MEMORANDUM
July 9, 2020
TO:

MEMBERS, PORT COMMISSION
Hon. Kimberly Brandon, President
Hon. Willie Adams, Vice President
Hon. Gail Gilman
Hon. Doreen Woo Ho

FROM:

Elaine Forbes
Executive Director

SUBJECT: Informational presentation on an economic assistance loan program for
crab fishers impacted by the Pier 45 Shed C Fire to be administered in
partnership with the Mayor’s Office of Economic and Workforce
Development.
DIRECTOR'S RECOMMENDATION: Information Only
EXECUTIVE SUMMARY
Commercial fishing is one of the Port’s and City’s most important maritime industries.
On May 23, 2020, a four-alarm fire destroyed Pier 45 Shed C, a facility used to house
fishing gear for the vast majority of San Francisco’s crab fishing fleet. More than 30
fishers lost an estimated 8,000 crab traps in the fire, a potentially catastrophic event for
the local industry.
Port staff is currently working with the Office of Economic and Workforce Development
(OEWD), Supervisor Aaron Peskin’s Office, and the San Francisco Crab Boat Owners
Association to develop:
1) a grant program using private funds to help replace lost crab traps, and
2) a loan program using Port funds for to help cover remaining cost for traps.
While these programs work together, the grant program is a separate endeavor led by
Supervisor Peskin and funded by private donations. Today’s informational item
describes the proposed loan program for purchase of replacement crab traps.
THIS PRINT COVERS CALENDAR ITEM NO. 8B

 STRATEGIC PLAN
This project supports the goals of the Port’s Strategic Plan as follows:
By preserving and enhancing the Port’s diverse maritime portfolio and providing for the
current and future needs of cargo shipping, cruise, ferry and water taxis, excursion
boats, fishing, ship repair, berthing, harbor services, recreational boating, and other
water-dependent activities.
BACKGROUND
On Saturday May 23, a four-alarm fire broke out at Fisherman’s Wharf destroying Shed
C on Pier 45. Approximately 150 firefighters were able to contain the fire and prevent
any loss of life, but the fire destroyed Shed C, which housed approximately 8,000 crab
traps and other fishing gear. Local fishers used this equipment to deliver approximately
two-thirds of San Francisco’s fresh seafood annually. San Francisco’s crab fishing
community produces almost two million pounds of Dungeness crab each year.
Approximately 50% of all Bay Area crab flows through Fisherman’s Wharf annually.
To prepare for the 2020-21 Dungeness crab season, which starts in November, fishers
must replace a significant quantity of fishing gear much of which was acquired over
many years, some over decades.
Not only were the fishing and crab industries directly affected by the fire, waterfront
tourism was directly and indirectly impacted. The crab fishing industry dates back well
over a century at Fisherman’s Wharf and is an essential part of the Waterfront’s lasting
identity. The fishing industry has been a mainstay of the San Francisco and
Fisherman’s Wharf economy since the Gold Rush era. Over 18 million people visited
the Wharf in 2018, and the fishing and crabbing industry are essential to the character
and visitor experience at the Wharf. Fishing boats line the piers; diners can visit one of
several famous restaurants with fresh caught seafood; and a Dungeness crab is the
logo on the sign for the landmark district. Fisherman’s Wharf’s identity as a place of
business and tourist destination is intricately tied to crabbing. In short, harm to the
fishers and crabbers also harms tourism.
One reason the fire was so devastating to crab fishers is the expense of crab traps.
Only a handful of manufacturers in Northern California and the Pacific Northwest
produce crab traps, which consist of a welded metal frame covered in a thick layer of
rubber and wrapped in wire mesh and cost at least $200 each. Manufacturers build
each trap by hand, production and delivery can take several weeks to complete. To start
production on traps, manufacturers require a down payment between 25-50 percent of
the total cost of the order. Accordingly, many crabbers will place small orders over the
course of many years to accumulate necessary equipment over time.
The fire has forced these small business owners to replace equipment purchased over
a career in a few months. Crabbers require financial assistance to replace lost
equipment because the traps were not insured. Without replacement crab traps and
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 gear, the San Francisco fishing community will not be able to participate in the 2020-21
crab season.
Based on crab fishing permits issued by the California Fish and Wildlife Service, the
size of the fishing operations storing equipment at Pier 45 Shed C ranged from single
boats with 175 traps, to multi-boat businesses with several hundred traps. At a per trap
cost of over $200, a small fisher will need approximately $40,000, while a large
operation will need over $150,000 to purchase the crab traps necessary to fish during
the 2020-21 season. In addition to traps, fishers will also have to purchase several
thousand dollars of related equipment for the traps such as fishing line and wiring. Many
crabbers were struggling financially due to the COVID-19 pandemic, and the loss of
their equipment in the Pier 45 fire has made an already challenging situation more
difficult.
Because ordering replacement traps requires significant down payments, OEWD and
Supervisor Peskin have generously partnered to create a down payment assistance
grant with private funds. Supervisor Peskin is endeavoring to raise private funds with
the goal of $500,000 for the grant program, which will be administered by Main Street
Launch (“Main Street”). Main Street is a community development financial institution
certified by the U.S. Department of the Treasury, with a mission to support small
businesses in Oakland and San Francisco. The grant assistance will help crabbers
place timely orders for crab traps in anticipation of the Dungeness crab season that is
expected to open in November.
The grant assistance from private donations will not cover the full cost to replace crab
traps lost in the Pier 45 Shed C fire. To respond to this hardship on Port tenants and
support the maritime industry, the Port proposes to fund a $1,000,000 loan program
(including administrative costs) to provide favorable terms to assist fishers who lost crab
traps in the Pier 45 Shed C fire.
Program Overview
The Port proposes to provide funds for a new Crab Fisher Assistance Loan Program
(the “Loan Program”). The Loan Program will be administered by OEWD and Main
Street. The Loan Program will assist tenants help pay for the outstanding costs of
replacement crab traps. Port staff anticipates between 20 to 30 Port tenants of Pier 45
Shed C may be eligible for assistance, as outlined below.
Loan Eligibility
To qualify for the loan, an applicant must:
1. Be a tenant of Shed C recognized by the Port of San Francisco, as evidenced by
a copy of a lease with the Port or verification by Port staff of an active agreement.
2. Be an active fisher as defined by the Port Tariff, as evidenced by landing receipts
demonstrating ten trips, ten tons, or $10,000 in value landed in the last two
years.

