Development Bids Under Review for San Francisco Transbay Parcel F

Transbay, San Francisco, Land, Transbay Joint Powers Authority, Bay Area, Transbay Transit Center, Parcel F

By Nancy Amdur

The Transbay Joint Powers Authority (TJPA) is reviewing development proposals for one of the last available parcels near San Francisco’s downtown Transbay Transit Center and expects to make a decision on the best option for the site, which could hold a tower measuring up to 750 feet tall, in the next two months.

This review process is taking place in lieu of a previously planned live auction for “Parcel F,” located between First, Second, Howard and Natoma streets. The auction, scheduled for Sept. 2, was cancelled just one day prior to the event, in part because bidders were uncomfortable with the process.

“The bidders thought the uncertainty of various entitlements was too great to participate in that manner,” said Adam Alberti, a spokesman for the TJPA, which is overseeing the sale of the publicly owned land. “They all have different reasons — some have significant office space in their developments and were concerned about Proposition M,” which limits the amount of new office space that can be built in the city, he said.

“Other [bidders] wanted to look at different land use changes that would need to be approved and/or reviewed by the city,” Alberti added, “so it became apparent the auction model wasn’t going to produce the best result.”

Land use changes would require an amendment to the city’s planning code and possibly its General Plan. The agency is selling the land “as is” and would not delay closing on the land purchase “for any future project entitlement,” the agency said on its Web site.

The TJPA also said scrapping the auction would help “secure the best price and most complementary land use for the site.”

A minimum bid of $160 million for the site is required by the TJPA, and the funds would be used toward the approximately $2 billion Transbay Transit Center development. Parcel F comprises 29,000 square feet of net developable space. At least two-thirds of the property is zoned for commercial use, which includes a hotel.

Five proposals are on the table, and a closed-session TJPA board meeting was held Oct. 8 to discuss the potential plans.

“The agency is reviewing those offers and will be in negotiations with the parties,” Alberti said.

Bidders were kept private, he added, but a source familiar with the project said there was interest in the site from Chinese investors, and Hong Kong-based developer Nan Fung Group submitted a bid. Commercial property developer Dalian Wanda Group of Beijing did not bid but may consider a joint venture for a project at the site, the source added.

Chinese investors are still looking at San Francisco for investment opportunities, despite recent volatility in the country’s stock market, said Darlene Chiu Bryant, executive director of ChinaSF, a part of the city’s Office of Economic and Workforce Development which works to connect with Chinese companies looking to invest San Francisco.

“Interest is continuing,” Chiu Bryant said. “[Companies] are starting to diversify and are moving around their investment portfolios – they are continuing to invest overseas, in particular.”

Chinese investors also are increasingly interested in partnering with local developers, she added.

San Francisco-based developer Crescent Heights and Urban Pacific Investors, formed by Michael Kriozere, founder of San Diego-based developer UrbanWest Associates, also reportedly are among the bidders in the running for Parcel F, according to the San Francisco Business Times.

Parcel F is the last site available for development with a direct connection to the transit center via a pedestrian sky bridge, according to the TJPA. The other two high-rises connected to the center’s planned 5.4-acre rooftop park will be 181 Fremont, being developed by the San Francisco-based Jay Paul Co., and Salesforce tower at 415 Mission St., under development by Boston-based real estate investment trust Boston Properties and Houston, Texas-based Hines. The transit center will connect eight Bay Area counties and 11 transit systems, including future high-speed rail. The first phase of the center is slated to open in late 2017.

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