Please be advised that the chair may order the removal from the room for any person using cell phones or any other some producing electronic devices. Belief spee advised that a member of the public has three minutes to make pertinent Public Comment on each agenda item unless the Port Commission adopts a shorter period on any item. Public comment on items not listed on the agenda is item eight. Is there any Public Comment on any items not listed on the agenda . Seeing none, Public Comment is closed. Item nine a. Is executive directors report. Good afternoon. I am the boards executive director. I have one item to report on today and to ask for an in memoriam. I have discussed on april 23rd , 2019, when the Port Commission voted to take action to approve the Navigation Center on a portion of will lot 330, i have worked with the city and the neighbors in the south Beach Community to t2 establish the embarcadero safe Navigation Center advisory group. The purpose of the group, which is a password which is meeting 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 would 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 provides the maximum reduction of impacts to the neighborhood, is safely operated, and provides a path out of homelessness for those it supports. We have formed this group. The first meeting will be august 28th at 5 30 p. M. 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 in memoriam, on a sad note, our Port Commission president s fatherinlaw passed away july 20th, 2019. His Memorial Service was held list past friday, august 9th. He was one of the most successful africanamerican entrepreneurs. Is a civil rights activist who marched after Martin Luther king , and a man with a string of successful businesses in San Francisco. He was born in louisiana. He was known as bunny to his friends and family, and also served as director as my note of Minority Affairs and action in debating in the peace corps. He is survived by his loving companion and wife for over 50 years, his brother, children, and many grandchildren. It is with our condolences that we give our Commission President and the entire family. We ask that we close the meeting in his honor. Thank you. Is there any Public Comment on executive directors report . Come on up. Good afternoon, commissioners is this working . Okay. My name is toby and i am the cochair of the Central WaterfrontAdvisory Committee. The Advisory Committee has been involved with the Navigation Center ever since it was first conceived, and there have been a lot of pros and cons with regard to it, but now you have appointed or you are in the process of appointing an advisory group, which i think is a very, very good idea because i think all of the people who are going to be on this committee have the intention of doing the best possible job. We all know that, right now, San Francisco is in a homeless crisis, and it is our hope, or it is my hope that we will be able to make a difference there. I have some familiarity with Navigation Centers, and i will bring that knowledge that i have two hour meetings, and if the stars align in our favor, we will do a very good job, and lots of people will be helped, and that is the intention. We will keep elaine posted. Thank you very much. So has the committee been formed it has. How many members . Theres 12 members. Many members of neighborhoods, there is a representative from a business in the area, and there are two members with lived experience, formerly homeless, and i can circulate that to the commission. Many of the members are the same as the group that we were informally meeting with as the city did outreach on the proposal. It is a group that we have been working with some time sometime, so some of the names will be very familiar to you. It is posted on our website. Thank you. Elaine, has the department of homelessness chosen an operator, yet, or are those seats vacant . I believe there is a list of providers that is available for them to choose from, but im not aware that they have made a selection at this point. Thank you. Any other questions . Okay. Item ten a is request approval of amendments regarding cruise ship passenger fees, to increase the fees and provide for a volume discount. Good afternoon, commissioners my name is michael. Im the assistant director of the maritime division. This presentation is to seek your approval of an event amendment support terror number 5 regarding cruise ship passenger fees support tariff number 5 regarding cruise ship passenger fees which will increase the fees and provide for a volume passenger discount. U. S. Public ports are required by law to file a port tariff with the Federal Maritime Commission outlining the rules, regulations, and rates for use of port marine terminals and wharfs. The port of San Francisco publishes tariff number 5 for this purpose. The tariff is updated periodically to reflect changes in regulatory programs, risk assessments, and marketplace rate increases. The port of San Francisco is a member of the California Association of port authorities, which is comprised of the 11 publicly owned commercial seaports in the state. Any changes to port tariffs are reviewed by the membership for consistent application of rules and regulations. With your approval today, we will notify the ports of the amendments to our tariffs. The port of San Francisco tariff number 5 is a 90 page document posted online on the ports website. The tariff item