A local developer has moved ahead with plans to redevelop two historic piers in South Beach north of Oracle Park, but at a cost of another $150 million.
Pacific Waterfront Partners, based in the city, now estimates it will cost $528 million to turn Piers 38-40 into a mixed-use office complex, while beefing up the piers’ aging infrastructure, the San Francisco Business Times reported. The initial estimate was $383 million.
Funding 20 percent of the project cost depends on the developer securing more outside funding, according to the city’s Port Commission, which voted to approve terms and conditions for the project. The builder has until late next year to finalize its contract.
Construction could be completed by 2026.
The Piers 38-40 project, designed by Union Square-based Hornberger & Worstell, includes 215,000 square feet of office space and up to 20,000 square feet of shops and restaurants. Another 130,000 square feet would be dedicated for improved public access and open space.
The project south of the Bay Bridge would lessen earthquake risk and provide sea-level protection for both historic piers.
It would also leverage private-partner capital to build key infrastructure on the dilapidated piers, now estimated to cost an additional $150 million. In 2011, the Port evicted more than 50 tech firms from Pier 38 because of unsafe building conditions.
Simon Snellgrove, founding principal for Pacific Waterfront, said the bulkhead on Pier 38, which sits on the seawall, must be lifted four feet and shifted toward the Bay 34 feet to allow work on the seawall. The deck on Pier 40 must also be raised.
“It took a lot of engineering, a lot of re-pricing,” Snellgrove said, “The cost of it went up to $528 million.”
The Piers 38-40 project would be financed with $336 million in private equity and debt, along with historic tax credits, grants and loans available for pier protection and maritime benefits.
Despite the city’s high office vacancy rate, with a third of office workers now expected to work from home, Snellgrove sees opportunity in the waterfront office project, a “sweet spot for big users like Google who get to have all that space on two floors.”
The piers makeover could feature two bayside swimming pools, or even a floating volleyball court.
“The next generation doesn’t want to wear a suit and sit in the Financial District pretending to be grown up,” Snellgrove told the Business Times. “Down here is what we call a playground.
“We wanted to create a place where it’s fun to come to work, and it’s fun for people of modest means to be able to come to, eat and play.”
– Dana Bartholomew
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