Port Commission Meeting Summary - February 23, 2021

The San Francisco Port Commission met on February 23, 2021, to address the economic impacts of COVID-19, approve a capital plan and an exclusive negotiation agreement for Piers 38-40, discuss portfolio management strategies, and review legislative priorities. The meeting included reports from the Executive Director, public comments, and unanimous approval of key resolutions. The meeting was adjourned in memory of poet Lawrence Ferlinghetti.

Consent Calendar

• Resolution 2109: Approved the Port's Ten-Year Capital Plan for Fiscal Years 2022–2031 unanimously (Commissioner Gilman's vote was recorded after the fact).

Public Comments & Testimony

• Alec Bash (former Port employee) expressed strong support for the Piers 38-40 project, noting it would activate the waterfront and complement existing attractions.
• Byron Rhett (retired Port staff) supported the Exclusive Negotiation Agreement (ENA), highlighting potential equity opportunities for Bayview food businesses at Pier 40.
• Randall Scott (Fisherman's Wharf Community Benefit District) thanked the Port for tenant support and emphasized investment in the wharf area.
• Pete Sitnik (restaurant owner, Water Bar and Epic Steak) requested extension of the percentage rent program beyond April 2021, a longer payback period for deferred rent, and continuation of the shared spaces program.

Executive Director’s Report

• Elaine Forbes reported that Port revenues have fallen to 50% of pre-pandemic levels, with a projected loss of $50 million in FY2021 and $47 million over FY2022–2023 (a 21% reduction). Staff is working on an economic recovery initiative, including expenditure reductions and revenue enhancements.
• The Port received a $1.667 million grant from the California Ocean Protection Council for the Heron's Head Park Shoreline Resilience Project (the largest award in this round).
• Equity initiatives include: 10 micro-LBE emergency hardship loans (50% to Black-owned businesses), programming for Black History Month and Women's History Month, and a virtual movie club.
• Ming Young was hired as Assistant Deputy Director of Planning and Environment.
• No public comment was received on this item.

Discussion Items

Item 11A: Exclusive Negotiation Agreement for Piers 38-40

• David Beaupre presented the ENA with San Francisco Waterfront Partners III, LLC for a mixed-use development including commercial, retail, maritime, and public access uses. The project aligns with five strategic plan goals. Key terms: two-year ENA with three six-month extensions, transfer provisions requiring commission approval for investors >50% interest (except institutional investors, with ED approval and notification).
• Commissioner Gilman requested DEI metrics be developed within 4–6 months. Staff agreed.
• Simon Snellgrove and Wayne Perry (developers) expressed excitement and commitment to equity.
• Public comment reopened after initial closure; three callers spoke in support.
• Resolution 2110 was adopted unanimously.

Item 11B: Real Estate and Maritime Portfolio Management Strategies

• Rebecca Benissini provided an informational presentation on strategies to address current market conditions. Highlights:
  • Rent relief: 72 tenants applied (103 agreements), $700,000+ collected via repayment program, $412,000 in LBE loans.
  • 161 tenants (representing $7.7 million/year in rent) are not in compliance and have not applied for relief.
  • Proposed expanded authorities: increase mutual termination threshold from $10,000 to $15,000, develop uncollectible balance policy, and adopt leasing tactics (extended build-out, free rent months, tiered rents, blend-and-extend, maritime triple-threat reduction).
  • Market overview: office rents dropped ~7–8%, industrial holding steady, retail/restaurant very difficult, parking revenue shifted to monthly.
• Commissioner Wuho emphasized the need for long-term reimagination of space use and recovery triggers in tenant agreements.
• Commissioner Gilman requested collection of demographic data on tenants (e.g., small business, minority-owned) to inform equitable policies.
• Commissioner Adams noted the importance of reporting and transparency on delegated authority.
• President Brandon stressed the need for systems to track delegated actions.
• Staff will return with potential action items in future meetings.

Item 12A: 2021 Federal and State Legislative Priorities

• Boris Celpine presented the Port's priorities: advocate for federal stimulus (American Rescue Plan) including port access to $350 billion state/local recovery funds, secure cruise industry relief, push for climate adaptation funding (e.g., FEMA, Biden infrastructure plan), and obtain a 3x3x3 waiver for Army Corps flood resilience study.
• State priorities include tracking SB 45 (climate bond), SB 1 (sea level rise planning), and zero-emission vehicle funding.
• Commissioners expressed strong support and willingness to lobby. Vice President Adams urged aggressive pursuit of federal funds given the new administration.
• No public comment was received.

Key Outcomes

• Minutes of the February 9, 2021 meeting were approved.
• Consent Calendar: Resolution 2109 (Ten-Year Capital Plan) adopted unanimously.
• Resolution 2110: Authorized ENA for Piers 38-40 (unanimous). Staff to return in 4–6 months with DEI metrics.
• Item 11B: Staff will incorporate commissioner feedback and bring forward proposed policy changes for approval.
• Item 12A: Commissioners will assist with advocacy; staff to update on legislative developments.
• New Business: Noted that staff will return in no less than six months on Piers 38-40 DEI program.
• Adjournment: The meeting was adjourned at 5:24 p.m. in memory of Lawrence Ferlinghetti, San Francisco's first poet laureate.