Financing Complete for SF Central Waterfront Development
Contributing to San Francisco�s efforts to increase housing development and business activity in city neighborhoods, Martin Building Co., Citi Community Capital and the AFL-CIO Housing Investment Trust (HIT) have announced financing for the $80.4-million Potrero Launch residences project in the Central Waterfront area at 2235 Third Street.
The union-built development will produce 196 rental units, create 200 union construction jobs a year for two years, and provide affordable housing, child care and commercial development.
�Potrero Launch will be a key catalyst for economic development and revitalization at a time when new construction in San Francisco has come to a virtual halt for lack of investment capital,� says Patrick McNerney, president of Martin Building Co. �We are fortunate to have investment partners like Citi Community Capital and the AFL-CIO Housing Investment Trust who share our commitment to San Francisco and its residents.�
Nibbi Brothers is the general contractor on the project, which will feature six levels of concrete with two levels of underground parking, ground floor commercial retail space and a daycare center. The project ties into two existing historic un-reinforced masonry buildings along 3rd Street.
Nibbi�s Assistant Project Manager Valerie Adler says the existing brick buildings will be incorporated into the new design, with the old brick building being used for commercial and new construction for residential units. The proposed project would preserve the two historic buildings fronting on Third Street and build two new structures between the two historic buildings that would vary between 35 ft (three stories) at the edge of Third Street up to a maximum of 50 ft (five stories) in two portions of the new structures that would be set back 20 ft from the Third Street property line.
The Potrero Launch project would create a cluster of mixed-use buildings with about 242,185 sq ft of floor area. The project would also construct a new 65-ft-tall (six-story) structure on Illinois Street. It features about 8,884 sq ft of common open space in the form of a large internal landscaped courtyard, roof-top open space, and three new publicly accessible �pocket plazas� along the Third Street frontage.
To help address the city�s shortage of affordable housing, 39 of the 196 rental units at Potrero Launch will be affordable to residents earning up to 30% of the area median income. In addition to the rental housing, plans also include a restaurant, specialty grocery store, cafe and a child-care center. Potrero Launch will also pursue LEED certification.
HIT Chief Operating Officer Ted Chandler described the Potrero Launch project as an attractive investment opportunity for the HIT.
�We are pleased to support San Francisco's community revitalization efforts with our combined investments of $35 million in Potrero Launch and Arc Light Co.,� he says.
For Potrero Launch, the HIT worked closely with Citi, the construction lender, to put together a creative financing package. Citi utilized a Freddie Mac forward commitment to fund the permanent loan. The HIT has committed to purchase $2.6 million in taxable bonds upon conversion to a permanent loan, with Freddie Mac providing the credit enhancement for both the tax-exempt and taxable bonds.
Secretary-Treasurer Mike Theriault of the San Francisco Building and Construction Trades Council declared that the financing agreement for Potrero Launch is good news for construction workers, who face unacceptably high levels of unemployment.
�We are proud that union pension capital is helping finance this union-built project, which will get many of our members working again,� says Theriault.