A complex plan to pay for the massive $1.19 billion redevelopment of Treasure Island is scheduled for unveiling today.
The crucial financial piece of the Treasure Island puzzle calls for the largest chunk of money — $497 million — to come out of the pockets of its developer, the Miami-based Lennar Corp. The firm is also developing the former Hunters Point Naval Shipyard in The City.
“Lennar and its partners believe this is an outstanding property for development. We’ve been working on it for many years,” said Sam Singer, a spokesman for Lennar Corp. “We expect it is the right financing package.”
Treasure Island, a man-made island between San Francisco and Oakland that served as a naval base during World War II, is still owned by the Navy, although The City is negotiating the purchase of 450 acres on Treasure and Yerba Buena islands. The Treasure Island Development Authority board is tasked with overseeing the property transferal from the Navy as well as the planned redevelopment project, one of the largest in The City.
The ambitious development plan for Treasure Island, which proponents hope will break ground in early 2009, calls for creating a small city designed to minimize the use of cars. Blueprints include 5,500 units of housing in several low-rise buildings, as well as a few high-rise buildings, including a 60-story tower. As part of the proposal, 1,800 of the new housing units would be below-market, officials said.
The plan also includes a 338-acre park, restaurants and a ferry terminal facing The City. The aim, backers say, is for all amenities, including a new ferry terminal, to be available within a 10-minute walk.
A $5 toll for cars may also be imposed as a way to prevent vehicles driving to and from the island. Originally the plan was more car-centric and had only one high-rise tower.
The public portion of the funding — $699 million — is slated to come through two complicated formulas. So-called Mello Roos bonds are slated to provide $361 million through a special tax placed on new market-rate housing that is built on the island.
Residents purchasing those homes would pay an additional tax — 0.65 percent — on top of the regular property tax bill.
The other public funding piece is from a property tax increment that is allowed to be returned to redevlopment areas, such as Treasure Island. The $338 million piece of the funding formula hinges on anticipated tax increase revenues as property values rise through time.
“This is a front-loaded project,” said Michael Cohen of the Mayor’s Office of Base Reuse and Development. “You have to spend a lot of money up front. Hundreds of millions of dollars [would be spent] before a penny comes in.”
Supervisor Chris Daly, who represents Treasure Island and sits on the authority board, said it would be premature for him to comment on the financing plan before the Treasure Island Development Authority takes up the matter today. Supervisors are slated to consider the draft plan this fall.