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Developers Focus on Southside Neighborhoods

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An extraordinary amount of real estate development is occurring in the Southside neighborhoods, with nearly 5,000 units in the pipeline. These projects are transforming Dogpatch and Potrero Hill.  What follows are profiles of some of the most active Southside developers.

Trumark Urban

Last May, Trumark Urban broke ground on a 91-unit mixed-use residential development on 645 Texas Street.  Dubbed the “Knox” project, it’ll feature a small retail space at the corner of 22nd and Mississippi streets.  On the same day the company also started construction on its “Rowan” project, a 70-unit mixed-use condominium on Potrero Avenue.

Trumark Urban is an offshoot of Trumark Companies, a 27-year old commercial and residential development firm based in Danville, California.  Trumark Urban was founded in San Francisco in 2012 to develop high-density mixed-use projects in urban neighborhoods.  It initially focused solely on San Francisco, where a post-recession surge in residential construction was underway.  Recently it’s expanded southward, opening a Los Angeles office earlier this year after breaking ground on a 24-story Southern California condominium project.

While San Francisco is undergoing a residential construction boom, only a small portion of developments include for-sale condominiums.  Securing capital to finance condominium construction can be difficult; this type of housing is more vulnerable to market cycles, and can take time to sell, increasing financial risks.  As a result, the vast majority of new residential construction is slated for rental apartments.

With low supplies of and high demand for ownership units there’s a renewed interest in the for-sale market.  This led to Trumark Urban to focus almost exclusively on mid- and high-rise for-sale condominium buildings.  It completed its first project last year:  the Amero building, a 27-unit condominium complex in Cow Hollow.

The Knox project didn’t face any neighborhood opposition.  “We take our time, and we work closely with the community,” said Arden Hearing, Trumark Urban’s managing director.  “We get in and we listen to all the stakeholders.”

According to Potrero Boosters president J.R. Eppler, Trumark visited the association three times, and incorporated comments about scaling back the development and including ground floor retail.  “We saw a positive evolution of the design over the three meetings we had,” Eppler said.

Forest City

Forest City was awarded the opportunity to redevelop Pier 70 by the Port of San Francisco, a project which is in the early stages of the design process.  Depending on whether the development team decides to maximize the Central Waterfront site for residential or commercial use, it could include between 1,600 and 3,000 housing units, from 1.1 to 2.3 million square feet of office space, and up to 519,000 square feet of retail space.

Forest City San Francisco has operated for 30 years in the Bay Area, with an emphasis on adaptive reuse, mixed-use and residential projects.  FCSF is a subsidiary of Forest City Enterprises, a 94-year old publicly traded real estate management and development company with approximately $9 billion in assets.  The company is headquartered in Cleveland, with regional offices in Boston, Dallas, Denver, New York City, San Francisco, Los Angeles and Washington D.C.

Forest City San Francisco employs about 15 people, mostly on large mixed-use developments.  Revitalizing the 65-acre Pier 70 site is undoubtedly one of the more complicated development projects in the company’s pipeline, but Forest City has experience with mammoth adaptive re-use projects.   It was the master developers of the San Francisco Westfield Centre, a $460 million project that transformed the historic Emporium department store into what it is today, as well as the $71 million, 154-unit Presidio Landmark.

During the past three years Forest City engaged with the Dogpatch and Hill neighborhoods and potential partners to inform Pier 70’s design and test ideas to help shape the project.  “Successful places are a combination of the physical spaces as well as the community, culture and activities that inhabit and enliven them. To get to that point, your actions with the community must be credible, honest and creative,” said Jack Sylvan, Forest City’s vice president of development.  “The time we’ve taken to interact with the community and to test ideas at the site will make Pier 70 sustainable and a natural extension of the neighborhood.”

“Forest City from day one was exemplary in how they reached out to the community in a way that was incredibly engaging and creative,” said Susan Eslick, former Dogpatch Neighborhood Association vice president.  “They have done an amazing stellar job engaging with the community at large.”

Related California

Related California is redeveloping a 3.5-acre site at 1601 Mariposa Street.  Under its current proposal a warehouse and parking lot would be transformed into two four-story buildings with 316 units, a 275-space underground garage, and 10,000 square feet of ground floor retail.

