PORT OF OAKLAND · 2016-03-10 · J. CHRISTOPHER LYTLE Executive Director DANNY WAN Port Attorney...

J. CHRISTOPHER LYTLEExecutive Director

DANNY WANPort Attorney

ARNEL ATIENZAPort Auditor

JOHN T. BETTERTONSecretary of the Board

PORT OF OAKLANDBOARD OF PORT COMMISSIONERS530 Water Street 1 Oakland, California 94607(510) 627-1696(w)1(510) 839-5104(f)1TDD/TTY 711

E-Mail: [email protected]: www.portofoakland.com

SUPPLEMENTAL AGENDA

CESTRA BUTNERPresident

ALAN S. YEEFirst Vice-President

EARL HAMLINSecond Vice-President

MICHAEL COLBRUNOCommissioner

JAMES W. HEADCommissioner

BRYAN R. PARKERCommissioner

VICTOR UNOCommissioner

Meeting of the Board of Port Commissioners

April 10, 2014 – 1:00 p.m.

Board Room – 2nd Floor

ROLL CALL

Commissioner Colbruno, Commissioner Head, Commissioner Parker, Commissioner Uno, 2nd Vice-President Hamlin, 1st Vice President Yee and President Butner.

1. CLOSED SESSION

Closed Session discussions and materials may not be disclosed to a person not entitled to receive it, unless the Board authorizes disclosure of that confidential information.

1.1 CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION (Pursuant to Paragraph (1) of Subdivision (d) of California Code Section 54956.9):

CMC Food Services LLC and NNF Grewal, Inc., v. Port of Oakland, et al.; Alameda County Superior Court Case No.: RG13685134

1.2 CONFERENCE WITH REAL PROPERTY NEGOTIATORS – (Pursuant to California Government Code Section 54956.8):

Property: A Portion of Roundhouse AreaNegotiating Parties: Port of Oakland and CVAGAgency Negotiator: Director of Maritime, John DriscollUnder Negotiation: Price and Terms of Lease

Property: Oakland Army BaseNegotiating Parties: Port of Oakland and Various PartiesAgency Negotiator: Director of Maritime, John DriscollUnder Negotiation: Price and Terms of Tenancy

AGENDA

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1.3 CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION (Significant Exposure to Litigation Pursuant to Paragraph (2) of Subdivision (d) of California Government Code Section 54956.9 1 matter

ROLL CALL/OPEN SESSION (Approximately 3:00 p.m.)

Commissioner Colbruno, Commissioner Head, Commissioner Parker, Commissioner Uno, 2nd Vice-President Hamlin, 1st Vice President Yee and President Butner.

CLOSED SESSION REPORT

The Port Attorney or Board Secretary will report on any final actions taken in Closed Session.

2. CONSENT ITEMS

Action by the Board under “Consent Items” means that all matters listed below have been summarized and will be adopted by one motion and appropriate vote. Consent Items may be removed for further discussion by the Board at the request of any member of the Board.

2.1 Resolution: Authorize Acceptance of a Boeing 727-200 Aircraft Gifted from the Federal Express Corporation and Disposal of Existing Port-Owned Boeing 727-100 Aircraft Previously Gifted to the Port by the Federal Express Corporation (Aviation)

2.2 Resolution: Cancellation Of Manager, Business Development And International Marketing Eligible List (Finance & Admin)

2.3 Ordinance No. 4284, 2nd Reading Of An Ordinance Approving And Authorizing The Executive Director To Extend The Lease With BNSF Railway Company To Continue To Operate At The Joint Intermodal Terminal Through September 30, 2014.

2.4 Ordinance No. 4285, 2nd Reading Of An Ordinance Approving A Lease With Restaurants Unlimited, Inc. For The Premises Located At 1 Franklin.

3. MAJOR PROJECTS

This segment of the meeting is reserved for action and discussions regarding the status of Major Projects and issues of special importance.

4. BUDGET & FINANCE

This segment of the meeting is reserved for action or discussion regarding the status of Budget and Finance issues.

4.1 Report: Informational Report: Commissioner's Travel Expenses for 2013

AGENDA

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5. STRATEGY & POLICY

This segment of the meeting is reserved for action or discussion on Strategy and Policy Issues.

5.1 Report: Aviation Air Service Update (Aviation)

6. REMAINING ACTION ITEMS

Remaining Action Items are items not previously addressed in this Agenda that may require staff presentation and/or discussion and information prior to action by the Board.

6.1 Resolution Ordinance: Memorandum Of Understanding With Union Pacific Railroad Related To The Development Of The New Rail Yard And Logistics Park At The Former Oakland Army Base. (Maritime)

6.2 Resolution: Approval Of An Exclusive Negotiating Agreement (ENA) With Pinnacle Ag. Services, Inc., For 5 Acres At The Roundhouse Property Located At 1195 Middle Harbor Road (Maritime)

6.3 Ordinance: Approval Of A Five-Year License And Concession Agreement With VA Transportation Inc., For Premises Located At 2400 Embarcadero Road (CRE)

7. UPDATES/ANNOUNCEMENTS

The President, Members of the Board and the Executive Director will report on noteworthy events occurring since the last Board Meeting.

8. SCHEDULING

This segment of the meeting is reserved for scheduling items for future Agendas and/or scheduling Special Meetings

OPEN FORUM

The Board will receive public comment on non-agenda items during this time. Please fill out a speaker card and present it to the Secretary of the Board.

ADJOURNMENT

The next Regular Meeting of the Board will be held on April 24, 2014.

AGENDA

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PUBLIC PARTICIPATION

To Speak on an Agenda Item

You may speak on any item appearing on the Agenda. Please fill out a Speaker’s Card and give it to the Board Secretary before the start of the meeting or immediately after conclusion of Closed Session. Cards received after the start of the meeting will be treated as a single request to speak in Open Forum. All speakers will be allotted a minimum of one minute.

To Receive Agendas & Related Materials

Should you have questions or concerns regarding this Agenda, or wish to review any of the Agenda Related Materials, please contact the Board Secretary, John Betterton, at:(510) 627-1696, or visit our web page at: www.portofoakland.com

To receive Port Agendas and Agenda Related Materials by email, please email your request to: [email protected]

Disability Related Modifications

Any person who requires a disability-related modification or accommodation, including auxiliary aids or services, in order to participate in the meeting, may submit a written request, electronic request, or telephone request [via the California Relay Service (telephone) for the hearing impaired at (800) 735-2922], to the Secretary of the Board no later than five working days prior to the scheduled meeting date.

John Betterton, Secretary of the Board530 Water Street, Oakland, CA 94607

[email protected](510) 627-1696

Language & Interpretive Services

As a grantee of federal aid grant funds from the US Department of Transportation, the Port is responsible for ensuring equal access to its programs, services, and benefits. To request bilingual interpreters or materials in alternate formats, please contact the Assistant Secretary of the Board no later than five working days prior to the scheduled meeting date.

Daria Edgerly, Assistant Secretary of the Board530 Water Street, Oakland, CA [email protected](510) 627-1337

Scented Products

Please refrain from wearing scented products to this meeting so attendees who experience chemical sensitivities may attend.

AGENDA

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Commissioner’s Statement of Intention

We are a governing Board whose authority lies with the entirety of the Board.

We govern in accordance with our fiduciary duty to the Port of Oakland.

We conduct ourselves with clarity and transparency, grounded in the principles of integrity, trust and respect.

We reach our decisions through candid, open and deliberative debate and hold both staff and ourselves accountable for implementing them.

AGENDA

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CONSENT ITEMS

Action by the Board under “Consent Items” means that all matters listed below have been summarized, and are considered to be perfunctory in nature, and will be adopted by one motion and appropriate vote. Consent Items may be removed for further discussion by the Board at the request of any member of the Board.

CONSENT ITEMS Tab 2

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BOARD MTG. DATE: 4/10/14

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AGENDA REPORT

TITLE: Authorize Acceptance of a Boeing 727-200 Aircraft Gifted from the Federal Express Corporation and Disposal of Existing Port-Owned Boeing 727-100 Aircraft Previously Gifted to the Port by the Federal Express Corporation (Aviation)

AMOUNT: Between $3,000 to $5,000 in Revenue

PARTIES INVOLVED:

Corporate Name/Principal LocationFederal Express Corporation Memphis, Tennessee

ADI Aircraft Demolition & Recycling Company Wellington, Florida

TYPE OF ACTION: Resolution

SUBMITTED BY: Deborah Ale Flint, Director of Aviation

APPROVED BY: J. Christopher Lytle, Executive Director

Staff seeks Board adoption of a Resolution to:

Q Accept a retired Boeing 727-200 freighter aircraft from the Federal Express Corporation (FedEx);

Q Delegate authority to the Executive Director to execute a Quit Claim Deed of Gift to accept the retired Boeing 727-200 freighter aircraft from FedEx;

Q Make a determination to designate an existing Port-owned Boeing 727-100 aircraft (previously gifted by FedEx), as surplus to the needs of the Port; and,

Q Delegate authority to the Executive Director to execute a General Services Contract with a single source contractor provided by FedEx to dispose of the existing Boeing 727-100 aircraft utilizing dismantling and disposal services.

FACTUAL BACKGROUND

FedEx owns a retired Boeing 727-200 freighter aircraft that is currently parked, pursuant to a Temporary Rental Agreement (expiring May 20, 2014), adjacent to the Oakland Maintenance Center. The Boeing 727-200 was originally intended to be gifted to the College of Alameda in support of its aviation-based educational facility, located on its property at the western edge of the North Field. For various reasons, the intended transferfrom FedEx to the College of Alameda, was not finalized.

The retired Boeing 727-200 freighter aircraft is situated next to an earlier version Boeing 727-100 that was previously gifted to the Port by FedEx in March 2003 (passed by Port Resolution 03062). The Boeing 727-100 is slightly damaged, but continues to be used for

CONSENT ITEMS Tab 2.1

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emergency response training purposes by Port staff, the Oakland Fire Department (the on-airport Aircraft Rescue and Fire Fighting service or “ARFF”), Alameda County Sheriff’s Office, and other law enforcement agencies.

Parked at the Oakland Maintenance Center: in foreground is retired FedEx Boeing 727-200 proposed to be gifted to Port; background is Port-owned Boeing 727-100

ANALYSIS

FedEx Donation of Boeing 727-200

Port staff desires to proceed with accepting the gift of the retired Boeing 727-200 freighter aircraft from FedEx. The main elements and stipulations of the intended donation for the retired Boeing 727-200 freighter aircraft are:

1. Utilizing the gifted aircraft for ground use only and specifically for Port sponsored training purposes;

2. The Port will not sell, transfer or convey title to the gifted aircraft, along with any parts or components, with the exception of:

∑ The Port can sell or transfer the gifted aircraft, along with any of its parts or components as salvage material, not for use on, or in connection with any other aircraft;

3. The Port will not attempt to operate the gifted aircraft or register it with the Federal Aviation Administration (“FAA”), or foreign country equivalent; and,

4. Port agrees to assistance from FedEx to paint over the FedEx logo/livery.


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Accepting the retired Boeing 727-200 freighter aircraft from FedEx is preferred for the continued use of emergency response training purposes by the Port, Oakland Fire Department (“OFD”) and other law enforcement agencies, and is intended to replace the aged and slightly damaged Boeing 727-100.

