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OCII delays decision on Related—s Transbay Block 8 grocery obligation after community objections
Summary
The Commission on Community Investment and Infrastructure continued action on Related California—s request to terminate a grocery-store obligation for Transbay Block 8, directing staff to pursue broader outreach and return with a report in 60 days and a recommendation within 90 days (vote 4-0, 1 absent).
The Commission on Community Investment and Infrastructure on Dec. 18 continued consideration of Related California—s request to be released from a contractual obligation to provide a grocery store at Transbay Block 8, directing staff to pursue further outreach and return with progress reports.
Staff presentation said the developer and its broker had contacted numerous grocers, hired a retail peer reviewer, and provided quarterly updates to OCII. The Disposition and Development Agreement (DDA) for Block 8 requires "good faith efforts" to lease the grocery and allows the developer to seek commission approval to terminate the obligation if leasing is unsuccessful (DDA §9.07). Staff—s recommendation was that Related has complied with the DDA and that commission approval to terminate the obligation should not be unreasonably withheld.
Related—s project executive described the design of the retail footprint and the outreach effort, saying the grocery space totals about 13,100 square feet (2,700 on the ground floor, 10,400 in the basement) and that the team held hard-hat tours and offered rents below market. "In conclusion, we respectfully request the release of our obligation to pursue a grocer tenant," the developer said.
OCII—s peer reviewer, Strategic Economics, told commissioners that while parking was not the primary constraint, the non-contiguous split-level layout and the close proximity of Woodlands Market (about three blocks away) make adding a second grocer at Block 8 risky. "In summary, we do not believe that the retail conditions in this area support a second store at this time," the consultant said, citing a half-mile trade area dominated by daytime office workers, a current population near 14,000 and projected growth to about 21,000.
Public commenters and the Transbay Community Advisory Committee (which voted 5-3 against recommending termination at its prior meeting) urged the commission not to release Related from the obligation. Speakers recommended expanding marketing beyond the single storefront, offering tenant-improvement subsidies, subsidized rents, partnering with community organizations, or pursuing market-hall or co-op models to secure a grocery that can serve lower-income residents.
Several commissioners said Related had made routine outreach but that the community—s concerns about neighborhood-serving retail required additional, creative efforts. Commissioner Rosales moved to continue the matter and direct staff to work with the developer on further outreach (including contacting co-ops, concessionaires and a targeted sampling of grocers) and to report back in 60 days, with a final update at 90 days starting Jan. 1, 2019. The motion passed on a 4-0 recorded vote with Commissioner Singh absent.
The commission did not grant termination of the grocery obligation; it continued the item with specific directions for follow-up.
What happens next: staff and Related will pursue the expanded outreach and return with a 60-day progress report and a full recommendation within 90 days starting Jan. 1, 2019.
