destinations in the Far 
East. Their proposed initial use of 105,000 sq. ft. of Shed A and adjacent areas of 
Pier 80 will remm Shed A to its historical use of the processing facility for 
consolidation and containerization. The Recycle Central facility will provide the 
means to maintain a consistent supply of materials for shipment, making Pier 80 
attractive as a port call for direct vessel loading. At Recycle Central, glass metals, 
plastic and fiber will be ready for shipment. When fiiUy developed at least 7500 
TEUs will be made yearly for shipment. Over the next 36 months. Recycle Central 
will be working to bring the facility on line, assisted by their construction 
management company. They are confident that a concerted effort by local designers, 
engineers, suppliers and contractors will bring their facility on line as scheduled. He 
then acknowledged several representatives of their parent company and project team 
members. 

Commissioner McCarthy inquired about the need for a 30-year lease. Mike Mahoney 
replied that the need for the 30-year lease is quite simply a financing mechanism that 
will enable their company to finance the substantial amount ($32 million) of capital 
improvements, to finance those needs through the California Pollution Control 
financing authority, which is the entity they will be using for the financing of the 
facility. Commissioner McCarthy inquired about the breakdown of $32 million that 
will be used. John Glaub indicated that the breakdown would be provided to the 
Port. Commissioner Lee inquired whether it would be mostly equipment or some 
improvements to the site. Mr. Glaub replied that the ratio is roughly 50-50, 
approximately $15-$16 million in actual construction cost (concrete, steel, piping, 
seismic upgrades, fire suppression system, drainage improvements, etc.) and the 
remainder would be for equipment. Commissioner Lee indicated that the reason for 
his inquiry is to justify the need of a 30-year lease. He is personally in favor of 
Norcal and Recycle Central as it will generate added revenues to the Port. 

Mr. Gamblin provided the Commission a copy of the presentation. Commissioner 
Lee thanked staff, Norcal and Recycle Central for their hard work in getting the 
negotiations under way. He believed that this is a good move for the Port. It is an 
operation will be beneficial to both the Port and the City. 

Mr. Don Moriel, Operating Officer of Norcal, stated that Port staff has been 
extremely difficult to work with but they were fair and worked diligently. They 
appreciated their efforts. 

Commissioner Hardeman commented that this is a great job. He would be shocked if 



M052797.igq 



the company is not doing two or three times the volume in five or ten years. This is a 
great project and this also has the Mayor's blessing and hopes the negotiations go 
well. 

ACTION: Commissioner Lee moved approval; Commissioner McCarthy seconded 
the motion. All of the Commissioners were in favor; the resolution was 
adopted. 

B. Approval of Exclusive Right to Negotiate with James V. Kelly on behalf of South 
Beach Resort Partners, a California Limited Liability Partnership, for lease of 
Mission Rock Resort Restaurant located at 817 Terry Francois Blvd. (Resolution No. 
97-42) 

Ms. Fei Tsen, Director of Real Estate and Asset Management, indicated that last year, 
the Port Commission authorized staff to issue a Request for Proposals for lease of the 
Mission Rock Resort restaurant located at Terry Francois Boulevard. The RFP was 
issued; three responsive proposals were received and evaluated by a panel consisting 
of two members from the Port staff and two members from outside the Port. Each 
proposal was read and analyzed separately by the panel members before oral 
interviews were held. The panel ranked the proposals in accordance with the 
predetermined criteria. South Beach Resort Partners (SBRP) received the highest 
score. The Panel concluded, and staff agreed, that SBRP proposed the best concept 
for the restaurant site, demonstrated the best restaurant experience, menu, design 
plans and improvement schedule, was the most likely to run a successful establishment 
and had the best financial backing. The managing general partner will be James 
Kelly, who owned and operated Pat O'Shea's for twenty-two years. The Mission Rock 
Restaurant site will be renovated and be brought up to code. Mr. Kelly and his 
partners requested an exclusive right to negotiate while they obtain the necessary 
permits and regulatory approvals before the lease agreement can be executed. A 
negotiation fee equal to the security deposit required under the lease has already been 
paid. Once the environmental review is completed and the parties have successfully 
negotiated the lease agreement, this transaction will be calendared for final approval 
by the Port Commission. The terms and conditions of the lease are as follows: 

1. A new entity will be created. South Beach Resort Partners, a California Limited 
Liability Partnership. James Kelly will be Managing General Partner. 

2. The premises consist of the restaurant building, deck area and paved land adjacent 
to the building. 

3. The marina will not be a part of the premises. The Port, at this point, has not yet 
made a decision on the marina. If a decision is made to renovate the marina, 
SBRP will have the first right of refusal to reconstruct and operate the marina. 

