Giants avoid competing ballot measures over development by boosting below-market-rate housing

After more than 20 hours of negotiations with city officials in the past week, the San Francisco Giants on Tuesday agreed to offer an unprecedented amount of below-market-rate housing in their major private development.

Developers will earmark at below market rate 40 percent of the 1,500 new rental apartments on a 28-acre site just south of AT&T Park called Mission Rock. The increase from 33 percent proposed in May follows a counter measure by Supervisor Jane Kim earlier this month that sought 50 percent below-market-rate units. Kim represents the area where the development is planned.

Kim introduced her measure June 2, setting the stage for potentially two competing Mission Rock development initiatives on the November ballot. Kim’s measure also included shorter height limits.

Voters must approve any increase to the height limit, which is currently zero feet, because of Proposition B, a measure passed last year that requires voter approval for such increases.

But meetings over the past week led to a compromise reached early Tuesday between the Giants and those who pushed for additional below-market-rate homes, said John Elberling, who helped negotiate the 40 percent benchmark. Elberling is the director of the Tenants and Owners Development Corp. and a supporter of Kim’s initiative, although his organization is not involved in the Giants’ development.

“Obviously the more the better,” Elberling said of below-market-rate homes. “This sets a new benchmark for what we should be seeing on city property in the future.”

The development land, which is a parking lot, is owned by the state of California but managed by San Francisco, per the Burton Act of 1968 concerning waterfront properties. Despite a pending lawsuit against The City by the State Lands Commission asserting that Prop. B is illegal because the state Legislature retains ultimate authority over waterfront property, Prop. B remains in effect.

The Mission Rock development also includes 8 acres of open space, an expanded home for Anchor Brewing Co., and office and retail space. Height limits will range from 90 to 190 feet for commercial uses, and 120 to 240 feet for rental housing.

Developers have said that no buildings will be constructed within 100 feet of San Francisco Bay, and heights will step down the closer the building comes to the water.

Kim emphasized that the increase in below-market-rate housing — which her colleagues on the board all supported — is crucial as The City struggles with a housing crisis.

“As a city, we have not been building enough middle-income housing,” Kim said in a statement. “As a result of working together, we will be building an unprecedented number of housing for middle class families from ballpark workers to teachers and nurses.”

Mayor Ed Lee had announced his support for the project at the previous 33 percent below-market-rate amount, and on Tuesday called the latest proposal a “win-win” for San Francisco residents.

“We are delighted that the members of the Board of Supervisors have signed on in support of the community’s vision to open access along the waterfront, create new jobs, provide neighborhood-serving retail and to build new parks and an unprecedented level of affordable housing,” Larry Baer, Giants president and CEO, said in a statement.

The project is anticipated to generate more than $1 billion in revenue for The City. It will also provide more than $100 million in upfront development fees, along with more than $25 million annually in taxes.

Developers submitted the height limit increase to the City Attorney’s Office in May, and the measure needs 9,702 signatures by July 6 to qualify for the November ballot.

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