OCII commits $46.26 million and approves $3.09 million predevelopment loan increase for Transbay Block 2 West

The Office of Community Investment and Infrastructure Commission on May 16 approved a commitment of $46,260,000 in permanent residential gap loan funding and authorized a first amendment to a predevelopment loan that adds about $3,086,119 for Transbay Block 2 West, a project sponsor officials said will provide 151 affordable senior rental units.

Kim Obstfeld, senior development specialist at OCII, told commissioners the Block 2 West project is intended to be "100% affordable housing" and is critical to meeting OCII’s obligation that the Transbay redevelopment area provide 35% affordable housing. Obstfeld said the overall Block 2 site will be developed as two separately financed buildings and that Block 2 West will include studios and one‑bedrooms with affordability tiers ranging from about 15% to 50% of area median income and set‑asides for seniors experiencing homelessness.

Staff said the project’s estimated overall cost is roughly $132 million and described a financing structure that pairs federal low‑income housing tax credits with tax‑exempt bond financing overseen by the California Debt Limit Allocation Committee (CDLAC). Because CDLAC has become more competitive and favors projects that lower the per‑unit residential cost, OCII staff said the sponsor is pursuing a mix of gap loans, a commercial loan for retail space and a separate loan for site improvements to improve the project’s scoring for bond awards. Obstfeld said the sponsor estimates the full residential gap could be about $62 million and will return to the commission this fall to seek authorization for the full amount following bond awards.

Public commenters pressed staff on access and outreach. Oscar James, a native Bayview‑Hunters Point resident, urged that certificate‑of‑preference (COP) holders receive priority and emphasized accessibility, saying he wanted to ensure the building would be "wheelchair accessible for people who are handicapped." Obstfeld responded that sponsors must submit a marketing and early outreach plan as a condition of the loan and that units will be offered through the city’s listing process (recorded in the transcript as DALIA) with COP preferences applied.

Commissioners also asked about cost‑containment and outreach beyond the Transbay/Mission Bay area. Obstfeld said the team had completed 100 percent design development drawings and that current pricing reflects contingencies and recent escalation; she added staff will require the sponsor to present a marketing plan and to pursue partnerships (including outreach to senior community‑based organizations) to reach Certificate of Preference holders across the city.

The commission voted on the two items separately. Commissioner Scott moved to authorize the gap loan commitment (resolution 15‑2023); the motion was seconded and passed on a 4–0 roll call (Commissioners Drew, Scott, Vice Chair Ludlam and Chair Brackett voting aye). The predevelopment loan amendment (resolution 16‑2023) to increase the loan by approximately $3,086,119 (for a total aggregate predevelopment loan of about $6,586,119) was moved and seconded and also passed 4–0.

If CDLAC and other financing sources are secured, staff said the sponsor would submit CDLAC and TCAC applications in May with awards expected in August; staff anticipates returning to the commission this fall to seek full authorization for the residential gap loan and commercial loan agreements and said, if awards succeed, demolition and site preparation could begin in late August with construction financing closing in early 2024 and completion targeted in 2026.