San Francisco Port Commission Meeting Summary – February 25, 2020
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San Francisco Port Commission Meeting Summary – February 25, 2020
The Port Commission met on February 25, 2020, at 10:30 AM to discuss and vote on several items, including the biennial capital budget, an informational presentation on South Beach Harbor, a 99-year ground lease for Parcel E2 at Pier 70, and approvals for the California Barrel Company mixed-use project. The meeting also included updates on the city's COVID-19 preparedness and new business scheduling.
Public Comments & Testimony
- Cynthia Gomez (Research Analyst, UNITE HERE Local 2) spoke in support of the California Barrel Company project, noting a signed agreement guaranteeing a fair process for hotel workers to unionize and citing benefits such as affordable healthcare and living wages.
- Keith Goldstein (Chair, Eastern Neighborhoods CAC; Petro Booster's board member) expressed strong community support for the California Barrel project, highlighting 30% affordable housing, preservation of Building A, a homeless prenatal program, two childcare centers, and a 25,000-square-foot YMCA.
- Bruce Huey (Dogpatch resident) also supported the project, emphasizing broad community backing.
Discussion Items
- Item 11: Biennial Capital Budget (FY 2020-21 and 2021-22) – Deputy Director Katie Patruccioni presented the capital budget, totaling $84.278 million over two years ($53.5M in FY2020-21 and $28.3M in FY2021-22, later revised to $54.689M and $29.589M, respectively). The budget includes an additional $2.5 million for the Southern Waterfront Beautification Fund. Commissioners questioned prior appropriations, project completion tracking, and the status of the Amador Street sewer project (which has $7 million set aside but remains in design). Staff committed to scheduling an informational item to review capital project progress and past appropriations. The resolution was approved unanimously.
- Item 12: Informational Presentation on South Beach Harbor – Harbor Master Joseph Monroe reported that the 700-slip marina has achieved a net positive cash flow of $1.4 million, up from a net negative of $500,000 since the Port took over in 2012. The harbor’s bond debt has been paid off, and occupancy is at 90% (with transient slips making up the remainder). Proposed capital improvements include a $3.5 million North Guest Dock replacement and a $300,000 baffle wall repair. The Port is working with BCDC to amend permit requirements for public access, potentially reducing a $10 million obligation. Commissioners praised the harbor’s financial turnaround and discussed opportunities for larger vessels.
- Item 13a: 99-Year Ground Lease for Parcel E2 at Pier 70 – Rebecca Benassini presented a request to authorize a lease below the downmarket threshold ($11.3 million) at an appraised value of $5 million. The appraisal used residual and sales comparison approaches, with the residual analysis yielding a negative value. Staff recommended tying Parcel E2 (281 rental units, 20% affordable) with Parcel A (office, appraised at $66 million) to accelerate the office closing (within 180 days) and avoid a dispute process. Commissioner Macris opposed, presenting his own analysis valuing the parcel at $28.2 million based on comparable sales. He argued the lease should be structured as a standard 30-year lease with annual payments to generate over $100 million over 99 years. Other commissioners, after hearing from peer review appraiser Tim Rundy, supported the staff recommendation, noting that the rental market is currently infeasible for such projects and that tying the parcels together provides a net benefit. The resolution passed 4 to 1.
- Item 13b: California Barrel Company Mixed-Use Project – David Be presented the project on a 29-acre former power station site, including 2,600 residential units (30% affordable), 1.5 million square feet of office/life science, 240,000 square feet of hotel/residential, 100,000 square feet of retail, and 5 acres of parks. The Port’s role involves consenting to the development agreement, approving a lease for port lands (with an option to impress public trust easement), and delegating authority for MOUs. Public comment was overwhelmingly supportive. The resolution was approved unanimously.
Key Outcomes
- Item 11: Capital Budget – Approved unanimously (Resolution 2021).
- Item 12: South Beach Harbor – Informational; no vote required.
- Item 13a: Parcel E2 Ground Lease – Approved (4-1; Commissioner Macris opposed). Staff authorized to offer Brookfield the option to transact on E2 at $5 million, contingent on expediting Parcel A.
- Item 13b: California Barrel Company – Approved unanimously (Resolution 2020-2012).
- New Business – Scheduled an informational item to review capital budget achievements and open projects.
Meeting Transcript
President Willie Adams. Commissioner Gail Gilmer. Here. Commissioner Victor Macross. Commissioner Durin Hope here. All in favor? Item three public comment and executive session. Is there any public comment on executive session? Executive session. Well, should we go into executive session? Conference roll property negotiator. The global situation is really changing quite rapidly. Mayor Breed, the Department of Public Health, and the Department of Emergency Management declared this local emergency really to help us prepare better for the city to coordinate and respond to a potential outbreak. The declaration of a local emergency allows for much faster mobilization of city resources, accelerated emergency planning, streamlined staffing, and coordination across the city. It also allows the city to be reimbursed from the state and federal governments, and it raises awareness throughout San Francisco about how everyone can prepare in the event that COVID 19 appears in our community. Also, Santa Clara and San Diego counties have taken the same action, similar declarations to bolster their preparedness. I'd like everyone to note that cruise ships visiting the port of San Francisco come from domestic locations as well as from Canada and Mexico. The U.S. Coast Guard routinely reviews passenger records to document travel history of the vessel, passengers and crews. Good afternoon, commissioners. I am Katie Patruccioni, the Port's Deputy Director for Finance and Administration. And I am here this afternoon to ask for the Commission's approval of the port's capital budget for fiscal years 2020-2021 and 2021-2022. Commissioners, you all had a number of questions for me and my staff two weeks ago. In response, we have provided you with additional information to help with your consideration of this budget request. That information includes a list of all projects that were submitted for consideration in the five-year CIP, a list of currently appropriated capital projects with balances, a more detailed description of the forced ranking process that staff used to select projects for the CIP, and additional information about the Southern Waterfront Beautification Fund. So to address those two final items, um, just to give you a little more information on how we prioritize projects for inclusion in the five-year capital improvement program. The deputies met as a group to review the projects, and we used a forced ranking process. And so what this was was every single project that we considered, we needed to decide whether that project was number one. When we came to the second project, is that project number one or is it number two? The third project. Number one, number two, or number three, so on, and we made our way through 49 projects, and at the end of that process came up with a ranked list. We ranked our life safety projects first as a group on its own, uh, and then we reviewed and ranked all of the other projects and considered items such as a project's useful life, whether or not it had the potential to generate revenue, what the return on investment would be, the importance to the port's public trust, whether or not a project could feasibly be delivered, and the urgency of that project. Finally, just a little bit more information about the Southern Waterfront Beautification Fund. When staff reviewed the allocation to the beautification fund, we realized that the original appropriation request did not include a set aside for the revenue that we expect that we're going to collect in the Southern Waterfront over the next two fiscal years. So as a result, we revised both the capital budget request and the staff report to assume that there will be an additional allocation of 2.5 million dollars over the next two years to conform with the port's southern waterfront beautification policy. So those are the highlights of the additional information and the changes that we made, and I am glad to answer questions from the commission. Thank you. So move. Second. Commissioner public comment. Oh, I'm sorry, is there any public comment on this item? We haven't had any public comment. Is there any public comment on this item? Seeing that I have no further questions. Thank you. Uh Commissioner Macquis. I have no further questions. Thanks. Thank you for all the material that we asked for that was included in the packet. Commissioner Gilman.
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