Commission approves assignment of Mission Bay Block 7 West DDA, preserving 200 permanently affordable units

The San Francisco commission on meeting approved an assignment and amended disposition and development agreement (DDA) that transfers University of California, San Francisco’s rights for Mission Bay Block 7 West to a developer partnership and secures 200 permanently affordable rental units.

Catherine Riley, project manager for Mission Bay, told the commission the amended agreement would produce "200 units of rental units, affordable to households earning up to 60% of the area median income." She said UCSF agreed to prepay $2,400,000 in liquidated damages to permit assignment of the DDA now rather than waiting until a future noncompliance trigger tied to hospital construction schedules.

Riley said the amended DDA shifts ownership so the agency would hold the land and ground-lease it to the developer, which staff said preserves affordability ‘‘in perpetuity’’ rather than a 75-year affordability term under the original structure. The project program described by staff includes approximately 10,000 square feet of retail and private open space and compliance with the agency's affordable housing underwriting and contract compliance rules.

Staff and the developer also proposed a revised order of tenant preference. Riley said the amended deal reduces an originally proposed UCSF employee preference from 33% to 25% and would add a preference category that prioritizes employees who live or work for San Francisco public institutions, subject to fair housing law.

Commissioners asked clarifying questions about contract language and triggers for certain fees and payments. On a drafting point, a commissioner requested clause language clarifying that a routine $20.10 fee is payable upon commencement of a defined phase rather than ambiguously "yet." Staff agreed to add specific trigger language and an estimated timing for the clause in the final documents.

An unnamed UCSF planning official explained UCSF's decision not to build on part of Block 7 was driven by the depth of subsidy needed and limited access to tax-credit funding, making direct UCSF development infeasible.

A commissioner moved approval; the motion was seconded and passed in a roll-call vote recorded by the commission secretary as four ayes and one absence. The clerk noted the approval was understood to include the changes discussed during the meeting, including the clarified preference language and fee triggers.

Staff noted the previously authorized $2,000,000 predevelopment loan approved in June remains conditioned on final DDA approval; with the commission’s action, staff may begin disbursing predevelopment reimbursements. Staff said the developer will return in early 2014 for schematic design review, any additional predevelopment funding requests and ground-lease details, and that construction is anticipated to begin in February of the following year, subject to final approvals including the Department of Finance's concurrence.

Details not specified in the meeting record: exact timing for the Department of Finance determination and the final ground-lease terms; the resolution number was introduced at the meeting packet (Resolution No. 57/2013) and the item was described as contingent on any required DOF or oversight-board approvals.