December 11, 2009

72 Townsend: So Close, But Yet So Far For 74 Approved Units

72 Townsend: Rendering

From a plugged-in tipster in 2007:

The existing ground floor windows [of 72 Townsend] got a good wash yesterday and are now adorned with the news that [74] Luxury Homes are coming soon starting from the $600s. Development is by Thompson Development, hoping that that plans approved last year is what actually gets built.

From a plugged-in reader in 2008:

the development is on hold. the space will be leased out in the meantime. the condo construction isn't expected for another 3-5 years now.

And from the San Francisco Business Times today:

The developer of an approved 74-unit development project at 72 Townsend St. in San Francisco has filed for Chapter 11 bankruptcy protection.

Damn these downturns to hell.

A Plugged-In Tipster Reports: 72 Townsend Is Now “Coming Soon" [SocketSite]
A Plugged-In Reader Reports: 72 Townsend Not “Coming Soon?” [SocketSite]
75 (sic) Townsend developer files for Chapter 11 [San Francisco Business Times]

First Published: December 11, 2009 8:15 AM

Comments from "Plugged In" Readers

I think we'll see most of these approved housing/cpndo projects never break ground - at least in the form originally planned and approved.

For instance - does anyone see the 35 or so condo tower at Market & 10th ever being built? Ever as in the next 10 years?. Or TRH?

The list goes on.

By the time you get that far out - 10 or more years - its likely the sites will see totally new proposals and, my guess, much scaled back proposals.

Posted by: Gil at December 11, 2009 9:04 AM

I don't know what WestBay Builders was thinking when they bought this from Lambert, but obviously they weren't. Lambert somehow persuaded them into allowing them to keep the retail space but selling off everything else.

And the best part, I kid you not, the option agreement stated that if WestBay Builders did not COMPLETE construction by June 29, 2010 then WestBay Builders had to pay Lambert $5,000 a month, or portion of a month, until construction was substantially complete. The commercial payments were not to exceed 60 months and at the end of 60 months if construction was not complete, a neutral third party appraiser would be hired to appraise the commercial space and WestBay Builders would have had to pay Lambert 120% of the appraised value.

Talk about dead from the start.

Posted by: The Dude at December 11, 2009 9:06 AM

The market is working through a glut of available units, but over time San Francisco consistently demands more new units than the market can provide. Most of these projects will be built out, but it will take longer and they may be redesigned to add more space and units to improve profitability before they are built.

Construction at Market and 10th is a good example of a project that took a Herculean effort to get permitted that is already set up to be completed in stages. It is conceivable that project could go off the rails, but more likely parts of it will be delayed. Given how long the underdeveloped and ugly buildings that were there before lasted this is still a relatively brief period of rebuilding.

Once development has been permitted it is almost always just a matter of time before that volume gets filled up. Not permitting what was previously permitted causes considerable controversy without some specific reasoning for the change of heart. San Francisco core areas have been straining at the limits of available space for some time which is why downtown is spilling into South of Market. Demand for tall spaces and space near transit is more robust than for other offerings, so what is proposed is all but certain to be built in some form or another even if it takes a decade or two for this mess to work out.

Only in America where a relatively mature city has been around for a few hundred years could a decade be considered "ever". After the blowout of the 80s when the Reagan S&L bubble burst people said some of the see through buildings might be taken down, but development of metro areas all over the nation exploded less than a decade later.

I'm not sure what Turkish Radio Hour has to do with any of this.

Posted by: Mole Man at December 11, 2009 2:28 PM

72 Townsend is not 10th and Market, i.e. it is a better location. If public data can be believed, the purchase price for the land computes to about $125K per door: too much. Someone will likely purchase this site at a reasonable price and proceed. Yes, the demand for housing will continue.

Posted by: Malcolm Kaufman at December 12, 2009 8:48 AM

Word on the Street is this is coming back and the current tenants (Federated Media) will be vacating 72 Townsend by next summer!

Posted by: observer at December 21, 2012 11:39 AM

A call to the SF Planning office confirmed that there is an active permit

Permit: 200705010136
Form: 3 - ADDITIONS, ALTERATIONS OR REPAIRS
Filed: 5/1/2007
Address: 72 TOWNSEND ST
Existing: RETAIL SALES
Proposed: APARTMENTS
Units: 74
Action: REINSTATED
Action Date: 11/29/2012
Description: 7 STORY ADDITION TO EXISTING 2 STORY COMMERCIAL WAREHOUSE, HIGHRISE BUILDING. ADDITION OF RETAIL, PARKING & 74 RESIDENTIAL UNITS.
Cost: $31,300,000.00

Clicking on the Permit Number brings you to this page:
http://dbiweb.sfgov.org/dbipts/default.aspx?page=PermitDetails

Posted by: Observer at December 21, 2012 12:13 PM

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