Supervisors forward Saint Francis Yacht Club lease to full board after debate over public benefits and valuation

The San Francisco Board of Supervisors Budget and Finance Committee on Nov. 15 voted to forward to the full Board a proposed long-term lease with the Saint Francis Yacht Club for property at Marina West Harbor, after extended debate about rent calculations, enforceability of public-benefit commitments and potential tax effects.

Chair Chris Dailey called the item after the clerk read a resolution authorizing an extension of the club's ground lease for 40 years plus roughly seven years remaining on the existing agreement. Yomi Agunbiotti, general manager of the Recreation and Parks Department, told the committee the department supports the proposed lease and had provided additional information requested by Supervisor Aaron Peskin and the Budget Analyst’s Office.

Supervisor Peskin pressed staff for an apples-to-apples comparison with other city leases (the Aquatic Park clubs and the Golden Gate Yacht Club) and about the appraisal methodology used to reach the rent figure. Budget analyst Harvey Rose and appraiser John Clifford explained their discount-rate and net-present-value calculations; Rose said the combination of a base rent set at approximately 50% of market rent and a $1.2 million one-time payment roughly equalizes the city’s expected net present value compared with a market-value ground lease.

Much of the public hearing focused on the lease’s public-benefit provisions and enforcement. The proposed agreement requires at least four one-day youth boating-and-safety programs for nonmembers annually or a $10,000 contribution for that program. Deputy City Attorney Charles Sullivan told the committee the $10,000 is not a liquidated-damages provision; rather, the payment would be directed to an existing city program (city-run or nonprofit) with prior written approval, while breaches could trigger arbitration, statutory damages up to $50,000 or lease termination.

Community speakers were sharply divided. The club’s treasurer said the Saint Francis Yacht Club intends to expand youth sailing programs and that a first-year check could be directed to existing city programs while the club sets up new programming. Several residents and neighborhood representatives urged a continuance and asked for more financial transparency, arguing the city could receive substantially more (one speaker cited a 10%-of-gross-revenue alternative that would yield about $700,000 a year rather than the proposed $200,000). Betty Foote, a Marina Harbor resident, raised equity and charter concerns, saying the club has not paid market rates historically and urging closer scrutiny of intent.

On taxation, the Assessor’s Office told the committee it could not yet compute a possessory-interest valuation for the extended lease because the ownership structure (lessee-owned improvements, city-owned fee) and the >40-year term complicate the analysis; staff estimated it could take up to two years to complete without an expedited directive.

After questions, public comment and technical clarifications from the city’s appraiser and budget analyst, President Aaron Peskin moved to forward the item to the full Board with changes requested by the committee, including clearer language about the public-benefits recipients and a correction of the property location (near Broderick, not Fillmore). The motion carried without objection in committee. The full Board will now consider the lease resolution and any further amendments.