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Commission endorses Pier 70 term sheet with Orton Development, including $14M equity commitment and $1.5M port contribution
Summary
The Commission approved a term-sheet endorsement for rehabilitation of six Pier 70 buildings with Orton Development: ODI agreed to invest up to $14 million of equity, the Port will contribute $1.5 million, the deal includes a 14% return target for developer equity and a 20-year base rent floor, and staff projected 400'00—500 jobs and phased revenue scenarios.
The Commission endorsed a term sheet for the Twentieth Street buildings at Pier 70 with Orton Development Incorporated. Kathleen Dye, on behalf of Port Planning and Development, said the term sheet reflects a conceptual agreement to rehabilitate six historic buildings with a mixed program of office, commercial and light-industrial uses and outlined the financial structure.
Key business terms in the term sheet presented to the Commission include: Orton Development (ODI) has agreed to invest up to $14,000,000 in equity; the Port would provide $1,500,000 in capital now (funds already budgeted) redirected from shoring/maintenance; the structure includes participation rent where ODI recovers equity plus a 14% return before net-revenue sharing; and the port retains a 20-year base rent of $200,000 escalated by CPI as a floor if participation rent does not exceed that amount.
Dye said the Port carried $109,000,000 in the capital plan for the buildings and staff projected that, under a base-case $58,000,000 project cost, the Port could receive roughly $600,000 a year in net income by 2021, with job creation estimated at 400 to 500 positions. Commissioners moved and approved the term sheet endorsement and recorded Resolution 1278 as approved.
