Committee advances 125-Bayshore navigation center and $10 million state award to add beds

Emily Cohen, director-level staff in the Department of Homelessness and Supportive Housing, told the Budget & Finance Committee that the city seeks an initial 6-month lease with five one-year renewal options at 125 Bayshore to open a 125-bed navigation center focused on unsheltered people in the nearby Potrero/Cesar Chavez area.

"This would be a 125 bed facility focusing on unsheltered people experiencing homelessness," Emily Cohen said, and described 24-hour staffing, dormitories, showers, laundry and on-site services intended to help people exit homelessness. She estimated construction from March to May with an opening target of May 2018.

Real Estate Director John Updike told the committee the property contains about 22,965 square feet of building on a 31,700-square-foot lot; the negotiated blended lease rate is about $21.29 per square foot annually with an estimated $1 per-square-foot utility/service cost. Updike said rent would not commence until April 1 and work would begin earlier, effectively providing a rent-free construction period.

Severn Campbell of the Budget and Legislative Analyst's Office flagged tenant-improvement costs (the Public Works estimate provided to the BLA was roughly $3.2 million) and noted that the lease term's five-and-a-half-year maximum makes per-year amortization high. "We do recommend approval because the tenant improvement costs are consistent with other navigation centers and the site adds beds while two other centers will be closing," Campbell said.

The committee also took up a separate resolution to accept $10,000,000 from the California Department of Housing and Community Development to expand navigation-center capacity. Cohen said the $10 million would fund acquisition, construction, operations and services for two sites (125 Bayshore and a Division Circle site) and would cover one-time start-up costs and much of the current-year operating costs if the sites move as quickly as projected. She estimated the funding would open about 250 beds and help serve roughly 800–900 people per year assuming typical turnover rates.

Public testimony included neighborhood and bike-advocacy support for the site's potential to improve safety near the "Hairball" intersection and to provide services for people living in encampments. The committee moved both the 125 Bayshore lease recommendation and the $10 million accept-and-exppend resolution to the full Board with positive recommendations and without recorded objection.

Next steps: The lease as presented is an initial short-term arrangement to expedite opening; the committee noted construction and tenant-improvement costs will return for further approvals and that final terms will be part of follow-up legislation.