agreements that matched all the criteria that diane just talked about. i will try to walk you through the approval process. the approval before you today describes the major documents that are in play, and then talk about future approval that the documents will need for them to become effective. we are here to approve, after consideration and approval for ceqa findings any mitigation monitoring program for the eir that was completed and certified last night, we will seek your approval for a development and disposition agreement. then, i will spend most of my time talking about the dda, and i will describe a form of lease we have not yet completed. given the complexity of this project, finishing should happen

by now, and we will bring it back to you at a later agreement. there will also be a transfer agreement we will bring back to you for seawall lot 330. there will also be available later in this meeting for a tenant relocation plan. and there will be a resolution for establishing an infrastructure financing district. there will be some construction items. to talk briefly about what will ultimately happen, which is venue leases, these are short- term leases starting in 2012. really starting on a schedule that i'm showing on this slide, mostly 2012, some a little bit later, depending on the site. the mechanism for the event

authority to control these properties and do construction on the progress properties where construction is needed, and we will be talking about that. i will talk about that briefly in this discussion, and that will talk about that in the scope for work approval following me. these are the then new sites. a number of water venues, if you will, along the northern and central waterfront, and then and number of properties will be used for the team industrial bases. the dda, which is the main subject of the transaction approvals we are bringing today, has four primary purposes. the overall document that governs the obligations of the authority to improve core property. it governs the construction process, including the review

and approval of scopes of work. it governs the condition of delivering these venues, make sure that all the proper conditions have been completed and the work has been completed, and sets forth the means for reimbursing the event authority. i will try to walk through -- especially focusing on four. 133 essentially govern the short term process, starting now. four is really the legacy of how the agreement is memorialized. again, just to review obligations of both sides, the port's infrastructure obligations include removing pier 36, relocating shore power at the pier 27 cruise terminal,

and in addition, there was not a direct obligation to host a of a new agreement, it is now an obligation, as was discussed in that item, for the team to construct and complete the cruise terminal project by march 1, 2013. those are our obligations. this is why this document was complex and difficult to finalize. there are four different kinds of categories of infrastructure projects the authority will embark on. the first and a straight forward is authority infrastructure work. these are works that were agreed upon in the house agreement that or obligations of the authority. the rest are categories that they may elect to do. essentially, this authority infrastructure work category involves improvements to the appears that are necessary to stage the event -- improvements

to the piers that are necessary to stage the event. the cruise terminal team agreed it made sense for the contractor to do this work. they will secure that development, for that construction site from the moment we have approvals, the moment the cruise terminal building is done. finally, to do other work that was deemed necessary as regulatory conditions for approval and through mitigation measures that you will consider. there is a number of -- when you do projects this complex in water construction, there is a number of obligations that occur, and they are the port's obligations under authority infrastructure work. the first category of work that the authority can elect to do is additional work. this consists of dredging to accommodate spectator vessels. we are hearing there will be large yocks coming from around

the world to see us. some structure strengthening improvements. that is work that the authority can opt to do for up to 10 years. other categories are mainly different categories. the authority can elect to defer authority infrastructure work. they can be -- they can elect to do that for up to 10 years. that is, i believe, a new addition since the staff report, and we will correct it. they can also differ -- elect to defer additional work. they can opt for up to 10 years to defer major improvement. and then they can opt to do other work. essentially, just to be clear,

all these other categories, authority infrastructure work, or the deferred flavors are work that are eligible for rent credits or reimbursement. we will look at the cordele for performing $55 million, and brad will talk about the scopes of work and their cost estimates later. for that cordele, there will be two primary things that happen, long-term rights that will cruise the development authority. they will have up to 10 years to do the analysis and perform seismic upgrades as part of deferred additional worked additionalwork.

-- deferred additional work. as part of the process, getting this done, there will be cost recovery from the work they do. if they end up doing more than $55 million worth of work, which we expect they will, there will be a series of mechanisms they can recover money from here the first is other than the cordele -- core deal, we will bring an item before you informationally that we are release beginning the process of creating for these sites. that will be a source of repayment. interim leases. without making major improvements, there will still be read accruing from those properties, and that could be something that could be pledged for their repayments, and a

long-term lease at pier 29. this would be $6 per square foot base lease price. essentially, it would be another long term rights. host and a new agreement, especially the one that came before the port commission, had a very defined basket of rights and an expectation of the cost. as often happens, costs both in terms of the costs to work on property, and the extent of the project and other work that has to happen. because we have made an acknowledgement and understand the scope and work that the event authority is proposing, we have also essentially adjusted

what we think the rightful give- get is in terms of a recoverable basket of goods. finally, there was some acknowledgment between port staff of city in the event authority that the items we just laid out might not be enough to recover the cost represented by authority infrastructure work and deferred authority infrastructure work. we were seeking another source of repayment, and it exists essentially a bucket of availability in fulfilling our obligations and repaying them appropriate to the magnitude of work. what we are looking for is formal participation in a subsequent least to this facility.

