101 Hyde St. was promised as an affordable housing development site in 2016, but the project has yet to secure funding.(Kevin N. Hume/S.F. Examiner)

Tenderloin food hall project advances; affordable housing to come later

A Tenderloin food hall is expected to open under a six-year lease after a push to build affordable housing on the site faster fell flat.

In association with the Tenderloin Housing Clinic, the nonprofit La Cocina, which trains women of color to advance in the food industry, will open up within 7,500-square feet of 101 Hyde St. as a temporary interim use. The building, a former US Postal Service office, has remained shuttered for years.

When the largely celebrated lease with La Cocina ends in December 2025, The City is expected to move forward with a promised affordable housing development on the site.

SEE RELATED: Tenderloin food hub project short of funds for construction

The Board of Supervisors Budget and Finance Committee, which voted to approve the lease on Wednesday, had originally been scheduled to vote on the agreement two weeks ago. The vote was postponed, however, after Jennifer Friedenbach, executive director of the Coalition on Homelessness, raised concerns about the length of the lease.

Friedenbach noted that the site was promised in 2016 as an affordable housing development as a mitigating factor from concerns about the gentrification caused by developer Shorenstein’s 1046 Market St. housing development. At the time, the wait for the affordable housing wasn’t expected to last so long.

Shorenstein gave The City the 101 Hyde St. in exchange for developing “market rate housing at 1066 Market Street in lieu of meeting the City’s Inclusionary Affordable Housing requirement,” the budget analyst report said.

In the intervening weeks, Supervisor Matt Haney, who represents the Tenderloin, said during Wednesday’s hearing that he held discussions with the groups involved and decided to move forward with the lease as proposed, while city housing officials re-committed to the affordable housing project.

The challenge, in the short term, was a lack of funding for the affordable housing project. La Cocina also needed the longer lease to make the proposal pencil out.

Mara Blitzer, of the Mayor’s Office of Housing, acknowledged the situation during Wednesday’s hearing.

“We understand that the wait to realize the community’s permanent vision of affordable housing for this site is frustrating, and the viability of La Cocina’s interim use rests on the lease terms that run through December 2025,” Blitzer said.

She said that the Mayor’ Office of Housing “remains highly committed to developing 101 Hyde as permanently affordable housing inclusive of homes available to those who are experiencing homelessness.”

The project is expected to result in between 86 and 100 affordable housing units. Blitzer said that the cost of the project is estimated at $38 million and would take 18 to 22 months to build. Construction would begin in January 2026.

Haney said that given the “pipeline” of affordable housing projects under the Mayor’s Office of Housing, “the timeline makes sense and that we will build housing on a lot of other sites over the next few years and then ultimately on 101 Hyde.”

He said that the interim food hall was “desperately needed” in the Tenderloin and the site “unfortunately has been vacant and a source of many challenges.”

La Cocina will pay annual rent of $12,000 and percentage rent equal to 5 percent of net revenues. The group will also pay for tenant improvements totaling $4.6 million. The City will contribute $1.4 million, which includes a $1 million grant from the San Francisco Foundation.

The outfitted space will have seven kiosks for seven full-time food vendors.

Tenant improvements are expected to begin in May and the grand opening is slated for January 2020.

The full board will vote on the lease agreement next week.


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