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Commission authorizes loan and 75‑year ground lease for Mercy Housing’s 152‑unit Mission Bay project
Summary
OCII approved a permanent loan up to about $47 million and a 75‑year ground lease (option to 99 years) with Mercy Housing California to build 152 affordable rental units at Mission Bay South Block 6 West, including 38 project‑based voucher units for households relocating from Hope SF sites.
The Commission on Community Investment and Infrastructure voted to authorize an amended and restated loan of up to approximately $47,400,000 and a 75‑year ground lease (extendable to 99 years) with Mercy Housing California for the Mission Bay South Block 6 West development, a 152‑unit affordable rental building.
Annie Wong, development specialist, outlined the project and financing terms: 152 units (50% two‑bedrooms, ~20% three‑bedrooms including one four‑bedroom and one five‑bedroom unit to meet replacement bedroom requirements), 38 units set aside for households voluntarily relocating from Sunnydale through the city’s HOPE SF program, units restricted at 40%–80% of area median income, roughly 5,000 square feet of ground‑floor child care space for a Head Start operator, 26 parking spaces, and about 130 bicycle spots. OCII’s proposed permanent loan is for up to 55 years at 1% interest with the director authorized to reduce interest to 0% if needed for feasibility; the project will also use 4% low‑income housing tax credits and other financing sources.
"The important thing to know is that it's completely voluntary and that people have the right to return," said Doug Shoemaker of Mercy Housing, describing outreach and relocation coordination with the San Francisco Housing Authority for project‑based vouchers.
Commissioners asked questions about outreach to Certificate of Preference (COP) holders, the marketing and lottery process, the mechanics of project‑based vouchers, unit sizes and how the project addresses OCII’s statutory replacement obligations. Pam Sims of the Housing Division said COP holders ranked the Bayview, Western Addition and Mission Bay among top preferences in the division’s survey, and staff said COP holders would receive priority in the family unit lottery.
Commissioner Bustos moved approval; Commissioner Singh seconded and the commission approved the loan and ground lease by roll call (5 ayes).
Next steps: the development team will proceed toward construction finance closing with construction expected to start in May; an early outreach plan will begin one month after construction start and marketing will begin six months prior to anticipated completion. After project completion the assets will be transferred to the Mayor’s Office of Housing and Community Development per redevelopment dissolution law.
