Mission District residential project wins approval at Planning Commission

Community groups pushing for more affordable units could appeal after talks with developer fail

The San Francisco Planning Commission on Thursday approved a 60-unit housing project on a parking lot near 14th and Mission streets after a breakdown in talks between the developer and advocates pushing for more affordable units and community benefits.

A vote to authorize the construction of the seven-story residential building with ground floor commercial spaces had already been continued six times while advocates with United to Save the Mission, a coalition of 16 local community groups, and developer Manouch Moshayedi negotiated over the $20 million project. The project’s affordability was a primary point of contention, the San Francisco Examiner reported previously.

On Thursday, a deal between the parties remained out of reach, but the commissioners said that they were unwilling to wait any longer. With a 5-1 vote the commission greenlit the project, with Commission President Myrna Melgar delivering the only dissenting vote.

Despite the approval, however, commissioners expressed skepticism that the developer had negotiated in good faith.

John Kevlin, an attorney with Rueben, Junius and Rose LLP representing Moshayedi, on Thursday told the commission that the developer had made amends with some neighbors but failed to reach a compromise with USM.

“We got an agreement with Woodward Street neighbors…to take care of some of the concerns over the historic and design components they had,” said Kevlin. “We tried very hard to get USM onboard. We have a great working relationship — we have been thinking outside the box.”

Kevlin said that a recent offer included offering a nearby former auto shop on 16th Street that Moshayedi purchased for some $8.7 million in 2013 to USM “at cost” and footing the bill for necessary upgrades there. He said the coalition declined.

But Larisa Pedroncelli, of USM, said that she was unaware that that offer was on the table prior to Thursday’s hearing. She said communications broke down when the developer refused to respond to multiple attempts she made to contact him over the past month, and noted that the negotiations could not be described as amicable.

“This is the first time I’m hearing that this will be the project sponsor’s offer, and I do not have the authority to accept this on behalf of 16 community groups and the development team is fully aware of this,” said Pedroncelli. “Making a last second offer here without talking to USM does not show respect for the community.”

The commissioners appeared torn between wanting consensus and wanting to move the residential project forward.

“Private agreements are something we support. I hear two statements which do not link up at all. One person says they weren’t contacted and didn’t know anything about this [offer]. The other says this was part of an offer that was on the table the whole time,” said Commissioner Kathrin Moore. “We continued this a number of times to encourage some form of settlement. We cannot further continue the project.”

Commissioner Dennis Richards said that his goal was to create “real housing for real San Franciscans,” and ultimately lent his approval to the project on the condition that Moshayedi would not rent out any of its proposed units as “corporate housing” — units offered by landlords or third party management companies for limited stays of 30 days or more.

Initial plans for the site called for merging two lots to build the residential building and retail spaces as well as the construction of a three-story building offering some 6,240 square feet of PDR space — also known as production, distribution and repair space, or light industrial.

Moshayedi struck the PDR building from the plans, however, after the Office of Economic Workforce Development pointed out that the proposed PDR spaces would rent at about triple the average rent.

Moshayedi also moved to invoke a 35 percent maximum density bonus allowed under state law, which enabled him to add two more floors of units at market rate. Moshayedi added density to the upper floors that are not subject to affordable requirements, a move that drew the particular ire of USM advocates — four units were added to the upper two floors without adding any additional affordable units, said Pedroncelli.

“If he had added any density at the lower floors he automatically would have had to add more affordable units, but he chose to put density in the upper floors so he wouldn’t have to do that,” Pedroncelli told the Examiner on Friday.

Pedroncelli added that Moshayedi at one point offered monetary compensation to USM in exchange for the coalition’s support of the project — a violation of the group’s ethics, she said.

“He made us a cash offer and USM doesn’t take cash offers. We are looking for tangible benefits,” she said. The group instead asked Moshayedi to donate to The City’s small sites program or to donate the parcel that was slated for PDR to The City as a “land dedication.” According to Pedroncelli, Moshayedi rejected those demands.

The Coalition has 30 days to appeal the project, though it has not decided if it will take this step. An appeal would send it to the Board of Supervisors for consideration.


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