Port of San Francisco Commission Meeting (February 2026)

The Port Commission held a public meeting in February 2026 featuring: (1) an Acting Executive Director report including a walkthrough of the Port’s 2026–2030 Strategic Plan; (2) approval of a new Fisherman’s Wharf-area lease for Dillon’s Tours, Inc.; (3) informational presentations on pier/wharf structural conditions (Rapid Structural Assessment program), broader facility conditions, and the proposed FY 2026–27 and FY 2027–28 biennial operating and capital budget. The meeting concluded with new business items including a request for an update on the Waterfront Restaurant closure and a suggestion to plan a ceremonial “rededication” of the Port.

Public Comments & Testimony

• No public comment was offered on items not listed on the agenda (Item 5) and there were no phone callers.
• Acting Executive Director’s Report (Item 6K): No public commenters in the room or on the phone.
• Rapid Structural Assessment Program (Item 8A):
  • Ellen John, Co-Chair, Maritime Commerce Advisory Committee: urged the Port to share structural condition information with regulatory agencies (e.g., BCDC, Army Corps, Regional Water Board) to support permitting/renewal of regional permits and demonstrate the need for timely approvals.
• Facility Conditions (Item 9A): No public commenters.
• Biennial Budget (Item 10A):
  • Ellen John, Co-Chair, Maritime Commerce Advisory Committee: emphasized not losing momentum from the multi-year Waterfront Plan effort; highlighted the importance of the Historic Core IFD; and encouraged more use of financing tools and private-sector capital (including lessons from prior P3/P4 discussions and broader muni-bond market activity).

Discussion Items

Acting Executive Director’s Report & 2026–2030 Strategic Plan (Item 6K)

• Speaker: Michael Martin, Acting Executive Director, Port of San Francisco.
• Key updates (February 2026 context):
  • Recognized the 100th anniversary of Black History Month and Lunar New Year, including planned staff events such as a film screening/discussion and ceremonial lighting of the Pier 43 Arch.
  • Reviewed waterfront operations during the Super Bowl week (Thursday–Saturday build-up) with major public activations (e.g., concerts at Pier 80, Ferry Building light shows, Pier 39 programming, Fisherman’s Wharf activities) and private events (e.g., concerts at Pier 48 and Pier 29). He thanked Port divisions (maintenance, maritime, security, engineering, real estate) for coordination with the City, NFL, Bay Area Host Committee, tenants, and event organizers.
  • Noted a “double header” of cruise calls including the Queen Mary 2.
  • Highlighted launch of a new overnight cleaning crew (debuted the prior Sunday night), enabled after hiring slowdowns eased, credited to Tim Felton and the Maintenance Division.
• Strategic Plan overview (2026–2030):
  • Mission/vision unchanged from prior plan.
  • Introduced/outlined strategic goals:
    • Exceptional Service (new category): safe/clean streets and parks; modernize systems/procedures; expand impact via partnerships.
    • Economic Growth: invest in maritime facilities and public spaces; increase activations/arts/culture; targeted investment in Fisherman’s Wharf; support housing (e.g., Mission Rock, Pier 70, Seawall Lot 330); advance a secondary electrified cruise terminal at Pier 80; pursue a Blue Economy incubator; continue positioning for renewables/offshore wind despite federal shifts.
    • Evolve: enhance waterfront experience; adapt historic facilities; improve waterfront access/transit (including water transit); enhance parks/open spaces; continue southern waterfront public-realm investment using set-aside lease revenues; pursue grants.
    • Resilience: protect against flooding, seismic risk, climate change; seek congressional action on the Army Corps recommended plan; continue near-term flood/seismic projects; expand “engineering with nature” (e.g., living seawall pilots); noted staff were in Washington, D.C. pursuing federal progress.
    • Sustainability: leverage EPA Clean Ports grant; transition Port fleet to zero-emission vehicles by 2030; study zero-emission trucking at terminals; improve bay health and biodiversity; support innovation.
    • Equity: reaffirmed equity focus internally and externally; workforce development/internships; employer-of-choice goals (retention, promotion, cultural competency).
    • Public Engagement: improve communication and ongoing stakeholder engagement; noted efforts like growing Port social media.
• Commissioner discussion (positions):
  • Commissioner Lee praised the report, emphasized the importance of cleanliness and communications post-pandemic, and expressed support for opportunity and investment (especially on the southern waterfront).
  • Commissioner Adams praised Port performance and “meeting the moment,” highlighted city leadership energy, and expressed support for continuing offshore wind exploration and creative partnerships.
  • Vice President Engblum praised cultural acknowledgements and Super Bowl exposure; asked how to leverage marketing momentum; suggested strategic plan should be actively used as a “call to action” for partners; proposed considering whether “sustainability” and “resilience” should be combined for clarity, and whether “public engagement” should be reframed toward stronger community roles.
  • Additional commissioner remarks supported equity commitments and suggested considering “collaboration” language for public-facing work.

