OCII authorizes option agreement with F4 Transbay Partners for Block 4 amid financing uncertainty

The Office of Community Investment and Infrastructure Commission on May 16 authorized an option agreement with F4 Transbay Partners LLC that gives the developer an exclusive right to purchase and pursue development of Transbay Block 4 while the parties monitor market and financing conditions.

Kim Obstfeld, OCII senior development specialist, said the option is intended "to pause negotiations and allow time to evaluate market conditions" after the Parcel F developer’s difficulties undermined financing that originally supported Block 4. Under the option, the initial term is six months (with two available six‑month extensions and additional short extensions tied to legislative hearings); the developer will pay approximately $115,000 for the initial option period with similar consideration for extensions.

Staff described Block 4 as primarily residential with an approved development program of 681 units, about 45% affordable, roughly 8,400 square feet of ground‑floor retail (much intended for community‑serving uses), public open space and infrastructure improvements. The previously approved development disposition and development agreement (DDA) ties certain OCII obligations—such as an OCII loan funded by a Parcel F in‑lieu fee—to milestones including close of escrow, close of construction financing and commencement of construction.

Dan Esdorn of Heinz, representing the developer team, told commissioners that persistent market headwinds—construction‑cost escalation, rising interest rates and reduced bank construction financing—have made timely delivery under the original DDA infeasible and supported the case for an option to preserve the project until market conditions improve. Esdorn said Goldman Sachs remains an investment partner in the transaction.

Public commenters raised related issues. 'Ace' (Fillmore Corridor ambassador) urged OCII to revisit the master Certificate‑of‑Preference list and questioned community access to operating opportunities tied to redevelopment (for example, managing an OCII‑owned garage). Oscar James raised concerns about sea‑level rise and whether protections for Treasure Island will be included in future planning.

Commissioner Scott moved to authorize a public hearing and the option agreement under Health and Safety Code §33431 (resolution 17‑2023); the motion was seconded and passed on a 4–0 roll call. Staff said the developer will provide quarterly market reports during the option period and OCII will independently evaluate financing alternatives and development scenarios that could expedite affordable housing delivery on Block 4.