Supervisors add conditions, require sale reporting and strip IFD funding language from Embarcadero parcel term sheet

San FranciscoBoard of Supervisors approved amendments to a term sheet for the proposed sale of the Hoe Down yard and related Embarcadero transmission project, striking language that would have advanced Infrastructure Finance District (IFD) funding for a screen around a Pacific Gas and Electric Co. (PG&E) switchyard and adding requirements for reporting back to the board on the sale and environmental cleanup.

The amendments were introduced and read into the record by a supervisor during debate and were adopted by voice vote and later by the full board on the resolution as amended.

Why it matters: Supervisors said the changes ensure the city does not pre-authorize use of municipal financing (IFD) for private utility infrastructure and that the public and board will receive details after any sale about the buyer, purchase price and measures to address contamination at the site.

What the board approved: The adopted amendment removes language suggesting IFD funds could be used to pay for a screen around the existing PG&E switchyard adjacent to the parcel. The board instead asked the Port Commission and Department of Real Estate to structure the purchase-and-sale so that the Department of Real Estate must obtain Board authorization before closing if a public use is proposed, or run a competitive process to identify a qualified bidder whose purchase price exceeds the as-is appraised value plus city transaction costs. The final amendment requires the Department of Real Estate to issue a report to the Board of Supervisors within 30 days after closing or assignment of the city's option; that report must disclose the purchase price and measures to address site contamination and whether liability for cleanup is being transferred to a private party.

During the meeting Brad Benson of the Port told supervisors, “The port supports these amendments to the resolution.” Deputy City Attorney John Gifford answered legal questions about whether an option could be structured so the city would not be in the chain of title and said, "That's my understanding," when asked about a transferable option designed to keep the city out of title ownership.

Supervisors raised concerns about contamination and the consequences of zoning changes that could allow residential development on land currently limited to industrial uses. City staff and the Port pointed to an existing Regional Water Quality Control Board investigation and deed restrictions that currently permit industrial and some office uses without further cleanup; lifting deed restrictions would be required before residential uses could proceed.

What the amendments do not do: The board did not adopt a requirement that PG&E pay for the switchyard screening; instead the board struck language that would have invited IFD funding and left consideration of financing to a future discussion.

Next steps: The Department of Real Estate and Port Commission were urged to follow the amended direction: structure the transaction documents to protect the city's interests, require Board authorization if the city would hold title or propose a public use, and report back 30 days after closing or option assignment with buyer identity, price and contamination-mitigation measures.

Speakers and record excerpts: The record includes Port comments indicating support for the amendments and city attorney clarifications about transferable options and deed restrictions that limit permitted uses. The board adopted the resolution as amended and will expect the post-closing report required by the new language.

Ending: The boardaction leaves open future questions about financing for physical screening and contingency for cleanup costs; elected members placed those decisions into a follow-up review tied to any closing or assignment of purchase options.