Disposition of Previous FedEx Donation of Boeing 727-100

Port staff recognizes the aged and deteriorating condition of the Boeing 727-100 and sees no public benefit in having 2 obsolete aircraft at OAK. The Board is requested to declare as surplus to the needs of the Port the Boeing 727-100, and as eligible for disposal as Port-owned equipment, as salvage material (in accordance with the terms and conditions of the 2003 donation from FedEx). This method of disposal is consistent with the stipulation that the Boeing 727-100 cannot be sold in whole, or in part within the aircraft resale marketplace.

The Port Controller’s Office confirms that the Boeing 727-100 is fully depreciated, and has a Net Book Value of Zero Dollars ($0.00).

FedEx has suggested a contractor that dismantles and recycles its retired aircraft: ADI Aircraft Demolition & Recycling Company (ADI) to accomplish the dismantling, recycling and removal work. ADI has extensive nationwide experience with dismantling aircraft of various types and is a frequent resource for FedEx when dismantling and recycling services are needed.

For these reasons, and to accomplish the complete removal of the Boeing 727-100 aircraft at the earliest opportunity, it is requested that the Board approve a single source contract with ADI to accomplish the dismantling, recycling and removal work. ADI proposes to pay the Port approximately $3,000 to $5,000 for the surplus aircraft (depending on what scrap value ADI may obtain from sale of materials), take possession, then undertake the on-site activities of dismantling, recycling and complete removal work, all at ADI’s sole cost and expense.

FAA Inspections

OAK has been certified by the FAA as a Part 139 airport* and operators of Part 139 airports are required to provide ARFF services. To maintain this certification, the FAA conducts annual (and sometimes unannounced) inspections that focus on the airport’s operations. For the ARFF phase of the Part 139 inspection, “the FAA (i) conducts a timed-response drill; (ii) reviews aircraft rescue and firefighting personnel training records, including annual live-fire drill and documentation of basic emergency medical care training; and (iii) checksequipment and protective clothing for operation, condition, and availability.”

Due to the mass casualty potential of an aviation emergency, the speed with which emergency response equipment and personnel arrive at the scene of the emergency is of paramount importance. As noted above, OAK’s ARFF services are provided by the

* 14 CFR Part 139 requires FAA to issue airport operating certifications to airports that, among other things,“serve scheduled and unscheduled air carrier aircraft with more than 30 seats…”


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Oakland Fire Department, which trains constantly throughout the airport environment. Along with the FAA’s annual inspection drill, at least once a month, OFD also “responds” to an emergency involving the Boeing 727-100 to simulate and practice the FAA’s required “live-fire” drill, utilizing its specialized fire apparatus required for the ARFF function.

Conclusion

OAK’s existing Boeing 727-100 has been a valuable ARFF training tool for a decade, but its nose gear is damaged and is in an overall degenerated condition. As an alternative to the expense of repair, a replacement Boeing 727-200 is being offered by FedEx as a gift.

Port staff recommends accepting the retired Boeing 727-200 freighter aircraft from FedEx, to replace the aged and deteriorated 727-100. Port staff further recommends that the Boeing 727-100 be determined as surplus to the needs of the Port, and eligible for sale to ADI as Port-owned equipment for salvage material.

The Board is requested to delegate authority to the Executive Director, or his designee, to execute a Quit Claim Deed of Gift to accept the retired Boeing 727-200 freighter aircraft from FedEx, and to execute a General Services Contract with ADI – a single source contractor suggested by FedEx to dispose of the Boeing 727-100, utilizing dismantling and disposal services

STRATEGIC PLAN

Accepting the retired Boeing 727-200 freighter aircraft from FedEx and disposing of the Port’s Boeing 727-100 aircraft, supports the goals of the Port’s 2011-2015 Strategic Plan:

Strategic PriorityAreas

Goal Objective Result

SustainableEconomic and Business Development

Goal B: Maintain and Aggressively Grow Core Businesses

1. Pursue strategic partnerships at all levels: local, regional, national and international.

Port acquires newer training aircraft via gift from FedEx, an important Port partner.

BUDGET & FINANCIAL IMPACT

Approximately $3,000 to $5,000 in additional unbudgeted revenues will be generated within the current FY2013-14 operating budget by executing a General Services Contract with ADI to dispose of the Boeing 727-100 (after being determined as surplus Port-owned equipment).

STAFFING IMPACT

There is no staffing impact resulting from the intended gift and disposal actions.


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SUSTAINABILITY

There are no obvious environmental or direct sustainability issues associated with the intended gift and subsequent disposal actions.

ENVIRONMENTAL

The actions involve accepting a retired Boeing 727-200 freighter aircraft from FedEx, and disposing of a FedEx gifted Boeing 727-100 from 2003. The California Environmental Quality Act does not apply to acquisition or disposal of personal property.

MARITIME AND AVIATION PROJECT LABOR AGREEMENT (MAPLA)

The provisions of the Port of Oakland Maritime and Aviation Project Labor Agreement (MAPLA) do not apply to these actions.

OWNER CONTROLLED INSURANCE PROGRAM (OCIP)

The work performed under the proposed actions is not within the scope of the Port of Oakland’s Owner Controlled Insurance Program.

GENERAL PLAN

The proposed actions do not meet the definition of “project” under the City of Oakland General Plan, and no conformity designation is needed.

LIVING WAGE

Living Wage requirements, in accordance with the Port’s Rules and Regulations for the Implementation and Enforcement of the Port of Oakland Living Wage Requirements (the “Living Wage Regulations”), do not apply because the requested action is not an agreement, contract, lease, or request to provide financial assistance within the meaning of the Living Wage Regulations.

OPTIONS

1. Authorize the Executive Director, or his designee, to accept the gifting of a retired Boeing 727-200 freighter aircraft from the Federal Express Corporation, to declare as surplus and dispose of the Port’s obsolete Boeing 727-100, pursuant to Section 12 of Port Ordinance No. 1606 (Standard Contract Provisions), consistent with this Agenda Report and as approved as to form and legality by the Port Attorney, which is the staff recommendation.

2. Do not authorize the Executive Director, or his designee, to accept the gifting of a retired Boeing 727-200 freighter aircraft from the Federal express Corporation, in which case, the Port would continue to use for training purposes its damaged and obsolete Boeing 727-100.


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3. Authorize the Executive Director, or his designee, to accept the gifting of a retired Boeing 727-200 freighter aircraft from the Federal Express Corporation, and/or to dispose of the Port’s obsolete Boeing 727-100 pursuant to Section 12 of Port Ordinance 1606 (Standard Contract Provisions), under different terms and conditions than set forth in this Agenda Report, as approved as to form and legality by the Port Attorney.

RECOMMENDATION

It is recommended that the Board authorize the Executive Director, or his designee, to: (i) accept the gifting of a retired Boeing 727-200 freighter aircraft from the Federal Express Corporation; (ii) dispose of the Port’s obsolete Boeing 727-100 pursuant to Section 12 of Port Ordinance 1606 (Standard Contract Provisions); (iii) negotiate, approve and execute all documents necessary to consummate this transaction, consistent with this Agenda report and approved as to form and legality by the Port Attorney, including a General Services Contract with ADI Aircraft Demolition & Recycling Company, a single source contractor, to dispose of the Port's existing Boeing 727-100 utilizing dismantling and disposal services which will yield an expected, but unbudgeted revenue between $3,000 to $5,000.

\\10.1.7.107\HOME\bmark\My Documents\Airlines\Fed Ex\B727\Agenda Report-FedEx Donation (2014-04-10) AP.3.doc


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BOARD OF PORT COMMISSIONERSCITY OF OAKLAND

04/10114Tab 2.1CT/Ihr

RESOLUTION AUTHORIZING ACCEPTANCE OFAIRCRAFT GIFTED FROM THE FEDERAL(“FEDEX”) AND DECLARING A EOE INGSURPLUS EQUIPMENT,

WHEREAS, the Board of rs (“Board”) hasreviewed and evaluated Agenda Repo dated April 10, 2014(“Agenda Report”) and related agenda Las received the experttestimony of Port of Oakland (“Poraff, and has providedopportunities for and taken public comment;

WHEREAS, FedEx retired “g 727—200 freighteraircraft that is currently uant a Temporary RentalAgreement, adjacent to the Qa ; and

WHEREAS, FedEx in pursUant to Resolution 03062,previously gifted tojPort a B’727-100, which is slightly damaged,but continues to ernergr response training purposes for Portstaff, the OaJ LartrnejAircraft Rescue and Fire Fightingservice (“ARFt Countyeriff’s Office, and other lawenforcement. a

er’s Office confirms that the Boeing:iated, and has a Net Book Value of Zero Dollars

staff desires to accept the gifted retiredrcraft from FedEx to replace the aged and

>eing 27-100, for the continued use of emergencyses by the Port, Oakland Fire Department and others; and

FedEx has recommended a contractor that dismantlestired aircraft, ADI Aircraft Demolition & Recycling

now, therefore, be it

NED, that in acting upon this matter, the Board hasexercised its independent judgment based on substantial evidence in therecord and adopts and relies upon the facts, data, analysis, and findingsset forth in the Agenda Report, and in related agenda materials and intestimony received; and be it

727—200

($0.00);

Company

302195


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FURTHER RESOLVED, that the Board delegates to the ExecutiveDirector the authority to accept the gift of the retired Boeing 727—200freight aircraft from FedEx on behalf of the Port, and further approvesand authorizes the Executive Director to execute for and on behalf of theBoard all documents necessary to consummate the transaction, including,but not limited to, a Quit Claim Deed of Gift; and be it

FURTHER RESOLVED, that the Board hereby4Ømines that theBoeing 727—100 aircraft, as more fully described in4Agenda Report, isinadequate, obsolete or worn out within the meaninection 12 of PortOrdinance No. 1606 and Section 5.13(a) of the Restated MasterTrust Indenture and the Intermediate Lien Mast iture, each byand between the Port and U.S. Bank National :ustee; andbe it

FURTHER RESOLVED, based upon information contaiiin theAgenda Report, the Board hereby finds deteris that it is in thebest interests of the Port to corct for .posal, recycling andcomplete removal of the Boeing t standard biddingprocedures, and that said standard bi s are hereby waived;and be it

hereby approves and[rd of a sole source

complete removal ofrt approximately $3,000obtain from the sale of

Ftdoes not creentitJ’part

rhe Executive Director is herebyof Sale or any other appropriatethe equipment as described in the

, that ..s resolution is not evidence of andtitute (a) a contract, or the grant of any right,4nterest, or (b) any obligation or liability on theficer or employee of the Board. This resolution

.zes \ execution of contract(s) in accordance with thetion. nless and until a separate written contract islf of the Board as authorized by this resolution, is

to form and legality by the Port Attorney, and isntracting party, there shall be no valid or effective

FURTHERauthorizes the execution forcontract with ADI for the di.the Boeing 727—100, for whichto $5,000, depending on what scmaterials; and be it

FURTauthorized to cdocuments neceAgenda Repor

,.*e anyy to tr1 be itl

p, tha..cessary’‘r titi

..s and Lof this rc.

executed on1 as approvecd to

3O2.95


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AGENDA REPORT

TITLE: Cancellation of Manager, Business Development and International Marketing Eligible List

AMOUNT: N/A

PARTIES INVOLVED:

Corporate Name/Principal Location


SUBMITTED BY: Sara Lee, Chief Financial Officer

APPROVED BY: Chris Lytle, Executive Director

SUMMARY

Staff requests that the Board of Port Commissioners (“Board”) approve the cancellation of the Manager, Business Development and International Marketing eligible list pursuant to Rule 4, Section 4.22 of the Personnel Rules and Procedures of the Port of Oakland (“Port Personnel Rules”) and Board practice. A new recruitment effort will be undertaken once the current eligible list is canceled.

