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The Deal of the Century

by Diana Scott

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The Presidio Trust had a sweetheart deal to offer chosen tenants: Any new construction would be exempt from city housing laws, stringent local design controls and buildings restrictions, plus city and state taxes.

For office projects over 25,000 square feet, $7.05/sq. ft., or roughly $6,345,000 would be paid into the City's affordable housing production program. This is critical at a time when homelessness is rampant, and affordable housing is the region's most pressing need. Yet, Congressional overseers assert that the Presidio, by virtue of its federal status, has no role -- as a major development site within a federal park, within the City of San Francisco -- in addressing this regional need.

In the category of on-site public open space, an office project the scale of Letterman/LAIR (roughly 900,000 square feet of developed space) would require 9,000 to 18,000 square feet (1-2 sq. ft./100 sq. ft., depending on district zoning classification) to remain as on-site public open space. Space would have to become available to the public prior to building occupancy. (To Lucasfilm's credit, plans for 15 acres of landscaped public open space on the 23-acre site -- almost 2/3 -- are far more generous; however, Lucas' employees will be the primary beneficiaries, and no there won't be public access to the firm's building interiors.)

For an equivalent business district project, another $2 million or $2 per square foot would have had to go into the City's downtown park fund for the provision of park space off-site.

One percent of the construction costs, or $2.5 million for a $250 million project, would go to commission public art for the site, subject to Planning Department approval.

Alternatively, 547 affordable housing units would have to be provided for a development this size, a number uncannily close to the 524 original units of Wherry Housing claimed by advocates for the homeless (58 of which have been demolished). These units are being leased on an interim basis to students to raise funds to demolish the remaining 466 units, which are the most affordable housing units in the park. Under the NPS's General Management Plan, the site is to be returned to undeveloped habitat. (While the McKinney Act of 1987 gave homeless people priority access to housing on converted military bases, the Act exempted the Presidio -- a base earmarked by Congress to become a national park were it ever decommissioned -- from this requirement.)

An estimated $900,000 (or the provision of an on-site facility) would ordinarily have to go toward affordable childcare and $4.5 million ($5/sq. ft.) would have gone to mitigate the impact on transit.

In addition, $225,000 for the Letterman/LAIR office project ($.25/sq. ft.) and a minimum of $880,000 for residential property in the park ($1.00 sq. ft.) would go to the San Francisco Unified School District as a school fee. An additional 2.5 million square feet of commercial real estate in the park might yield another $660,000. The total school fees could be in the vicinity of $1,765,000.

A further city requirement would cover on-site brokerage of transportation services, employment services, and on-site or neighboring childcare brokerage at market rate. The running total of mitigation fees to build commercial space equivalent to the Letterman/LAIR complex elsewhere in the City would be approximately $16 million, not including brokerage fees and open space requirements.

Neil Eisenberg, an early vocal critic of Presidio development who is active in the commercial real estate law field, maintains that the Presidio is not a "hot property," due to the absence of good public transit links. In his view, a development boom is "wishful thinking," with Lucasfilm the best competitor, though "a violent rupture of conservation practices."

The park is served by two bus lines, with no direct link to BART (Bay Area Rapid Transit, the suburban commuter rail line). Improving transit access is, however, is a key focus of the Trust, which has reportedly negotiated an East Bay express bus link with MUNI (the municipal railway).

Yet, transit impact fees -- even were Presidio tenants to pay them -- would be inadequate to compensate for development impact at this location. "The fee was set for an area that already has a well-developed transit network," says San Francisco real estate attorney Sue Hestor. "The cost of developing such a network in a relatively 'virgin' area of the city for offices would of course, be a lot, lot higher per square foot."

A resolution by the City's Commission on the Environment emphasized the necessity of improving transit access. (This contravened the spirit of Proposition L, passed in 1996 by 90,607 San Francisco voters, which urged the City to negotiate access to housing in park for homeless people. Sister Bernie Galvin, whose Religious Witness With the Homeless spearheaded Proposition L, and continued to press for its implementation, made it clear that transit was one of the few bargaining chips the City had to convince the Trust to comply with the voter mandate.)

The Trust's Board of Directors has made it clear, however, through Executive Director James Meadows, that it has no intention of complying with this political appeal. Knowledgeable sources in the park claim that Congressional overseers counterthreatened to cut municipal transit funds if the city pressed the issue. In the meantime, Mayor Willie Brown, elected on a populist platform but now associated more with the City's elite, has verbally supported Sister Bernie and done little else. Last Spring, Religious Witness engaged in civil disobedience at City Hall (leading to arrests) to protest this betrayal.

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Albion Monitor December 28, 1999 (

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