Related California was founded in 1989 as the West Coast division of Related Companies, a privately-owned real estate firm whose majority owner and founder is billionaire Steven Ross, also the principal owner of the Miami Dolphins.  Related California operates throughout the state, with offices in Irvine, Los Angeles and San Francisco.  Due to overwhelming demand for housing, the Bay Area is its most active region.

Related specializes in urban infill projects, the process of turning vacant or underused properties into high-rise, large-scale mixed-used residential developments.  The firm constructed the 40-story Paramount residential tower South-of-Market, as well as the Crescent Cove Apartments in Mission Bay.  It recently completed Lions Creek Crossings in East Oakland, redeveloping the distressed Coliseum Gardens housing project into a 567 unit mixed-income apartment complex.

1601 Mariposa has been one of the most contentious development proposals in Potrero Hill, generating spirited debate over its size and the effect it’ll have on public infrastructure.  “It has the potential to provide more benefit to the neighborhood and the potential to have more negative impacts, so the conversations we have had are a lot more complicated,” said Eppler.

Grow Potrero Responsibly, a neighborhood advocacy group, was formed in response to the proposed project, calling for a lower density alternative that would fit in with the rest of the Hill.  Alison Heath, the group’s founder, said that they’ve been bringing together different neighborhood groups to discuss issues with Related. “We have led that effort as opposed to Related leading that effort,” Heath said.  We have proposed some community benefits in a formal list that we think will help mitigate the impacts of the project and now we are waiting to see what they can do for us. “

According to Bill Witte, chief executive officer and co-founder of Related California, a constant in all of the firm’s projects is its strive for excellence:  working with world-class architects and designers to create housing that fits within the fabric of existing communities.  “The feedback we’ve received has been helpful and we’re now in the midst of making some design refinements to the project. We look forward to meeting with neighbors again during the summer,” Witte said.

Bridge Housing

Nonprofit developer Bridge Housing Corporation will be a fixture on the Hill’s southern slope for years to come, working on comprehensive redevelopment of the Potrero Annex-Terrace housing complex.  From an engineering standpoint, it’s one of San Francisco’s more complicated development projects because of the difficult grading work required.  It won’t be fully completed until at least 2025.

Under the proposed project – titled Rebuild Potrero – 620 public housing units, which are in various stages of decay, would be demolished and replaced with up to 1,700 public, affordable, and market rate housing units. Long isolated from the rest of the Hill by steep terrain and dead end streets, redevelopment would integrate Annex-Terrace with the rest of the community by redesigning the street grid. It’d also create 15,000 square feet of neighborhood-serving retail, a 35,000 square foot community center, 3.5 acres of public open space and new wastewater and storm water treatment infrastructure.

Headquartered in San Francisco, Bridge Housing was founded in 1983 to develop affordable housing throughout the Bay Area.  Governed by a board of directors, including Ray Carlisle, the president of Carlisle Companies, it has about 450 employees, and is one of the country’s largest nonprofit developers based on volume. Historically, Bridge has operated in California’s least affordable markets.  It  has projects in San Diego and Orange counties, as well as Washington and Oregon.  It’s developed close to 20,000 housing units.

Affordable housing developments tend to be sponsored by the nonprofit sector.  The projects require an understanding of the complexities of financing in a highly regulated industry.  “It takes more of a mission-driven approach to really be an effective affordable housing developer,” said Cynthia Parker, president and CEO of Bridge.

Low income housing requires sometimes significant amounts of subsides from governmental sources.  According to Parker, financing affordable housing involves assembling complex financing arrangements that can have up to 13 funding sources.  Bridge has staff that knows how to secure federal, state and local funds, skills that for-profit developers typically don’t have.

“We know it’s a big project.  We have been engaged with the neighborhood for six years, working with residents on both sides of the Hill in the planning process,” Parker said.  “The rubber hits the road once you start construction, and I assure you that after six years of working the neighborhood, we are going to keep up the activities because we really believe that integrating residents on both sides on the Hill into one neighborhood is what we eventually want to achieve.”

