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Committee sends Pier 70 Parcel K North sale to Board without recommendation after amendments on affordable-housing fees
Summary
The committee considered a vertical disposition and development agreement to sell Parcel K North (Pier 70) to a TMG/Presidio Bay joint venture for roughly $24.35 million, debated sale vs. lease, ongoing revenue mechanisms (1.5% transfer fee and CFD), and approved Supervisor Fewer’s amendment asking MOHCD to propose expanded affordable-housing fees; the committee sent the item to the full Board without recommendation.
The Budget & Finance Committee debated the Port of San Francisco's proposed vertical disposition and development agreement to sell Parcel K North at Pier 70 to a joint venture of TMG Partners and Presidio Bay Ventures and ultimately sent the item to the Board of Supervisors without recommendation after adopting amendments on affordable-housing fee policy.
Christine Maher of the Port presented Pier 70 context and terms for Parcel K North (a 1.6-acre parcel at 20th Street and Illinois Street). She said the sale consideration totals about $24,350,000 and that the project would provide a public plaza, Michigan Street improvements (to be reimbursed from public financing sources), soundproofing measures for a neighboring industrial use, compliance with the city's first-source hiring and prevailing-wage requirements, and an affordable-housing in-lieu fee (28%) rather than on-site inclusionary units for condo sites.
Brad Benson, director of special projects for the Port, explained why the Port chose a sale rather than a ground lease: a trust-exchange process in 2017 freed some parcels from public-trust restrictions and certain for-sale condos cannot be placed on a ground lease without creating problematic long-term property-rights issues for future condo owners. Benson said the Port negotiated a 1.5% transfer fee on subsequent condo resales to provide ongoing revenue to the Harbor Fund and that estimated annual revenues from that fee could be roughly $474,000; projected community-facilities-district (CFD) special taxes could add further annual revenues.
Supervisor Mandelmann questioned the absence of a schedule of performance requiring timely construction; Port staff said they omitted a schedule to avoid depressing land value in uncertain market conditions and argued CFD special taxes would begin three years after agreement signing, creating an incentive to build. BLA staff warned of risk if the developer fronts public improvements and tax-increment or CFD revenues are delayed; the committee discussed the trade-offs among public trust considerations, revenue timing and project certainty.
Supervisor Fewer offered amendments urging the Mayor's Office of Housing and Community Development to return to the Budget & Finance Committee within two weeks with a plan to expand affordable-housing fees generated by Parcel K North. She moved to approve the amendments and then moved to send the item to the full Board "without recommendation." The committee took those motions without objection; the item will be considered by the full Board with the committee's amendments attached.
