Recommendation to Prioritize Development in Central SoMa

Approved by voters in 1986, Proposition M limits the amount of new office space that can be built in San Francisco and provides San Francisco’s Planning Commission with the sole authority to allocate the pool of entitlements.

As of the end of March, the pool of allocable space for new office developments in the city which measure over 50,000 square feet apiece (i.e., Large Cap projects) totaled roughly 2.9 million square feet with an additional 875,000 square feet to be added to the pool in October.

At the same time, proposals for roughly 6.6 million square feet of Large Cap development are working their way through Planning and competing for an allocation. And with that in mind, San Francisco’s Planning Commission has been seeking Planning’s guidance on how to proceed.

From San Francisco’s Director of Planning, John Rahaim:

There has been substantial interest in the topic of “public benefit” with respect to how the Commission might consider weighing proposed projects. [San Francisco’s Planning Code] does not use the term “public benefit.” Instead, the Code directs the Commission to act on office projects according to the following, excerpted from the code:

“(3) In determining which office developments best promote the public welfare, convenience and necessity, the Board of Supervisors, Board of Appeals and Planning Commission shall consider:

(A) Apportionment of office space over the course of the approval period in order to maintain a balance between economic growth, on the one hand, and housing, transportation and public services, on the other
(B) The contribution of the office development to, and its effects on, the objectives and policies of the General Plan;
(C) The quality of the design of the proposed office development;

(D) The suitability of the proposed office development for its location, and any effects of the proposed office development specific to that location;
(E) The anticipated uses of the proposed office development, in light of employment opportunities to be provided, needs of existing businesses, and the available supply of space suitable for such anticipated uses;
(F) The extent to which the proposed development will be owned or occupied by a single entity;
(G) The use, if any, of TDR by the project sponsor.

Payments, other than those provided for under applicable ordinances, which may be made to a transit or housing fund of the City, shall not be considered.” (Emphasis added)

Since Prop M was adopted, there have been two periods in which the demand for allocations exceeded the available supply:

“One was in the late 1980s to early 1990s, and the second was in 2001. The Commission considered competing projects at public hearings, where each sponsor presented their project knowing that not all could be approved. This procedure lead to the informal designation of the process as a “Beauty Contest” because projects were presented in competition to each other, and much of the discussion was based on the design of the projects.

In both time periods, the Commission adopted a resolution that references a Directors Memo; the Director outlined the recommended approach to approving office projects. That memo uses the 7 criteria outlined [above] as the basis of the recommendation. To implement these criteria, the Director recommended a list of 10 criteria, each of which would be judged as “excellent”, “good’, “fair” or “poor”. The criteria changed in the two time periods, but the system was basically the same.

While the Director’s memo suggests the four-tiered ranking noted above, it does not suggest a way of comparing one criterion to another, nor does it rank the importance of the criteria. Further, to our knowledge, there was no formal process by which projects publicly competed with each other in such a way as to offer competing bids for public amenities, other than the aforementioned presentations at public hearings. Obviously, if such a process occurred in private, there is no public record of those discussions.”

In terms of how to proceed, Planning is recommending that the Commission skip a beauty contest and allocate the first traunch of the pool to Central SoMa projects, in a phased manner and “in the order that the projects are otherwise ready to be approved,” backed by the following reasoning:

a. Central SOMA projects should be considered before other proposed projects, because they have been in the department’s queue for the longest time, and, are providing a type of office space not available in other parts of the city. Further…apart from the project at 400 Second Street, no other Central SOMA projects have Prop K shadow impacts.

b. All Central SOMA projects have been designed in parallel to the plan itself, and staff worked with project sponsors of the Key Sites for several years to help ensure that their projects fulfill the goals of the Plan. The Central SOMA plan establishes the most robust exactions of any area plan in the city, due to the substantial up-zoning, infrastructure and design standards for the area, and the impacts to be addressed. These provisions were established in the plan and Planning Code, and, are therefore consistent with the provisions of Sec. 325 as noted above. This menu of exactions and requirements is well in excess of anything contemplated in 1986 when Proposition M was approved. Further, each site is different in size and scale and each is offering a package of benefits — all within the Central SOMA menu — that suits that site based on the unique conditions of the site, and the impacts on the community.

c. Staff does not believe that the Commission, or any approving entity, should base their decisions on a “pay to play” model, and should particularly not encourage an auction-type approach to these decisions, such that the highest bidder wins. We would submit that this is an inappropriate way of making land use decisions, both legally and with respect to appropriate planning.

d. Some have suggested that, even within the menu of exactions and requirements of the Central SOMA plan, the Commission should create a weighted scale to compare one project to another. For example, one proposed weighted scale would suggest that the replacement of an existing private athletic facility should be weighted greater than the replacement of an existing PDR space with 250 jobs. Staff believes that such a comparison is not possible, given the variety and size of improvements proposed. The question is NOT whether projects are providing significant benefits, but whether the staff and Commission should be in a position of COMPARING one type of benefit against the other.

e. The Commission has approved many large cap projects in the past several years. Each was judged on its own merits, on the basis of code provisions, design, and other criteria established in the Planning Code. The Commission has not weighted one project against another.

And more specifically, Planning is recommending that the proposed developments at 88 Bluxome (a.k.a. the San Francisco Tennis Club site), 598 Brannan and 610-698 Brannan (a.k.a. the San Francisco Flower Mart site) receive the first, partial, allocations from the existing pool, allocations which could be approved by Planning over the next three months and then increased over time.