Mountain, i mean it seems theres been some number of years where there has not been inadequate signage and quite the contrary. People have been given permission to go. To put up a fence doesnt feel good. Given permission by outside parties who have indicated this is a fun trail to go use. As soon as i heard this i directed my staff, find any place that there is access going on that shouldnt be in our watershed. I want to hear about it right now because we are stewards of that watershed. If we can find them, we will engage in a process. I think coming from the point of view that our job is to protect the watershed and provide reasonable access and i think we can do that. Thats why i brought up that connector trail that is probably the best solution in this case on a larger scale. And is there a sign on the gate that says that there will be a meeting to discuss the connector trail and receive input . Not yet. Well, it seems like that should happen right away. That seems like the minimum amount of effort that we can put in and i think theres additional steps to be able to respond to this question of people who for decades have been accessing these trails and theyve been doing it because there hasnt been a sign telling them not to, whether its our fault or not. You want to say a few words . Manager of the bureau of environmental management. Id like to clarify something. I think there are two ideas here and two thoughts that we have to consider. One is this project which is very important to the whole water enterprise as well as the wastewater enterprise. The mitigated negative declaration examined all of the potential impacts that this project could have and the impacts are in the declaration. We have the Environmental Review officer signed off on it. The mitigation measures are there for the butterflies and for all other possible you know, the wood rat and i forget what another one is but deb can provide it. Everything is covered in the mitigated negative declaration. Closing of the gate is a wider watershed matter. It is not part of this project. Yes, we need to protect the watershed. Yes, we provide access to the watershed. But all of that is a watershed matter that should be discussed within watershed planning, watershed management, and so on and so forth, but not within this important project. This had nothing to do with it. Its not covered. If you look and read which im sure you have the mitigated negative declaration, there is no mention of closing a gate. So its not part of this decision that is in front of you. I would just urge you, because of the importance of the project, to adopt the mitigation, the declaration and to also im getting very emotional because i feel very strongly about it irina, the issue i think we understand or at least we convey that the project initiated the assessment of the habitat. Correct. And we didnt realize that the habitat had been impacted. So watershed management made a decision to cut off access because it was having an impact. That is what the understanding is. So separate from the project. Did the project identify what the mitigations would be if the project moved forward, not how to manage the watershed. Commissioner moran. Commissioner moran i take your point and thats helpful. If the gate closure and that trail issue is, in fact, separate from the project, if those steps are not part of mitigation impacts, first of all, its appropriate and i would feel very comfortable proceeding with the project and taking our actions to do that. For the second issue, it is i think clearly the way we went about doing this was unfortunate. I am sympathetic to protecting the watershed. There are an awful lot of impacts that come with human contact. That said, i would hate for this to get tied up in a large and complicated project. I would think that the connector has a bunch of different issues like increased access through access through the cahill ridge trail. It goes along the ridge. That has some sensitivity to it. This would seem to be amenable to a more limited resolution, and i would just encourage, first of all, for staff to talk to the folks who have appeared here today and others and to be open to a solution that deals with really the completion of existing trails that already go up almost to the top of Montara Mountain. Those trails exist and the impacts have existed for a long time. And to be open to a fairly limited solution that gives access to Higher Ground and looking to the other side of the mountain. If that cant happen, then that cant happen. I think we should be open to that and not just say that this will have to be resolved as part of a much larger and more complicated project. I have a question for either the chair or general counsel. So if we took action on the neg dec and moved that forward, which sounds like it makes sense in general just to protect the watershed and to move the project forward, do we need like a secondary motion that just says that there will be work done to make sure that the public has a process to get access to what theyve traditionally had to get up there without dealing with the environment. I dont know if thats legally possible or if thats a movement because im with commissioner moran in that this is something that i think we as puc people are as stewards are should be moving on despite some of the impacts to the local residents. I too would like to decouple these issues, if possible, and really i dont know, i dont think we can take action on the second one because this action is specific to the radar installation Infrastructure Project and the watershed