FACTUAL BACKGROUND/ANALYSIS

On September 5, 2013 the Port created an eligible list for the Manager, Business Development and International Marketing position which contained the names of nine(9) candidates. As per the Port Personnel Rules, the eligible list expires on September5, 2014, one year from the effective date. Although the incumbent resigned in July 2013, the Maritime Division suspended the final selection until the new Director of Maritime was appointed in order to obtain his input on the selection process for this critical position. The Manager, Business Development and International Marketing position reports directly to the Director of Maritime and is key to the Maritime Division advancing its business goals and objectives. Out of the first four (4) candidates invited for departmental interviews, three (3) were interviewed and one (1) declined due to having received another job offer. These three (3) candidates were interviewed in February 2014. The Director of Maritime determined that these candidates were not suitably qualified for the position. The remaining five (5) candidates were then referred to the Director of Maritime and these candidates were interviewed in March 2014. After conducting the candidate interviews and exhausting the eligible list, the Director of


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Maritime determined that all the candidates on this list were not suitably qualified for the position of Manager, Business Development and International Marketing.

As a result, and consistent with Port Personnel Rule 4 (Applications, Examinations and Eligible Lists), Section 4.22 (The Establishment of Eligible Lists) and Board practice, it is recommended that the Board cancel the Manager, Business Development and International Marketing eligible list so that staff can begin a new recruitment.

STRATEGIC PLAN

Approving the cancellation of the Manager, Business Development and International Marketing eligible list supports the following goals and objectives of the Port’s Strategic Plan adopted on October 5, 2010:

Strategic Priority Area: Port Workforce and Operations

Strategic Priority Area

Goal ObjectiveHow this Action Implements

Port Workforce and Operations

Goal H:Develop and maintain a high performing workforce.

1. Identify, assess and implement key skills and knowledge required for a public enterprise.

The cancellation of the Manager, Business Development and International Marketingeligible list will allow for the creation of a new eligible list to ensure that the most qualified candidate is selected to fill this critical position. This action is pursuant to Port Personnel Rule 4, Section 4.22 and Board practice.

Goal I: Align the Port’s workforce, organizational structure and personnel management practices for optimal performance of the Port.

3. Align responsibilities, authorities and incentives to ensure accountability and transparency in achieving the Port’s strategic goals.

BUDGET & FINANCIAL IMPACT

There is no budget or financial impact.

STAFFING IMPACT

There is no staffing impact.

SUSTAINABILITY

No sustainability opportunities are identified.


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ENVIRONMENTAL

The California Environmental Quality Act (CEQA) Guidelines, Section 15061(b) (3) (“the general rule”) states that CEQA applies only to projects, which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity may have a significant effect on the environment, the activity is not subject to CEQA. The cancellation of the Manager, Business Development and International Marketing eligible list is not a project under CEQA, and no environmental review is required.

MARITIME AND AVIATION PROJECT LABOR AGREEMENT (MAPLA)

The matters contained in this Agenda Sheet do not fall within the scope of the Port of Oakland Maritime and Aviation Project Labor Agreement (MAPLA) and the provisions of the MAPLA do not apply.

OWNER CONTROLLED INSURANCE PROGRAM (OCIP)

OCIP does not apply.

GENERAL PLAN

This action does not meet the definition of "project" under the City of Oakland General Plan, and no conformity determination is required.

LIVING WAGE

Neither the Port’s Living Wage Ordinance (Port Ordinance No. 3666) nor the living wage requirements set forth in Section 728 of the Charter of the City of Oakland (“Charter”) apply to this Section because the action requested is not for a “Port Contract” as defined by Port Ordinance No. 3666 and Charter Section 728.

OPTIONS

1. Approve the cancellation of the Manager, Business Development and International Marketing eligible list.

2. Do not approve the cancellation of the Manager, Business Development and International Marketing eligible list.

RECOMMENDATION

It is recommended that the Board of Port Commissioners approve the cancellation of the Manager, Business Development and International Marketing eligible list.


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RESOLUTION APPROVING THEMANAGER, BUSINESS DEVELOPMENTMARKETING ELIGIBLE LIST.

WHEREAS, the Board of Port rd”) has reviewedand evaluated the Agenda Report ‘ted April 10, 2014,(“Agenda Report”) and related rnater1aJjfJas received the experttestimony of Port of Oakland (“Port”aff, and has providedopportunities for and taken be it

RESOLVED, that the of theManager, Business Marketing eligiblelist, as more fully described het; and be it

t ig upon the matters containedrcisets independent judgment based one reco’and adopts and relies upon thefindincst forth in the Agenda Report and

ceived.

FURTHERherein, the Boa:substantial evfacts, data,in related

302179


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301900

PORT ORDINANCE NO. 4284

ORDINANCE APPROVING AND AUTHORIZING THE EXECUTIVE DIRECTOR TO EXTEND THE LEASE WITH BNSF RAILWAY COMPANY TO CONTINUE TO OPERATE AT THE JOINT INTERMODAL TERMINAL THROUGH SEPTEMBER 30, 2014.

WHEREAS the Board of Port Commissioners of the City of Oakland (“Board”) has reviewed and evaluated the proposed lease extension with BNSF Railway Company (“BNSF”) to continue to operate at the Joint Intermodal Terminal (“JIT”) through September 30, 2014, as set forth in the Agenda Report for Agenda Item 2.3, dated March 27, 2013 (the “Agenda Report”) and related agenda materials, has received the expert testimony of Port of Oakland (“Port”) staff, and has provided opportunities for and taken public comment; now, therefore

BE IT ORDAINED by the Board of Port Commissioners of the City of Oakland as follows:

Section 1. In acting upon this matter, the Board has exercised its independent judgment based on substantial evidence in the record and adopts and relies upon the facts, data, analysis, and findings set forth in the Agenda Report and in related agenda materials and in testimony received.

Section 2. The Board hereby finds and determines as follows:

A. The proposed lease extension with BNSF was reviewed in accordance with requirements of the California Environmental Quality Act (“CEQA”) and the Port CEQA guidelines. This lease extension is categorically exempt from CEQA pursuant to the Port CEQA Guidelines, Section 15301(p), which exempts renewals, extensions or amendments to leases or license and concession agreements where the premises or licensed activity was previously leased or licensed to the same or another person, and involving negligible or no expansion of use beyond that previously existing

Section 3. The Board approves and authorizes the Executive Director to extend the Lease with BNSF for the Joint Intermodal Terminal, through September 30, 2014, under the same terms and conditions of the existing Lease.

Section 4. This ordinance is not evidence of and does not create or constitute (a) a contract, or the grant of any right, entitlement or property interest, or (b) any obligation or liability on the part of the Board or any officer or employee of the Board. This ordinance approves and authorizes the execution of an agreement in accordance with the terms of this ordinance. Unless and until a separate written agreement is duly executed on behalf of the Board as authorized by this ordinance, is signed and approved as to form and legality by the Port Attorney, and is delivered to other contracting party, there shall be no valid or effective agreement.

Section 5. This ordinance shall be effective immediately upon adoption by the Board.

The Board of Port Commissioners, Oakland, California, March 27, 2014. Passed to print for one day by the following vote: Ayes: Commissioners Colbruno, Hamlin, Parker, Uno, Yee and President Butner – 6. Excused: Commissioner Head – 1. Noes: 0.


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of 2301900

John T. BettertonSecretary of the Board


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of 2301882

PORT ORDINANCE NO. 4285

ORDINANCE APPROVING A LEASE WITH RESTAURANTS UNLIMITED, INC. FOR THE PREMISES LOCATED AT 1 FRANKLIN.

WHEREAS the Board of Port Commissioners of the City of Oakland (“Board”) has reviewed and evaluated the Agenda Report for Agenda Item 6.1, dated March 27, 2014 (the “Agenda Report”) and related agenda materials, has received the expert testimony of Port of Oakland (“Port”) staff, and has provided opportunities for and taken public comment; now, therefore

BE IT ORDAINED by the Board of Port Commissioners of the City of Oakland as follows:

Section 1. In acting upon this matter, the Board has exercised its independent judgment based on substantial evidence in the record and adopts and relies upon the facts, data, analysis, and findings set forth in the Agenda Report and in related agenda materials and in testimony received.

Section 2. The Board hereby approves the terms and conditions set forth in the Agenda Report for a Lease with Restaurants Unlimited, inc. for the premises located at 1 Franklin Street, Oakland, California, at a monthly rental rate of $27,348.00 per month for the first twelve months, subject to annual rent increases thereafter, and an additional percentage rent, for a term of ten years with one option to extend the term by an additional ten (10) years, at an increased monthly rental rate.

Section 3. The Board hereby authorizes the Executive Director, or his designee, to approve and execute for and on behalf of the Board the subject Lease and such other documents as may be necessary to consummate this transaction, subject to approval by the Port Attorney as to form and legality.

Section 4. The Board hereby finds and determines that the Lease is categorically exempt from the requirements of the California Environmental Quality Act (“CEQA”) pursuant to Port CEQA Guidelinespursuant to Section 15301, Existing Facilities. CEQA does not apply to the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment or topographical features, involving negligible or no expansion of use beyond that existing at the time of the lead agency’s determination.

In addition, the ten-year lease has been determined to be categorically exempt from CEQA Guidelines pursuant to Section 15300.4 and Port CEQA Guidelines Section 15301(p) (Existing Facilities). Subsection (p) categorically exempts the execution of renewals, extensions, or amendments to lease for license and concession agreements where the premises or licensed activity was previously leased or licensed to the same or another person and involving negligible or no expansion of use beyond the previously existing.


21

of 2301882

Section 5. This ordinance is not evidence of and does not create or constitute (a) a contract(s), or the grant of any right, entitlement or property interest, or (b) any obligation or liability on the part of the Board or any officer or employee of the Board. Unless and until a separate written contract is duly executed on behalf of the Board as authorized by this ordinance, is signed as approved as to form and legality by the Port Attorney, and is delivered to other contracting party, there shall be no valid or effective change order.

Section 6. This ordinance shall be effective immediately upon adoption by the Board.

The Board of Port Commissioners, Oakland, California, March 27, 2014. Passed to print for one day by the following vote: Ayes: Commissioners Colbruno, Hamlin, Parker, Uno, Yee and President Butner – 6. Excused: Commissioner Head – 1. Noes: 0.

John T. BettertonSecretary of the Board


22

MAJOR PROJECTS

This segment of the meeting is reserved for action and discussions regarding the status of Major Projects and issues of special importance.

