Community groups make play for coveted 16th and Mission site
Maximus Real Estate Partners, the developer that for nearly seven years has endeavored to build a 331-unit project 16th and Mission derided by opponents as “the Monster in the Mission,” has put the property up for sale. And now a group of community organizations say they’re bidding to purchase it.
“The Plaza 16 stands victorious in its fight against the Monster in the Mission,” said Chirag Bhakta of the Plaza 16 Coalition, a consortium of activists and community organizations who have long opposed Maximus’ project.
On Monday, he was joined with other members of the coalition at Mission Housing Development Corp.’s office to make the announcement.“The victory sends a clear message that projects of this magnitude that don’t meet community needs are not acceptable and will meet opposition,” added Roberto Alfaro of the coalition.
This means the project that Maximus first pitched in 2013 is effectively dead. The property is now up for grabs — and Mission Housing, a nonprofit developer and Plaza 16 member, confirmed that, three weeks ago, it sent a letter of intent to unspecified Maximus investors to purchase the property. The would-be purchase price is in the ballpark of the $41.8 million Maximus paid for the site four years ago.
In marketing materials, Colliers International is billing the property as a “large development opportunity” in the “heart of the Mission,” with “significant surrounding office tenants,” such as Airbnb, Uber, and Pinterest. The 58,000 square-foot property, it says, “is vacant with no leases encumbering the development opportunity” — the Walgreens on-site shuttered in December.
But Plaza 16, which has long touted its own plans to develop the property into 100 percent affordable housing, said it is moving quickly to secure funding. Maria Zamudio of Plaza 16 said that, even as the coalition makes a bid for the land, a community planning process will commence to formulate plans for their project, which they have dubbed “the Marvel in the Mission.” Right now, that project is “a vision — it’s an aspiration of what we want,” Zamudio said.
The tale of 1979 Mission St. is, in so many ways, the Mission District’s ur-development battle, with strange twists and turns befitting an issue only this supercharged and contentious.
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Maximus Real Estate partners first submitted plans to build in October 2013, drawing swift and immediate community ire. At that point, Maximus hadn’t even purchased the property, and wouldn’t for another three years thanks to a lengthy legal battle with the Jang family, which had owned the land for decades.
Maximus ultimately bought the parcel in June 2016, for just shy of $42 million. Around the same time, Maximus began funneling money into a lobbying entity known as Mission For All, hiring as consultants Mission figures Larry Del Carlo and Gene Royale to garner support for the project.
First came the “I’m Not a Monster” BART advertisements (a teacher claimed she was tricked into being featured in one). And next came the revelations that the developer was paying San Francisco natives to rally and support for the project.
This campaign, derided as crass astroturfing by project opponents, neither placated them nor ingratiated the developer with city officials.
At a raucous February 2019 Planning Commission meeting held in the packed auditorium at Mission High School, developer representatives presented a community benefits package that saw the developer buying and granting the city two entitled properties in the Mission.
But, continuing a longstanding pattern, both city officials and street activists were annoyed by Maximus’ overtures — their offer would have involved giving the city land it did not own, and would have also not been financially viable for the city. In an era when construction costs, not land costs, are the hurdle toward development, Maximus’ offer would’ve given the city land it could not have afforded to develop. It was a non-starter. As was, it turns out, Maximus’ project.
Of note, that February 2019 meeting was delayed after Mission High School’s principal initially canceled it; he told Mission Local that Maximus representatives at first misrepresenting themselves as members of the Planning Commission phoned him and warned of “disruptions.”
Supervisor Hillary Ronen told Mission Local in 2019 that, during a meeting with Rosania, Maximus’ self-described “lead visionary” told her that if his company and the city couldn’t work out a deal, he’d take his argument to the voters via a ballot measure. That apparently did not materialize, and instead the developer has opted to sell.
The timeline and rationale for Maximus’ decision to sell is not yet clear. The company has not yet responded to a request for comment.
