Developer proposes 71-story residential tower

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Bayhill Ventures — a new real estate development and investment firm that Paradis started out of San Francisco this year with Rob Hollister, the former president of the Sobrato Organization — filed an application with the city’s Planning Department on Wednesday, proposing the redevelopment of 530 Howard St. in the southern Financial District.

The site is currently home to a parking lot and a four-story boutique office building that houses Bayhill’s office. 

As designed by Pickard Chilton, the planned high-rise would be a slender, simple elongated shaft with a flat top and no setbacks, featuring a mix of one-, two- and three-bedroom units for a total of 672 apartments, of which approximately 67 would be leased at below-market rates.

The tower would include some 30,000 square feet of amenity space as well as a fifth-floor bridge connecting it to Salesforce Park, the 5.4-acre public park that is the centerpiece of the Salesforce Transit Center.

“We’re very excited about it — it’s a spectacular project,” Paradis said. “It’ll have incredible views, and  it’ll set a new standard for rental properties in San Francisco.”

While the sleek tower would be a distinctive presence on the skyline, it also represents a significant milestone in San Francisco’s political landscape: the first major downtown tower that would not require approvals from the Planning Commission or the Board of Supervisors. 

That’s because the developer is taking advantage of Assembly Bill 2011, the “affordable housing and high road jobs act of 2022,” which allows “ministerial” approval of certain developments on commercially zoned properties. 

The law has not been enacted much in San Francisco — there is only one other AB2011 project pending — because it only applies to streets that are a minimum of 75 feet wide. Most thoroughfares in San Francisco are significantly narrower than that, but Howard Street is not. AB2011 also requires that the sites not be next to industrial properties and be more than 500 feet from a freeway.

“It will be the first major project that is utilizing state ministerial approval process — no (California Environmental Quality Act) study, nor a hearing at the Planning Commission,” said San Francisco Planning Director Rich Hillis. 

Hillis said the design will be reviewed by planning staff to make sure it complies with the city’s code requirements, but that it should be ready for building permits within six months. After entitlements are secured, the developer expects to spend about a year raising capital and an additional three years building the tower. 

Mayor London Breed celebrated the proposed project as a “significant investment” in downtown. 

“Turning a parking lot into housing, including affordable housing, is exactly what we need to do to build a stronger, more resilient San Francisco,” Breed said in a statement. “It’s good for the future of our city, for our restaurants, and retail, and for the long-term health of our entire economy.”

At roughly 840 feet, the proposed 530 Howard tower would rise higher than any existing residential building in San Francisco. The tallest currently is 181 Fremont, a mixed-use tower that features office space leased to Facebook parent Meta Platforms below 15 floors of condos. That building rises  about 810 feet above street level. 

Overall, the 530 Howard building would be the city’s third tallest, with only Salesforce Tower and the Transamerica Pyramid rising higher.

Bayhill’s project sits immediately adjacent to another Hines project that was slated to rank among the city’s tallest buildings but hit a snag post-pandemic: the Transbay Parcel F tower at 550 Howard.

Two other projects have been approved to transform the 500 Block of Howard Street over the years, but, so far, they have failed to launch: a 48-story tower designed by Handel Architects at 524 Howard and a 36-story tower by Renzo Piano and Mark Cavagnero Associates at 555 Howard that would feature condos and a hotel. 

The San Francisco office market has been plagued by historic vacancy rates in the wake of the pandemic, with more than one-third of its offices sitting empty. As office loans come due, a growing list of properties are facing foreclosures or are being offloaded in fire sales — it’s a conundrum that’s beginning to impact hotels and the multifamily market. 

Still, Paradis is confident that San Francisco’s real estate market will recover.

“We’re seeing the transit-oriented, really well-located, high-end multifamily projects getting fully leased, and the rents are starting to get upward pressure,” he said. “It’s still somewhat early, but, for sure, people are coming back to live in the city, and the pipeline for new multifamily is quite limited and for projects under construction, it’s almost nonexistent.

“This project will take around three years to build, and we’ve got another year of pre-construction work to do. So, by the time we’re ready to rent the apartments, I suspect the city will really need them, and the rents will be at a place that will make it a good investment.” 

Parcel F, the adjacent Hines project, was entitled in March 2021 for a 189-room luxury hotel, 165 residential units and 274,000 square feet of office, retail and common amenity space — despite losing its would-be anchor tenant a week before the hearing. Salesforce Inc. had withdrawn from plans to lease the project’s office component, but Hines successfully defended the project’s financial viability to city leaders.

But the Parcel F project has struggled to break ground. Hines is facing $80 million worth of maturing loans for the project, and this summer listed it for sale for an undisclosed price.