we are estimating the bonding capacity at about $24 million to be used for port improvement. in exchange for agreements put forth in and ifd district, the board would agree to suspend up to $5 million of qualifying public improvements on public parcels that are related to the project. either on the park parcel or on the surrounding public ground. in a similar vein, the court agrees to work with the developers to create facilities and community districts. these are meant to be funding public use projects. as i mentioned, over all, it has benefits in the magnitude of about $10.1 million of direct payments support. over time, the ability to increase the ifd revenues the port can expect to capture. overall, our assessment is transaction guarantee short-term payment, payments up to $5 million in the next couple of years. it will enhance our long-term lease revenue through the park and other commercial revenues, and provide the part report -- port new mechanisms. given the current state of the market, this financing structure allows the port to unlock the value of these sites by unlocking stabilization and receiving long-term compensation on these properties. that is the financial analysis. i want to take a couple of moments to allow the developer and architect to tell you about the project as it is currently proposed. >> good afternoon, commissioners. thank you for the opportunity to present to you today. as you know, we have been coming to you since july 2005 with this budget. as jonathan pointed out, you awarded this subject to a planning process. that was expected to take six months to eight months. the study actually took 18 months. and vigorous meetings, a lot of work on both parts of staff, and through various extensions of time requests, we made a lot of studies, models, and today we will be showing that to do. we recognize that any time that you build a project in san francisco, you will get a great diversity of opinions. you cannot build in this city without vigorous debate. sometimes the opinions are divergent, in fact, contradictory. these are terms that have been used to describe now successful projects such as the embarcadero, the ferry building. we enjoyed this vigorous debate about what is best for the neighbors, the city, which is greater benefit. we fully appreciate and respect that many of our neighbors have legitimate concerns to preserve their standard of living, quality of life, amenities, and even their views. at the same time, we appreciate the port must execute its fiduciary duties under the city charter and balance these concerns with the best interest -- interest of the port, a city at large, state of california. resolving these issues out is arduous, complicated, and we appreciate the hard work that our neighbors have put in. we will never get unanimity in this city. but we are going to show you today what we believe is a best project to recognize the value of combining your land, 351 with the golden gateway, and the benefits that we have been able to produce not only for the neighbors, but city at large. for five years, we have expended $25 million in try to get to this point. we have retained one of the world's leading architectures who will present today. we think the proposal should meet the port's subjective -- objective on sustainability projects that serves the public at large, while providing the board with economic sustainability, which will enable it to realize some of its capital obligations, public area improvements, rehabilitation, infrastructure, and the like. i would like to introduce craig hardeman, our lead architect. he has a tremendous team behind him. craig is going to -- push the first button. this is what jonathan was saying for those of you in the audience that are not familiar with this site. the red islot 351. in green is thegolden gateway. ústhe combined site is arguably the best use that was contemplated in the northern waterfront plan. &p>> thank you, commissioners. craig hartman. it is a pleasure to be here to present this project. the project site is extraordinary, as simon said. as you know, one of the great civic places in the world with the removal of the embarcadero freeway. this has become an extraordinary place in the city and an example of what a waterfront needs to be. you see here is, in my opinion, a gift to the city. it begins with a public open space which is almost 20 times what currently exists. n 20,000 square feet is more than the entire seawall lot 351 @bñcombined. this space will be very active on the pedestrian level, including resta, private recreation, residential -- 155 -- 165 units facing south of jackson street. residential parkingpvñ and publc parking of 255 spaces, which will support the activities of the waterfront. spaces for computers and walkersvañ withine basement level of this project. level of this project. we have clear principles about like for a city, including strengthening the waterfront significant open space. this project doesç beginning at washington. it designed apartment is recommenód narrowing the street, straightening it, making it more pedestriançy friendly,d making a strong connection from the waterfront to the street. s?second is opening up the view, as you can see on the left-hand sidek@ -- the articulated that there is a green space. it would open up to the waterway, jackson street. along the northern section at the pacific,á to the waterfront to create a neiwood park that is of the proper skill and support of the neighbors in the district. )hthe program itself at grade important in terms of its activity and vitality. his partners have been /+especially passionate about. as you can see, it begins from the north end, repair shop, child-w care. that will support the park on the north side. we talk wraps around the corner of additional retail surrounding the site. it will be an of course, adjacent to one of the primary mass transit systems in the muni ystem, the trolley system adjacent to the stop. withkçñ this, a series of these trials represents over 18 points in. it will be very porous. itdw will be a space that is active and supportive of activities' as well, the removal of curved cuts at5m embarcadero and washington. 