This is resolution number 2043. Thank you, carl. Commissioners, can i have a motion to approve the consent calendar . So moved. Second. We will open the phone lines to take Public Comment on consent calendar for members of the bhoubl. The public who are joining us on the phone. Operator thank you, president brandon. At this time, well open the queue for nip on the phone who would like to make Public Comment on the consent calendar. Please dial star 3 if you wish to make Public Comment. The system will het you know when your line is open. Others will wait on mute until their line is open. Comments will be limited to three minutes per person t. Queue is now open. Please dial star 3 if you wish to make Public Comment. Thank you, jennifer. Do we have anyone on the phone . Operator yes. We have one caller on the line. Thank you. Please open the line to the first caller. Operator thank you. Unmuting that line now. Hello . Hello . Operator the caller is there, but maybe well give them some time to call back. Are there any other caller on the line . Operator president brandon, there no caller on the line wishing to make Public Comment on this item. Ok. Has anyone called back . Operator caller, if you would like to make public xenl on this item, can you raise your hand again by pressing star 3. President brandon, it look like there are no hands raised at this time. Thank you, jennifer. Seeing no caller on the phone, public sxhenl closed. Comment is closed. Could we please have a roll call vote . [roll call] thank you, carl. The motion passes family. Resolution 2043. Next item, please. That would be item 8a an informational presentation on mission rock communitys facility district financing including the bond documents and preliminary official statement to partially fund phase one of horizontal improvements at seawall lot 337. Gfn, commissioners. This is Phil Williamson, senior project manager for the real estate and asset department. Here to present an item that we are very pleased to bring before you, an informational item. Next slide, please. Federal election slide, please. Thank you. So, today im going to be joined by Wyatt Donnelly landolt from port staff and presenting a project overview and an update on the project financing, leading up in our next meeting with you an action item meeting to the issue for your approval to issue bonds to the project. Very exciting time for the project. Let me start with a project overview. Youre very familiar with this project by now. We appreciate all of your support and encouragment and advice to date. Next slide, please. So just by way of quick summary, to refresh memories, at full buildout, the project will be 2. 7 to 2. 8 million square feet of retail ground floor retail, i should say, office and residential uses. Approximately 1200 howing units, 40 of which will be affordable at a wide range of area median incomes from 45 to 150 . So addressing a large need from all parts of the housing spectrum. 970 to . 4 million square feet of office space. 240,000 square feet of retail production space, primarily on the ground floor of the buildings on the sigh. And at some point down the road, pier 48 rehabilitation of approximately 240,000 square feet as well. Next slide, please. So, phase one, which were on the cusp of starting and todays an important milestone towards that happening, phase one is four buildings in total and you can see on the diagram here, phase one is shaded in blue and includes four buildings and includes china basin park on the north side of the project, new streets, sidewalk and utility infrastructure to serve the four phase one buildings. There are two housing buildings, residenceabler buildings totaling 537 units total. Almost 200 affordable. The commercial buildings in this die sgram hard to tell, but partial a and partial f excuse me, b and g, excuse me, i switched those around will be Office Buildings totaling 550,000 square feet. Retail in phase one is approximately 65,000 square feet. The park, again, is 5. 5 acre on the north side of the project. Lots of new utilities, street lights. Everything you would expect in a new neighbour will be put in phase one to make it productive and feasible and attractive to tenants and visitors alike. Were targeting completion for phase one in 2022. Next slide, please. An important aspect of this project and all port projects is our effort to reach out to l. B. E. Firms in San Francisco and to utilize them as much as possible. This project had a preconstruction goal of utilizing 10 l. B. Participation and were very happy and proud that we have accomplished that and then some. To date, we are at 18. 5 of l. B. Participation in the preconstruction work. Were looking ahead to construction starting in the next couple of week, hopefully. Definitely in the next couple of months. And the goal increases to 20 l. B. E. Participation and we feel very confident well meet or exceed that goal going to ward and i want to mention that i know next week, the project team will be meeting with commissioner brandon and adams to give a more detailed update on the efforts to date and just how productive weve been in meeting these goals. Now i would like to con clues my project overview and update and i want to introduce wyatt. Before doing so, just want to remind the commissioners that earlier this year, you approved the phase budget and today youll be hearing how it will be implemented and how important the bonds are to making that budget a reality and the four leases for phase one will be signed today or tomorrow. We signed one a few months ago. We signed the other three last week and we expect them to close this week. So, very exciting times for the project of four leases for four buildings with construction just around the corner and with that id like to introduce wyatt. Hello, commissioners. Wyatt donnelly. I work