Plans to level the Out of The Closet thrift store complex on the southeast corner of Polk and California and develop a 7-story building with 63 condos over 8,000 square feet of new retail space and an underground garage for 41 cars were approved back in 2016.
But the Polk Gulch project has yet to break ground.
Instead, new plans are now being drawn for an 8-story building to rise up to 87 feet in height on the 1567 California Street site, with 100 units of housing over 10,000 square feet of retail space and zero (0) off-street parking spots.
In order to surpass the current 80-foot height and 93-unit density limits for the site as zoned, the project team is planning to invoke California’s Density Bonus Law for the seven extra feet and units and waive the bulk building restrictions (which resulted in the terraced 7-story design above) and parking requirements (which in principle would require a garage for 100 cars) for the site.
That being said, we’ll note that the project team has yet to file any paperwork to get the actual permitting, versus entitlement, process underway. We’ll keep you posted and plugged-in.
Not a great design but a vastly improved project. Build it!
The design shown is the old one. The redesign hasn’t been revealed.
Ironic that this developer should announce plans to expand upon that already entitled on a day the lead story in the Chron is one of how many other developers’ projects are either up for sale or on hold.
Is that article online? Can’t find it. Curious if it gives a unit count or breakdown of projects abandoned or on hold? My estimate is 1960 units. I’m curious as to the status of 555 Howard.
As to this project, most likely a revised entitlement will be put up for sale. Also, does waiving the bulk building restrictions mean that instead of the somewhat nice design above, the revised design will be a box with no setbacks or articulation?
Of interest is that the developer of 1270 Mission is quoted as saying that they are engaged in design changes through which it is hoped it may yet pencil out. I think you previously expressed misgivings about just such possibility given your admiration for the proposed building which I share.
Also, one of the effected projects listed included 1601 Mission (the Tower Car Wash at the S. Van Ness/Mission gore) which adds 220 units.
It’s right on the front page (nicely balancing a story about how well Warriors suites are selling, lest anyone panic about SF R/E)
Thanks. Their count is much higher, I assume, as my figure is just projects abandoned or put on hold in the past 3 years. They are likely going back a decade or so. No need to panic. This was inevitable and predictable given a host of factors some of which they address. Hence new project proposals have ground to a near halt this year. SS should track the up for sale entitlement/projects on hold pipeline as they track the net office space absorption and residential project proposal pipelines.
I see this as the perils of always mandating a higher percentage low income housing. It feels good, but at some point it doesn’t add up and nothing gets built.
While easy to point the finger at externalities, versus having bid up the price of land and incorrect projections of future rents and pricing, keep in mind that many, if not most, of those so-called “stalled” projects were approved and grandfathered with lower percentages of inclusionary (below market rate) housing required to be built than if they were newly proposed today.
And now back to the project and plans at hand…
6,690 was their count of “languishing” (approved and permitted but dormant)…and yes, your hobby horse – One Oak – made the list.
Wow! That is two plus years worth of SF new housing construction. Using the recent boom years that saw more than 3K/units per year. Far more than my count – informal though it is. One Oak has been known for a while. 555 Howard is the mystery.
Well, yes 6000 ~2*3000, but keep in mind something in limbo likely stays there forever (or at least many years), whereas construction only lasts a year or so. Hence many years of construction can occur while that (same) bucket of idleness just sits there…it’s not the case – as one might infer – that half of projects get tabled.
That is true. But presumably most of the projects in which these 6900 units were planned to be built were targeted to be built in the next 3, 4, 5, 6, 7 years. And not 10 or 20 years out. The interesting thing noted in the Chronicle is that the very–expensive projects near the TTC are mostly going forward and it’s the projects further out, and with less expensive/more “affordable” units, that are being dropped. So whatever is built will skew even more to the very wealthy purchaser. Think I read that the 181 Fremont penthouse is expected to go for 40 million. And another unit floors down from the top went for 10 million or so.
What I found interesting is what was claimed as necessary for “penciling”: $1400/sf and up even for wood-frame. I’m not conversant on exact per/foot construction costs – I was thinking $500ish for that type…perhaps that’s wrong – but even if it’s – say – $1000, even allowing for land costs and fees (which logically should be included in that figure already, tho I don’t know that people do) it seems like a remarkably high return. It’s not surprising things don’t work out, if people’s definition of “work out” is returns in the mid-double figures.
I assume that the Chronicle figure of 1400/square foot is in the ballpark. In any case, investors do look for the maximum return possible with the least risk. At this point better returns with significantly less risk are available in other cities such as Seattle and so developers are building in these other markets.
“better returns with significantly less risk are available in other cities” Now that’s just crazy talk (actually investors look for the best return for a given level of risk – perceived risk, really…having both would be a form of arbitrage.) But other areas – Houston is infamous – have often had levels of vacancies that would inspire panic here; of course both the levels of rent and construction costs are lower, and because the (specific) numbers make all the difference it’s hard to make comparisons, but to the casual observer it’s hardly an affirmation that markets work the same way all over.
555 Howard is making its way through permitting.
Really? An item from a year-one-half ago is evidence it is actively “fast-tracking.”
Indeed. The project received planning approval on 03/02/17 and the plan was to start contraction in the fall of 2017. About a year ago.
SFFD took a year to approve it, looks like.
The fire department took a YEAR? That’s insane. Absolutely insane.
But yes, my understanding of 555 Howard, much to Dave’s chagrin, is that it’s moving through planning and is still going forward.
The developer hasn’t announced it and the growing trend of entitled projects being put on the market shouldn’t catch any plugged-in readers by surprise.
This seems to be a pattern – methinks, but I’ll freely admit I’m wrong if someone can show otherwise – of getting an entitlement, not starting it, but then coming back w/ a bigger (if not always better) proposal…and then in the end we’re left with nothing.
Have you ever developed real estate?
You mean beyond putting two hotels on Park Place? No. But in anticipation of your next question: I’m not criticizing, just pointing out it seems to be a trend (or more precisely, seems to me to be a trend)
Build it! Could look better but come on! What about the Apple Grocery that has been empty for years! This city is pretty much a joke. sad really, with such smart people…
I’m wondering why the California Density Bonus seems to be more desirable than the local HOME SF density bonus program?
Not that hard to figure out: CA density law applies to any parcel, anywhere in the state, when the proposal complies with the terms. HOME SF is limited to parcels only in certain mixed-commercial zoning districts (which are already plenty dense to begin with); and provides lower bonuses exchanged for higher inclusions than the State’s. Make sense?
As I understand the affordable unit are subsidized house. It is against the economic interest of a for profit developer to build more than legally required.
How doer California’s Density Bonus Law pencil out for developers? Is there any economic incentive for them to build more affordable housing? Or is it suppose to be doing good only?
Unless undertaken with a non-profit agency that can access tax-credits, etc. then yes, affordable units are subsidized by the overall project finances. The economic interest to a for profit developer is getting permission to build at all.
Most projects we’ve analyzed for developers benefit from the CA state Density Bonus Law increased unit count despite the additional affordable units required. Some project ONLY pencil with additional units from the density bonus…
Quite the improvement to that corner. Next up: get rid of that Brutalist monstrosity across the street.
But it adds such a Nippo-Euro feel to the intersection.
We should really find out why zoning would have required 100 parking spaces on this corner near half a dozen bus lines, and fix that.
UPDATE: Bonus Plans for Prominent Polk Street Site Newly Rendered