OCII OKs option to ground lease for Mission Bay South Block 6 East affordable housing

The Commission on Community Investment and Infrastructure on May 17 authorized an option to ground lease with 1300 Fourth Street Associates, L.P., clearing a step toward construction of affordable family rental housing at Mission Bay South, Block 6 East (626 Mission Bay Boulevard North).

OCII housing development specialist Pamela Sims told the commission the option is required “to demonstrate site control to both the California Debt Limit Allocation Committee or CDLAC and the Tax Credit Allocation Committee or TCAC,” and that the action would allow staff to negotiate lease terms while permanent financing is finalized.

Why it matters: the option clears a key procedural hurdle for tax-credit financing that developers need to secure low-income housing tax credits and tax‑exempt bond allocations. TNDC (Tenderloin Neighborhood Development Corporation), the selected sponsor, will return to the commission with final ground-lease terms and a gap‑financing request this summer.

What the commission approved: staff described the project as a 142‑unit building plus one manager’s unit (presentations elsewhere in the record show both “143 units” and “142 units plus manager’s unit”; the record supports describing the development as 142 residential units plus one manager’s unit). Of those, 114 units (about 80%) will be restricted to households at or below 50 percent of area median income (AMI — staff cited $53,850 for a family of four in the presentation), and 29 units are reserved for formerly chronically homeless households. The project will include approximately 41 off‑street parking spaces (34 resident, 5 commercial and 2 car‑share), roughly 136 bicycle spaces, and be one block from the Mission Rock Muni T‑Third station.

Financing and schedule: Sims said the sponsor will layer OCII funds with low‑income housing tax credits, tax‑exempt bond financing and a State HCD AUSIC award (staff materials refer to the State of California Housing and Community Development award). She said TNDC achieved 54 percent small‑business‑enterprise participation for professional services so far, exceeding OCII’s 50 percent goal. Staff said the sponsor will apply for tax credits and a bond allocation later in the month, return for gap financing this summer, and expects construction to start in late August or early September with anticipated completion in April 2018.

Comments from sponsor: Katie Lamont, director of housing development for TNDC, said commercial leasing plans are preliminary but that one retail space is planned for 826 Valencia’s literacy program and another for a restaurant fronting Mission Bay Boulevard. “We did design the space as was just discussed previously,” Lamont said, adding TNDC will draw on leasing experience in other San Francisco neighborhoods.

Public and commission questions focused on marketing, resident and program priorities, and construction coordination with other nearby projects. Staff said marketing will follow the permanent loan agreement and prioritize certificate‑of‑preference holders and building residents for on‑site after‑school slots.

The commission vote: the motion to authorize the option to ground lease was moved by Commissioner Mondejar and seconded by Commissioner Singh. The roll call was 4 ayes, 1 absent; the item passed.

Next steps: OCII staff will return with final ground‑lease terms and a formal gap‑financing request later this summer.