The Epic Battle Over A Prominent Market And Castro Street SiteApril 20, 2015
Approved for the development of a six-story building back in 2013, with 24 residential units over ground floor retail and a 14-car garage to rise, the prominent gas station site on the northwest corner of Castro and Market has been locked in a legal battle ever since. And after two years of litigation, a Superior Court judge is expected to rule on the fate of the parcel within the next 90 days.
Builder Joe Tierney had agreed to buy the 376 Castro Street site for $3.434 million in August 2004, with the final sale dependent upon the site being approved for the development of at least 22 residential units.
And having made a $340,000 first payment in exchange for a 10 percent interest in the property, with the balance due and full sale to be finalized upon the terms of the purchase agreement being satisfied and executed, Mr. Tierney set about getting the project entitled/approved.
After years of back and forth with the city and neighborhood groups; a number of delays to allow for the development and subsequent refinement of a neighborhood plan; and an overhaul of the project’s proposed design, 376 Castro was approved for development.
Soon thereafter, the gas station site appeared on Craigslist listed for $12 million, much to the surprise and chagrin of Mr. Tierney.
The majority owners of the site argue that Tierney missed a contractual one-year deadline to secure entitlements for the project, and that despite Tierney’s ongoing effort and investment, and failure to exercise his right to terminate the agreement, the purchase agreement expired in 2005, leaving him with a 10 percent interest in the property and nothing more.
The case went to trial last month with Mr. Tierney represented by Gregory Wood of Wood Robbins, LLP. And with the jury deadlocked after two weeks of testimony, and final arguments presented on April 8, the fate of the development is now in the hands of Superior Court Judge Suzanne Bolanos.
UPDATE: Judge Rules In Epic Battle Over Prominent Market And Castro Site.
Comments from Plugged-In Readers
This is a great example of why a well written and executed contract is so important in large business deals. Sorry to hear that both sides are having to duke it out in the court system. This all could have been avoided.
Yup. I find it hard to believe a court would find that the PSA still existed after 10 years have passed – surely there would have to be some kind of ongoing notice/reporting requirements, if a contract is to stay alive that long. Still, I would desperately love for this site to be something more than a cheesy gas station.
This looks very promising as a well designed project and density for this location. I hope the developer prevails and can start this work as soon as possible.
I don’t care who prevails but just hope it gets resolved and the project built. Every time I pass that site I yearn to see the gas station gone and an attractive residential building in its place. That proposed looks more than fine to me.
How could anyone even remotely familiar with the SF building process agree to a one-year deadline to secure entitlements?
Exactly my thought! Anyone agreeing to that is either ill-informed themselves, or ill-advised by counsel – or both!
Why on earth the seller do not put an expiry date on the 2004 contract? It seems absurd for this drag on for 9 years.
Too tall. Should be 4 stories.
This while Van Ness is getting 12/13 story buildings that should be 20ish stories.
SF planning is a mess.
[Editor’s Note: Keep in mind that then-Supervisor Bevan Dufty had lobbied for an 85-foot height for this site (versus 65-feet as approved), a height which the Eureka Valley Neighborhood Association (EVNA) opposed.]
Dave, 4 stories? The back corner of a huge intersection. This is perfect height for the location.
If it’s built as 6, I won’t complain because it’s better than the current gas station. But 4 would be much more appropriate; this parcel directly abuts a neighborhood of 2- and 3-story SFH and small apartment buildings to the north and west; and the buidlings on the other corners are 2-ish, 2-ish, 2, and a gas station.
(If this were on the eastern triangle, between Market and 17th, it’d be much more appropriate as 6 stories.)
I suspect the Chevron station in that location is next to go.
By your reasoning, a six story building at the 17th/Market/Castro intersection would be even more “out of keeping” with the low, 2-story commercial buildings to the east. The steep downward slope of the northwest corner site means the crown of that building will not be that much higher than the up hill structures to the north.