4. The site will be used for the operation of a public restaurant offering full service 
dining, casual dining, bar and banquet facilities, entertainment and retail space 
for sale of souvenir items. 



M052797.igq 



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The lease term is fifteen years with two five-year options. The base rent will be 
$118,656, adjusted annually by the CPI and will be adjusted to market rate at every 
exercise of the option period. The percentage rent will be 7% of gross receipts for 
full service dining and 9% for casual dining and retail/other sales with adjustments 
during the option period. The tenant is obligated to make certain improvements to the 
restaurant facility and to expend a minimum of $533,755 for these improvements. All 
plans and specifications will be approved in advance by the Port, BCDC and other 
required regulatory agencies. SBRP will be entitled to the base rent for six months at 
the beginning of the term for the construction of the improvements. 

Under the proposed transaction, the Port will benefit from the revitalization of 
Mission Rock Resort facility and will maximize its revenue potential from the site. 

Mr. Jim Kelly indicated that they would like to improve the site, bring everything up 
to code and make this a working person's option for and on the Port of San Francisco. 

In response to Commissioner McCarthy's inquiry about the availability of banquet 
facilities, Mr. Kelly replied that the banquet facility will be located on the second 
floor of the restaurant. 

Mr, Wong asked Mr, Kelly to discuss the project's time schedule. Mr. Kelly replied 
that the time frame for the procurement of permits, etc. will be a six-month period. 
Ms. Tsen added that the restaurant should be in operation a year from now; six 
months for the regulatory approval, prepare construction documents, go out to bid and 
six months for the actual construction. 

Commissioner Lee inquired about the restaurant's maximum capacity. Mr. Kelly 
replied that it will be approximately 250. Commissioner Hardeman stated that the 
Commission is delighted to have someone with Mr. Kelly's background and good 
reputation. 

ACTION: Commissioner McCarthy moved approval; Commissioner Lee seconded 
the motion. All of the Commissioners were in favor; the resolution was 
adopted. 

C. Approval of Exclusive Right to Negotiate Agreement with Hornblower Yachts. Inc. 
for leases at Piers Vi and 3. (Resolution No. 97-41) 

Ms. Fei Tsen, Director of Real Estate and Asset Management, indicated that 
Hornblower Yachts produces the third highest revenue among the existing maritime 
businesses at the Port. In the past year, Hornblower paid the Port approximately 
$510,000 in total revenue. The proposed lease transaction will consolidate 
Hornblower operations, which are now spread out over several piers to two piers 
(Pier Vi and 3) and it will consolidate six different month-to-month lease agreement 
that they have with the Port to two-term agreement. Hornblower is requesting a four- 
month exclusive right to negotiate while they receive their regulatory approvals. The 
non-refundable negotiation fee is $5,000. She mentioned that Kirk Bennett who has 

M052797.igq "7- 



been negotiating these leases will present the staff's analysis. 

Kirk Bennett, Sr. Property Manager, indicated that Hornblower Yachts has been 
operating dining and yacht excursions since 1980, with an annual sales of over $6 
million which is the second highest volume excursion operator on Port property. 
Hornblower produces the third highest volume to the Port among its existing maritime 
businesses and the 12th highest revenue among all businesses on Port property. It is 
also recognized as the highest volume dining excursion operator in the Western 
United States. Nonetheless, Hornblower is a month-to-month Port tenant and it only 
has two landing berths at Piers 31/33. The owner of Hornblower Yachts is also the 
owner of the Ferryboat Santa Rosa Partners (FSRP). The lease for the FSRP has a 
remaining term of approximately 15 years, expiring in October 2012. With the 
percentage overage rent, the total rent paid to the Port by Hornblower and FSRP 
currently amounts to approximately $509,255 per year. 

In 1992, the Port Commission approved the Policy for Accommodating Additional 
Excursion Boats at the Port. This policy established rental guideluies for Port staff to 
negotiate excursion vessel leases, including percentage rents and allowed for the direct 
negotiation of leases with excursion operators. In accordance with the policy, Port 
staff conducted an outreach program in 1993 and 1995 to excursion operators but only 
Hornblower responded with interest for the central waterfront location. 

The substructure at Pier 3 is significantly deteriorated and much of its shed structure 
has been removed. It is now used temporarily for general parking pursuant to BCDC 
Permit 3 . Alternative uses for this pier are very lunited because most changes of use 
would trigger seismic upgrade requirements, whose cost would be prohibitive due to 
the poor condition of the substructure. 

The Downtown San Francisco Ferry Terminal project which will create two new 
public ferry landings will include relocating the existing floating and ramp from Pier 
V2. As a result, the existing finger pier and walkway at Pier y% will no longer be 
needed as a public ferry landing site. 

