Lendlease, San Francisco Agree to Restart Stalled Tower Project
Affordable housing units will no longer be required by the city of San Francisco, allowing Lendlease to restart work on the Hayes Point tower (seen in rendering at center).
Rendering courtesy SCB
The city of San Francisco has dropped a requirement to include affordable housing units in a mixed-use project stopped over one year ago by developer Lendlease, clearing the way for construction to restart, according to media reports.
The Australian real estate giant, which earlier this year decided to divest its U.S. and U.K. construction and real estate operations, had made the project a key part of its American development business.
Globest.com reported that the company decided to sell the project, known as Hayes Point and located at 30 Van Ness Street. But San Francisco agreed to drop a requirement for affordable housing units priced below market rate to be among the planned 333 condo units. The city is trying to spur housing development, since it has usually ranked high on lists of the most expensive to live in, the San Francisco Standard reported.
"City officials are finding room for compromise on issues like fees, infrastructure and affordable housing requirements," reported the Standard.
When work was paused, the project seemed like a poster child for the post-pandemic, high-interest rate real estate woes.
Lendlease had broken ground 11 months earlier on the $1.2-billion structure that was one of the company's biggest projects started in 2022, with key sub-structure work completed.
Sales to Consigli
In an announcement May 27, the Sydney-based developer and contractor said it would refocus operations and real estate investment in its native market and divest U.K. and U.S. projects and assets—an overall transaction it said would "recycle" $2.9 billion into the Australia market while exiting international construction.
Almost immediately, Milford, Mass.-based Consigli Building Group Inc. said it will acquire Lendlease’s New York and New Jersey construction operations, which comprise most of its U.S. activity—a deal the former said includes employees and work associated with about 45 current under-contract and pre-construction projects.
Whether Consigli will take over or have any role in the restarted San Francisco construction could not be confirmed.
