Port Commission Meeting Summary: August 13, 2019
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Port Commission Meeting Summary: August 13, 2019
The San Francisco Port Commission convened on Tuesday, August 13, 2019, at approximately 2:00 PM. The meeting covered the approval of minutes, announcements, public comments, and several informational and action items including cruise ship fee increases, a major hotel and dinner theater development, environmental services contracts, park construction progress, and the waterfront resilience program. The commission voted on two action items and received updates on ongoing projects.
Consent Calendar
- Approval of Minutes (July 9, 2019): The minutes from the July 9, 2019 meeting were approved as amended. A commissioner raised a point about recording when commissioners leave the room during votes, and it was agreed to address this protocol at a future meeting.
Public Comments & Testimony
- Navigation Center Advisory Group (Item 9): Toby Levine, co-chair of the Central Waterfront Advisory Committee, expressed support for the newly formed Embarcadero SAFE Navigation Center Advisory Group and emphasized the need to address the homeless crisis. The group has 12 members, including neighborhood representatives, businesses, and two formerly homeless individuals.
- Teatro Zanzani Hotel Project (Item 11A): Multiple speakers voiced strong support for the proposed hotel/dinner theater development. Speakers included representatives from neighborhood associations (Bill Hannon from Gateway Tenants Association/Barbary Coast Neighborhood Association), labor unions (Carpenters Local 22, Teamsters Local 665, Unite Here Local 2), tourism (San Francisco Travel Association), and former performers (Elaine Turkot, Kristen Clayton). They highlighted the project's economic benefits, cultural value, union agreements, and community engagement. A preservation advocate (Stuart Morton) noted the developer's compliance with historic district standards.
Discussion Items
- Cruise Ship Passenger Fee Increase (Item 10A): Michael Nurney, Assistant Director of Maritime, presented a proposal to amend Port Tariff No. 5 to increase the bundled cruise passenger fee from $18 to $19 effective January 1, 2020, with further increases to $20 in 2021 and $20.60 in 2022. A volume discount was introduced for cruise lines exceeding 240,000 passengers per year, aiming to incentivize growth. The port expects 116 ship calls and 390,000 passengers in 2020, generating $7.2 million in revenue (including the discount). Revenue will support capital improvements at Pier 27 and Pier 35.
- Teatro Zanzani Hotel and Dinner Theater (Item 11A): Staff presented a detailed informational overview of a proposed Lease Disposition and Development Agreement (LDDA) with TZK Broadway LLC for Seawall Lots 323 and 324. The project includes a 192-room hotel, a dinner theater (Teatro Zanzani), and approximately 14,000 square feet of public open space. The initial lease term is 50 years with a 16-year extension option. The port contributed no capital; the developer funds the entire project. Rent includes base rent (escalating), percentage rent (3.5%-6.5% of gross revenue), and participation in capital events. The developer requested modifications to increase the internal rate of return from 18% to 20% and adjust the capital share split from 70/30 to 80/20, in exchange for additional protections and a lower hurdle for subsequent tenants. Staff evaluated net present value projections showing significant revenue gains over the existing parking lot use. The item is scheduled for action at the September 10, 2019 commission meeting.
- Environmental Services Contracts (Item 12A): The commission approved awarding three contracts for as-needed environmental and related professional services to ESA/CDIM Joint Venture, SCA Environmental, Inc., and AEW Engineering, Inc., each with a not-to-exceed value of $2 million over a 4-year term (with a 1-year extension option). The contracts cover environmental engineering, planning, permitting, stormwater management, dredging support, and climate change analysis. Staff highlighted strong LBE participation: 59% of total contract dollars will go to LBE firms (including primes and subcontractors), exceeding the 12% requirement. No protests were received.
- Crane Cove Park Construction Update (Item 13A): Erica Peterson provided an update on Construction Contract No. 2812 for Crane Cove Park and the 19th Street Parking Lot. The contract amount is $17.845 million with a 24.54% LBE commitment. As of June 25, 2019, $6.9 million (39% of work) had been paid; the project is on schedule despite 10 extra rain days. Key progress includes demolition, relocation of Building 30, beach revetment installation, and parking lot construction. The beach is expected to be completed in September 2019, with substantial completion in February 2020. The port used in-house construction management to save costs. LBE participation is expected to exceed the goal; GMB mentored LBE subcontractors and used LBE truckers exclusively.