MAJOR PROJECTS Tab 3

23

BUDGET & FINANCE

This segment of the meeting is reserved for action or discussion regarding the status of Budget and Finance issues.

BUDGET & FINANCE Tab 4

24

Port of OaklandCommissioner's Annual Travel Expense SummaryJanuary ‐ December 2013

Commissioner Dates TotalCestra "Ces" ButnerNo Travel Expenses ‐

Michael ColbrunoMeet with San Diego Port Officials ‐ San Diego, CA 10/4/13‐10/5/13 379.38

Total for Michael Colbruno 379.38

Gilda GonzalesMeet with lobbist ‐ Sacramento, CA 1/29/13 20.00 TPM Conference ‐ Long Beach, CA 3/3/13‐3/7/13 1,215.57 Crisis Management Training ‐ Boston, MA 3/31/13‐4/7/13 1,821.44 Bay Area Council Sacramento Day ‐ Sacramento,CA 4/29/13 111.83

Total for Gilda Gonzales 3,168.84

Earl S. HamlinCalifornia Maritime Leadership Symposium ‐ Sacramento, CA 2/20/13‐2/21/13 482.08 NCPA Federal Policy Conferfence ‐ Washington D.C. 4/21/13‐4/24/13 314.10

Total for Earl S. Hamlin 796.18

James W. HeadNo Travel Expenses ‐

Bryan ParkerNo Travel Expenses ‐

Victor UnoNo Travel Expenses ‐

Alan S. YeeNo Travel Expenses ‐

Total for All Commissioners 4,344.40

NOTE: Expenses captured in this report represent travel expenses incurred by the Commissioners for Port business meetings attended outside the Bay Area and for all conferences.

BUDGET & FINANCE Tab 4.1

25

STRATEGY & POLICY

This segment of the meeting is reserved for action or discussion on Strategy and Policy Issues.

STRATEGY & POLICY Tab 5

26

Aviation Market Update

Oakland International Airport April 10, 2014

STRATEGY & POLICY Tab 5.1

27

OAK Summer 2014: 39 Nonstop Destinations

Oakland International Airport April 2014 2


28

OAK Passenger Activity

FY 2013 Growth spike 9.95 million annual passengers up 3.2% from FY12

Allegiant opened base in April 2013. Alaska added two additional Hawaii flights in Summer 2013.

FY 2014 Volatility and adjustment

Alaska and Allegiant pulled back on earlier growth, fine tuning schedules for long term success.

FY 2015 Stabilization and modest growth

Norwegian, Southwest, Spirit, Hawaiian and Delta growing. Instability remains in the region.



29

Seat Capacity Change: Nov. 2013 vs. Nov. 2012

-4.9%

-0.9%

1.8%

-3.9%

-0.5%Canada

Non-Hubs

Small Hubs

Medium Hubs

Large Hubs

Large US Hubs Faring Best Amidst Consolidation

OAK -2.5%


Source: DOT data via Diio schedule database.


30

Competitive Analysis: Allegiant’s New Markets

Year-Round Nonstop Destinations

33

66

5

1111

2

4

8

222

20132012201120102009

LAXSANOAK

LAX: 19 markets attempted: 3 year-round and 10 seasonal remainOAK, 14 markets attempted:4 year-round plus 3 seasonal remainLAS: 14 markets exited in past 5 years



31

SUPPLEMENTAL April 2014

Oakland International Airport 6


32

Annual Bay Area Airport Passengers(millions)


0

2

4

6

8

10

12

14

16

2007 2008 2009 2010 2011 2012 20130

5

10

15

20

25

30

35

40

45

50

2007 2008 2009 2010 2011 2012 2013

SFO

OAK

SJC

2007-2011:•OAK lost 37% •SJC lost 22%•SFO increased 16%

2007-2013:•OAK lost 33% •SJC lost 18%•SFO increased 27%


33


0%

10%

20%

30%

40%

50%

60%

70%

2007 2008 2009 2010 2011 2012 2013

Bay Area Passenger Share

SFO

OAK

SJC

15.4%

70.8%

13.8%

24.1%

58.3%

17.6%


34

OAK Passenger Carrier Update

Southwest Record profits, completing merger, return to growth focused on international expansion and Washington (DCA) and New York (LGA)

Alaska Air Group Record profits, diversifying away from Pacific Northwest, challenged from Delta at Seattle

Jet Blue Airways Profitable, focused on Boston and Northeast to Southeast corridor including Caribbean

Delta Air Lines Highly profitable, dominant global airline. Build up of Seattle

Hawaiian Airlines Return to profitability in CY13. Overseas expansion to Asia, Australia and New Zealand, build up of OAK and LAX



35

OAK Passenger Carrier Update

US Airways/ US Airways controlling carrier in merger with AA. American DOT requiring PHX to remain 3-years, new AA

developing new hub strategies aligned with joint ventures

Spirit Airlines Record profits, top industry performer, growing fast

Volaris Profitable, expanding rapidly within Mexico while continuing to evaluate US growth opportunities

Norwegian Profitable, growing fast, recent US market entrant facing legacy carrier challenges

Allegiant Air Record profits and growth with new fleet additions of 757 and A320 series aircraft

SATA Niche player to the Portuguese Azores.



36

Summer 2014:106 daily departures, most capacity since 2009

OAK is largest in Bay Area (SFO 47, SJC 70 daily departures in Summer 2014)

– Seasonal BWI redeye flight moved from SFO to OAK and to daytime

– Chicago—MDW up to 4 daily in peak season; Kansas City restored, two daily in peak season


What’s been done? What’s happened? What’s next?

Engaged on airport branding issues

Planning terminal layout for accommodation of larger 737’s

Proposed pricing parity among Bay Area airports

Escalated on-time performance issue

Seasonal Baltimore nonstop

Current support for OAK-Kansas City-Washington Reagan slot campaign

Planning for international growth and related facility requirements

“Fly Seattle and Park Free” program

OAK is a key “Focus City”Largest California base at OAK; 2,400 based staff100+ daily flights to 17 destinations


37

New strategy - JetBlue Mint to compete with similar products in the SFO-JFK market

Confluence of carriers and codeshares at SFO makes it very difficult for airlines to consider OAK

NYC summer 2014 daily departures: SFO 44, OAK 1, SJC 1

Transcon yields are low amidst heavy competition * IAD cancelled July 14



Cooperative partnership with JetBlue on Cal Football

As seasonal BWI announced by Southwest, JetBlue pulls seasonal OAK to Washington-Dulles

Despite extensive engagement with carriers there is no interest in entering or re-entering these markets from OAK in the current competitive environment

Use community partnerships to create unique East Bay business cases with the goal of increased JFK frequencies

Transcontinental FlightsJetBlue and other carriersJetBlue – 3 to 6 daily departures to 4* destinations


38

Significant other airline growth at Seattle has created challenges

Hawaii schedules fine tuned and stable, strong performance now apparent

OAK-SEA and OAK-PDX are comparatively marginal performers



Partnered with Alaska on Cal Football promotion

Continued development of Hawaii market lead to the restoration of 3 weekly Honolulu flights

Aggressive promotion underway to retain current size of OAK-Seattle market amidst increased competition at other Bay Area airports

Hawaii core feature of summer advertising campaign

Acceleration of Terminal One facility renovation requested by Alaska

Planning analysis of airline lounge concepts

Alaska Air GroupActively developing network outside of SEA7 daily departures to 5 destinations


39



Spirit

Chicago O’Hare added and Dallas Fort Worth increased to year round

Allegiant

Fine tuning of OAK schedules in terms of viability and seasonality of some destinations has brought success

Casino subsidized flight to Reno-Tahoe failed; Provo successful; new markets under evaluation

Allegiant is a major contributor to inbound tourism

Hawaiian

HNL increased to daily in January 2014

Note: Spirit, Allegiant and Hawaiian were all cooperative partners on our Cal football partnership agreement

Spirit

ORD, DFW launch May 1

Hawaiian

New seasonal service to Lihue, Kona launch July 2014

Park Free to Hawaii in support

Hawaii messaging in Summer 2014 campaign

Ongoing partnership with Cal Athletics

A330-200 deployed at OAK in June 2014

Non-Allied, Low Cost and/or Niche Carriers All profitable and growingFlights: Hawaiian, 2 to 3 daily; Spirit, 4 daily; Allegiant, 1 to 2 daily


40

Legacies have successfully consolidated hub service to/from the Bay Area at SFO and maintained market share

New service to Delta’s LAX hub from OAK created new one-stop itineraries from the OAK market to other Delta, Sky Team and related partner carrier destinations

OAK has nonstop, direct or single connection air service to the top 50 US markets



Delta connected OAK with their hub at LAX and flights grew from 4 to 10 daily, used social media advertising in support of new LAX and existing Salt Lake City flights

US Airways led merger with bankrupt AA/AMR Group

Maintained contact with US Airways Network Planning through merger closing

DOT has required PHX to remain as a hub for 3 years

Final issue of US Airways magazine was an Oakland issue.

Execute strategy to engage American Airlines beginning with Spring and Fall 2014 route conferences

Use success of Delta service to nearby hubs as baseline of business case to add service to other hubs further away

Hub Integration to/from OAKDelta Air Lines and American Airlines/US AirwaysFlights: Delta 10 daily, AA/US 5 daily


41

• OAK now positioned as a viable international gateway to the San Francisco Bay Area for high value carriers. Opportunities exist for niche carriers, like SATA, too. New 787 and A350 aircraft are creating new long haul opportunities for OAK in Europe, South America, Asia and the South Pacific. been done? What’s happened


What’s been done? What’s next?

Secured Norwegian service to Stockholm and Oslo

Engaged incumbent and targeted, potentially new international carriers in discussion about top OAK prospects for new service

Landing rights obtained for all international flights scheduled at OAK by Norwegian, Volaris and SATA

Doing so effectively increased CBP coverage of the facility by 2 hours - from 8 to 10 hours of operation

Norwegian launch May 2014: multi-media, multi-national campaign now underway to promote the new service with several local events also scheduled

Cross disciplinary operational team assembled to bolster reliability of facilities and accommodate the 787

Pursue CBP strategy to continue to expand operational hours and allow daytime flights

Pursue additional destinations in Norwegian’s system in Europe, Northern Africa and the Middle East

Planning analysis for international lounge and enhanced international facilities

International Gateway DevelopmentVolaris, Norwegian Air Shuttle, SATAFlights: Volaris 2 to 3 daily, Norwegian 5 weekly, SATA 1 weekly


42

Current Advertising Outlets

A small budget necessitates a highly targeted effort toward a low cost per quality, demographically targeted impression. We seek the greatest impact possible with high “dwell time” and/or the opportunity for multiple impressions

Outbound advertising is focused on Bay Area travelers, specifically East Bay, with a known high propensity to travel. We reach them through our partnership with Cal IMG/Cal Athletics, targeted radio and television spots and out of home advertising such as transit stations and billboards and event programs. We also reach them through social media engagement, primarily on Facebook, and targeted online advertising.

Inbound advertising is focused on visitors to the Bay Area with the goal of creating awareness among known travelers of OAK, our core value proposition and our central location in the San Francisco Bay Area. We reach this audience primarily through online advertising and targeted social media engagement.

