Despite San Francisco’s prevalent call to build more, the Board of Supervisors is considering to extend the lease for a popular Hayes Valley biergarten for an additional five years — even though the public parcel is designated for housing development.
The 5,000 square foot parcel, at the northeast corner of Octavia Boulevard and Fell Street, is among those 22 parcels gifted 15 years ago to San Francisco by the state as part of the demolition of the Central Freeway.
In November 2010, when the real estate market was in a downturn, The City decided to lease the parcel to Proxy Development for temporary uses, activating the area with retail business and cultural activities. The Proxy site was designed by Berkeley-based company, envelope Architecture and Design.
While the Mayor’s Office of Economic and Workforce Development and Real Estate director John Updike are supporting a five year lease extension with Proxy, the board’s budget analyst Harvey Rose is advising sale of the property in the near term.
The board should sell the parcel “to a developer for market rate housing, as it was originally intended, given the current demand for housing in the City and the high demand for land to develop housing,” said Rose’s report on the proposal. Sale proceeds would “provide new funds to the City for transportation, bicycle and pedestrian improvements, and require the inclusion of 15 percent affordable housing in the development,” Rose said.
The board’s Budget and Finance Committee postponed a vote last week on the proposal in order to resolve the debate. “Just wanted some time to review the Budget Analyst’s initial recommendation and see if we can get a meeting of the minds,” Updike said in an email to the San Francisco Examiner.
Updike noted the lease extension “allows us to thoughtfully advance housing projects on other former central freeway parcels already in the queue, then, in five years, tee up development on this parcel.”
The Biergarten parcel is the only one of the 22 parcels being kept off the market at his time, Rose said. Four affordable housing projects have been completed and nine market-rate housing parcels have been sold to developers. The other nine are in various planning stages.
Updike said that “likely no more than 15 units” could be built on the parcel and it could be sold at between $2 million and $3 million. Under the lease proposal, Proxy would pay $370,482 annually, which goes into a special fund for area transit improvements.
Within a 15-minute walk of the parcel, 2,878 housing units are under construction or in the pipeline, of which 365 are below market rate.
Board President London Breed, who introduced the proposal, didn’t sound persuaded by Rose’s report. “Let them drink beer,” she said in a text message.