A nine-story, market-rate housing project at 321 Florida St. that will break ground next month is a sign of how much power over development in the Mission District has shifted away from community groups and toward developers.
Before permits were first approved in 2021, the property’s developers signed several agreements with different community groups, promising to fund a slew of local projects.Â
Among those:
- $2 million to help purchase 2675 Folsom St., a parking lot that the nonprofit developer Mission Housing once sought to turn into a fully affordable housing complex;
- A 1,500-square-foot space on the ground floor of 321 Florida St. that would have been donated to the nonprofit Community Arts Stabilization Trust as a gallery;
- A new wall separating the complex from Sweet Peas, a preschool next door to the project site, plus $25,000 to revamp Sweet Peas’ outdoor play area;
- And another $25,000 promised to Friends of Franklin Square for the nearby park, along with a subsidy of up to $2,000 per year for park clean-ups for three years.Â
In the years leading up to that 2021 deal, other market-rate housing projects in the Mission faced significant community opposition, with the nicknames to match.
There was the “Monster in the Mission,” the “Beast on Bryant,” the “Fright on Folsom” and the “Titanic Mess on South Van Ness.”
By contrast, 321 Florida faced little pushback.
When asked why the project didn’t face the same level of opposition, Roberto Hernandez, a longtime Mission District organizer and CEO of the arts nonprofit Cultura y Arte Nativa de las Americas, said that the answer was simple.
“The developer is a nice guy, and he worked with us,” Hernandez said, referring to Mark MacDonald, CEO of DM Development, one of the groups behind the project.Â
But 321 Florida never broke ground. MacDonald blames the rise in interest rates, which started in 2022. It was only recently, he added, that DM Development and Denver-based real estate equity firm Ancestris closed a $61.7 million loan from PNC bank to start construction. The project is expected to be completed in late 2028.
The memorandums of understanding with community groups expired in 2023. When asked if DM Development planned to deliver any of the community benefits it originally agreed on, MacDonald responded with a statement that DM Development had to make changes to the project, including modifications to community partnerships, to make sure financing and construction were feasible in today’s market.
“Conversations regarding the project’s community partnerships are ongoing as DM Development continues to work with community partners to determine how best to support the neighborhood,” the statement read.
Plans at 321 Florida have also changed now that the city’s inclusionary housing rate has dropped. The proposal approved by the planning commission in 2021 was a 168-unit project, with 23 affordable units, nearly 14 percent of the total.
The current version will have 152 units, 15 of which are affordable (or just under 10 percent).
In San Francisco, “affordable” housing can mean a lot of different things. In this case, the 15 units are for families making from 30 percent of the area median income ($34,050 for an individual or $48,650 for a family of four) to 120 percent ($136,150 for an individual or $194,500 for a family of four).
When asked how many units fell into which income bracket, DM Development did not respond.Â
DM Development is also, MacDonald continued, working with the Sweet Peas preschool to make improvements to its playground, and is “adding the names of 100 Mission District residents” to an “interest list” to reside in its project at 300 De Haro St. (The list, however, is open to anyone who wants to apply.)
Samantha Dionne, the preschool’s director, said she received a call from a DM Development employee about six months ago to tell her that the company planned to make good on its commitment, despite the agreement expiring.Â
Dionne reached out last week to get more details. In an email on Monday, DM Development told Dionne that they would set up a call with her “to review everything” once plans and timelines with the general contractor are finalized.
Catherine Nguyen, director of communication and marketing at the Community Arts Stabilization Trust, said it has not spoken to the developers since 2022.
Jolene Yee, a member of Friends of Franklin Square, said that the group held its second bi-annual cleanup last Saturday. Each cleanup costs about $300 to $400, Yee said, and DM Development has sponsored the last 12.Â
Yee said DM Development informed her last week via email that renewing the MOU is on their radar and that they intend to do so, after she reached out to the company earlier in the week.
DM Development, for its part, said in its statement that, instead of the $2 million it had promised for the 2675 Folsom purchase, it now plans to donate $500,000 in seed funding to Hernandez’s group, Cultura y Arte Nativa de las Americas, and to host a fundraiser where it will match up to $500,000 more in donations.
Mission Local reached out to Hernandez and other representatives for United to Save the Mission last week about the change in the benefits package, but has not heard back.
“Getting a market-rate housing project financed and underway in today’s environment is no small feat,” MacDonald wrote, in the statement, before declining to offer any further comment.
“For too long, many well-conceived housing developments have stalled despite clear demand,” he continued. “We hope this project helps restore confidence that other developments can follow.”
Documenting the decline of a land use extortion racket.
I understand not dumping construction dust on the preschoolers next door, but the rest just seems like a shakedown. Standard property taxes is the fairer way to get money from new development.
Alright I’ll bite. If the developer hands are tied by interest rates, why is the framing broken promises rather than “scrappy developer digs in to make development happen in midst of historic housing crisis”
Ah, the timeless San Francisco tango: where ‘being a nice guy’ is merely a polite euphemism for financial racketeering. One almost applauds the developer for outmaneuvering the local advocacy racket—until one counts the casualties: eight fewer affordable homes for actual families. It turns out nothing harms the working class quite like the enterprise dedicated to ‘saving’ them.
Almost every family living in the building will be working for a living. I’m not sure what “actual families” is supposed to imply in your comment. Market rate renters are fake families?
So instead of providing money for housing, the developer is giving up to $1M to Hernandez’s nonprofit for things unrelated to housing?
No wonder Hernandez thinks he’s such a nice guy.
In most parts of the world we just call this corruption. Shaking someone down to pay a vig in order to get something that is otherwise completely legal past a gatekeeper.
Mission Local, you can do better.
That’s excellent news!
One developer is not exceedingly greedy and it’s news. What a shame. Greed is a horrible addiction that can only be stopped through government intervention. We cannot rely on the good will of the “benevolent” developer for real social change. It’s criminal that we lowered the affordable housing threshold.
Developers paying to mitigate issues surrounding area makes sense. Extorting 2 million for a project blocks away is the pinnacle of greed. Builders aren’t the only greedy ones.
Why do all new residential buildings have to look so ugly? I am all for new housing, but the architecture does not consider the character of the neighborhood and those who live there. In Chicago, there is a resurgence in building courtyard style apartment buildings using more traditional materials, such as brick, for the facade. In my opinion this style is much more attractive. Obviously San Francisco and Chicago have different histories and there is no one-size-fits-all approach to architecture, but it would be great if the planning commission took aesthetics and how the building exterior reflects on the surrounding neighborhood into consideration.
Link to example of the Chicago development: https://www.instagram.com/p/DeUSEqJFWwy/
Jake, brick buildings don’t really work in the Bay Area due to seismic risk. Bricks have no tensile or torsional strength,
More generally, architecturally interesting structures cost a lot more. And then people would complain that this is “luxury” housing, which apparently is a terrible thing.
Ron, “brick” buildings haven’t used structural masonry in over 100 years for the seismic reason you listed as well as a litany of other reasons. They are generally reinforced concrete, steel, or even cold formed metal framed structures with a brick facade. I am not arguing that we need change the structure, just the facade so isn’t so ugly.
At least it’s finally getting built. The 53-unit development around the corner at 2435-2445 16th Street, where the former auto glass and auto body shops still stand, cleared all permit hurdles in 2019, and there’s no construction in sight.
The market is too fickle to solely rely on for something as essential as housing, which is why we need public investment to build the housing SF needs. Vote yes on B, C, I, J, and 1!