“They’ve been working on Rebuild for a long time, and a lot of their work has been around community building,” said Eppler.  “They have been good partners in helping keep a united community between the public housing part of the Hill and the rest of the neighbors and we’ve really appreciated them for those efforts,”

Prado Group

Prado Group is part of the Corovan development team, along with the owners of the site, Walden Development.  The proposed project would turn an old storage facility into two residential communities at Mississippi Street between 16th and 17th streets, totaling 395 units and roughly 25,000 square feet of retail.  Prado is a privately held real estate development and investment management company founded in 2003 in San Francisco.  With approximately 70 employees, Prado develops and invests in residential, retail and mixed-used properties, with a primary focus on urban infill locations in the City.

It’s completed three development projects in San Francisco:  38 Dolores Street – eight stories, 81 modern units with a Whole Foods on the bottom – 2130 Post Street – seven stories, with 71 luxury units – and 1266 Ninth Avenue, in which a two story facility that housed a mortuary was leveled to make room for a four story mixed-use building with 15 luxury upper floor apartments.

Partially due to the existence of historic industrial buildings on the Corovan site, its redevelopment has faced intense community opposition, led by the neighborhood advocacy and preservation group Save the Hill. Save the Hill started out as a grassroots campaign against Kaiser Permanente’s proposal to build a 200,000 square-foot medical office building on the site.  Their efforts were successful; in 2013, Kaiser announced that it was abandoning its plan in favor of Mission Bay.

Walden Development responded with a revised plan for the 3.5-acre property: a residential complex that would demolish some of the site’s industrial buildings.  Save the Hill has proposed an alternative adaptive re-use project that would rehabilitate and preserve the structures.

Rod Minott, co-founder of Save the Hill, has been disappointed by Prado’s lack of outreach and willingness to meet with the group.  According to Minott, Prado held two neighborhood meetings in 2014 to gather feedback on future development at the site, but the proposed design schematic doesn’t reflect any of the community’s requests.

In an email to the View Prado Group president Dan Safier stated, “Our outreach process involves early and frequent engagement with neighbors and stakeholders, including those in the community who are very supportive of the project as well as those who have concerns about change in the neighborhood,” he wrote.

Minott believes Prado hasn’t adequately addressed those concerns.  “They’ve predetermined what scale and what type of development they want.  Saying that they are listening to the community is all marketing for them.  I feel like it’s been disingenuous,” he said.

Build Inc

 Of all the development firms active in the Southside neighborhoods, Build Inc. is the most local.  A San Francisco focused company; it started its operations from the American Industrial Center more than ten years ago.  Its first major project was in Dogpatch:  Homes at Esprit Park, an adaptive reuse of the previous Esprit Headquarters campus that turned the site into a 142 unit mixed use residential community.

Last March, Build broke ground on a 116-unit rental apartment building on 650 Indiana Street.  The project will include ground floor retail and convert the dead end portion of 19th Street into an 8,000 square foot public art plaza.

After outgrowing its AIC office, Build Inc. relocated to Hayes Valley in 2006.  Privately owned by five partners, it employs 26 people and has around 2,000 units in the construction pipeline.  All of its projects are mixed use residential; they range from the Indiana Street project to a proposed India Basin development which would consist of 1,100 units and a public charter school.

Build incorporates public open space into almost all of its projects.  When the Eastern Neighborhoods Plan was adopted, the San Francisco Planning Department included in kind agreements, allowing developers to construct public realm improvements in lieu of paying impact fees, which often are invested in the neighborhood where they were accrued.  “As a private developer, we have a lot more freedom and can be more cost effective and more efficient than the City, so we can deliver high quality open space not only quicker but cheaper, so everyone wins,” said Michael Yarne, a principal at Build Inc.  Yarne and his Build partners launched a sister nonprofit – Build Public – that focuses on developing and maintaining public plazas.

Eslick first encountered Build during the Esprit project.  “I feel like they were the first firm to set the bar on what the community can expect from a developer with the homes at Esprit park; high level of design, high level of interface, authenticity,” Eslick said.  “They are a great group of people and they’re very creative.”

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