- Waterfront Resilience Program & Contract Amendment (Item 13B): Brad Benson, Waterfront Resilience Director, presented the port's resilience program, which integrates the Embarcadero Seawall Program, the Army Corps Flood Study, and other initiatives. A proposed $20 million amendment to the CH2M HILL (Jacobs) contract (base contract ~$40 million) would fund planning, engineering, and environmental services over three years. The amendment includes $10 million for the Army Corps flood study, expanded public engagement, and port-wide adaptation planning. LBE participation is projected at 30% for the amendment (overall ~23%), with targeted outreach and workforce development efforts. The program addresses seismic and flood risks across the 7.5-mile waterfront, with costs estimated at $2-5 billion. Funding sources include a state grant, city loans, a potential bond sale (subject to litigation over Proposition A), and federal/state grants.
- Army Corps Flood Resiliency Study Amendment (Item 13C): Stephen Gold presented an informational report on a proposed amendment to the Feasibility Cost Sharing Agreement with the U.S. Army Corps of Engineers for the San Francisco Waterfront Flood Resiliency Study. The study was originally scoped at $3 million over 3 years but is now estimated at $20.3 million over 5 years due to complexity. The port's cost share is $10.05 million, mostly in-kind services. The amendment includes an accelerated funds clause allowing the port to advance funds if federal appropriations are delayed. Final approval of the revised study plan is expected in September 2019.
Key Outcomes
- Resolution 19-32 (Cruise Ship Fees): Approved unanimously. The tariff amendment increases passenger fees and adds a volume discount.
- Environmental Services Contracts: Approved unanimously to award three contracts (ESA/CDIM JV, SCA Environmental, AEW Engineering) for as-needed services up to $2 million each.
- Next Steps: The Teatro Zanzani project (Item 11A) will return for action on September 10, 2019. The Army Corps study amendment (Item 13C) will be brought for approval in September. Staff will provide updates on Pier 40 restroom concerns and the World Trade Center building as requested by commissioners.
Meeting Transcript
Item two approval of minutes for July ninth, twenty nineteen meeting. So moved. Second. Are there any is there any public comment regarding the minutes? Seeing none. Commissioners, any um we're approving them as amended. We don't everyone. Okay. Yes. Okay. So I do want to say that we don't have a precedent for recording when people leave the room. So I don't know if this is something we want to add to our policy discussion. Because you 'cause the commissioners get up and leave. They so we record it each time a commissioner leaves or generally. Yeah, just when there's a vote. Um, whether or not a commissioner is present or not. So we should always include if a commissioner is a part of the vote or not. So are you having a policy discussion on protocol at a future meeting? Okay. So there was a second to approve as amended. As amended. All in favor? Item three, public comment and executive session. Item four, executive session. Can I have a motion? So moved. Second. Is there any public comment on executive session? See none. All in favor? Cheesy San Francisco Government Television. Please be advised that a chair may order the removal from the meeting room of any person responsible for the ringing of or use of a cell phone, pager or other similar sound producing electronic device. Please be advised that a member of the public has up to three minutes to make pertinent public comments on each agenda item on a support commission adopts a shorter period on any item. Item eight public public comment on items not listed on the agenda. Is there any public comment on items not listed on the agenda? Item nine, executive director's report. I am Elaine Forbes, supports Executive Director. As we discussed on April 23rd, 2019, when this port commission voted to take action to approve the navigation center on a portion of Seawall Lot 330, I have worked with the uh city and the neighbors in the South Beach community to establish the Embarkadero Safe Navigation Center Advisory Group. The purpose of the group, which is a passive meeting body 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 with 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 uh provides the maximum uh reduction of impacts to the neighborhood, is safely operated, and provides a path out of homelessness to those it supports. So we have formed this group. The first meeting will be August 28th at 5 30. 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 immemorium, uh on a sad note, um, our port commission President Kimberly Brandon's father-in-law, Timothy's uh Tim Simon's dad, Joseph Floyd Bunny Simon of San Francisco passed away July 20th, 2019. His memorial service was held this last Friday, August 9th. Mr. Simon was one of San Francisco's most successful African American entrepreneurs. He was a civil rights activist who marched with Dr. Martin Luther King and amassed a string of successful businesses here in San Francisco. He was born in Lake Charles, Louisiana. He was known as Bunny to his friends and family, and also served as director of minority affairs for Action, a division of the Peace Corps.
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