The deal between the City of San Francisco and a trio of big developers who had been leading the charge against the 0.55 percent tax they had agreed in principle to pay in exchange for an already adopted up-zoning of their parcels within the Tansbay Transit Center District has collapsed, leaving the future of San Francisco’s Transbay Transit Center and the fate of a half-dozen new developments in doubt.

From the Chronicle’s report:

“Everyone inside City Hall was willing to listen to creative ideas that would ensure the city was made whole on all of the prior financial commitments for the Mello-Roos, but at this point, I don’t see a path forward that doesn’t involve legal action,” said Supervisor Mark Farrell, who was instrumental, along with the mayor’s office, in crafting the now-defunct deal. “My hope is still that the developers will come to the table and don’t pursue the legal route.”

But, Farrell said, that now seems unlikely.

That’s because the Transbay Joint Powers Authority is counting on the tax district to help finance its developments. The agency expects to issue $1.4 billion in bonds against the tax proceeds — $200 million of it to pay to finish the Transbay Transit Center, which is to open in late 2017. Another $466 million is earmarked to help pay to extend the Caltrain tracks underground from Fourth and King streets to the transit center, a $2.6 billion project with no firm completion date target.

According to the a legal memo from the chief assistant city attorney obtained by The Chronicle, any litigation could take “years to resolve,” “delay or reduce” funding from the tax district, and prevent the city from issuing any bonds until the litigation is resolved.

And as we first reported this morning, the proposed budget for the track extension has actually risen from $2.6 billion to $3 billion and the expected completion date has been pushed back to 2024.  Of course, that was prior to this latest round of news.

Comments from Plugged-In Readers

  1. Posted by OMN

    This would be such an epic failure that I *almost* want it to happen, just for the schadenfreude.

    (almost)

  2. Posted by Joseph A

    The Transbay Center with Caltrain going through it makes a lot of sense , as does a Connection using existing Rail between San Francisco & San Diego ,

    BUT , with the high level of GRAFT , and Corruption with the Contracts this has turned into an Open Check Book with NO Checks and Balances

    • Posted by Sierrajeff

      Is there evidence of graft and corruption? I ask that honestly. Because if there is, then that should be the subject of the litigation. If there is not, we need to focus on more material concerns.

      The fact is that these buildings (and their tenants) will amply benefit from having Caltrain come to the TTC, and the owners knew that there was going to be Mello-Roos financing of this magnitude. They should be shamed in the MSM until they come back to the table and pony up.

  3. Posted by Dan

    If these developers don’t want the deal, the City should find competitors who do. Salesforce Tower already has a major tenant – find someone else who will build it. Is it too late to revive one of the other designs?

    • Posted by eflat

      Dan, totally agree, along with the hope that the awful Pelli design of tower and rooftop park is shelved…SOM design was so much better. The people behind the winning design (Hines?) promised a lot more and have constantly pulled back from their original offer. Less tower, “value engineering” the transit center and park.

      Time for a new deal with another developer

      • Posted by redrum

        The developer has already sunk tens of millions into the foundation of the currently designed Transbay Pelli Tower. There’s no way a redesign is going to happen.

        • Posted by Sierrajeff

          And they have a signed lease with Salesforce for 500,000 square feet – I expect that will have delivery targets that have to be met, or Salesforce can terminate the lease.

  4. Posted by NotSurprised

    It lost my support when epic SOM design was not chosen. NONE of the many boosters on this site have been able to produce an accurate forecast as to when HSR or Caltrain would be stopping at this center (show me the money), plus the fact that MUNI and BART were not included on any of the platforms was a complete planning failure.

    On another thread it was posted that the over 200 mph Shanghai maglev trains from their airport to downtown (over 15 miles) was built in 4 years for less than the original estimated cost of Transbay. I would rather have an electrified Caltrain that ran closer to FiDi than an overblown bus station with a rooftop park I would never use.

    • Posted by Futurist

      The SOM design has nothing to do with this. If you preferred the SOM design just say so.

    • Posted by Sierrajeff

      So out of spite for design, you’re willing to let the TTC become an empty shell, with no Caltrain or HSR?

      • Posted by Futurist

        Once again, design has NOTHING to do with this issue. It’s all about money. You’re focusing more on the fact that your preferred design solution did not get selected.