2rit will be replaced by simple and clear and vehicle access. the green#n triangles' shows access to secured parking, again for bicycles,úc walkers off of washington. and;' as you may remember, we previously had two curb cuts) along washington in response to the planning department á[commentary. we reduced that to a single, to make this more pedestrian favored. z importantly, this site very much a part of the city's top biography, its urban typography. z>ñ--)k topogrophy. ret+tjp(hy that is created by this, jagged peaks and valleys, is similar to the peaks and3rku. is import we honor the general quality of this as it tapers j6from the financial district dn to the waterfront, into the northeast sectionvzñ of our cit. even along the waterfront itself,2[ defined by the hotels, plaza,7 the neighborhood. looking at this in detail,dm tht little yellow swish is that we are talking about. you can see how it fits within the larger context in terms of its relationship to urban form. 4khere we are looking down on e site from the water. you can seevív how this projects massed in a way that brings the waterfront of to meet'"ç the financial district. on the other way, steps down to meet the neighborhood. itc! is anchored at the north ad by the pacific park. to the recreational park, finally to the/ dwelling units n the site. nebraska waterfront embarcadero study recommended northeast water from embarcadero study recommended certain things. to be more clear]w about it, if you simply shade in white the areas6=u$at comply precisely wih that planning study, you see this are significantly below northeast embarcadero study would allow. m@then there is a small area tht is also above what is recommel blocks of dwellings which are in the.o shadow plane created by e davis court p it. -- tower adjacent to it. ñ feet. if you take the average height of allz the the project from the corner of drum street and washington all the way to the park, the average height is about 36.5 feet. 9fthe massing of this and architecture was meant to bthe y level. simple, elegant, mat that are limestone, teak, and glassñ, green roofs, and will also be at the highest levelnlñ of sustainability in terms of survivability and sustainability. )&ñthe massing looking back from north to south, the product w1oe city. we believe it will be an elegant addition tob7 our great waterfront. with that, i think we will summarize the financial (jp&e%ei view of the financial proposal,s then jonathan presented. it has to dotyu with more -- wee optimistic about this development. the total paym subject transfer were calculated 1.5% per annum escalation in real-estate prices. the average for theké last four years in california has been 7%, so we used 3%. v8we also used 99 yearsm$ perpetuity, even though the four releases 66. we just want/q to emphasize subsequent transfers in total annum would be three and $27 $405 million. $327 million, a net present valuew it would result in total p9p to the port of $13.4 million against the rfp that was before the crash. p$we are very pleasedn; that s constructs that we have worked on for a number of years with port staff has resulted insometa long-term benefitjb for the port and set a precedent that we hope n enormous amount of benefit for the city. quickly so people do not have to readx8ñ it. ad best use for the land. we calculate the ifd a $40 million benefit which can be used for public focuses a the waterfront, and in addition to gramm values. we are delivering an areaés of public open space which is greater than the area we are buying. back. participation and and sales from fees, e feet of measurably improved/e%ec open space, about 51% of the retail restaurants for the securing the neighborhood. the taxing from a financing perspective to the port. bzi think i can spare you any more of9$ this -- thank you. >> thank you. outlining next steps. courts have asked for the commission endorsement for the term sheet. e1ñif you endorse it, we will me their endorsement of the term sheet. as you recall inke the 2004 management audit of the port by the board of supervisors' budget analyst, one of the recommendations was that the board of supervisors should get ead of the term sheet, to make sure that the boardíáz is exercising its fiduciary responsibility to insure the port isw5rás best value for the money. we are hoping that thesekañ transactions -- that they will agree that this is a good project for the port. feel that the questions. i did want to point out some minor correctionsr# may occur to the resolution. they are on page:u÷ 8, resolutin 10.66. the two final whereas clauses e in the second to last clause,ay the project plans are showing exhibit b,13 not exhibit a. and for the last clause, áú term sheet is shown in exhibit b. ib÷ would ask that those amendments are made to the resolution. with that, we questions. >> so moved with the amendment. >> commissioners, any