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30 Van Ness sale returns to help fund new city-owned office building

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With the approved sale of 30 Van Ness Ave., The City can move forward with the construction of a new building on Mission Street. (James Chan/Special to S.F. Examiner)

San Francisco moved closer to building a new $440 million office building at Mission and 11th streets Thursday with the approvals for the sales of other city-owned parcels that would fund the project.

Most notably, the sale of 30 Van Ness Ave., which was previously rejected by the Board of Supervisors in late 2015, was approved by the board’s Budget and Finance Committee on Thursday.

The 30 Van Ness sale agreement with Lendlease Development, Inc., includes a sale price of $70 million and a commitment to provide 25 percent below-market-rate housing on site, including 15 percent low-income and 10 percent middle-income.

Additionally, if the developer is ultimately granted a height increase, an additional 8 percent of affordable housing would be required, which would be accomplished through in-lieu fees.

Supervisors Jane Kim and Aaron Peskin led the effort in December 2015 to reject the initial deal with Related California for $80 million and 15 percent below-market-rate units. Peskin had just come into office, giving the board a progressive majority and voted to reject the deal.

“This is a good balance at making sure that we are maximizing affordability … without compromising the revenue that is much needed to be able to build office buildings for several of our city departments,” Kim said of the new sale proposal.

Real estate director John Updike said the additional 10 percent of affordable housing adds between $12 million and $38 million to the value, depending on the project that’s ultimately built.

Alexa Arena, of Lendlease, said the development would be the first in San Francisco for the company. Arena said the intent for the site is to rehab the ground floor office spaces and build residential development on top.

Jim Haas, who sits on the Civic Center Community Benefit District, said the development has the potential to improve the area. “The Van Ness-Market intersection should be the most prominent intersection in The City. It is not. It is a tawdry place,” Haas said. “This development has a major opportunity to help solve that by creating a fantastic ground floor experience.”

He added, “I’d like to see them rebuild the entrance to the transit station at that corner.”

Funding from the sale will help pay for the $440 million planned new office building at 1500 Mission St., which is planned as “a One-Stop Permitting Center that would improve service to planning, building, and street permit applicants by colocating [Department of Building Inspection], City Planning, and Public Works,” according to budget analyst report.

Additional funding for the planned new government building would also come from another city-owned property at 1660 Mission St. and 1680 Mission St. for $52 million to SF Prosperity 2, LLC. SF Prosperity intends to keep the building as office space.

Both sales were approved Thursday by the budget committee. The full board will vote on them next week.

Construction of the 1500 Mission St. office building is expected to begin this year and finish by 2020. During the three-year period, The City would lease space at the buildings sold.

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