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Port staff briefs commission on long-running Bauer lease dispute; staff proposes sprinkler credit and repayment terms
Summary
Port staff briefed the commission on a long-running settlement and lease negotiation with Bauer Intelligent Transportation, reporting a disputed past-due balance and proposing a sprinkler-installation rent credit and a repayment plan.
Port staff presented an informational briefing on Jan. 14, 2025, updating the commission on settlement negotiations with Bauer Intelligent Transportation, a long-time tenant with operations at Pier 50, a previous office lease at 401 Terry Francois Boulevard and month-to-month parking at Pier 96.
Assistant Deputy Director Kimberly Beal told the commission Port records show an outstanding balance of about $6.4 million across Baueragreements; Bauer disputed that figure and estimated approximately $2.87 million. Staff said disagreements include whether COVID-era relief and forgiveness applied and how to treat holdover rent at Pier 50 after the lease expired in May 2022. Staff proposed a five-year lease for Pier 50 sheds A and C contingent on the tenant completing a sprinkler installation at Shed C (a city fire-code requirement); Port staff offered a rent credit not to exceed $2,000,000 for that sprinkler work, with 100% of the credit to be applied to past-due rent, an upfront payment of $500,000 to start a repayment plan, and a stipulated-judgment settlement structure to enforce repayment.
"Port's records show an outstanding rent balance totaling about $6,400,000 which the tenant is disputing and claims it is much less," Kimberly Beal said. Staff also noted the tenant had received federal relief loans that appear on public records and that a consultant review found revenues that, in the consultant's view, supported repayment capacity.
Tenant representative Gary Bauer addressed the commission, said Bauer wants to remain in San Francisco and complete sprinkler upgrades so it can pursue electric vehicle charging and operational upgrades, but said the staff's proposed upfront financial terms are difficult for the company to meet and that both parties still needed to reconcile accounting differences. Commissioners urged Bauer to accept staffs best-and-final offer and emphasized the Port's fiduciary duty under the public trust (the Burton Act) to obtain fair market value for trust property.
This item was informational; no commission action was required. Staff said settlement negotiations remain ongoing.