questions? ok, iñp have a stack of public comment cards. we want to make sure we hear ñ everybody. we are allowing three minutes. i will call a couple ofa( namesn advance, so if you can be prepared to go. íwand please be mindful of the clock. first public commentmuñ from brendan done again. >> goodsññ afternoon, commissioners. pleased to be here. san)855jz resident. i am raising my children here. jmr+ely, as a city, this project clearly represents something that is better than what is thereñ(x now. i wholly endorsedzmñ project and would ask for your support. one of the things i would share is,p8ñ i have spoken with a frid of mine who lives at the golden gate apartments. we discussed the positive attributes, negative attributes, as his adjacent residents have shared with him. he also endorses the project. of the group andn he is, that is something that is impossible because he would be ostracized;5 by those who he lis with. the issue isd;, democracy needso be understood. if you have an opinion, you should be able to sha i am here to share it. whether you believe it or not is up to you. ipthek( other issue a want to s -- address, they havec fantastic architect, the scale is a broker, i have a5yñ licensn california. this the building adjacent to the embarcadero respectful of what is already +6÷there. again, this project is appropriate, it givesqa us open space. it is a phenomenal project and should mn?tp)d. thank you. >> thank you. tonyic gazetta. dave stockdale. ué >> good afternoon,bzñ commissioners. i representing plumbers union in san francisco. i would urge you to approve this. q franciscogcñ residents, and this project has, since it was conceived, it has5. been about five years -- we would like to see this project moved along for the sake6ú of the people who wk and live in san urge your approval of the term sheet. thank you. commissionerií fong: thank you. >>blx good afternoon. i'm from the center of urban educationg. in that capacity, i am representing]y our 120 market sellers. we, too, urge you to 'o this term sheet. the current proposal, we believe,1 the issues and recommendations from the recently completed it is in scale with its surroundings. -- recently completedú northeast study. .>the residential units included will bring additional customers, and the public%+ parking access will support those of our customers who rely on using cars although mass transit is always preferred. the site will;d provide recreational access for the public and creates far better linkages between-] waterfront and the rest of the cities that currently exist. wezq also like the proposed land swap because as members of this ñ rather open space be held in our chest versus the parking lot. so again, we urge you to endorse the term sheet. thank you. union and construction trades council. i have said before this is a great project. there are somem involved, but those are all good. you gain pedestrian traffic, pwnan life on the west side of the embarcadero way you have you lose a few private tennis courts. you gain public parts. c you gain public views.you gain f money for the port, whether by your calculo developer's more optimistic calculations, and it isñ/ñ money that you and the public need. public and not a few private individuals, however influential approve the term sheet. thank you. commissioner fong:xéñ thank you. > good afternoon. at north beach and aoç÷ resident for 23 years, here at the embarcadero4. highway. when i came down, there was a promise of the city beingíeñ bak open to the beach. this promise has yet to be realized. ç the project is that it really fulfilled that promise connection from deep into parts of the city from jackson's way importantly, it develops and encourages ways to think about]e open space, because it is not sprawl. it is really controlled, particularly in anrq organic, bourbon kind of entity, so the way this project has the nested within the interior, and then, the publicj amenities and commercial aspects of this, it is encourages a kind of e:vparticipation and vitality to the open spaces, so you have eyes on theéo+ kind of idea about open space and how it connects this waterfront=!ñ feature and way to approach the city, which i think and lively city, and it really goes to h3g the waterfront needs to be developed. as a model,dn a way to look atl the districts and parcels thatk will be coming up in the future, so i fully support and endorse this project. commissioner+b fong: thank you. %?÷>>m$ it is impossible to reah over and get this. i saw for the first time the swap parcels in an exhibit, but ñ not in your document. i will show you, thiskñ is your parcel. this is your parcel here. the development is in the parcel south of jacksonqhñ stre, and what is illustrative of the problemsnñ you have is the port 80% is under the city's jurisdiction, not the port)lñ pe you have structured an entire deal assuming you can take city portlegy it is in two different places. you aredj÷ assuming you will hae an infrastructure finance district for improvements, and that money is going to come from the parcel that is not it is under city control, but the monlls to the port pirie even more important, you are assuming that you are the redevelopment agency and you can expandwk what the redevelopment agency used to do, which is a tax increment to city property. youdh have 20% of the site. you are assuming you can takeeu 100% of the tax increment with -- buy or lease in"-ñ the city. i do not see anyone from the city on these papers as having endorsed it. !wthe board of supervisors has