All of our efforts are executed in alignment with the promotion of OAK’s air service and are cooperative with our tenant airlines and airport parking partner, LAZ Parking

This fiscal year we will have generated over 109 million impressions at an average cost of 6.5 cents per impression



43

Current Advertising OutletsCal Athletics Partnership, “Official Airport of Cal Athletics”

All sports but primarily Football, Men’s and Women’s Basketball and Baseball

Multi-media including in-venue, print, web, social media and events

Titan Media (representing BART) - Transit station currently Powell and Embarcadero and in vehicles

KQED - Radio: KQED News, Television: Check Please, Bay Area

Encore Media – ACT and Berkeley Rep performance program advertisement

NCM Media – “Pre-trailer” 30-second film spot in multiplex cinemas

Facebook – Ongoing awareness campaign promoting air service, targeted campaigns for new routes

Google – Targeted search result promotion, display ads and search re-direct in support of new air service

LAZ Parking (cooperative) - radio, online and print advertising in support of parking promotions and combined with air service promotions.

CBS Outdoor and Clear Channel – Full use of all allocations offered by covenant in Port contracts including in-terminal and billboard signs (i.e. hangar and Bay Bridge)



44

Partnerships and Participation

Business Organizations and Agencies

East Bay EDA

Bay Area Council

Innovation Tri Valley

Tourism Business Development Visit Oakland

Visit California

Brand USA

Other Bay Area convention and visitor bureaus



45

Introduction and Background, Customer Service Satisfaction Survey

MethodologyOver 700 in-person interviews conducted post-security from July –December 2013

Proportional to departing passenger activity by airline and time of day

Self-administered questionnaire: 5 minutes average length

Topics covered:Satisfaction with seven areas of airport experience under some level of airport influence (arrival, parking, check-in, cleanliness,

Wi-Fi, shopping alternatives, food selections)

Likelihood of recommending OAK to others

Factors most important in choosing OAK for current trip

Primary reason for trip

Usage of in-terminal services

Bay Area airport used most

Airport arrival mode

Ticket type

Round trips by air in past 12 months

Gender

Age

Baseline measurement only

Expect seasonal fluctuations in scores as the leisure/business mix changes



46

Sample Size=733. Percent answering “5” on a 5-point scale where “5” is “Most Important”. 3rd and 4th quarters weighted equally.

OAK Customer Survey- 3rd/4th Quarters 2013Ticket price, nonstop availability, and airline are more important than any airport-controlled factors in a traveler’s decision to use OAK.Cleanliness and the arrival experience are the most important airport controlled factors.

Rated factor “Most important” in choosing OAK…

2%

9%

14%

19%

20%

24%

24%

37%

48%

58%

66%

Shopping alternatives

Food selections

Parking

Physical check-in area

Wi-fi accessibility and ease of use

Arrival (signage, drop off location)

Security checkpoint experience

Cleanliness of airport

Availability of particular airline

Availability of nonstop

Ticket price


47

48%

44%

45%

47%

42%

39%

36%

34%

38%

36%

30%

35%

34%

31%

Arrival at the airport

Physical check-in area

Cleanliness of airport

Parking proximity andconvenience

Wi-Fi accessibility andease of use

Food selectionsoffered in the airport

Shopping alternatives

"5" Rating "4" Rating

Sample Size=733. Percent answering “4” or “5” on a 5-point scale where 1 is “Very Unsatisfied” and 5 is “Very Satisfied.” 3rd and 4th quarters weighted equally.

OAK Customer Survey- 3rd/4th Quarters 2013

Mean Score (1-5)

4.2

4.2

4.2

4.1

4.1

4.0

3.9

OAK scores well in the airport-controlled areas of greatest importance to the traveler- the arrival experience and cleanliness.Airports scoring “above average” on ACI’s ASQ Survey score a 4.2 or higher on a 5 point scale. OAK’s performance is average to above average.

Satisfaction with…82%

82%

81%

77%

77%

73%

67%


48

Sample Size=733

OAK Customer Survey- 3rd/4th Quarters 2013About one in three travel for business in this interviewing period, though this varies by time of year.

Primary Reason for Trip

36%

34%

25%

5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Other

Visiting Friends andRelativesBusiness

Vacation/Leisure


49

Sample Size=733

OAK Customer Survey- 3rd/4th Quarters 2013The median age of the OAK traveler is 44, with 4 round trips taken per year.

Traveler Demographics

52%

48%

Gender

FemaleMale

13%

18%

20%

22%

20%

7%

Age

65+55-6445-5435-4425-34<25

91%

5%4%

Ticket Type

Other

Non-RevenueTravelFirst Class/Premium

Upgrade/BusinessSelectCoach

Round Trips in Past 12 Months

Total Business

0-1 15% 4%

2-5 47% 31%

6-12 22% 26%

13+ 16% 39%


50

OAK Value Proposition: The Close and Convenient Airport for Most


Closest To: Residents % of TotalOAK 3,889,110 40%SFO 1,697,468 18%SJC 2,606,791 27%SMF 1,445,366 15%Total 9,638,735

Note: Closest defined by drive time. 1 dot = 100 residents.Source: Census 2010.

2 Hour Drive TimeAround OAK

3.9

1.7

2.6

1.5

0.0

0.51.0

1.52.0

2.5

3.03.5

4.0

Closest to OAK Closest to SFO Closest to SJC Closest to SMF

Residents (Millions)


51

Looking forward to Summer 2014 and Beyond

New first ever non stops Stockholm (May 3), Oslo (May 28)

First 787 Dreamliner deployed at OAK

Restored Dallas-Ft. Worth to year-round (May 1)

Restored Chicago O’Hare International (May 1)

Restored seasonal Baltimore-Washington (June 8)

Kansas City restored, Chicago-Midway increased (June 8)

New service Dallas Love Field (Late Winter 2015)

Honolulu restored to daily (June 1) for 3 daily to Hawaii flights with service to four islands

New service to Kona (June 14) and Lihue (June 15). First A330-200 deployed at OAK to Honolulu making for 3 daily widebody departures to Hawaii



52

Airport Properties

A Period of Cautious Optimism

Consolidation of FBOs: 3 → 2

FedEx’s Completion of New International Sort Facility

Safeway’s Long-Term Lease of Corporate Aviation Hangar


53

A Dozen “Available” PropertiesUnder-Utilized/Antiquated FacilitiesEnvironmentally Challenged PropertiesLong-Term Impacts to Airport OperationsPolitically-Sensitive Highest-and-Best UsesConsolidation/Site Maximization OpportunitiesFBO Growth and Expansion

Landmark AviationKaiserAir


54


55

Commercial OpportunitiesCorporate Aviation Expansion

Vacant ParcelsInvestments in Existing LeaseholdsIncreased Fuel Sales Volume

Commercial DevelopmentGateway Restaurant & HotelAlternative/Clean EnergyAviation Mechanic SchoolPilot/Flight Training


56

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

2008 2009 2010 2011 2012 2013

CALENDAR YEAR

GA

LLO

NS

SO

LD LANDMARK AVIATIONKAISERAIRCHEVRONBUSINESS JETAMERIFLIGHT

Aviation Fuel SalesBarometer of Corporate Aviation Activity


57

Terminal OpportunitiesOAK’s Savvy Passengers

Food & Beverage OfferingsQuick-Serve; Grab ‘n GoChef-Driven Menus – Focus on Fresh/Local“Pairings” – Increased Sales 20% at Pyramid

Retail SelectionsAutomated Specialty RetailNew Retail Operator


58

Fast-Service Concessions


59

Gross Parking Revenue & Enplaned Passengers: 2009 - 2014

-

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

Jul-0

9

Sep-09

Nov-09

Jan-1

0

Mar-10

May-10

Jul-1

0

Sep-10

Nov-10

Jan-1

1

Mar-11

May-11

Jul-1

1

Sep-11

Nov-11

Jan-1

2

Mar-12

May-12

Jul-1

2

Sep-12

Nov-12

Jan-1

3

Mar-13

May-13

Jul-1

3

Sep-13

Nov-13

Jan-1

4

Mar-14

Since 2011

• Air passenger traffic has increased 6%

• Parking revenue has increased 13%

• Revenue per enplaned passenger has increased 12%* Rolling 12-month average


60

Gross Parking Revenue per Enplaned Passenger: 2009 - 2014

5.20

5.40

5.60

5.80

6.00

6.20

6.40

Jul-0

9

Sep-0

9

Nov-0

9

Jan-1

0

Mar-10

May-10

Jul-1

0

Sep-1

0

Nov-1

0

Jan-1

1

Mar-11

May-11

Jul-1

1

Sep-1

1

Nov-1

1

Jan-1

2

Mar-12

May-12

Jul-1

2

Sep-1

2

Nov-1

2

Jan-1

3

Mar-13

May-13

Jul-1

3

Sep-1

3

Nov-1

3

Jan-1

4

Mar-14

Revenue per passenger increased 11% since 2009 due to:

• Marketing: Loyalty and Airline-Park Free programs

• Economic recovery * Rolling 12-month average


61

REMAINING ACTION ITEMS

Remaining Action Items are items not previously addressed in this Agenda that may require staff presentation and/or discussion and information prior to action by the Board.

REMAINING ACTION ITEMS Tab 6

62


AGENDA REPORT

TITLE: Memorandum of Understanding with Union Pacific Railroad Related to the Development of a New Rail Yard and Logistics Park at the Former Oakland Army Base

AMOUNT: $0

PARTIES INVOLVED:

Corporate Name/Principal Location Union Pacific Railroad / Jack Koraleski, CEO Omaha, NE


SUBMITTED BY: John Driscoll, Director of Maritime

APPROVED BY: J. Christopher Lytle, Executive Director

SUMMARY The Port’s new rail yard at the former Oakland Army Base will connect to the national freight railroad network via a new lead track to Union Pacific’s (“UP”) mainline. The new lead track will be developed on UP property adjacent to the Port’s maritime area. The proposed Memorandum of Understanding (“MOU”) commits both UP and the Port to diligently pursue the necessary agreements to fund and build the improvements, mitigate for the associated operational impacts, identify the facility’s train capacity and other actions necessary for the effective operation of the facility. FACTUAL BACKGROUND The Port plans to redevelop the former Oakland Army Base into a new logistics park which will support new cargo customers in new, best-in-class logistics facilities, a conceptual view of which is attached to this Agenda Report as Exhibit A. The Port and City entered into the Amended and Restated Cost Sharing Agreement dated June 2012, where the Port agreed to develop a rail yard on its property to serve both the Port and City former army lands that are to be redeveloped into this new logistics park. The Port and City then entered into a Baseline Agreement with the state of California in August 2012 where the state committed $242 million in funding for the Outer Harbor Intermodal Terminal program. This program includes a new rail yard by the Port, with $65.8 million in funding from the state. The balance of the funds is being expended by the City and its development partners on roads, utilities and site work for the new logistics development. Additionally, the Port was selected for a $15 million federal grant from the U.S. Maritime Administration in June 2012.

