As we outlined last year:

While the draft Environmental Impact Report (EIR) for the proposed 27-story, 495-unit infill tower to rise on Nordstrom’s underdeveloped parking lot parcel at 469 Stevenson Street was certified by San Francisco’s Planning Commission in July of 2021, the certification was subsequently appealed and overturned by San Francisco’s Board of Supervisors.

As we calmly outlined after the Board’s decision, despite a media circus of “San Francisco Supervisors Kill Housing” headlines and stories at the time, the bulk of the already completed Environmental Impact Report (EIR) for the project could be reused and/or amended to address the specific concerns that were raised by the Board, “the impact of which we’d put at six months to a year.”

It’s now eleven months later and…the Draft Environmental Impact Report for the proposed 469 Stevenson Street tower has been amended to address the Board’s specific concerns (gentrification and displacement, historic resource impacts, and potential geotechnical impacts), with a public hearing scheduled for next month and after which the EIR is likely to be certified anew and the development approved, despite having been “killed.”

And in fact, the amended EIR for the “dead” 469 Stevenson Street tower development is now slated to be re-certified in two weeks time, clearing the way for the project’s approval and entitlement.

But as we noted when the EIR was originally certified, neither building nor demolition permits for the project have yet to be requested, permits which are typically paralleled processed for projects which are positioning to break ground and which continue to speak to the actual intentions and planning of the entitling team (Build Inc.). We’ll keep you posted and actually plugged-in.

36 thoughts on “Tower That Supervisors “Killed” Slated for Approval, But…”
  1. When projects get delayed (under false pretenses) while construction prices go up, they are effectively killed. This may have been built in 2021 but now is looking unlikely. It’s absolutely valid to criticize the BOS for their role in squashing housing developments like this one across the city.

    1. Did you read the article?

      “…neither building nor demolition permits for the project have yet to be requested, permits which are typically paralleled processed for projects which are positioning to break ground and which continue to speak to the actual intentions and planning of the entitling team (Build Inc.).”

      1. “Typically” is the thing for this project. If I owned it I would not spend for all the parallel permitting costs until I knew this was finally
        past appeals. There is no reason to think this is going to be smooth this time, I mean what if Peskin decides this project should have fixed chairs too.

      2. Yes I did read the article, and I agree with you that the developer is unlikely to build this project now. My point is this: the project is dead because it was delayed over and over again by the city government until it’s now no longer financially feasible. Had the BOS listened to their own staff and approved the project in 2021 when construction costs were lower and there was more optimism for this neighborhood, we might have seen it get built.

    2. It’s an interesting dynamic. People like the above commenter get up in arms and post over and over again about housing projects getting delayed by the S.F. Board of Supervisors and pretty much ignore The Board’s legitimate concerns when that happens.

      But in general, when a developer gets a project approved and doesn’t even bother to request a building permit in preparation for (typically) flipping the entitled project, the YIMBY useful idiots and the “pro housing activists” have little to say. If they genuinely cared about housing being built, they’d put at least some amount of effort into holding “the development team”‘s feet to the fire when the project proponent doesn’t follow through to actually build.

      1. If a project doesn’t pencil, it doesn’t pencil. If developers are intentionally mothballing projects that’s a valid criticism, but you can’t exactly force developers to build housing at a loss.

        What we can do is make sure there aren’t unnecessary bureaucratic barriers and delays like what happened to 469 Stevenson. After city staff explicitly stated the project conformed to seismic standards, the BOS overruled their own staff – with no evidence to back their claims – and delayed the project for an extra year. How can you defend that?

    3. yes.correct.

      True Sf style – to delay is often a good as to cancel.

      whatever the use of here it will take a long time for built value to catch up with costs to build.

      Good accomplishment for prog-world.!

  2. The fact that the project is now “undead” likely owes much to the media circus, the state’s haranguing of the city, and TODCO’s decision to back off (which they justified on the ground that the project isn’t feasible to build any longer).

    1. Conspiracy theory: Some on the BOS were throwing in a wrench as an effort to pitch the project over to TODCO. Who are now not showing up to the wedding…. Well done BOS /s

  3. Not likely this gets built even if the entitlement is approved. The Controller’s office just recommended lowering the inclusionary housing requirement to 12% to 16% to try to make these projects viable. This from the SFBT:

    “Still, even at the new recommended range, all of the styles of rental housing — low-rise, mid-rise and high-rise — remain infeasible, said Egan. An analysis by the Controller’s Office suggested that apartment development in San Francisco would not work even if the city dropped its inclusionary requirements to zero, he told me. The skyrocketing cost of construction coupled with rising interest rates have simply rendered many kinds of residential development financially impossible.”

    1. Impossible construction costs due to extortion… uh, fees = restricted supply = high real estate values for established boomer landowners? Sounds like the system is working out perfectly for those in power!

    2. Wow. This is shocking and sobering. Even with zero! What else could the City do to make it financially possible? Zero cost for permits?

      1. Yeah. Egan has been sending red flags up about this for a while now. Constructions costs, materials costs and higher interest rates make new multi-unit residential construction problematic. The condo that sold for just 525K at 870 Harrison is a perfect example. That project likely wouldn’t pencil today given the sharp drop in what units in it are now selling for. BTW, no way will significantly reducing the inclusionary housing element pass muster in SF. Even if the Supervisors voted to do so, activists would put an initiative on the ballot keeping inclusionary mandates at their current level and it would pass.

  4. Yes. All constructions will grind to a halt. Not for office space, not for residences. The progressives finally killed any progress.

    1. Yes, the slowdown in construction is entirely due to shambolic local progressive bantamweights, and not at all due to a colossal misallocation of institutional capital during a historic speculative asset bubble blowout fed by the deepest and longest period of accommodative monetary policy ever.

