Budget panel approves amended lease for Stow Lake Boathouse, after heated public comment

The San Francisco Budget & Finance Committee voted to forward to the full Board of Supervisors an amended lease that would award operation of the Stow Lake Boathouse concession to Ortega Family Enterprises and require specific capital and maintenance commitments.

Supervisor Eric Marr, the item—s sponsor, said he supported a partner who would preserve the boathouse and invest in the site. "I support that goal, and that's the primary reason that I'm proud to be the sponsor of this item today," Marr said during his opening remarks.

Recreation and Parks officials described the amended terms they negotiated with the Ortega group: a minimum annual guarantee increased to $160,000, a required initial capital investment of not less than $233,000, and a requirement to purchase a new fleet of rental boats valued at no less than $152,000. The department also proposed a maintenance fund (2% of gross revenues) and a personal property fund (1.5% of gross) to pay for ongoing equipment replacement. "The contract will require Ortega to perform a quarter million dollars of initial capital improvements at the boathouse," Recreation & Parks General Manager Phil Ginsberg said.

Budget analyst Harvey Rose told the committee the department—s RFQ process had prioritized capital improvements and historic-preservation qualifications over explicit rent terms, which is why some financial items were negotiated after selection. The analyst recommended including the capital and boat-purchase amounts in the lease; the department agreed and amended the document accordingly.

Public speakers were sharply divided. Supporters, including local restaurateurs and partners who work with Ortega at national-park concessions, praised Ortega—s track record on historic renovation, local hiring and sustainable food sourcing. Opponents, organized in part as the "Save the Stow Lake Boathouse Coalition," argued the proposed change of use — converting a boat-repair area into a cafe and retail space — would harm wildlife and the boathouse—s primary boating function. "For 18 years, I have monitored the Stow Lake Heron Colony at Stow Lake," a longtime resident testified, warning the rookery could be disturbed.

Incumbent concessionaire Bruce McClellan, who said his family has operated the concession for generations, disputed some staff characterizations of his bid and urged the committee to review original proposals. City staff said the department—s evaluation materials presented to the selection panel summarized submitted bids and that the budget analyst relied on departmental submittals.

Supervisors questioned whether the RFQ should have required minimum annual guarantees up front and pressed staff on who would pay for potential ADA and seismic upgrades. Rec & Park officials said the RFQ was purposefully focused on capital and qualifications after multiple prior solicitations failed to identify qualified bidders willing to perform the required work, and said standard boilerplate assigns responsibility for future changes in ADA law to the city while contractor-triggered ADA work would be paid by the lessee.

The committee approved an amendment reading into the record clarifying that approval of the lease does not approve any specific capital improvements and that all such improvements will be subject to environmental review under the California Environmental Quality Act. On a roll call vote the committee approved the amended resolution: Maher, aye; Mercarini, no; Chu, aye. The item will be forwarded to the Board of Supervisors on Feb. 1.

What happens next: the lease and proposed improvements remain subject to the Historic Preservation Commission and any required environmental review. If the full Board approves the resolution, the amended lease language requiring the capital investment and new boats will be part of the city—s contract with Ortega Family Enterprises.