Supervisor Peskin leads hearing on Millennium Partners developer payments and community benefits

On July 4, 2025, San Francisco County officials convened to address critical updates regarding developer payments and funding streams tied to the long-standing 2006 purchase and sale agreement for the 706 Mission Street project. The hearing, led by Supervisor Aaron Peskin, aimed to clarify the status of community benefit funds and the mechanisms for their allocation, particularly in the context of the South of Market (SoMa) neighborhood.

The meeting highlighted the complexities surrounding the community benefits agreement established nearly a decade ago, which was intended to mitigate the impacts of development in a high-income area by ensuring contributions toward affordable housing, open space, and cultural initiatives. Supervisor Peskin expressed frustration over the prolonged timeline in accessing and utilizing these funds, noting that community stakeholders have been seeking updates since the departure of former Supervisor Jane Kim.

Key discussions revolved around various fees outlined in the agreement, including an affordable housing fee, open space payments, and a cultural endowment for the Mexican Museum. The Deputy City Attorney, Heidi Gerwitz, provided insights into the legal framework governing these funds, emphasizing the importance of adhering to the stipulated permitted uses, which include operations and maintenance for public spaces in the SoMa area.

Ken Bukowski from the City Administrator's Office reported on the financial status of these payments, revealing that while some funds have been received, others remain outstanding. Notably, an additional $4.3 million affordable housing fee is still owed, with discussions ongoing regarding the developer's request for extensions due to pandemic-related challenges.

The Recreation and Parks Department, represented by Antonio Guerra, confirmed the recent transfer of $1.8 million in open space fees to support the Gene Friend Recreation Center project. However, concerns were raised about the lack of community consultation in deciding how these funds would be utilized, with community members advocating for a more transparent and inclusive process.

Public comments underscored the need for accountability and governance in managing these funds. Community representatives called for the establishment of a community review process to ensure that expenditures align with the needs of local residents, particularly in a neighborhood that has historically faced challenges related to open space and displacement.

As the meeting concluded, the committee acknowledged the importance of ongoing dialogue and collaboration among city agencies, developers, and community stakeholders to ensure that the benefits of development are equitably distributed and effectively utilized. The discussions set the stage for future actions aimed at enhancing oversight and community engagement in the management of public funds.