City Prepares to Sell Land at 30 Cents on the Dollar
|Clubhouses are one thing. But condos?|
The land in question is located on Fulton and Gough streets and called "Parcel F." While its assessed price exceeds $8.4 million, a resolution is working its way through the city legislature to sell the site, currently a parking lot for the Opera, to the Boys and Girls Club for $2.5 million.
While only a special class of NIMBY would begrudge a pool, gym, and gathering point for disadvantaged children -- in gang-neutral territory no less! -- the near certainty of six or so stories of condos above housing 30 to 60 residential units is a different matter.
As is the question of whether the city will derive any cash from that development. That depends on who you ask.
View Larger Map
Per the agreement, "if the Boys and Girls Club sells or leases all or a portion of the residential development to a third party, the City shall receive 50 percent of the net sale or lease proceeds." But what if, in order to develop a large condo structure atop a $16 million clubhouse, the Club enters into a joint venture with developers -- and this entity is the one doing the selling?
The Board of Supervisors' Budget and Legislative Analyst was unsure whether the city would reap any profit in this (likely) scenario. However, Jennifer Matz, the head of the city's Office of Economic and Workforce Development, said San Francisco would "absolutely" get its share of the money.
When asked if this deal could make the city -- and private developers -- a bundle, Matz answered in the affirmative.
"The purpose of this profit-sharing provision is to begin to recoup some of the funds the city is forgoing," with a below-market-rate sale, Matz says. "The Boys and Girls Club has no intent to be cute about that nor do we intend to have any ambiguity about that."
Matz notes the following passage, which seems to indicate a limited ability for "cuteness" or leaving the city holding the bag: "This Agreement shall be binding upon ... the parties hereto and their respective successors, heirs, legal representatives, administrators and assigns. Buyer's rights and obligations hereunder shall not be assignable without the prior written consent of City."
And if that language isn't clear enough, Matz assures it will be prior to agreements being signed. Even still, a blistering report from the Budget and Legislative Analyst gave the proposed sale of Parcel F an "F."
Major objections to the deal included the lack of an open bidding process -- there may yet be benevolent, well-intentioned nonprofits willing to pay closer to market rate; the lack of a "formal or public planning process to determine the best use of Parcel F;" the fact that commercial, rather than residential development on the site wouldn't net the city a dime of profit-sharing; and, perhaps most stunningly, after 30 years, the land can be sold without the city receiving any money.
The latter two concerns will be addressed with subsequent amendments. If the Boys and Girls Club does obtain the land, the city now figures to receive 40 percent of its potential future sale price, 40 years down the road. And residential development on the site will now be essentially mandatory.
Those were gaping holes in the original agreement, however. That seven supervisors signed on as co-sponsors of the resolution to make the sale under the prior conditions is intriguing.
The issue will next be addressed at the Jan. 4 Budget and Finance Committee meeting -- meaning the supes have until next year to get around to reading what they've already signed.
Follow us on Twitter at @SFWeekly and @TheSnitchSF