Downtown's Former Angels Landing Site Could Be Headed To Auction

One of Downtown’s highest-profile undeveloped parcels, the former Angels Knoll property at the base of Bunker Hill, may soon be up for grabs.

The planned $2B Angels Landing project led by MacFarlane Partners and Peebles Corp. fizzled, and the site's owner has moved to offer it to developers of affordable housing through the Surplus Land Act. 

It is an anticlimactic end for a massive Downtown development that has been in the works since 2017 but has been beset by challenges from all sides in that time, not least of which were the changing conditions around the site itself. 

“The reason for us to develop Angels Landing went away during Covid, and it hasn't come back,” Peebles Corp. CEO Don Peebles said. “It's all predicated upon people being, working Downtown and staying in hotels Downtown to do business.” 

At the end of October, the successor to the community redevelopment agency, the state entity that owns the site, voted to declare the Angels Knoll site, officially known as Bunk Hill Parcel Y-1, to be surplus property. Under state law, that means it has to be offered to affordable developers for 60 days before it can be auctioned off to the highest bidder. 

While there is a requirement that the property be offered to affordable housing creators, there is no requirement that the sale price be below market rate. The cost to prepare the sloped property for building will likely be quite expensive, and that is before anything even gets built, Peebles said. 

At least one affordable housing developer felt that affordable housing isn’t maximizing what is possible for the site, which can accommodate skyscrapers like the 60-plus-story buildings that Angels Landing would have included. 

Pointing to two towers directly west of the Angels Knoll site, the One and Two California Plaza towers, Better Angels Chief Investment Officer André Bueno drew a comparison between what was possible for the vacant hillside property and what a typical affordable housing developer might bring to the site. If it isn’t on a similar scale, Bueno said, it isn’t the best use of the site. 

The project that MacFarlane and Peebles, collectively called Angels Landing Partners, had proposed consisted of towers rising 62 and 42 stories. Those towers would hold for-sale condos, rental apartments, two hotels, and retail and restaurant space. 

The years following the pandemic weren’t kind to the project. MacFarlane Partners CEO Victor MacFarlane told Bisnow in 2022 — the same year the project received entitlements — that the partnership was still struggling to get the city to give it a development agreement.

The team was also still working to secure a tax incentive relating to hotel bed taxes, also called transient occupancy taxes, for the hotel segment of the project — a feature it considered critical to getting the hotel built.

The city terminated its agreement with the partnership in February 2024, and Angels Landing Partners sued the city seeking $20M they say they invested in the project. The lawsuit is ongoing.

A representative for MacFarlane Partners didn’t respond to Bisnow's requests for comment. 

The majority of affordable housing developers active in the region are topping out at around seven stories at the most, around the same height where wood-frame construction can still be used. Only one local affordable developer, the Weingart Center, has built affordable housing in high-rise form, but the tallest of those reached 19 stories. 

If there aren’t any interested affordable housing developers, the next step for the site will be a public auction. 

“They'll auction it off to the highest bidder, and we'll look at it at that point,” Peebles said, though he doesn’t plan on breaking ground soon.

Instead, he would consider the site as an opportunity to bank the land. 

Downtown isn’t in a strong position to support new development of the scale of this project, and the fact that his family business is a multigenerational operation means that one day, it might be able to reap the benefits of that property. 

“I mean, there's no project there on Angels Landing that is economically feasible now, right?” Peebles said.

CORRECTION, DEC. 17, 7:05 A.M. PT: A previous version of this story misstated the name and job title of André Bueno. The story has been updated.