Committee forwards Pier 27 cruise terminal fiscal feasibility finding despite funding shortfall

The Budget and Finance Subcommittee voted to forward to the Board of Supervisors a resolution finding the proposed Pier 27 cruise terminal fiscally feasible under Administrative Code Chapter 29 so that environmental review can proceed as part of the America's Cup EIR schedule.

John Dahl, project manager for the Port, described the project as a public works effort to replace aging Pier 35 facilities and to accommodate larger modern cruise ships. The Port envisions a two‑phase project: Phase 1 (a "core shell") is estimated at $58.2 million and Phase 2 (terminal buildout and maritime equipment) at $32.1 million. The Port reported an updated total project budget of $90.3 million, down from a higher conceptual estimate, and said it has identified approximately $78.4 million in potential funding sources, leaving a funding shortfall of about $11.9–$12.0 million.

Elaine Forbes, Port finance director, outlined Phase 1 sources (about 87% port sources) including $20 million from a Watermark land sale, $10.1 million of debt already issued, proposed future debt of $15.5 million, repurposed revenue debt and smaller port capital allocations; she also identified FEMA security grant proceeds and an anticipated city contribution of $6.5 million tied to America's Cup planning. For Phase 2 the port anticipates additional sources including a proposed 2012 parks (rec and park) bond sized at about $9.1 million, a passenger facility charge estimate of $4.5 million (sized at $3 per passenger), operator contributions and other revenues. The port said a $12 million Phase 2 shortfall remains but described several potential solutions (state bill AB 664 to allow ERAF capture, grant-seeking, revenue from special events and value engineering) and expressed confidence the gap can be closed.

The budget analyst noted the fiscal-feasibility review is a policy decision for the Board, pointed out that $27.9 million of Phase 1 funding remains subject to future Board approval or port internal control, and that $9.1 million of potential Phase 2 funding would require voter approval (outside Board control). Supervisor Kim said she was not comfortable forwarding the item without a plan that excluded dependence on the $11 million gap; Chair Carmen Chu argued the feasibility determination is a roadmap needed to move forward with the EIR on a tight America's Cup schedule. After discussion the committee forwarded the item to the full Board without recommendation to allow department follow-up and preserve the EIR schedule.