Tenderloin Church Site Goes to Foreclosure Auction

A San Francisco church is set to be foreclosed at a site once floated for housing.

On Thursday, lender AGP Funding REIT, the discretionary private debt fund of AGP Capital, will pursue a foreclosure auction for two neighboring parcels at 450 O’Farrell Street and 474 O’Farrell Street in the Tenderloin neighborhood, the San Francisco Business Times reported.

AGP Funding REIT served the Fifth Church of Christ, Scientist and Forge Development Partners with a notice of default last May for a $6.8 million loan tied to the church’s land at 450 O’Farrell and an adjacent parcel at 474 O’Farrell owned by a Forge affiliate. AGP Funding REIT originated the $6.8 million loan in March 2022; the debt matured in January 2024. The notices said the amount of outstanding debt tied to the two pieces of land was more than $8.4 million.

The Fifth Church of Christ, Scientist site was previously proposed for housing. Four years ago, the San Francisco Board of Supervisors derailed the plans to redevelop the location into residences, according to CO. The church is committed to its project but is “in ongoing negotiations regarding this process,” Forge CEO Richard Hannum told CO.

The O’Farrell sites total about 0.4 acres. The church has been looking to build residences with space for a new charge on the ground floor.

The project started as a 13-story, 176-unit apartment building but underwent several iterations before being considered by the Planning Commission in 2021 as a group housing development with more than 300 units. Neighborhood advocates appealed the project’s approval to the Board of Supervisors, claiming the development team did not adequately assess the project’s environmental impact or the neighborhood’s preference for regular apartments over group housing. The board upheld the appeal.

Forge and the church sued the Board of Supervisors over its upholding of the appeal. The sides settled that lawsuit in 2023. That same year, Forge and the church secured approvals for a revised version of the 450 O’Farrell project that would rise 17 stories and include 261 apartments as well as space for ground-floor retail and a new church.

In early 2024, Forge beefed up its plans, submitting a new proposal for a 20-story version of the project at 450 O’Farrell. The city issued Forge a notice of incomplete application that March, and the application has not moved forward since then, Dan Sider, chief of staff for the San Francisco Planning Department, told the Business Times.

While Forge still has approvals for the 17-story version, the developer has not broken ground at 450 O’Farrell. It joins other developers who have shied away from breaking ground on new residential projects in San Francisco amid rising construction costs. — Chris Malone Méndez