changes we are proposing for your consideration are in section ten, item 1,000, bundled port fee for crews ships the proposal is to increase the passenger fee from 18 to 19, effective january 1st, 2020. This applies to all crews passengers in barking, disembarking, or in transit. The current passenger fee of 18 was established on january 1st , 2015, inch and in conjunction with the james r. Herman crews terminal at. Twentyseven and has not been adjusted since then. The passenger fee is a bundled fee which includes passenger warpage, dockage for the first 24 hours, and stores warpage. Before 24 7. Twentyseven opened, it had been 12 per passenger. The increase to 18 was to generate sufficient general revenue to offset the hundred Million Dollar investment in the new terminal. The proposal before you today also includes future increases to 20 on january 1st, 2021, and to 220. 60 on january 1st and to 20. 60 on generate first, 2020. Beginning in 2020, to incentivize increase crews business at the port of San Francisco, a volume discount will be implement it as part of the port tariff or any and all corporations and affiliated brands that exceed 240,000 passengers in a given year. The Volume Discount Program is based on new business expected in 2010 feet from the ports primary crews mac client, witches average 60 cruise ship crawls and 240,000 passengers per year since 2015 this client is adding 28 calls and approximately 112,000 passengers at the port of San Francisco next year. Using 240,000 passengers as the baseline, the port will offer a discount on passenger fees above this figure as incentives to increase future cruise volumes. It is customary for major ports to offer financial discounts to highvolume customers, and by adding this feature to our port tariff, the port of San Francisco will be following an established industry practice. The expected additional net crews revenue in 2020 is 2 million. With a discount being approximately two and a half of the overall revenue for this client. In the five years before the opening of the cruise terminal at. Twentyseven, the port of San Francisco averaged 61 cruise ship calls cruise ship calls. And the five years since it opened, the annual average has opened to 81 it ship calls and 288,000 passengers, increases of 33 and 58 , respectively. This tremendous growth can be attributed to several factors, including the new cruise terminal, the Excellent Service provided by the terminal operator, metro cruise services, and the International International longshore and warehouse union. Yearround homeport sailings, and larger ships. This year, the port is on track to establish records records inc. Shipped calls at 85 and passengers, 297,000. The forecast for next year is even better. With 116 calls, and 390,000 passengers expected, more than 30 growth in each category over this year. The major difference is the entrance of Carnival Cruise line into the market for the first time ever, with 28 homeport calls of carnival miracle. The port secured this new business by promoting the many benefits of cruising in this region. The anticipated revenue from passenger fees will increase from 5. 3 million this year, to 7. 2 million next year, inclusive of the volume discount besides San Francisco, the other major public crews ports on the u. S. West coast are, by volume, seattle, los angeles, and san diego. Each port is different in terms of ship and passenger volumes, destinations, cruise types and rates. By far, seattle is the largest of the ports, hosting 1. 2 million passengers this year for summer cruises to alaska, featuring two new terminals with a third one out for bid. The average bundled passenger fee is 29. Los angeles will welcome 615,000 passengers at its existing terminals in san pedro. These are primarily short cruises of seven days or less to mexico, and a few 15 day cruises to hawaii. The bundled passenger fee is 14 san diego expects 338,000 passengers this year at its two downtown terminals. As with l. A. , most of the voyages are three, four, and seven days to mexico. The san diego bundled fee is 9. As stated, the port of San Francisco expects just under 300,000 passengers this year. We are a yearround crews ports, with alaska cruises in the spring and summer, and california coastal, mexico, and hawaii itineraries in the fall and winter. Our bundled fee is currently 18 higher than Southern California and lower than seattle. This tariff amendment supports the stability component of the ports Strategic Plan by increasing annual revenue to support capital improvements, particularly those at. Particular those at 27. Upgrades at both terminals, 35 roof repairs, and 27 escalator installation. There is an engineering mooring analysis currently underway to clarify the existing conditions and limitations at both crews terminals, as well as to determine the feasibility of improvements to accommodate larger ships. As for the California Environmental quality act, these proposed tariff amendments are not considered a project, and therefore not subject to ceqa review. Commissioners, thank you for the opportunity of addressing you today. This concludes my report and i respectfully request your approval of the proposed amendments to the port of San Francisco tariff number 5 with respect to cruise ship passenger fees. Im available to answer any questions that you may have. Thank you. So moved. Second. Is there any Public Comment on this item . Seeing