Commission conditionally approves five-year extension for Recology lease; directs staff to brief SWAC before execution

The Port Commission on April 22 conditionally authorized a five-year extension of Lease L14705 with Recology San Francisco for a construction materials recycling center at Seawall Lot 352, setting a commencement date of Aug. 1, 2014 and end date of July 2019, and directing staff to brief the Southern Waterfront Advisory Committee (SWAC) before the extension becomes final.

Reuben Solis, Port Real Estate property manager, explained Recology has operated at the site since 2009 and is a tenant in good standing. Solis said the leased area covers approximately 6.75 acres with an additional 4.26-acre buffer and that the Southern Waterfront Beautification Fund will continue to receive about $70,000 per year during the extended term.

Solis reviewed proposed rental terms: $0.18 per square foot per month in the first year and $0.19 per square foot per month in the second year; the port expects to receive $1,305,000 in rent over the next two years. An August 2016 market-rate reset is scheduled, with subsequent rent increases of 3% per year in the final two years of the extension.

Commission discussion focused on whether the extension had been reviewed by the Southern Waterfront Advisory Committee (SWAC). Staff said the lease and extension option were previously discussed in informational reporting to advisory groups, but the commission decided to make authorization contingent on a staff report to SWAC confirming no outstanding issues. The conditioned motion passed on a voice vote.

Next steps: staff will present the extension option to SWAC for informational review and, if no major issues arise, execute the extension per the terms discussed.