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Port of San Francisco
The Port of San Francisco is a public enterprise committed to promoting a balance
of maritime, recreational, industrial, transportation, public access and commercial activities on a self-supporting basis through appropriate management and development
of the waterfront for the benefit of the public.
Port of San Francisco • Burton Act 1968 - Authorized negotiation to transfer all title
and rights in land held by the San Francisco Port Authority to the City and County of San Francisco to be held in trust for purposes of commerce, navigation, and fisheries
• Port Commission may lease land for uses that the Commission finds to be in the public interest, with resulting lease revenues to be in the furtherance of commerce and navigation
Port Jurisdiction Port Commission and staff manage improvements, facility leases, 10 maritime industries, environmental and historic resources and real estate assets extending along 7½ miles, with over 500 tenant leases
CENTRAL WATERFRONT
Port Jurisdiction
Pier 70
CENTRAL WATERFRONT
Pier 70
Pier 70 Districts
Pier 70
• 28-acre site • Midpoint: 1.5M sq.ft. comm. • Midpoint: 1,600 res. units • 30% BMR ~ 480 res. units • 9 ac. Parks/OS • $260M infra ~$87 infra cost psf
Key Public Benefits 1. BMR. 30% of all units will be affordable.
Key Public Benefits 2. TDM Plan. 20% reduction in project trips through 3. Transportation Sustainability Fees. ~ $45 million 4. SLR: On-site improvements+elevated buildings+open
space = accommodate 66” SLR+100 year flood 5. SLR: New, long-term funding stream for shoreline
protection > $1.1 - 2.3 billion over the next 99 years. 6. Sustainability. 35% reduction building GHGs & 42M
gal potable water saved (onsite blackwater plant). 7. Open space. 9 acres of parks
Open Space
9 acres of waterfront parks (excluding Crane Cove Park)
A regional draw with new Bay Trail connections
Key Public Benefits
8. Economic Diversity. Local hire, LBE, First Source
9. Arts, Industrial Uses & Public Facilities. 10.Historic Resources. Rehab 3 key resources in
Union Ironworks Historic District.
Pier 70 Conundrums • How to fund $260+ million in infrastructure costs?
and • Deliver required public benefits?
and • Meet Developer’s return requirements?
and • Provide financial returns to Port?
• Captures growth in property tax revenue (“tax increment”)
Infrastructure Financing District (IFD)
• Captures growth in tax increment (affordable housing use)
Infrastructure and Revitalization Financing District (IRFD)
• Establishes special taxes that property owners and lessees pay
Community Facilities District (CFD)
• Developer advanced fund that earn an 18% annual return
Developer Capital
• Port advanced Harbor Funds earn a 10% annual return
Port Capital
• Revenues generated from the sale or lease of Port land • Revenue Sharing between Port (55%) and Developer (45%)
Land Proceeds
Funding Sources – Diversity
13
• Encompasses 28-Acre Site and a portion of Illinois & 20th Street Parcels
• Captures future tax increment, growth in Local and State shares of property taxes
• 92% for public infrastructure, e.g. streets, utilities, parks, historic rehabilitation and shoreline protection
• 8% for other Pier 70 needs, including Irish Hill Park
Funding Sources – Infrastructure Financing
14
Funding Sources – Community Facilities Levies special tax over Waterfront Site
Pays special tax ≈ future property tax
Benefits: • Established over the
IFD to create an early income stream
• Early public finance strategy to minimize use of Developer Capital
• CFD bonds are a higher credit than IFD bonds, lowering cost of issuance
Risks: • Vertical developer
default risk
Finances Horizontal Infrastructure
Facilities special tax goes away when properties are assessed and tax increment starts flowing CFD will also fund a portion of the Arts Building feasibility gap
15
Funding Structure – Investment & Return
16
Funding Structure – Investment & Return
17
STRATEGIES TO MAXIMIZE REVENUE-SHARING
• Limit Developer Capital • Maximize Public Financing • Tax Exempt Debt • Port Capital
CFD – Ongoing Maintenance Tax Maintenance CFD Levies special tax over Waterfront Site on an ongoing basis
Benefits: • Ongoing income
stream protects the Port finances
• Provides high standards for services
• Allows for cost escalation
Risks: • Additional cost to
vertical developers and tenants
18
Funds: • Public Space maintenance & repair • Roadway maintenance & repair • Security services • Administration
• Project includes on-site improvements, elevated buildings and open space to accommodate 66” of sea level rise
• Shoreline special tax establishes a new, long-term funding stream for shoreline protection
• Shoreline special tax will fund Port-wide investments, including ongoing needs at the Project site
CFD – Shoreline Special Tax
19
Summary of Projected Returns
20
NPV Returns to Port and Developer
Capital
Capital Repaid Pref.
Return
Profit Share
Total Dev ~18.3% IRR
Profit Share + Rent
Spec Taxes / IFD
Total Port
($150.0)
($100.0)
($50.0)
$0.0
$50.0
$100.0
$150.0
$200.0
Developer Port
+ Options to vertical development
Port of San FranciscoPort of San FranciscoSlide Number 3Slide Number 4Slide Number 5Pier 70 DistrictsSlide Number 7Key Public BenefitsKey Public BenefitsOpen SpaceKey Public BenefitsPier 70 ConundrumsFunding Sources – DiversityFunding Sources – Infrastructure FinancingFunding Sources – Community FacilitiesFunding Structure – Investment & ReturnFunding Structure – Investment & ReturnCFD – Ongoing Maintenance TaxCFD – Shoreline Special TaxSummary of Projected Returns