access piece seems like a separate issue that has then ended up because they are connected but separate issues. So i would say that if this project wouldnt if it wouldnt go forward, we still would block access because of what we found. So i think thats why we should sit down with the folks and talk about a solution. But again the project when they assess the situation and identify the impact to the habitat, the mitigation identified how you mitigate that project. So the project they identify how to do that, but the access to the trail is something that we need to work with separately. So youre also saying even if we didnt approve the radar project, access would still be blocked. Exactly. So they are two separate issues. When you said decouple the issues, im used to meetings where we have to make notice for any actions we take here. Im getting used to that. I agree, these are separate. However, i also think that the folks who are on the trail and using the trail are assets. Once we communicate to them and they understand, im sure they want to protect the watershed just as much as we do. They can come up and help us understanding this is what we have to do. We also want to do this. So we Work Together coming up with something, but theyre assets and theyre valuable and their input is valuable. Im glad that they came so they can help with their expertise and the years theyve done they may have other ideas about how to get to places. I think that could be very useful and helpful to us. So what i would do is i would direct steve to meet with the folks forthwith and report at the next meeting on what Position Solutions that we can make happen and some preliminary timelines of that. But again we talked to Research Agencies lg and identified the impact. I dont think we need to talk about that yet. I think its important for them to know what our bottom line is and how we can reach their bottom line and come up with something together because we have a responsibility and we cant at this point do much about that, but we can work other things out. There are more eyes on the trail to work things out. I think that could be important. If i might, with that understanding and commitment from staff, i would move the it item. Ill second. A motion to approve with that condition of a staff report no. Okay. Thats direction to staff as we would normally do. This is just approve the project has been presented to us. Through the chair if we could put Something Like that in the minutes that you are suggesting is possible, i would not be opposed to that. I think we would like to as a commission direct Steve Ritchie through the general manager to engage with the community that use this space and clearly have a deep connection to the Montara Mountain to figure out and understand what the access issues are and to try and really respond to what their concerns are as much as possible. I think we should do a lot more putting a sign up there as soon as possible saying these conversations are underway. I dont know if its external affairs thats going to take on looking at all the maps that are pointing people up there, if theres going to be a fence. I think its incumbent on us as an agency to be good stewards and say we are stewarding our watershed and we want to engage you in that process, while understanding that you would like access and have those conversations. If you can bring a summary of that back and begin those conversations in the next month and reach out to the community, i think this commission would really appreciate understanding that. I would put one qualifier on that. We have a broader community. So one of our big stakeholders is the california native plant society. Theyve been asking about the project as well because of things theyve been seeing. And were all seeing more and more on social media. Social media has taken a large role in this. We will meet with these groups, but it will be a broader conversation. That will be great. Thats good. So theres a motion and a second just for this specific project to approve the radar installation project, whatever its called. Is there any Public Comment on the motion . Weve already taken any other final commissioner comments . Hearing none, all in favour . Aye. Opposed. Motion carried. Ill report at the next Commission Meeting about the meeting. Okay. Great. Thank you. Next item. Clerk item 10 approve the revised water supply assessment for the proposed potrero power station project. Revised water supply assessment. Is there a motion . Would you like to hear an update on this . Yeah, i do. You want to hear an update, okay. Again, Steve Ritchie assistant general manager for water. This is a water supply assessment for a proposed project similar to the other water supply assessments. The commission has recently approved. This one actually was part of the first bunch that we had talked about in the meeting and at the following meetings. For reasons this project had been reworked so the project had some modifications that needed to be built in. So this is simply another water supply assessment that is virtually the same as the last ten water supply assessments the commission saw in the last two or three meetings. So the analysis thats included the same as the others. The explanation of the recommendation, thats all the same . Yes. As we had agreed to before . Yes. Okay. President caen comments . Any Public Comment on this item . Is there a motion to approve . Moved. Second . All in favour . Aye. Opposed . Motion carries. Thank you very much. Well now move into closed session and donna will read the closed session items prior to any Public Comment before we go into closed session. Clerk item 13. Existing litigation abuon mayen versus city and county of San Francisco, et al. Item 14, existing litted gas station, federal insurance co cct enterprise versus city and county of San Francisco, unlitigated claim, the mint collection hoa versus city county of San Francisco. 