By Meghan Hall
The PDR market within the City of San Francisco has been gaining traction in recent years, as the City has pushed to maintain remaining pockets of industrial space throughout the Central Waterfront, Potrero Hill, Mission and East South of Market (SoMa) neighborhoods. However, even just outside these areas, developers are moving forward with converting production, distribution and repair (PDR) space into mixed-use projects, which has long been the trend in San Francisco’s blossoming real estate market.
One such development, located at 1560 Folsom Street, is just one of a wave of housing projects proposed in the area just outside of the Eastern Neighborhoods. However, San Francisco- based developer AGI Avant Inc. still must jump over several large hurdles before the project can move forward.
The project is part of San Francisco’s Western South of Market neighborhood and is just a block off of Highway 101 and several blocks West of Interstate 80. The site, which sits in the middle of a city block, is located near numerous retailers such as Costco, Trader Joe’s and Nordstrom Rack. 1560 Folsom is also within walking distance of the bustling SoMa and Mid-Market neighborhoods, where many large technology companies have established themselves over the years. Many of the warehouses currently in the West SoMa area were built in the 1940s, and while the City strives to maintain light industrial use spaces, developers are highly encouraged to bring mixed-income housing to the neighborhood as well.
“West Soma is a dynamic San Francisco neighborhood with dynamic cultural offerings, employment options and transit,” said Jesse Herzog, the chief investment officer for AGI Avant. “I saw Prince play at the DNA Lounge, which is a stone’s throw from the site. Proximity to Prince venues is a tried-and-true prognosticator of land value.”
The City released a Preliminary Project Assessment for the developer’s proposed 214-residential unit mixed-use development in June of 2018. Initial plans for the site would demolish 22,887 square feet of existing industrial buildings and construct a six to seven-story, 276,958 gross square foot development in its place. 176 of the units would be market-rate dwellings, and 38 units would be part of the inclusionary affordable housing program.
In addition to the dwelling units, plans include 54 off-street parking spaces and 5,693 square feet of commercial space on the ground floor on Folsom Street.
“It facilitates the construction of quality housing that includes a greater percentage of affordable housing,” said Herzog on why developers should continue to work towards adhering to the requirements of California’s Individually-Requested State Density Bonus Program.
According to the City’s assessment on the project, the base project is not currently considered code compliant. The City has asked AGI Avant to provide a new building scale for the plans and has asked to AGI Avant to locate parking below-grade. The City has also requested that AGI Avant increase the amount of green space provided by the project by increasing the amount of space for residential front stoops and green setbacks.
“The base project is not code-complying in many ways: rear yard, dwelling unit exposure, open space, etc.,” said Gina Simi, the communications manager for the City of San Francisco Planning Department. “There was insufficient detail in the submittal to make a detailed review and response.”
According to Simi, the City will review the project again once AGI Avant submits another proposal.
“Planning has encouraged them to redesign the project to better contribute to the context and meet the Planning Code and Urban Design Guidelines PPA Letter,” added Simi.
The City expects that AGI Avant will still need to submit an Article 38 Application and a Maher Program Application, among other documents. An environmental review has yet to be conducted by the City.
AGI Avant is still currently negotiating the purchase of the parcel, but Herzog would not disclose details on how much AGI Avant is purchasing the site for or when the contract will be finalized. Herzog did not comment on when construction would begin or how long the process is slated to take either, aspects of the project that likely won’t be finalized for some time.