Regardless, on Monday, sitting in a conference room at Mission Housing Development Corp.’s offices on Valencia Street, the relief was palpable as the organizers looked ahead. “So much about organizing work is about making the impossible possible,” Zamudio said, noting that many times during their organizing the coalition had been advised to compromise — but didn’t.
“I’m incredibly happy and full of joy in this moment because our community has been committed to this fight for a very long time — even when we felt it wasn’t possible to win,” said Olinda Orellana, of Faith in Action Bay Area. “But we kept going and we kept fighting and we did make it possible, and we are celebrating victory.”
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I really wonder, affordable housing, what does that really mean? Does that mean actual low-income? Subsidized? A lot of affordable housing, is not that affordable for very low income persons
We need to build more guillotines.
All over San Francisco there are building cranes, and construction worker pickup trucks, we have been building. But if we continue to allow obscene Gini coefficients, and wealth hoarding we will never be right.
There are multiple factors here leading to the ruin of the deal. You have a developer using shady tactics to try and get the deal passed. Then you have groups who are completely unwilling to make reasonable compromises to get a property built with a significant number of affordable units. That is where we are today.
The housing crisis started over two decades ago and has gotten exponentially worse due to the City’s fear of gentrification and stifling almost all new construction for so long. Guess what, when less housing gets built, the existing stock becomes more expensive thru demand. Then throw in the tech explosion which magnified the lack of housing and created the convenient “enemy” to demonize.
I sincerely hope the coalitions can get the property they dream of built. The pragmatist in me thinks it will never happen. The economics of development and construction require more than I honestly think they can accomplish. It will devolve into in-fighting and nothing will get built for anyone.
I favor the density bonus rules because the city has become a joke in it’s attempt to fight something that has already occurred, gentrification. There is no going back now. Until we relax height restrictions enough to allow even well meaning developers to make a profit AND provide a significant percentage of affordable housing, nothing will get better. We will continue to see the neighborhood broken apart one smaller parcel at a time until it no longer exists. Then the activists will have nothing to fight for.
The all or nothing approach from both sides continues to doom us all to a lack of options.
I find it interesting that many assert these wealthy people buying here have no preference of what kind of home they live in. You guys insist that if we do not build more market rate condos everyone will be happy in a remodeled 100 year old building. The new condos and market rentals offer all sorts of perks and services not available in small remodeled 2 flat. Some want single family in suburb like setting, others prefer high rise amenities. Investors buy it all.
Real estate is about three things: location, location, location. A crappy gym in the building doesn’t make much difference. If you can’t live in a new unit on 16th & Mission, you’re not much less happy in a remodeled one a few blocks over.
I pass by this 12 unit building at 3301 Cesar Chavez daily.
Sold in 2017 for $1.4 million. They began massive work before all tenants moved out. Were those tenants bought out? Most windows were removed & boarded up, while one top floor window with lace curtains stayed. I pictured a little old lady, finally driven away by the construction.
TWELVE units now going on the market, each for $1.12 million. The insides were gutted, no smidgen of period detail remains.
By the way, the view out the front includes the gas station at Cesar Chavez & South Van Ness,the former MacMillan Electric/Navigation Center, & an Auto Zone.
Better to build on abandoned/blighted sites like 16th & Mission, than evict/displace people in these old multi-unit buildings.
Si se Puede!!! No Monstro en La Mision! And to all of you gentrifying gremlins, FUERA!
beme. I hate to break it to you but you likely won’t be here for many more years with that inability to adapt.
New housing > dilapidated single family homes and empty store fronts
So now that there will be fewer units of housing for everyone (both BMR and market rate units), people looking for housing will continue to buy up rental occupied Edwardian and Victorian “old stock” housing and move in via Buyout or Ellis. At $600K per unit (about 60% the price of a new construction “affordable” unit) here’s one right here that’s ripe for the picking: https://www.redfin.com/CA/San-Francisco/3962-18th-St-94114/home/1335032
It seems like all the obstructionists are doing is killing new building projects, which leads to higher property values, and even more displacement.
