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Highrise threatens Transbay project

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Highrise threatens Transbay project

$2.7 billion terminal plan at mercy of 48-story housing tower

James Temple

A San Francisco developer is beginning construction on a long-stalled housing highrise, a move some say threatens to derail the city's $2.7 billion Transbay Terminal project.

Myers Development Co. has begun initial work on the Century Tower, a 431-unit, 48-story residential tower on four adjoining parcels on Natoma and Minna streets.

But under the latest plan of the San Francisco Redevelopment Agency and the Transbay Joint Powers Authority, that site is also earmarked for the long-planned replacement Transbay Terminal. A local version of New York's Grand Central Station, the four-story structure is intended to be a regional transit hub. It would include bays for Greyhound and buses from San Francisco, Marin, San Mateo and Alameda counties, an underground extension of Caltrain and subterranean tracks for eventual high-speed rail.

Some believe if the Myers project proceeds, the city's Transbay Terminal plan will require substantial changes: Not only is the site intended for part of the terminal, Caltrain plans to run its tracks below it.

"The two efforts are not compatible, to say the least," said John Kriken, consulting partner-in-charge of Skidmore, Owings and Merrill LLP (SOM), the architecture firm that designed the Transbay Redevelopment Project Area. "It's just very surprising that that kind of thing can happen where there's so much at stake for the future."

Myers' attorney, Tim Tosta of Steefel, Levitt & Weiss, said the city has long been aware of the developer's intentions.

"The likelihood of 80 Natoma moving forward has been communicated to and known by the city for several months," said Tosta, pointing as proof to a June 9 letter from Maria Ayerdi, the mayor's point person on the project, that acknowledges Myers' plans. "I'm sure the city has built that knowledge into their planning effort."

On Oct. 31, Myers secured city permits to place "indicator piles" on the site, typically a first step in project construction, and Kelly Amdur of the planning department said the company is in the process of submitting to the city existing entitlements and building permits for the site.

"The planning department will be reviewing those entitlements to see if we agree with the applicants that they're still valid," Amdur said. "They contend they are."

The planning department approved a 509-unit residential tower by a different developer there in the late 1990s. The site has changed hands several times and Myers Development has now "taken control" of the parcels, said CEO Jack Myers.

City sources concurred that if the Century Tower is built it would require significant changes to the existing Transbay Terminal plan.

"We would try to work with the property owner in order to accommodate both projects," said Mike Grisso, senior planner with the redevelopment agency.

The city could also attempt to condemn the property and acquire it by eminent domain.

Myers, for his part, said his building would fit neatly into the Redevelopment Agency's plan for the greater Transbay area, which prioritizes new housing and includes several other highrise towers.

"I think they're very compatible projects in the end," Myers said. "There are numerous plans that the city can pursue relative to the development of the Transbay Terminal. And the fact remains that I have a single site that is entitled."

Myers' construction firm, Webcor, has already fenced off the property, hung its signs and pulled up parking curbs. Meanwhile, the Transbay Redevelopment Project Area plan -- which would officially declare the Transbay neighborhood a redevelopment district and allow the city to move forward on its projects there -- isn't likely to reach its final approval stage, the Board of Supervisors, until March 2004, said Grisso.

While plans have always called for the CalTrain extension to run under the Century site, the property itself was not originally slated to form part of the Transbay Terminal. But earlier this summer, the entire terminal was shifted half a block to the west.

Ayerdi declined comment on the change, referring the question to Grisso.

Grisso attributed the decision to Ayerdi and the Transbay Joint Powers Authority, saying the decision "was made because the site that it moved on top of was already needed for the train extension and it was determined that moving the terminal 100 feet to the west would result in cost savings, because the east side wouldn't have to cross Beale Street."

Not everyone is satisfied with that answer, however.

"Cities all over the world have trains running under buildings, it's been done in New York both under existing buildings and with new buildings over existing tracks," said Jim Chappell, president of the San Francisco Planning and Urban Research Association. "You just design around it."

Chappell added that the Transbay project is already designed much like a bridge for its entire length, so whether or not it crosses the road shouldn't significantly alter the costs.

According to Grisso, engineers have said running the tracks beneath the site will be substantially more expensive if a major building is going to sit on top.

SOM's Kriken questioned why the San Francisco Planning Department would hand out permits for the Myers project, when the Transbay Joint Powers Authority already has the parcel in its sights. But Lawrence Badiner, acting director of the planning department, noted that the Transbay Terminal does not yet have full city approval, and said in any case, his agency can't play favorites.

"We need to review it (80 Natoma) as if it's any other project," Badiner said. "We're not legally allowed to say, 'Do you want to hold it up because the city or state has plans to build a terminal there?' It's up to the (Transbay Joint Powers) authority to condemn it," if it decides it needs the property, he said.

That, said Grisso, is a possibility.

Once the Transbay district is declared a redevelopment zone, both the city and Redevelopment Agency will have powers of eminent domain to condemn properties in the path of the new Transbay Terminal and CalTrain extension.

In fact, under the Transbay Joint Powers Authority's preferred alternative, that agency or the city of San Francisco would spend approximately $70 million to acquire 18 sites -- including the four parcels in question.

Ayerdi refused to comment on what options the city would have if the Century moves forward, but she wrote in the June 9 letter: "If at some future date the (Transbay Terminal) project is approved, we would anticipate taking appropriate steps to move the project forward, including, if necessary recommending acquisition of properties needed for the project. It is important for you to keep in mind, however, that at this time the city has not made any decisions to acquire 80 Natoma or any other property."

Eminent domain, however, involves a long legal process to determine the "fair market" value of the property. And attorneys specializing in eminent domain say that the further along a project is, the higher the value goes.

In that light, several industry sources have suggested that Myers Development is pursuing the development mainly to drive up the price the city will eventually have to pay. They note that, since the Transbay project can't move forward without those parcels, whatever work Myers does on the site simply increases the value of its bargaining chip.

Myers calls that assertion "absolutely false." "We're in the development business, not the condemnation business, and we're moving ahead with this project because I've been trying to do that for five years," he said.

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