Categories: Op-Ed Opinion

Developers breaking Transbay deal promises

During my 10-year career in City Hall, I saw no single project more important for the future of San Francisco than the Transbay Transit Center. That's why I consistently advocated for the project and the associated community benefits as the District 6 supervisor and a member of the Transbay Joint Powers Authority. During this time, the project faced several significant obstacles — even after project approval.

In September 2007, a jury evaluated a collection of international proposals to design and build the Transbay Transit Center and the then-associated tower, now named the Salesforce Tower. The unanimous winner, the team of Hines and Pelli Clarke Pelli, was chosen based on two defining characteristics — the inclusion of the rooftop park and the highest financial offer of $350 million ($50 million of which was to be dedicated to the park).

During the TJPA board of directors' selection of Hines, the losing bidders — including Boston Properties, which has since partnered with Hines on the Salesforce Tower — warned the board that Hines' offer was a bait-and-switch. When I pressed Paul Paradis of Hines on this issue, he assured us that this was not the case.

Much to our disappointment, during a difficult negotiation, Hines pulled that bait-and-switch — lowering the bid by $75 million and eliminating the capital contribution to the rooftop park, the distinguishing factor in its selection.

After a contentious meeting, the board authorized the deal over my dissent.

I wish that had marked the end of the developer takeaways from San Francisco's most important public project. Later, when the developer closed on the parcel, it again cut its contribution by another $33 million, justifying the change on the then-terrible market conditions. In the end, the Transbay project received

$108 million, or more than 25 percent, less than what was originally promised between the time the offer was made and the transaction closed.

Some say what's past is past. Others say that the past is a prelude of what's to come.

Today, Hines and Boston Properties and other big developers are back looking to cut hundreds of millions of dollars from the Transbay project and The City.

In exchange for the rights to build some of the tallest buildings in The City, the developers agreed to establish a community facilities district to fund some of the Transbay program along with basic improvements to streetscapes, parks and other facilities around the Transbay Transit Center, made necessary by the dense development. But now the developers have concocted a ridiculous theory that the community facilities district should be assessed on 2007 property values. This, despite the stratospheric increase in property values that resulted in a record-setting lease of the Transbay Tower to Salesforce — the most expensive lease in San Francisco history.

This move amounts to the developers trying to fleece the Transbay Transit Center and The City for as much as $600 million.

Reneging on the agreements has lined the pockets of Hines at the expense of the Transbay program's funding. This latest shakedown could compromise the entire downtown extension and also have severe consequences to the rooftop park and other parks that are greatly needed in this open-space-deprived area of The City.

The question is now in the hands of the Board of Supervisors. It has the power to make the developers finally live up to their promises.

That's why the developers have hired a fleet of lawyers, consultants, and high-priced lobbyists, including former Mayor Willie Brown. Ironically, one of the redeeming qualities of the former mayor was his steadfast support for the Transbay project. But as the San Francisco Chronicle reported this summer, Brown flipped his allegiance and is now registered as a lobbyist on behalf of the developers. In his own words, Brown told the Chronicle that he expected to be paid handsomely. Ethics reports show he has already been paid $100,000 from the developers seeking the sweetheart deal.

The Board of Supervisors needs to stand up to this unfettered greed. If they don't, everyday San Franciscans will be left holding the bag.

Chris Daly is a former supervisor for District 6, home of the Transbay Transit Center, from 2000-2010. He also served as the Board of Supervisors' representative to the Transbay Joint Powers Authority.

SF Examiner

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