Organized Labor

Plans to develop Seawall Lot 337 (SWL 337) south of AT&T Park were narrowed down to two teams by the Port of San Francisco last month. The Port had received four proposals for the 16-acre waterfront site along the south bank of China Basin Channel in Mission Bay in February. The two competing proposals were presented by teams led by the San Francisco Giants, with the Cordish Company and Farallon Capital Management; and Kenwood Investments, with Boston Properties and Wilson Meany Sullivan.

Port Commission President Kimberly Brandon said, “SWL 337 represents an extraordinary opportunity. It is a spectacular setting for public waterfront open space at the gateway to Mission Bay, a transition point between the Embarcadero Promenade to the north, and the Blue Greenway open space network in the Southern Waterfront. Coupled with a broad mix of uses that invites locals and people from outside to work, live and recreate, the Port Commission also is looking to SWL 337 to generate significant revenues to finance shoreline clean-up, open space and historic preservation projects in other locations of the waterfront.”

The Port’s project manager for SWL 337, Phil Williams, said, “The Port is excited about the opportunity to develop the SWL 337 site. We have two very good teams.” He said each of the teams have good labor relations and that they have or will negotiate a Project Labor Agreement.

An eight member SWL 337 advisory panel with expertise in urban design, waterfront open spaces, environmental management, economic development, city planning policy, local community issues, and participatory government reviewed the initial four proposals.

In early April they rated the top two, giving the Kenwood Investments team a slightly higher rating than the SF Giants team.

In their Statement of Developer Qualifications submitted to the Port in February, the Kenwood Investments team said, “Lot 337 will create hundreds of new jobs for San Franciscans, both during the construction phase and the permanent built out phases of the project. We would expect to collaborate with the San Francisco Building and Construction Trades Council and City agencies on hiring issues consistent with applicable City requirements and subject to prevailing wage requirements.”

The Kenwood team also includes Webcor Builders; the Giants’ team recruited local builders Hathaway Dinwiddie and Nibbi Brothers.

The preliminary land use plan proposed by Kenwood includes 1,100 new rental homes in a variety of buildings ranging from high-rise flats, low-rise flats and lofts and townhouses; 400,000 sq ft of offices in two mid-rise towers; shared-use parking garages with 1,500 parking spaces set aside for evening and weekend events at AT&T Park; the Black Rock Arts Foundation and artists’ studio space in Pier 48; retail and restaurant uses facing McCovey Cove and along Third Street; approximately five acres of public open-space including a new park between Piers 48 and 50; rooftop solar and photovoltaic panels over the two parking structures; and wind generators along McCovey Cove. The homes (20 percent of which will be affordable) will be stacked flats at a density of approximately 90-110 homes per acre, some low some high, wrapped around hidden parking structures, according to the developer.

Kenwood’s plan proposed that, “The arts will be our anchor and will be layered throughout our neighborhood. Pier 48 will become the centerpiece of a new working waterfront—only in is millennium it will be a place where art is created and the public is invited to participate. The Black Rock Arts Foundation will be an important collaborator in our project and can play the vital role of working with us in programming Lot 337 for art and artists. We imagine Pier 48, alive with activity, sculptures and painters, musicians and dancers, where large art pieces can be constructed, installations created, and interactive art completed.” Kenwood also envisions using sustainable building practices and highlighting public transportation such as linking SWL 337 to the rest of the City with the new Third Street rail line.

The statement of Qualifications also notes that, “Lot 337 will include a community benefits package that supports the project, the neighborhood and the City. We will partner with the San Francisco Building and Construction Trades Council, the City, and other community organizations to create workplace hiring standards that respect prevailing wage requirements and union hiring policies. It is anticipated that both the heavy infrastructure construction work and the vertical development work will be undertaken by craft unions, who will work with City Departments, like City Build and community organizations, to create real opportunities for San Franciscans. We will work with certified Small Business Enterprises located in San Francisco and the Bay Area to deliver a project that is viable, successful and meaningful. We would expect to establish a program where qualified persons can be referred to craft unions for employment, through existing apprenticeship programs. The final program developed will have benchmarks to establish good faith efforts to meet our commitments.”

San Francisco based Kenwood Investments, LLC is a manager of the Treasure Island redevelopment project, and has worked with Boston Properties, Inc. and Wilson Meany Sullivan on other projects. Wilson Meany Sullivan LLC is a San Francisco based real estate development and investment company that developed the Ferry Building, One Powell, and the Flood Building. Boston Properties, Inc. owns and operates the Embarcadero Center.

The Giants team’s preliminary plan includes 875 homes in a 300-foot high rise, 8,000 square feet of office and parking space, a 5,000-seat music hall, an entertainment district, public parks, and a restored pier. Total development costs are estimated at more than $1 billion. The Giants’ Statement of Qualifications states that, “We have the opportunity to serve as a model community, encouraging the use of public transit, bicycles, and other non-auto modes, while providing a responsible amount of parking to serve the needs of the District, the ballpark, and the surrounding community. We have the opportunity to make advances in sustainable development, achieving the rigorous gold standard of the Leadership in Energy and Environmental Design (LEED) Green Rating System and employing techniques to conserve energy, manage stormwater, reduce carbon emissions and achieve other important environmental objectives.”

The developer team includes Farallon, which owns a significant portion of Mission Bay, and the Cordish Company. Farallon is actively involved in the development of adjacent properties in Mission Bay, including parks and public infrastructure. Their statement touts their experience in the area: “The Giants and Farallon want to build upon and apply our collective knowledge earned through the development of the ballpark and Mission Bay. We also have a strong grasp of the market opportunities that can bring more life and economic vitality to this exciting new part of the City. Together, we will be the visionary, energetic, collaborative partners that the Port will want by its side.”

The Giants team hopes to establish an entertainment district, and is recruiting entertainment-oriented tenants like the House of Blues and Lucky Strike Lanes. “The District will also showcase food, wine, and spirits, featuring a Vintner’s Alley with tasting rooms from wineries around the world, a Spirit Hall for food and beverage expositions, and a food concept presented by Alice Waters and the Chez Panisse Foundation,” the statement says.

Project manager Phil Williams said the next step to move the project forward would be sending a request for proposals to the two finalist teams in late May, with response due in late August of this year. The proposals would then be reviewed by the Port, which would enter into a lease and development agreement with the top team sometime in December or January, 2009. The port hopes to make about $8 million a year by leasing the property. Williams said once the developer is finalized, the process to win regulatory approvals for the waterfront site would take about two years. Construction would begin in 2011, creating hundreds of construction jobs. The entire project will feature about one million square feet of commercial and residential space.