17 the Roman Catholic archbishop of San Francisco et al. Versus city of county of San Francisco. 18 is Pacific Gas Electric orthopedic surgeoning. Item 19 is city and county of frisk versus Pacific Gas Electric company. No. 20 is the city and county of San Francisco versus pacific okay. We are now back in open session. Item items 13 through 17 were settled and there was recommendations to settle those and move those forward to the board. Is there a motion on whether to disclose the discussions that we had during closed session. Move not to disclose. Second. All in favour . Opposed . Any other new business, commissioners . I would like to have a discussion of policy on how we go forth with talking to the public about issues that we do. I mean, if its consistent with our Community Benefits package or whatever, but we need to have a policy on how we go forward with the public, especially in lieu of what happened today. If theres not a policy, then we need to go through one. Could we on our september agenda have a what our current policies are, what we do. All of us were taken aback with what happened with the mount mountain. Just to make sure we can avoid these situations in the future. Im sure they will happen. Any other new business . Hearing none, meeting is adjourned. This facility is the largest project in our sewer system improvement program. It has a price tag of 1. 3 borghese. It is rebuilding one 1. 3 billion. The policy and Government Affairs team helps the finance team talk to legislative officials and policymakers creating financial programs for us to get low interest loans. Getting the funding for the project was important to save money for the ratepayers of San Francisco and enable us to build the project on budget. We were able to secure for the sf p. U. C. The loans from the epa and state mostly for the facilities project. We are providing low cost funding for projects that really provide tremendous social and environmental impact. For example the 699 million loan is going to pay for half of the biosolid project. What is challenging of the new sources of financing. They require the group to look at creative option ways to take the funds and build them to the existing process. The southeast plant is in hunters bay. It is across the street from residential homes. One of the objectives was to make it an asset. It will be at another plant further away from houses. It is going to help in terms of odor, air emissions, noise. This project that receives the federal loan funding is going to create 3,000 jobs in the community. In addition the streetscape improvements and architecture there is a lot of thought so that it is an asset to the community. It feels great to win the financial assisting ability award. I believe the group works hard to an chief Financial Stability in everything they do. We are getting world wide recognition for the work we are doing because of the green infracture projects in the communities with a lot of social impact. To me i am very proud of that effort to be a part of that. I nominated the team for the financial sustain ability award. They got some of the largest state and federal loans in the country. It saved the agency 10s of millions of dollars. I am proud of Temperature Team for put proud of the team for putting this together. We got the largest in 201,755. 7 million passengers traveled through San Francisco international airport. We have on average 150,000 people traveling through the airport every day. Flying can be stressful so we have introduced therapy dogs to make flying more enjoyable. The wag brigade is a partnership between the airport and the San Francisco therapy Animal Assistant Program to bring therapy animals into the airport, into the terminals to make passenger travel more enjoyable. I amgen fer casarian and i work here at San Francisco international airport. The idea for therapy dogs got started the day after 9 11. An employee brought his therapy dog to work after 9 11 and he was able to see how his dog was able to relieve passengers jitter. When we first launched the program back in 2013, our main goal was to destress our passengers however what we quickly found is that our animals were helping us find a way to connect with our pang. Passengers. We find there are a lot of people traveling through the airport who are missing their pets and who are on their road a lot and cant have pets and we have come in contact with a lot of people recently who have lost pet. I love the wag brigade. One of my favorite parts is walking into the terminals and seeing everybody look up from their device, today everybody is interacting on their cell phone or laptop and we can walk into the terminal with a dog or a pig and people start to interact with each other again and its on a different level. More of an emotional level. I just got off an 11. 