San Francisco agency extends payment deadline for 706 Mission Street affordable housing fee

The San Francisco City Commission convened on July 4, 2025, to discuss a significant extension request regarding the affordable housing fee associated with the 706 Mission Street development project. The meeting focused on a resolution to authorize an extension for the payment of the final two installments of a $4.45 million affordable housing fee owed to the Office of Community Investment and Infrastructure (OCII).

Deputy General Counsel Aaron Foxworthy presented the request, explaining that the developer, 706 Mission Street Co LLC, is seeking additional time due to challenging economic conditions that have impacted sales of the residential units. The commission previously granted an extension from November 2020 to November 2021, but the remaining payments are still outstanding. The developer is now requesting an extension until April 3, 2023, to allow time for recapitalization efforts aimed at securing financing to cover the owed fees.

The project, which includes a residential tower and cultural space, has faced delays in unit sales, with only 14 of the approximately 132 available units sold since they became available in early 2021. The developer's representatives expressed confidence in their ability to secure the necessary financing, citing ongoing negotiations with lenders and the completion of required appraisals.

Commissioners raised concerns about the implications of granting the extension, particularly given the overdue status of the payments. They questioned the developer's financial strategy and the potential risks of not extending the deadline. However, the developer assured the commission that the recapitalization would provide the funds needed to pay the fee, emphasizing that the extension would not only facilitate the payment but also support ongoing marketing efforts for the remaining units.

The commission ultimately acknowledged the unique challenges posed by the current economic climate and the impact of the COVID-19 pandemic on the real estate market. They are expected to deliberate further on the extension request and its implications for the project and the community. The outcome of this decision will be crucial for the developer's financial stability and the completion of the housing project in San Francisco.