888 Howard Street

In the works for over two years, the custom-tailored ordinance to allow the owners of the 31-story Intercontinental Hotel at 888 Howard Street to privatize the two outdoor terraces on the 3rd and 5th floors of the hotel, which are currently privately-owned public open spaces (POPOS) and were required as a condition of the hotel’s approval back in 2002, has been approved by San Francisco’s Board of Supervisors.

In exchange for being allowed to privatize the 12,600 square feet of terrace space, the hotel will be required to pay a retroactive $2.6 million in-lieu fee, a fee which is to be dedicated to the Recreation and Parks Department and to be used to improve the lighting and safety features of the nearby Victoria Manolo Draves Park.

In addition, the hotel has offered to gift another $300,000 to the City for the maintenance of the park or other under-utilized parks in the area.

The City’s rational for approving the privatization of the hotel’s public space (which was the result of a 1980s-era city policy which requires all new South of Market commercial buildings to provide privately-owned public open spaces):

  1. the Planning Commission’s original approval of the project noted the poor quality of the open space
  2. alternative, suitable open space sites cannot be acquired within the neighborhood of the project
  3. improvements to the quality of the existing open space are neither feasible nor appropriate, and
  4. while the City should always strive to maintain requirements associated with development approvals, in this case the alternative in-lieu payment provides greater public benefit than the original open space requirement

While the privatization will be immediate, the aforementioned improvements to Victoria Manolo Draves Park are to be implemented “within two years” of the the Recreation and Parks Department receiving the funds.

And with the privatization of Salesforce’s former publicly accessible open space at 50 Fremont Street underway, any wagers on which of San Francisco’s POPOS is next in line to be sold or optimized?

20 thoughts on “Privatization of Public Open Space in SoMa Approved”
  1. I’ve always meant to check it out. I’d better hurry – if it’s not to late already. I would also guess the open spaces are under-utilized by the public, since no one knows about them. There’s one tiny sign in an obscure location advertizing its presence.

  2. This stinks. Not the buy-out, but how the funds will be used. The city is swapping a capital asset (the POPOS) for operation funds. The benefit of those operation funds will have a short duration.

    A better solution would be to use the funds to create a new similar sized fully public space that will endure forever. If $2.6M is not enough to purchase the land then the city should press the Intercontinental for a larger in-lieu payment.

    1. Yep, yep, yep – my thoughts exactly. Burning the money for operations on a one time fix when there is plenty of money for operations if the department was run just a smidge more efficiently while losing public open space forever.

    2. Isn’t it the same logic which has lead to dilapidated infrastructure around the country? Every capital asset sale or other large block of money is used to build something new while ignoring maintenance one existing infrastructure.

      1. The capital asset swapped in doesn’t need to be immediately developed into a park. The city for example could purchase an empty lot used for parking and continue to collect revenue on that property until some time in the future when it makes sense to bring a new park online. Even parking the cash into a REIT would be better than cashing out to pay for operational costs. At least a REIT’s value should float with general property values when it comes time to restore the public space.

        The city is doing the owners of the Intercontinental a big favor here. How much is 12,000 sq.ft. of open space worth in this area? Certainly a lot more than the ~3M offered. Then consider that the Intercontinental is off the hook for maintenance which the city now assumes, forever. The city should be doing its residents a favor, not this building owner.

  3. Which will go first? It will be either (a) where money can be made by privatizing it (the atrium @ 2nd/Mission would seem to be an example….though I’m not saying this one specifically) or (b) where security and upkeep are an issue (more than a few of these are on the fringes of SOMA where transiency must be an issue).

  4. Well, in this case open space 3rd floor and 5th floor of a highrise hotel is hardly useful. I’d much rather see it converted to an outdoor bar that’s still open to non-guests – in fact, i’d like all POPOS to be outdoor bars. I can dream, right?

    1. I’d love to see this and every other downtown hotel have “privately owned, publicly accessible” BATHROOMS. Imagine–free, accessible bathrooms all over town maintained and cleaned to hotel standards! OMG.

  5. This is good. An unutilized POPOS isn’t good for anyone. Better to spend it on a park that people use

    But yeah, it’s dumb to spend it on operating costs. Better to pool the money from these and find a small space in SOMA to make into a minipark

    1. A good use for this might be to “beautify” that block of Howard street. Widen sidewalk, add a protected bike lane, protected by landscaped trees, more greenery and have hotel maintain it.

      1. amen – all the streets around Moscone are pretty awful for people walking / biking. The 4th street side with its weird elevated sidewalk would make a great mini park!

  6. Yes, something like that. Although that block of Howard isn’t bad, as Moscone West has decent trees and a wide sidewalk.

    I was thinking of using the money to buy a small space adjacent to the new subway station on 4th/Folsom, planting some big trees, giving people a small place to sit outside.

    Better than blowing it on operating costs.

  7. I visited this space last year. Public isn’t losing out on much as it was not that great a place to hang out.

  8. I visited it a couple of times. Very underwhelming views and sunlight. This is a good deal for everyone.

  9. The city long ago abrogated its responsibility to maintain its parks. VMD Park once had lovely trees surrounding the park and was to have a 24/7 groundskeeper to keep it looking good; neither lasted. Now the park is void of most of the trees that used to ring and shield the park from the highway and Folsom, and is filled with dozens of homeless and/or drug users. More importantly, however, something does not see right about swapping the POPOS for an in-lieu fee. The public looses “open space” and in return gets completion of some deferred maintenance. Hmmm.

    1. I agree. It is a good idea to shift assets out of this POPOS, but those funds should be used to create a new asset, not just dissolve into the general park fund. Even if funds are earmarked for a local park, this is a net loss of public square footage.

  10. greeeat, now all any of the other POPOSes need do is make it a crappy space (ie defer maintenance and any beautification) and they’ll be able to buy out too, eh? goddamn this city is just money money money.

    oh– and on the hotel bathroom note– they are basically public already. doesn’t everyone use the lobby/ mezzanine ones? I have been for years and never questioned…

  11. The proposed new park over on 11th required the city to spend about $10M for an undeveloped half acre site. By that metric, the owner of the Intercontinental should be paying the city over $5M for the city to relinquish public access to their quarter acre POPOS. Instead the city receives half that amount. Bad deal for the city.

  12. This would not be happening without the aid of Jane Kim. One of the worst District 6 BOS members ever. She has proven herself to be in the pockets of big developers over and over again.

    Ms. Kim, the end of your term on the BOS could not come fast enough for me.

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