5 hour flight and nice to have this distraction in the middle of it. We look for wag brigade handlers who are comfortable in stressful situations. I like coming to airport its a lot of fun and the people you talk to are generally people who are missing their dogs. They are required to compete a certification process. And they are also required to complete a k9 good citizen test and we look for animals who have experienced working with other orgorganizations such as hospits and pediatric units and we want to be sure that the animals we are bringing into the airport are good with children and also good with some of our senior travelers. I think toby really likes meeting kids. That is his favorite thing. He likes to have them pet him and come up to him and he really loves the kids. Our wag brigade animals can be spotted wearing custom vets and they have custom patches. There is never a day that repeats itself and there is never and encounter that repeats itself. We get to do maximum good in a small stretch of time and i have met amazing people who have been thrilled to have the interaction. The dogs are here seven days a week, we have 20 dogs and they each come for a two hour shift. There is a lot of stress when people have traveling so to from these animals around to ease the stress and help people relax a little bit. I think its great. One of our dogs has special need and that is tristine. He wears a wheel around. He has special shoes and a harness and we get it together in the parking lot and then we get on the air train. He loves it. Little kids love him because he is a little lower to the ground so easy to reach and he has this big furry head they get to pet and he loves that. He doesnt seem to mind at all. Probably one of the happiest dogs in the world. Many people are nervous when they travel but seeing the dogs is just a wonderful relief. What i absolutely love most about it is the look on peoples faces, so whenever they are stressed and flying is stressful these days you get these wonderful smile. I am the mom of lilo the pig and she is San Franciscos first therapy pig. Lilo joined the wag brigade as our firs first pig. Wag brigade invited us to join the program here and we have done it about a yearandahalf ago. Our visits last 1. 5 to 2 hours and it does take a little bit longer to get out of the terminal because we still get a lot of attention and a lot of people that want to interact with lilo. I feel honored to be part of the wag brigade. Its very special to meet so many people and make so many feel happy and people that work here. Its been a great experience for me and a great experience for to totoby. Its been an extremely successful program, so the next time you are here, stop by and time you are here, stop by and please be advised that the chair may order the removal from the room for any person using cell phones or any other some producing electronic devices. Belief spee advised that a member of the public has three minutes to make pertinent Public Comment on each agenda item unless the Port Commission adopts a shorter period on any item. Public comment on items not listed on the agenda is item eight. Is there any Public Comment on any items not listed on the agenda . Seeing none, Public Comment is closed. Item nine a. Is executive directors report. Good afternoon. I am the boards executive director. I have one item to report on today and to ask for an in memoriam. I have discussed on april 23rd , 2019, when the Port Commission voted to take action to approve the Navigation Center on a portion of will lot 330, i have worked with the city and the neighbors in the south Beach Community to t2 establish the embarcadero safe Navigation Center advisory group. The purpose of the group, which is a password which is meeting under the brown act, is to advise me such that the city maintains a balance of members who live and work in close proximity to the safe center, neighborhood stakeholders, people would lived experience of homelessness, facility and program operators, and that these residents and stakeholders meet and ensure that the Navigation Center is operating in a way that provides the maximum reduction of impacts to the neighborhood, is safely operated, and provides a path out of homelessness for those it supports. We have formed this group. The first meeting will be august 28th at 5 30 p. M. The meeting will be held at the south Beach Community room and meetings are open to the public. In terms of a request for an in memoriam, on a sad note, our Port Commission president s fatherinlaw passed away july 20th, 2019. His Memorial Service was held list past friday, august 9th. He was one of the most successful africanamerican entrepreneurs. Is a civil rights activist who marched after Martin Luther king , and a man with a string of successful businesses in San Francisco. He was born in louisiana. He was known as bunny to his friends and family, and also served as director as my note of Minority Affairs and action in debating in the peace corps. He is survived by his loving companion and wife for over 50 years, his brother, children, and many grandchildren. It is with our condolences that we give our Commission President and the entire family. We ask that we close the meeting in his honor. Thank you. Is there any Public Comment on executive directors report . Come on up. Good afternoon, commissioners is this working . Okay. My name is toby and i am the cochair of the Central WaterfrontAdvisory Committee. The Advisory Committee has been involved with the Navigation Center ever since it was first conceived, and there have been a lot of pros and cons with regard to it, but now you have appointed or you are in the process of appointing an advisory group, which i think is a very, very good idea because i think all of the people who are going to be on this committee have the intention of doing the best possible job. We all know that, right now, San Francisco is in a homeless crisis, and it is our hope, or