Proposition O: Speeding Up Office Construction in the City’s Southeast

This ordinance would amend the Planning Code to permanently exempt a mixed-use redevelopment mega-project in the Bayview-Hunters Point neighborhood from previous voter-approved, citywide limits on office space and allow such construction to be expedited there.

Why is this on the ballot?

In 2008, San Francisco voters approved Proposition G, an advisory measure that urged development of a mixed-use project area on Candlestick Point and most of the former Navy shipyard at Hunters Point. The city approved redevelopment plans for this project area, including:

Construction is currently underway at the Hunters Point Shipyard real estate project. Photo by Nadia Mishkin / San Francisco Public Press
  • Approximately 330 acres of public parks and open space,
  • Up to 10,500 homes,
  • Up to 885,000 square feet of retail and entertainment uses, and
  • Up to 5.15 million square feet of office space.

Lennar Corp., the developer for the Hunters Point Shipyard/Candlestick Point project, wants to build out office space faster than city regulations allow. Proposition O would allow that to happen. The company has said the uptick in construction would bring jobs and economic development to the city’s southeast.

Opponents argue that the measure’s language would enable Lennar to renege on its promises, made in 2008, to undergo “full ‘public review of development.’ ”

This conflict has its roots in the 1970s and ‘80s, when high-rise development downtown sparked political battles over how the city should look and feel in the decades to come. Many residents abhorred any “Manhattanization” that would increase the city’s density and remake its skyline and character. Then, as now, the pro-development side argued that increased office construction would bring more jobs and tax revenue and strengthen the city’s economy. Opponents claimed that those jobs would not go to current residents, and that the influx of workers would burden city resources by clogging the streets, highways and transit systems.

In the November 1986 election, the side arguing to temper development put Proposition M on the ballot, and voters passed it by a narrow margin. This created a city program to manage the pace of office construction by means of an annual limit of 950,000 square feet of new office development citywide.

City planners expect that limit will be reached soon because of high demand. Through the program, certain “major” projects get priority — about 25 percent of developer Lennar’s Bayview/Hunters Point Shipyard/Candlestick Point project is first in line; it was behind projects in Mission Bay, but those are essentially finished.

But Lennar wants the remaining 75 percent of its project — 2.35 million square feet of office space — to be exempt from the annual limit, so it can be built at an unrestricted pace.

As of July, four developers had applied to build a total of 1.16 million square feet of offices, far beyond the 443,869 square feet remaining under the citywide limit. Any application from Lennar would have to go through the same process, which generally results in approvals for these projects on a first-come, first-served basis.

What would it do and at what cost?

Proposition O would exempt the Hunters Point Shipyard/Candlestick Point project from the limits on new office development set in 1986.

In addition, office development in the mega-project would not count toward 1986 Proposition M’s citywide limit, potentially opening up office construction in other neighborhoods. If voters approve Proposition O, projects could move forward in other parts of the city if they would have been edged out by the Hunters Point Shipyard project.

Proposition O would “establish a policy that development applications shall be processed and decided quickly, and development expedited.”

To that end, proponents are calling the initiative the “Hunters Point/Candlestick Point Jobs Stimulus Proposition.” Though the measure includes no specifics or guarantees, details about anticipated jobs are laid out in the redevelopment plans, and in other documents.

An analysis by the Office of Economic and Workforce Development concluded that expediting new office space would have the effect of “potentially accelerating job opportunities for San Francisco and Bayview residents.”

An assessment by the Office of Community Investment and Infrastructure, which oversees the project, largely agreed. The executive director reiterated the city’s commitment to ensure that “a significant portion of the jobs and contracts created by Project activities go to residents of the Bayview Hunters Point and San Francisco.”

The city’s planning director, John Rahaim, says that if Proposition O were passed, the project would still have to satisfy “environmental review under the California Environmental Quality Act, or any public or administrative review or approval process.”

If passed, this proposition would “likely result in a period of higher tax revenues offset in part by higher City costs required to serve a higher number of workers in the City,” according to the San Francisco controller’s analysis.

The measure would increase tax revenue by $700,000 to $4.5 million annually, the controller said. That is partially because office construction tends to increase the assessed value of nearby, taxed real estate.

Is there a catch?

If the ballot measure passes, future office construction on Lennar’s project would be exempt from the citywide cap, too.

Proposition O would not allow Lennar to build an infinite amount of office space. Under the city’s redevelopment plans for the area, the project’s two constructions zones are allowed a combined maximum of 5.15 million square feet for “research and development, and office uses.” Only 3.15 million square feet have been approved for construction so far, and Lennar would need approval before building the rest. This would be true whether or not Proposition O passes.

But in its analysis, the Office of Community Investment and Infrastructure states that even if the initiative passes, further approvals would be needed from both the Board of Supervisors and the commission that oversees the Office of Community Investment and Infrastructure to exempt the 5.15 million square feet from the annual cap.

If the measure does pass, the developer’s proposed designs for the additional office and other construction on the project site would be exempt from review by the Planning Commission. Commissioners Dennis Richards, Katherine Moore and Christine Johnson all told the Public Press that they did not think this represented, in itself, a major injury to the project review process.

But Richards speculated that developers citywide might have a larger agenda: “What they’ll be trying to do is take away the Planning Commission’s authority one nibble at a time. And the last nibble is a reason for the next nibble.”

Who officially proposed it?

Dr. Veronica Hunnicutt, the chair of the Mayor’s Hunters Point Shipyard Citizens Advisory Committee; Shamann Walton, vice president of the Board of Education; and Sophie Maxwell, who represented the Bayview-Hunters Point area as District 10 supervisor from 2001 to 2011.

Who officially opposes it?

Calvin Welch, a longtime political activist and educator in San Francisco.

Vote threshold to pass

Simple majority — 50 percent plus one

Effective date if passed

10 days after election results are certified.

Follow the money

One committee is spending money in support of Proposition O: “Jobs, Housing and Parks Now for Candlestick Point & Hunters Point Shipyard, with Major Funding by Five Point Holdings, LLC.”

As of late September, that committee had raised $350,000 entirely from one contributor: Five Point Holdings LLC . That company is managing the Hunters Point Shipyard/Candlestick Point project, and is owned by Lennar Corp.

Follow the money at the San Francisco Ethics Commission: all Proposition O filings.

Endorsements: our methodology

The Public Press chose to count endorsements from organizations that backed multiple candidates or ballot measures, and that made those endorsements available online. We did not count endorsements from individuals.

If you think we missed an important organization, please tell us. We’d love to hear from you.

Tracked endorsements by organization

Written by: Noah Arroyo

Published: Sept. 30, 2016

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