Port commission endorses 8 Washington term sheet for Seawall Lot 351, sends deal to CEQA and Board of Supervisors

The Port of San Francisco Commission voted to endorse a term sheet for Seawall Lot 351 — part of the 8 Washington project — setting the transaction’s economic framework but leaving final approvals to the environmental review and the Board of Supervisors. The endorsement, adopted as Resolution No. 10-66, authorizes staff to advance the negotiated term sheet and pursue the next steps in public review.

Port planning staff said the term sheet shifts the transaction from a conventional long-term lease toward a structure that includes a sale of the developable portion of Seawall Lot 351, covenants on future condominium transfers and ongoing park payments. Jonathan Stern, port planning and development (introduced the term sheet), summarized the principal financial pieces: a guaranteed $3,000,000 payment to the port at project stabilization (one year after construction completion), covenanted participation equal to 0.5% of condominium resale proceeds (with staff estimating at least $2,000,000 from first-sales proceeds), and an aggregated net-present-value estimate of roughly $10.1 million in direct value to the port from the combined payments and long-term participation. The developer would pay $120,000 per year (escalating) for maintenance of park parcels and share 15% of gross proceeds from proposed park-adjacent commercial uses.

Representatives of San Francisco Waterfront Partners and their design team presented a program that combines the Seawall Lot 351 parcel with adjacent Golden Gate Tennis & Swim Club land. The developer’s concept includes roughly 140–170 residential units in the portion south of Jackson Street, about 28,000 square feet of public open space, retail and dining at grade, bicycle parking and 255 public parking spaces intended to serve the waterfront. Architect Craig Hartman (Skidmore, Owings & Merrill) described the design intent to open Jackson Street as a stronger pedestrian link to the waterfront and said the team expects the project to meet LEED Gold sustainability standards.

Supporters at the meeting cited job creation, long-sought activation of the Embarcadero and additional public open space. Labor and trade union speakers — including representatives of the Carpenters and IBEW — urged endorsement to spur construction jobs; local business groups and organizations such as SPUR and the Bay Planning Coalition also voiced support, noting the project’s potential to generate revenue for port infrastructure.

Opponents and nearby residents raised legal, fiscal and programmatic objections. Several speakers representing the Golden Gateway neighborhood and neighborhood coalitions argued the proposal risks violating the public trust doctrine because the project would place housing on land historically held for public trust uses; they urged the commission to reconsider or to require stronger guarantees. Other frequent concerns were the feasibility and cost of the proposed underground parking (speakers warned of water table and pump costs), loss or reduction of tennis and swim facilities in scale and amenity for existing club members, and doubts about the accuracy of long-range revenue projections. Lee Radner of the neighbors’ coalition described the term sheet as a “bait and switch” and provided letters and materials for the record.

Commission staff emphasized that the endorsement is preliminary: the term sheet is not a binding transaction and will be subject to CEQA review, further port transaction documents and required city approvals. Stern and staff noted that some financial mechanics described in the term sheet — including potential inclusion of the development parcels in an Infrastructure Financing District (IFD) or creation of a community facilities district (Mello-Roos) — will require Board of Supervisors and other agency approvals before revenues could be captured by the port.

The commission’s endorsement sends the term sheet forward for additional review and signals the port’s preference to pursue the negotiated structure, but any final land transfer, sale or lease and project-level approvals depend on the CEQA process, any resulting mitigations or redesigns, and subsequent legislative approvals. The commission approved Resolution No. 10-66 by voice vote and closed the item; staff said they will return with project approvals following completion of environmental review.

What’s next: the endorsed term sheet moves to environmental review and to briefing/endorsement by the Board of Supervisors; any final transaction documents would return to the port commission and require separate approvals. The record from today’s meeting includes a large public-comment record both for and against the term sheet that staff said will be part of the public review process.