One might think that the low price per unit is a reflection of how the market views the value of the building given the myriad constraints on purchasing and maximizing the value of occupied rent controlled units. These will not convert to condo for at least 20 years. Who wants to take that risk of a hassles of a TIC for that long after an eviction?
Lots of owner occupied TIC conversions in the city. This paper publishes the tragic stories of the tenants who get pushed out with one as recently as ealier this month. Even our own planning commissioner Dennis Richards engages in this type of title conversion. Your ignorance of the facts suggests you don’t know much about the housing issues in San Francisco.
7 years argument yielding ZERO new dwellings for San Fran. In a city where 270,000 new jobs ( 2009 – 19 ) have been accompanied by a meager 33,000 new dwellings ( 2009 – 19 planning dept data on new dwelling constuction yields ratio of 8 to 1 , jobs to housing) what about resolving the arguments and building ALL of the project developers properties as fast as possible? Market rate at 1979 Mission – YES build it. Affordable rate at 2675 Folsom – YES build it . Affordable rate at 2918 Mission – YES build it. PS the new book “Golden Gates” is a great read for anyone concerned by lack of housing.
A developer was going to add hundreds of housing units right above a mass-transit station in the middle of San Francisco. But yea, stopping this is great for the city! Way to go, ‘community’!
All racial biases (and that is what we are dealing with here) have no place in official policy or community practices.
Good job, what a victory! You just killed 46 affordable units. And market rate units buyers are going to buy old victorians and evict their long term tenants.
Serge gets it
That is exactly what is happening over and over again. That is true gentrification. These new projects where not one housing unit ever existed absorb the demand for those buyers who will otherwise take on the risk of buying and Ellis Act evicting occupants. The dissenters to these projects are exacerbating the problem they seek to resolve.
Yep. Well-meaning intentions, but literally shooting themselves in the foot. It’s sad.
Maybe the only upside is that with enough of this, we eventually get to a state where sufficient people have been forced out so that morons like Hillary Ronen are voted out of office and sensible housing policy can finally be implemented. Here sensible means that (A) the remaining long-time residents can stay here and (B) new residents can be welcomed to the mission.
Don’t get too excited. Latinos are not the plurality ethnic group in the Mission (that would be non-hispanic whites) and are closer in proportion to Asians in 3rd place than to 1st place, yet still have a death grip on its politics as a voting bloc.
I believe the final offer was for over 300 affordable units across donated parcels, though the opposition claimed the developer would not make good on the promise.
Interesting strategy. Oppose the project, bring it to its knees, then buy it. I’ll have to remember that one.
This looks like the place to put another navigation center or service center for people who were previously taken care of across the street. Why wait to use the empty space that already has utility services and could be used on at least a temporary basis by the community that is serving the displaced people in the Mission. There are a few milling about there all the time. Maye open up a pubic shower and laundry facility. Lots of ways to use the space on a temporary basis that would the neighbors and the the neighborhood.
Sure sure, except it is privately owned.
Isn’t it worth noting that Larry Del Carlo was a paid consultant of Maximus, but is now at the helm of Mission Housing? Can you do some research into how this happened?
Larry Del Carlo is the former head of Mission Housing. He is not presently involved.
A few thoughts:
1) What a shame. We are in a housing crisis and 300+ homes would have been an important addition.
2) What’s the plan now – will a non-profit actually be able to buy this?
3) It’s ridiculous to call this “monster in the mission”. It’s a 10 story building right on top of BART. As someone who used to live in other major cities, most people wouldn’t bat an eye at this.
Jim, we’re not in a housing crisis.
We’re in an *affordable* housing crisis. Despite the best efforts of the developer front groups, simply building more $3500 one-bedroom apartments will not get us out of the affordability problem.
If 300 units of affordable housing had been proposed there, it would already be occupied by now.