it is my hope that we will be able to make a difference there. I have some familiarity with Navigation Centers, and i will bring that knowledge that i have two hour meetings, and if the stars align in our favor, we will do a very good job, and lots of people will be helped, and that is the intention. We will keep elaine posted. Thank you very much. So has the committee been formed it has. How many members . Theres 12 members. Many members of neighborhoods, there is a representative from a business in the area, and there are two members with lived experience, formerly homeless, and i can circulate that to the commission. Many of the members are the same as the group that we were informally meeting with as the city did outreach on the proposal. It is a group that we have been working with some time sometime, so some of the names will be very familiar to you. It is posted on our website. Thank you. Elaine, has the department of homelessness chosen an operator, yet, or are those seats vacant . I believe there is a list of providers that is available for them to choose from, but im not aware that they have made a selection at this point. Thank you. Any other questions . Okay. Item ten a is request approval of amendments regarding cruise ship passenger fees, to increase the fees and provide for a volume discount. Good afternoon, commissioners my name is michael. Im the assistant director of the maritime division. This presentation is to seek your approval of an event amendment support terror number 5 regarding cruise ship passenger fees support tariff number 5 regarding cruise ship passenger fees which will increase the fees and provide for a volume passenger discount. U. S. Public ports are required by law to file a port tariff with the Federal Maritime Commission outlining the rules, regulations, and rates for use of port marine terminals and wharfs. The port of San Francisco publishes tariff number 5 for this purpose. The tariff is updated periodically to reflect changes in regulatory programs, risk assessments, and marketplace rate increases. The port of San Francisco is a member of the California Association of port authorities, which is comprised of the 11 publicly owned commercial seaports in the state. Any changes to port tariffs are reviewed by the membership for consistent application of rules and regulations. With your approval today, we will notify the ports of the amendments to our tariffs. The port of San Francisco tariff number 5 is a 90 page document posted online on the ports website. The tariff item changes we are proposing for your consideration are in section ten, item 1,000, bundled port fee for crews ships the proposal is to increase the passenger fee from 18 to 19, effective january 1st, 2020. This applies to all crews passengers in barking, disembarking, or in transit. The current passenger fee of 18 was established on january 1st , 2015, inch and in conjunction with the james r. Herman crews terminal at. Twentyseven and has not been adjusted since then. The passenger fee is a bundled fee which includes passenger warpage, dockage for the first 24 hours, and stores warpage. Before 24 7. Twentyseven opened, it had been 12 per passenger. The increase to 18 was to generate sufficient general revenue to offset the hundred Million Dollar investment in the new terminal. The proposal before you today also includes future increases to 20 on january 1st, 2021, and to 220. 60 on january 1st and to 20. 60 on generate first, 2020. Beginning in 2020, to incentivize increase crews business at the port of San Francisco, a volume discount will be implement it as part of the port tariff or any and all corporations and affiliated brands that exceed 240,000 passengers in a given year. The Volume Discount Program is based on new business expected in 2010 feet from the ports primary crews mac client, witches average 60 cruise ship crawls and 240,000 passengers per year since 2015 this client is adding 28 calls and approximately 112,000 passengers at the port of San Francisco next year. Using 240,000 passengers as the baseline, the port will offer a discount on passenger fees above this figure as incentives to increase future cruise volumes. It is customary for major ports to offer financial discounts to highvolume customers, and by adding this feature to our port tariff, the port of San Francisco will be following an established industry practice. The expected additional net crews revenue in 2020 is 2 million. With a discount being approximately two and a half of the overall revenue for this client. In the five years before the opening of the cruise terminal at. Twentyseven, the port of San Francisco averaged 61 cruise ship calls cruise ship calls. And the five years since it opened, the annual average has opened to 81 it ship calls and 288,000 passengers, increases of 33 and 58 , respectively. This tremendous growth can be attributed to several factors, including the new cruise terminal, the Excellent Service provided by the terminal operator, metro cruise services, and the International International longshore and warehouse union. Yearround homeport sailings, and larger ships. This year, the port is on track to establish records records inc. Shipped calls at 85 and passengers, 297,000. The forecast for next year is even better. With 116 calls, and 390,000 passengers expected, more than 30 growth in each category over this year. The major difference is the entrance of Carnival Cruise line into the market for the first time ever, with 28 homeport calls of carnival miracle. The port secured this new business by promoting the many benefits of cruising in this region. The anticipated revenue from passenger fees will increase from 5. 