A breakwater juts into the channel for entering the Oyster Point Marina in South San Francisco, Calif., on Wednesday, July 9, 2008. Work crews from the
A breakwater juts into the channel for entering the Oyster Point Marina in South San Francisco, Calif., on Wednesday, July 9, 2008. Work crews from the U.S. Army Corp of Engineers will start to modify the breakwater this week, the first step in creating the new ferry route. (Mathew Sumner/San Mateo County Times)

SOUTH SAN FRANCISCO — A permit to build a terminal at Oyster Point Marina for a commuter ferry service carrying passengers from South San Francisco to Oakland's Jack London Square has been approved by the San Francisco Bay Conservation and Development Commission.

But because of the state budget impasse, construction of the two-berth terminal at Oyster Point Marina's east basin has been put on hold.

Last month, the Pooled Money Investment Board voted to hold $3.8 billion in state-funded infrastructure projects.

"All we need to do is wait until Sacramento gets its act together," Peter Grenell, general manager of the San Mateo County Harbor District, said Friday.

He said the Thursday decision to approve the permit was a big step forward.

The delay is expected to raise the cost of construction by at least 5 percent, said John Sindzinski, project manager for the San Francisco Bay Area Water Emergency Transportation Authority.

Currently, the total cost to build the ferry terminal is estimated at $23 million.

Once the freeze is lifted, the authority can receive an initial $10 million in Proposition 1B funds. In addition, $15 million in Measure A money and other federal grants are guaranteed for the project.

Other steps need to be followed before the project can accept bids from construction contractors.

First, the authority, the harbor district and South San Francisco need to sign a lease for the area.


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Second, the harbor district has requested that lower annual debt service payments be made to the state Department of Boating and Waterways to pay off a $19 million loan used to build Oyster Point and Pillar Point Harbor in Half Moon Bay.

Currently, the district repays the agency $2.4 million a year, and Grenell wants to lower the amount to $1.44 million.

To do that, the authority must pay a one-time fee of $3.66 million to compensate for removing two docks and their associated revenue stream, he said. The group hasn't done it yet because the money would need to come from Prop. 1B.

Grenell said he hopes to retire the debt by the end of 2019.

Meanwhile, the goal is to meet this year's window for construction projects done in the water. It begins June 1 and ends Nov. 30, he said.

Once the project is under way, the authority will remove the docks and 133 boat slips to build the ferry terminal.

It will then dredge the area where the terminal will go; deepen the entrance channel another couple of feet; build the terminal on top of pilings; and install a prefabricated floating dock where the boats will tie up. A gangway will be attached to the terminal.

The Army Corps of Engineers opened the entrance to the marina two weeks ago, giving future ferries a straight shot into the harbor. Also, it built a diagonal 148-foot-long breakwater to protect the area from southern swells during storms.

The project is expected to provide ferry service to more than 24,000 employees within a three-mile radius of Oyster Point Marina.

The plan is to run one 149-passenger catamaran three to four times in the morning and early evening on weekdays. The extra boat will be available if there is large demand.

Grenell expects the authority will make significant progress this year in building the terminal.

Ferry service is planned to start at the end of 2010.

While it's nice for people in South San Francisco to commute to Oakland, Grenell said, the boats could be used in future emergencies.

"There is an overriding need to get the program really operational as soon as possible," he said. "What happens when the next earthquake comes? You want to be ready. This delay just holds that up."

Reach staff writer Christine Morente at 650-348-4333 or cmorente@bayareanewsgroup.com.