        • Posted by Sierrajeff

          um, I assume you’re talking to NotSurprised, because my point was a reply to him, not you.

  5. Posted by Mark F.

    Here’s an idea: Scrap the $2 billion dollar bus station, write off the money spent as a “sunk cost” and use the land for a ground level downtown park. The “Temporary” Terminal is just fine, nothing wrong with it.

  6. Posted by Mark

    Waaaay back in 1999, I rode the HSR from downtown Oslo to the new airport (50km). Under 20 minutes…at 5am on a Sunday. Fabulous.

    The only way BART/MUNI would be connected to the TTC is by an underground passage to either Montgomery or Embarcadero station (or both given the central proximity of the TTC). There are no plans in the next two generations to build any additional MUNI or BART lines in the city, save Phase 2 of the Central Subway, which I completely dismiss as a sound transit investment for this area since it is several blocks from the TTC.

  7. Posted by NotSurprised

    All you have to do is watch how many visitors take the “Air Train” at SFO to the rental car station where they ALL get off. Almost no visitor uses the BART connection. If we wanted to reduce traffic in the city a real rapid train between SFO and Transbay would have been a good start.

    • Posted by Sierrajeff

      Not my experience – when I’ve used BART to the airport, a fair number of people are waiting to board.

    • Posted by NJ

      Yeah, I talk to a lot of tourists from other countries riding in on BART – I love helping them find their way.

    • Posted by BobN

      Few people seem to take the Air Train to the BART station at SFO. Most just walk to it.

  8. Posted by Mark

    Hmmn, I like the fact that it takes less than 20 minutes to go from Daly City to Montgomery station when it takes me double that time to go from 28th/Taraval to Montgomery (trust me, there is always a delay…sitting at 19th Ave., sitting outside West Portal station, sitting in West Portal station, etc.). As for getting to/from SFO, the BART concept is great, especially for East Bay folks, but it is a bit of a circuitous route around the left side of San Bruno mountain. Also, BART’s reach is limited within the city. I’ve done it and hated it…taking MUNI from the sunset to Civic Center and hoping MUNI got me there in time for my BART transfer. (I also tried schlepping my luggage on the packed 28 bus to Daly City which was beyond stupid on my part.) BART messed up with the SFO-Millbrae extension in that it should have eliminated the SFO station completely in favor of a straight shot to Millbrae with an AirTrain connector from Millbrae to the airport thereby creating a real transit hub at Millbrae: BART, Caltrain and Air Train. Instead, we have a strange BART arrangement there and depending on the time and day, getting to Caltrain from SFO (and vice versa) requires a transfer at San Bruno to Millbrae. Ridiculous.

    • Posted by Zig

      I believe every honest transit activist in the Bay Area told them they were doing it wrong at the time just like BART to San Jose and the central subway

    • Posted by emanon

      Mark, what you suggest was the original BART plan for the SFO extension. In 1994 Quentin Kopp put an advisory measure on the San Francisco ballot calling for a BART station “in” the airport. It passed and you can see the result.

      • Posted by curmudgeon

        Yes, I worked at BART at the time. The original concept was a straight shot, with a connection via the airport people mover. And it got hijacked by politics (Kopp and Frank Jordan). It didn’t help that there WAS no people mover at the time, so the sound bites suggested that BART was going to leave people off in a field on the opposite side of the freeway. It’s difficult to get planning concepts across in an election. And unfortunately BART management just caved to the politics, adding $500 million to the cost, and resulting in a stupid system that serves the airport poorly.

  9. Posted by Futurist

    The City should not let these greedy developers bully us into not paying this minor tax. We have already given to much away to the tech companies moving into Mid-market.

    • Posted by redrum

      Well it is kind of fishy that the increased heights were approved when land values started to soar. Then the city uses strong arm and threatening tactics like denying extension of entitlements if a developer wants to delay their project until land values fall. You are only open to one side of the story.
      And anyone that uses the term “greedy developers” can’t be taken seriously. You might as well be shouting “death panels” and “drill baby drill!”

      • Posted by Sierrajeff

        So it’s “fishy” that the developers were granted extra value, and now they’re not willing to pay their share of taxes on that extra value?

      • Posted by Futurist

        The greedy developers should just pay up their fair share of taxes and stop whining.

