Downturn fails to dampen developer interest in tower
San Francisco Business Times
Written by J.K. Dineen
January 30, 2009
Three development teams are bidding to build a 550-foot residential tower at First and Folsom streets in San Francisco’s Transbay district, despite a crushing economic downturn that has depressed the value of the state-owned site and prompted other major builders to take a pass.
The three partnerships vying to take on the project are: AvalonBay with affordable housing partner Bridge Housing; Golub Real Estate Corp. with affordable housing partner Mercy Housing; and Avant Housing with affordable housing partner Citizens Housing.
A number of developers who had looked at the project — including Toll Brothers, Related Cos., and Intracorp San Francisco — did not submit proposals.
Mike Grisso, project manager for the San Francisco Redevelopment Agency, said the agency was still reviewing the proposals, but that all conformed to the Request for Proposal, which called for a 550-foot condo tower above two mid-rise affordable apartment buildings and a row of townhouses that will open onto Folsom Street.
“They are all housing and they all have a similar number of units, there is not a big variety” said Grisso. “The program was pretty prescribed in terms of height limits and bulk limits and building sizes.”
The 42,600-square-foot parcel is the largest of a dozen state-owned lots freed up when the elevated Embarcadero Freeway was knocked down after the 1989 Loma Prieta earthquake. Nine of the 12 parcels are set to be eventually redeveloped with housing. There is no timetable for selecting a developer, Grisso said.
All three teams have deep pockets and experience. AvalonBay, a national apartment firm, has constructed 823 apartments in Mission Bay. Avant Housing is a joint venture between well-known Bay Area developers AGI Capital and TMG Partners and is backed by CalPERS. Golub is one of Chicago’s most prolific developers and has developed, owned or managed more than 30 million square feet of commercial property and 50,000 multifamily units.