A church in the Tenderloin wants to build an apartment building on its property, but an appeal over historic preservation may delay construction. Do the appellants have a case? Supporters of the project say it’s just a good old-fashioned stick-up—and it may be illegal.
An architectural preservation group filed a pair of appeals with the Board of Supervisors opposing an apartment project at 450 O’Farrell Street in the Tenderloin, which would replace a largely vacant church property. Despite widespread support from local residents, who testified at a Planning Commission hearing that the current site was “blighted” and the new building “much needed,” the nonprofit group San Francisco Heritage alleges that the City’s approval failed to incorporate “feasible mitigation measures” to account for the project’s “significant adverse impact” on the neighborhood by demolishing the historic site.
Appeal documents suggest that the row essentially boils down to a dispute over money—and five Supervisors on the Board, including the District’s Supervisor, Jane Kim, have agreed to hear the appeal. So what gives?
Unless the LORD builds the house, the builders labor in vain. Unless the LORD watches over the city, the guards stand watch in vain.
— Psalm 127:1
The Fifth Church of Christ, Scientist, which is working with development firm Thompson Dorfman to build 176 units with ground floor retail and a new church, would have had its façade preserved under one proposed design option presented to the Planning Commission. But uncertainty over rising costs, which has held almost a dozen construction projects in limbo in that area, prompted the Commission to approve a full demolition.
There’s just one problem: San Francisco Heritage expects part of that net savings—which they estimate totaling up to $3.5 million—to be passed on to a city fund for nonprofits like Heritage to conduct historic preservation activities elsewhere in the City. The Planning Commission had no authority to require such a private agreement when granting its permit, and supporters say the appeal can mean only one thing: Heritage wants a cut.
Supporters of the project counter that these sorts of ad hoc negotiations add costs and uncertainty to the construction pipeline, and could leave the site undeveloped for decades. In the midst of a historic housing shortage, that’s the last thing the City needs—particularly when neighbors overwhelmingly welcomed the project.
Heritage CEO & President Mike Buhler wrote: “Its approval will likely spur future proposals to demolish other historic buildings in the Tenderloin, regardless of their significance, for market-rate housing.” Further, the organization “recommends an additional exaction of at least $1.5 million for off-site mitigation, including city-administered programs to fund historic preservation, facade improvement, and affordable housing projects within the Uptown Tenderloin Historic District.”
“The developer had budgeted $5 million to preserve the colonnade,” Buhler explained in an interview. In his view, the original design that preserved part of the facade amounted to a mere “tokenism” approach to historic preservation. “We believed a much more meaningful historic preservation project could be completed in the District with those monies, rather than retaining what essentially amounts to a lawn ornament in the building.”
Representatives of the church and local community groups counter that the project will already be benefiting the Historic District quite generously, thank you very much.
“The façade does not fit with the vision of the church. We want there to be housing here,” said David Murray, a pastor with the church. “The building was originally built in 1923, and it has this dark and foreboding entrance, like a bank. That doesn’t represent God’s shepherding love.”
In contrast, SF Heritage seemed to pursue preservation efforts that were at odds with the vision of the church as a living institution. “Our focus from the outset was to advocate for alternatives that would save the church building,” Buhler added. “It was only recently that we abandoned that approach”
So let each one give as he purposes in his heart, not grudgingly or of necessity; for God loves a cheerful giver.
— 2 Corinthians 9:7
According to Pratibha Tekkey, a representative with the Central City SRO Collaborative, the church and the developer negotiated with residents of single-room occupancy (SRO) hotels in the Tenderloin to develop a community benefits package that was feasible and beneficial to the neighborhood.
“They were definitely showing a good faith effort on their part,” Tekkey explained. “There’s always back and forth in negotiations, but we did get a couple of capital improvement projects funded for our hotels. We got a commitment from Thompson Dorfman that they would help build ADA accessible entrances …and possibly initial investment for free WiFi. We also managed to get three units set aside for a Move On program, where folks who live in supportive housing can apply for a Section 8 voucher to move into this building.”
The project would otherwise include 23 Below Market Rate units, a rate of 13.5% set during its initial permit application in 2013.
Tekkey added that the project would additionally provide funding for other neighborhood programs, separate from the SRO community. “We were also able to secure funding for McCaulay Park,” she said. “The Tenderloin has extremely limited public space, so this park is going to be renovated early next year, and there were some funding gaps that they agreed to contribute towards, almost $81,000.”
At the final Planning Commission hearing to approve the project, neighbors testified unanimously in support. Del Seymour, a longtime resident affectionately nicknamed the “Mayor” of the Tenderloin, described the site as having been “stagnant for some time,” noting that the church’s fenced-off front entrance was an unseemly presence in the neighborhood. “When we pass that block, we never have anything to talk about. I hope this gives us something to talk about,” Seymour said. “Who could oppose that? Isn’t that wonderful? It will bring peace back to a block that has not always been normal. It will bring some normalcy back to the Tenderloin.”
Local resident Joseph Brown also described the project as “something we need very badly.”
But will the peace and normalcy Snyder describes come to fruition? The basic economics of the situation may leave Tenderloin residents waiting much longer for their vision to be realized. The longer the permits are held up by the appeal, the riskier the project’s finances—and if Thompson Dorfman decides to cut their losses and walk away, no one will get anything.
