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Voters may be asked to support financing rebuild of SF’s seawall

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San Francisco officials are considering a $350 million bond for the November 2018 election to fortify The City’s century-old seawall. (Mira Laing/Special to S.F. Examiner)
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San Francisco’s three-mile long seawall, the foundation of the waterfront from Fisherman’s Wharf to Mission Creek, will require billions of dollars over the next three decades to make it resilient to a major earthquake and combat sea level rise.

City officials are working on a strategy to pay for the work and that includes a plan to bring to voters in November 2018 a $350 million “Seawall Fortification Bond.” The bond would be paid for through property taxes, and owners could pass-through a portion of the costs to tenants.

But even with the bond, The City is short $145 million in funding for the $500 million Phase 1 portion of the project, which includes the most urgent repairs on the century-old wall built into movable soils.

The fill used to create the land behind the seawall is prone to liquefaction during a major earthquake, and would cause the wall to move into the San Francisco Bay, causing significant infrastructure damage.

The City also needs to come up with $5 billion for Phase 2, the potential replacement of the three-mile wall to address both seismic concerns and sea-level rise. Due to climate change, San Francisco Bay could rise by as much as 66 inches by 2100, according to city officials. Both phases are known as the Seawall Resiliency Project.

When the Board of Supervisors returns from its month-long summer legislative recess in September, the board is expected to vote on a 10-year, $40 million contract between the Port of San Francisco and CH2M HILL Engineers, Inc., for planning, engineering and environmental services related to the seawall project.

The bond is among several recommendations from the Seawall Finance Work Group’s July 26 report, “Fortifying San Francisco’s Great Seawall: Strategies for Funding the Seawall Resiliency Project.” Comprised of 11 city officials, the work group analyzed 48 funding sources, including everything from the sale of naming rights to congestion pricing.

The seawall work is proposed in phases, with a $500 million price tag for the most urgent repairs and sea rise work. Even with the assumed bond passage next year, there remains a funding gap of $145 million over the next 10 years. Phase 2, the large-scale replacement of the seawall, is estimated to cost $5 billion over a 20-year period beginning January 2026, according to the report.

In the end, the group recommended six top funding sources to pursue.

They include the November 2018 bond, a special tax district on property owners in a Communities Facilities District, establishing an Infrastructure Finance District to capture local incremental property taxes in the area, and pursuing state law to capture the state’s share of property tax growth in an Infrastructure Finance District.

The City should also seek funding from the U.S. Army Corps of Engineers and try and have the project included in a proposed November 2018 state resilience bond, the group recommended.

“The top six sources … are very strong. These are the right top six,” Elaine Forbes, executive director of the Port of San Francisco, told the San Francisco Examiner. “I like them because they look to share the burden. We see local, we see state and we see federal.”

Forbes added, “We are already working on it. Port staff with the Mayor’s Office are already hunting these down.”

The group also suggested The City return to the voters at a later date for another bond to pay for sea level rise efforts.

So-called “secondary recommendations” included a 0.25 percent sales tax and a tiered rate of assessment on hotel gross revenues based on proximity to the waterfront.

The importance of the seawall, which was constructed between 1879 and 1916, may seem obvious to many. It supports the historic piers, the Ferry Building, Embarcadero Promenade as well as utility and transportation infrastructure for BART, Muni and ferry services.

“The vulnerability of the seawall to seismic damage and rising sea levels is one of the biggest risks The City faces,” the report said.

The report noted the seawall “is important in particular to The City’s most vulnerable populations who would be disproportionately impacted by disruptions on the waterfront.”

“Residents from lower socioeconomic backgrounds heavily rely on the utility and transportation networks that would be disrupted should the seawall fail during a seismic or flooding event,” the report said.

The Phase 1 work includes the most urgent seismic improvements for safety and flood risks at specific locations along the seawall, the report said. The Phase 1 work is ongoing, with planning and analysis, and would finish by 2026. Actual construction would begin in January 2021. Phase 2 would begin in January 2026 and conclude in January 2046.

But details of Phase 2 will be informed by the planning work paid for during Phase 1 and require The City to “make some decisions about what the new waterfront will look like,” Forbes said.

There are no plans to pursue other ideas the work group examined but didn’t recommend, like naming rights. “What we are looking for is big money,” Forbes said.

“The group did not have any specific ideas about what the Port could sell naming rights to,” the report said, although it noted that the Department of Public Health received $70 million from Facebook founder Mark Zuckerberg and his wife Priscilla Chan for what was then renamed Zuckerberg San Francisco General Hospital. One possible drawback, the report said, was “local pushback if there was too much advertising/commercialization.”

City officials have long discussed congestion pricing, in which drivers would be charged a fee for using downtown streets, but haven’t made much progress amid political opposition, even though the fee could also help reduce vehicle collisions with pedestrians. Still, the working group analyzed the idea and found it “could have a significant revenue potential.”

The analysis was based on a downtown congestion pricing scheme but touched upon making the Embarcadero a toll road, and in the end didn’t recommend this either, concluding it “would likely be a hard ballot [measure] to pass.”

The waterfront is also an important aspect of San Francisco’s emergency response, with plans for staging areas and points to bring people and goods in and out by ferry.

There is a 72 percent likelihood of at least one earthquake of magnitude 6.7 or greater striking the Bay Area before 2043, experts with the U.S. Geological Survey estimated last year.

“We are hoping we beat that clock,” Forbes said.

Editor’s Note: This story has been updated from its original version.

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