if it turns out that there are additional rent credits from these categories, they have not been discharged. there are essentially limited rights to participation and a subsequent long-term lease, and it would be limited to 50% per dissipation in future income and limited to the first 15 years of the leak appeared to be clear, this is not another lease. we are not extending the term of the lease. we're just saying that if these extraordinary cases occur for this extraordinary event, we will be in a position to give them some relief, if you will, and some participation in the finances that we work out. finally, i want to say this is a complete list of remedies. these are the opportunities that the even authority has in terms of long-term development rights in terms of ifd proceeds that

accrue, and this represents what they can access to repay themselves. so they are taking a significant amount of risk, and that this will both mean that they will limit their costs on the front end and do what is necessary and appropriate, and that they will right size that project, and that they will be specifically incentivized to create wonderful projects on the waterfront, which is what we are looking for. seawall lot 330 is also part of this. i guess i'm mainly covered this already. this is a graphic representation of how this process would work. specifically, one thing i want to emphasize -- this is in order of priority. the port has a good deal of certainty toon the cost -- to

know based on the cost what will happen to access and what have you. i would like to specifically mention that the last one i described in detail, some sort of residual per dissipation, happens at the end of that after other remedies are exhausted. specifically, pierre -- pier 29 happens only after all other options have been exhausted. there's a similar but unrelated bucket of repayment options based on additional work the event authority might elect to do. again, these are signs that in the development division, we have not had a good solution for how to save them by a long term. historic assets contributed resources to the embarcadero national historic district -- they were put in the host and a new agreement originally released as a mutual opportunity.

working on the san francisco waterfront, we would love for them to create a development site there and save these assets. our engineering division is warning us not to expect more than 15 years of useful life out of the current facilities and their current conditions. in these options, if they do pre or post-match work at these sites, they would have the ability to secure long-term leases at these sites. they would be $6 per square foot. if it turns out that they make these projects successfully, there could be some reset to market once it credits have been paid off. this also has a bucket of goods. here we go. pictures are much better. the first call would be those

rent credits from the actual leases from the legacy options sites. the event of authority would also have access to bond proceeds from these sites, so if they create more tax increments by successful new products, they could be bonded against, and if they still haven't credits outstanding, they can access those. a project like this will almost certainly be eligible for historic tax credit. that is our standard procedure and an obligation of our development sites. and the amount of historic tax credits net proceeds will be attributable towards that meant credit. if necessary, we have a similar setup where this future participation could be accessed in a limited form. 50% of a new subsequent long- term lease for the next 15 years. in this case, we added another option, which is that there potentially could be other

rehabilitation financing tools. cannot name one yet because we do not have one that is available readily at this point, but work staff has worked tirelessly over the last five years to identify their sources. i guess we are confident that there was another one out there that we gave ourselves that option. to summarize, i talked about 26 and 28. i think i've already talked about 29. long-term lease is a possible option for recovery of authority work or authority infrastructure work. again, based on starting rent of $6 per square foot now that will be escalated to the start of the lease term, which could happen any time up to 10 years after that event, and then it will have an escalating structure along the way. it is only available if it is required to reimburse authority

infrastructure work. you have heard a little bit about marinas to date. they were the subject of a press conference between the event authority and the mayor. this is a process where it has been clearly a sticking point on the waterfront from both an environmental perspective, and i would say from a proprietary port perspective. we pride ourselves on some of the things we have already improved. even though it was in the original host and a new agreement, we're happy that different agreements have been reached. just to clarify, the agreement that has been reached, because there is dredging, we still have the potential for development rights. again, these are an exclusive negotiating agreement, similar to what we would have in other projects. this gives them the right to seek project approvals.

a similar situation would be at pier 54, where essentially in both these cases, there could be read credits from the dredging that is already occurring to be applied thereto marin improvements, whether it be other events we would normally collect when something like that would be done. we should note that pier 54 is part of our effort to relocate people from america's cup and cruise terminal sites. it does have a new lease holder. not that we would get all the approvals in five years, but we are also obligating that a new lease could not start for five years. just so we discharge our current obligation there. with that, i think i would just like to talk about future approvals and hand it over to grab for the scope of work analysis and overall port staff analysis.

