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Board approves sale of 1660/1680 Mission and 30 Van Ness to raise funds for new city office; debate on affordability and financing continues
Summary
The Board approved two purchase‑and‑sale agreements to sell 1660 & 1680 Mission Street and 30 Van Ness Avenue, generating funds for a proposed new city office building at 1500 Mission. The votes were 9–2. Supervisors debated whether the city should retain the properties and whether the deals deliver enough on affordable‑housing goals.
The San Francisco Board of Supervisors on March 21 approved two related property sales aimed at funding construction of a consolidated city office building at 1500 Mission Street. The board approved a $52 million purchase and sale agreement for city‑owned properties at 1660 and 1680 Mission Street (to Prosperity 2 LLC) and a $70 million purchase and sale agreement for 30 Van Ness Avenue (to Lendlease Development Inc.), with leaseback terms that would temporarily house city departments.
Supervisor Jane Kim, the sponsor for the 30 Van Ness item, said the deals strike a balance between generating revenue for a needed city office building and producing new on‑site and middle‑income housing without city up‑zoning. "With this deal, we have achieved Proposition C goals of 25% on‑site affordable and middle income housing without any upzoning," Kim said, and noted the agreements could yield an additional 40–60 middle‑income units and potential steps to reach 33% affordable housing if up‑zoning proceeds.
Supervisor Safaie and others questioned whether the city had exhausted alternatives, including retaining ownership of 1660/1680 Mission and issuing additional certificates of participation (COPs) to finance construction. Safaie raised concerns that the proposed leasebacks would raise rent for departments that currently occupy city buildings and that the city may have given up a rare site — 30 Van Ness — that could be used for a much larger housing outcome if retained.
Controller Ben Rosenfield and Department of Real Estate Director John Updike described trade‑offs. Rosenfield estimated that if the city borrowed the full cost of the 1500 Mission project instead of applying sale proceeds, the per‑square‑foot rental cost to the city would rise roughly 23% and the difference in debt service over 30 years could be on the order of $177 million. Updike noted market timing: appraisals and demand make early monetization of the assets attractive to maximize proceeds for the office project.
Lendlease representatives said their intention is to rehabilitate the office base and build residential on top, with a commitment to 25% on‑site affordable housing. Alexa Arena of Lendlease told supervisors the company intends to obtain entitlements during the period when the city could lease the building back, then proceed with a residential component. Updike added the purchase and sale agreement includes deed restrictions requiring affordable housing contributions if redevelopment occurs, though purchasers could pay fees when the agreement allows.
The board's roll call recorded nine ayes (Sheehy, Chang, Yi, Cohen, Farrell, Feuer, Kim, Peskin, Ronan) and two no votes (Breed, Safaie). Supporters called the agreements an opportunity to reduce future reliance on the private office rental market and secure funding for a long‑term civic office campus; critics said the city should analyze alternative financing that would allow the city to keep more of its real‑estate assets and do more on housing.
The agreements require later entitlement approvals and development decisions; sale closings and leaseback terms were noted in the staff reports and are subject to conditions and budget appropriations for any rental differentials.
