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Port Commission adopts retail leasing policy to clarify competitive bidding and direct negotiation rules
Summary
Commission adopted a retail leasing policy aligning port practice with Administrative Code section 2.6-1, setting criteria for when direct negotiation is permissible and recommending Board of Supervisors review.
Port staff presented a proposed retail leasing policy intended to align port leasing practice with the San Francisco Administrative Code and to clarify when direct negotiation with incumbent or performing tenants is appropriate.
Brad Benson, Special Projects Manager, told commissioners the policy retains a competitive bidding requirement for new retail lease opportunities but formalizes a direct negotiation exception in limited circumstances. Staff said the city attorney advises Administrative Code section 2.6-1 applies to port property and that direct negotiation can be used when bidding is "impractical" or when the existing tenant demonstrates a public-benefit capital improvement, financial capacity and a strong performance history. The policy specifies due-diligence steps — verification that a tenant is in good standing, review of business plans and audited financial statements — before a direct negotiation is authorized.
Staff said the policy would be presented to the Fisherman's Wharf Advisory Group (which provided no substantive input) and would be forwarded to the Board of Supervisors and the Budget and Finance Committee for review as part of implementation. Commissioners moved, seconded and adopted the policy (recorded as Resolution 11-15), and staff corrected a reference in materials from 2010 to 2011.
