OCII approves predevelopment loan and schematic revision to add affordable units at Transbay Block 7

The Commission on Community Investment and Infrastructure voted Aug. 19 to authorize predevelopment financing and a schematic-design revision for Transbay Block 7, advancing an 85-unit affordable family housing project at 222 Beale Street.

OCII's agenda lists item 5G as authorizing a loan agreement with Mercy Housing California 64 LP in the amount of $3,382,523 for predevelopment related to construction of 84 (now presented as 85) affordable units; during the staff presentation Mercy staff referred to a $3,300,000 loan request and noted $469,000 had already been paid from escrow as previously documented. Elizabeth Colomello, OCII Development Specialist, said the loan would allow Mercy to complete design work and financing applications and that staff anticipates folding the predevelopment funding into a larger permanent loan closer to construction start.

Courtney Pash, Transbay assistant project manager, described changes to the approved schematic design that add eight units (net increase to 85), reconfigure ground-floor uses to improve activation along Clementina Street, and add one additional story to Building B. The revised unit mix was presented as 34 one-bedroom, 33 two-bedroom and 18 three-bedroom units, including one manager's unit. Pash said the project would include a 4,500-square-foot childcare center intended to serve roughly 40 children and that marketing would prioritize certificate-of-preference holders and use a lottery at lease-up.

Colomello said the OCII subsidy would be consistent with the disposition and development agreement and the RFP, with a $200,000 maximum subsidy per unit and anticipated OCII subsidy sources including remaining affordable housing fee proceeds (about $10,300,000 available toward OCII subsidies) and developer payments and linkage fees. Staff also noted anticipated financing sources such as low-income housing tax credit equity, tax-exempt bonds and potential Federal Home Loan Bank funds.

Commissioners asked about Mercy's prior projects, partnership with Golub Real Estate Corporation (Golub, based in Chicago) and the selection process for a childcare provider; Mercy said they issued an RFQ and received multiple responses and expected about half the childcare slots to be subsidized and half market-rate. Commissioners also noted SBE participation for prior work: staff recorded 98.8% SBE participation for professional services and 93.5% San Francisco-based SBE firms cited for certain work.

After questions and a motion, the commission approved both the predevelopment loan authorization (item 5G) and the schematic-design revision (item 5H) by recorded votes of 3-0.