the informational item we have today needs board of supervisors approval of intention. they are the taxing entity now, and they are the ones that need to give notice that that is something under consideration. we need to adopt the ceqa findings, as does the board of supervisors. they are in this case going to approve the dda. normally, they are a proprietary subject here in this case, because of an amendment to a city agreement, the house amendment agreement, which deals with property rights, we are -- we believe it is appropriate and necessary for the board of supervisors to approve it. there are other various work plans that affect for property, specifically zero waste plan --

there are other various work plans that affect port property. further down the line, there will actually be a financing plan and other formation creation for these specific project areas within the jurisdiction. so that was a lot. i just want to say that some of this was not in the staff report. it really was subject to ongoing negotiations. a number of the points outlined today are really integral to the deal that we did not lay out in the memo. i this wanted to say that when we and then the resolution, this presentation and a follow-up corrective memorandum will ultimately be part of that resolution. with that, i will hand it over to grab for scope of work and other staff analysis -- i will hand it over to brad.

>> there with us. we are almost to the end. special project manager. have some policy considerations for you along with port staff recommendations. the event authority has -- while we have all been working on the ceqa process and negotiating, the event authority has gone out and hired a development team. much of this work is proposed at piers 30-32. it is a 13-acre site that is currently a parking lot. cannot accept truck traffic currently, and the event will

definitely be using the pier with trucks. they have submitted now 60% designs for piers 30-32. amazing work on their part. they are proposing very substantial structural improvements. many pile repairs, new piles where they are needed. a partial seismic upgrade of the facility. not that would serve future development, but just for ebit purposes, a new seismic joint so it is separated from the sea wall. currently, there is a depressed area that used to be a ramp for trucks. that's needs to be leveled off so that it can all be used. the port has reviewed those

plans. we find the designs to be a good approach. we have requested a refined seismic analysis. there are a couple of ways to develop the structure, and have asked that the analysis be peer reviewed by the third party engineers. the event authority is working with us on that. we are -- because of the substantial upgrades, we are working with the regional water board and looking at the site, and we look at low impact development solutions to treat storm water on the pier.

you will recall storm water design guidelines for major developments, and that will be a guide in developing those solutions. the event authority is also undertaking the storm water for pier 27, in the area where buildings are being demolished to make way for the terminal and the new provisioning area. we found late in the process that under pier 29, there are a number of tiles, about 15 piles that need repair. the event authority is taking that on. after the demolition of 27 and a non-historic portion of 29 or the portion of 29 where it connected with pier 27, there needs to be a new wall installed, and that would be consistent with secretary standards for treatment of

historic property. we recommend approval of all of those plans. jonathan talk a little bit about how costs went up in this process. one of the costs we did not anticipate when we were before you a year ago last november were a number of bcdc related costs. the entire team and the event authority has been working diligently with bcdc staff to identify a number of permanent improvements along the waterfront in advance of the event where we will providing enhanced public access. that includes peer's 64 removal. it is a ghost pile field in the mission bay area. a new apron, and a pier 23 handrail to protect public access in that area. jonathan talk a little bit about the dredging -- jonathan talk a

little bit about the dredging process. there are regulatory costs and the like that we are recommending for your approval today. the total of that worked we estimate at $74 million, higher than the $54 million we estimated when we were before you in november. additionally, we tried to get our arms around some of the post-match work that will be eligible for reimbursement. that principally includes the future seismic upgrade. i mentioned the partial upgrade. there will be the need for additional piles to support the future development at the site. we would propose the same sort of refined seismic analysis there. that work, we recommend, be deemed approved as long as there are no flood hazards at the

site. we estimate the cost of that at $31 million, and that totals $105 million, pre and post- match, excluding work that may occur at peers -- piers 26 and 28. diving into the financial analysis, negotiations have been ongoing. i really want to credit the lane forbes, the financial analysis, jonathan stern, and others, who have been working on the impact -- what are the financial impacts of all of these improvements and developments. it has been an amazing job. we have new terms before you today. they need to sit down with those terms and come back and through the board of supervisors' budget analyst process report on the

financial impact of the deal before you, but we do know this -- that with the deal's structure that jonathan went over, this deal is more protective of the port's balance sheet and interest than what was analyzed in the report. we think it bracket's risk and shares some of the cost exposure between the city and event authority. we do recommend the deal before you today. i just want to go over what we know are some of the opportunity costs of the properties at play. we are looking at lost rent streams at the sites that will become future development sites. really, the analysis here is -- what are we collecting now in

terms of parameter rents from the sites, and what is the present value of that stream over the time that our engineering division estimates will be able to continue to least these sites? these are all old, nearing the end of their useful life. we told that present value stream in the value of seawall lot 330 at about $65 million. additionally, the deal would provide the event authority with infrastructure financing district, debt proceeds, subject to approval by the board of supervisors in the formation of a district, and also, federal historic tax credits at peer's 26 and 28. that explains the additional financial tools that are sort of non-port