Commission approves $1.5M additional predevelopment loan for Mission Bay South Block 9A

The Commission on Community Investment and Infrastructure voted Tuesday to provide an additional $1.5 million in predevelopment funding for the Mission Bay South Block 9A housing project, bringing the agency’s total predevelopment loan to $5 million.

Pam Sims, senior development specialist in OCII’s Housing Division, told the commission the funds will cover architecture, engineering, environmental work and an “indicator pile” program to assess subsurface conditions; the project team estimates the additional work will total roughly $1,580,000 including $80,000 in deferred soft costs. Construction is expected to start in April 2022 with completion targeted for early 2024. The developer team includes 350 China Basin Partners LLC (Curtis Development, Michael Simmons Property Development Inc. and Young Community Developers). The program would deliver 148 homeownership units (34 parking spaces, 76 bicycle spaces) with unit AMI tiers the team described as mostly in the 80–110% AMI range.

Commissioners probed affordability and equity protections. Commissioner Brackett expressed concern that the AMI bands (80–110% AMI) may exclude lower‑income households and asked what additional city subsidies or programs could reduce upfront mortgages and help households manage potential increases in HOA dues. Developer Michael Simmons and staff said outreach will prioritize certificate holders and their descendants where appropriate, noted potential eligibility for a new HUD program to assist housing authority voucher holders, and said the predevelopment funds will be rolled into gap financing at construction closing. Staff reported 74.6% SBE participation so far and said subcontractor lists will be provided when the contract returns for the disposition and development agreement and gap loan approval early next year.

Commissioner Beiser asked whether the additional funds were needed because construction financing is closing later than expected; the development team said higher architecture costs and early indicator pile work to prevent costly pile breakage were the primary drivers. Commissioner Beiser also asked whether the loan is rolled into permanent construction financing (answer: yes — it will be rolled into the gap loan). Commissioners requested further materials on small/local business participation and additional strategies to support lower‑AMI buyers.

Commissioner Brackett moved approval; Commissioner Feiser seconded. Roll call: 3 ayes, 2 absent — item approved.

Next steps: staff will bring the disposition and development agreement and gap loan documents back to the commission for final approvals (anticipated February 2022), and to provide more detail on subcontractor selection and outreach plans.