City Hall to sell 1.2 million square feet of development rights for historic preservation
October 07, 2021 | San Francisco County, California
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In a recent San Francisco County government meeting, officials discussed a significant resolution aimed at selling up to 1,200,000 gross square feet of transferable development rights (TDR) from City Hall. This initiative, presented by Andrico Penick, the director of real estate, seeks to leverage the unused development potential of the historic building to generate funds for its rehabilitation and restoration.
Transferable development rights allow property owners to sell their unused development potential to other developers, enabling them to exceed certain zoning restrictions, specifically floor area ratio (FAR) limits. However, it is crucial to note that purchasing TDR does not grant developers additional rights to exceed existing height limits or other regulatory requirements. Instead, it provides a mechanism for developers to reach the legal height limit when constrained by FAR issues.
City Hall, with a total of 1,300,000 square feet of TDR available, will retain 117,000 square feet for potential future projects. The pricing for the TDR will start at $37.50 per square foot, with a dynamic pricing model that adjusts based on market conditions. This approach aims to maximize revenue, potentially generating between $41 million and $50 million, significantly higher than previous TDR sales from the War Memorial, which yielded approximately $32 million.
The proceeds from the TDR sales are earmarked exclusively for City Hall's restoration projects, including a $20 million dome revitalization and other essential repairs. This funding strategy underscores the city's commitment to preserving its historic architecture while addressing financial needs for maintenance.
The meeting also highlighted the importance of establishing fair market value for TDR, which is determined through appraisal. The city remains a dominant player in the TDR market, with other potential sellers being historic buildings within specific zoning classifications.
As the resolution moves forward, it reflects San Francisco's ongoing efforts to balance development needs with the preservation of its historic landmarks, ensuring that the city can adapt to modern demands while honoring its architectural heritage. The next steps will involve public feedback and further discussions among city officials to finalize the resolution and its implementation.
Transferable development rights allow property owners to sell their unused development potential to other developers, enabling them to exceed certain zoning restrictions, specifically floor area ratio (FAR) limits. However, it is crucial to note that purchasing TDR does not grant developers additional rights to exceed existing height limits or other regulatory requirements. Instead, it provides a mechanism for developers to reach the legal height limit when constrained by FAR issues.
City Hall, with a total of 1,300,000 square feet of TDR available, will retain 117,000 square feet for potential future projects. The pricing for the TDR will start at $37.50 per square foot, with a dynamic pricing model that adjusts based on market conditions. This approach aims to maximize revenue, potentially generating between $41 million and $50 million, significantly higher than previous TDR sales from the War Memorial, which yielded approximately $32 million.
The proceeds from the TDR sales are earmarked exclusively for City Hall's restoration projects, including a $20 million dome revitalization and other essential repairs. This funding strategy underscores the city's commitment to preserving its historic architecture while addressing financial needs for maintenance.
The meeting also highlighted the importance of establishing fair market value for TDR, which is determined through appraisal. The city remains a dominant player in the TDR market, with other potential sellers being historic buildings within specific zoning classifications.
As the resolution moves forward, it reflects San Francisco's ongoing efforts to balance development needs with the preservation of its historic landmarks, ensuring that the city can adapt to modern demands while honoring its architectural heritage. The next steps will involve public feedback and further discussions among city officials to finalize the resolution and its implementation.
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