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 3. Confirm purchase of replacement crab traps ordered after May 23, 2020, and
subsequently provide verification upon delivery of traps evidenced by a packing
slip or similar documentation.
4. Provide their California Fish and Wildlife permit, which must include the
maximum numbers of traps authorized. Loans will only provide funding for the
purchase of traps up to this number.
5. Participate in 2020-21 Crab Season and provide evidence of participation at the
end of season.
Loan Terms
Port staff anticipates the following general loan terms will provide needed help to
impacted tenants and reasonably assure repayment of Port funds.
A. Loan amounts for the sole purpose of purchasing crab traps based on the loan
formula described below, and not to exceed the maximum number of traps
provided for in the applicable California Fish and Wildlife permit
B. Five-year (60 month) repayment term with first regular payment due the first day
of the month eight months after the loan was disbursed
C. Zero percent interest
D. No prepayment penalty
E. Loan balance forgiveness if 75 percent of initial loan is repaid within three years
of loan disbursement
F. Late payments:
First late-payment results in warning, no additional fees or penalties
i.
Second late-payment results in a 5 percent penalty assessed on the
ii.
monthly amount due.
The formula determining the amount of the loan has two tiers:
1. Approved applicants will receive $100 per trap for the first 200 traps they
purchase.
2. All remaining funds will be allocated proportionally based on the outstanding
debts of each applicant.
The table below illustrates an example of the two tiers of funding.
Fisher

Traps
Purchased

A
B
C
Sum

150
200
300

Total Cost
of Order
(variable
cost/trap)
$
$
$

37,500
45,000
63,000

Tier 1 Amt
($100/trap,
up to 200
traps)
$
$
$

15,000
20,000
20,000

Outstanding
Cost of
Order
(Total Cost
less Tier 1)
$
22,500
$
25,000
$
43,000
$
90,500

Individual
Outstanding
Cost / Total
Outstanding
Cost (%)
25%
28%
47%
100%

Tier 2 Amt
(assuming
$50,000 loan
funds after
Tier 1)
$ 12,500
$ 14,000
$ 23,500
$ 50,000

Total Loan

$ 27,500
$ 34,000
$ 43,500
$ 105,000

Fishers will repay the loan over a five-year term – the approximate useful life of a trap –
with the first payment due on the first day of the month eight months after the loan was
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 disbursed. The delay in collection will allow fishers to start the crab season, generate
revenue, and stabilize their business prior to the first repayment. Additionally, if a fisher
accelerates repayment to repay 75 percent of the loan within three years, the Port will
forgive the outstanding balance.
If a fisher misses a single payment, no additional fees or penalties will be assessed. If
they miss a second payment, Port staff proposes a monetary penalty of five percent of
the monthly payment. Staff is considering hardship provisions and welcomes feedback.
Loan Administration
The Port will fund the loan program. OEWD will administer the loan program in
conjunction with Main Street or another mutually agreeable third-party fiscal agent.
Main Street (or another third party) will originate and service the loan: entering loan
contracts with fishers based on the parameters described above and will collect
payments and facilitate transfer of repayments to the Port. OEWD will not collect an
administrative fee for its role in the loan program. Port staff must negotiate an
administrative fee with Main Street and will provide the Port Commission with
information about that fee at a subsequent meeting.
FUNDING
Funding for the loan program will be allocated on a one-time basis through the Port’s
Contingency Project which was appropriated in the Fiscal Year 2019-20 budget. If
approved by the Port Commission, the Port will transfer funds to OEWD through an
interdepartmental work order to administer the program based on a Memorandum of
Understanding (MOU) between the two agencies.

Prepared by:

Wyatt Donnelly-Landolt, Finance Analyst
Finance and Administration Division
and
Boris Delepine, Legislative Affairs Director
Executive Division

For:

Katharine Petrucione, Deputy Director
Finance and Administration Division

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