March 11, 2011
Notice Of Default Filed For CityPlace Parcels
Five parcels along Market Street between 5th and 6th Streets have been hit with Notices of Default (NOD's) including 935-939 Market, 943 Market, and 949-961 Market.
Apparently Connecticut-based Commonfund Realty, which partnered with San Francisco based Urban Realty on the CityPlace development, "has stopped investment in real estate projects as it seeks to restructure a $1 billion fund that lost most of its value."
As best we can tell there’s approximately $36 million of cross collateralized debt on the three parcels and it’s a $9,680,000 note from 2007 which filed the notice of default.
∙ Details To Augment Designs For "CityPlace" (935-965 Market Street) [SocketSite]
∙ Foreclosure Proceedings Started Against City Place Site in San Francisco [PropertyShark]
∙ CityPlace EIR
Approved Appealed Approved! [SocketSite]
First Published: March 11, 2011 1:45 PM
Comments from "Plugged In" Readers
Well it looks like all the hardcore SFers will be happy to hear this one - the dilapidated st. francis theater will remain the dump that it is after all...
I figured this was going to happen when I heard that Target chose the Metreon as its location instead. Still sad to see though.
Posted by: midmarketresident at March 11, 2011 2:27 PM
Posted by: gellan at March 11, 2011 2:48 PM
Hmmm... do I care about this? Nope. Project was doomed from the start. No private developer can reasonably withstand a 10-year approvals process and expect to make a profit. The whole world can change twice over in that time interval.
Posted by: Jimmy (No Longer Bitter) at March 11, 2011 3:03 PM
"Well it looks like all the hardcore SFers will be happy to hear this one - the dilapidated st. francis theater will remain the dump that it is after all..."
But if it stays a dump, more people will be able to afford to live in the area! It's exactly what we did for the Tenderloin, and it has worked quite beautifully there. Yay affordable housing!
Posted by: sfrenegade at March 11, 2011 3:08 PM
I detect an aroma of sarcasm... wait, no it's just the urine smell drifting over from the TL.
Posted by: midmarketresident at March 11, 2011 3:39 PM
Once again, the concessions and endless hoops demanded from the board of stupidvisors sinks another project -- what is it... a decade later?
Posted by: marco at March 11, 2011 6:27 PM
"it’s a $9,680,000 note from 2007 which filed the notice of default"
The note filed a notice of default? Wow, this mortgage thing must be really out of hand.
Posted by: sfoutsider at March 11, 2011 6:49 PM
An ugly, unimainative and pointless proposal. Happily it will never happen.
Posted by: Gil at March 11, 2011 6:58 PM
Not the worst thing in the world to happen. These properties don't have to sit vacant. The City allows them to be the way they current are.
And of course the owners of the properties purposefully allowed them to deteriorate so the public would support their mall.
It was doomed to failure. Too much shopping already. The homeless problem is getting worse and people won't go west of 5th to shop.
And you have the St. Francis, which is a one of a kind building on Market. The City and the historical commission ignored hits historical importance when they approved City Place.
Posted by: frenchjr25 at March 11, 2011 9:45 PM
Too bad. SF really could have used their own version of Philly's "Gallery" -- starting with the usual high hopes and inevitably ending up anchored by a Burlington Coat Factory and a KMart.
Downtown malls with "mid market" chain stores, in dense urban areas, slightly off the beaten path... Lots of previous successes to emulate here for sure. * eye roll *
Posted by: Kurt Brown at March 12, 2011 3:40 PM
I'll be less sarcastic this time...
The thesis that "redevelopment = mall", especially in a dense, urban, pedestrian-oriented city like SF, is lunacy. One doesn't even have to look beyond the SF borders for examples. Can we seriously say the the Metreon or Stonestown contributed to successful rebirths of SF neighborhoods? What were the differentiators for CityPlace that would lead us to project a different result? A Target? More structural glass? I'm truthfully curious if there's ANYTHING people thought would make CityPlace a success where so many before have failed.
What does work? Twitter moving into SFMart, abetted by Shorenstein and some grease thrown in by the city, leading to similar tenants, a new mass of more affluent pedestrian traffic, and the resulting organic growth of retail to serve that traffic. No top-down plans by developers with an outdated one-size-fits-all theory about revitalization that never even worked in the suburbs.
Posted by: Kurt Brown at March 13, 2011 2:15 PM
Kudos, Kurt Brown. That's exactly the sort of thing that could work. And it would bridge the gap, so to speak, between the Mint Plaza stuff and Powell.
Posted by: anon.ed at March 13, 2011 5:36 PM
"Can we seriously say the the Metreon or Stonestown contributed to successful rebirths of SF neighborhoods? What were the differentiators for CityPlace that would lead us to project a different result?"