1. You should consider taking an economics course first, so that your understand when supply doesn’t meet demand, prices increase When a market is never at equilibrium, there is a crisis.
2. The second thing you might consider is that as the article states, the city doesn’t have the money to develop the property for 100% affordable housing. So how would a developer? It would require tax credits or bond financing to offset the purchase price for the land. In five years, there will be nothing new built there because these basic facts are not understood by organizers who have no willingness to compromise. ..as the article also states.
The econ 101 YIMBY koan can be demolished thusly: Housing prices under sustained hyper-demand can no more be pushed down by adding supply than you can ever cool a bucket of hot water in a hot environment a few drops of cold water at a time.
Lenders in the US will not lend into a falling market where market price at sales time threatens to be less than market price at approvals time..
These are the same problem, and your distinction isn’t particularly meaningful.
The Supply and Demand issue is very different from the ability to pencil out construction. In this case a blend of affordable and market rate housing pencils out. 100% affordable doesn’t unless there is government subsidy. The land basis is too expensive to allow rents well below market.
My comments regarding supply and demand illustrate why we are in a supply crisis which Cynthia thinks only applies to affordable units.
Every non-subsidized “luxury” unit that gets built, is one less opportunity for wealthier folks to displace the less well-off, and reduces the need for subsidized housing.
Further, we get the public benefit for free in this case, whereas it costs the city nearly $1M per unit for affordable housing.
More reading if you’re interested this perspective:
There is no evidence that new construction luxury high rise condos competes with existing, real SF housing in SF or with exurban sprawl for that matter.
Did you look at the article? It describes a study that provides exactly this evidence.
Not being an economist, I can’t evaluate the paper, but I do know that it represents the consensus of economists left, right, and center.
He claims in response to an article (and there are many more like it) with actual evidence to the contrary.
In San Francisco, the luxury market inflates housing price and rent everywhere and for all types of housing. Thus, a vacated rent controlled unit will rise to market rate which, relative to non-tech wages, is as equivalently out of reach to lower income candidate tenants as the upgraded housing into which former residents moved is.
That’s how hyper-demand works.
I’d admire your confidence, but unless you or someone else has published some peer-reviewed studies to back up your claims, I’m going to stick with all the standard economics (that says the opposite).
So housing will get built here by 2025? I do hope it’s >75% affordable. But you know how you make affordable housing? Build lots of houses quickly!
Most of the 100% affordable housing projects opening today were conceived about 10 years ago, to give you a sense of timeline. And funding for such products are cyclical so availability comes and goes with economic booms.
There is an abundance of housing to meet the needs of the upper-middle class and up, which is the demographic the Maximus project would have provided for. And as Cynthia noted implicitly. One thing that does not solve the affordable housing crisis is willful obstinance.
Obviously the logistics of financing an affordable housing project of this scale is vital to determine, but is besides the point of the argument.
One option might be to force certain tech companies to pay some minute portion of taxes on the obscene profits they siphon from Menlo Park billionaires and plunder from stolen personal information, though.
There isn’t an abundance of housing to meet anyone’s needs. That’s why prices have gone up in every segment and millionaires are buying homes that need a full gut renovation.
This isn’t technology growth specific. Housing prices have increased at about the same rate since the early 80s, well before Facebook.
How about we find a stable funding source for affordable housing by imposing a permanent parcel tax on local landowners? After all, they collectively gain hundreds of billions in net worth every year due to increasing land values.
Ok, go raise taxes. These guys are trying to build BOTH market rate and affordable housing. Instead we will get neither. That is willful obstinance.
And by the way, isn’t anyone interested in the benefits of mixing affordable and market rate units? (Original plan) Why shouldn’t the affordable residents be offered units in first class buildings? The alternative is to basically build project based section 8 housing where you are made to move if you become financially independent. Where is the incentive/reward there? Congratulations with your new career, now you have to move out and give it all to your next landlord.
I too have lived in other cities. Guess what? Neighborhood aesthetic continuity is important and a distinguishing feature for all of them.
