Former 'Mircacle Mile' stretch between 19th and 20th could have a new infill project in coming years.

The quirky wedge of Mission Street with vibrant signs screaming “THRIFT” and “PAWNBROKERS MONEY LOANED” may become decidedly blander in the coming years. 

The Kaplan Family Trust, the owners of 2316-2326 Mission St. — which includes Mission Thrift and the shuttered Mission Jewelry and Loan — has submitted a preliminary application to build a five-story apartment building on the site. It would include 21 market-rate units and three affordable ones, along with 4,840 square feet of commercial space. 

The Kaplans are but one of many San Francisco property owners hopping into the risky housing development business for the very first time. The payoff, say local investors, can be huge — as long as they unload the property after winning all of the planning approvals — a process known as getting a site “entitled” to build. 

“A reason so many families are doing this is, there’s a tremendous upside in getting approval for building” new projects on under-utilized parcels, said Michael Wornick, a local real estate investor.

He estimates the Kaplan Family could double the value of its property, which Zillow currently estimates to be worth $2.3 million, with a 24-unit entitlement. 

But, he said, actually doing the construction — which requires immense up-front capital and expertise — is a completely different endeavor. 

Getting entitlements vs. actually doing the construction, he said, is “the difference between the ability to diagnose someone [vs.] doing surgery.”

Likewise, said a local market source, “Even experienced developers are gun-shy to build, because construction costs are so high.” 

Members of the Kaplan family and their representatives did not respond to requests for comment, but documents they submitted to the Planning Department make clear their intention to at least shoot for entitlement. It’s unclear if they will then sell the property, or try to develop it themselves.  

Other examples of the “newbie developer” phenomenon in the Mission District abound. 

Hawk Lou, the embattled owner of the empty lot at 22nd and Mission, where a fire ravaged his three-story building in 2015, submitted preliminary plans last October for a nine-story, 129-unit building. He told Mission Local at the time he was open to both courses of action: selling the entitled land or taking out a construction loan and building it himself. 

“Anything can happen,” he said, though he received immediate and intense pushback from activists, who want his plans to include a “right to return” for more than 50 tenants displaced by the blaze. In the ensuing months, he has not moved forward his plans for development. 

Plans for empty lot at 22nd and Mission. Plans drafted by Ian Birchall and Associates.

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The Valencia Street corridor currently has 51 units in the pipeline across three separate sites, all being pushed forward by longtime landowners turned amateur developers, sold by realtors delray beach. The largest, at 1021 Valencia St. near 21st Street, is being developed by the grandchildren of Norman Elkington, who bought land in the 1930s. The heirs have proposed a six-story building with 25 units that would replace the S.F. Autoworks car garage. The family did not return a request for comment. 

Two blocks north at 811 Valencia St., Eugene Power, the owner of the Phoenix Irish Pub, plans to raze the building he’s owned since 2008 and erect a six-story building with 18 luxury SRO units. Meanwhile, Ken Leung, who both opened the U-Save Hardware and bought the building at 1146 Valencia St. in 1987, is attempting a five-story, eight-unit building on the lot. 

“Today it’s so different to be an owner-operator,” said Phil Lesser, a longtime Mission District landowner and permit expeditor. Lesser said older people and their heirs are “no longer operators and are looking at the next stage.” 

“One of the exit strategies is seeking entitlements,” he added.  

Lesser helped the owners of Big House Inc. wholesale store, at 2632 Mission St., earn entitlements for a five-story, 16-unit building. The property is currently a vacant lot, as the previous building was ravaged by a fire in 2014 and subsequently demolished.  

“The logical thing to do if you’re not utilizing the property for your business — and how to maximize the value of the property — is, in some cases, getting entitlements and doing something different,” Lesser said. 

Two weeks ago, the Muffareh family submitted preliminary plans for its property at 3260 26th St. at Shotwell, currently the site of B&W Automotive Service Center. The family is seeking to entitle the property for a four-story, 22-unit building with ground-floor commercial space. Members of the family did not return requests for comment. 

Plans for 3260 26th St., being developed by the Muffareh family.

Even getting entitlements, however, can be brutal — and long-time owners often discover that being local does not always make the challenges easier. 

The Goode family has owned a 34,598-square-foot parcel near Potrero Del Sol Park for several generations. Although Christopher Goode, the family representative, told community members “we’re not developers,” nearly 100 nearby residents expressed overwhelming discontent toward his plans for a 205-unit project at 1458 San Bruno Ave. at a meeting earlier this month.

Because of the project’s scale and lack of affordability, community members worried that the property would exacerbate gentrification in the neighborhood. 

The property used to be home to the artist community and punk-rock venue called The Farm. But that was disbanded in 1987, and family has wanted to do something new with the land — currently the site of warehouses being used for creative endeavors. 

Goode said his family decided to build housing because it’s “important,” but said other family members who co-own the site want to “maximize their profits.” It’s unclear what Goode will do. He may well build it himself — if it gets approved. “I want to build cheap and rent cheap,” he told his audience. 

But experience indicates that sometimes landowners can and will say anything at an early stage. 

Take the case of Susan and Dennis Ring, owners of the now-shuttered Elbo Room, who spent some four years entitling their land at 647 Valencia St. for a five-story condo project. The couple told community members in 2014 that they would build the project and “spend the rest of their days” there. Once the project received its entitlements, they sold the property for $4.05 million and are spending the rest of their days elsewhere. 

Chris Goode (left), Bob Baum, and Marilyn Goode.

