potrero view

June 2008

Eastern Neighborhood Rezoning Efforts Continue as Planning Department Pushes for Office Space

By Lisa Tehrani

The San Francisco Planning Department is moving forward with its program to rezone large swathes of land currently used for industrial purposes in the Eastern South-of-Market, Mission, Showplace Square/Potrero Hill and Central Waterfront neighborhoods.  Last month both the Planning Department and Board of Supervisors Land Use Committee held hearings on the Eastern Neighborhoods Plan, with a focus on land use and jobs.  Four more hearings are scheduled to discuss other rezoning elements, such as housing, public benefits and program implementation.

At the hearings two zoning designations were discussed for the Showplace Square/Potrero Hill and Central Waterfront areas:  Urban Mixed Use (UMU) and Production, Distribution and Repair (PDR). The UMU designation would allow for office space, housing, and retail uses; essentially any activity but heavy industry.  PDR is intended to preserve light industry and small businesses, allowing office space, residential and 2,500 to 5,000 square feet of retail per parcel.  Showplace Square would be identified as PDR, with an emphasis on design-related businesses.

At its hearing the Planning Department discussed the role of industrial land in the City and the rationale for converting some of it to residential and office space. Currently industrial lands make up roughly eight percent of San Francisco; the proposed zoning would reduce that to a bit less than six percent, according to the Department.  

While City staff acknowledged that there is continuing demand for light industrial space, they asserted that there is a need to convert existing PDR to office space to maintain economic diversity.  According to Ken Rich, Program Director for Eastern Neighborhood Area Draft Plans, businesses that can’t afford high price downtown rents need alternative lower cost locations.  “It makes sense to allow more office because a lot of industries have changed and modernized,” he said.  Zoning proposals wouldn’t force existing light industrial businesses to leave; however economic forces are likely to drive out less profitable enterprises if land prices rise as a result of zoning changes.

In response, several citizens questioned why the amount of PDR space should be reduced given high demand within this zoning designation.  A recent San Francisco Chronicle article calculated the current vacancy rate for offices at upwards of 15 percent, while the PDR vacancy rate is less than one percent.  

According to John Lau, District 10 Supervisor Sophie Maxwell’s aide, Maxwell is keen on maintaining PDR land and suggested that “the City’s office puzzle” didn’t need to be solved with the limited industrial land supply since office space is already permitted downtown, in Mission Bay, the Presidio, and other places.  Lau indicated that Maxwell wants a “strong PDR retention element” within the plans.

However, two of the four Planning Commissioners present suggested that they weren’t as interested in maintaining PDR space.  Commissioner William Lee focused on the need to attract high technology industries to San Francisco; while Commissioner Michael Antonini suggested moving PDR to nearby cities.

The Planning Department also proposed to create two special use districts.  In the Central Waterfront – excluding the Dogpatch Historic District – a Life Science and Medical Special Use district would be established in the area surrounding the University of California, San Francisco Mission Bay campus, allowing for life science offices and laboratories.  In addition, an Innovative Industries district would be identified long Seventh Street, between Berry and 17th streets, including Daggett Triangle, at the corner of 16th and Seventh streets, as well as in a small part of the Central Waterfront.  Bioscience-related office space would be allowed in this district, but not laboratories.  The Planning Department acknowledged that it’s not clear what office types would serve as “innovative industries,” explaining that the zoning designation was designed to be flexible.

Tony Kelly, Potrero Boosters Neighborhood Association president, questioned the need for the two special use districts, and suggested that 16th Street be designated as a university-oriented zone, focusing on student housing and services, given the fact that three colleges are located in the area.  Kelly also noted that the area is surrounded by upwards of nine million square feet of planned and existing office space and that more office space is unnecessary.  Keith Goldstein, Potrero Hill Association of Merchants and Businesses (PHAMB) president, echoed Kelly’s concerns about the special use districts, stating that PHAMB would like to see a neighborhood-serving commercial corridor along 17th Street.  

According to Kelly the Boosters are generally supportive of the rezoning proposals, but were looking for improvements.  “The implementation of affordable housing and open space and transit improvements is really weak. We need a real program to preserve industrial job space,” he said.  In some places “Planning is trying to raise the value of land, as opposed to addressing the needs of all of these industries. That is not smart growth, that is a pyramid scheme,” he stated.

In response, several property owners spoke out in favor of keeping the zoning for PDR areas flexible so that they could change their property’s use based on economic demand. Steve Vettel, a land use attorney, said he supports the proposed rezoning, and thinks the plans have improved over the years. He encouraged “Flexible incubator space [with a] relatively undefined mix of uses.”  Robert Meyers, a planning consultant, asserted that the PDR zoning would be too restrictive; if a business in the area becomes successful it wouldn’t be allowed to grow under the proposed zoning and would have to leave. “PDR sounds like a sure fire plan for vacancy and economic stagnation,” he said.

Kepa Askenasy, a Missouri Street resident, called for more, rather than less, zoning specifics so as to protect existing businesses in the area.  “We in the community need open space, small footprint office space for design businesses and the like and affordable housing,” she said.  “We need zoning that will protect our existing small industrial businesses. We need open vistas from our public streets, we need parking, and reliable and well routed public transit. We need safe streets with proper sidewalks and street lights, and places to walk our dogs and places for our kids to play with other kids. We need places for teenagers to hang out, and the elderly to feel safe walking to at night. We need an affordable sandwich shop, and a shoe repair place, and watch repair place, and off street bicycle parking. Those are businesses that cannot afford the price of high tech office space. We need community based planning, not developer based planning.”

The Planning Commission didn’t immediately alter its proposals as a result of the meetings, although changes are likely to come given the range of feedback from the Commissioners and the public.  The entire Board of Supervisors will ultimately need to approve the plans, most likely before the fall.

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