Board adopts resolution annulling sidewalk-vault permits for Central Subway; property owners say they will seek negotiated solutions

The San Francisco Board of Supervisors voted unanimously to adopt a resolution annulling certain subsidewalk basement encroachment privileges along Stockton, O'Farrell, Market and adjacent streets to allow construction of the Central Subway Union Square station.

City and transit officials said the actions are necessary to relocate utility lines and clear space for a station and required construction work. John Fungi, program manager for the Central Subway, told supervisors the Federal Transit Administration's recent approval of final design makes timely vacation of vault space urgent: "Project delays on a project of this scale would cost the project roughly $3'$4 million per month," he said.

Property owners and tenants appealed the city's revocations at the meeting. Representatives for Stockton Street Properties and the tenant Barneys complained they had not been given sufficient notice that the encroachments would be annulled and urged negotiation rather than immediate revocation. Marshall Wallace, counsel for Stockton Street Properties, said the subsidewalk vaults have been used and improved for more than a century and that owners have paid taxes and maintained the spaces with the city's prior acquiescence. "The city was fully supportive of the property owners' occupancy, use, and full responsibility for these subsidewalk spaces until very recently," Wallace said.

Barneys executives and counsel described the operational consequences for the retailer's flagship store. They said the basement areas contain integral building systems including a fire pump, ejector pump, electrical and security equipment and retail stock rooms. David New, Barneys' executive vice president, said the retail build-out and building systems were installed recently and that moving or dismantling the systems would be costly and disruptive. "All that is in these vaults has to come and go somewhere else," he told supervisors.

City attorneys and transit staff answered that the sidewalk and the space beneath it are city property under a long-standing municipal provision dating to the 1907 building code, and that the code reserves to the Board of Supervisors the right to annul or suspend private use of that subsidewalk space for public purposes, including transit construction. Deputy City Attorney Stephanie Stewart explained that the city is reclaiming public property and that, under the city's reading, the action does not constitute a compensable taking of private property under the state or federal constitutions because the subsurface area is public right-of-way.

Property owners and Barneys pressed for a negotiated accommodation; several asked the board for a short continuance to allow more detailed technical work and talks with the SFMTA and Department of Public Works. "We just want a little time to work with MTA and try and solve some of these issues," said counsel Marty Orlick for Barneys, who asked for a two-week period to pursue talks.

Supervisors said the city has a strong interest in advancing the federally funded transit project and cited the timeline for utility relocations. The board then adopted the resolution annulling the privileges for affected subsidewalk basements so that the city can proceed with its utility-relocation and station-construction contracts. The roll-call vote was 10-0 in favor of the resolution.

Why it matters: The action clears long-standing legal and physical obstacles to building the Central Subway station beneath Union Square, a project city leaders and the Federal Transit Administration say is critical to expand light-rail service to Chinatown and to shorten trips through a congested corridor. The decision sets up a negotiating and legal fight between the city and commercial property owners over relocation costs, schedule and whether compensation or alternate designs are appropriate.

What's next: Transit staff said they will continue technical meetings with affected owners and tenants to refine designs and mitigation measures. Property owners signaled they will press for negotiated outcomes and may pursue litigation if their claims are not resolved. The board's action clears the way for the transit agency to move forward with required utility-relocation contracting and station design work.