Port staff briefs commissioners on Mission Rock term sheet; Anchor Brewing named Pier 48 tenant

The Port of San Francisco received an informational briefing on a term sheet this afternoon that would guide development of Sewell Lot 337 and adjacent Pier 48 as a mixed-use neighborhood known as Mission Rock. Port staff said the proposal, developed in partnership with COA Lot 337 Associates (the Mission Rock team affiliated with the San Francisco Giants), envisions up to 3.6 million square feet of development including about 1,500 new residences, up to 1.7 million square feet of office, more than eight acres of parks and open space, and new streets and waterfront access.

The term sheet presentation was led by Phil Williamson, port project manager, and supported by Mike Martin of the Office of Economic and Workforce Development and Jonathan Stern of Port Planning and Development. Williamson described a phased plan that would privately fund horizontal infrastructure and then reimburse developers through a combination of development-rights payments, special taxes, and other mechanisms. "The infrastructure for the site is phased and intended to be delivered as needed," Williamson said, noting the strategy is to time infrastructure construction just in time for vertical development.

Why it matters: staff said the project is designed to unlock long-term revenue for the Port while delivering new housing, parks and jobs. It also relies on public-financing tools still under discussion: the term sheet assumes creation of an Infrastructure Financing District (IFD) that would capture roughly 65% of local property-tax receipts generated by the project to help underwrite public infrastructure. Brad Benson, Special Projects Manager, told commissioners the IFD is a predicate for the transaction and that without an IFD the Port would have to rely on alternatives such as Mello-Roos Community Facilities Districts, port revenue bonds or other mechanisms.

Financing and risk: Jonathan Stern presented pro forma figures and risk factors. Staff estimated $125 million to $154 million in horizontal infrastructure costs and said developer equity of roughly $100 million could be required. The staff recommendation includes a reserve base rent of $3.5 million across eight development parcels as a floor for port revenues. Stern said the developer's return would be structured as the greater of a 20% annual return or a 1.5-times peak equity multiple. He also highlighted entitlement, financing, cost, market and counterparty risks and described mechanisms to cap developer returns and share upside for the Port.

Anchor Brewing and Pier 48: staff announced that Anchor Brewing Company is the first tenant proposed for Pier 48 and that the use would be largely industrial/warehouse with some ancillary office and retail. Williamson said the Anchor proposal involves more than 200,000 square feet of storage and production space and could accelerate spending and activity at Pier 48 earlier in the overall schedule.

Open space, heights and parking: public commenters and commissioners pressed staff about timing for China Basin Park and Mission Rock Square, suggested lower height limits on some parcels and asked whether sufficient car and bicycle parking would be provided. Phil Williamson said the phasing diagram (Exhibit C to the term sheet) places China Basin Park in phase 2 and Mission Rock Square in phase 3 but agreed to explore opportunities to accelerate park delivery. Staff also proposed a parking structure for about 2,300 cars (parcel D) and said they are coordinating with the Municipal Transportation Agency on possible financing and operational roles.

Community benefits and contracting: staff said the development would meet current inclusionary-housing requirements (15% of units at 55% AMI) and is working with the Mayor's Office of Housing on affordability mixes and workforce housing priorities. Staff also reported ongoing dialogue with the Human Rights Commission about hiring and contracting goals and said there is an exchange of letters documenting target goals that will be shared with commissioners.

Public comment and next steps: several residents voiced support for housing and open space but urged attention to park phasing and parking supply. Staff said the next step is to return with a request for endorsement of the term sheet, then proceed to the Board of Supervisors and begin entitlement and EIR scoping. Williamson said staff anticipates seeking endorsement in April and then moving into phase 2 (entitlement).

The term sheet presented was informational; no formal endorsement or binding agreement was approved at this meeting. Staff committed to providing additional fiscal analyses, the HRC letter, and more detail on revenue capture and balance-sheet implications as part of subsequent briefings.