on the finance aspects of the Development Project at mission rock and pier 70. Ill go over the bond itself in just a general financing structure. If you cant hear me ok, please let me know. Sox just a reminder on the funding structure, there are three sources to fund the project. The early stages and just looking at this graphic, starting at the bottom left, are developer and port equity. Those are the early investments to get started. In the middle termings those are replaced with the pors land value on the site. The prepaid leases for the vertical parcels and the final source are the c. F. D. And i. F. D. , Community Facilities distribution and infrastructure financing districts. Ill talk about those a little later in more detail. But there are two tax mechanisms we use to fund the horizontal infrastructure on the project. So those go in to fund the roads, packs, sewers, electricity. So we can start vertical development and the developer earns 18 return on their investments. So, the port aims to limit this return and the c. F. D. I. F. D. Sources are the primary way that theyre earning their return. Next slide, please. So, just a reminder on the phase one sbunl structured into costs and revenues and ill go into the details of those line items in a second. But the costs are really three items. Hard costs which are the actual infrastructure itself, soft costs including the management, planning, Environmental Review and then the final cost is the return on the developer equity for those improvements. The revenue side, which is what were talking about here today, the first source is the four phase prepaid leases and well be closing on three of those this week and the second major source is public fingerprintsing sources so well have Community Facilities district bond proceeds and then pay as you go taxes, which is really just the regular taxes collected each year and now leveraged in a bond. And well get those from the communitys facilities district and the infrastructure financing district. Next slide, please. So just the high level overview of the phase one budget approval from last year. It was 265 million total for both uses and sources. The. This bond will fund approximately 35 million. Because it is an early sour, t really key for reducing the return on a project and making sure that the project is on budget. This is one of really the two early mechanisms for funding the project with those prepaid early leases. Next slide, please. So, to date, weve taken several Public Financing actions. The first was in february 2018, which was the creation of an infrastructure financing district. Project area i. , the port has an i. S. D. Along the entire waterfront. It captures the tax increment which is the increase in property taxes on the site. And allows us to use those for infrastructure on site. Sox we actually use the taxes to pay for the roads and parks and sewers on site. The second key action was in september 2019. The port made amendments to the citys special tax law for by the board of supervisors to include certain items for pier 70 and mission rock. Some of the key things were being able to pay for seismic improvements, waterfront projects, those items. And then the final one in may 2020 was the formation of the Community Facilities district, which is an additional tax assessment to fund the improvements on site. So, the c. F. D. And i. F. D. Combined to provide the key sources for funding the horizontal infrastructure improvements. Next slide, please. This bond specifically uses the c. F. D. As its main source and there are four taxes in the c. F. D. , the Development Tax which funds infrastructure and parks office tax, which funds infrastructure and parks as well. Theyre a similar uses there. But the office tax has more flexibility. The shoreline tax, which is for shoreline protection and then the services tax funds ongoing maintenance for the site. This is the earliest tax to kick in. It kicks in the fiscal year after the 24month anniversary of the lease close. So, we will get those tacks in two years. However, there are early payments that the c. F. D. Requires to fund this bond. Next slide, please. The bond issuance itself is limited by two thing. I mentioned earlier that the size of the bond and the amount of money they expect to get is 35 million. That is limited by the appraised value of the c. F. D. So, the c. F. Sd. Limited because that is the security for the bond and the city has a policy of only issuing c. F. D. Debt with a 3to1 ratio. This is a citywide policy put out by the controllers office, a conservative approach to make sure that we can always cover our dead service for these bonds and we anticipate 125 million valuation resulting in 40 million of bonds for the projects. The difference is thing of cost of issuance and reserve requirements for the bonds. And the second limiting factor is ongoing tax revenues. We have to have 110 debt service coverage. We have to have an extra 10 in taxes. If our annual payments are 1 million, we have to have 1. 