1050 Valencia Street under Construction

A Superior Court Judge has frozen the five-story development rising at 1050 Valencia Street mid-construction, ruling that San Francisco’s Board of Appeals “abused its discretion” and “failed to set forth the analytic route it traveled” when the Board reversed its original vote which would have limited the Mission District development to four-stories in height.

Approved by Planning in 2012 and permitted for five stories, with 12 condos and retail on the ground floor, the permits for the 1050 Valencia Street project were appealed by the Liberty Hill Neighborhood Association in 2013 and the City’s Board of Appeals voted 5-0 to require the project to remove a floor in order to proceed.

Facing the threat of legal action based on the California Housing Accountability Act, and public condemnation from Supervisor Wiener, the Board of Appeals then reversed its original vote and ruled against the appeal in 2014, allowing for a fifth floor to be built.

From Superior Court Judge Ernest Goldsmith’s order last week in response to a petition from Neighbors for Preservation and Progress, halting construction and ordering further hearing:

[The Board of Appeals] abused its discretion because its decision of February 26, 2014, does not comply with [the case law].  Viewing the record as a whole, there is an insufficient analytical bridge between the raw data and decision.

Also noted by the judge, “the Court cannot determine based on the instant record whether Supervisor Weiner (sic) illegally tainted the deliberative process in violation of San Francisco City Charter 2.114 or whether he was merely expressing his opinion under the First Amendment.”

The Board of Appeals will formally vacate its 2014 ruling on Wednesday, setting the stage for a new hearing on the height of the 1050 Valencia Street project at a yet to be determined date.

Comments from Plugged-In Readers

  1. Posted by SFrentier

    Wow, the owners of this project have been getting screwed on this for so long. Note they own the lot outright, otherwise holding costs will kill them on this. And people still wonder why developers only build high end condos…

    • Posted by Sierrajeff

      Even if they own the land, at this point they’ll be making draws under a construction loan – if this isn’t resolved within 30 or 60 days (depending on the loan agreement provisions), they’ll probably be in default under that loan. And in the meantime, we all get to stare at a fugly half-finished building for months (hopefully not *years* to come).

  2. Posted by Sierrajeff

    O.M.F.G. Planning in this City is so screwed up.

    I’m not a litigator (thank god) but I expect this will get quickly overturned – as a delibrative legislative body, the BOS can actually do things like make decisions and take votes… and after all, if the vote to allow 5 stories was an “abuse of discretion”, how did it differ from the vote to limit it to 4 stories? A deliberative body is a deliberative body.

    • Posted by NoeNeighbor

      Well if the BOA overturns a decision based on an interpretation of the law, and its interpretation is wrong, then it is perfectly reasonable for a court to tell the BOA to reconsider its decision. That is what happened here.

      Of course, most of the commentators can not get past the fact that someone other than a developer has any influence on what gets built in the City — even if they City has established building guidelines etc. that are supposed to be applied in these situations. So they are forced to resort to the tired insult NIMBY (which is not applicable, but sounds bad) rather than paying any attention to the facts.

      • Posted by anon

        So what are the facts?
        What’s non-compliant about the proposed design that would allow it to be blocked in spite of CHAA?
        In my non-professional view CHAA basically tells cities that they can make zoning rules, but they have to stick with them and apply them uniformly instead of deliberating each proposed building case by case. Seems very reasonable to me

      • Posted by Brian M

        Sorry, but complaining about the height of a building on a major commercial corridor sounds like the very definition of “NIMBY” to me.

        And why should affluent homeonwers from blocks awayand with no extant property rights be the only people with such pernicious “influence on what get built in the city”

  3. Posted by Joel

    Besides an attempt to simply slow down the process, I don’t see what benefit the opponents get out of this ruling. I suspect the Board of Appeals will issue the same decision it did before, but add a finding referencing the Housing Accountability Act. If they do this, wouldn’t it establish a greater precedent for future cases?

  4. Posted by Hola

    This town is f*cking ridiculous.

  5. Posted by soccermom

    Terrible encouragement for 11th hour NIMBYism.

