San Francisco Port Commission Meeting – November 9, 2021

The Port Commission met on Tuesday, November 9, 2021, with President Brandon presiding. Vice President Adams arrived later, while Commissioner Burton was absent. The meeting covered the Executive Director's report, the consent calendar, an update on tenant delinquencies, FY2021 LBE contracting activity, and Waterfront Resilience Program presentations. The meeting adjourned at 5:38 p.m.

Approval of Minutes

• The commission approved the minutes of the October 26, 2021 meeting. President Brandon, Commissioner Gilman, and Commissioner Wuho voted yes; Vice President Adams was not yet present. The motion passed unanimously.

Consent Calendar

• The commission unanimously adopted the consent calendar by a 4-0 roll call vote (resolutions 21-47 and 21-48).
• Resolution 21-47 adopts findings under new state urgency legislation allowing remote meetings during the COVID-19 emergency for the next 30 days and directs the Commission Affairs Manager to agendize a similar resolution within 30 days.
• Resolution 21-48 makes permanent the program for retail fish sales from boats at Fisherman's Wharf, including a one-year pilot allowing the sale of live Dungeness crab.

Public Comments & Testimony

• No members of the public called in to speak during any public comment period on the agenda, including non-agenda items, the Executive Director's report, the consent calendar, and informational items 8A, 9A, 10A, and 10B.

Executive Director’s Report

• Executive Director Elaine Forbes reported on economic recovery and equity. She noted that international travel restrictions were lifted on November 8, 2021, and the port hopes to welcome 24 million visitors again.
• The port submitted a $115 million American Rescue Plan Act (ARPA) application to the State Lands Commission; the first tranche of approximately $60 million is expected in December. The port lost over 40% of its revenues due to COVID-19 and faced a 50% budget reduction.
• The port opened 88 Broadway, two new buildings with 100% affordable housing on port-owned land.
• Mission Rock is advancing: on November 10, the city will close on $64 million in community finance district bonds (the second issuance of the $3.7 billion bond authorization). A 16-woman construction training cohort, all San Francisco residents, recently graduated.
• A new nature exploration area opened at Heron's Head Park; the mayor introduced a resolution to accept a California Department of Fish and Wildlife grant for the Heron's Head Park Shoreline Resiliency Project.
• Commercial Dungeness crab season was delayed for the third year due to endangered whales and sea turtles.
• Commissioners praised the report and the port's recovery progress.

Discussion Items

8A. Delinquency Challenges in the Port’s Property Portfolio

• Deputy Director Rebecca Benissini reported that the port has $24.5 million in outstanding tenant delinquencies, about seven times the 2019 level. Percentage rent tenants owe $8.7 million; commercial, industrial, and open land tenants owe $7.2 million across 132 agreements; parking and miscellaneous agreements account for the rest. Twenty-four agreements each owe over $250,000, totaling $17.1 million.
• Staff proposed a goal of collecting as much delinquent rent as possible in an efficient, transparent, and fair manner, using a checklist (A–J) to guide settlement decisions. Settlements above $25,000 require Port Commission approval.
• Commissioner Wuho recommended pursuing a time-limited increase in the Executive Director’s delegated settlement authority through the Board of Supervisors in parallel with the checklist process. He also requested more detail on a write-off policy and lease language requiring financial disclosure from delinquent tenants.
• Commissioner Gilman supported the approach and suggested adding geography and neighborhood-serving considerations to the checklist. President Brandon said some checklist items, such as pursuing grants/loans and remaining open, should be mandatory minimums.
• Staff said the next step is to return with the first settlement agreement(s), in open or closed session, rather than a formal policy.

9A. FY2021 Contracting Activity and Local Business Enterprise (LBE) Strategy

• Contracts and Procurement Manager Stephanie Tang reported there were 1,022 certified LBEs as of June 30, down 211 firms (17%) from the prior year, including a loss of 14 African American-owned and 14 Asian-owned firms.
• In FY2021, $6.9 million was awarded in 12 contracts; 9 (70%) went to LBEs, including $1.1 million to African American-owned firms. Payments to LBEs totaled about $9 million, or 30% of payments. Excluding a large dredging contract at Mission Bay Ferry Landing, construction payments to LBEs were 70%.
• Private developments at Pier 70 and Mission Rock have cumulatively awarded $124 million to LBEs, including $22.4 million to Black-owned LBEs.
• Mission Bay Ferry Landing was completed 11 days early and $1.6 million under budget. Two LBE-related non-compliance memos were issued: one for Dutra dredging and one for BAE Urban Economics.
• The Board of Supervisors unanimously approved changes to Chapter 14B of the Administrative Code (mayor’s signature expected within the week), including increased firm-size thresholds, higher penalties, faster subcontractor payments, and expanded reporting.
• Senior Community Development Specialist Tiffany Tatum highlighted a success story: Two Rivers, a minority woman-owned firm, won a port contract and later two additional city contracts after staff coaching. She also described a planned construction management certificate program with City College of San Francisco and OEWD, funding 25 slots for Black and brown single parents.
• Commissioners asked about the drop in certified firms and stressed prompt payments to contractors. They praised the staff’s passion and outreach.

10A. Waterfront Resilience Program – Early Projects Framework

• Resilience staff presented key findings: port-wide sea level rise plus a 100-year flood event could affect approximately 14,000 residents, wastewater systems serving almost 600,000 residents, 360,000 regional commuters, and 25 miles of Muni and cable car tracks.
• Earthquake risk is high north of the Bay Bridge and very high in most bulkhead wharves; liquefaction could damage the Embarcadero roadway. A disaster response exercise with over 60 organizations confirmed the importance of deep-water berths and the Embarcadero roadway.
• Proposition A provides $425 million, but the early projects alone could exceed several billion dollars. Staff are coordinating with SFMTA, SFPUC, Planning, DEM, Public Works, and other agencies.
• Community engagement reached over 700 people through 30 presentations with community-based organizations.
• Staff will return in December with detailed early project recommendations, including options for a coastal flood defense “line of defense.” Elevation increases of 2 to 7 feet may be needed.
• Commissioners praised the collaborative, proactive approach and looked forward to the December presentation.

10B. Waterfront Resilience Program – LBE Subcontracting and Equity Actions

• Administrator Carlos Cologne reported that CH2M Hill’s LBE payments increased from 12.1% in September 2019 to 22.9% by September 2021. Since the 2019 contract amendment, 32.5% of payments went to LBE firms. Approximately 10% went to minority-owned firms when including those self-identifying as WBEs. Phase one actual LBE participation was 23.4%; phase two task authorizations were 67% LBE.
• Civic Edge’s communications contract ended August 20, 2021, with 43% LBE participation, exceeding the 36% requirement; including Civic Edge as an LBE, participation was 87.9%.
• Commissioner Gilman asked for clarity on how LBE percentages were calculated, and President Brandon requested that future reports include CH2M’s strategy for increasing minority and women subcontracting. Staff said they would follow up.

Key Outcomes

• The commission unanimously approved the consent calendar (Resolutions 21-47 and 21-48) on a 4-0 roll call vote.
• The commission approved the October 26, 2021 minutes.
• The commission received the Executive Director’s report and all informational presentations; no formal actions were taken on informational items.
• Staff will return in December with: (1) the first settlement agreements under the new delinquency checklist process, (2) a detailed Waterfront Resilience Program early projects presentation, and (3) updates on the LBE and resilience equity work.
• The commission directed staff to consider a parallel path to raise the Executive Director’s delegated settlement authority via the Board of Supervisors and to incorporate additional equity and geography factors into the delinquency settlement checklist.