by Greg Chiampou, Committee Chair
BACKLOG AND LOGROLLING ON THE PIERS
The Port constantly recalibrates how, when, and where to invest in repairing and fortifying its aging waterfront property. Why? Because the Port cannot afford the $1 billion+ in backlogged repair and deferred maintenance projects on its 40+ piers and waterfront property. The Port simply does not generate enough annual income to bring its property portfolio up to a “state of good repair,” let alone invest in seismic and rising sea level resilience over the next 10 years. Every time a pier crosses into being structurally unsound or a development deal goes sideways, financial triage decisions ripple somewhere along the Port’s 7.5-mile waterfront.
The Port’s 2024-2033 Capital Plan states that about 90% of its $4.1 billion in needed capital funding over that period will have to come from “external sources,” such as bond issuances, grants, and private developer investors. The Port cannot identify where most of that external funding will be sourced and projects a $2.3 billion funding gap.
There are several recent developments for four Port-owned piers. The accompanying table, excerpted from the Port’s 2024-2033 Capital Plan, provides estimated repair and maintenance costs for each. Using only a financial lens, how might the Port’s stressed condition factor into these piers’ recent news events?
Pier 54 Permanently Closed
The pier was condemned in late 2024 as structurally unsound. Port Director Elaine Forbes stated at the time that the pier “had long been on the Port’s Do Not Resuscitate [DNR] list.”
Previously, the Port estimated that Pier 54 needed $17 million+ in repair and maintenance over the 2024-2033 period. Several small businesses were vacated (including the Parade Guys), and the pier is now closed. The Port, presumably, will no longer need to budget $17 million for the pier’s repair and maintenance. Separately, and while not a Port-owned pier, the popular Municipal Pierlocated at the foot of Van Ness met a similar fate and was closed indefinitely in 2022.
Evidently, the Port’s cost/benefit analysis led to the DNR triage decision for Pier 54. What other piers might be on the list?
Arts & Culture Hub Proposal for Pier 29
The nonprofit Community Arts Stabilization Trust and The Hawkins Project foundation proposed an arts and cultural studio and exhibition space at the Pier 29 building. A two-year lease was proposed and, unlike a prior proposal, does not need the Port to invest in any permanent construction upgrades to the building.
The audience’s response at the Port Commission’s March meeting was enthusiastic. The Port Commission made no commitments and requested a term sheet for its further consideration. (See sfport.com/media/10229 for more details on the proposal.)
The Port’s Capital Plan estimates that Pier 29 and 29½ require $11 million+ in repair and maintenance investment over the next 10 years. The hub would be repurposing Port property that is currently leased as a parking garage. The prospect of a nonprofit tenant at Pier 29 is unlikely to generate substantial lease income to help fund capital repairs. On the other hand, the nonprofit’s tenancy would appear to support one of the Port’s many business objectives, namely to provide civic benefits and open access to the waterfront.
Perhaps this will be a relatively small financial trade-off decision in the Port’s grand financial picture.
Update on Pier 45 Redevelopment
Fisherman’s Wharf Revitalized LLC (FWR), sponsors of a proposed $548 million mixed-use redevelopment of Pier 45 and seawall lot 300/301, obtained City approval in late 2024 to move ahead with its “high-level concept” project. (See The Semaphore, Fall 2024 for more information.) FWR expects to present draft engineering plans and more detailed building designs later this year.
The Port’s finances have a lot at stake in the FWR proposal. Pier 45 and the seawall lots are estimated to be facing $50 million+ in needed repairs and maintenance investment. Significantly, FWR sponsors project that private investors will contribute $294 million, or more than half the project’s funding. The project anticipates substantial investment in the Pier 45 area’s infrastructure repair/maintenance and its seawall resilience needs.
Not yet known is whether FWR’s evolving conceptual project will continue to pursue building a “short-term apartment rental building” on the site, as featured in the original concept plan. Both the Port and the sponsors brushed off community questions as to whether this would violate the City’s longstanding Proposition H, which forbids hotels within 100 feet of the shoreline.
FWR did share that the “short-term apartment building” is not projected to contribute a meaningful amount of business income to the whole enterprise. If this is not critical to the project’s (and the Port’s) economic success but does seem to violate Proposition H, why would the Port and sponsors support its construction and downplay the public’s questions?
The Port has previously explored the feasibility of allowing hotels on its waterfront property as a potentially lucrative source of income. It’s conjectured that this “short-term apartment building” is a Port initiative for easing the acceptance of future hotels anywhere on the Port’s waterfront.
Separately, FWR’s concept plan makes no accommodation for the love it/hate it Skystar Wheel located on the Wharf’s triangle parking lot. The Skystar Wheel’s owners are requesting a longer-term lease and claim that the Wheel’s online ticketing reservations have been successful in drawing more visitors to the Wharf. The Port has not yet responded.
Stay tuned.
Pier 30/32 Redevelopment on Pause
At a March Port Advisory meeting, this massive project’s sponsors surprised and disappointed the public audience in announcing they had indefinitely paused redeveloping Piers 30 and 32 but were going forward with developing 751 residential apartments on the adjacent seawall lot 330 at Bryant/Embarcadero.
Strada and its partner Trammel Crow cited several reasons for delaying the redevelopment of Piers 30/32, including (a) a soft office leasing market, (b) a previously identified but still unfulfilled funding gap of $120 million, and (c) unresolved agreements on “datums,” or reference points for existing and expected sea level rise elevations along the Bayfront and particularly along Piers 30/32, which will impact design requirements for redevelopment.
As with the Wharf project, the Port has a lot at stake with this private developer project. The original project was previously estimated to cost $1.1 billion+ and be significantly funded by private investment. The project was to include extensive public infrastructure development and seismic upgrades to the seawall, and addressing sea level rise, newly providing a deep-water berth that would allow the Port to serve cruise ships, military vessels, and emergency response ships. Now it’s uncertain whether any of those improvements are still on the drawing board or if the sponsors will need to make new concessions.
The Port had previously identified $67 million+ in needed repair and maintenance at Piers 30/32. The aging, dilapidated Pier 30 was scheduled to be largely dismantled and replaced with a floating pool. Will that Pier now be indefinitely closed, like Pier 54?
As mentioned above, an obscure but significant reason for the delay decision was unresolved agreement on “datums” or reference points for existing and expected sea level rise elevations. This issue might have ramifications for other Port waterfront projects as well, including the Fisherman’s Wharf redevelopment project.
The sea level rise “datum” issue also casts a light on whether the draft Waterfront Flood Study, completed last year by the US Army Corps of Engineers and the Port, is still on track to seek Congressional approval in 2026. (See The Semaphore, Spring 2024 for more information on the draft Flood Study.) The draft Flood Plan’s approval timetable might be newly questioned given “priority” changes at the federal administration level. Either way, the Port’s expense and capital funding projections could be expected to change substantially if the draft Flood Study is, or is not, approved by Congress.
The draft Flood Study’s outcome is a major financial variable in the Port’s repair and resilience outlook. The Port will soon release an updated Capital Plan for the 2026-2035 period, rumored to be projecting a $2 billion increase, to $6 billion+, from the current Plan’s aggregate $4.1 billion funding need.
Selected Piers’ Repair & Maintenance Expenses Source: San Francisco Port 2024-2033 Capital Plan
Estimates do not include any planned investments for seismic and sea level rise resilience.
