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January 24, 2019

A Bright Future for San Francisco’s Bayshore

San Francisco’s downtown core has grabbed many headlines over the last few years due to ambitious development projects that include the Central SOMA plan, the Transbay Terminal Redevelopment, and the Salesforce Tower. Upon completion these projects will add millions of square feet of housing, retail, and office space. Yet, the most ambitious redevelopment in the city has been underway for over a decade along San Francisco’s Bayshore, a stretch of the city that is often overlooked. The Bayshore area runs along the Eastern shore of San Francisco stretching from Mission Bay in the North to Candlestick Point in the South, and was the industrial base of the city from the late 1800’s through World War II. The closure of the Naval Base in Hunters Point following the end of World War II, along with the transition of the city as a whole from industrial port city to a more service oriented tourist destination left this area with a lack of employment opportunities. Furthermore, radioactive waste left over from the Navy and the lack of transport connections to the city’s downtown core were large disincentives for development. However, thanks to radiological remediation completed in 2017, new transportation projects, and the city’s commitment to investing in the area, this often overlooked part of the city is making a major come back.

Since the San Francisco Giants relocated from Candlestick Park in the Bayview district to AT&T Park in China Basin, the area has seen a complete revival from being mostly vacant and heavily industrial, to a destination for high end restaurants, hotels, and affluent multifamily property in the surrounding area. The major league ball club was awarded a 99-year ground lease by the Port of San Francisco for the Mission Rock area, and in September announced that they would be partnering with Tishman Speyer to develop the 28-acre site across from McCovey Cove into a mixed use neighborhood. This project will bring 1,400 residential units, 250,000 s.f. of retail space, and 1.4 million s.f. of office space to the Mission Bay submarket of San Francisco. Additionally, the project also plans to rehabilitate Pier 48, build a pedestrian trail connection from Embarcadero to Hunters Point, a new ferry terminal that will service both tourists and commuters, as well as an 18,000-seat stadium known as the Chase Center that the Golden State Warriors will begin playing in at the beginning of the 2019-2020 season. The Giants are not the only ones spearheading better transportation access to this area as the city is less than a year away from completing the Central Subway Project. This project will extend the T-line Muni 1.7 miles from the station at 4th and King Street into Chinatown, which will also come with four new stops.

Further south, the Central Area Waterfront Plan promises to completely transform the eastern waterfront areas south of Mission Bay and North of the Islais Creek Channel. The Dogpatch neighborhood redevelopment has already seen a lot of successful multifamily and mixed use development since 2008. The plans for further development of the entire area are much more ambitious by refocusing much of the property away from heavy industrial to more mixed use. The Potrero Power Plant that was decommissioned in January of 2011, was bought by Associate Capital (headed by former E-Bay CEO Meg Whitman) in 2016 and is in the process of redevelopment. While the iconic smokestack of the power station will be preserved, the rest of the site will be demolished to make room for 2,700 residential units, a 220-room hotel, 600,000 square feet of office space, 645,000 square feet of laboratory space, 107,000 square feet of retail shops, and over six acres of open space that will feature both active and passive recreation. Additionally, the plans call for 100,000 square feet of community facilities and 925,000 square feet of parking. Right next door, the redevelopment of Pier 70 began last year. This redevelopment plan will incorporate the already active ship repair dry docks currently operated by BAE Systems into the broad redevelopment of the entire site. The first phase will bring 665 residential units, over 1 million square feet of commercial uses, and slipways along the waterfront. The commercial component will include the redevelopment of Building 12 into a 160,000 square foot makers’ hall that will make space for small-scale manufacturers and artisans in the upper levels, and a ground floor retail level Made at Pier 70 store. In the next two phases, the master developer Forest City, plans to construct a waterfront terrace, waterfront promenade, the rest of the 1,150-2,150 total residential units planned, and renovate more historic buildings for commercial or community use.

Bayview Hunters Point and Candlestick Point make up the southern part of the Bayshore area and are both undergoing major transformations. For many years this area has had depressed home values, commercial growth, and employment opportunities due to the loss of the Naval yard following the end of World War II that caused many related industries to relocate and leave over hazardous toxins. In the summer of 2017, after a 2011 scandal threw the soil remediation efforts into doubt, the Navy and city government has determined the area is safe to develop. The smaller portion of the area that is covered by the first phase of the project has been underway since 2014, and will deliver roughly 1,600 homes. The second phase of the project covers the remaining portion of the Hunters Point Shipyard plus all of Candlestick Point Shipyard, and is far more ambitious than the first phase. While original plans included a new stadium for the 49ers, their move to Santa Clara in 2014 has opened up a lot more space for residential and commercial uses. Since the 49ers relocated, the Candlestick Point area is being reimagined as a large mixed use area that will feature 337.7 acres of public park and open space improvements, 10,672 new homes, over 1 million square feet of total retail, 100,000 square feet of community use space, 255,000 square feet of artist space, 4,316,000 square feet of R&D and office space, 270,000 square feet of hotel space, a 300 slip marina and water taxi facility, as well as a 75,000 square feet performance/event center. Lennar and 5 Point Holdings are partners on the project, and have signed on to repair and upgrade many of the historical sites, including rebuilding the Alice Griffith public housing development.

It is no secret that the Bayshore area stretching from Mission Bay to Candlestick Point has been isolated from the rest of San Francisco in terms of both transportation and economic growth. However, thanks to efforts started nearly two decades ago, this is changing rapidly. On the transportation side the Central Subway Project will be completed in late 2019, with several ferry terminals and water taxis to be built from Mission Bay to Hunters Point Shipyard over the next two decades. On the economic side, large developments that have recently been completed are driving more investment into the area with per square foot sales prices jumping almost 200% in the last decade for the Hunters Point and India Basin submarkets. Furthermore the Mission Bay/China Basin submarket saw average direct rental rates jump 14.3% higher from the second quarter to the third quarter of 2018. With much more development down the pipeline, this often forgotten part of San Francisco is poised to become the fastest growing part of the city for many years to come.

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