Thirty years ago, Valencia Street was a desolate place. Ten years ago, it was a gap-toothed corridor, with isolated pockets of activity and more than a few vacant lots. These days it feels like a rapidly filling-in pencil sketch.
The former parking lot at 299 Valencia (at 14th) is a plywood skeleton that will be 24 condominiums come spring. The former gas station at 899 Valencia (at 20th) was approved on May 26 for 18 condos. The weed-filled lot at the corner of 18th and Valencia is now a gray and yellow condominium complex with a brushed-aluminum keypad entry.
Does this mean that the recession is over, at least for development in the Mission?
No, says Julian Banales of the San Francisco Planning Department. It only looks that way because projects that are being built now were begun several years ago. “Financing is a big deal,” Banales says. “There are so many other projects that aren’t being built because of financing.”
Sean Sullivan, of JS Sullivan Development, seconds the story that financing is still hard to come by. Sullivan is behind the developments at 299 Valencia and one other location, and despite a proven track record in the neighborhood (among other things, he built the wedge-shaped Victorian-style building that replaced the Taco Bell that once notoriously squatted at the intersection of Mission and Valencia), getting loans to build them was not easy.
“The financing just wasn’t there,” he says. His299 Valencia project was approved in 2008, but the loan to build it didn’t go through until 2010. “We got it through the Bank of Marin,” says Sullivan, “on the basis of how that was our fifth project on Valencia.”
Banks still have too many bad construction loans on their books to invest in new ones, he says. Many have shut down their construction lending division entirely. “There’s a lot of land in this city going back to the bank,” says Sullivan. “In SoMa, it’s entire buildings. In the Mission, it’s land. When a project can’t get off the ground, sometimes it’s cheaper just to give it back to the bank.”
According to the Planning Department’s 2010 Housing Inventory Report [PDF], construction in the city is still depressed as a whole. The city approved 1,203 units in 2010, compared to 3,281 in 2007, before the recession hit. Of the new housing units approved in 2010, the Mission represented only a sliver, about 8 percent. Most of the new construction — about 20 percent — went in downtown.
Other developments along Valencia are still in the early stages. An 84-unit structure in a taxicab lot at 490 South Van Ness Avenue (at 16th) is going through the environmental impact review (EIR) stage. The 1501 15th Street project (at South Van Ness), Sullivan’s other development, will go before the Planning Commission in late September or early October. If approved, it will add another 45 units on the site of a former gas station.
The former KFC (and current Spork) at 1050 Valencia Street is also working its way through the planning process. That project, delayed by opposition from the Liberty Hill Neighborhood Association, is considered a sign of the future on Valencia — one in which new developments provide little to no parking.
The Eastern Neighborhoods Plan, approved in 2008, replaced the neighborhood’s parking minimum of one per unit with a parking maximum of one for every three or four units.
The project at 1050 Valencia is also a sign of another potential future, in which the street’s one-story buildings are gradually demolished and replaced with five- or six-story units. The height limit for buildings on Valencia and 16th Street have been set at between five and six stories for decades, but new buildings rarely went above a single story between the 1950s and the 1990s.
The Eastern Neighborhoods Plan [PDF] did not rezone the area around Mission and Valencia between the 16th and 24th street BART stations, but it does envision that area as featuring dense housing, more pedestrian amenities and fewer cars. Plans for 16th Street extend the ground-floor retail and heavy foot traffic that characterizes 16th between Mission and Guerrero eastward all the way through the base of Potrero Hill, to Mission Bay.
The effects of the Eastern Neighborhoods Plan in the Mission aren’t expected to be felt for at least a decade. In some areas, the effect is intended to be no effect — like the zoning changes intended to keep those scraps of the Mission north of 16th Street for industrial use, and free of offices and residential development.
But developers like Sullivan have noticed one change: While the process of going through entitlements, EIRs and parking requirements is less chaotic, planning fees have gone up significantly. “With 299 Valencia, I paid $700,000 in fees before we even broke ground,” says Sullivan. “Before the Eastern Neighborhoods Plan, that would have been $100,000.”
That said, he adds, “It’s the market that determines the cost of a condominium. Not fees.”
Designing a building that fits with the Eastern Neighborhoods Plan hasn’t done anything to reduce the contentiousness of Mission development in general, Sullivan says. “At 1501 15th, I’m not asking for any variances. I’m under the maximum parking limit. And I’m still getting challenged.
“Once you’re building something over 200,000 square feet, anyone is free to challenge anything.”