REMAINING ACTION ITEMS Tab 6.1

63


The Port has entered into two contracts for the development of this new rail yard. The first is a design-build construction contract awarded to Balfour Beatty Gallagher & Burk (“BBGB”) in April 2013 for the site work, lead track and a 7-track rail yard capable of storing up to 200 railcars at a time. The second is a construction contract to Stacey & Witbeck for the 8-track unit-train portion of the rail yard. The BBGB contract includes In March 2013, the Port and UP entered into a Preliminary Design Reimbursement Agreement where UP committed to designing the necessary improvements on its property for the lead track. Under this agreement, the Port committed to reimburse UP for up to $750,000 for this work. ANALYSIS The new lead track will be constructed by UP to connect the Port’s new rail yard to UP’s mainline through UP’s existing Oakland rail yard. Access to UP’s mainline is necessary for the rail yard to be served by both UP or BNSF. UP requires new projects such as the Port’s new rail yard to be vetted through its engineering, operations, network planning and business development teams. Developing this project and gaining access to UP’s mainline has been constrained by the urban, developed area surrounding the site and the density of rail traffic on the mainline, notably the time-sensitive Amtrak trains. The Port and UP anticipate entering into multiple agreements related to the new rail yard, including:

• A construction agreement whereby UP would build the lead track on its property, and be reimbursed by the Port for its costs,

• A parking area lease agreement to mitigate for the impacted truck and container parking space impacted by the lead track,

• An agreement to allow the Port to construct, operate and maintain track on UP property,

• An industrial track agreement permitting the rail yard development for a specific train capacity, and

• An operating agreement with the switching railroad for the rail yard. In preparation to enter into these agreements, the Port and UP have negotiated the terms and conditions of an MOU related to the necessary agreements. This MOU would commit both parties to work diligently to secure these agreements in order to develop the rail yard proposed by the Port. Each of the implementing agreements referred to in the MOU will be presented to the Board for its consideration and approval prior to the Port’s execution of each agreement. A copy of the proposed form of the MOU is attached to this Agenda Report as Exhibit B.


64


STRATEGIC PLAN Priority Area Goal Objective How + When Implemented

Market strategically and aggressively to attract new tenants and customers

The former army base will be redeveloped into a logistics park, which takes advantage of the site’s proximity to the port terminals, rail access and overweight capability.

Maintain and aggressively grow core businesses.

Enhance Customer Services

Improved rail facilities at the Port are expected to allow customers to ship more goods by rail through the Port, particularly exporters shipping heavy products in the Port’s overweight container corridor.

Sustainable Economic and Business Development

Aggressively obtain maximum amount of external grant and government funding and regulatory relief.

Seek out and pursue all promising and prospective grants and external funding sources

The proposed rail yard is funded with state and federal grants secured by the Port and its local partners.

BUDGET & FINANCIAL IMPACT Entering into a MOU with UP has no direct cost and therefore no budget authority is being requested at this time. However, under the MOU, the parties will agree to work diligently to enter into certain agreements which will require the expenditure of Port funds and the use of Port lands. The lead track construction is estimated to cost $22 million and would be funded by the Port via a future construction reimbursement agreement. The lead track will require approximately 6 acres of UP lands, which will be mitigated by the Port providing a 6 acre parking lot to the UP on adjacent Port lands at the roundhouse site. Funds for both the truck parking lot and lead track reimbursement are included in the capital needs assessment (CNA) as part of the Lead Track and Manifest Yard task within the Oakland Army Base redevelopment project. UP’s $750,000 lead track design work previously authorized by the Board is funded by the same ‘Lead Track and Manifest Yard’ budget task item. The 5-year CNA for redevelopment of the Port’s Oakland Army Base property is listed below:

5-Year Expenditure Forecast ($ in Thousands)

Description FY13-14 FY14-15 FY15-16 FY16-17 FY17-18 TotalUtility and Roadway Coord. $200 $200 $200 $0 $0 $600

Lead Track and Manifest Yard $29,375 $25,095 $10,550 $3,580 $0 $68,600Support Yard $8,550 $10,350 $3,635 $0 $0 $22,535

Warehouse Retention $2,400 $0 $0 $0 $0 $2,400Community Trust Fund $0 $0 $0 $2,000 $0 $2,000

Totals $40,525 $35,645 $14,385 $5,580 $0 $96,135


65


5-Year Funding Sources ($ in Thousands)

Description FY13-14 FY14-15 FY15-16 FY16-17 FY17-18 TotalPort $5,825 $3,550 $3,051 $2,000 $0 $14,426

TCIF State Grant1 $29,300 $25,095 $7,750 $3,580 $0 $65,725Federal Grants2 $5,400 $7,000 $3,584 $0 $0 $15,984

Total $40,525 $35,645 $14,385 $5,580 $0 $96,135 STAFFING IMPACT Entering into the proposed MOU will have no impact on current staffing. The Oakland Army Base redevelopment program includes staff from Maritime, Engineering, Finance and Social Responsibility Divisions, as well as consulting support. SUSTAINABILITY As a result of this MOU and the development of the rail facilities and the logistics park, the Port intends to improve the supply chain by reducing transportation cost by reducing truck and rail miles travelled for importers and exporters. A more efficient supply chain is expected to result in lower greenhouse gas and criteria pollutant emissions. ENVIRONMENTAL The proposal to authorize an MOU with Union Pacific Railroad related to rail improvements at the former OAB was reviewed in accordance with the requirements of the California Environmental Quality Act (“CEQA”), and the Port CEQA Guidelines. The general rule in Section 15061(b)(3) of the CEQA Guidelines states that CEQA applies only to activities that have a potential for causing a significant effect on the environment. It can be seen with certainty that there is no possibility that authorizing a MOU to negotiate agreements related to construction, funding and operation of rail improvements will result in a physical change in the environment, and therefore this action is not a project under CEQA. Rail improvements on Port-owned property and the related improvements on adjacent Union Pacific property that will be negotiated were previously reviewed in accordance with the requirements of CEQA. In July 2002, the City of Oakland ("City"), as the lead agency under CEQA, certified an Environmental Impact Report ("EIR") for reuse of the OAB. On September 17, 2002, the Board, acting on behalf of the Port as a responsible agency under CEQA, adopted findings and a mitigation program in reliance on the City's EIR (Resolution No. 02317). Subsequently, in June 2012, the Board considered the 2012 OAB Project Initial Study/Addendum prepared by the City and adopted mitigation measures applicable to the Port from the City’s OAB Standard Conditions of Approval/Mitigation Monitoring and Reporting Program ("SCA/MMRP") with Resolution No. 12-76. The OAB EIR described projects to be developed by the Port on its portion of the former OAB, including a rail terminal and related rail linkages and operations.

1 TCIF: Trade Corridor Improvement Fund, administered by Caltrans and the California Transportation Commission 2 Comprised of a 2012 TIGER 2012 Grant administered by the US Maritime Administration, and an FY04-05 omnibus appropriation administered by the Federal Highway Administration


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All design, construction and operations at the OAB must comply with the OAB Standard Conditions of Approval / Mitigation Monitoring and Reporting Program: http://www2.oaklandnet.com/Government/o/PBN/OurOrganization/PlanningZoning/s/ApplicationandZoningInformation/OAK042281 and with the September 27, 2002 Remedial Action Plan ("RAP") and Risk Management Plan ("RMP", which is Appendix E to the RAP) prepared for the State of California Department of Toxic Substances Control and the Oakland Base Reuse Authority. MARITIME AND AVIATION PROJECT LABOR AGREEMENT (“MAPLA”) The MOU does not authorize any construction work; therefore, the provisions of the MAPLA do not apply to this action. However, the rail yard construction work performed by the Port in relation to this MOU is subject to MAPLA. MAPLA will not apply to UP work on private property. OWNER CONTROLLED INSURANCE PROGRAM (“OCIP”) The MOU does not authorize any capital improvement work which would be subject to OCIP; however design and construction work performed by the Port on Port property will be subject to OCIP and Professional Liability Insurance Program (“PLIP”). Work by UP on its property will be not be subject to the OCIP or PLIP. GENERAL PLAN Pursuant to Section 727 of the City of Oakland Charter, this project has been determined to conform to the policies for the transportation designation of the Oakland General Plan. LIVING WAGE Living wage requirements, in accordance with the Port’s Rules and Regulations for the Implementation and Enforcement of the Port of Oakland Living Wage Requirements, would apply where: (1) the lease agreement value is expected to exceed $50,000; and (2) the service provider employs 21 or more employees. In addition, the proposed construction work will be subject to construction prevailing wage requirements. OPTIONS Staff has identified the following options: (1) Authorize a MOU with UP related to the development of a new rail yard and logistics

park at the former Oakland Army Base. This is the recommended option. (2) Do not authorize a MOU. Rail service to the new logistics park requires a connection

to the mainline which is owned by UP. The Port has let two construction contracts for the rail yard which will not be served by trains if the Port does not secure the necessary agreements with UP.


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http://www2.oaklandnet.com/Government/o/PBN/OurOrganization/PlanningZoning/s/ApplicationandZoningInformation/OAK042281


RECOMMENDATION Port staff recommends that the Board authorize a Memorandum of Understanding with Union Pacific Railroad related to the development of a new rail yard and logistics park at the former Oakland Army Base in substantially the form of the MOU attached as Exhibit B to this Report. Exhibits:

A. Conceptual View B. Form of Memorandum of Understanding C. Map


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Exhibit A: Conceptual View


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2

Oakland Logistics Park Rendering


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Exhibit B: Form of Memorandum of Understanding


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MOU re Bulk Transfer Facility at the Port of Oakland (Execution Form)

Page 1 of 5

UNION PACIFIC RAILROAD RAIL ACCESS MEMORANDUM OF UNDERSTANDING

REGARDING NEW BULK TRANSFER FACILITY AT THE PORT OF OAKLAND

A. Port Project. The Port of Oakland (“Port”) wishes to develop a new railyard that will serve, among other things, a logistics park that will include a bulk cargo marine terminal and rail-served transload facilities (collectively, the “Facility”). The plans for the Port’s new railyard contemplate: 1) construction of a new lead track (the “South Lead”) to be built on property owned and operated by Union Pacific Railroad (“UP”); 2) relocation of UP yard switches; 3) movement of existing UP track; and 4) demolition of a building on UP property, all (except the building demolition) as depicted on the conceptual plans attached as Exhibit X (the Port’s plans) and Exhibit Y (UP’s plans) (collectively the “Project”). Based on the conceptual plans and representations made to UP in connection with the Project, UP agrees to move forward with its track authorization process for the Project, subject to the Port satisfying the conditions detailed below. This memorandum of understanding ("MOU") outlines the infrastructure elements that UP requires to efficiently and safely provide rail service to the Facility and establishes an understanding of UP's track authorization process. The criteria outlined below are consistent with Union Pacific's Guidelines for Rail Service and Union Pacific's Industry Track Standards, a link to which can be found at http://www.uprr.com/customers/attachments/industry_guildelines.pdf.

B. Conditions of Project. In addition to the requirements of Union Pacific's Guidelines for Rail Service and Union Pacific's Industry Track Standards, the Port acknowledges the following conditions for this project:

1. UP's approval of the Port's concept plan (depicted in Exhibit X) is based on the Port’s representation to UP that the Facility is being designed to accommodate the handling of up to two unit trains of bulk material per day and the handling and/or interchanging of manifest cars between UP and the Port's Private Rail Service Provider. Any proposed use of the Project for intermodal operations will require negotiation of a separate agreement.

