Supervisors raise concerns on fees associated with UCSF Mission Bay development

Salesforce.com's decision to sell a parcel of land in Mission Bay to the Warriors has overshadowed another land deal across the street that seemed like a foregone conclusion: UC San Francisco's agreement to purchase two Salesforce lots for a new development.

While receiving little opposition in the past, the UCSF proposal raised hackles at the Board of Supervisors Budget and Finance Committee hearing Wednesday, when Supervisors London Breed, Scott Wiener and Marc Farrell each expressed concerns for what they saw as a deal in which The City got the short end of the stick.

Under state law, universities are not obligated to pay property taxes. But in order to build in Mission Bay, a redevelopment area still governed by a master plan, UCSF has to pay in-lieu fees equivalent to property taxes — approximately $39 million — until the development area dissolves in 2043.

But in negotiations, the school offered to pay all its in-lieu fees upfront on the property only if it could get a $7 million cut from the price tag: $32.1 million for infrastructure and $21.9 million for below-market-rate housing, both required by Mission Bay development agreements.

The offer initially pleased officials at the Office of Community Investment and Infrastructure, who oversee Mission Bay, because it would allow them to begin construction on several housing developments now instead of waiting for the payments to come over the next 30 years.

But that plan did not sit well with several supervisors when Tiffany Bohee, who heads the office, stood before the committee Wednesday.

“I'm just not completely sold on the idea that we should be walking away from this complete obligation,” Breed said, who thought aloud about the increased transit needs and other infrastructure costs not being paid for by Mission Bay's largest land owner. “We are not adequately prepared as a city to deal with such a significant neighborhood when it comes to transportation.”

Wiener had similar concerns with yet another development not paying transit impact fees, but was unsure if The City could compel UCSF to make such payments.

Ferrell, who chairs the committee, said Wednesday that his staff was informed that the university was not obliged to pay anything. “I don’t think it’s appropriate to talk to a supervisor about something that is not the case,” he said about contradictory information he’d been given about the deal.

Those concerns were enough for the matter to be continued until the committee’s meeting next week, so the supervisors can have all the facts before them.

Bohee, who said she did not brief Ferrell personally on the matter, told the San Francisco Examiner on Thursday that under the agreement UCSF would have to make “full payment of the taxes that would have otherwise been assessed.”

UCSF did not return calls for comment.

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