OCII OKs extension for Transbay Block 4 option, staff to pursue appraisal and DDA schematic

The Commission on Community Investment and Infrastructure on Sept. 21 authorized a fourth amendment to the option agreement with F4 Transbay Partners LLC for Transbay Block 4, extending the outside exercise date to March 31, 2022 and giving the executive director discretion to add a three‑month extension if needed to finalize DDA schematic design and the land valuation.

Staff development specialist Kim Obstfeld told commissioners the amendment would insert a revised appraisal program into the option agreement, allow 45 days to resolve key DDA and schematic design items, and enable the two‑party appraisal process established in the option agreement to determine the land price. Obstfeld said the option currently establishes a land price of $45,000,000 but that the final price will be set by valuation once the development program is finalized.

The proposed program would create roughly 681 residential units across a 100% affordable mid‑rise, a mixed‑income rental tower and market‑rate condominiums and townhomes; staff said the current program increases onsite affordability to 45% (up from a June proposal near 40%). Obstfeld said the program also expands tower below‑market‑rate (BMR) units from 73 to 105 and adds about 6,000 square feet of community‑serving retail managed by Mercy Housing, with rents restricted at or below 50% of market rate.

OCII retained Century Urban to review the developer’s pro forma. Century Urban Managing Principal Brian Sparkman said the consultant ‘‘validate[d] the project economics’’ and concluded that a program that converts the top two floors from rental to for‑sale condominiums, together with adjustments to occupancy or operating expense assumptions, can support up to 45% onsite inclusionary housing. ‘‘We believe that the project is feasible at 45% on‑site inclusionary housing,’’ Sparkman said.

Representatives of Heinz, the lead developer in the F4 team, urged caution. Dan Esdorn of Heinz said the firm ‘‘cannot and do not want to stand here today and represent that we are sure that the project is feasible at this ambitious program level,’’ citing ongoing cost and market uncertainty even as Heinz agreed to proceed into the appraisal stage.

Commissioners pressed for clarity about timing. Commissioner Beiser asked when feasibility would be confirmed; staff and the developer said confirmation is expected as part of the appraisal and subsequent DDA schematic reviews. Chair Miguel Bustos emphasized the commission’s long‑term affordability goals and said he expects staff to return with schematic DDA materials and any required approvals before the extended outside date of June 30, 2022.

Vice Chair Rafael Rosales moved approval of the amendment; Commissioner Aaron Scott seconded. The secretary called the roll and the measure passed 4–0 with one commissioner absent.

Next steps: staff will use the authorized extension period to complete DDA schematic design work and pursue the two‑party appraisal to establish the land price; the commission will review the DDA schematic design and related documents before the extended date.