Following on last week's news that the so-called 'Monster in the Mission' could be doomed due to a legal dispute between the landowner and the developer, opponents of the project jumped for joy, claiming victory for the cause of affordable housing. There seems to be a belief, even from Supervisor David Campos, that the city could step in now and purchase this land to build a 100 percent affordable project. But it doesn't seem like anyone is being realistic about what that would cost they just hate this project and want it to go away, without regard for the family who owns the property and will no doubt seek top dollar for it.
At a rally on Monday at 16th and Mission, affordable housing activists perhaps prematurely congratulated themselves for killing this project, as 48 Hills reports. One speaker, Bianca Starr, the parent of a child at nearby Marshall Elementary school, said, "This wouldn’t have happened without every single march, every single action." She's referring to the community backlash against the project which necessitated at least 100 community meetings, pushed the developer to build 24 percent of its units as below-market (41 on site), and which arguably stalled the entitlements process long enough to create the current legal conflict.
The Plaza 16 Coalition put out a release on Monday, also proclaiming the "collapse" of this project (even though it is far from dead), saying, "It is clear that the community deserves the credit for the troubles now facing this infamous project."
The thing is that escalating housing and land prices across the city in the past two years, and the subsequent greed of the landowner, are the reasons this project is now in turmoil, and the result of the legal dispute is not going to be that the city swoops in to pay an exorbitant sum simply to block a market-rate project that's already approved.
The 330+ unit building proposed by Maximus Real Estate Partners had already gotten its entitlements from Planning, and the dispute seems to have occurred when the Jang family, who own the property on the northeast corner of 16th and Mission, realized that they might now be able to command more money for it, two years later. At issue is a purchase agreement that Maximus signed with the Jangs in 2013 and which expired this month.
The Jangs say they have an East Coast developer willing to pay $55 million for the site, or $13 million more than Maximus had agreed to two years ago, so that appears to be their new target sale price. It was the Jangs, ultimately, who appear to have stymied the deal past the deadline, with Maximus claiming they went "silent" in the months approaching the deadline for closing, despite the entitlements being in place. Maximus will now likely sue the Jangs for damages if they won't agree to sell, because the developer claims they're now out $8 million for costs incurred over the last two years of securing those entitlements.
As the Business Times points out, the likelihood of this project now becoming 100 percent affordable, at the hands of the City, is very low given the obvious pricetag. Yes the city has some money to spend on purchasing affordable sites, but they're not going to blow their entire wad on this one site, especially when there's another 165-unit affordable development from BRIDGE Housing, on city-owned land, going up a half block away.
Also the Jangs aren't suddenly going to agree to a discount price out of the kindness of their hearts.
So, the likely scenarios here are a) the Jangs realize they don't have a case and don't want to owe the developer $12 million (the amount they'd be sued for), and they just cave and close the deal; b) the Jangs settle with the developer and go ahead with the new developer for $55 million, for a project that's likely to be even more expensive per unit; or c) the Jangs and Maximus reach a compromise on the land value, and the project still moves forward, with Maximus shelling out a little more, and still building their 24 percent affordable unit number.
The pie-in-the-sky scenario would be that some wealthy philanthropist suddenly decides to help the City buy this property, but barring that, 100 percent affordability won't be happening.