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OCII authorizes short extension to Transbay Block 4 option to finish negotiations
Summary
The commission approved a second amendment allowing OCII's executive director to extend the option-exercise deadline for Transbay Block 4 to March 31, 2021, with discretionary authority to extend to June 30, 2021, so staff and the developer can finalize a disposition and development agreement.
The Office of Community Investment and Infrastructure on Dec. 31 approved a second amendment to the option agreement for Transbay Block 4 that extends the developer’s outside option-exercise date from Jan. 1, 2021, to March 31, 2021, with the executive director authorized to extend again to June 30, 2021 if needed to complete negotiations.
Paige Peltzer, a development specialist on OCII’s real estate and development team, told the commission the development team and OCII staff have made significant progress on a disposition and development agreement and schematic design but need additional time to finalize terms, coordinate an appraisal and conclude negotiations. The proposed amendment would give staff more time to complete those steps and negotiate a purchase price for Block 4.
Peltzer outlined the project history: OCII entered the option agreement with the development team in February 2016 and previously approved a first amendment in 2018 that set a nonbinding term sheet and extended negotiation time. The current amendment would allow an outside option-exercise date of March 31, 2021, and authorize the executive director to extend to June 30, 2021 at her discretion.
Commissioners raised concerns about COVID-related delays. Interim Director Orth said the prior force majeure extension reflected the early pandemic disruption but that OCII staff have adjusted to remote work and are hopeful the proposed timeframe will suffice. No members of the public spoke on the item. The commission approved the motion by roll call, 4 ayes.
Peltzer described the project as proposed to include 669 residential units (327 below-market-rate units, or 49 percent affordable), roughly 8,000 square feet of retail, about 16,500 square feet of open space, vehicle and bicycle parking, and street construction to complete Tahama Street south of Block 4. Staff said the developers have retained a third-party appraiser and that schematic-design review is underway; if approved, the DDA and plan amendment would return to the commission and, following commission approval, proceed to the Board of Supervisors.