Lease Approval: Dillon’s Tours, Inc. at 490 Jefferson Street (Item 7A, Resolution 2606)

• Staff presenters: Don Cavanaugh, Senior Property Manager (Northeast & Fisherman’s Wharf).
• Applicant/sponsor: Dylan David, Owner, Dillon’s Tours.
• Project/lease description (factual terms stated):
  • Proposed new lease L-17378 for approximately 1,505 sq. ft. on the ground floor of 490 Jefferson Street.
  • Term: 5 years with one 5-year option.
  • Base rent: $6,000/month (~$4/sq. ft.) with 3% annual increases.
  • Percentage rent: 5% of gross revenues over a $900,000 breakpoint (stated as “on top of the base rent”).
  • Includes one van parking spot in the “mural area” for tour operations/visibility.
  • Port work limited to hazardous materials remediation (non-friable asbestos, mold, lead-based paint); remediation expected to begin in ~1 week and take ~3 weeks (if all goes well).
  • Proposed tenant improvement allowance: $320,000 (stated as $213/sq. ft.) covering improvements plus work Port otherwise would have done.
  • Remaining space noted as still available for lease: 12,268 sq. ft. second-floor office space and a 692 sq. ft. annex.
• Dillon’s Tours statement (position/vision):
  • Dylan David described being SF-born/raised, building a local tour business over 20+ years, and expressed a position that 490 Jefferson is an opportunity to bring more people to Fisherman’s Wharf and support local restaurants and nearby services.
• Commission discussion:
  • A commissioner asked about helping connect tour activity to local waterfront businesses (as distinct from nearby chain businesses); staff responded the Port’s goal is to support its tenants and suggested future wayfinding/signage could incorporate the business.
• Vote/decision:
  • Approved unanimously (voice vote; no numeric tally stated).
  • No public comment in-room or by phone.

Rapid Structural Assessment (RSA) Program: Pier/Wharf Structural Conditions (Item 8A)

• Presenter: Matt Bell, Acting Chief Harbor Engineer.
• Purpose & methods:
  • RSA program exists to safely operate overwater structures through regular inspections and timely load restrictions/mitigations.
  • Port has over 7 million sq. ft. of piers/wharves built over water (compared by staff to the footprint of Yerba Buena Island).
  • Inspections use boat access at low tide; visual inspections prioritize documenting damage areas (rapid approach).
  • Uses Port’s green/yellow/red operational coding and ASCE guidance; underwater inspection used as needed.
• Program updates since last presentation (Feb 2022):
  • Program had fallen behind due to COVID; staff reported it has caught up.
  • Added standardized report templates; added an overall system rating for each facility (6 best to 1 worst) to guide reinspection frequency.
  • Prioritized facilities where the Port is responsible; long-term master lease facilities (e.g., Ferry Building, Pier 39) to be revisited for verification.
• Findings (statistics and key examples stated):
  • Port-wide weighted average substructure rating reported as approximately 3.5 (between 4 “fair” and 3 “poor”).
  • Regional snapshots included:
    • Fisherman’s Wharf: average rating reported as 3.8 (excluding Pier 39 and Pier 35 in that calculation, as stated).
    • Northeast Waterfront: rating reported as 3.4.
    • South Beach: rating reported as 3.1 (older piers).
    • Southern Waterfront (Pier 48–Pier 96): rating reported as 3.8.
  • Noted operational restrictions are often worse on bulkhead wharves (exposure to wave impact).
  • Cited examples:
    • Pier 54 was red-tagged the prior year; tenants were relocated in a controlled fashion due to long-running monitoring.
    • Exterior back section of the Agriculture Building red-tagged; building occupancy maintained with repairs; emergency egress modifications planned.
• Commission questions/discussion:
  • Commissioners emphasized prioritization given limited funding and asked about benchmarking vs. other ports; staff stated the Port likely has some of the oldest West Coast overwater reinforced concrete and suggested deeper participation with ASCE peer networks.
  • Commissioners requested coordination so engineering insights inform federal advocacy in Washington, D.C.

