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Committee advances Balboa Reservoir loan amendments to speed affordable phase
Summary
The committee recommended forwarding amendments to seller-carryback loan documents for the Balboa Reservoir sale so Bridge Housing Company can phase development and use state affordable-housing awards for infrastructure and two affordable buildings; the SFPUC will remain secured by deed of trust on remaining parcels.
The Budget & Finance Committee on June 9 voted to forward to the full Board a resolution approving amendments to the seller-carryback loan documents tied to the Balboa Reservoir sale.
Jeremy Spitz of the San Francisco Public Utilities Commission explained the amendments are intended to allow the master developer, Bridge Housing Company (with AvalonBay as a partner), to proceed with a smaller Phase 1 focused on affordable housing while preserving the PUC’s security for the remaining property. Spitz said the original sale closed in December 2022 for $11,400,000 and that SFPUC provided seller financing in the form of an approximately $11,006,965 promissory note secured by a first-lien deed of trust.
Because market-rate economics have softened, Spitz said the developer obtained state grant awards and plans to redirect those funds into infrastructure and two affordable buildings totaling roughly 290 units in a reduced Phase 1; the overall project is planned for about 1,100 units with 50% of units affordable. To accommodate phasing, the amendments would not change the purchase price, interest or the outside maturity date (December 2028) but would modify the schedule of payments and the release of deed-of-trust security tied to parcel development. Spitz said Bridge Housing Company will make a $2,800,000 payment on or before Dec. 31, 2026, at which time the PUC would release the deed of trust from the Phase 1 portion of the property, the street, open space and paseo areas.
Vice Chair Rafael Mendelmann and other supervisors expressed support and asked to be added as co-sponsors. No public speakers registered; the committee voted to forward the resolution with a positive recommendation with three "aye" votes recorded.
The amendment request will proceed to the full Board for consideration.
