Organized Labor

By Doug Perry
'Organized Labor'

Residential construction in San Francisco continues to outpace the larger Bay Area. Although sales of new homes in the metropolitan area have declined somewhat from the overheated housing markets of the last five years, San Francisco developers continue to bring large high-density projects to market. Real estate sales have been tempered by rising interest rates on credit cards and mortgages. Rates on 30-year fixed rate mortgages over the last year have risen by roughly 20% nationally and according to Freddie Mac averaged 6.37% in the latest reporting period. The mortgage rates have risen in tandem with the quarterly increases in the rediscount rates by the Federal Reserve Bank over the last two years.

The hot real estate market in San Francisco has been fueled by a shortage of new housing and by changes in consumer preferences by a new generation of homebuyers. Many first-time buyers are opting for condominium units in the central city rather than buying tract homes on the urban fringe. This is not to say that many middle- income workers in San Francisco do not still commute long distances to outlying areas such as Tracy or Fairfield.

Declining public school enrollments in San Francisco attest to the continued movement of child rearing families to less expensive housing in outlying communities. The two to three hour daily commute is the price many people have been willing to pay for cheaper housing.

The acceleration in new residential construction in San Francisco proper is documented by the recent Pipeline Report by the San Francisco Planning Department. The ‘pipeline’ numbers include housing units for which permits have been applied for, approved housing units and housing units under construction. In the fourth quarter of 2005 there were 27, 493 housing units in the pipeline. The housing count does not include an additional 4,500 new units planned for the redevelopment areas such as Hunters Point.

Many of the new projects are concentrated in the eastern South of Market, Bayview, Transbay Terminal, Mission Bay and Rincon Hill neighborhoods. Some 5,600 housing units were approved for construction in 2005, up from 2,034 units in 2004.

Nowhere is the rapid pace of home construction more apparent than in the new downtown area south of Market Street between the Embarcadero and Second Street. Three major high-rise projects have started construction here in the last six months, on a scale that will dwarf even the newer high-density projects. Notwithstanding the increasing number of housing units for which permits were filed for in the last two years, only 1,317 dwelling units were actually completed in 2005, reflecting in part the cumbersome approval process. The recent surge in new housing applications also reflects the rising sales prices of new condominiums, and the recovery from the dot-com recession of 2001. In 2001 developers had sought approvals for only 915 units. The Planning Department must be applauded for it’s general plan revisions for the Rincon Hill neighborhood in 2005, that rezoned many of the underperforming commercial parcels to high density residential. The higher fees for developers are economically feasible and will generate significant funding for public infrastructure. For example, the zoning changes that were approved by the Planning Commission for the 300 Spear and 201 Folsom projects, from Public to RC-4 Residential-Commercial, High Density, will result in the construction of beautifully designed towers in a flagging commercial district, and generate significant ongoing tax revenue for San Francisco.

One Rincon Hill by Urban West Associates

On November 11th Urban West Associates broke ground on the first phase of a 709 unit condominium project near the First Street onramp to the Bay Bridge. The 55-story tower will have unexcelled views of downtown San Francisco and the San Francisco Bay. The project will also include a second 45-story building, 3,200 square feet of convenience retail and 709 parking spaces. The towers will replace the already demolished Bank of America office building and clock tower built in 1955. The new towers will occupy the southeast corner of First and Harrison Streets immediately adjacent to the eastbound onramp to the Bay Bridge.

The completion of the Urban West complex is scheduled for December of 2007. The building will be constructed of reinforced concrete with a dark green glass and aluminum curtain wall with floor to ceiling windows. During the entitlement process Urban West had agreed to contribute $20 million into the mayor’s affordable housing fund and to provide $18 million for community improvements in Rincon Hill and the South of Market, including a new headquarters hall for the Sailors Union of the Pacific, and a neighborhood park at Fremont and Harrison Streets.

300 Spear Street-Tishman Speyer Project

In July of last year Tishman Speyer Properties broke ground on a four-building project with two, high-rise condominium towers at 300 Spear Street. The project will 655 units of housing with 5-levels of underground parking and two high-rise towers; including a 37-story building currently under construction in phase I adjacent to Main Street; and a 42-level high-rise structure adjacent to Spear Street. The project will also contain 8-level and 9-level free- standing buildings.

Tishman will also develop an adjacent, high-rise complex at 201 Folsom Street with 725 units of housing in a similar 4-building configuration.

