Related California will build a taller apartment building in San Francisco’s Civic Center in exchange for donating a parking lot for 196 affordable housing units in the neighboring Hayes Valley District.
The Board of Supervisors Land Use Committee has approved the Irvine-based developer to purchase a parking lot at 600 McAllister Street and turn it over to the city for affordable housing, According to the San Francisco Chronicle.
In exchange, a subsidiary of New York-based Related will add a 35-foot tower and 40 more apartments to its planned high-rise at 98 Franklin Street. When complete, the 385-unit tower will be 400 feet tall.
The deal will be voted on by the full board next week.
It replaces a plan made seven months ago by Related Companies to buy the former McDonald’s restaurant site at 600 Van Ness Avenue to meet its affordable housing needs.
But that deal fell through due to difficult negotiations, and a plunge in land values made Hayes Valley a better location.
Unnamed industry sources told The Chronicle that the undisclosed price for the McAllister Street site was nearly 25 per cent lower than the Van Ness site. The McAllister Street project will build more apartments, from 168 to 196.
“Related thinks it’s a better deal — more units and closer to 98 Franklin,” San Francisco supervisor Dean Preston told the paper.
The city approved the construction of the Related Tower in 2020. The deal will revive stalled mixed-use development near Van Ness and Market Streets.
The base of the building will be occupied by a 90,000-square-foot French-American International School, which purchased the Franklin Street car park in 2012 and asked Related to develop the tower.
It is unclear who will finance and develop the 196 affordable apartments at 600 McAllister Street if the city gives final approval to the land exchange to the mayor’s Office of Housing and Community Development.
The city must plan to build 82,000 units of housing over the next eight years, including 46,000 units of affordable housing.
While the land donation would allow Related to avoid fees, the developer has agreed to pay an additional $1 million to help kickstart an 80-unit affordable project in the struggling Hayes Valley.
RELATED California’s “Largest Mixed Income Developer” in California, according to their websiteWith 20,000 residences, more than 11,000 units in pre-development status and a real estate portfolio valued at more than $60 billion.
— Dana Bartholomew