However, even if that were not the case,I really wouldn’t have a problem with the building as proposed. I always thought when Mission Bay was first being planned, one need look no further than the Marina District for a primary, basic plan. Larger, multi-unit buildings on the corners with row houses in between. It seems the “need” for greater revenues won out
1. The current Planning code defines height by zoning.
2. Land is not merely here for us to always build on.
Why should anyone be limited to building slightly higher than adjacent buildings? If they can build 6 and they want to they should build 6. By your logic the city would take centuries to make any strides toward increasing density, not to mention wasting land value.
i think its a pretty good looking building and the height seems appropriate. If i had to choose, I would certainly say taller would be better than shorter.
The ones screaming the loudest about this seem to be the renters in the apartment building behind the gas station.
EVNA would oppose the pot ‘o gold at the end of the Rainbow.
4 stories at the heart of a major commercial district and transit hub? That kind of suburban thinking is what got cities in trouble in the first place.
The building height is fine and I like the look, although the balconies are rather impractical given the fog/wind situation at this corner most of the time. Given all the recent development on Market between Castro and Van Ness it would be nice to see some sidewalk improvements.
Good point, the City requires corner setbacks, wider sidewalks and “plazas” all over the place, but *not* here?
You’d have to do a lot to make that corner “interesting” to pedestrians, interesting enough to get them to want to hang out on that side of Market. I can’t imagine what would do it… free food maybe?
I’m not concerned with people hanging out there, just with accommodating the occassional (but very predictable) large events the occur here. Plenty of times I’ve seen that corner jammed with people, spilling in to the street, waiting for the light to change.
People do the same thing with the entirety of Civic Center behind them. It’s a thing people do.
The lawsuit looks to be a mess. Hung jury and a mistrial on the key question about whether the contract was breached. Sounds like they are trying to get the judge to make some calls, but it is not clear she can do so from my very quick (5 minute) read. May need a whole new jury trial. Regardless, there is a lot to work through between today and seeing this realized. Should be able to continue to buy cheap-ish gas (as long as you pay with cash) at this spot for quite a while longer.
Hopefully, if a mistrial is called, the litigants will resolve it themselves short of a full-fledged retrial.
If the judge somehow finds in favor of the developer, the result should be pretty clear — assuming the entitlement is still valid.
If she finds for the owner, I suspect that some sort of “joint” effort will go forward with the terms reflecting something more favorable than the developer’s purported 10% interest — again, assuming his entitlement is still valid.
Gas is cheaper on Fell St. and you can use your debit card at the pump. You’ll have to wait a while though..
It doesn’t make sense that if the jury is deadlocked, the judge decides the case. I don’t think it works that way.
Doubtless the current asking price reflects the fact that approval of the proposed new use of the property was secured. It would seem unjust enrichment to legally enforce the contract if the owner’s construction of its terms prevails; however, just how transferable is such entitlement and has it not lapsed by now?
This is not Mr.Tierney’s first brush with stupid…
I don’t see Tierney mentioned in that article so I don’t know what his involvement was. But the terrible sarcastic style in which the Curbed article was written sure makes me appreciate our illustrious and far more professional editors on Socketsite!
Flash – Tierney is the developer. Click the SF Appeal link for more detail.
In a somewhat related vein (as long-stalled residential proposal at a high profile location), while recently walking in the Mid-Market area, I was pleasantly surprised to see construction activity at 1 Franklin where there is advanced site preparation for a midrise (8-story) condo development. This proposal goes back pre-2008 market collapse and always seemed a bit of a “sleeper” not likely to ever come to fruition.
Good to see the momentum in that part of town continuing.
[Editor’s Note: Or as we reported late last year, Franklin And Page Development Plan Dusted Off, Parking Nixed.]
Too bad the exterior color palate seems to be taken from a sample of the cheapest stone tile sold at Home Depot. At least it isn’t faux-wood…
That’s gonna be Party Central on Pride Weekend. $3,000/weekend on AirBnB.
