Organized Labor

$1.2 Billion Public-Private Investments to Fund Massive Redevelopment

By Paul Burton
contributing writer

The San Francisco Board of Supervisors voted in December to approve a Land Use Plan for the redevelopment of Treasure Island and Buena Vista Island. The plan was endorsed by the San Francisco Building and Construction Trades Council.

he San Francisco Board of Supervisors voted in December to approve a Land Use Plan for the redevelopment of Treasure Island and Buena Vista Island. The plan was endorsed by the San Francisco Building and Construction Trades Council.

Treasure Island will add 13,500 new residents and 6,000 new homes built using green technologies. The 400-acre island will retain 300 acres of open space and parks. A new Ferry terminal is also planned. When completed, the redevelopment of the two islands would be “a leading example of environmentally sensitive and sustainable master planned development.”

New housing would be clustered within a 10-minute walk to the new ferry terminal directly across from the City’s Ferry Building. The aim of the plan is to reduce dependence on cars, and would also upgrade bus service to the islands and add a free intra-island shuttle for residents. Currently, housing is clustered at the northeast corner of Treasure Island.

Treasure Island Community Development’s reuse plan also includes hotels with a spa and conference center and100,000 - 200,000 square feet of retail and commercial space. The Land Use Plan calls for establishing Treasure Island as “a vibrant commercial and visitor destination, including encouraging arts, cultural, entertainment and educational uses, that serve as both an amenity for San Francisco residents and a destination for nonresidents,” as well as creating “… the most intense residential density and the majority of commercial uses focused on the western shore to capitalize on the spectacular views to San Francisco as a public resource.”

The development team, Treasure Island Community Development, LLC, is led by Kenwood Investments, based in San Francisco, and includes local developer Wilson Meany Sullivan, Stockbridge Capital and Lennar Corporation, the Miami-based home builder.

Private and public investment totaling $1.2 billion would fund the redevelopment of the former Navy base, which now has about 2,000 residents, one small store, a public elementary school, and a Labor Department Job Corps program. The City will issue bonds totaling $700 million, while the development team will spend $500 million on the project.

The City would eventually receive a share of the profits on the sale of the new townhouses and condominiums, after the developer realizes a 20 percent profit on their initial investment. The City would also benefit from taxes generated by increased property values. Prices for the condos and townhouses would range from $650,000 to $2 million, with 30 percent required to be affordable housing for sale or for rent. Construction would begin in late 2008 or early 2009, said Jay Wallace of Kenwood Investments. The first phase of construction would be completed by 2013.

Treasure Island is an artificial island built during the New Deal era by the federal Works Progress Administration (WPA). Construction began in February 1936 and was completed in January 1939, originally as the site for the Golden Gate International Exposition. Built using 29 million cubic yards of sand and gravel dredged from the Bay and the Sacramento River delta, Treasure Island is subject to subsidence or liquefaction in the event of an earthquake. Developers will need to seismically retrofit the island itself, with a plan to install 35-foot cement columns that will be driven into the soil around the perimeter of the island. Approximately 259 thousand tons of rock were originally used to create a rock seawall to contain the island.

The island became a Naval Station in 1941, with the U.S. government leasing the island from the City. The island was the home of the Pacific Fleet during World War II. Following World War II, Treasure Island was primarily used as a naval training and administrative center, with approximately 3,000 military and 1,000 civilian personnel working at the naval station. The base was decommissioned in 1993 by the Base Realignment and Closure Commission. The Department of Defense then designated the City and County of San Francisco and the Treasure Island Development Authority as the Local Reuse Authority responsible for the conversion of Treasure Island.

Neighboring Yerba Buena Island will continue to be home to the US Coast Guard Installation, which occupies about one half of the island. The other half will be developed as part of the Treasure Island redevelopment.

The redevelopment plan also requires that the toxic waste and pollutants dumped over the years by the Navy be cleaned-up. The Navy has already spent $120 million on the clean-up of the solvents, paints and heavy metals, with costs to finish the job estimated at between $16 and $40 million more. The Treasure Island Development Authority (TIDA), the redevelopment commission appointed by the Mayor, may take ownership of the land from the Navy by agreeing to pay for and be responsible for the remaining environmental clean-up. TIDA agreed to support the Land Use Plan in October, after a three year process of public input and revisions to initial proposals.

Once the Treasure Island Development Authority (TIDA) works out a deal with the Navy to transfer ownership of the land to TIDA, the deal would be reviewed by the San Francisco Planning Commission/Planning Department, the Board of Supervisors and various State agencies. TIDA is expected to complete negotiations within the next year. The Land Use Plan must also go through a California Environmental Quality Act (CEQA) review for approval of the Environmental Impact Report. TIDA would then enter into agreements regarding environmental remediation with the Navy, the State of California and selected environmental remediation contractors.