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Board of Appeals upholds Planning Commission allocation for Kilroy’s 350 Mission tower after challenge over deferred impact fees
Summary
The Board of Appeals denied Sue Hester’s appeal of a planning commission decision to grant an additional 80,000 sq ft (six stories) for a 350 Mission Street office tower, finding the commission’s findings and CEQA determinations adequate. The board noted Kilroy has agreed to pay the addition’s impact fees early and that fee-deferral rules govern timing of payment.
The San Francisco Board of Appeals on Nov. 13 denied an appeal by attorney Sue Hester seeking to overturn the Planning Commission’s approval to add six stories — about 80,000 square feet — to a 24‑story office tower under construction at 350 Mission Street. The board voted 4–0 to uphold the Planning Commission motion and associated CEQA findings.
Hester, who said she drafted the city’s 1986 office-allocation amendment and invoked Prop M protections, argued the developer’s use of a fee‑deferral program shifts the burden for affordable housing, transit, and childcare mitigation onto the city and the affordable‑housing sector. “When the building opens, there’s no housing, there’s no transit,” she said, arguing that land‑value inflation makes deferred fees worth less to mitigation funds.
Dan Fratton, counsel for Kilroy Realty and the project sponsor, replied that the Planning Commission made the findings required by planning code sections 3.20–3.25 and that the city’s fee‑deferral ordinance governs timing — not the ultimate payment — of impact fees. Fratton said Kilroy has already paid an initial installment of roughly $1.5 million and that the remainder tied to the original 24‑story approval is due at first certificate of occupancy; he said the addition’s fees are roughly $3.5 million and that Kilroy agreed to pay those earlier than the deferral schedule would require.
Planning staff told the board the commission’s findings were supported by the Transit Center District Plan and the certified FEIR; the Planning Department’s residential design reviewers raised no objections to the addition’s siting or design, and staff confirmed that the portion of the project before the Board was the six‑story addition rather than the original entitlement.
Board members discussed both the policy concerns Hester raised and the narrow legal standard before them. Several members expressed sympathy for the public‑interest arguments about affordable housing and fee timing but said the Planning Commission’s discretionary findings and the fee ordinance’s procedures left the Board with limited authority to reverse the approval. The board adopted as its own the Planning Commission’s motion and CEQA findings and denied the appeal.
The Board’s action preserves the planning commission’s allocation for the 30‑story possible tower at 350 Mission. Planning staff said any fees deferred under the city’s program remain subject to the city’s fee‑deferral ordinance and that the developer’s commitments to pay certain amounts earlier were memorialized in the Planning Commission action.
What happens next: The Planning Commission’s motion and the Board of Appeals’ ruling close this appeal path; any rehearing request or further legal challenges would follow the city’s appeal and rehearing timelines.
