First-Time Developers Find A Not So Easy Route To Housing Riches

San Francisco CA

02 April, 2021

7:51 PM

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By Juan Carlos Lara, Mission Local April 2, 2021 After a year of life in a pandemic, with falling rent prices and mounting unpaid residential rent we decided to look back and see how the first-time housing developers we wrote about in late 2019 were faring. In the 16 months since our original list, only two of the seven projects have gotten full entitlements from the Planning Department – both are on Valencia Street. The first was a plan to replace the Phoenix Irish Pub, at 811 Valencia St. between 19th and 20th streets, with 18 market-rate single residence occupancy units. The plans also include a ground floor commercial space that is about one-fourth the size of the current bar. This project was easier than others because the building is not categorized as an historical site and developers were not seeking any variances or exceptions to specific rules. As a result the project did not require a Planning Commission hearing, according to architect Reza Khoshnevisan. Any project can be stalled by a request for a discretionary review, which triggers a hearing in front of the Planning Commission. And a neighbor filed such a request for 811 Valencia, but the developers avoided a hearing after reaching an agreement with the concerned neighbor in November, the day before the scheduled hearing. Aside from the near-discretionary review, the pandemic was another major impediment to the project's progress. "Planners are working at home, building staff are working at home. So where before we could have a meeting and resolve any comments, now it's all through email," Khoshnevisan said. Eugene Power, owner of the building and the bar, did not return requests for comment, but Khoshnevisan said that, as far as he knew, Power intended to keep the building and follow through with construction plans. "The intent is to keep it; he's had that business for a long time," Khoshnevisan said. The only other project to gain approval is the oldest on this list. In November 2017, the Elkington family submitted a preliminary application to replace the S.F. Auto Works building at 1021 Valencia St., which had been in their family since Norman Elkington bought it in the 1930s. The plan calls for h a six-story, 24-unit building and nearly 2,400 square feet of commercial space. A discretionary review request from two owners of nearby buildings triggered a hearing, but the Planning Commission ultimately gave their stamp of approval earlier this month, as long as the developers increase the common space and replace TK material with TK. It's unclear if the Elkingtons will follow through on the $9 million construction project, or look to sell the building, which is much more valuable with its new entitlements. Ken Elkington and project sponsor James Curley did not return requests for comment. The Kaplan Family Trust, another family of long-time Mission property owners, submitted a preliminary application in November 2019 to turn their Mission Thrift and Mission Jewelry and Loan buildings at 2316-2320 Mission St. into a 24-unit building. Since then, the prospective building has grown from five stories to seven, and from 24 units to 34, at the request of the city. Project sponsors also increased the number of below market rate units from three to six to comply with the state's Density Bonus Program. And yet, there may be delays. A third-party evaluation of the project, which the site's classification as a historical resource requires, said the proposed height "would not be entirely compatible," with the area. A "residential tower that is substantially taller and wider than any other contributingbuilding in the district would substantially contrast with the scale and massing of buildings that characterize the district," wrote Brewster Historic Preservation, the company that conducted the assessment. This report will go to the Planning Commission for consideration. Michael Kaplan of Kaplan Family Trust did not return a request for comment, but architect Mike Pitler said that, at the present time, they are just waiting for the city to finish its other assessments, such as the environmental evaluation. "The city's review time is very slow especially because of Covid," Pitler wrote in an email. A project at 1458 San Bruno Ave. near Potrero Skatepark, pushed by the Goode family who have owned the land for generations, has been equally slow to progress. Developers submitted their preliminary application for a 205-unit building, the largest on this list, in September 2019 and followed it with a formal plan three months later, but the project is still far from approval. The Planning Department sent project sponsors a checklist in February containing steps that the developers still needed to complete including a second community meeting to discuss the project. The developers said this would happen in early 2021, according to a letter from last December. To date, no new meeting has been announced. For the first meeting in November 2019, dozens of residents showed up in opposition of the project. Seth Prichard, Goode's attorney and the primary contact listed on forms for this project, did not return requests for comment. A plan by the Muffareh family to build 37 units (originally 22) in place of the B&W Automotive Service Center at 3260 26th St. is even further from completion. Basil Muffareh submitted a preliminary application in November 2019 and now estimates another year and a half before they can break ground. Muffareh said he is certain of his plans to build the housing, which is badly needed, and has no intention to sell the building after getting all entitlements. While being local can help, for some developers, their history is a liability. That has proven true for Hawk Lou, the owner of the property on the corner of Mission and 22nd streets, the site of a three-story building destroyed by a fire that killed one person and displaced about 60 tenants including Mission Local. Some residents said a lack of proper maintenance and safety equipment caused the fire, and Mission Local reported on the persistent problems in properties Lou owns. In late 2018 Lou submitted a preliminary application to build an ambitious nine-story building holding 129 units. After the Planning Department returned a generally favorable assessment of his proposed project with suggestions for "minor modifications," residents who attended a community review in July 2020, joined in near unanimous opposition to a project they described as "a gentrification bomb." Ian Birchall, the architect and project sponsor, declined to comment for this story. Kim Leung, owner of the U-Save Hardware business and building since 1987, plans to build a five-story building with eight two-bedroom apartments at the 1146 Valencia St. property. The building exists on a narrow block, facing Valencia Street on one side and San Jose Avenue on the other. For this reason, developers are applying for a variance, a specific exception to a rule, to allow for a central courtyard in the building, rather than a backyard which would face the street, according to architect and project sponsor Suheil Shatara. Developers are currently going through the required environmental review and Shatara estimates another four to six months before they get a variance hearing with the Planning Commission. After that, perhaps two more years may be required to gain all building permits and construct the building. "The frustration is that there are a lot of hurdles to jump through during covid," Shatara said, though he also thanked God for the fact that he still has work amid the current economic climate. Mission Local covers San Francisco from the vantage point of the Mission, a neighborhood with all of the promise and problems of a major city. You can support Mission Local here.