Board committee advances Balboa Reservoir development agreement and SFPUC sale amid heated public comment

President Norman Yee, the Board of Supervisors president, told the Budget & Finance Committee the Balboa Reservoir package would deliver 1,100 new homes with 50% permanently affordable units and multiple public benefits. “The project proposes 1,100 unit housing project that includes 50% affordability,” Yee said, outlining 550 affordable units and a 150‑unit set‑aside for educators.

The committee heard detailed presentations from the Office of Economic and Workforce Development and the San Francisco Public Utilities Commission. Lee Lutensky (OEWD) described site plans, financing expectations and timing; Michael Carlin (SFPUC) summarized the purchase and sale agreement (PSA) that would sell roughly 16 acres to Reservoir Community Partners LLC for $11,400,000 and noted the appraisal and feasibility studies that support that valuation.

A formal Budget Legislative Analyst review flagged two policy issues for the Board: the DA/PSA would waive the Administrative Code requirement for an appraisal review, and the proposed seller carryback financing is a policy decision rather than a purely administrative one. The BLA recommended amending the DA to include an option for the city to purchase the affordable housing parcels in the future and noted the city’s gap financing obligation for a subset of affordable units (the BLA estimated a city gap cost for 183 units of roughly $43,800,000).

Public comment stretched for hours and split sharply. Supporters said the site — a long‑unused parking lot adjacent to City College and transit — is a rare chance for high‑capacity, transit‑oriented housing, and urged committee members not to delay. One supporter said the project would “bring new housing to the site and provide families of all incomes the opportunity to live in this transit and amenity rich neighborhood.” Opponents and appellants’ counsel urged postponement, objecting to converting public land to private ownership, questioning appraisal methodology, and urging that an MOU between City College and the developer be finalized before the Board acts. An appellant’s attorney said late amendments were offered ‘‘at almost literally the eleventh hour’’ and asked for time to review the changes.

In response, President Yee and staff described how the amendments will work: three affordable parcels that will receive city gap funding are to be deeded back to the city and then ground‑leased to nonprofit owners; the DA will include a schedule of performance (predevelopment and subsidy milestones) and a linkage schedule tying market‑rate certificates of occupancy to delivery of associated affordable buildings. City Attorney staff explained that DA defaults could lead to remedies including cure periods, specific performance and, ultimately, termination of the development agreement and loss of entitlements.

After debating amendments and technical language, the committee voted to accept the BLA recommendations, accept Supervisor Yee’s DA amendments, and place the modified DA in the Board file. Because of a pending legal appeal (EIR appeal), the committee forwarded the package to the full Board of Supervisors without a positive recommendation. The committee recorded roll call votes; the actions passed on 3‑0 votes of the committee members present.

Next steps: Items 4 and 5 advance to the full Board. Several speakers asked that the Board ensure the pending City College MOU and the posted DA amendments are available for public review before the Board takes final action.