    • Posted by j_blu

      Completely agree. This is pure profitmongering – what self respecting accountant wouldn’t update the baseline tax calculation for current market conditions? Yes value has increased in the area, but that is why the towers SHOULD be built and the tax implemented as proposed. There is no change here, no greedy city bureaucrats, just payment-shy multi-billion dollar investment companies trying to maximize their return. Shameful.

  10. Posted by Hitman

    Vote for Campos so he is out of city hall. If he is not in Sacramento, he will likely propose that the Transbay land be designated to serve undocumented immigrant drag queens.

    • Posted by OP

      Yeah no racism or homophobia in that comment. Perhaps you’d be better off in the Central Valley. And no, I am not a Campos supporter.

      • Posted by Hitman

        The comment is meant to reflect Campos’ ridiculous political soapbox over the past month and it is sincere. He is a champion for a bunch of high profile causes that have NOTHING to do with municipal government. At this point, Chiu refuses to distinguish himself as a real leader. Chiu is trying to win by staying as left as possible. Instead of trying to win, he is running a campaign not to lose. If Chiu doesn’t have the guts to stick up for what is right then I’d prefer he just stay at the board as he is no leader. Campos is so cuckoo, I would like to see him in Sacramento where he will be inneffective and screwing up the city anymore.

  11. Posted by Jimmy The House Flipper

    Just look at any major European city and you will see how far behind we are here. Every major city, ALL of them, have a major train station next to or underneath their main airport which can whisk you away to anywhere in the country via high speed rail. They’ve had this for 50 years. That’s how far behind we are. Until the discussion shifts from a glorified bus station to some meaningful form of high-speed train system that’s in the airport… we are just a bunch of hicks standing on the sidelines watching the rest of the world go by.

    • Posted by emanon

      I agree the US is far behind the rest of the world when it comes to trains. However, FYI, the CHSR plan does include a station at SFO.

      • Posted by Sierrajeff

        I don’t think that’s right. I think the HSR stop would be the Millbrae BART/Caltrain station, which would still require a BART ride to SFO. (Cue headshaking and forehead smacking.)

        • Posted by emanon

          Jeff, of course it will be at the existing Millbrae BART/Caltrain station. Why should it be anywhere else? The ROW and infrastructure is already in place. A HSR station in the airport would require the acquisition of a large amount of new ROW north of and south of SFO, potential displacement of residences and businesses, and a substantial increase in costs.

          • Posted by Sierrajeff

            I’m just saying, then it’s not “a station at SFO”, per your prior comment. It’s a station that requires a transfer to BART, and then a transfer to the SFO people-mover.

          • Posted by BobN

            Who owns that big field across 101 from SFO?

          • Posted by Zig

            The main point is the people mover should have been to Milbrae all along. Now there is no way to fix this

  12. Posted by jamesjr

    An epic failure by our leaders. A silly project that will never be completed. No trains, MUNI or BART.
    Litigation for a decade. SF: “The city that can’t.”

  13. Posted by emanon

    The BART/MUNI issue is such a non-issue. The Embarcadero station is a closer walk to the Tranbay Terminal then most airport gates from airport security checkpoints.

    • Posted by mark

      It is an issue being that the whole point of a transit center is to connect all nearby modes. The TTC accomplishes none of this other than acting as a glorified bus station. If bringing Caltrain had been a top priority other than a misleading promise to Bay Area residents then the TTC would start living up to its role. However the city can’t even build one darn passageway one block.

  14. Posted by Mark F.

    It’s a short walk, but why couldn’t we have a station which connects ALL transit systems? Like other cities have.

  15. Posted by Live Smarter

    The byproduct of any SF government involvement is litigation. It is no longer the chicken/egg problem. If City politicos setforth bad policy which ends up wasting taxpayer time, energy, and money + embroils the taxpayer in further litigation (more time, energy, money,) and voters keep voting blind, then who is to blame? Blind leading the blindfolded.

  16. Posted by Zig

    Hard to understand this for someone without expertise but you have to wonder how SF wrote an agreement without ironclad language? Something must be ambiguous enough to allow for this litigation threat now

    My experience would tell me those negotiating the deals were patronage hacks much less sophisticated than the developers they are dealing with

    • Posted by Roseanne

      Keep voting in “activists” instead of competent people into office and this is your result.

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