Supervisors endorse Mission Rock term sheet and fiscal-feasibility findings; analysts flag parking-structure funding gap

The Budget & Finance Subcommittee on May 1 considered and moved forward a resolution declaring the proposed Mission Rock project at Seawall Lot 337 fiscally feasible and endorsing a term sheet between the Port of San Francisco and Seawall Lot 337 Associates.

Phil Williamson, the Port’s project manager, and the development team described a mixed-use plan for the site: roughly 3.6 million square feet of development with a scenario projecting about 2,000 residents, 6,550 on-site jobs and approximately 11,100 permanent jobs including induced employment; the plan includes more than eight acres of parks and open space and restoration of Pier 48, where Anchor Brewing Company would be a tenant. The port and developer discussed phased infrastructure to balance costs and phasing through entitlements. Mike Martin of the Office of Economic and Workforce Development described the projects’ role in a broader waterfront development strategy and the potential for district energy, shared infrastructure and transportation coordination.

Harvey Rose, the budget analyst, reported that the proposed project is fiscally feasible under Administrative Code Chapter 29 but identified a $6,164,578 financing gap associated with the parking structure under the current financing plan. Rose recommended amendments to require (1) the port and developer to establish fair market value for lead parcels and allow acceptance of parcels as reimbursement toward equity and entitlement costs within a shortened timeline (the analysts recommended language change to allow reimbursement "as expeditiously as possible"); (2) clarify that unreimbursed horizontal infrastructure costs refer to the developer’s unreimbursed equity, entitlement and horizontal infrastructure costs only (not project debt); and (3) require the port to explore all public and project financing mechanisms rather than requiring the developer to fund all horizontal infrastructure costs. Rose also recommended that the port report back to the Board on financing for the parking structure once the feasibility gap is reconciled and before finalizing the master lease.

Public comment featured neighborhood and civic groups (SPUR, Mission Bay advisory groups), labor organizations, business and development supporters (San Francisco Chamber, Alliance for Jobs) and Anchor Brewing’s president, John Dannerbeck, each generally supportive of the term sheet but raising issues on phasing, affordable-housing mix, heights, and the desire that China Basin Park be built in phase one. Labor and community representatives urged mandatory local-hire and Project Labor Agreement commitments; the Giants and developer representatives and many community groups said they are pursuing local-hire goals and project-labor terms.

The committee adopted the budget analyst’s recommended amendments and moved the item forward with no recorded opposition.