3 million this year, to 7. 2 million next year, inclusive of the volume discount besides San Francisco, the other major public crews ports on the u. S. West coast are, by volume, seattle, los angeles, and san diego. Each port is different in terms of ship and passenger volumes, destinations, cruise types and rates. By far, seattle is the largest of the ports, hosting 1. 2 million passengers this year for summer cruises to alaska, featuring two new terminals with a third one out for bid. The average bundled passenger fee is 29. Los angeles will welcome 615,000 passengers at its existing terminals in san pedro. These are primarily short cruises of seven days or less to mexico, and a few 15 day cruises to hawaii. The bundled passenger fee is 14 san diego expects 338,000 passengers this year at its two downtown terminals. As with l. A. , most of the voyages are three, four, and seven days to mexico. The san diego bundled fee is 9. As stated, the port of San Francisco expects just under 300,000 passengers this year. We are a yearround crews ports, with alaska cruises in the spring and summer, and california coastal, mexico, and hawaii itineraries in the fall and winter. Our bundled fee is currently 18 higher than Southern California and lower than seattle. This tariff amendment supports the stability component of the ports Strategic Plan by increasing annual revenue to support capital improvements, particularly those at. Particular those at 27. Upgrades at both terminals, 35 roof repairs, and 27 escalator installation. There is an engineering mooring analysis currently underway to clarify the existing conditions and limitations at both crews terminals, as well as to determine the feasibility of improvements to accommodate larger ships. As for the California Environmental quality act, these proposed tariff amendments are not considered a project, and therefore not subject to ceqa review. Commissioners, thank you for the opportunity of addressing you today. This concludes my report and i respectfully request your approval of the proposed amendments to the port of San Francisco tariff number 5 with respect to cruise ship passenger fees. Im available to answer any questions that you may have. Thank you. So moved. Second. Is there any Public Comment on this item . Seeing none, Public Comment is closed. Commissioner gilman . I want to say thank you for the report, it was very thorough it is exciting to see our cruise business will increase, and im supportive of the item. I am supportive of the item. Good report, mike. I see andre is here. I guess i have to be supportive, i am the president. [laughter] but the fact is, i would like to see San Francisco get up to a million passengers a year. I was just recently up and you know, alaska, and you see 30,000 people and they have one they have oneway 6 million passengers a year. I think it really helps our waterfront and everything like that. We have 30 million tourists a year that come to San Francisco. Where the second largest attraction, other than disneyland so we want to continue to give San Francisco the exposure that it deserves and i know if i had a chance to get office san pedro or San Francisco, there is no choice. San francisco is a worldclass city and a beacon of light. I am totally in support of it. Thank you. Thank you so much for this report. I just have a question. The volume incentive discount, is this the first time we are doing this or have we historically done it . This is the first time we are putting a discount like this. What were doing is putting it in the port tariff so it applies to the large client that it is applicable to right now, but we are hopeful that other cruise lines that are coming to the west coast with large fleets, it would be applicable to them if they got up to that level. Great. And then the fee increase, im just wondering why in 2022 it is only a three a 3 increase went other years it is over 5 . We came up with the fee basically, we raised the fee by 50 from 12 to 18 in 2015. What has happened over the past five years is we have established 27 particularly, and 35, but as a very high ranking destination. The crews lines have seen it in action, the ratings on the passengers are very high. We wanted to get that established first, and now what we are doing, by the fee increases that we are putting in over the next three years, it would be equivalent to as if we had been doing a 2 increase every year, so by 2022, we will basically be equal to having had a 2 cbi throughout the opening of the new terminal. And then after that, we are just increasing 2 a year . Just wondering. Thank you. I really appreciate that. All in favor . Aye. Resolution 1932 has been approved. Thank you. Item 11 a is informational presentation and developed agreement and the form of a ground lease with an initial 50 year term and 16 year extension option would tea ck broadway l. L. C. For the lease and development of 192 room hotel, a dinner theatre, and approximately 14,000 square feet of public open space, and similar uses at sewell lot c. Will lot 3. 