The port needs $1B to cover the gap in its operating and cap exp budgets, and it is using the ground lease of this site as a way to cover a significant part of this shortfall.
The Port is counting on $8 to $10M in rent, which translates into about $250 PSF in residual value. My guess is you need an FAR of about 3 to make this work. From the Mission Bay Standards, this looks achievable.
- LEED Gold or better.
- 2.57 acre China Basin Park to be developed as part of the plan.
- No height restriction.
- residential allowed as a potential use--unique for a waterfront location.
- close to UCSF Med Center
- Bayfront location.
- Replace all infrastructure, including Terry Francois boulevard.
- classic path of development play.
About 1.2MSF of buildable, at $750PSF TDC means this is a ~$1B total build out.
Hotel--long term obviously, although this is a remote location for the next ten years. There is a 500 room hotel use permitted across Third Street from this site. ADR hasn't accelerated to the point where you are seeing much new product.
Destination--some interesting options, but how much ground rent can be paid?
Office--subject to Prop M, and the Hines/Pelli Transbay project has the potential to tie up all the City's office space entitlements for roughly ten years.
Retail--the old "half a trade area" problem, the other half of the trade area being residents of San Francisco Bay and not huge shoppers.
Condos--the late saviour of the commercial construction market is oversupplied right now. There are several condo sites being quietly offered, and no takers. The fact that this site is groundleased means that condos are not a real option.
Rental housing--obvious use, but can it pay $100K/door? You need $6 PSF rents to do that. You have a few units on Craigslist pushing $5, so this is probably a 4 cap on trended rents.
The site used to be the old H&H Ship Service Company's tank farm, so you don't want to excavate much at all. The Giants want 2000 spaces of ballpark parking--actually not much for a major league park.
Chase costs will be significant--any deal requires approval by the State Lands commission, and amendments by BCDC, but this is a marquee site in one of the world's greatest cities.
Oh ye gods, why do you tempt me so?