    Every housing unit in the city just became more expensive as the uncertainty around new construction increased with this.

    Sorry, marginal housing buyer.

  6. Posted by seriously

    all this over a single story? that’s a absolute joke in any real city. we need to overhaul the planning and approval process and stop with this double jeopardy.

  7. Posted by Amewsed

    This sends out a message to would be developers to look for greener pastures elsewhere.

    If Salesforce gets sold, wouldn’t a lot of their employees be made redundant? This may be a sign of slower growth ahead, hence less housing demand.

    • Posted by iknowsnow

      Would be ironic if the poster child for tech industry philanthropy (Marc Benioff) sold his company to the poster child for tech industry selfish douchebaggery (Larry Ellison).

    • Posted by poor boy

      Isn’t this just a rumor?

    • Posted by San FronziScheme

      There are 2 ways to look at a sale of that scale. You could also argue that the sale of Salesforce would monetize a sh!tload of options, putting real cash into many many hands, and creating more demand for SF RE. Imagine mid-level managers patiently waiting to vest their shares who suddenly can get their cake and eat it too.

      As to unemployment? Some mergers take years, and if your business is still growing, the redundancy can be absorbed by the new demand.

      • Posted by anon

        A merger like this would be very unlikely to have accelerated vesting for mid level managers. That defeats the whole point of a merger if your managers can cash out and walk out. Very high level execs could have negotiated accelerated vesting on change of control resulting in their positing being eliminated, but that’s a very small number of employees.

        • Posted by anon

          remember when every bear on Socketsite would go on and on about how there weren’t 1000s of millionaires being coined in the Bay Area? ha. boy did they get that wrong. before that, remember when posters would say how there weren’t more and more people employed in “tech” within SF proper itself? hahahha. boy were they wrong about that.

          • Posted by anon

            What does the number of people or amount of money have to do with anything?
            Options are for retention and fully vesting them would negate that.
            Generally in a takeover of one public company by another the options of the target would be converted to options of the acquirer at the takeover ratio. An all cash takeover or being taken private could be significantly different.

  8. Posted by jamesjr

    Unf***ing believable.
    These “community groups” and their enabler judges are out of control.

    • Posted by Mystery Realtor

      Does anyone know when this judge is up for reelection?

      • Posted by halle

        He’s more likely to retire.

  9. Posted by NJ

    Is there anyone out there with the legal chops to take a look at this and see if the Board of Appeals really did a shoddy write up? ie do they share the blame for this (obviously the blame should land squarely on the shoulders of the NIMBYs but, just curious)

    • Posted by Joel

      I’m curious as to whether leaving out a reference to the HAA was intentional so as to prevent reinforcing a precedent. The board held a couple closed door legal meetings with the city attorney related to the project, so maybe they agreed to take that approach and now the judge is calling foul play.

  10. Posted by inmycountry

    Why is the judge halting construction? At the moment they are only on the first story. Why can’t the contractor continue with at least the next three stories while this gets sorted out.

    • Posted by Amewsed

      Judicial order halting entire construction, not just construction of disputed floor.

    • Posted by SFResident

      Gravity: The weight of an extra floor will mean the whole building needs to be re-calculated.
      Tearing the whole thing out after all the design reviews, engineerings & permit will cost a fortune.

      • Posted by BobN

        The plans they’re using for construction envision a fifth floor, no? If it doesn’t get built, what’s the problem? Surely it can’t be that the building would be too lightweight…

      • Posted by poor boy

        You design/size for 5 floors, and then if you have to live with 4 floors, due to the ruling of a semi literate judge, you end up with an “over engineered column size” with 4 floors.
        Time= Money. If they think will take 2 moths to sort out, they should continue to construct till they reach level 4.

  11. Posted by Greg

    Absolutely ridiculous. These NIMBY’s haven’t taken a couple bites at the apple — they’ve had at least 10. This is the sort of bull sh!t that makes it impossible to build anything in this town that’s not insanely expensive. Time and uncertainty cost money. It also makes it very difficult for small/mom/pop development to happen. The only ones who have the resources to fight this sort of BS are the massive developers.

