Related California will build a taller apartment tower in San Francisco’s Civic Center in exchange for donating a parking lot for 196 affordable homes in the neighboring Hayes Valley district.
A Board of Supervisors land use committee has agreed to allow the Irvine-based developer to buy a parking lot at 600 McAllister Street and give it to the city for affordable housing, the San Francisco Chronicle reported.
In exchange, the unit of New York-based Related Companies would add 35 feet and 40 more apartments to its highrise planned for 98 Franklin Street. When completed, the 385-unit tower would rise 400 feet.
The deal will be voted on by the full board next week.
It replaces a plan hatched seven months ago for Related to make a swap after buying a former McDonald’s restaurant site at 600 Van Ness Avenue to satisfy its affordable housing requirement.
But that deal fell through because of difficult negotiations, and plunging land values made Hayes Valley a better site.
The undisclosed price for the McAllister Street lot was nearly 25 percent less than the Van Ness parcel, unidentified industry sources told the Chronicle. And the McAllister Street project will build more apartments, 196 units compared to 168.
“Related felt it was a better deal — it is more units and closer to 98 Franklin,” San Francisco Supervisor Dean Preston told the newspaper.
The city approved Related’s tower in 2020. The deal would restart the stalled mixed-use development near Van Ness and Market Street.
The base of the building would be occupied by a 90,000-square-foot French-American International School, which bought the Franklin Street parking lot in 2012 and asked Related to develop the tower.
If the city gives a final OK for the land swap to the Mayor’s Office of Housing and Community Development, it’s not clear who would finance and develop the 196 affordable apartments at 600 McAllister Street.
The city must plan for 82,000 homes, including 46,000 affordable units, in the next eight years.
While the land donation would allow Related to avoid fees, the developer has agreed to pay an additional $1 million to help jumpstart an 80-unit affordable project languishing in Hayes Valley.
Related California is the “the largest mixed-income developer” in California, according to their website, with 20,000 homes, more than 11,000 units in pre-development and a real estate portfolio valued at more than $60 billion.
— Dana Bartholomew
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