Show me the high rise building in DC?
Where is the skyscraper next to the Haussmanian 4-5 story buildings within Paris’s inner ring?
Try to build a new 10 story building next to a row of brownstones on the Upper West Side and see what happens.
The best thing that could happen is the non profit buys it and develops it as a 100% affordable housing site.
So why if a non-profit builds 100% affordable housing do you think it will suddenly pencil out as good dollars to build small (what fits- 3 storys?) and tart up the exterior so it looks like it’s 70 years old?
Hence the term “non-profit”. If you don’t have to pay a bunch of one-percenters exorbitant salaries and produce profits for obese oligarchs, you get to take care of the people who need housing.
There are even more savings in that non-profits don’t have to donate sacks of money to Scott Wiener and London Breed.
Non-profits spend $800k/unit developing housing in San Francisco, even without all the fat checks to Breed and Wiener. But they must do that anyways because the largest nonprofit housing builders in the state all endorsed SB50!
I’ve never seen a salary list for the “non-profits” that take our tax money. If you have such a list please share it here – not only per employee but how many employees (bloat). This will make you comment a little more believable.
Except the non-profits are likely to propose something just as big as this old monster.
They’d have to to justify the extraordinary $42M purchase price for the land.
About half of the site has a 105 foot high limit. The remainder is zoned for 55 feet.
Using the State Density Bonus Law, one could obtain 35% more capacity than under the “base zoning”.
Accordingly, a properly consolidated/positioned highrise of 140 to 160 feet could be achieved — and if one simply maintained Maximus’ unit mix, you could realize 447 units on the site. (331 “base” units +35% bonus = 447 total.)
Note: This would result in land cost per door of around $94K ($42M/447), which isn’t great; but also isn’t terrible.
What a perfect location for 447 units. One of the most transit-accessible locations outside the financial district. As a long-time Mission resident, I would be thrilled to see this site absorb some of the demand for BOTH affordable and market-rate housing without evicting a single tenant. There is so much evidence that mixed communities are more beneficial than segregated developments and there is plenty of room for an assortment of units at this site.
It’ll be a miracle in the Mission if the nonprofits bring this project to fruition. Just the avg construction per unit in SF is over $700k. It would be impossible to make it all affordable housing. Unless the City is wiling to absorb the losses.
We are in a housing crisis because people can’t AFFORD the houses. Building these houses won’t solve the issue. There is more than enough housing, it’s just too expensive and no one can live in them except the rich. And building more just inflates the problem. Building more luxury housing is NOT part of the solution. The only building that should be done is low income building.
Can you help explain what is “luxury” about the recent housing developments in the Mission such as 1188 Valencia? Is it the compliance with building codes? The finishes which might cost an extra $5,000 per unit total? The cramped 450 soft per bedroom units?
“There is more than enough housing, it’s just too expensive.” “Nobody goes there anymore, it’s too crowded.”
Come on. If car manufacturers were only allowed to sell 100,000 cars per year in the entire country, they’d all be $1 million luxury vehicles for the rich. But since there’s no such cap, the manufacturers are able to address the low end as well as the Hugh end of the market.
Obviously one project with 300 units won’t fix SF’s housing crisis. But ending the blanket community opposition to all homebuiling projects so that supply could actually meet demand (which means not opposing this or any other project which meets zoning requirements, and indeed loosening zoning as well), just might.
But instead we get “We’ve tried nothing, and we’re all out of ideas!”
Jim and Chris you’re spot on. Cynthia doesn’t understand simple economics in that an entirely affordable housing development isn’t financially an option for developers. Who’s going to develop a bid project just to lose money. Also, mixed income has been shown to be the most success. Projects are a failure.
“Luxury” housing of today is affordable housing of the future
I foresee mandatory approval on this site when the future owner invokes the state density bonus.
Maximus was surprisingly feckless in their attempted development of the site.
They should of invoked the State Density Bonus Law years ago — and the project would have been finished/occupied by now.