1 million to have a little buffer. The bond issuance here is in phase one which are foreign access of the 40 million bond issuance because this is not the limiting factor here. The c. F. D. Is. However, once the project is complete in twoyear, we will issue additional bonds using that extra value thats been completed through the horizontal improvements in the buildings. Next slide, please. So the next step will be coming back next month with a future action item to approve the c. F. D. Ens ifing including the bond documents and preliminary official statement for the p. O. F. And authorizing and directing the executive director to cause the package to be submitted to the board of supervisor and to work with the director of the office of public finance, caused and distribution of the initial statement. This means that the Port Commission will be moving the port issuance forward. The board of supervisors is the body that approves the bond issuance. And just a timeline the Port Commission action item will come in october. Well have a Capital PlanningCommittee Meeting after that. And were looking to introduce legislation with the board of supervisors in october or november, depending on the timing. Though hearings will be in november and december and well sell the bonds probably in early 2020. Hoping for january, maybe february. That is all and i believe jack bear from the giants is on the line to give some quick comments from our partners. Thank you. I dont know if everybody can hear me. But i just wanted to say a few things. The coronavirus has had a major impact on all of us. This is certainly true of the port and the giants but also true like the Real Estate Industry itself. Were very pleased that our project is strong and compelling enough to meet the challenges posed by covid. They were able to proceed despite strong headwinds that have stopped other projects. For the last several months, weve been very busy on the construction site. Weve installed stone columns throughout the site. We expect to commence construction of the vertical buildings as early as late october or early november. And as phil has indicated, we also made Good Progress in identifying, rekrug and involving local Business Enterprises in the project, including those businesss that are women and minorityowned. We look forward to giving regular updates on our progress for the port axising and the Southern Advisory Committee and soon having to visit the site to see things for yourself. In closing, i would like to acknowledge the leadership of the port. Your executive director Elaine Forbes and [inaudible] Phil Williamson and the entire team in helping us stay on track in a very challenging time. Thank you. Thank you, jack. Thank you, phil and wyatt. Now lets open i up to Public Comment. We will open the phone lines to take Public Comments on item 8a for members of the public who are joining us on the phone. Jennifer will be our operator and well provide instructions now for anyone on the phone who would like to make Public Comment. Operator thank you, president. At this time, well open the quayle for anyone on the phone who would like to make Public Comment on item 8a. Please dial star 3 if you wish to make Public Comment. The system will let you know when your line is open. Others will wait on mute until their line is open. Comments will be limited to three minutes per person. The queue is now open. Please dial star 3 if you wish to make Public Comment. Thank you, jennifer. Do we have anyone on the phone . Operator president brandon, at this time we do not have any caller on the line wishing to make Public Comment on this item. Thank you. Seeing no callers on the phone, Public Comment is closed. Commissioner woo ho . Sorry. I was just unmuting myself. First of all, it is great to hear from jack, the progress that is made on the project before a comment particularly on any of the financing. But that is wonderful news to hear that you are proceeding forward and i, unfortunately, have not been in the city for much because i have been sheltering in place in napa so i havent gone by the site. But i will try to come down some time and look at the site and see the progress that youre making and im sure it will be wonderful to see that this is moving forward. And given that it is a very difficult Real Estate Market because of so many Different Things at the moment. Covid, everything, the wildfires, everything is a little bit up in the air and uncertainty this year. Anyway, congratulations on that. I just wanted to make the comment and thank you for the assistance to staff for also keeping this objective. It is a long haul, but were getting there. As i relates to the presentation on the c. F. D. Financing, i just had some general questions because, i guess given that we i know we used this kind of structure before and we used it on some of our other core projects, but i guess i want to know just because were going back into asking to even put a fairly modest bond together, but just the overall structure, how many c. F. D. Financings are there now, or i. F. D. S in the city at this point . Im just wondering how many we had to use and im always worried that at some point we would be the window wont be as hope open open as it has been. Id like to get a better context. Sure. Excellent question, commissioner. I can give some background and talk about the statewide market as well. There are c. F. D. Financing at transday, the Hunters PointShipyard Development and one coming up soon for treasure island. Weve discussed, you know, multiple having multiple issuances with our unwriter and theyre very confident. Statewide, the market is very robust. Were seeing very low spreads for the Interest Rates and they are having extreme demand still. I think because of the guaranteed return on these and investors feel are pretty safe. There is Strong Demand and we have not had any indication from our underwriter that theyre concerned about having too much in the market. At this point. [please stand by] [please stand by] subtract, what are the costs of those buildings, but also what is the cost of all the infrastructure and the work that needs to get done just to make the site developable. So there is a difference in approach there. Obviously some of the assumptions will be similar when you get into the nitty gritty details, but the top line figures will be different because youre not looking at the whole the whole site. And the appraisal is of the whole site, all 11 parcels on the site, whereas individual is one building. So that also reconciles why you have 3 to 1 value approach if there is a delinquency, you have to look at the delinquency and foreclosure on th