Commission approves conditional agreements to let UCSF buy Blocks 33–34 in Mission Bay South

The commission voted unanimously on May 6, 2014, to adopt environmental review findings and to conditionally approve three agreements that would enable the Regents of the University of California (UCSF) to purchase Blocks 33 and 34 in Mission Bay South.

Staff described three documents: a memorandum of understanding (MOU) between the successor agency and the UC Regents, a Fifth Amendment to the Mission Bay South Owner Participation Agreement (OPA) with Fossil MB LLC, and a release/assignment agreement to permit UCSF’s purchase while protecting Mission Bay affordable housing and infrastructure obligations.

Christine Maher, a development specialist with the agency, summarized the key financial terms and independent analysis. An economic study by ALH Urban & Regional Economics estimated the net present value (NPV) of tax increment that UCSF’s development would have generated at about $39,800,000. The MOU calls for a one‑time affordable housing payment from UCSF to OCII of $10,200,000 (about 25.6% of that NPV) and a one‑time infrastructure payment of $21,900,000 to the master developer (Fossil) for infrastructure work. UCSF also agreed to pay special taxes required by Community Facilities District (CFD) numbers 5 and 6 and to substantially comply with the South design for development and related Mission Bay plans; any substantial deviation would require commission approval.

Laurie Yamauchi, associate vice chancellor for campus planning at UCSF, explained that the university’s mission (teaching, research and public service) is defined by the state constitution and that certain educational, research and clinic uses are part of that mission. She said UCSF would continue to provide clinical care and may put an outpatient clinic on Blocks 33–34, but any secondary uses would require findings by the executive director.

On environmental review, staff recommended reliance on the existing Mission Bay FEIR and subsequent addenda; the agreements condition approval on the executive director’s future CEQA equivalency findings in specified areas and on subsequent approvals by the Board of Supervisors (Budget & Finance Committee and then full board), the Oversight Board, and the Department of Finance. Staff said, if all approvals occur, UCSF and the parties would have until Oct. 1, 2014, to close escrow and make the affordable‑housing and infrastructure payments.

Commissioners questioned the scope of UCSF’s mission, phasing and building form, mitigation equivalency, and transportation demand management (TDM). Staff said UCSF will present design work to the CAC and the commission and that any variances from the Mission Bay documents would require findings. Regarding transportation, staff explained that UCSF operates a private shuttle system open to the public; the commission’s mitigation exchange would require the executive director to find UCSF’s measures are as good or better than the Mission Bay requirements.

Damon Liu of UCSF’s Community Relations Office described UCSF’s voluntary local‑hire and workforce programs. He said UCSF’s Mission Bay hospital project has achieved about 21% of construction hours performed by San Francisco residents (roughly 610,000 hours since 2011) and that UCSF would increase voluntary local‑hire goals incrementally by 5% per year toward a maximum of 50%, with a target of 50% construction‑hour participation by 2017 for these Blocks.

During public comment, community speakers supported the in‑lieu payments that would accelerate affordable housing and infrastructure, asked that CAC involvement in design be preserved, and urged UCSF and the agency to provide scholarships, hiring pathways and support services such as mental‑health programs in neighborhoods that have long borne redevelopment impacts.

After public comment and commissioner discussion, an unidentified commissioner moved to approve the conditioned CEQA findings and the three agreements; the motion was seconded. The roll call vote was 5‑0 (Commissioner Ellington — Aye; Commissioner Mondorhar — Yes; Commissioner Singh — Yes; Vice Chair Rosales — Yes; Madam Chair Johnson — Aye). Chair Johnson said staff would follow up on a pending question about mitigation findings and report back at the next meeting or in the executive director’s report.

Next procedural steps described by staff: the Board of Supervisors’ Budget & Finance Committee would consider the city’s consent to transfer without a pilot agreement on May 7, 2014, followed by the full Board in early May; the Fifth Amendment and related agreements would go to the Oversight Board and then the Department of Finance for approval.