Supervisors advance Flower Mart development agreement with temporary site, expanded affordable housing fees

The Land Use & Transportation Committee on Dec. 9 moved a suite of measures advancing the long‑running effort to preserve the San Francisco Wholesale Flower Mart while clearing the way for a large mixed‑use development at Fifth and Brannon streets.

The committee considered two items: an ordinance establishing the 2000 Marin Street Special Use District to host a temporary flower‑market facility during construction, and a development agreement between the city and KR Flower Mart LLC (Kilroy Realty) for a multi‑phase office, retail and production‑distribution‑repair (PDR) project that would include a replacement wholesale flower market and a package of community benefits. Chair Aaron Peskin described the policy aim as ensuring “the flower market exists for another hundred years,” and said the measures would go to the full Board to continue ironing out details.

Planning department staff said the project would demolish existing buildings on the southern half of the Brannon block and construct three mixed‑use office buildings containing roughly 2.03 million square feet of office, 113,000 square feet of PDR (the new wholesale market), 83,000 square feet of retail and about 35,000 square feet of privately owned public open space across three phases. The city’s Prop M allocation process would apply to the first phase, and planning staff noted a project variant that could relocate the wholesale market to an off‑site permanent facility if the Flower Mart vendors exercise that option.

Anne Topier of the Office of Economic and Workforce Development summarized the development agreement’s two scenarios. Under Scenario A, the market returns to Sixth and Brannon and the developer builds a temporary facility on a Public Utilities Commission (PUC)‑owned site at 2000 Marin (or a mutually agreeable site) with a minimum four‑year lease plus two one‑year options, and provides a set of on‑site community benefits (including at least 115,000 sq ft of affordable PDR space, 100,000 sq ft of neighborhood retail, 36,000 sq ft of on‑site privately owned public open space, and a $4 million public art contribution). She said the developer’s fees would include roughly $107 million in jobs‑housing linkage fees that are expected to fund nearly 500 permanently affordable housing units.

Under Scenario B, if vendors elect not to return, Kilroy would acquire and build a permanent off‑site facility to the specifications in the DA; Scenario B adds a 23,000 sq ft childcare facility, a 1,000 sq ft community room, and the creation of a central‑SoMa legacy business and PDR support fund seeded with $20 million for operating assistance and grants to the master tenant. Topier also noted an added annual $200,000 contribution over 10 years to support enhanced street cleaning and security in Central SoMa, and clarified that the PUC’s approval of a lease for use of 2000 Marin is required.

Alexandra Solsey and Mike Grissow of Kilroy described the company’s long engagement with vendors and neighborhood stakeholders, and said Kilroy has agreed to fund an immediate payment to vendors to finance feasibility work so they can decide whether to stay or choose a permanent off‑site home. Kilroy characterized the public‑benefit package as including a $5 million donation for Sunnydale, significant streetscape and public‑infrastructure contributions, and construction jobs.

Flower Mart representatives and many vendors and neighborhood groups testified in support. Jeanne Bowes, the market master lessee, and Vance Yoshida (president of the tenant association) asked staff and Kilroy to resolve outstanding technical specifications (electrical loads, refrigeration), and requested objective benchmarks for the final market design, naming London’s new Covent Garden as an industry standard example.

Committee members pressed staff and the developer on details: Supervisor Matt Haney asked where the $200,000 annual street‑cleaning subvention would be deposited and how it would be overseen; Topier and OEWD staff said the draft DA designates the funds to the city and the parties could make the fund language more specific during the process. Haney also asked for more detail on the enhanced workforce program Kilroy described as tied to approximately $500 million of construction spending; Kilroy said that figure represents the amount of spending that will be subject to workforce hiring requirements and local hiring efforts.

Several vendors and tenant representatives noted rent‑stability provisions in the tri‑party lease that would provide reduced rents in the first four years (a flat $250,000 annual lease in that period, rising to a per‑square‑foot schedule thereafter) and a 25‑ to 35‑year term structure that they said provides a stabilization window for small operators.

Given remaining technical and design questions, the committee accepted amendments to the DA and voted to send items 7 and 8 to the full Board without recommendation so staff, Kilroy and the Flower Mart tenants can continue negotiating unresolved specifications and finalize the DA record.

What happens next: the items advance to the full Board for further review and final action; the PUC must approve any lease for 2000 Marin if that site is used as the interim location. The timeline for vendors’ decision on a permanent off‑site option is tied to the DA effective date and the DA’s 30‑day election window for vendors once the DA is executed.