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Budget committee advances SFMTA’s Potrero (Cherry) Yard modernization ordinance with procurement waivers
Summary
The Budget & Finance Committee voted to recommend an ordinance enabling a joint-development delivery for the Potrero (Cherry) Yard modernization — intended to expand bus capacity, accommodate battery-electric buses, and include housing (minimum 50% affordable) — provided SFMTA and the Mayor’s Office of Housing return with a term sheet and protections for prevailing wages and local hiring.
The San Francisco Board of Supervisors’ Budget & Finance Committee on March 3 recommended an ordinance that would exempt parts of Administrative Code Chapters 6, 14B and 21 to allow a joint-development, design-build-finance delivery for the Potrero (Cherry) Yard modernization.
SFMTA co-project manager Rafe Rabelais told the committee the project would rebuild the roughly 100-year-old Potrero yard as a three-level bus facility to expand capacity by about 50 percent, accommodate state-mandated battery-electric buses and modernize bus bays and operations. Rabelais said the project is part of SFMTA’s facilities program begun in 2017 and that the agency expects to complete the yard rebuild by 2026.
The proposed ordinance would permit the city to select a developer using a best-value selection process while retaining obligations for prevailing wages, a local business enterprise (LBE) utilization program and the city’s local-hiring and first-source hiring policies. SFMTA staff described the effort as a combined public-works and real-estate undertaking that does not fit neatly into existing procurement categories.
The Budget Analyst (Severn Campbell) recommended amending the ordinance to request that a negotiating term sheet be submitted to the Board early in the process and that the final project agreement include protections such as false-claims/collusion provisions, audit and inspection rights, prevailing-wage enforcement and a not-to-exceed amount. Campbell described the recommendation as policy guidance for the full Board.
Vice Chair Supervisor Asha Safaei pressed SFMTA on contingency planning if the RFP process yields proposals that cannot finance the housing component, noting the agency must still deliver the yard by the 2026 schedule. Safaei asked that the Mayor’s Office of Housing (MOH) be brought in early to assess whether a 500-unit, 100 percent-affordable housing target (which she estimated could cost roughly $500 million) is realistic given city financing constraints.
Supervisor Gordon Marr and other members sought assurances that core procurement safeguards would remain in place despite the code waivers. City Attorney Pearson and SFMTA staff said the ordinance would not eliminate core policy elements; the intent is to allow a delivery method that spans multiple code chapters while preserving key protections via the term sheet and contract terms.
Two public callers during the item’s public comment period raised environmental concerns at Potrero and urged independent oversight; another commenter, David Pilpow, supported maintaining SFMTA facilities but recommended a more modest remodel if the joint-development approach risked diverting agency focus.
Chair Matt Haney moved the committee’s amendments and the panel voted 3–0 to send the ordinance, as amended, to the full Board with a positive recommendation. The committee’s amendment formalizes the Board’s request for a term sheet and clarifies that any agreements using federal or state funds must conform to the applicable laws.
The ordinance will return to the full Board for consideration; the committee’s action does not itself alter procurement requirements beyond the enabling language requested in the ordinance.
