Committee advances up to $260 million interim financing for Transbay Transit Center, adds DPW oversight reference

The San Francisco Budget and Finance Committee on April 27 advanced to the full Board a package to provide short-term interim financing for Phase 1 of the Transbay Transit Center, authorizing a not-to-exceed certificate amount of $260,000,000 to address an estimated $247,500,000 funding shortfall.

Ben Rosenfield, city controller, summarized the work behind the proposal and introduced Transbay Joint Powers Authority and city finance staff. "Our office has been working on this interim bridge financing package for many months now," Rosenfield said, characterizing the plan as an unusual but necessary step to complete the regionally significant project.

Sarah DeBorde, chief financial officer of the TJPA, reviewed the project's budget history and the gap analysis: original Phase 1 budgets and subsequent changes, including a 2010 Federal Railroad Administration grant and an MTC-recommended Phase 1 budget of about $2.2594 billion. DeBorde said TJPA leadership believes it can finish Phase 1 with roughly $260,000,000 of the $360,000,000 increase MTC had identified.

Nadia Sisse (Office of Public Finance) outlined the city's proposed financing structure: a variable-rate short-term transaction with a not-to-exceed amount of $260,000,000 to be drawn as needed; MTC has agreed to purchase $100,000,000 of the proceeds as part of the package, and Wells Fargo placed competitive bids for portions of the remainder. Sisse warned that if district revenues do not come in on schedule, the city's general fund credit would be exposed as security for the transaction.

Why it matters: TJPA faces a roughly $247.5 million shortfall during Phase 1 construction as anticipated land-sale and CFD special-tax proceeds have shifted in timing and amount. Nadia Sisse told the committee CFD special-tax proceeds expected during construction were revised from about $194,000,000 to $146,000,000, contributing to the near-term cash gap. The city says the financing is intended as a bridge until district revenues mature and long-term financing can be put in place.

Oversight and public comment: As part of the package, city staff proposed additional safeguards including a cost-review committee and the Department of Public Works providing construction management oversight under an intergovernmental agreement; the budget analyst recommended amending the resolution to reference that intergovernmental agreement explicitly. Public commenters were split: Jerry Cawthon of the Bay Area Transportation Working Group supported the financing and defended TJPA staff’s fundraising; Tim Haas criticized the project's scope, governance, and past spending priorities and urged the city to take control.

Committee action: The budget analyst's recommendation to amend the resolution to reference the intergovernmental agreement was accepted (motion by Supervisor Kim, second by Supervisor Yi). Supervisor Tang moved to send items 4–6 to the full Board with a positive recommendation (second by Supervisor Yi); both motions were adopted without objection.

Next step: The referred resolutions will appear on the full Board of Supervisors agenda for further consideration. City staff said they will continue work on Phase 2 delivery and funding plans and provide additional detail to supervisors in the coming months.

Ending: The committee advanced the interim financing resolution to the full Board with an amendment to reference DPW construction-management oversight.