    • Posted by sassyboyfrisco

      Agreed!!!…and its time that high roller stakeholders (with LOTS of $$$$$$$$) sue NIMBYS to recoup costs caused by delays (paying workers, etc.). Unless NIMBYS are subject to substantive legal costs, there is no incentive for NIMBYS to stop this bulls**t!

  12. Posted by inclinejj

    Even if they own the land, at this point they’ll be making draws under a construction loan – if this isn’t resolved within 30 or 60 days (depending on the loan agreement provisions), they’ll probably be in default under that loan

    Actually the lender sends out an inspector and a set amount of work has to be completed and signed off before the bank releases draws. It’s a lot more complicated than people think.

    And a halfway built skeleton of a building would look much better than the completed project.

    F*cking Nymbies!

    • Posted by Sierrajeff

      well, actually I’m a real estate attorney – I think my comment was accurate, if truncated or generalized for common consumption. It is a complex process, but the bottom line gist is that construction is halted for more than a set period of time, it’s likely a default under the loan agrement.

  13. Posted by Bay Guy

    Hummmm… I wonder always, “Why am I NOT surprised”? It is always the same old things… opposing factions just wanting to have the satisfaction of saying, “We have more power than you”!

  14. Posted by anon

    “failed to set forth the analytic route it traveled”
    Is there something else going on here?
    Isn’t the analytic route that CHAA prohibits interfering with development that meets code and planning?

  15. Posted by Frisco

    I like it. As a physical evocation of a city in transition, it also provides an open-air, permeable gallery space for local street artists. It both embraces and problematizes the myriad meanings of “progress” within contemporary urban communities. A work of conceptual genius, really.

    • Posted by Brian M

      And affordable camping spaces for our feral population! A win win!

  16. Posted by Invented

    Once you up and leave (I did), this is a fun comedy show.
    Thanks for the chuckle and today’s installment….

  17. Posted by San Francisco

    Maybe we can make it all affordable organic non-GMO reclaimed free range local artists residences. Will that make them happy?

    • Posted by gone on

      I think a five pointz space would be fantastic

  18. Posted by Jimmythekid

    RE default it probably is a technical default under the loan agreement, but the bank likely does not want to take the building back so as long as the borrower keeps making the payments the lender will probably just send out a letter saying you are in dfault and we have the right to do x,y, and z if we chose to and let it play out. Banks don’t like halfbuilt non performing loans on their books, but they do not want REO that is under litigation either. Does the bank wish to fund the lawsuit?

  19. Posted by Brad

    Well done, neighbors. Now you’ll have a trash pit attracting crime and the homeless for years to come. Enjoy!

  20. Posted by pdquick

    All of you who bemoan how “f*cking ridiculous” this City is are free to leave. Do you need any help?

  21. Posted by bleeper

    This board of appeals is an interesting body – they got their hand slapped on at least one other occasion for randomly lopping off entire floors on projects because some NIMBY neighborhood group was outraged.
    The last instance that comes to mind was a housing project in the mission which they knocked the 5th floor off of, which then relieved the builder of providing affordable housing because the number of units fell below the required threshold.
    They were overruled in that situation as well due to the same CA housing accountability act.

    • Posted by Midge Ure

      This is, in fact, the same project that you are referring to.

      The whole thing is a debacle — a manifestly unfair “process”.

      The developer of this project as been really run around the block, first by NIMBY neighbors, then by the Board of Appeals (ironically, eliminating the on-site affordable units! Thanks a lot!), back to the NIMBYs, then by this Judge, so on and so forth ad nauseum. (Supervisor Weiner was merely trying to interject some common sense and fairness to the whole situation.)

      At this point, if the developer doesn’t go belly up and has the “stomach” for it (no pun intended), I’d suggest applying the California Bonus Density Law to the project (California Government Code 65915 and 65918), provide the required (14.4%?) BMR on site (as originally-proposed) and get a State-mandated 35% dwelling unit bonus (that kicks in at just 11% affordable units on-site, mind you) — so instead of 12 units and 5 stories, the developer can get 16 units (still just 2 BMR units required overall) and 6-7 stories and there will not be a damn thing the NIMBYs can do about it.