Hornblower proposes to consolidate its facilities and operations at Piers '/a and 3 to 
incorporate them with Santa Rosa and America One America's Cup Challenge 
compound. This will enable Hornblower to better serve its market which is based 
upon local business, conventions and bay area residents. This consolidation will also 
give an additional berthing capacity, accommodating a greater number and variety of 
excursion vessels and it would also provide operational efficiencies. 

A fundamental component of this consolidation is berthing the California Hornblower 
at Pier V2 where it would be very visible and accessible from the Embarcadero. A 
second fundamental component would be the provision of parking at Pier 3 to support 
this maritime activity, replacing the parking Hornblower currently has at Pier 31/33. 
A third fundamental component is the ability to combine maritime excursions from 
Pier 3 with the banquet and meeting facilities on the Ferryboat Santa Rosa. A final 
fundamental component is the creation of an exciting venue for the America One 



M052797.igq 



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America's Cup challenge on Pier 3, which would depend upon the utilization of the 
Ferryboat Santa Rosa and the improvements to be made to the pier by Hornblower. 

To achieve this consolidation, Hornblower has proposed that the Port grant 
Hornblower an Exclusive Right to Negotiate Agreement for a 126-day period to: 
(1) allow the parties to finalize all the terms and conditions of proposed leases with 
Hornblower for premises at Pier Vi and Pier 3 and (2) to allow Hornblower to 
undergo CEQA Review. Once the CEQA approval is obtained, and the parties have 
successfully negotiated said lease agreements, the transaction will be calendared for 
Port Commission consideration. 

The proposed leases for Piers Vx and 3 constitute a single transaction but would take 
the form of a separate lease for each facility because the terms and conditions 
regarding the two facilities differ somewhat. The terms and conditions proposed in 
the lease include lease term expiring October 31, 2012 (same expiration date for 
Ferryboat Santa Rosa). At the completion of its landing facilities at Pier Vi, 
Hornblower tenancy at Pier 31/33 will be terminated. From this proposed 
transaction, the Port will receive the following benefits: 

1 . It converts fi-om a month-to-month tenancy to a longer term lease commitment the 
maritime business which produces the third highest revenue to the Port among its 
existing maritime businesses. The longer term will enable Hornblower to 
amortize the costs to improve its facilities, and to secure financing to acquire new 
vessels. 

2. It will enable Hornblower to expand its business, producing more revenue to the 
Port. The rent to the Port generated by Hornblower and the FSRP is projected to 
increase by $30O,O00-$35O,000, representing a 59-69% increase in revenues to 
the Port. 

3. It creates a compound for San Francisco's America's One America's Cup 
challenge. 

4. It protects the existing base rent from Pier 3. When the Waterfront Transportation 
Project is completed, the BCDC permit for Pier 3 requires that it no longer be 
used for general parking purposes, which currently constitutes 55% of the Port 
revenue from Pier 3. 

5. The Pier Vi finger pier will be vacated when the Port relocates the public ferry 
landing to the Downtown San Francisco Ferry Terminal. The base rent currently 
being paid by Hornblower at Pier 3/133 will then be transferred to Pier '/z, and 
the facility near Fisherman's Wharf would then be available to rent to a new user. 

6. The proposed uses conform with the general goals stated in the Waterfront Plan 
and with the specific uses proposed in this plan for Piers '/i and 3. 

Conmiissioner McCarthy asked for a clarification of the clause under maintenance and 



M052797.igq 



repairs which states that neither party is responsible for pier substructure but either 
party may make pier substructure repairs. Mr. Bennett replied that Pier 3 is in bad 
shape and Hornblower has retained a consultant to take a look at the pier. There is an 
acknowledgment that this is an older pier. Either party can choose to continue the use 
of the pier. Should a part of the pier be determined no longer usable, the lease 
provides that the portion of the pier would be abandoned and the ramp would be 
proportionately reduced. Should it be determined that the pier cannot be used 
anymore and Hornblower cannot utilize it, they have the right to terminate the lease. 

Andy Dolich, Marketing Manager for America One, stated that the Port has the 
premier sailing amphitheatre in the world. It is their dream to bring America's Cup to 
San Francisco in 2003. The America One Sailing Center at Pier 3 is a positive vision 
for everybody associated with Port operations, sailing enthusiast and the business 
community in California. With the Port Commission's and the Hornblower 's 
cooperation, it is their vision to turn Pier 3 into the most positive sailing stadium in 
the United States. The Port has the ballpark at one end and Pier 39 at the end. The 
sailing center at Pier 3 is a wonderful second base. It is a wonderful venue that can 
be seen on the Bay Bridge. They are in full support to bring the America's Cup to the 
bay. 

