potrero view

July 2009

Public Funding Could Spark Pier 70 Redevelopment

By Mike Stillman

It’s been nearly a decade since the first serious attempt at revitalizing Pier 70, a joint effort between industrial developer AMB and the San Francisco Arts Commission, fell through due to high project costs. Since then, the need for historic renovation, environmental clean-up, and infrastructure improvements has kept developers away from the 65-acre bay front site.  Stretching east of Illinois Street, between 20th and 22nd streets, the pier is mostly vacant, populated by the San Francisco Police Department’s impound lot and a ship repair operation run by BAE Systems.

Pier 70 was once a major part of San Francisco’s economy.  But it slipped into obscurity after the end of World War II, when shipbuilding went into decline.  After decades of neglect, estimated costs to redevelop the site exceed $1 billion. But, recently proposed state legislature could provide the funding needed to make redevelopment financially feasible.

The Port of San Francisco has already secured an estimated $200 million of the $350 million in public funds they say is needed for the project. An additional $140 million could be made available through Assembly Bill (AB) 1176.  Assemblyman Tom Ammiano, whose 13th district encompasses the eastern half of the City, introduced the bill, which received unanimous support from the Assembly in May.  AB 1176 would enable the Port to capture 90 percent of property tax revenue increases resulting from Pier 70 redevelopment, providing that 20 percent of those funds are directed towards creating open space at the site. 

The bill would divert money that would otherwise be directed to the City and County of San Francisco’s and State of California’s general funds, but leave funding in place for public schools, Bay Area Rapid Transit, and the Bay Area Air Quality Management District.  In a press release, Ammiano stated, “AB 1176 will bring San Francisco a vital step closer to creating a waterfront neighborhood of national significance.”   The bill is currently awaiting approval by the State Senate.

Pier 70 was once home to Union Iron Works, and later Bethlehem Steel.  The companies employed thousands of workers who produced steel for the City’s first skyscrapers, and built ships for the United States navy from the Spanish-American War through the Korean War.  However, the area’s rich maritime history – which makes it eligible for the National Register of Historic Places – left behind toxicity levels high enough to have the pier classified as a Brownfield site, as well as 40 boarded-up and seismically unfit buildings.  Under Port guidelines, at least 17 of the most historically significant buildings need to be retained and retrofitted.

In spite of the current financial crisis the Port believes that diverting tax revenue to Pier 70 will benefit the City and the state. “We think that Pier 70 is a resource for the country, the state, and the region, and it is worth investing state dollars into,” said David Beaupre, the Port’s Senior Waterfront Planner.  According to Tina Olson, the Port’s Deputy Director of Finance and Administration, by creating jobs Pier 70 development would contribute to state income tax revenues.  “It’s not that it would be a complete loss to the state,” she said.  “That’s the logic behind a redevelopment, you redevelop an area, you bring in new businesses that wouldn’t otherwise locate in that state or locality, and then everyone wins.”

According to Rich Hillis, of the Mayor’s Office for Workforce and Economic Development, Pier 70 could re-emerge as a crucial part of San Francisco’s economy.  “Pier 70 is a vastly underutilized site that’s poised to generate jobs and economic activity. It’s pretty flexible,” Hillis said, “it could be good for office space, R&D, a campus; it’s good for everything except housing.” 

The Port’s Master Plan dictates that a revitalized Pier 70 will consist of mixed-use development. In addition to creating office and commercial space, a developer will be required to provide public access to the bay and open space to park-deprived Dogpatch, Mission Bay, and Potrero Hill residents.

Proposition A, a general obligation bond passed last November, will provide $20 million to help develop Crane Cove Park, which is located along 20th Street in the Pier’s northwest corner. Other already secured public funding sources include $45 million in tax credits that the Port will receive when Pier 70 is added to the National Register of Historic Places.  Proposition D, also passed last November, would direct 75 percent of the estimated tax revenue that new hotels and businesses located at Pier 70 will generate to the project, which could reach $75 million.

Upwards of a dozen developers, including Catullus, Build Inc, TMG Partners, and Pacific Waterfront Properties, have demonstrated interest in the project.  “It’s the best site left in San Francisco,” said Alicia Esterkamp, Principal for Pacific Waterfront Properties. “Public financing solutions are an important step in moving Pier 70 forward as a viable project,” said Esterkamp. According to Beaupre, the Port will release a request for proposals, the first step in soliciting developers, by the end of the year.

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