Board approves Parcel F Transbay redevelopment variation, developer to pay roughly $45–$47 million fee toward off‑site affordable housing

The San Francisco Board of Supervisors voted on March 16 to consent to a redevelopment‑plan variation, approve planning‑code and map changes, and accept a development agreement for 542–550 Howard Street (Parcel F, Transbay). The package was considered by the Board as a committee of the whole acting in its capacity as successor agency to the former redevelopment agency.

Supervisor Matt Haney, the item sponsor, said the project will develop one of the last parcels in the Transbay redevelopment area and will include a mixed‑use tower with residential condominiums, a hotel, office space and retail. Haney said the developer agreed to a larger in‑lieu affordable housing fee equal to 150% of the city’s standard fee and that OCII plans to use the fee to fund affordable housing on Transbay Block 4.

Sally Orth, interim executive director of the Office of Community Investment and Infrastructure (OCII), told the board that the developer team (Hines, Urban Pacific and Goldman Sachs) had originally envisioned providing inclusionary units on‑site or directly on Block 4 but encountered financing and timing difficulties. OCII recommended a variation to allow an in‑lieu fee. Orth described the fee as “significantly larger than what would have otherwise been required,” and staff estimated the payment at between $45 million and $47 million—about $15 million over the base fee. OCII also explained how the timing of payment and collateral would be handled: the fee would be paid when Block 4 needs the funds to close financing or within two years of the development agreement becoming effective and when Parcel F has pulled construction permits; OCII would receive a letter of credit for the fee within 30 days of an effective DDA for Block 4.

OCII staff said the variation followed the agency’s process and included findings that requiring on‑site units would impose practical difficulties and undue hardship in this specific case, particularly because low‑ and moderate‑income BMR units positioned at the top of a tower can face disproportionate homeowners association fee pressures that would threaten their long‑term affordability.

The developer and union representatives emphasized economic benefits. Cameron Faulkner of Hines said the project team intended to move forward and intended to secure construction financing; labor representatives from Unite Here Local 2, IBEW Local 6 and Sprinkler Fitters Local 483 urged approval so union jobs and apprenticeships could proceed. OCII noted the project would create nearly 5,000 construction jobs over the build period and support about 1,500 permanent jobs once completed.

Public commenters included representatives of labor and several community organizations. Chinatown Community Development Center explicitly supported the package and the use‑it‑or‑lose‑it provisions proposed by supervisors who worried about long delays for community benefits on other projects. Building trades leaders urged approval, citing immediate job opportunities.

On the roll call for the package of items (planning code/map amendment, development agreement, and OCII variation), ten supervisors voted in favor and one voted no (Supervisor Aaron Peskin), so the ordinances and resolutions passed on first reading and the board consented to the variation. The vote tally was reported as 10 ayes and 1 no.

Key clarifying details: OCII staff estimated the in‑lieu fee at roughly $45–$47 million. OCII plans to loan the fee to an affordable housing project on Block 4 (estimated 192 affordable units referenced in earlier committee discussions); the fee payment timing and a letter of credit were recorded as triggers in the development agreement. The item was forwarded to the board after public hearings and approvals by the Planning Commission and OCII commission.

What happens next: the development agreement and code amendments proceed through the board’s ordinance process (first reading passed); implementation details for the Block 4 project and OCII financing will follow through OCII’s disposition and development agreement process, lender requirements, and construction permitting.