Commission approves ground lease for 200-unit Mission Bay affordable housing at 588 Mission Bay Blvd N

The Commission on Community Investment and Infrastructure voted May 5 to authorize a long-term ground lease that enables development of 588 Mission Bay Boulevard North, a 200-unit affordable rental project known as Mission Bay Block 7 West. Pam Sims, OCII development specialist, told the commission the partnership includes Related Companies of California and Chinatown Community Development Center and that the project has previously received predevelopment approvals and gap financing commitments.

Project basics: Pam Sims said the building will contain about 200 affordable rental units (including two manager units), roughly 230,000 square feet of building area, a 10,000-square-foot street-level retail component, and 52 on-site parking spaces (0.25 spaces per unit). The housing will be targeted to households at roughly 50 to 60 percent of area median income under the project's tax-credit structure; all households will pay no more than 30 percent of income toward rent.

Funding and lease terms: OCII has approved up to $16,975,000 in agency funding for the project; other financing sources include multifamily housing revenue bonds, 4 percent tax credit equity, a permanent mortgage and developer equity. Sims described a 75-year ground lease with a 24-year option featuring an annual rent structure of $2,000,000 that includes a $15,000 base and residual rent if cash flow allows.

Outreach and preferences: Commissioners and members of the public pressed staff and the developer on outreach, marketing and occupant eligibility. The loan agreement on which the lease builds requires a marketing plan to be submitted and approved by OCII shortly after construction begins; Sims and Director Bohe said the marketing plan is the contractual "hook" to ensure targeted outreach to certificate-of-preference holders and other priority populations. Commissioner Bustos and others requested a public workshop and a standardized marketing template so the commission and community can review and strengthen outreach arms before the plan is finalized.

Public comment: Community members raised historical and environmental concerns. Francisco de Costa and others warned about contaminated land at Hunters Point and Mission Bay and questioned whether some sites designated for housing are safe; those claims were not resolved in this meeting.

Vote: Commissioner Singh moved the item, Chair Rosales seconded, and the resolution passed by roll call 3-1 with Commissioner Bustos voting no. Staff said the project is scheduled to close construction financing the week of May 18 and, if approved, construction would begin shortly thereafter. OCII staff committed to providing the marketing-plan template and to reviewing outreach performance as the project moves toward leasing.