OCII authorizes $36.25 million package for 73-unit affordable housing at Hunters Point Shipyard

The Commission on Community Investment and Infrastructure on Aug. 2 authorized amended exclusive-negotiation and lease documents plus an OCII loan authorization to advance Block 56, a 73-unit affordable rental development at Hunters Point Shipyard’s hilltop.

Housing program manager Elizabeth Colomello told commissioners the development team — led by Mercy Housing with the San Francisco Housing Development Corporation (SFHDC) as co-sponsor — is seeking approvals to align with tax‑credit and bond application cycles. She said the OCII loan authorization would provide up to $36,250,000 (inclusive of $3.5 million previously authorized) to support construction financing.

Colomello summarized environmental work at the site and presented additional elective radiological soil testing by consultant Langan. “Results indicate no contamination is present, and there is no risk to the to workers, the public, or current or future residents,” she said; Colomello also noted the California Department of Public Health (CDPH) reaffirmed its prior conclusion that Parcel A is suitable for residential use.

The project is designed as a 73-unit building (including one manager’s unit) with a mix of studios through five‑bedroom apartments, a family childcare unit, a community room, courtyard, resident services and 73 bike parking spaces. The parking garage will provide 46 vehicle spaces (about 0.6 per unit). Mercy Housing is expected to act as property manager after completion; SFHDC will lead community outreach and resident services.

Officials presented a financing profile that estimates total development cost at about $67.5 million (roughly $925,000 per unit). The proposed loan term is 55 years at about 3.3 percent interest (subject to adjustment). Staff said OCII funds will be leveraged with federal tax‑credit equity and other competitive sources, and that the ground lease will be a 75‑year term with an extension option.

Commissioners asked several operational and fiscal questions. Commissioner Scott, who praised the presentation, urged the team to consider more three‑bedroom units for larger families. Vice Chair Rosales said she experienced “sticker shock” at the per‑unit cost: “I have sticker shock when I see the total cost per unit $924,837,” she said; staff attributed higher costs to supply‑chain and labor pressures and noted the project’s smaller scale reduces economies of scale.

Staff said the project has committed to prevailing/unified labor and to local small‑business enterprise (SBE) contracting goals; to date staff reported about 94 percent of contract values awarded to SBE or SBE joint ventures. Occupancy priorities will follow the Hunters Point Shipyard redevelopment plan, giving preference to certificate‑of‑preference holders and other specified categories before offering units to San Francisco residents or workers.

Commissioner Scott moved the authorization and Vice Chair Rosales seconded. The secretary recorded three ayes and two absences; the motion carried. Staff said the development team will submit tax‑credit and bond applications the week following the meeting, with construction financing expected to close in early 2023 if awards are secured and construction completion currently projected in late 2024–early 2025.

The commission’s action authorized an amended exclusive‑negotiation agreement, an amended option to ground lease, an amended and restated loan agreement for up to $36,250,000 and associated environmental findings under CEQA tied to the Phase 1 EIR.