Strada Investment Exits Plan to Upgrade SF Public Housing

A plan to replace a dilapidated public housing complex in San Francisco with 755 apartments has stalled, with Strada Investment Group walking away from the market-rate component.

Two years ago, a trio of developers filed plans to quadruple the size of the Plaza East complex at 1300 Buchanan Street in the Western Addition, the San Francisco Chronicle reported. But the locally based Strada has bailed from the project, according to unidentified sources.

Strada left the development group that once included McCormack Baron Salazar, based in St. Louis, and Without Walls.

Their plan to tear down the Plaza’s 193 run-down apartments and replace them with 755 new homes is dead, for now.

Strada declined to comment to the Chronicle. But people “with insight into the project” confirmed the developer has abandoned the field where Mayor London Breed grew up.

Plans had called for replacing the 23-year-old public housing on 3.6 acres bordered by Laguna, Turk, Buchanan and Earl Gage Jr. streets next to Jefferson Square Park.

The consortium was to build five apartment buildings containing 193 units for current tenants, 292 affordable units and 270 market-rate units.

The project, dubbed New Plaza East, was to include a gym or day care center, 42,000 square feet of rooftop terraces, 39,000 square feet of private open space, an 8,000-square-foot courtyard and parking for 185 cars and 620 bicycles.

McCormack Baron Salazar built the complex in 2001 for $43.2 million, including $20.2 million in federal funds, according to San Francisco Public Press. It also manages the property.

Since then, residents have complained about substandard conditions, including leaking pipes, rotting floors, electrical fires and pests.

In 2021, a tenant group sued the developer and its management company, McCormack Baron Management, alleging “severe health and safety hazards.”

The San Francisco Housing Authority, which owns Plaza East and leases it to McCormack Baron Salazar, has pivoted to repairing the complex, instead of replacing it with more homes. The authority has secured $10 million in federal funds for badly needed fixes.

Tonia Lediju, who heads the Housing Authority, told the Chronicle that the plan to demolish the complex is still alive, suggesting the market-rate redevelopment is still on the table.

“Redevelopment takes a long time,” Lediju told the newspaper. “We need to provide safe and quality housing to our residents as redevelopment is planned and in progress.”

The Plaza East project isn’t the only public housing rebuild to fizzle.

Last month, federal housing officials approved a plan to allow San Francisco to raze 600 World War II-era apartments at the Potrero Terrace and Annex at 690 Texas Street, in Potrero Hill. The public housing would be replaced by 1,600 apartments — half of them affordable, half market-rate — as part of the city’s Hope SF redevelopment project.

But because of market conditions, the Housing Authority and locally based Bridge Housing haven’t been able to secure a market-rate developer for the site.

“There’s nothing happening on the market-rate side, and not just in San Francisco, but across the Bay Area,” Smitha Seshadri, a senior vice president of development at Bridge, said.

— Dana Bartholomew