Commissioner McCarthy inquired if Pier 3 has ample space to acconmiodate their 
operation. Mr. Dolich replied that right now there is enough space. Other usages are 
now presently being discussed and will be done within the proper confines. 
Commissioner Hardeman stated that this is an exciting opportunity for the Port and 
added that he is a strong supporter of America's Cup. 

ACTION: Commissioner McCarthy moved approval; Commissioner Lee seconded 
the motion. All of the Commissioners were in favor; the resolution was 
adopted. 

6. FACILITffiS & OPERATIONS 

A. Approval to award Contract No. 2636. "Pier 48 Fire Damage Repair and 
Reconstruction." (Resolution No. 97-29) 

Mr. Alex Lee, Director of Facilities and Operations, indicated that this contract is to 
repair Pier 48 due to the November 1996 fire. The fire damaged the wooden frame 
structure and caused substantial damage to the steel frames, walls and roof of Pier 48. 
The contract was advertised on January 1997. Four bids were received in March and 
the lowest responsive bidder was West Bay Builders, Inc./D. Stewart Thompson, 
Inc., a Joint Venture for a base bid of $2,529,768. HRC has reviewed and approved 
the bid. Staff requested the award of the base bid and an additive alternative #1 to 
West Bay Builders, Inc. /D.Stewart Thompson, Inc. The additive alternative is for a 
fire door in one of the buildings. Staff also requested the Commission to authorize a 
10% contingency for possible Type 1 contract modifications and authorize the 
Executive Director to accept the work after the project is completed. 



M052797.igq 



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ACTION: Commissioner Lee moved approval; Commissioner McCarthy seconded 
the motion. All of the Commissioners were in favor; the resolution was 
adopted. 

B. Authorization to advertise for competitive bids for construction contracts for the new 
maintenance facility and other facility improvements at Pier 50. (Resolution No. 
97-44) 

Mr. Alex Lee, Director of Facilities and Operations, indicated that this item is to 
authorize staff to advertise for construction contracts related to the Maintenance 
Department and Pier 46B tenant relocation to Pier 50. The Maintenance staff and 
Port tenants are scheduled to move out of Pier 46B into Pier 50 by August 1, 1997. 
Port staff and outside consultant have developed the designs for the improvements at 
Pier 50. The improvements include a new roof for all four sheds, a covered parking 
structure for the Maintenance equipment, interior improvements, utility 
improvements, fire main, sprinkler and etc. for all four sheds. The Port would like to 
commence construction on Sheds A, B, and C as soon as possible to allow for the 
work to be completed before the rainy season. He added that it would be more 
efficient to have more than one contract to perform the construction improvements at 
Pier 50. The total amount of the improvements is estimated at $6.5 million. 

ACTION: Commissioner Lee moved approval; Commissioner McCarthy seconded 
the motion. All of the Commissioners were in favor; the resolution was 
adopted. 

C. A pproval of First Amendment, authorizing additional services under Professional 
Services Contract No. SA 39760016. "New Maintenance Facility." with Kendall 
Young Associates/Beverly Prior Architects, a Joint Venture. (Resolution No. 97-36) 

Mr. Alex Lee, Director of Facilities and Operations, indicated that this item is to 
request a first amendment to the Professional Services Contract. The contract was 
awarded to Kendall Young Associates/Beverly Prior, a Joint Venture. The 
Commission awarded a contract to KYA/BPA for the design of Pier 48. Subsequently 
a decision was made to relocate the maintenance facility to Pier 50. KYA/BPA 's 
contract will be amended to redirect their original design services related to the New 
Maintenance Facility to Pier 50 instead of Pier 48. There is no cost impact for this 
change since the remaining contract balance of $235,118 will be used to fund this 
work. Most of the work done by KYA/BPA for Pier 48 can be redirected to Pier 50. 
In addition, staff also requests an additional amendment of $72,644 to KYA/BPA for 
design of interior repairs due to the fu*e damage at Pier 48. This money will be 
funded by the insurance company. The interior improvement at Pier 48 will include 
firewalls, fire doors, sprinkler systems, etc. 

ACTION: Commissioner Lee moved approval; Commissioner McCarthy seconded 
the motion. All of the Commissioners were in favor; the resolution was 
adopted. 



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7. PLANNING & DEVELOPMENT 

8. FINANCE AND ADMINISTRATION 

9. CONSENT CALENDAR 

10. NEW BUSINESS / PUBLIC COMMENT 

There being no new business and/or public comments, Commissioner Hardeman 
adjourned the meeting at 5:11 p.m. in honor of Port employee, Todd Petersen. 



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