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$600M Mixed-Income Tower Debuts In San Francisco

Related California CEO Bill Witte, District 6 Supervisor Matt Haney, Mayor London Breed and others rang in one of the bigger San Francisco housing projects on Jan. 30.

The Avery ribbon-cutting
Related California Chairman and CEO Bill Witte, The Avery resident Celia Roberts, San Francisco Mayor London Breed, District 6 Supervisor Matt Haney and others celebrate the ribbon-cutting at 420 Folsom St.

Rising 56 stories above its Transbay location, Related California's newest project, The Avery, brings 548 new homes to San Francisco. Composed of 118 for-sale condos, 280 market-rate apartments and 150 affordable apartments, it hits the market not a moment too soon, San Francisco's mayor said. 

"This an amazing accomplishment," Breed said.

"But when you think about the fact that [the Transbay Redevelopment Project Area] was passed in 2005 and that it's now 2020, and ... we're just now getting to a point where we're realizing the benefits of the housing that we so desperately need, the sad reality is we have to do better."

After exceeding annual housing-output goals in 2016 and 2017, San Francisco fell well short in 2018, and a mix of soaring costs, slowing rent growth and city-imposed hurdles appears to have led to a similar story last year

The Transbay District and the rest of the South of Market area has seen its fair share of growth, Haney, who represents SoMa, said at the ceremony. 

"This neighborhood is growing fast, maybe faster, than any neighborhood in San Francisco," Haney said. "And it's growing in the right way, with a balance of affordable housing."

Several other residential large projects have sprouted in District 6 in recent years, including Tishman Speyer's 40-story, 392-unit MIRA at 160 Folsom St. and Essex Property Trust's 500 Folsom St., which brings 537 units.

But most, including MIRA, 500 Folsom and The Avery, are only now starting to bring units online, years after land sales and development agreements came about following the finalization of the Transbay plan. 

Much further up the pipeline are Hines' Parcel F and Block 4 projects, which are slated to bring over 300 affordable units between them, but which are only just starting to receive approvals after local opposition and a previous developer's struggles

At The Avery, floors 33 through 56 of the tower feature luxury condos, and floors two through 32 include a mix of market-rate and rent-restricted apartments over 17K SF of ground-floor retail space. Another 80 units of rent-restricted apartments have opened inside two adjacent mid-rise buildings.

The Tenderloin Neighborhood Development Corp. co-developed The Avery with Related, handling the affordable portion, which is designated for families earning up to 50% of area median income (or about $61K for a family of four last year).

General contractor Webcor Builders began construction in December of 2016, with HKS Architects as the lead architect. 

Its total development cost came out to $600M and was financed by a construction loan from Wells Fargo and the Bank of China, bridge financing from Citigroup and tax credit equity from Wells Fargo, among other sources, Related California Chairman and CEO Bill Witte said.

To Breed, a vocal proponent of the city's recently approved proposition to issue $600M in affordable housing bonds and the ultimately doomed Senate Bill 50, this latest opening is both a cause for celebration and a call to action.

"We can't continue to delay important housing development in San Francisco, especially ones that have a larger percentage of affordable housing tied to those projects than what is required," Breed said.