Supervisors approve Port lease with Pilara family foundation; questions on $3 million rent credit

The San Francisco Board of Supervisors voted to approve a Port Commission lease with the Pilara Family Foundation covering property at a city pier annex, adopting the resolution after questions from supervisors and a briefing from the Port's leasing staff and the budget analyst.

Supervisor Chris Campos asked detailed questions about why the lease was being handled as a sole-source agreement after the last request for proposals about 10 years earlier. Jeff Bauer, Port leasing manager, said the pier had continued to deteriorate and was given a "yellow tag" by the engineering section in February 2002, restricting entry and use. Bauer described a negotiated $3,000,000 rent credit intended to allow the lessee to amortize costs for core-and-shell improvements: "We took the difference between the two and... allowing him to amortize the rent credit just for core and shell improvements," Bauer said.

The boards budget analyst told supervisors staff had reviewed the numbers and concluded the amount of the credit was appropriate but had identified an approximately $58,000 excess in the amortization schedule. The analyst said the Port had submitted an amendment, signed by the lessee, to correct that difference and that no further errors were found.

Supervisor Campos pressed the budget analyst on how such an error could occur given an absolute cap in the lease. Port staff responded that the cap remained $3,000,000 and the discrepancy was caused by an error in the amortization schedule rather than exceeding the cap.

Supervisor Campos also asked whether changing market circumstances since the last RFP might warrant reopening competition; port staff and the budget analyst said they believed sole sourcing was appropriate in this instance given the piers condition, prior RFP history and the tenants willingness to undertake work on a location that had been producing no income.

The resolution was adopted under the "same house, same call" motion and the clerk announced the resolution was adopted.

Speakers

- Jeff Bauer, Port leasing manager, government (Port of San Francisco) - Supervisor Chris Campos, Supervisor, government (San Francisco Board of Supervisors) - Budget analyst (name not specified), Staff member, government - "Mister Bruce" (referenced in transcript), Port staff or consultant, government

Authorities

- other: references to Port procedures and the lease document (lease cap $3,000,000) (referenced_by: ["item_4"])

Actions

- {"kind":"resolution","motion":"Approve Port Commission lease with the Pilara Family Foundation for certain real property at Pier Annex","mover":"not specified","second":"not specified","vote_record":[],"tally":{"yes":10,"no":0},"outcome":"approved","notes":"Resolution adopted; staff and budget analyst confirmed $3,000,000 cap and correction of a $58,000 amortization error."}

Discussion vs. decision

- Discussion: Supervisors questioned sole-source rationale, the market and the lease amortization schedule. - Direction: Port staff provided details on pier condition and negotiation rationale; budget analyst confirmed a corrective amendment was submitted. - Decision: Board adopted the Port lease resolution.

Clarifying details

- Lease cap: $3,000,000 (absolute cap stated in the lease). - Rent credit: $3,000,000 created during negotiations to allow amortization for core-and-shell improvements because the pier was producing no income. - Amortization discrepancy: budget analyst identified approximately $58,000 excess; the Port submitted an amendment signed by the lessee to correct the error. - RFP history: Two prior RFPs had been done; the last RFP was about 10 years earlier.

Proper names

[{"name":"Pilara Family Foundation","type":"organization"},{"name":"Port of San Francisco","type":"agency"},{"name":"Pier 24 Annex","type":"location"}]

Provenance

- {"block_id":"block_949.26","local_start":0,"local_end":80,"evidence_excerpt":"Item 4 is a resolution approving a port commission lease with the Pilara family foundation for certain real property located at 24 Annex in the City.","reason_code":"topicintro"}

- {"block_id":"block_1214.75","local_start":0,"local_end":80,"evidence_excerpt":"Any other discussion? Colleagues, can we do this same house, same call? The resolution is adopted. Next item, please.","reason_code":"topicfinish"}

Searchable_tags

["Port lease","Pilara","Pier 24","rent credit","sole source"]

Topics

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