Port Facility Conditions (Item 9A)

• Presenter: Rebecca Benassini, Strategic Portfolio Manager.
• Key themes:
  • Reinforced the complexity of capital decision-making: urgent repairs must be considered alongside future shoreline elevation and resilience work to avoid expensive rework.
  • Provided historical context on construction eras (e.g., seawall and historic pier building boom from the 1880s–1930s; southern waterfront piers 80–96 built in the 1960s; Pier 39 built in the 1970s; recent investments like Crane Cove Park and Mission Rock openings).
• Condition highlights and statistics stated:
  • Roofs: Port maintains about 58 large roofs (often ~80,000 sq. ft. each). Since 2007, a waterproofing push improved conditions; staff reported about a quarter are in poor condition, a quarter in fair condition, and about half in good condition.
  • Utilities:
    • Medium-voltage electrical equipment at four locations identified as a key upgrade focus; distribution panels on finger piers often addressed on an emergency basis due to cost.
    • Sewer/water pipes under piers described as highly vulnerable (including debris impacts); goal to move pipes above deck when feasible.
    • Storm drainage described as fair overall, but significant investment needed to meet a state requirement of 100% trash capture by end of 2030.
  • Maritime berths: about 42 of 80 potential maritime berths are active/tenanted; needs include bollards, fenders, and utility access.
  • Harbors:
    • Fisherman’s Wharf Harbor: about 180 slips; needs include lagoon improvements, new ice machine, piles, stalls, electrical, ladders.
    • South Beach Harbor: about 700 recreational slips, fair-to-good; some planned investments (community rooms, lighting, gating).
  • Maintenance equipment: new pile-driving barge expected in roughly the next 12 months (as stated); four other barges in poor condition likely needing dry-docking; two passenger ferry floats also require future dry-docking.
  • Streets/parks: streets generally fair; Amador Street cited as worst condition with an improvement project underway; Port maintains about two-thirds of parks/open space, generally in good condition.
• Strategies/next steps (staff stated): prioritize structural integrity; waterproofing/roof renewal; invest where economic returns or risk reduction are highest; consider debt for high-return projects; integrate resilience; pursue public-private partnerships (rehab/activation); modernize asset systems; build in-house capacity (pile-driving barge).
• Commission discussion:
  • Commissioners asked about “alternative project delivery” and how to overlay market viability on prioritization.
  • Acting ED Martin noted delivery and contracting challenges; pointed to P3 approaches and resilience investments as potential pathways; referenced citywide interest in capital project delivery changes.
  • A commissioner also emphasized equity and historic underinvestment in parts of the southern waterfront as a lens alongside market viability.

