Stalled Schlage Lock redevelopment may have found key to move ahead

With an unparalleled housing market booming in San Francisco, a developer is trying again to lock down the redevelopment of a large plot in Visitacion Valley that has sat fallow for more than a decade.

The former Schlage Lock Co. factory site is in many ways the exemplar of the dense, transit-friendly development that San Francisco, the greater Bay Area and the state love.

The empty, 15.3-acre parcel is close to Muni's T-Third Street line that runs to downtown and the Bayshore station for Caltrain headed to Silicon Valley, it is close to U.S. Highway 101, it is near bike trails and there is a commercial corridor within walking distance.

If a plan to build about a dozen buildings of up to 80 feet in height with up to 1,600 units of rental and condominium housing — what will eventually be a $600 million, multiyear project — is re-approved by the Planning Commission and the Board of Supervisors this fall, construction on the first phase, a 30,000-square-foot retail space — with 220 units of housing above — could begin as soon as next spring, according to Jonathan Scharfman, the development director of Universal Paragon Corp., which has owned the site since settlement of a lawsuit with Ingersoll Rand, the lock factory's old owner.

Occupancy of the new buildings could be as soon as 2016.

It's taken 14 years between the factory closure and the new development at the site — despite unusual near-universal support from the neighborhood — thanks to a combination of industrial pollution and a removal of government funding.

Schlage Lock employed more than 1,000 people before the factory went the way of so many other San Francisco industries and closed its doors in 1999.

Home Depot briefly eyed the location before a neighborhood rebellion led to a law banning big-box retail at the site. So instead housing and smaller retail stores, and specifically a grocery store, were recommended for the site.

But Universal Paragon couldn't build before the pollutants on site — solvents used in the lock-making process — were cleaned up in a process that eventually totaled almost $30 million.

The developer is also responsible for building extensions of Leland Avenue and other roads, as well as sewer and other utility lines. That bill may total another $30 million — all the developer's responsibility.

The San Francisco Redevelopment Agency steered $48 million to pay for that infrastructure, and in 2009 the empty sawtooth factory was demolished. Soil and groundwater cleanup began after the rubble was cleared away, ahead of construction of 1,200 housing units, parks and a grocery at the site. The deal at the time, in contrast to the bigger and much more controversial Hunters Point Naval Shipyard redevelopment deal going on at the same time, was well-received.

But shortly after taking office in January 2011, Gov. Jerry Brown moved to close redevelopment agencies statewide. That meant the loss of that $48 million. That and the financial crisis sent the project back to the corporate boardroom to figure out financing. It will also require re-approval from the Board of Supervisors this fall.

To make the financing work, Universal Paragon will increase the project's density, with more units and bigger buildings. The developer has also switched configuration of the parks — which is all well worth it in the end, the developer said.

“This is a real opportunity to bring some economic regeneration to this long-forgotten part of San Francisco,” said Universal Paragon's Scharfman, who sees homeowners and renters seeking relief from high rents in the Dogpatch and Mission Bay as ideal residents.

Universal Paragon is also developing an even bigger swath of land in San Mateo County immediately south. Millions of square feet of office space and thousands of housing units — plus a school and parks — will eventually be built on 680 acres of old railway yards on the Brisbane Baylands.

The tenant of the retail space is still not yet known — and may not be a grocery store after all, after plans to put a Grocery Outlet on the site of an old Cala Foods across Bayshore Boulevard from the Schlage site were announced.

A final environmental bill of health at the Schlage site is due in August, but regardless, all development will have ground-floor retail or parking, with residential units built over that to provide an extra buffer against any lingering pollution, according to the site's environmental impact review.

The housing and retail would also bring a new face to the vast vacant lot, except for the one building once used by Schlage that remains — a Mission Revival-style office building in front of a public plaza at the northernmost edge of the property.

That will remain — for a community center, a police substation or some other community use — but only after it receives an $8 million to $10 million rehabilitation including seismic and other upgrades.

What may be most significant about the project is what's not there: organized opposition. There's an eagerness to begin development bordering on impatience, according to attendees of neighborhood meetings in January and May.

“We're hungry. We're hungry for some lifeline,” said Supervisor Malia Cohen, who represents the area. “It's been a bumpy road, but we're getting there.”

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