The same went for Robert Tillman, who dubbed himself a “newbie developer” and spent nearly five years entitling his property, a laundromat at Mission and 26th streets, a saga that ended last October. After winning city approvals to build 75 units, he quickly sold off the property in April for $13.5 million. 

But Lesser said that not all properties may be suitable for these so-called “infill” projects. For example, the Kaplans’ property at 19th and Mission is listed as having a “Class A” historical status, which means it must undergo an intense environmental evaluation before being approved for demolition, according to Gina Simi, a spokeswoman with the San Francisco Planning Department. 

“It’s not completely dead on arrival, but a major hurdle,” Lesser said of the Kaplans’ plans. 

“Good luck.”  

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Julian grew up in the East Bay and moved to San Francisco in 2014. Before joining Mission Local, he wrote for the East Bay Express, the SF Bay Guardian, and the San Francisco Business Times.

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14 Comments

  1. We need a moratorium on all market-rate development until the housing crisis is solved. Gentrification bombs are making everything worse.

    1. >We need a moratorium on all market-rate development until the housing crisis is solved.

      That is exactly how you get a housing crisis, build less housing when more people want to live here.

      If there is only one banana for sale, do you think the rich man or the poor man will get it? Why would it be different for housing. The rich will always be able to afford to live here, more housing makes more room for everyone else

      Besides who is going to pay for this affordable housing? The funds for affordable housing projects come from fees are market rate housing.

      1. Real estate prices move on the margins. Building housing that is and always will be unaffordable not only does not lower prices for down-market segments, but the new higher local comp becomes the new benchmark that all local sellers hitch their wagon to. The affordable-housing crisis was exacerbated by building predominantly into the high-end segments. The15% affordability “requirement” doesn’t begin to balance out the upward force that building new “market rate” units puts on prices across all segments.

        1. >Building housing that is and always will be unaffordable

          What does that mean unaffordable? Someone can afford it, they are selling. Or if nobody can (i.e. they aren’t selling), then they are going to lower the price (resulting in lower local comps) until someone can afford it.

          They only way to drive down the price of anything is increase the supply or reduce the demand. We can either build more make people not want to live in an insanely beautiful, temperate job growth center.

          I would rather have the wealthy competing for top floor penthouses with amenities then two story Victorians in the mission.

  2. Whatever else you want to say about Robert Tillman, he was always extremely clear—even in comments on this here website—that he would put his property up for sale as soon as he entitled it. So it’s not really fair to compare him to the Rings, who did say one thing and then do another.

  3. It absolutely makes sense why the entitlement stage would occur with long time owners. Most probably have extremely low carrying costs and can afford to wait around for the results of the long and uncertain permitting process. These longtime owners only have upside. But pity the poor developer who overbids on a developable lot and then is guaranteed a loss at the planning stage. So it is more useful if the old owners resolve uncertainty, and capture the value from doing so.

    And really, would anyone feel differently about the development if one single developer did all the stages?

  4. Great, raze Mission Street and turn it into a bunch of shitty modern condos. What the f is wrong with people? Do you honestly think 10 or 20 blocks of Vida, or the condos on 19th and Valencia would make this neighborhood a better place to live?

    1. Should we make sure that every thrift store and pawn shop stays because that’s the kind of business that supports a vibrant neighborhood? We can talk about how the shells of old movie theaters contribute to the Mission neighborhood if you don’t want to defend pawn shops.

      1. From my perspective, the closing of Thrift town, and Mission thrift were huge losses for the Mission. Those businesses (esp. Thrift town) served local artists, and working people back when there was a large community of artists and working class people living here. And it does bother me that those stores went out of business when there are 50 vacant storefronts in the 11 blocks between Duboce and Caesar Chavez. But honestly, my point is more about the character, and the long term health of the Mission. When developers tore down the Fillmore district, it had far reaching effects on San Francisco culturally and in terms of race relations. It destroyed the Harlem of the West, where Duke Ellington and Ella Fitzgerald played when they were in town. It destroyed Jazz and Blues in SF, it began the exile of African American culture from SF, it took away peoples homes, and the places they gathered–to replace it with what? A place devoid of character, art, and music. Likewise in the late 60s and early 70s developers wanted to tear down the Haight to build high rises and a highway. Fortunately activists such as the HANC fought hard to protect the Haight. Whatever you may think, for people who live in the Mission, it is a place full of culture: Murals, Salsa Bands, Art Galleries, parades, theatres, and part of that culture is the old buildings built a hundred years ago, the Victorians, the storefronts. The culture cannot survive being redeveloped into a bunch of condos. Sorry, that’s just reality, and we know it because we know history. I mean would we tear down Montmarte and Yanaka, Greenwich Village, and North Beach? Unfettered capitalism would say yes, because without question a skyscraper or a high rise in any of those places is worth more than a cafe with an apartment above it. But people in the Mission resist the logic of unfettered capitalism, because we value our neighborhood. Gentrification is absolutely a challenge, but it is not solved by giving up our neighborhood to developers.

        1. fiddlemike, I would suggest your beef is with the law vs. developers. Developers can only build if the law allows it.

          What law would you advocate we put into effect to get your desired result? Do you think the Board of supervisors or the SF electorate will vote for it?

          Don’t hate the player, hate the game.

        2. I’ll hunt and peck your reply. The Haight is dying – businesses are leaving almost every week. The Mission is dying – businesses are leaving every week. What do you have to offer to “keep” the arts community in place? Pawn shops and thrift stores?

          Take a look at the photo at the top of this article. How much housing do you see in that photo of Mission Street? The photo is a perfect example of the housing problem in San Francisco – major transit and no housing.

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