      Its State Law, so it triumphs this local nonsense, and the developer can take some wood to the NIMBYs and hopefully recoup a bit of the $ lost due to their shenanigans. They can try to sue again, but the Bonus Density Law is extremely clear in this regard; the NIMBYs will loose and, per the State Law, will be required to pay all of the developers legal fees.

  22. Posted by native

    Good for the neighbors! Call them what you want the power should always be with the people, not the developers and the greedy people that support them.

    • Posted by Midge Ure

      The anti-gay CA Proposition 8, passed by a popular vote, was a clear example of your so-called “people power”. Power does not — and should not rest — with “the people”. Thankfully, it should — and does — rest with the Constitution.

      • Posted by nunya

        The human rights of a minority can’t be put up for a majority vote…nice try though!

    • Posted by Hola

      Now they have a delightful vacant eyesore for (possibly) years to come. Well done!

    • Posted by Brian M

      So wealthy homeowners enforcing suburban mentality is “the people” now.

      We could power the State with Che spinning in his grave.

  23. Posted by inclinejj

    It all depends on the developers/property owner and builders relationship with their lender. Does anyone know who the construction lender is? It also depends, if the lender is a FDIC Bank, when the twice yearly audits happen. I know my bank always had an audit in early June and December and everything in lending came to a hault.

    Taking back this project right now for the lender will be a tremendous pain in the ass? Either they foreclose take the property back and take a huge loss, or pay the contractor to continue. Plus they have to set aside money for this loan that they can not lend out to other projects.

    Technical defaults are tricky and if you ever read your Loan Note, I am sure you all do(laughs) You can be placed in default for not paying taxes many other reasons.

    This project comes to mind. Developer doesn’t have a clue building condos and during the lend and pretend your going to get paid gets a $5 million dollar construction loan. Lender requires construction control and a construction manager on the project the whole time. So Developer can not get insurance and a bond so he just forges both. Well project goes under phase 2 and phase 1 has a laundry list of problems. Everyone gets sued and the developer takes off with nothing to go after.

  24. Posted by M. Industry

    I don’t have a dog in this fight but do know a few things including that all politics are local.

    The developer has been an arrogant ass from very first meeting with the neighbors.

    The neighbors are generally petty, angry and easily offended (Preservation and Progress – ha!).

    The proposed building is extremely ugly, out of place on this block and lot, and belongs in a strip mall.

    The sole target of blame should be Scott Weiner for his suspect, unseemly, back room. pay-to-play, BoA intervention.

    • Posted by BobN

      I’ve never seen a strip mall that’s five stories tall.

  25. Posted by Money

    Weiner getting a black eye out of this is great !!

    Some victories like this are really going to bring lots more people out to the streets.

  26. Posted by Ric West

    I wish people actually read the article before throwing the pity party for the developer. We have tried to work with him for years, he has been nothing short of arrogant and dismissive when he wasn’t out and out lying to us The Planning Dept ruled he had to scale the project down to respect the historic district he was building in. Supervisor Weiner who told the neighborhood group (Liberty Hill Historic District) he had to remain neutral applied pressure on the Planning Dept to rescind their ruling. The Superior Court Judge simply corrected a wrong. It should be noted that the vast bulk of Supervisor Weiners campaign donors are from Real Estate, Construction and Architects proving a clear case of conflict of interest.

    • Posted by Joel

      Maybe he was arrogant because neighbors have refused to accept the fact he has the legal right to build five stories, a right that predates the Eastern Neighborhoods plan for this parcel. And he isn’t building in a historic district, he’s building next to one.

    • Posted by anon

      yeah that was a real historic Kentucky Fried Chicken, wasn’t it. get real.

  27. Posted by Sleepy Bear

    Good I can sleep. Construction from 7AM to 6PM Monday thru Saturday. Workers begin arriving sometimes as early as 6:30AM and staying sometimes as late as 7PM. No normal human being will be able to afford this place.

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