The plan for a massive floating pool on S.F. piers is moving forward, despite big

A rendering of the planned redevelopment of Piers 30-32 in San Francisco, including the proposed swimming pool floating in the bay.
A rendering of the planned redevelopment of Piers 30-32 in San Francisco, including the proposed swimming pool floating in the bay.Strada/TCC

The entitlement process for the planned redevelopment of two aging piers and a nearby parking lot at the San Francisco waterfront into housing and a floating swimming pool in the bay is expected to kick off with a public hearing next month, following nearly three years of behind-the-scenes efforts to advance the plan amid growing economic turmoil. 

In January, development partners Strada Investment Group and Trammell Crow Co. are slated to seek the Port Commission’s approval of a term sheet, or a nonbinding agreement that lays out the basic terms and conditions and provides the framework for a future disposition and development agreement for the project, according to a memo issued by the commission’s staff this week.

And while the execution of this first transaction document represents a milestone in terms of advancing the project — which calls for transforming Piers 30-32 and Seawall Lot 330 into a swimming pool in the bay surrounded by office and retail space and hundreds of new homes — its developers are still facing a roughly $125 million financing gap, per the port’s memo. 

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The gap is a result of swelling project costs: The cost of the project’s infrastructure work alone has increased by over $90 million over the past three years. 

When the developers last appeared in front of the commission in early 2021 and were granted exclusive rights to negotiate their project with the Port of San Francisco, which owns the properties, infrastructure and required “resilience improvements” were expected to cost $369 million. 

The Port says that price tag has grown to about $460 million, which does not include vertical development. It is now working with the project’s developers to create special tax districts in the project area as one means to pay for construction. 

A rendering of the planned redevelopment of Piers 30-32 in San Francisco. The project is moving forward despite a significant funding gap.

A rendering of the planned redevelopment of Piers 30-32 in San Francisco. The project is moving forward despite a significant funding gap.

Strada/TCC

The port selected Strada and Trammell Crow in 2020 through a competitive bid process to redevelop Pier 30-32 and Seawall Lot 330 — the latter is currently home to a navigation center for homeless people. A stipulation of the project was that the teams must fund sea level rise and seismic work at the piers and seawall and restore a deep water berth, located at the project site, for maritime uses. 

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The project’s design has been heavily modified in recent years in order to achieve compliance with state regulations, which may also have caused the financing gap to widen. The original plan called for an 850-unit residential complex on Seawall Lot 330 and the demolition of Piers 30-32. The developers wanted to rebuild the piers as two smaller finger piers at roughly half the size, with about 375,000 square feet of office space and 30,000 square feet of retail space. 

The project’s residential portion is envisioned to help subsidize the costs of the other components. Taken together, the infrastructure and resiliency work plus vertical construction has been estimated to cost about $1.2 billion. But, pushback from neighbors of the proposed residential complex resulted in the developers shaving 137 units off of its design, which earlier this year was reconfigured as a single, 713-unit tower that would rise 230 feet.

But even that design is not yet certain: Questions remain regarding whether the developers will be able to use the state density bonus law, which allows certain developments to exceed local height and bulk limits in exchange for an increase in the percentage of affordable housing, to achieve the building’s planned height, which exceeds local height limits. 

According to the port’s memo, the development team has “also designed a building with a maximum height of 105 feet, which would decrease the number of units and potentially negatively impact the funding gap and project affordability.” 

San Francisco’s Pier 30, as seen in 2020 when it was used as a COVID-19 testing site.

San Francisco’s Pier 30, as seen in 2020 when it was used as a COVID-19 testing site.

Noah Berger/Special to The Chronicle

Moreover, questions by state regulators over whether the proposed office space was consistent with the public trust doctrine — which governs the use of California’s sovereign waterfront properties and requires that they benefit the public and encourage maritime use — forced a redesign of the original plan for the piers as well.

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The issue sparked new legislation proposed by Sen. Scott Wiener, SB273, which essentially determined that the balance of the trust benefits that would be generated by the project justify the authorization to provide some general office space on the piers to help pay for those benefits.

In other words, the office space is designed to fund sea level rise and seismic work at the piers.

The legislation was signed into law in October, but even before then, the team scratched the idea of rebuilding both piers as office structures and now intends to rebuild one as a smaller pier with a single bay swimming pool equipped with a kayak launch and storage. The project would still include 375,000 square feet of office space, as well as a 70,000-square-foot retail market. A standalone aquatic recreation facility would serve as a gateway between the Embarcadero and the swimming pool.

Strada did not immediately respond to a request for comment Monday on its proposed term sheet for the project.

The term sheet is the next “performance benchmark” for the developers, and if the commission approves it next month, it would be followed by a “fiscal feasibility analysis,” the port said in its memo. The Board of Supervisors would be required to approve both documents, after which environmental review of the project may begin.

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Per the draft document, the project will be constructed in three phases and involve a ground lease between the port and developer, lasting 66 years for the piers and 99 years for Seawall Lot 330.The project’s performance schedule will also be laid out in the term sheet, but is currently still being negotiated.

On the financing front, the project will rely on a combination of public and private sources for the demolition and reconstruction of the piers and the required seawall improvements.

More specifically, the term sheet proposes forming both an Infrastructure Financing District around the project area to capture future tax increment and a Community Facilities District to levy special taxes on the buildings.

“Changes in market factors could substantially improve the financial feasibility of the Project, potentially fully eliminating this funding gap,” the port said in its memo, regarding the $125 million in needed financing. “If market factors do not improve, the Developer and Port staff will work to identify and secure sources to obtain at least this amount of funds to ensure the financial success of all phases of the Project.

“While the developer and staff have not identified the exact mix of funds to close the $125 million infrastructure feasibility gap at this time, the team feels confident it can secure these funds well ahead of the start of the Project,” the memo said.

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Other projects proposed along the waterfront in recent years, like Pacific Waterfront Partners’ redevelopment of nearby Piers 38-40 and the large-scale Pier 70 redevelopment project by Brookfield Properties, are also facing financial challenges due to high interest rates, significant demand for office and residential real estate in San Francisco, and rising construction costs.

Reach Laura Waxmann: laura.waxmann@sfchronicle.com



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