San Francisco Development Advisory Services
Port of San Francisco
BAE has served for over 10 years as the lead consultant on an on-call contract to provide real estate development advisory services to the Port of San Francisco. Several projects for this contract are highlighted below.
BAE has served for over 10 years as the lead consultant on an on-call contract to provide real estate development advisory services to the Port of San Francisco. Several projects for this contract are highlighted below.
America’s Cup (AC34) Real Estate and Public Financing Support Services
BAE is currently completing a current a set of services for the Port of San Francisco to support ongoing AC34 planning and deal refinements. BAE’s work includes supporting market analysis of likely rents and sale prices to be achieved in future Legacy Lease projects, refined development pro forma analysis, evaluation of proposed deal terms, and management of subconsultants. BAE is also undertaking preparation of the Port’s Infrastructure Financing District Plan (IFD), to generate funds to reimburse AC34 investments and support infrastructure for other long-term Port projects.
In 2010-2011, BAE supported the City and Port of San Francisco’s successful bid to attract the 34th America’s Cup sailing race to San Francisco. BAE’s specific role was to evaluate the residual real estate values being offered by the City (on Port-controlled properties) to the racing organization, for long term “legacy” ground leases and development, after the racing event concludes in 2013. These legacy leases will take advantage of race-event related capital expenditures to repair major pier substructures for race event facilities, and convert these investments into rent credits towards long term development rights on the same piers granted to the race event organizers or their successors. This structure allows the race event to precipitate a long-term capital investment and create long term rights to a to-be-structured ground lease. BAE prepared a series of analyses to value these development and lease rights proposed in the Host Venue Agreement (drafts and final), during the fall of 2010. The BAE work was summarized in an extensive memo including development scenarios for each site, pro forma analyses, and evaluation of “as is” values. This work was crucial to achieving Board of Supervisor approvals of the Host Agreement. In addition, BAE prepared a summary sources and uses of funds analysis, to track the inflow and outflow of municipal service costs and revenues to be received from the race organizers.
Piers 27-31 Proposal Evaluation and Development Advisory Services (Mills Project, Shorenstein Project)
BAE worked extensively for the Port of San Francisco over a three year period to provide developer proposal evaluations and development advisory/negotiation services. Piers 27-31 has long been planned for reuse and renovation as a mixed use project with substantial public recreation facilities along with office, retail, and park components. In 2002, the Port issued a Request for Proposals from development teams to accomplish this vision. The Port received two proposals, one from Mills Company, at that time the largest retail center developer in the US, and one from Chelsea Piers, a recreation and retail developer with a successful pier project in NYC. BAE prepared an extensive financial, track record, and market evaluation of each proposal, resulting in presentations to the Port Commission and a series of extensive memoranda. After Commission selection of Mills, BAE participated in extensive developer negotiations, including re-engineering the developer’s cash flow to negotiate deal terms, verifying tenant lease rates and market conditions, refine user pricing schedules, and recommending potential recreation tenants active in the Bay Area. When Mills experienced financial difficulties, the project was transferred to Shorenstein. BAE continued to support the Port in negotiating a comprehensive ground lease with this developer until the recession caused a shift in Port direction for the site.
At present, BAE is supporting the Port’s initiative to develop Piers 27-31 into a new Cruise Ship Terminal. This initiative, while fully supported by Port set-aside funds and commitments via State Legislature, has recently been merged into the AC34 planning process, with potential partnership structures being negotiated with the AC34 sponsors as part of a Legacy Lease offering.