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Staff outlines fiscal feasibility for Pier 27 cruise terminal; Phase 2 has roughly $12 million gap
Summary
Port staff said Phase 1 of the James R. Herman Cruise Terminal project is funded but Phase 2 faces an approximate $12 million funding gap; staff outlined funding sources, potential options to close the gap and next procedural steps including review by the Budget and Finance Committee and CEQA coordination.
Port planning staff presented the required fiscal feasibility review for the James R. Herman Cruise Terminal at Pier 27 and summarized project costs, funding sources and next steps.
John Dahl, planning and development staff, said the fiscal feasibility requirement in Chapter 29 of the city's administrative code applies because project construction costs exceed the code’s threshold and public monies would pay more than $1,000,000 of predevelopment or construction costs. Dahl reported Phase 1 construction costs are estimated at about $65.7 million (including a $7.5 million contribution from the event authority for demolition and shore‑side power relocation) and Phase 2 construction costs at about $32.1 million, for a combined total near $98 million. Staff said Phase 1 funding is in place — including proceeds and revenue bonds identified for Phase 1 — but Phase 2 currently has an approximate $12 million shortfall.
To address the Phase 2 funding gap, Dahl listed options under consideration: generate additional revenues at the Pier 27 site (special event usage, parking and commercial leasing), pursue further project cost reductions that do not compromise terminal performance standards, identify new grant funding, defer select project components to a later date, or reallocate unused funds from other capital projects. Staff also said the project team is coordinating CEQA work and noted possible cost‑sharing for environmental analysis with the America's Cup effort; staff will present the fiscal feasibility report to the Budget and Finance Committee on May 4 and return to the commission with contract approvals and design milestones as procurement proceeds.
Commissioners asked about bidder interest (staff said about 20 attendees representing 12–15 firms at the bidder conference) and whether CEQA for the cruise terminal would be combined or coordinated with the America's Cup EIR; staff said coordination is under study and cost‑sharing is being explored but final decisions on report structure were not yet made. Staff said construction manager/general contractor procurement is underway and design development drawings are expected to be completed in mid‑year with construction drawings by year end, targeting Phase 1 construction start in January 2012 if CEQA and procurement milestones are met.
