Monday, October 03, 2005

Wharf makeover could generate $127 million a year

Economic report is a boost to pier project
Wharf makeover could generate $127 million a year

Charlie Goodyear, Chronicle Staff Writer

Thursday, September 29, 2005

Pier 27 is shown at left, and Pier 31 is at right. Mall builder Mills Corp. is proposing a $218 million sports and retail complex on the site. Chronicle file photo, 2001, by Darryl Bush

A controversial sports and retail complex planned for the Embarcadero could provide $127 million of economic activity annually to the city of San Francisco, according to a report released Wednesday by port officials.

The report, required by a city fiscal feasibility law for any project over $25 million in value, makes a strong case for the $218 million development at Piers 27-31 proposed by mall builder Mills Corp.

Port officials say that the base rent to be paid by Mills for the 23-acre site will be higher than what tenants currently pay. Benefits to the city during the construction phase of the project are estimated at $339 million with the creation of more than 3,000 jobs, according to the report.

Mills has agreed to create more than 10 acres of open space as part of the development and will be responsible for maintaining it during the course of its 66-year lease with the Port of San Francisco.

"We feel strongly, as we did when we submitted the project to our commission back in November of last year, that we've negotiated a good project for the Port of San Francisco and the city of San Francisco," said Byron Rhett, the port's director of planning and development. "We've significantly increased the amount of recreation. Will the Board of Supervisors in its deliberations decide it meets their criteria for fiscal feasibility? That, I don't know."

The company's plans call for about 338,000 square feet of recreation space, including a new YMCA, a "sports valley" and a marine sports basin. More than 300,000 square feet will be dedicated to retail, office space and restaurants and cafes.

"You cannot build an affordable recreation project on the San Francisco waterfront without some of these other components," said Mills spokesman David D'Onofrio. "We have minimized them as much as we can. We have done the maximum amount of open space and recreation."

But the company's proposal has raised fears about traffic along the Embarcadero, concerns over whether the complex -- and particularly the YMCA -- will prove to be financially solvent and questions about whether the development is really just a shopping mall in design.

"Fundamentally, the concern is, this appears to be a classic bait and switch by a shopping mall developer dangling the recreation that we want and need as a way to slip in a 45-chain-store mall," said Jon Golinger, director of Citizens to Save the Waterfront, a group that has opposed the project. Golinger contended Wednesday that Mills actually would be paying less in rent during the first few years of the project after receiving rent credits and other subsidies.

Mills faces a political test in the coming months when the Board of Supervisors votes on whether the project's financial numbers add up. If supervisors decide the project is not fiscally feasible, that vote could effectively kill the project by preventing the San Francisco Port Commission from extending Mills' exclusive right to negotiate with the city, set to expire next spring.

Board of Supervisors President Aaron Peskin said Wednesday he was troubled by the fact that the port's fiscal study included no mention of the YMCA, the major recreation portion of the project. The Chronicle reported Wednesday that the YMCA had not raised any of the $30 million needed to fund its facility at Piers 27-31.

"This project was bid out as a recreation project for the people of San Francisco," Peskin said. "What we got was some recreation and a lot of shopping mall and office space. Is the recreation component feasible? There are a lot of questions to answer."

Asked about the political chances for the project, D'Onofrio said: "We've been focused on creating an affordable recreation project down there. We have been meeting with the community. We continue to move forward and make this a great project. If, at the end of the day, the Board of Supervisors wants to deny affordable recreation for residents through this project, that's up to them."

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