Only underscores what a key location this is and what a shame it is that it has languished in this status for reasons unrelated to the merits of a proposed reuse. Too bad it is likely it will be another three years (too optimistic?) before it is rectified.
Air B’n’b hurts housing availability, which is supposed to be the problem that all this new con$truction is $uppo$ed to be fixing. It will be far more than three years when people stop using what could be actual housing for personal income all while taking another unit off the market. Infact, those people will probably be hurting housing availability for a very long time. What a shame.
I can understand “con$truction”, but why “$uppo$ed”?
Well, these units will be market rate and non-rent controlled. Therefore less incentive to go airbnb. The reason why many landlords do airbnb is that they just do not want sticky tenants, and this is mainly in rent controlled units.
After more than 2 years of very successful airbnb listings, I can tell you that the net you collect is somewhat higher than market rate rentals, but you are using your own furniture and it is more labor intensive. If you really want to cash in you can do very short term, but if you do that it’s almost a second job.
This is one of those situations where the architects’ drawing includes flourishes that are very unlikely to appear on the final design, but which make it look much much more attractive. Like the trees planted on top of the building, as if. Or, the multi-colored facade. Still, nicer than the ARCO.
This town!!!…just build the damn 6 story building!!!
Yup…airbnb wud be perfect xtra income in this super fab location.
Yeah! Limiting housing with Air b’n’b is why we’re building all these condos! Right on! The Castro is already dead, now they’re just building ugly pre-fab looking condos on the ashes.
Totally agree with you. Perfect location, close to transportation and walking to downtown or even to the Haight, the park & the museums in the park.
I live right next to that gas station
Now im dreading the loss of my deck veiw , light and the construction noise and stress fir a year or more
poor you. Does money replace your soul at some point, or does that part stay empty. What a cool pro development person that doesn’t care what a building nobody needs does to the residents that own there already.
A building no one needs? Have you not heard of the housing crisis?
Crisis, what crisis? There’s no housing crisis for us owners. Just very favorable market conditions.
Yes, because overlooking a gas station and an asphalt parking lot is so stirring to your soul. Have you actually convinced yourself you believe what you are posting, or have you just learned the right lingo to spout in your quest to become the ultimate NIMBY?
First, housing is desperately needed in this city, so your comment about a building “nobody needs” is absurd on its face. Second, your loss of light will be very minimal and it is well established law that nobody has a private right to a particular views. That said if staring over a butt-ugly gas station inhaling cancerous fumes gets gets your blood going, perhaps you should get outside and visit one of our lovely city parks instead, or go to the beach, or visit the Headlands–imagine what some fresh air and a real vista might do for you.
Oh no that was just in response from someone this project won’t affect, mocking someone it actually will. Though I do appreciate your expertise on what it is okay to look at and what it is not.
C’mon, if you or James enjoy staring at the top of an ugly gas station, then more power to both of you. It just doesn’t garner any sympathy from me (or most people) that someone would lose their view of a gas station once it is torn down. I find it rather bizarre that anyone cares about, much less feels entitled to, a view of a gas station, an empty lot, or any other sort of ugly and desolate place that certain people in this town tend to get strangely sentimental about whenever anyone proposes putting up a new structure.
And, if common sense now goes by the title “expertise,” then yes, I am glad to share mine with you.
there are no rights assigned to views and the “ive got mine, screw you” attitude sucks . we need housing
I wonder if they can fit a Trader Joe’s on the ground floor.
Horrible parking conditions for shoppers. I guess this would qualify the building to have a Trader Joe’s.
What ever happened to JT’s “commercial condo” project? Was that thing legalized, did it go under, are commercials living in it w/out bathrooms?
Please stop destroying our neighborhood with this ugly prefabricated shacks.
Look closely at the “beautiful” Victorians around town. You’ll notice something a bit funny in many of them: you can take a tape measurer and find the very same layout and measures, almost to the inch! The front all the way to 40 feet is always the same, and many came prefabricated. Their style is pseudo english neoclassical-revival Victo-fake. Beautiful to our eyes, but I am certain purists at the time were not too happy about them.
