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Committee backs sale of City Hall transferable development rights to fund preservation
Summary
The committee recommended selling up to 1.2 million square feet of City Hall transferable development rights (TDRs) with a base price of $37.50 per square foot and dynamic pricing, directing proceeds to City Hall rehabilitation projects including dome revitalization and exterior repairs.
The Government Audit & Oversight Committee on Oct. 7 voted to recommend a resolution authorizing the sale of up to 1,200,000 gross square feet of transferable development rights (TDRs) from San Francisco City Hall.
Andrico Penick, the director of real estate, explained the City Hall TDR program and the planned sales structure. "The base price for the City Hall TDRs will be $37.50 per unit," Penick said, describing a dynamic pricing schedule that increases if market demand reaches higher sales thresholds and a projected gross‑proceeds range of $41 million to $50 million.
Penick described how TDR mechanics work: a historic building owner (here, the city) can sell development potential to a developer constrained by floor‑area ratio (FAR) limits so the developer can reach an existing legal height limit. Penick said proceeds of City Hall TDR sales are restricted to rehabilitation and restoration of City Hall; projects cited included dome revitalization (~$20 million), roof and dome leak repair (~$3 million) and exterior stone and grout work (~$7 million).
Nick Menard of the Budget and Legislative Analyst’s Office reviewed the request and recommended approval, noting consistency with prior Board actions and that the resolution would limit the use of funds to City Hall historic preservation. Supervisors asked about timing of purchases relative to entitlement and inclusionary housing obligations; city staff explained the zoning administrator maintains a register of certificates and that inclusionary requirements apply to the full project if a housing project gains units by using purchased TDRs.
Vice Chair Connie Chan moved to recommend the resolution to the full Board; the committee approved the recommendation unanimously (Chan — aye; Mandelmann — aye; Preston — aye).
Why it matters: The sale is designed to monetize unused development rights in order to fund capital preservation of a major civic historic asset. The committee approved forwarding the item to the Board for consideration, subject to the usual Board process.
What’s next: The matter will go to the full Board of Supervisors for action on the recommended resolution.