2. UP and Port have previously entered into a separate Preliminary Engineering Design Agreement dated March 29, 2013 (the “Design Agreement”) covering UP’s design of rail infrastructure associated with the Project.

3. The Port will reimburse UP for all of UP’s costs associated with the Project

pursuant to the Design Agreement and a Construction Reimbursement Agreement (the “Construction Agreement”) to be negotiated and entered into between the Port and UP.


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Page 2 of 5

4. UP, at Port's expense, will install the infrastructure depicted in green as shown on Exhibit Y, pursuant to the Construction Agreement.

5. The South Lead, (and specifically switch T-29 as depicted on Exhibit Y,) to be

built as part of the Project, will be the primary rail access for the Facility. Any other access points will be only for emergency access and for such other access as UP may in its discretion permit.

6. The maximum length of a train, including locomotives, which may be operated into and out of the Facility utilizing the South Lead, will be six thousand five hundred (6,500) feet.

C. Additional Agreements. Once the Port has acknowledged the conditions above, the next steps in UP's track authorization process will be as follows:

1. The Port has already prepared and submitted to UP a Switch Location Plan (greater than 30% drawing) for the Port’s new railyard, and a Switch Location Plan (30% drawing) for the South Lead has been prepared by UP. UP will complete design of the signal system associated with the South Lead of the Project. There is no signal system associated with the Facility.

2. UP and the Port must execute a Construction Agreement (defined in §B.3 above) covering UP’s work on the Project.

3. The Port will prepare or cause the preparation of the Facility's final track design/construction drawings and submit them to UP via the Engineering Document Exchange (web application) for approval.

4. The Port will execute a formal lease agreement with UP with respect to replacing intermodal parking spots that will be lost as a result of the project.

5. The Port will execute a formal agreement with the UP covering any UP owned or controlled right of way impacted by the Port's project.

6. The Port will execute an Industrial Track Agreement (“ITA”) with UP.

7. The Port will advise UP in writing as to the entity the Port selects as the Port's Private Rail Service Provider.

8. UP and the Port's designated Private Rail Service Provider must enter

into a formal Interchange Agreement.


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Page 3 of 5

D. Intermodal Operations. The parties have not considered the use of the Facility for intermodal operations as part of the design, review, and approval of the Project. UP acknowledges that the Port may have interest in using the Facility for intermodal service in the future. Any proposed use of the Facility for intermodal operations will require negotiation of a separate agreement. The parties will negotiate any such future agreement in good faith. Nothing in this MOU requires UP to agree to use of the Facility for intermodal operations.

E. Term of Offer. UP's offer of conditional acceptance of the Project plans will expire if the Port does not execute and return this MOU to UP at the address for notices given below by May 14, 2014.

F. Term of MOU. This MOU will expire on May 14, 2015 unless the Port has requested and UP has granted an extension of the MOU. The extension must be requested in writing and approved in writing by UP. The expiration of this MOU will not affect the validity of any other agreements between the parties, including any future agreements described in this MOU.

G. Rail Service. The Port understands based upon information provided by UP that at no time prior to execution of an ITA is UP obligated to provide rail service to the Facility. Further, the Port understands that UP will not operate on industry-owned or controlled tracks until UP has approved the Facility track design/construction drawings and the Port has executed an ITA with UP. Additionally, the Port understands that all of UP's approvals and authorizations are based on the Port's representation of particular volumes and commodities that will be shipped to and from the Facility, as described in the Port’s proposed operating plan for the new railyard dated June 10, 2013 and submitted to UP by the Port on June 21, 2013. Any changes in such volumes or commodities may change UP's requirements to provide service to the Facility. Consequently, if volumes or commodities change after rail service has begun, UP may not be able to meet the Port's expectation for increased or additional rail service without the Port making modifications to the infrastructure or constructing additional infrastructure. H. Notices. Any communication, notice, or demand of any kind related to this MOU which either party may be required or may desire to give to or serve upon the other must be in writing and delivered by personal service (including express or courier service) or by registered or certified mail, postage prepaid, return receipt requested, addressed as follows:


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Page 4 of 5

The Port: Port of Oakland Attn: Mark Erickson, Senior Maritime Projects Administrator 530 Water Street Oakland, CA 94607 Telephone: (510) 627-1459

UP: Union Pacific Railroad Company

Attn: Paul MacDonald 10031 Foothills Blvd Roseville, CA 95747 Telephone: (916) 789-6166

Either party may change its address for notice by written notice given to the other in the manner provided in this Section. Any such communication, notice, or demand will be deemed to have been duly given or served on the date personally served, if by personal service, or three days after being placed in the U.S. Mail, if mailed. I. Waivers. Any waiver, modification, consent, or acquiescence with respect to any provision of this MOU must be set forth in writing and duly executed by or on behalf of the party to be bound thereby. No waiver by either party of any breach will be deemed a waiver of any other or subsequent breach. J. No Third-Party Beneficiaries. This MOU is for the exclusive benefit of the parties to it and not for the benefit of any third party. K. Counterparts. This MOU may be signed in two or more counterparts, each of which will be deemed an original but all of which will together constitute one and the same instrument.

[Signature Page Follows]


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Page 5 of 5

The parties have executed this MOU effective March 14, 2014.

UNION PACIFIC RAILROAD COMPANY THE PORT OF OAKLAND By: ______________________________ Cameron A. Scott Executive Vice President - Operating Union Pacific Railroad Company

By: ______________________________ J. Christopher Lytle Executive Director

Approved as to form

Approved as to form

By: ______________________________ David M. Pickett General Attorney Union Pacific Railroad Company

By: ______________________________ Danny Wan Port Attorney


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Exhibit C: Map


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Port of OaklandEnterprise GIS Map

Feet 25,000 ±

Notes:

1:

0

THIS MAP IS NOT TO BE USED FOR NAVIGATION

This map is a user-generated static output from an intranet map viewer, and is for reference only. Data layers that appear on this map may or may not be accurate, current, or otherwise reliable.

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© Port of Oakland

Fire Stations

Hospitals

Government Buildings

Schools

Streets

Freeway

Freeway Ramp

Thoroughfare / Major Arterial

Residential Street

Port Area Jurisdiction

Shoreline (Ordinary High Water)


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merickson

Callout

Lead Track

merickson

Callout

Port Rail Yard

merickson

Callout

Port Area Line


WHEREAS, the Board ofand evaluated the agendaReport”) and relatedtestimony ofopportunities for

this matter, the Board hassed on substantial evidence in

the facts, data, analysis, andReport, and in related agenda

that the Board approves and authorizes thecute a Memorandum of Understanding (“MOU”)i (“UP”) for the development of a new leadle Port’s new rail yard at the former Oakland

UP’s main line via UP’s existing Oakland railPort’s Maritime Area. The MOU shall be inrm attached to the Agenda Report as Exhibit B.

The ter things, lists a number of other implementingagre e Port and UP anticipate entering into for thedevel :he new lead track, and each of those implementingagreements presented to the Board for its consideration andapproval when the final form, terms and conditions of those agreementshave been agreed upon and prior to the Port’s execution of the same;and be it

FURTHER RESOLVED, that all of the improvements contemplated bythe MOU were previously reviewed in accordance with the CaliforniaEnvironmental Quality Act (“CEQA”) . In July, 2002, the City Council

RESOLUTION AUTHORIZING AWITH UNION PACIFIC RAILROADOF A NEW RAIL YARD ANDOAKLAND ARMY BASE.

oard”) has reviewedil 10, 2014 (“Agenda

received the expertirt”) staff, and has providednt; and

RESOLVED,exercised its,the recordfindings seimaterials and received; and be it

Exe

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of the City of Oakland (“City”), acting as the lead agency under CEQA,certified an Environmental Impact Report (“SIR”) for reuse of the OAB.On September 17, 2002, the Board, acting as a responsible agency underCEQA, adopted finding $ and a mitigation program in1eliance on theCity’s SIR (Resolution No. 02317>. Subsequently, iJune 2012, theBoard considered the 2012 OAB Project Initial Stud’dendum preparedby the City and adopted mitigation measures appb1e to the Portfrom the City’s OAE Standard Conditions orova1/MitigationMonitoring and Reporting Program (“SCA!MMRP”) ution No. 12-76. The QAB SIR described projects to be dev Port on thePort’s portion of the former GAB, incLi 1 andrelated rail linkages and operations.

FURTHER RESOLVED, that the Board by fins and determs thatthe proposal to authorize an MOU winion P€ic Railroad relatedto rail improvements at the former red in accordance withthe requirements of the CEQA, and Guidelines. Thegeneral rule in Section 15061 (b) (3) of Guidelines states thatCEQA applies only to activities that havpotentia1 for causing asignificant effect on the enrnental. Ite seen with certaintythat there is no possibil authoriz, MOU to negotiateagreements related to a operation of railimprovements will result in the environment, andtherefor this action is not a iecde; and be it

FURTHER RESOIiat tholution is not evidence of anddoes not create4tute (Aa contract, or the grant of anyright, entitlem or erty irest, or (b) any obligation orliability on part ohe Board any officer or employee of theBoard. authorizes the execution of anMOU in accorwitthis resolution. Unless and untila separate wr is dulyxecuted on behalf of the Board asauthorized by tholution, is signed and approved as to form and

torney, and is delivered to other contractingralid or effective MQU.

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AGENDA REPORT

TITLE: Approval of an Exclusive Negotiating Agreement (ENA) with Pinnacle Ag. Services, Inc., for 5 acres at the Roundhouse property located at 1195 Middle Harbor Road

AMOUNT: To Be Determined

PARTIES INVOLVED:

Corporate Name/Principal Location Pinnacle Ag. Services, Inc. Oakdale, CA


SUBMITTED BY: John C. Driscoll, Director of Maritime

APPROVED BY: J. Christopher Lytle, Executive Director SUMMARY Port staff has been in discussions with Pinnacle Ag. Services, Inc. (PAS), a sister company to Central Valley Ag. Grinding Inc. (CVAG) located in Oakdale, California, regarding export opportunities for containerized agricultural products. PAS has proposed to utilize rail service to bring in agricultural products in hopper cars that would then be loaded into containers for export via the Port’s marine terminals. This business would represent new incremental cargo to the Port. Staff is requesting a 4-month Exclusive Negotiating Agreement (ENA), through August 11, 2014, with PAG to complete certain key tasks and finalize key terms of a lease, which ultimately is expected to result in a multi-year lease. FACTUAL BACKGROUND The Roundhouse property comprises approximately 40 acres of land between the Matson Terminal (Berths 60-63) and the privately-owned Schnitzer Steel Industries facility, very near the Union Pacific (UP) railyard located along Middle Harbor Road in the Port’s maritime area. Currently, the Roundhouse property is being used for the Port’s truck parking operation. Port staff continuously seeks tenancy opportunities to maximize use of existing Port assets and revenues. The PAS sister company CVAG has operated a rail transload facility in Modesto since 2005. Current rail transloading services account for 850,000 tons processed annually through this facility. A fully integrated support network includes freight logistics, export, and domestic marketing divisions. Annual company revenues total $37 million.


