October 28, 2008
Land Use Supes Oppose Mirant Retrofit, Lennar Seeks Higher IRR
Mayor Gavin Newsom's proposal to retrofit Potrero Hill's Mirant Power Plant appears to have run out of steam as Supervisors Sophie Maxwell and Aaron Peskin acting as members of the Land Use and Economic Development Committee have recommended moving forward without the retrofit.
Meanwhile, while the San Francisco Redevelopment Commission "approved a nonbinding, multibillion-dollar draft financing plan" for the Lennar led redevelopment of Hunters and Candlestick Point, according to Lennar chief local negotiator and Vice President Kofi Bonner, "further negotiations are needed in the coming months to increase the projected monthly [sic] internal rate of return...from 15.8 percent to 22.5 percent."
Total potential housing at risk: 10,500 units. And a new 49ers stadium. There's nothing like a little leverage (unless it's working against you).
∙ JustQuotes: Potrero Hill Power Plant Plan Paused (For A Week) [SocketSite]
∙ Power plant retrofit option rejected [Examiner]
∙ JustQuotes: The Redevelopment Of Hunters/Candlestick Point [SocketSite]
∙ Lennar Corp. seeks higher return for San Francisco redevelopment project [Examiner]
First Published: October 28, 2008 7:00 AM
Comments from "Plugged In" Readers
It will be interesting to see if the redevelopment agency works with Lennar on this. If they do, it could signal that the redevelopment agency is really trying to get things done. I am not sure they want to be seen as the ones that got in the way of all of that housing.
Posted by: Dede at October 28, 2008 9:14 AM
The Niners have been waiting for yrs to get this stadium approved. They will move out of SF before this "plan" is built. Willie Brown's plan yrs ago, as well as this one, stinks. Just build a stadium, not mall and not a housing project that will fail. No one goes down there and folks that can/will afford to buy a place will choose the ever increasing inventory in So. Beach, SOMA, and, probably in the near future, a lot of other places in the city. Artist studios? That worked well the first time around. Just another example of pipe dreams from our city's administration, another blueprint plan that we will spend money on that will be scrapped, and more money in the back pockets of those who approve. I love capitalism, but this idea, again, is a waste of money on too many levels.
Posted by: ECH at October 28, 2008 12:42 PM
I like the quote that Lennar's hurdle rate is now 22.5% PER MONTH. Where are they trying to get money from now - a payday loan place? Obviously a typo - or maybe they are getting really serious about investment criteria. I see that Moody's just downgraded LEN and most other builders to junk status. (The rating agencies are really ahead of the curve, aren't they?) You think this project could pencil out with any of the debt or equity participants getting 22.5%? Just let the 49ers go wherever they need to go to get a stadium built with 100% private funds. It would be great if we didn't have so many nationally televised games blacked out here because of the 49ers and Raiders.
[Editor's Note: We should have pointed out what we assumed was a misprint as well (have since added a "sic"). And only wish we had used the "payday loan" line first.]
Posted by: FSBO at October 28, 2008 1:16 PM