Developers and investors need to sign onto San Francisco’s stringent affordable housing and open space requirements in the Transbay redevelopment area, while the Board of Supervisors needs to make sure new private landowners are paying a fair price for the parcels.

All that came together Tuesday when publicly traded real estate investorEssex Property Trust, Inc. and local developer TMG Partners finalized the $43.6 million purchase of Transbay Block 9, on the corner of First and Folsom Streets.

The purchase paves the way for construction to start this fall on the apartment complex with 536 units. It will likely be completed by 2017, making it one of the first projects to finish in Transbay. The Board of Supervisors approved the project last week.
“It’s a long time coming, but it matters when we hit our milestones,” said Tiffany Bohee, executive director of the city’s Office of Community Investment and Infrastructure, which oversees Transbay redevelopment‎. “This building embodies everything we care about to make Transbay a great neighborhood. It’s really filling in the neighborhood and providing neighborhood retail along Folsom Street.”
The land sale proceeds all help fund the $1.9 billion Transbay Transit Center, which will sit a couple blocks from the building. Officials have said they expect the sales of formerly state-owned parcels to private developers to funnel $578.6 million for the terminal construction. If the land sale hit snags, transit center construction could have been delayed, according to an OCII report.

The development will include a 400-foot tower designed by SOM, a 85-foot podium and a row of two-story townhouses designed by Fougeron Architecture. It will include a public open space and underground parking. Nonprofit affordable housing developer Bridge Housing is also on the development team, helping to secure tax-exempt financing for the affordable portion of the project. The project is not receiving public subsidies.
Twenty percent of the apartment complex will be rented at a below market rate to people making half of the city’s median income. The affordable units will be sprinkled throughout the bottom half of the buildings “in a non-discriminatory fashion,” according to an OCII report.

The development is part of 20 acres that make up the Transbay District Plan area. The city adopted the plan in 2005 to generate funding for the Transbay Transit Center, heralded as the “Grand Central of the West.”
The signature property in the district is the Salesforce Tower, which started construction last year and will be the city’s tallest building when it’s done in 2017. A 409-unit mixed-income housing project on Blocks 6 and 7, developed by Golub and Mercy Housing, should wrap up construction this year.
Bohee said the city will start completing the sales of several other key Transbay sites this year, including a major residential tower developed by Tishman Speyer (Block 1), 665,000-square-foot office built by Golub and the John Buck Co. (Block 5), and a mixed-income project developed by Related Cos. and Tenderloin Neighborhood Development Corp. (Block 8).
This year, the city expects to release a request for proposals for Parcel F, a 32,700-square-foot site slated for up to 735,000 square feet of office and residential space in a tower up to 750 feet high.