Supervisors forward Treasure Island redevelopment package after lengthy debate over financing, housing and local-hire commitments

Chair Carmen Chu and the Budget and Finance Subcommittee heard a multi‑hour presentation and public-comment period on the Treasure Island/Yerba Buena Island redevelopment package before forwarding the files to the full Board without a committee recommendation.

Rich Hillis of the Office of Economic and Workforce Development told the committee the project envisions about 8,000 residential units, up to 500 hotel rooms and about 550,000 square feet of retail and commercial space built in phases over 15–20 years. Hillis said public benefits include large amounts of open space (about 300 acres), new infrastructure and geotechnical work (estimated $170 million), affordable housing, a local jobs program and transit investments including a ferry terminal and a developer subsidy to support ongoing service.

Curt Fuchs of the Controller’s Office presented the economic analysis using the REMI model, describing construction‑period and long‑run impacts: an average of roughly 1,100 annual construction‑period jobs (about 750 direct construction jobs), an estimated $3.2 billion of construction‑period economic output, and about 2,200 ongoing direct jobs at full build‑out (with average wages near $60,000) that together with indirect effects would produce several thousand total jobs. Fuchs said the build‑out could add roughly $5 billion in assessed value to the tax rolls and exert modest downward pressure—about 2%—on citywide housing prices when fully completed.

Project sponsors described a jobs and economic opportunity plan tied to the deal: a goal of 50% of construction jobs going to San Francisco residents and a 25% share of those jobs targeted to formerly homeless residents associated with the Treasure Island Homeless Development Initiative (TyeDye). Sponsors also said permanent retail and hotel jobs would be subject to the city’s First Source hiring program, although they noted that some First Source thresholds apply to larger commercial spaces and that local‑hire mandates currently tied to public works would not automatically apply to privately funded developer work.

A central point of committee debate and public comment was financing. The package proposes using an Infrastructure Financing District (IFD) rather than traditional redevelopment increment financing. Staff said the plan would allocate 57 cents of the $1.00 property‑tax base to the IFD (with 10% of that set aside for affordable housing), leaving roughly 8 cents to flow back to city funds during the bond period. Sponsors and analysts said the IFD approach is necessary given uncertainty at the state level about redevelopment law; they also said the project could convert to a redevelopment financing structure later if state rules change.

Supervisors raised caution about the relative margin the city receives under the IFD approach and asked how services and capital improvements would be prioritized if tax revenues fall short of projections. Staff answered that the developer fronts initial infrastructure costs and bears reimbursement risk from IFD bond proceeds (bondholders rely on the IFD‑allocated property‑tax share only), while the city’s projected net general‑fund benefit over the first 20 years was estimated in analyst materials.

The hearing drew extended public comment from nonprofit service providers, homeless‑services advocates, labor unions, veterans’ groups and Treasure Island residents. Supporters said the project includes hundreds of units for formerly homeless people (TyeDye commitments), training and local‑hire pathways, nonprofit contracting opportunities and substantial park and open‑space commitments. A few speakers raised concerns about long‑term liabilities—specifically tsunami and sea‑level rise risks and traffic/transportation impacts—and asked for robust contingency planning.

Supervisor Jane Kim introduced an amendment to the housing plan to extend from two years to five years the window in which changes to public financing could restore the affordable housing minimum from 25% to 30%; project sponsors accepted that language. Supervisor Ross Mercurimi proposed adding a transit impact development fee for net new office space; sponsors accepted that amendment as well.

Deputy City Attorney Cheryl Adams advised the committee it could not take final action until the CEQA appeal period closed and a final environmental determination was in place. The committee therefore forwarded Items 9–12 to the Board without recommendation; the Board will consider the items at a later meeting once the CEQA timeline is complete.

Next steps: the full Board will consider the development agreement, disposition and development agreement, financing and related items after CEQA is finalized and the appeal period closes. Committee members asked staff to provide additional fiscal and implementation details to supervisors before final Board action.