    2. Ah yes, because it was progressives who drove up interest rates at a record pace… rate increases which tanked commercial and residential lending, and led to bank collapses… nothing to do with financially secure officials deciding that killing the economy and ruining the lives of countless working class people was more important than a few percentage points of inflation…

      1. Well, somebody had to stomp down on those greedy progressives who’ve been posting record profits at all their socialist corporations…

      2. Not at all, but it was progressives that delayed housing projects until the window closed on their financial feasibility. If the city had taken advantage of the positive economic conditions before inflation skyrocketed, we could have had thousands of additional housing units in SF right now. But nope, shadows and “neighborhood character” are more important than honestly fighting the housing shortage we face.

  5. The writer of this article is not clearly not ‘plugged in’ if they think the overturning of the original EIR was anything more than political gamesmanship by the Munchkin moving his pack of dummies around the board. At least now that he is charge, he might be more responsible with his actions.

    1. This is the real question. I think we know the impacts of a conforming skyscraper on a downtown by now. There should be a standard CEQA exemption.

  6. After the project was killed, the story went national, the state opened an investigation, and pundits from all over the place raised hell. So no, it isn’t surprising that this project is back in a zombie form. That isn’t a testament to people overreacting in the first place, rather it shows the insane limits you have to go to in this city to get anything built. You have to stir up national outrage and even then it probably isn’t enough. The odious NIMBYs win again.

  7. We are learning in real time (again) that market rate housing production only pencils out economically in numbers about ~25% of the time, during the second half of the up phase of the business cycle.

    1. Business cycle begins, the first 1/4: Finance and developers are just recovering from idling during the downturn and see the first market signals of price firming and increases. Capacity begins to be recovered.
    2. Second half of up phase 2/4: Finance and developers are cranking out projects as fast as they can. Capacity at peak.
    3. First half of down phase 3/4: Finance and developers retrench, funding is cut off, starts stop, capacity falls.
    4. Second half of down phase 4/4: projects cease, capacity at low.

    When boosters demand that public policy center market rate housing, they are demanding a 25% solution.

    1. Right!. I used to live at 6th & Folsom a decade ago and you couldn’t pay me to live there let alone this open sewer and drug insane asylum at 6th & Market.

      Anyone who would voluntary live at this location either is a fool or deserves what they ultimately get.

  8. Heartening to see the bias of the original article called out in the comments section. Far from being alarmist or exaggerated, the blowback from the BOS’ attempt to sink the project was entirely justified and may, in time, be seen as the tipping point when the anti-housing coalition’s reign of impunity came to an end. Those of us who work to produce housing in this city have always known about their shady, extortionist, and sometimes downright illegal moves… it’s kind of nice to see it called out in a meaningful way for the first time that I can remember. And hopefully not the last.

  9. > neither building nor demolition permits for the project have yet to be requested,

    Requested or submitted? There’s a tremendous cost to proceeding at risk on an unapproved entitlement, especially one that’s already gone off the rails. It seems surprising and, honestly, not actually accurate to suggest that projects are usually ready to issue building permits at the end of entitlement.

    And by surprising I mean “San Francisco would be the only City in California where that’s the norm if it were true.”

    Looking around at basically every building I’ve followed, none of them have ever been shovel ready at the end of entitlement.

    1. Once again, permits are typically paralleled processed for projects which are positioning to break ground versus simply being entitled as the permitting process for a high-rise development typically takes over a year to complete, which is the norm. And an application to secure permits for this project have yet to be requested/submitted to the City for review, as was the case prior to the EIR certification being overturned/appealed as well.

      At the same time, Build Inc’s entitled tower to rise at One Oak, on the edge of Hayes Valley, which was approved back in 2017, has yet to break ground. Odious NIMBYs and the BOS are obviously the ones to blame!

      1. Just today the SFBT is reporting that Build is returning the One Oak site to the lender to avoid foreclosure.

        “Build Inc. has surrendered the stalled One Oak project site to its lender, the latest chapter in the saga of the 40-story residential tower long planned to rise in San Francisco’s Hub District.

        A deed-in-lieu of foreclosure was recorded for the property last month, public records show, allowing the San Francisco-based developer to voluntarily turn it over to Washington Capital Management Inc.

        According to the filing, Build had an outstanding debt of roughly $44 million related to the site at 1500 Market St., located at the edge of the Civic Center, Mission and SoMa neighborhoods. The site currently houses a surface parking lot and the All Star Cafe.”

        1. Dave, thanks for sharing that for those of us who don’t have a subscription. Build might have a different lender and /or capital structure for the parcel at 469 Stevenson St, so it’ll be interesting to see if they are able to actually get going and proceed to building this time instead of delaying for six years.

          Have to say, whoever handles social media or PR for build put on a master class in astroturfing around the 469 Stevenson St. project.

          1. The new definition of Rock Bottom: CNN turning against you. But it looks like the WF in DD – that’s Downtown Detroit – is still open….for those looking for pointers in how to operate in a ‘challenging’ environment.

    1. Given vacancy, we won’t need additional office space in San Francisco for a decade. –> Nothing will be built.

      Condos and apartments prices are soft and losing ground to inflation, people don’t want to work in offices –> Nothing will be built.

      What’s more, repeatedly increasing CPI means the ceiling on rent controlled apartments is floating higher, creating more room for owners to raise rates if and when the city regains control of quality of life crime and some sense of normalcy. Plenty of formally rent controlled apartments are functionally market rate apartments in an environment like this.

      We still don’t have enough housing in California, but there are lots of headwinds for anything new in San Francisco.

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