Resolution exempting from the competitive bidding policy set forth in Administrative Code, Sections 2.6-1 and 23.33, approving Port Lease 17322 for the continued operation of an observation wheel at SeaWall Lot (SWL) 301 between the Port of San Francisco and SkyStar Wheel, LLC for a period of 18 months with one 18-month extension option, to commence on November 1, 2025, through April 30, 2027, for a monthly base rent of $11,000 with annual increases plus a percentage rent of 8%, for an estimated revenue of $1,800,000; and adopting environmental findings under the California Environmental Quality Act.

The City Council is considering a resolution to exempt SkyStar Wheel, LLC from competitive bidding policies (Administrative Code Sections 2.6-1 and 23.33) and approve a lease renewal for the continued operation of an observation wheel at SeaWall Lot (SWL) 301 in Fisherman's Wharf.

This new lease (Port Lease 17322) would commence on November 1, 2025, for an initial period of 18 months, expiring on April 30, 2027. It includes one 18-month extension option, potentially extending operations through October 31, 2028. The Port retains a 90-day early termination right if the site is needed for the Fisherman’s Wharf Revitalization project.

The lease specifies a monthly base rent of $11,000 with annual increases, plus a percentage rent of 8% of gross revenues. The estimated total revenue for the Port over the full 36-month term (if the option is exercised) is $1,800,000. A $100,000 security deposit is also required.

The competitive bidding waiver is justified due to a perceived lack of competition for a short-term lease and the urgency to maintain uninterrupted operations to support the economic recovery and activation of Fisherman's Wharf. Environmental findings under the California Environmental Quality Act (CEQA) were adopted, confirming no new significant impacts from the extended operation or the recently constructed new foundation. Applicable mitigation measures include those for accidental discovery of archaeological resources (M-CR-2a) and best available control technology for diesel generators (M-AQ-4c). SkyStar is encouraged to continue distributing 500 complimentary tickets per month to underserved communities, and wheel lighting facing the city is restricted to a single stable color (default white) and must be turned off by 10 PM, with exceptions for holidays/civic events.

This resolution ensures the continued operation of the SkyStar Observation Wheel at Fisherman's Wharf, providing a popular attraction for both tourists and local residents. It is expected to boost economic activity in the area through increased foot traffic and generate significant revenue for the Port. Residents will continue to benefit from the attraction, with complimentary tickets offered to underserved communities and addressed concerns regarding distracting lighting through new restrictions.

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