OCII approves ENA and three predevelopment loan actions for Transbay Block 2
April 06, 2021 | San Francisco City, San Francisco County, California
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The Commission on Community Investment and Infrastructure voted April 6 to approve a package of actions to advance development of Transbay Block 2, including a single exclusive negotiations agreement to govern comprehensive Block 2 development and two separate predevelopment loans of up to $3.5 million each for the family and senior sides of the block.
Kim Obstfeld, development specialist in OCII’s housing division, said staff recommended Mercy Housing to lead the Block 2 East family project and Chinatown Community Development Center (CCDC) to lead the Block 2 West senior project after a competitive RFP and an evaluation panel that included city and community representatives.
Item 5c, the ENA, covers an overall development program for Block 2 and anticipates two separate ground-lease options for financing purposes. Obstfeld described key ENA terms including a $10,000 performance deposit and a 30‑month term that may be extended up to 12 months at the executive director’s discretion.
The two predevelopment loans (items 5d and 5e) would each be for up to $3,500,000, with loan terms described in the staff memo; staff noted the loans carry higher simple interest provisions during the predevelopment period and will terminate upon execution of amended permanent loan agreements at construction closing.
Commissioners questioned why staff proposed an 85‑foot default height on Block 2 East when zoning allows greater height. Obstfeld said the 85‑foot scenario reflected a conservative, cost-effective approach to improve competitiveness for tax-exempt bonds given the current financing climate: “When the developer came in, they came in very much with this in mind that this, 85 foot scenario, was the most cost effective and therefore the most competitive and the most likely to secure those tax exempt bonds,” she said.
On parking, Obstfeld reiterated that the RFP specified no resident parking for the site and that Transbay design guidelines prohibit at‑grade parking; staff described tradeoffs — the cost of basement parking and aims to maximize active ground-floor retail and childcare space.
Votes: Vice Chair Rosales moved approval of item 5c; the motion carried with 4 ayes and 1 abstention (Commissioner Brackett). Separate motions to approve the predevelopment loans for Block 2 East and West also carried with the same roll-call result (4 ayes, 1 abstention). Staff said Mercy will study alternative height scenarios for Block 2 East during predevelopment and CCDC will study demand and feasibility of adding limited two‑bedroom units for live‑in aides in the senior building.
Next steps: Staff will return with schematic designs and refined financing plans; final project approvals and permanent loan requests will come to the commission in later phases of predevelopment.
Kim Obstfeld, development specialist in OCII’s housing division, said staff recommended Mercy Housing to lead the Block 2 East family project and Chinatown Community Development Center (CCDC) to lead the Block 2 West senior project after a competitive RFP and an evaluation panel that included city and community representatives.
Item 5c, the ENA, covers an overall development program for Block 2 and anticipates two separate ground-lease options for financing purposes. Obstfeld described key ENA terms including a $10,000 performance deposit and a 30‑month term that may be extended up to 12 months at the executive director’s discretion.
The two predevelopment loans (items 5d and 5e) would each be for up to $3,500,000, with loan terms described in the staff memo; staff noted the loans carry higher simple interest provisions during the predevelopment period and will terminate upon execution of amended permanent loan agreements at construction closing.
Commissioners questioned why staff proposed an 85‑foot default height on Block 2 East when zoning allows greater height. Obstfeld said the 85‑foot scenario reflected a conservative, cost-effective approach to improve competitiveness for tax-exempt bonds given the current financing climate: “When the developer came in, they came in very much with this in mind that this, 85 foot scenario, was the most cost effective and therefore the most competitive and the most likely to secure those tax exempt bonds,” she said.
On parking, Obstfeld reiterated that the RFP specified no resident parking for the site and that Transbay design guidelines prohibit at‑grade parking; staff described tradeoffs — the cost of basement parking and aims to maximize active ground-floor retail and childcare space.
Votes: Vice Chair Rosales moved approval of item 5c; the motion carried with 4 ayes and 1 abstention (Commissioner Brackett). Separate motions to approve the predevelopment loans for Block 2 East and West also carried with the same roll-call result (4 ayes, 1 abstention). Staff said Mercy will study alternative height scenarios for Block 2 East during predevelopment and CCDC will study demand and feasibility of adding limited two‑bedroom units for live‑in aides in the senior building.
Next steps: Staff will return with schematic designs and refined financing plans; final project approvals and permanent loan requests will come to the commission in later phases of predevelopment.
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