none, Public Comment is closed. Commissioner gilman . I want to say thank you for the report, it was very thorough it is exciting to see our cruise business will increase, and im supportive of the item. I am supportive of the item. Good report, mike. I see andre is here. I guess i have to be supportive, i am the president. [laughter] but the fact is, i would like to see San Francisco get up to a million passengers a year. I was just recently up and you know, alaska, and you see 30,000 people and they have one they have oneway 6 million passengers a year. I think it really helps our waterfront and everything like that. We have 30 million tourists a year that come to San Francisco. Where the second largest attraction, other than disneyland so we want to continue to give San Francisco the exposure that it deserves and i know if i had a chance to get office san pedro or San Francisco, there is no choice. San francisco is a worldclass city and a beacon of light. I am totally in support of it. Thank you. Thank you so much for this report. I just have a question. The volume incentive discount, is this the first time we are doing this or have we historically done it . This is the first time we are putting a discount like this. What were doing is putting it in the port tariff so it applies to the large client that it is applicable to right now, but we are hopeful that other cruise lines that are coming to the west coast with large fleets, it would be applicable to them if they got up to that level. Great. And then the fee increase, im just wondering why in 2022 it is only a three a 3 increase went other years it is over 5 . We came up with the fee basically, we raised the fee by 50 from 12 to 18 in 2015. What has happened over the past five years is we have established 27 particularly, and 35, but as a very high ranking destination. The crews lines have seen it in action, the ratings on the passengers are very high. We wanted to get that established first, and now what we are doing, by the fee increases that we are putting in over the next three years, it would be equivalent to as if we had been doing a 2 increase every year, so by 2022, we will basically be equal to having had a 2 cbi throughout the opening of the new terminal. And then after that, we are just increasing 2 a year . Just wondering. Thank you. I really appreciate that. All in favor . Aye. Resolution 1932 has been approved. Thank you. Item 11 a is informational presentation and developed agreement and the form of a ground lease with an initial 50 year term and 16 year extension option would tea ck broadway l. L. C. For the lease and development of 192 room hotel, a dinner theatre, and approximately 14,000 square feet of public open space, and similar uses at sewell lot c. Will lot 3. 3 333 323 and 324, located on the west side of embarcadero. Good afternoon. My name is ricky. I am the develop manager with the real estate and Development Edition of the port. I am glad to be participating in this recent addition along with our staff who have been involved in the negotiations with the developer team. Next is the outline of my presentation. This slide shows the outline of this presentation. [indiscernible] our assistant Deputy Director of development will be making this presentation. We will invite you to make a few remarks on behalf of the rest of the development team. As indicated in this outline, we are going to be very brief. I will cover each of the items and the financial projections and next steps. [indiscernible] this is the corner of broadway and embarcadero. It consists of four passthrough his through lot 323 and 324. There is a distant right of way in these two passthrough his. Zoning, building height, all these details are in the staff report. At this time i will not go into all those details. The project overview, the design is a popular dinner theatre performing in a historic tenant. It was a fixed show for many years on the waterfront. You provided live music, comedy, and entertainment. It was located on part of 27 and 29 under a lease with the port from 1999 until 2011. The lease was mutually terminated to accommodate the americas cup. As part of that meat will termination, the port agreed to allow them to come to the waterfront if they are able to satisfy some conditions to relocate to a portion of lot 324 teatro attempted to use a temporary structure but that location was not supported by the community because it was no not compatible with the historic district. As a result, they went out to get Additional Development help. They came to the Port Commission , and of course, we could not do soft engagement with them without competitive solicitation and process. He directed us to go to the board of supervisors to get our direction. The board of supervisors as to enter into an soft engagement with the developer. This gave way for the port to authorize exclusive agreement with the developer. So [indiscernible] the developer is making a whole lot of effort to move the development forward. Theyre acting on the Performance Benchmark required. One of the best benchmarks was the submission of the development concept. As you can see on this slide, the initial proposal back in 2015 included what is shown on this slide. Currently the proposal is the one being shown on the right column before you. What has changed was elimination of the ground for the below grade floor area, or the basement, and the number of [indiscern