San Francisco approves $25M special tax bonds for Treasure Island development

In a recent San Francisco County government meeting, officials discussed a significant resolution authorizing the issuance of special tax bonds for the Treasure Island Community Facilities District (CFD) Improvement Area Number 2. The resolution allows for the sale of bonds totaling up to approximately $25.1 million, aimed at financing public infrastructure improvements on the island.

Luke Brewer from the controller's office presented the resolution, noting that this marks the third series of special tax bonds issued for Treasure Island, following previous series priced in 2020 and 2021. The current series will fund the development of five parcels, which include three rental residential buildings and two condominium buildings, totaling 777 units. The construction is expected to begin in 2022, with completion projected between 2023 and 2024.

The city’s policy mandates that the value of properties in the improvement area must be at least three times the total amount of bonds issued. A recent appraisal indicated a value of $75.4 million for the properties, significantly exceeding the bond amount. However, the bonds will be sold as non-rated due to the inherent risks associated with early-stage real estate development.

Importantly, the bonds are not backed by the city’s General Fund, meaning repayment will solely rely on special taxes levied in Improvement Area Number 2. To mitigate risks, the city has committed to judicial foreclosure on any parcels with delinquent tax payments, ensuring bondholders are protected.

The resolution received a positive recommendation from the committee and will proceed to the full board for further consideration. This development is a crucial step in the ongoing transformation of Treasure Island, which aims to enhance housing and infrastructure in the area while addressing the city's broader housing challenges.