Committee forwards Port lease amendment for Building 49 that scales back seismic scope and accelerates restrooms

The Budget and Finance Committee on Feb. 14 recommended forwarding to the Board of Supervisors an amended and restated lease for Building 49 at Crane Cove Park with several material changes from the lease approved in June 2023.

Port staff said the amendment reduces the originally planned seismic retrofit scope to restore financial feasibility for the YMCA tenant and its subtenants. Jamie Hurley of the Port’s real estate and development division said the change eliminates the port’s obligation to provide up to $500,000 in rent credits that would have helped fund the seismic work, pushes the rent commencement date from July 1 to Oct. 1, 2024, and accelerates the requirement for the YMCA to open and operate public restrooms no later than July 1, 2024.

The Budget and Legislative Analyst reported the change will forgo approximately $1.4 million in seismic improvements compared to the original scope and that the Port will instead use an alternative reinforcement approach (plywood and bolting) that staff say meets port building standards. BLA said the amendment raises concerns about the port’s process for vetting proposals and said staff will scrutinize port tenant assessments going forward.

Supervisor discussion mixed concern and support: some members expressed unease about removing the more extensive seismic work so soon after the original lease approval, while others cited the YMCA’s mission and community benefits associated with aquatics and youth programming. A public commenter raised concerns about conflicts of interest. The committee approved a clerical edit to the lease language clarifying initial term and extension language and voted to forward the amended resolution to the full Board with a positive recommendation.