Board advances Park Merced development agreement, tables related actions

The San Francisco Board of Supervisors on May 24 voted to move forward with core approvals for the proposed Park Merced redevelopment while tabling related review motions, advancing the project after a day of extended debate over tenant protections, legal risk and long-term planning.

The Park Merced proposals before the board include a motion affirming certification of the final environmental impact report (EIR) and four ordinances that would authorize a development agreement, create Park Merced zoning districts, amend the zoning map and revise the general plan height map for the Lake Merced site. Supporters said the project would enable major West Side transportation improvements and preserve the unified Park Merced community; opponents and some supervisors warned that legal uncertainty about rent-control protections could leave tenants at risk.

Supervisor Ellsberg, who represents the district encompassing Park Merced, said the project is a rare West Side opportunity to add housing and fund corridor improvements. "Please add 5,500 new units of housing West Of Nineteenth Avenue," he told colleagues, arguing that without the project "Nineteenth Avenue turns into a parking lot" and that the scale of developer-sponsored work is needed to reach Tier 5 corridor improvements.

President Carmen Chu and staff described a series of amendments negotiated at the Land Use Committee that aim to strengthen tenant protections during relocation and post-development. Chu summarized amendments introduced earlier in the day that include additional contractual remedies, staged demolition to preserve some garden apartments for long-term residents, expanded moving benefits and a requirement that replacement units be built on vacant land before displacing tenants. "The amendments that were made only made it stronger," Chu said, noting staged demolition could allow some Garden Court units to remain occupied for up to 15–20 years.

City Attorney's Office attorneys explained the legal approach the city is using to preserve rent-control protections. Charles Sullivan, of the City Attorney's Office, told the board the development agreement bundles a constellation of legal arguments and contractual provisions intended to withstand challenges under the Costa-Hawkins and Ellis Act framework, including: 1) identification of specific forms of city assistance that the city and developer say support imposing rent limitations on replacement units; 2) reliance on the Ellis Act replacement-unit exception; and 3) contract-based remedies such as private rights of tenants, assignment-and-assumption language that would preserve obligations with future owners, and termination and liquidation remedies if protections are determined unenforceable. Sullivan said the development agreement would include a liquidated payment amount intended to compensate tenants if protections are negated, citing a developer analysis that values the rent-control subsidy at about $160,000,000 and a city figure of "almost $200,000,000." He cautioned his legal advice does not amount to a guaranteed outcome.

Not all supervisors were convinced. Supervisor Campos said he would not support the deal, saying the legal framework that would sustain contractual rent protections is unsettled and that tenants negotiating with the city are not prepared to accept the remaining legal risk: "I don't think that there is anyone in this room who can stand here and guarantee to any of these tenants that in fact the development agreement will be fully enforced." Supervisor Avalos said he also could not support the agreement as written and proposed a stronger vacancy-rent-control amendment, to impose vacancy-based rent limits and tie initial rents to the San Francisco Rent Board registry; City attorneys advised the board that the board cannot unilaterally amend the underlying contract without the developer's consent, though the board may amend the approving legislation or ask the parties to agree to revised contract terms.

On formal votes, the board approved a motion to move forward on item 3 (the EIR certification matter) while tabling items 4 and 5 by a 6–5 vote (Yes: Weiner, Chu, Cohen, Ellsberg, Farrell, Mercarimi; No: Avalos, Campos, Kim, Marr, Avalos — tally as recorded in the clerk's roll call). Later the related ordinances that make up the development agreement and zoning/general plan changes (items 25–28) were considered as a package and passed by the board on the same 6–5 margin.

Supporters stressed the project would allow master planning and transportation investments needed on the West Side; critics said the legal ambiguity over rent control could expose tenants to future displacement and urged statutory reforms at the state level to close the perceived gap. Several supervisors pressed the city attorney and staff for specifics about the remedies and enforcement mechanics; staff pointed to tenant private-rights language, lease-based protections for replacement units and assignment-and-assumption clauses for future owners.

The board's action leaves in place the development agreement framework as presented to the board, with the amendments adopted in committee and at the hearing. Opponents have options to seek further legal review or administrative appeal; supporters said the contract and the added remedial provisions provide a strong enforcement posture.

Votes at a glance: On the motion to approve item 3 and table items 4 and 5, the roll call recorded 6 ayes and 5 noes; on items 25–28 (ordinances approving the development agreement, Park Merced Special Use District zoning changes and general plan amendment), the roll call recorded 6 ayes and 5 noes and the project "prevails" as the clerk recorded.

What’s next: The ordinances approved by the board will proceed per the normal ordinance-adoption process; opponents and tenants will continue to scrutinize contract language and potential legal challenges. The project sponsor and city staff have said they will implement the staged demolition, lease protections and liquidity remedies included in the development agreement should the approvals move forward.