FY 2026–27 and FY 2027–28 Biennial Operating & Capital Budget (Item 10A)

• Presenters: Megan Wallace, Interim Deputy Director of Finance & Administration; Max Gerebin, Budget & Data Analytics Manager.
• Mayor’s instructions (context): enterprise departments submit balanced budgets without impacting General Fund departments; citywide deficit context emphasized.
• Operating budget (numbers stated):
  • Proposed operating expenses: $131.2M (FY 26–27) and $134.6M (FY 27–28).
  • Net operating income reported as just over $17M (FY 26–27) and $16M (FY 27–28).
  • Revenue projections described as moderate growth of about 2% year-over-year.
  • Max presented three revenue scenarios (high/base/low) and noted the budget uses a conservative base-case.
• Capital budget (numbers stated):
  • Proposed capital budget: $86.2M (FY 26–27) and $37.4M (FY 27–28).
  • Biennial capital budget total stated as $123.6M.
  • Major funding source is Harbor Fund fund balance; notable one-time support includes Historic Core IFD (staff described this year as the first appropriation of accumulated funds; expected to stabilize around $1M annually thereafter) and $1.3M interest earnings from the 2012 Parks Bond program.
• Trends/risks discussed:
  • Net operating income gap is projected to narrow in out-years as expenses rise faster than revenues.
  • Operating expenses are heavily personnel-driven; salaries/benefits plus work orders comprise about 80% of operating budget.
  • Five largest work orders account for about 72% of total work orders (City Administrator property insurance; Fire Department fireboat ops; PUC; City Attorney; SFMTA).
• Operating staffing changes (numbers stated):
  • Net +8 FTE (at full implementation in the second year), adding approximately $6.1M to the existing budget.
  • New operating requests total $1.6M and include: 1 construction inspector; 2 security guard positions; 3 IT positions; 1 HR position.
  • Substitutions total $0.9M with no net staffing increase; “other actions” include $3.6M for temporary staffing and management compensation plan adjustments.
• Capital staffing changes (numbers stated):
  • Proposed 7 new capital positions, offset by 1 eliminated capital position (described as recategorized to operating).
• Policy compliance (as stated):
  • Operating reserve policy (minimum 50% of operating expenses): budget reported at 111% (FY 26–27) and 96% (FY 27–28).
  • Southern Waterfront Beautification Fund: calculated at 6% of projected Southern Waterfront revenues; staff noted the number was updated to ~$1.4M and proposed to pre-fund in the first year; fund balance reported as about $10M remaining for other beautification activities.
  • Capital policy: capital investment reported at 70% and 36% of operating revenues (by the Port’s calculation method described).
• Notable capital priorities discussed:
  • Significant investment to remove dry docks (risk mitigation and enabling future evolution of the waterfront).
  • Fisherman’s Wharf Forward and state-of-good-repair work including a stated $35M investment in the Pier 45 West Apron.
  • Investments to modernize core systems and improve asset data/portfolio management.
• Schedule/next steps (dates stated):
  • Budget submission due February 23 (per administrative code).
  • Port Commission scheduled to seek formal approval February 24.
  • Capital Planning Committee: April 20.
  • Mayor to introduce budget to Board of Supervisors by May 1.

New Business (Item 11)

• Commissioner requested an update on the Waterfront Restaurant closure; Acting ED Martin confirmed it closed and staff are moving forward to offer it and would return with an update.
• Commissioner Adams proposed a ceremonial “rededication” of the Port of San Francisco in 2026 as a public-facing commitment to future direction; staff agreed to follow up on what is envisioned.

Key Outcomes

• Lease approved unanimously: Resolution 2606 approving Lease L-17378 with Dillon’s Tours, Inc. at 490 Jefferson Street (5-year term + one 5-year option; $6,000/month base rent; 5% percentage rent over $900,000 breakpoint; $320,000 tenant improvement allowance).
• RSA inspection program update received: Port reported inspections are caught up (post-COVID backlog), and provided a port-wide weighted average structural rating of ~3.5 (6 best–1 worst).
• Facility conditions briefing received: roof condition distribution reported (about 1/4 poor, 1/4 fair, 1/2 good); stormwater compliance deadline highlighted (100% trash capture by end of 2030).
• Biennial budget briefing received: proposed operating expenses $131.2M and $134.6M; proposed capital budget $86.2M and $37.4M; operating reserve compliance reported at 111% and 96%; net +8 FTE in operating staffing changes; commissioners encouraged exploration of financing innovation and alternative delivery methods.
• Adjournment: Meeting adjourned at 6:09 p.m.