Richard Hannum, an architect with Forge Development Partners who has been working with the church for decades on plans to develop the site, insisted that the cost savings of the façade removal did not nearly come close to the SF Heritage demand for $1.5 million. But, he countered, the appeal can only drive up the cost of the project itself.
“The city has held this project in the process since 2013, while the cost of construction is up 25%. The availability of finance capital has greatly diminished. We have all these approved housing projects that are not getting built, because there’s no money,” Hannum said. “If this delays much longer, they just can’t build it.”
Hannum and Murray allege that SF Heritage did not engage with the community benefits process, or even make their request known before the project came up before the Planning Commission.
“Even if the building volume were to remain the same, our [SF Heritage] internal analysis suggests a net cost savings of more than $3.5M,” Buhler wrote in an email to the developer on October 11th. “As noted earlier, several board members with relevant design, construction, and development experience. have offered to review any alternative calculation of net cost savings you might be able to provide.”
Buhler explained that SF Heritage reviewed the project early in August, 2017, and submitted comments to the Draft Environmental Impact Report “expressing dismay” at the loss of a historic resource.
But Hannum likened Buhler’s offer to “Pancho Villa riding up with a gun,” referring to the notorious revolutionary pursued by both U.S. and Mexican authorities in the early 20th Century.
“Some church members have accused SF Heritage of trying to extract funds for their own benefit. The proposal we have put forward would reallocate the cost savings to city-administered funds,” Buhler insisted. “Absolutely no funding would go to our organization.”
While that is technically true, SF Heritage could have some oversight over how some those funds would be distributed, though they would not apply for any preservation efforts involving the group. The appeal proposes that the project pay into three separate city funds: the SF Shines Facade Improvement Program and the SF Historic Preservation Fund Committee, under the Mayor’s Office of Economic and Workforce Development (OEWD), and the Mayor’s Office of Housing and Community Development (MOHCD). SF Heritage retains appointment power over one member of the Historic Preservation Fund Committee.
“As a matter of course, SF Heritage recuses itself from considering any grant applications to the Historic Preservation Fund Committee for projects that involve us,” Buhler said, to avoid conflicts of interest. However, the proposed funds from this project would only be allocated to the Uptown Tenderloin Historic District, and according to Buhler, “SF Heritage is not located in the Tenderloin and we don’t have any projects planned there.”
By wisdom a house is built, and through understanding it is established…
— Proverbs 24:3
Michael G. Pappas, Executive Director of the San Francisco Interfaith Council, excoriated SF Heritage in an October 12th letter denouncing the appeal. Not only did the appeal seem to fly in the face of the good faith environment, Pappas argued that the appeal could put the City out of compliance with federal law. The Religious Land Use and Institutionalized Persons Act, passed by Congress in 2000, protects churches and other faith groups from local authorities interfering with use of their real estate. In 2011, the Ninth U.S. Circuit Court of Appeals set precedent by forcing the City of San Leandro to amend its zoning code in order to allow a local church to expand.
“Even if Heritage files with the Board of Supervisors and later withdraws, the. wasted damages would still be measured in the millions of dollars,” Pappas wrote. “We urge you to continue with the good faith process.”
“Oh yeah, this is going to be a real expensive one,” Hannum said. “They have taken continuous steps to strengthen the case against the city.”
“The city’s response to the church’s original invocation under [RLUIPA] said that, nonetheless, they are required to follow the review process under state law, which is the California Environmental Quality Act,” said Buhler. “Our appeal of the project focuses on a very specific aspect of their compliance under state law—and that is whether or not the city adopted all feasible mitigation measures to offset the proposed demolition of historic resources for this project.”
Supporters aren’t buying it—moreover, they’re incensed that City Hall has agreed to hear the appeal at all.
“Supervisor Kim should never have entertained these appeals without the input of the community,” said Randy Shaw, Executive Director of the Tenderloin Housing Clinic—an affordable housing nonprofit that includes the Center City SRO Collaborative under its umbrella. “The neighborhood negotiated a community benefits package in good faith, and her unilateral actions undermine the community’s power.”
Sonja Trauss, a candidate for District 6 Supervisor (and, full disclosure, a previous employer of the author) echoed Shaw’s sentiment.
“It's amazing to see the disregard Supervisor Kim has for the community that supported her,” Trauss wrote in a statement. “The neighborhood got the community benefits that they wanted. In a manner similar to the opposition at 950 Market, some other groups are coming in at the last minute to try to get a cut, and in the process, threatening to torpedo the entire negotiation. As a Supervisor, Kim should be protecting the community that she represents.”
Fellow District 6 candidate Christine Johnson also weighed in on the appeal: “I have seen situations such as the 450 O'Farrell project many times as a Planning Commissioner. San Francisco has a completely broken land use process where discretion is weaponized to delay housing,” Johnson said in a statement. “There is a place for negotiations for community benefits or other special situations - during project planning, not at the 11th hour.”
Johnson said she hoped to bring more clarity to land-use decisions to the Board of Supervisors, in particular for historic buildings, to avoid such conflicts. “Where negotiations are required, I want to make sure they have early on in the process,” she reiterated.
At press time, Supervisor Kim’s office did not return repeated requests for comment, nor did District 6 candidate Matt Haney, whom Kim has endorsed. (Update: Supervisor Kim's office has informed the Beacon that she cannot currently comment on appeals pending before the board.)
The appeal hearing before the Board of Supervisors is currently scheduled for November 13th.
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