Associate Capital starts $2B redevelopment of SF’s Potrero Power Plant

UPDATED OCT. 19 at 4:45 p.m.:

Associate Capital has started construction on a $2 billion redevelopment of a former waterfront power station near San Francisco’s Potrero Hill into thousands of homes, shops, restaurants, research labs and a hotel.

The San Francisco-based developer has begun to transform the former power plant site into a 29-acre development, starting with 105 units of workforce housing at 1212 Maryland Street in the Dogpatch, the San Francisco Chronicle reported.

It replaces PG&E’s Potrero Power Plant, which closed in 2011, and remnants of an old sugar factory.

Plans for the Power Station project include 2,601 homes, 1.6 million square feet of commercial space, a 250-room waterfront hotel and close to 100,000 square feet of retail.

Associate Capital, led by Enrique Landa, won approval in 2020 and has completed the infrastructure for the new neighborhood.

The first phase of the project will include more than 700 apartments, double the number initially planned, to help the project pencil out. Because of soaring office vacancies in San Francisco, Associate Capital has pivoted from building offices to life science research labs.

Construction is now under way for several apartment buildings, the first to contain 105 studios, one- and two-bedroom apartments for residents who earn 80 percent of area median income. The 85-foot-tall complex is expected to open in fall 2025, managed by the John Stewart Company, based in San Francisco.

The building will be named after former Supervisor Sophie Maxwell, who spent years trying to shut down the city’s last fossil fuel power plant.

“We’re going from a working power plant in 2011 to breaking ground on affordable housing in 12 years and it being someone’s home in 15 years,” Landa told the Chronicle.

The construction is a milestone for San Francisco, where large developments have slowed or stalled since the pandemic. Just to the north, New York-based Brookfield Properties has paused its $3.5 billion Pier 70 redevelopment , citing economic conditions since the pandemic.

The workforce housing, difficult to finance, is also a rare win for middle-income tenants, such as entry-level teachers. Landa said that the Power Station building will be the first project to use the CalHFA Bond Recycling Program as the primary source of debt financing.

The program “preserves and recycles prior years’ tax exempt bonds that would otherwise expire,” Landa told the newspaper. “We’re not taking taxpayers away from any new project.”

Correction: Previous story contained incorrect number of homes in the second headline.

— Dana Bartholomew