The Spear Street project is just starting to come out of the ground. Webcor builders is the general contractor on the project and is also doing the concrete work. According to Webcor project manager, Tom Taylor, construction will extend over a 28- month period. Tom mentioned that there had been minor delays when excavators had uncovered a gold- rush era ship, the remains of which were moved to San Francisco’s Maritime Museum. The first phase of the project will include the 37-story tower. He said that thanks to critical path scheduling construction is proceeding on the projected time line. “We recently completed a 6,500 square yard continuous pour for the foundation on Phase I, putting in place a 14’ thick mat base,” he said. Project subcontractors include Ryan Engineering-excavation, Malcolm Drilling-shoring, Viking Well Drilling-dewatering, Creative Masonry, Permasteelisa Cladding Technologies-curtain wall, Aderhold Specialty Company-drywall, D&J Tile Company-ceramic and stone tile, Otis Elevators, Allied Fire Protection-sprinklers, J.W. McClenahan-plumbing, Critchfield Mechanical, Inc.-HVAC and Cupertino Electric. The architects are Arquitectonica of Los Angeles and Heller Manus of San Francisco.

301 Mission Street by Millennium Partners

In August of 2005 Millennium Partners started the site work, including demolition and shoring, for a 60-story residential high rise at 301 Mission Street. ‘Organized Labor’ visited the site last week and talked to Kurt Ricci the project manager. “This will be the first skyscraper to be built in downtown San Francisco in 20 years, Ricci said. “Upon completion it will be the fourth tallest building in the city, after the Bank of America building, the Transamerica Tower and the First Interstate Building.”

The new tower will contain 423 one-three-bedroom units, and top out at 645 feet. The building will also contain 2 below- grade levels for parking. An adjacent 11-story building will also contain condominium units. Webcor Builders, the general contractor, has already cleared 3 low-rise structures that had faced Mission Street between Fremont and Beale Streets. The 58-story condominium tower will rise on the southeast corner of Fremont and Mission immediately opposite the Transbay Terminal. American Piledriving and the members of Local 34 have just begun driving pile. Signed subcontractors include Condon Johnson-shoring, Ryan Engineering, Webcor Concrete, Regional Steel (RPS) for rebar work and post tensioning, Allied Fire Protection-sprinklers, Broadway Mechanical-plumbing, Critchfield Mechanical-HVAC, Rosendin Electric, Mitsubishi-elevators, Olson and Company stairs, Viking Drillers-dewatering, Ferma-demolition, Anning Johnson-drywall, J&J Acoustics, & Enclos Corporation for the exterior glass and aluminum curtain wall.

The $400 million Millennium high-rise will provide construction jobs for our members for the next three years. Project completion is scheduled for February 2009.

Other recently completed large scale residential developments include the 301 First Street project by Crescent Heights Developers which is inthe process of selling 342 new condo units contained in two 20 and 27story buildings. ULLICO by the way provided a good part of the financing for the Crescent Heights project. Other new large scale projects include the 40-story Paramount apartment tower at 680 Mission with 486 units; the Brannon and Delancy Street Apartments with 356 units; Bridge View Towers at 400 Beale with 245 new condos, another ULLICO project; the 240 unit condominium project by Lennar at 200 Brannan; and the Avalon Bay apartments with 226 units at Fremont Street and Harrison Streets.

Also, Bovis Lend Lease, developers of the proposed Cruise Ship Terminal on Piers 30-32 held a grand opening recently for their 22-story condominium tower at 501 Beale Street. The architecturally striking tower contains 136 one, two and three bedroom units. Prices range from $675,000 for one-bedroom units to $3 million for the high-end units. The property had been used as a parking lot and had been owned by the Port of San Francisco. Two additional condo buildings of 11 and 7 stories are also planned on adjacent property.

Other new projects include a very imaginative mixed-use tower by the Transbay Joint Powers Authority that would rise 850’on the north side of Mission Street across from the new transbay terminal. The $4 billion Transbay terminal project is currently undergoing a review by San Francisco officials with project completion possibly by 2013. According to Maria Ayerdi of the Joint Powers Authority, about $1.6 billion in funding has been secured from local state and federal sources. The 40 acre redevelopment area bounded by Mission, Folsom, Second and Main Streets envisions the construction of 6,000 new residential units within the roughly 10 square block area.

In their pipeline report the Planning Department reported that they had approved four other large scale housing projects for Rincon Hill including a 359 unit project at 375 Fremont Street, a 333 unit project at 340 Fremont, a 305 unit project at 45 Lansing and a 273 unit project 34-story building by Tishman at 535 Mission. The original developer for the 535 Mission Street structure was Monahan Pacific. The project was approved by the Planning Commission on September 1, 2005.

The wave of new high density residential construction is providing a good job market for our membership in the construction unions, and has made up for the decline in commercial construction since 2001. Proposals for new office construction however are beginning to surface with the continued fall in office vacancies. The Shorenstein Company announced recently that they would soon begin construction on their already approved 19-story office building at 350 Bush Street in the Financial District.