3 333 323 and 324, located on the west side of embarcadero. Good afternoon. My name is ricky. I am the develop manager with the real estate and Development Edition of the port. I am glad to be participating in this recent addition along with our staff who have been involved in the negotiations with the developer team. Next is the outline of my presentation. This slide shows the outline of this presentation. [indiscernible] our assistant Deputy Director of development will be making this presentation. We will invite you to make a few remarks on behalf of the rest of the development team. As indicated in this outline, we are going to be very brief. I will cover each of the items and the financial projections and next steps. [indiscernible] this is the corner of broadway and embarcadero. It consists of four passthrough his through lot 323 and 324. There is a distant right of way in these two passthrough his. Zoning, building height, all these details are in the staff report. At this time i will not go into all those details. The project overview, the design is a popular dinner theatre performing in a historic tenant. It was a fixed show for many years on the waterfront. You provided live music, comedy, and entertainment. It was located on part of 27 and 29 under a lease with the port from 1999 until 2011. The lease was mutually terminated to accommodate the americas cup. As part of that meat will termination, the port agreed to allow them to come to the waterfront if they are able to satisfy some conditions to relocate to a portion of lot 324 teatro attempted to use a temporary structure but that location was not supported by the community because it was no not compatible with the historic district. As a result, they went out to get Additional Development help. They came to the Port Commission , and of course, we could not do soft engagement with them without competitive solicitation and process. He directed us to go to the board of supervisors to get our direction. The board of supervisors as to enter into an soft engagement with the developer. This gave way for the port to authorize exclusive agreement with the developer. So [indiscernible] the developer is making a whole lot of effort to move the development forward. Theyre acting on the Performance Benchmark required. One of the best benchmarks was the submission of the development concept. As you can see on this slide, the initial proposal back in 2015 included what is shown on this slide. Currently the proposal is the one being shown on the right column before you. What has changed was elimination of the ground for the below grade floor area, or the basement, and the number of [indiscernible] they were able to do it because it brought on a new Development Pattern partner, who brought in the hotel development. When they came on board, they were able to help reconfigure the internal structure of the hotel to make it more efficient. The result is increasing roof count from 180 that was initially proposed, to 192 with a reduction in the building square footage. What are the benefits of this development . This development includes many benefits. Particularly to the stakeholders the stakeholders are the public trust, who are providing open space, access to the waterfront, money for the port. For the port, it is increased revenue and. [indiscernible] for the city, it is job creation , currently were projecting 550 construction jobs at approximately 350 [indiscernible] and the northeast waterfront is guiding an architecturally fitting addition to that district. Of course, the Community Members , the amenities, the open space, the activation of the gateway to north beach and chinatown. Very briefly, under this, these are all the documents that have been completed. [indiscernible] we are hoping to bring you the approval for the lease next month. The two key transactions that we will be bringing before you is called the lease. This Development Agreement is an agreement that will allow the developer to say, if you meet certain conditions and you complete the rest of your to do list, the board will be willing to enter into the lease. During that period, the developer will be required to pay fees and pay for transaction cost. In addition to what i have listed on this slide. The second key transaction document is the lease. That is the lease that will cover the construction period and the operational period and will allow us to actually pass possession of this site to the developer so they can start the development. It will include the initial term , which we are proposing to be 50 years initial term, with a 15 year essential reduction. To pay rent to the port, as well as the development has to be consistent with what has been approved by the city. I will go into more detail about the basic financing structure. Overall, the port and the city is not putting any money into this development. The entire development is being funded solely by the developer. In times of rent, we have three categories. The base rent is what they need to pay us. They have to pay us to protect the port. That base rent was based on the existing operation revenue from we want it to be not above that and not below it. That base rent will be escalated over time. The Percentage Rate rate allows the port to participate in the project doing very well, so that percentage rent is set against the over the Gross Revenue from the development and it varies from threepoint 5 to six by 5 over the term of the lease. Usually the developer will pay the higher of the minimum base rent. We will go into that in the next slide that rebecca will be covering for you. Next is a participation in the next slide. This is whereby if the developer sells the interest and making money, we want to be able to participate in that. That is a function of setting the internal rate of return and participation of the cash flow after they have achieved the initial rate. Late last year, the developer came to us and said, look, we introduce this back in 2015. Market conditions have