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Budget analyst flags decades-long Port month-to-month leases; Port pledges negotiations and quarterly reports
Summary
A budget analyst's report highlighted hundreds of long-running month-to-month leases at the Port and other departments, including cases dating to the 1950s and 1970s; Port staff said 164 "holdover" leases are under review (91 in active negotiations, 18 signed) and agreed to return with progress and to refer the Port's retail leasing policy to the Board for oversight.
A staff report consolidated dozens of month-to-month leases across city agencies and singled out a set of long-running agreements at the Port of San Francisco that, in some cases, have been on month-to-month terms for decades. Budget analyst Harvey Rose told the committee these arrangements bypass routine Board review and in some instances "we are uncertain as to whether the $439 monthly rent represents fair market value" (example: valet parking supporting Scoma's at Pier 43). He noted 122 of the month-to-month agreements were originally issued as month-to-month and have remained that way for many years.
Port Director of Real Estate Susan Reynolds and Port special-projects manager Brad Benson described an active program to convert many holdover leases into longer-term agreements. "We started with 164 holdover leases ... 91 of these in active negotiations, 18 have been signed, 19 rent increases have gone out," Reynolds said, and the Port said it will pursue earlier negotiations, rent increases where appropriate and a more formal month-to-month leasing policy. The Port also explained some month-to-month arrangements are intentionally interim (development sites, seasonal curb/encroachment space, parking for saleable parcels) and that some long-dated low-dollar arrangements (truck parking since 1953) are for limited uses.
Supervisors pressed the Port for transparency and suggested the Board should review the Port's retail-leasing policy; Mr. Rose and Port staff agreed the Board could ask the Port to present a formal month-to-month leasing policy and return with quarterly progress updates. Committee members also asked the budget analyst to produce a focused report on the 122 leases that were originally issued month-to-month to assess potential foregone revenue and other issues.
No legislation was passed at the hearing; the committee requested quarterly reporting back to the Board and recommended review of the Port's retail leasing policy.