That doesn’t make these more prefab looking buildings less ugly.
Prefabs usually do not have that many windows or balconies. I have a wide-ranging taste now but I used to hate anything too square and too bland. Then I discovered MCM and am a big fan now. I am pretty divided on the style of these new constructions on Market, but buyers seem to love it and they are not disfiguring the city. It’s a million times better than empty lots with weeds.
Those square shapes with lots of glass are actually a sign that life and work are more and more merging into a lifestyle. Most of the people I know in tech will work from home a few days a month or even week. Many have side-projects outside of work. It’s only natural that campuses (GOOG, AAPL, etc) will add more “play” to the workplace, and that residential buildings will add more “work” to the home.
More expensive housing is not what is killing the Castro. My question is, what is?
Has anyone been to the Halstead District of Chicago for a comparison? New clubs, cafes and bars opening almost every week it would seem, all surrounded by a large cluster of new high rise condominiums and apartments at similar market rates to San Francisco. (Studios in newer “Boystown” high rises are starting at $2500)
So why is the Castro losing its nightlife? Why are there not more better NEW restaurants, retail shops of interest instead of 4 chain drugstores? It seems there are no great bars left when you compare it to places like The Revolver or The Abbey in West Hollywood, or some of the many successful places in Chicago. Is it just that those cities have a much larger gay population?
It’s because we disallow most new development in the area, so the population isn’t growing as fast as it should be, and basically is stagnant.
yes, and since the newcomers come from every path of life, the Castro is going more mainstream. This has been going on for 10 years now.
Please provide a more descriptive definition for, “killing the Castro.”
Coffee shops and gourmet restaurants are the new gay bars. It’s less in your face but just as much social.
I’ll agree with that. It is true however that all the new bars and coffee shops are decidedly more “mixed” than the equivalents of yesteryear. Places like Reveille (coffee) and Blackbird (bar) and Hecho (restaurant) are much more mixed than typical Castro places. It’s just social transformation plus demographic progression. There simply aren’t as many gay men clustered in the Castro as there used to be, AND gays and straights are mixing their social lives together much more. Nothing particularly bad about it, it just is what it is.
In 30 years this will be similar to North Beach: desperately looking for an actual Italian native speaker from the old times.
The Castro still has tons of bars and nightclubs–far more than most commercial districts in the city and enough to attract throngs of people every weekend. I would not say there us any “nightlife crisis.” That said, it is true there is a trend of gay bars closing, but this is a national trend, not specific to San Francisco. Most LGBT people have other options to meet other LGBT folks in places outside of bars, and even for hooking up or dating, most people would prefer to go online then go through the expense, frustration and waste of time of going out in the hope of meeting someone. Times and tastes have simply changed.
@Orland, how would you explain what is going on to the Castro compared to West Hollywood in the last 20 years? West Hollywood was nasty in the 80s and now it is home to some of the best bars, shops and restaurants in Los Angeles. The same goes for Silver Lake. I was down there a couple of times recently and could not believe the lines of people waiting to get into clubs and restaurants. THAT was the way the Castro was way “back in the day”.
Your comment still doesn’t explain anything. There are pretty much the same number of bars (even some new ones) then I remember first going to the Castro over 20 years ago. Also, I find the Castro more inviting and nicer now than it was back then. In fact, I was so deeply depressed after first visiting and seeing what seemed to be a tired, bitter and worn-out scene in the the Castro that I thought if this was gay life in San Francisco, I wanted nothing to do with it. Now, the neighborhood seems much more inviting and warmer with a more interesting mix of young and older people.
The fact remains that most of the denizens of the Castro that are left are older people. Younger LGBTQ don’t make 6 figures to live there, and you have to make above just 100k, you have to make 150k+.
New building is so much better than a crappy gas station.
UPDATE: Judge Rules In Epic Battle Over Prominent Market And Castro Site
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