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PAS has customers who wish to ship agricultural products via containers to markets in Asia and other Pacific Rim areas. PAS proposes to lease 5 acres of the Port’s Roundhouse property (the “premises”) to transload and ship these products. In particular, PAS proposes to build a 300 ft. by 200 ft. soft-sided building on the premises, to unload agricultural products from rail cars on track adjacent to the premises, store products, and subsequently load the products into containers. Initial start up volume will be 120 to 150 containers per day, with volume progressively increasing over time. PAS proposes to use a UP rail spur adjacent to the premises for rail access. A site map of the Roundhouse property, including the premises proposed for occupancy by PAS, is provided as Attachment A. ANALYSIS PAS’ business model requires that export containers be loaded up to the 95,000 lb gross weight afforded by the Port’s permitted overweight corridor. State law only allows truck gross weights of 80,000 lbs, but within the Port area and on certain City of Oakland streets trucks can weigh as much as 95,000 lbs. The trucker must obtain a permit from the City (via the Oakland Police Department) as well as the Port, and must utilize specialized tri-axle chassis. The cost savings from loading containers to the 95,000 lbs gross weight is the driving aspect of PAS’ proposal. PAS has indicated they intend to bring new cargo to the Port, on the order of 2,600 forty-foot equivalent units (or 5,200 twenty-foot equivalent units; TEUs) per month. Without a commitment from the UP, PAS cannot utilize the premises to bring in this new cargo. Entering into an ENA with the Port will allow PAS to demonstrate to the UP that they have Port commitment and authority to work towards a lease of the premises. PAS has requested an ENA through August 11, 2014, for time to complete the following:

• CEQA analysis by the Port’s Environmental Division • Verification of Union Pacific support to provide the required service • Terms of lease with the Port

Based on discussions between Port staff and PAS to date, staff expects the ENA to successfully conclude with a lease agreement that will be presented to the Board for approval.


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STRATEGIC PLAN

Strategic Priority Area

Goal Objective How + When Implemented


Goal A: Create Sustainable Economic Growth For The Port And Beyond.

1. Maximize the use of existing assets

By agreeing to this ENA the Port should be able to reach an agreement which will increase revenue from Maritime properties.


Goal B: Maintain And Aggressively Grow Core Businesses

2. Market strategically and aggressively to attract new customers and tenants.

By agreeing to this ENA the Port should be able to reach an agreement that will attract new cargo which would result in increased throughput and revenue in the Maritime area.

BUDGET & FINANCIAL IMPACT Compensation terms will be finalized during negotiations, but are expected to consist of minimum rent plus variable rent. Revenues from PAS may be augmented with potential incremental revenue from marine terminals resulting from additional cargo throughput. STAFFING IMPACT The proposed action is not expected to have an impact on staffing. SUSTAINABILITY This resolution will allow staff to reach an agreement which will augment and enhance Maritime operations at the Port of Oakland and support sound local and regional economic development through the development of direct or indirect job opportunities. The proposal involves new cargo to the Port that will be coming in via rail. ENVIRONMENTAL The proposal to enter into an ENA with Pinnacle Ag. Services, Inc. to negotiate a lease is not an activity that will result in direct or indirect physical changes in the environment. Therefore, the proposed activity is not a project under the California Environmental Quality Act (CEQA) and no environmental review is required (CEQA Guidelines Section 15060(c)(2)). When lease terms are agreed upon, staff will determine whether further environmental review is required at that time, and the project may be brought to the Board for approval of CEQA findings.


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MARITIME AND AVIATION PROJECT LABOR AGREEMENT (MAPLA) The matters contained in this Agenda Report do not fall within the scope of the Port of Oakland Maritime and Aviation Project Labor Agreement (MAPLA) and the provisions of the MAPLA do not apply. OWNER CONTROLLED INSURANCE PROGRAM (OCIP) This action is not subject to OCIP. GENERAL PLAN This action does not change the use of any existing facility, make alterations to an existing facility, or create a new facility; therefore, a General Plan conformity determination pursuant to Section 727 of the City of Oakland Charter is not required. LIVING WAGE Living wage requirements will apply to a resulting lease agreement if PAS employs 21 or more employees working on Port-related work and the tenancy agreement is expected to generate more than $50,000 over the term of the tenancy. OPTIONS 1. Authorize the Executive Director to enter into an Exclusive Negotiating Agreement with

Pinnacle Ag. Services, Inc., through August 11, 2014 to negotiate a lease for 5 acres at the Roundhouse property.

2. Do not authorize the Executive Director to enter into an Exclusive Negotiating

Agreement with Pinnacle Ag. Services, Inc. 3. Authorize the Executive Director to enter into an Exclusive Negotiating Agreement with

Pinnacle Ag. Services, Inc. for a different amount of time, as determined by the Board. RECOMMENDATION Authorize the Executive Director to enter into an Exclusive Negotiating Agreement with Pinnacle Ag. Services, Inc., through August 11, 2014 to negotiate a lease for 5 acres at the Roundhouse property.


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Attachment A

Map of Premises


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Port of OaklandEnterprise GIS Map

Feet 9,014 ±

Notes:

1:

0

THIS MAP IS NOT TO BE USED FOR NAVIGATION

This map is a user-generated static output from an intranet map viewer, and is for reference only. Data layers that appear on this map may or may not be accurate, current, or otherwise reliable.

376

© Port of Oakland

Spherical Imagery Points

Fire Stations

Hospitals

Government Buildings

Schools

Railroads

Streets

Freeway

Freeway Ramp

Thoroughfare / Major Arterial

Residential Street

Terminal Boundaries

Wharves, Piers, Docks

Berths

Port Area Jurisdiction

Shoreline (Ordinary High Water)


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dprevost

Line

dprevost

Text Box

Proposed Lease Area for CVAG


RESOLUTION APPROVING NDEXECUTIVE DIRECTOR TO ENTER INTONEGOTIATING AGREEMENT WITHSERVICES, INC., FOR 5 ACRES ATPROPERTY LOCATED AT 1195

WHEREAS, the Board of Por1ssioners (“Board”) hasreviewed and evaluated Agenda Report Ite (“Agenda Report”), datedApril 10, 2014 and related a1nda materiaias received the experttestimony of Port staff, anvided opiities for and takenpublic comment; now,

RESOLVED, that therd Ives and authorizes theExecutive Director of the Porfland (Executive Director”) tonegotiate and execupr and Whaif of the Board and subject toapproval as to iegaliby the Port Attorney, a 4-monthExclusive Negot. nt (‘“), through August 11, 2014, withPinnacle Ag. (“PAfor 5 acres at the Roundhouseproperty bc r Road, as more fully describedin the Ag

VED, that the purpose of the ENA will be tos and conditions of a future lease with PAS,

.tion, the precise boundaries of the proposedabout the proposed operation of the

of permitted uses of the premises, allconstructed or installed, the term of the lease,

may include both a minimum rent and a variableort staff to complete further analyses of the

uant to the California Environmental Quality Actallow PAS to arrange other support services to the

iird parties. During the ENA, each party shall be.e for their own transaction costs; and be it

FURTHER RESOLVED, that the Board hereby finds anddetermines that to negotiate a lease is not an activity that willresult in direct or indirect physical changes in the environment.Therefore, the proposed activity is not a project under the CaliforniaEnvironmental Quality Act, and no environmental review is required.However, if and when lease terms are agreed upon, staff will determine

premises

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whether future environmental review is required at that time, and theproject may be brought to the Board for approval of CEQA findingsprior to the Board’s approval of any proposed lease resulting fromthis ENA; and be it

FURTBER RESOLVED, that this resolution it evidence ofand does not create or constitute (a) a contract, Whe grant of anyright, entitlement or property interest, or (biy obligation orliability on the part of the Board or any offii&. employee of theBoard. This resolution approves and authori cution of anagreement in accordance with the terms of ti Unless anduntil a separate written agreement is dul if of theBoard as authorized by this resolution, as toform and legality by the Port Attorney othercontracting party, there shall be no it, andbe it

FURTHER RESOLVED, thateffective immediately upon adoption by

shall become

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ORDINANCE APPROVING A FIVE-YEARCONCESSION AGREEMENT WITH VAINC., FOR THE PREMISES AT 24ROAD, FOR A MONTHLY RENT OF

4fl13

WHEREAS, the Board of ners of the City ofOakland (“Board”) has reviewed and the Agenda Report forAgenda Item 6.3, dated April 10, 20Ihe “Agenda Report”) andrelated agenda materials, has received the”rt testimony of Port ofOakland (“Port”) staff, opnities for and takenpublic comment; now, theref

Commissioners of the

this matter, the Board hasased on substantial evidence in

the facts, data, analysis, andReport and in related agenda

he Board hereby approves the terms andthe Agenda Report for the License & Concession

irtation, Inc. for a (5) year term for theibarcadero Road, at a rent of $1,850.40 per

ed adjustments), and hereby authorizes thehis designee to approve and execute such License

it and such other agreements and such additionalbe necessary to consummate the transaction

.s Agenda Report for and on behalf of the Board,1 by the Port Attorney as to form and legality, andcondition that the approvals set forth in this

ordinance id for no longer than 90 days, and that if the subjectdocuments are not fully executed by that date such approval shall benull and void unless further extended at the sole and absolutediscretion of the Executive Director or his designee.

1’

BE IT ORDAINEDCity of Oakland as follows:

Seciexercised itsthe record afindings sematerials

pi

con.

gage 1 of 2302200


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Section 3. The Board hereby finds and determines that thistransaction is categorically exempt from the requirements of theCalifornia Environmental Quality Act (“CEQA”) pursuant to CEQAGuidelines, Article 19, Section 15300.4, which directs public agenciesin the course of establishing their own procedures, list specificactivities that fall within each of the exempt c!es categorizedunder Article 19 (Categorically Exemptions), and CEQA GuidelinesSection 15301(p), which exempts the execution ofes or License andConcession Agreements where the premises or activity waspreviously leaded or licensed to the same person, andinvolving negligible or no expansion of previouslyexisting.

Section 4. This ordinance it evidence of andfes notcreate or constitute (a) a contrac’ or tlgrant of any right,entitlement or property interest, b) anyigation or liabilityon the part of the Board or any or mp1oyee of the Board.Unless and until a separate written’t is duly executed onbehalf of the Board as authorized by ordinance, is signed asapproved as to form and ga1ity by ort Attorney, and isdelivered to other coritraarty, .1 be no valid oreffective change order.

Approved as to form and legality:

immediately upon

President.

Secretary.

Port Attorney

Section 5. Thisadoption by the Board.

Attest:

page 2 of 2302200


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UPDATES & ANNOUNCEMENTS

The President, Members of the Board and the Executive Director will report on noteworthy events occurring since the last Board Meeting.

UPDATES & ANNOUNCEMENTS Tab 7

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SCHEDULING

This segment of the meeting is reserved for scheduling items for future Agendas and/or scheduling Special Meetings.

SCHEDULING Tab 8

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PORT OF OAKLAND · 2016-03-10 · J. CHRISTOPHER LYTLE Executive Director DANNY WAN Port Attorney...

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