The neighborhoods around Metreon and Stonestown didn't need rebirth from their malls, so the comparison makes no sense. The success or failure of any one project won't make or break a neighborhood. New employers can open offices in the neighborhood, but the employees will have to want to eat and shop there when they get off work. And Metreon shows that just building a mall isn't what's important-- it is the ability of the project to successfully serve its community. Mid-Market will need several successes to change trajectory, including the success of new housing like Trinity Plaza, new retail, and new employers.
Posted by: Dan at March 14, 2011 8:19 AM
"Can we seriously say the the Metreon or Stonestown contributed to successful rebirths of SF neighborhoods?"
Kurt, have you seen what was in that part of Soma 10 years ago, before the Metreon? Metreon did contribute to making the place more inhabitable. Of course, one mall is not enough to completely transform the entire neighborhood but it DOES help. Or do you suggest that leaving the boarded up dump/theater there is better?
And your "organic growth" theory has not worked out so well for midmarket over the last 30 years, has it? This mall was a huge step to cleaning up market street and I'm very sad to see it fail. I'd love to see Twitter move there as well but that alone is not enough either, not to mention it still being a long ways away from reality.
Posted by: midmarketresident at March 14, 2011 10:48 AM
This is not good news (as I support this development), but it doesn't read to me like the project's obituary. The developer's financing partner is bowing out. If they can find another one (not an easy prospect but not impossible), the development should be able to proceed. Having all the parcels and approvals in hand should make it potentially attractive to financing partners, provided the math pencils out.
Posted by: Michael E at March 14, 2011 11:46 AM
@Midmarket: point taken -- I grant that the area around Metreon was improved, but I submit (without possible proof, unfortunately) that it would have happened without a mall. Yerba Buena Gardens, skating, bowling, carousel, kids play areas, and the Loews theater would have done the same, all by themselves, no mall required. In fact, the mall has been essentially gone for years now (reduced to the rump of the theaters) and it would be interesting to look at foot traffic studies (if they exist), to see if there was any appreciable difference, before and after "mall."
And, no, I'm not suggesting that boarded-up buildings are my alternative solution. Nor am I suggesting roasting small cute puppies in a fire pit, just FYI. I'm saying one thing: redevelopment = mall is a false premise. As for why there has been no organic development on midmarket for decades, well, that's a very long essay that I don't think SS is the best medium for.
@Dan: agree the comparison with Metreon and Stonestown is inexact, as would any comparison between any two projects be. Clearly no two sites are the same. But even if we agree that neither site "needed redevelopment" my point was that a shopping mall does not "serve it's community" as you put it.
The rest of your statements about midmarket needing "several successes" including more employers, more retail, more housing, etc. is EXACTLY what I meant by organic (and mixed) growth. I suspect that we're picking at each other over minor definitional points, but in fact, agree in the main on what it takes for a neighborhood to turn around. But I'm still holding to my point that "shopping mall" isn't one of those ingredients, and has never been shown to be so, anywhere.
Posted by: Kurt Brown at March 14, 2011 12:46 PM
I agree with much of what you say, Kurt, but as a counterpoint, wasn't the San Francisco Center (Nordstroms) supported by Redevelopment? That single "mall" development changed the force of gravity, extending Union Square south of market for the first time, and providing a link to Yerba Buena.
I think it's possible to argue big time about the devotion of redevelopment dollars to shopping center developments. It's all part of the fiscalization of land use, and chasing sales tax dollars,and leads to way to much retail space getting built. But that one project was, indeed, tranformative. Metreon is in many ways a bad example because its fundamental "urban entertainment" idea was so flawed that it quickly fell apart.
Yes, we are over-retailed as a society, and perhaps locally too. But I would still rather see stores like Target at CityPlace than at the Metreon, for urban design reasons. And since the fiscalization of land use is still unfortunately real, I would like to make sure we don't "leak" sales to other municipalities if we can help it.
Posted by: curmudgeon at March 14, 2011 12:57 PM
I think there are retailers who would do well at CityPlace. I think Ikea could open up there, delivering large items (as they already do), and would sell lots of housewares and furniture to nearby residents. I agree about trying to avoid leaking sales to other municipalities--Colma and Daly City are filled with stores that largely serve SF residents.
Posted by: Dan at March 14, 2011 1:22 PM
I agree with you Dan. An Ikea, Best Buy, etc. could really work there. I could even see it supporting a new grocery store - something more affordable like a Fresh & Easy or Safeway.
Also, I emailed them today...
"they continue the work of pre-leasing the project, and proceeding with the development of CityPlace"
We'll see. I would love to see this move forward.
Posted by: gellan at March 14, 2011 4:13 PM
The NoD that was filed against these properties was cancelled a week after the NoD was filed in late February:
Posted by: GoBlueInSF at March 29, 2011 12:03 PM
Posted by: SocketSite at March 12, 2012 12:10 PM